8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) MAY 21, 2008

NORTEL NETWORKS CORPORATION

(Exact name of registrant as specified in its charter)

CANADA	001-07260	98-0535482
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

195 THE WEST MALL, TORONTO, ONTARIO, CANADA	M9C 5K1
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 905-863-7000

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On May 28, 2008 Nortel Networks Corporation (“NNC”) announced the closing of the previously announced offering by its principal direct operating subsidiary, Nortel Networks Limited (“NNL”), of $675 million aggregate principal amount of 10.750% senior unsecured notes due 2016 (the “Notes”) in the United States to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), to persons outside of the United States pursuant to Regulation S under the Securities Act, and to accredited investors in Canada pursuant to applicable private placement exemptions.

The Notes are fully and unconditionally guaranteed by NNC and initially guaranteed by NNC’s indirect subsidiary, Nortel Networks Inc. (“NNI”). The Notes are part of the same class as NNL’s previously issued $450 million aggregate principal amount of 10.750% senior notes due 2016 but will initially not be fungible for trading purposes with the previously issued 10.750% senior notes due 2016. The press release announcing the closing is attached hereto as Exhibit 99.1 and incorporated by reference herein.

NNL expects that the net proceeds from the sale of the Notes will be approximately $655 million, after deducting commissions and other offering expenses. Nortel plans to use these net proceeds, together with available cash, to redeem at par the $675 million outstanding principal amount of NNC’s 4.25% convertible senior notes due September 1, 2008. NNC has issued a notice with respect to the redemption of the 4.25% convertible senior notes.

In connection with the offering, NNC, NNL, NNI and a representative of the initial purchasers entered into a purchase agreement dated May 21, 2008, which is attached hereto as Exhibit 10.1 and incorporated by reference herein. In the purchase agreement, NNC, NNL and NNI have agreed to indemnify the initial purchasers against certain liabilities, including liabilities under the Securities Act, or contribute to payments that the initial purchasers may be required to make in respect of those liabilities. In addition, NNC, NNL, NNI and The Bank of New York as trustee entered into a third supplemental indenture dated as of May 28, 2008, which is attached hereto as Exhibit 4.1 and incorporated by reference herein, supplementing the indenture dated as of July 5, 2006, as previously supplemented by a first supplemental indenture dated as of July 5, 2006 and a second supplemental indenture dated as of May 1, 2007.

In connection with the issuance of the Notes, NNC, NNL and NNI also entered into a registration rights agreement dated May 28, 2008 with a representative of the initial purchasers obligating NNC, NNL and NNI, if, on the fifth business day following the one-year anniversary of the issuance of the Notes, (i) any Notes are not freely transferable without volume restrictions by holders that are not affiliates of Nortel in accordance with Rule 144 (or any similar provision then in force) under the U.S. Securities Act of 1933, as amended, or otherwise, (ii) the restrictive legend has not been removed from the Notes, or (iii) the Notes bear a restricted CUSIP number (any Notes as to which any of these restrictions apply, the “Registrable Notes”), to use their reasonable best efforts to file with the United States Securities and Exchange Commission (“SEC”) and cause to become effective a registration statement relating to an offer to exchange such Registrable Notes for Notes registered with the SEC, evidencing the same continuing indebtedness as the Notes and with terms substantially identical to the Notes. If applicable interpretations of the staff of the SEC do not permit Nortel to effect the exchange offer, NNC, NNL and NNI have agreed to use their reasonable best efforts to make available an effective shelf registration statement relating to resales of any Registrable Notes. In the registration rights agreement, NNC, NNL and NNI have agreed to indemnify the holders of the Notes and the initial purchasers against certain liabilities, including liabilities under the Securities Act, or contribute to payments that the holders or the initial purchasers may be required to make in respect of those liabilities. The registration rights agreement is attached hereto as Exhibit 10.2 and incorporated by reference herein. Nortel expects that the Notes will become freely transferable under the Securities Act by the one-year anniversary of the date of issuance of the Notes, and that it will not be required to file an exchange offer registration statement, effect the exchange offer or make available any shelf registration statement.

Certain of the initial purchasers and their affiliates have provided in the past to Nortel and its affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for Nortel and such affiliates in the ordinary course of business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the initial purchasers and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in Nortel’s debt or equity securities (including the 4.25% convertible senior notes), and may do so in the future. The Bank of New York is also the trustee under other of

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Nortel’s indentures and may provide from time to time similar services in connection with future securities offerings by NNC, NNL and NNI and their respective affiliates.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously announced, the Notes issued by NNL consist of $675 million of senior notes due 2016 and are fully and unconditionally guaranteed by NNC and initially guaranteed by NNI. The Notes are part of the same class as NNL’s previously issued $450 million aggregate principal amount of 10.750% senior notes due 2016 but will initially not be fungible for trading purposes with the previously issued 10.750% senior notes due 2016.

The Notes are senior unsecured obligations of NNL and rank pari passu with all other senior unsecured obligations of NNL and effectively junior to all secured obligations of NNL to the extent of the value of the property securing such obligations. Each guarantee is the direct, unconditional, unsecured and unsubordinated obligation of the respective guarantor and ranks equally and ratably without preference among themselves and at least equally with all other senior unsecured obligations of the respective guarantor, except to the extent prescribed by law. Each Guarantee ranks effectively junior to all secured obligations of the respective guarantor to the extent of the value of the property securing such obligations. The Notes and related guarantees are effectively subordinated to all liabilities of the subsidiaries of NNC other than NNL (as issuer) and NNI (as an initial guarantor).

The Notes will pay interest semi-annually at a rate per annum of 10.75%. Holders of the Notes will be entitled to the payment of additional interest under certain circumstances set forth in the registration rights agreement, as described above in Item 1.01. NNL may redeem the Notes in the event of certain changes in applicable withholding taxes. On or prior to July 15, 2009, NNL may also redeem up to 35% of the 10.750% senior notes due 2016 with the proceeds of certain equity offerings. In addition, NNL may redeem the 10.750% senior notes due 2016, prior to July 15, 2011, at 100% of the principal amount thereof, plus accrued and unpaid interest and a “make-whole” premium. On or after July 15, 2011, NNL may redeem the 10.750% senior notes due 2016 at the redemption prices set forth in the indenture.

Upon a change of control, NNL will be required to offer to purchase the Notes at 101% of the principal amount thereof plus accrued and unpaid interest. In the event of certain events of default under the indenture either the trustee or the holders of not less than 25% in principal amount of the then-outstanding Notes may declare the principal of, and premium, if any, on all Notes of the series to be due and payable, together with accrued interest.

The indenture governing the Notes contains certain limitations on the ability of NNC and its subsidiaries to incur or guarantee indebtedness, grant liens without equally and ratably securing the Notes, pay dividends on or repurchase certain capital of NNC and NNL, and enter into certain mergers, amalgamations or consolidations. These covenants are subject to a number of important exceptions and limitations and certain of these covenants will either be inapplicable or more limited at any time that the Notes have an investment grade rating.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

4.1	Third supplemental indenture dated as of May 28, 2008 among NNL, NNC, NNI and The Bank of New York, as trustee.
10.1	Purchase Agreement dated May 21, 2008 among NNL, NNC, NNI and a representative of the initial purchasers.
10.2	Registration Rights Agreement dated May 28, 2008 among NNL, NNC, NNI and a representative of the initial purchasers.
99.1	Press release issued by NNC on May 28, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NORTEL NETWORKS CORPORATION
By:	/s/ Michael W. McCorkle
	Michael W. McCorkle
	Treasurer
By:	/s/ Anna Ventresca
	Anna Ventresca
	Assistant Secretary

Dated: May 28, 2008

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EXHIBIT INDEX

Exhibit No.	Description
4.1	Third supplemental indenture dated as of May 28, 2008 among NNL, NNC, NNI and The Bank of New York, as trustee.
10.1	Purchase Agreement dated May 21, 2008 among NNL, NNC, NNI and a representative of the initial purchasers.
10.2	Registration Rights Agreement dated May 28, 2008 among NNL, NNC, NNI and a representative of the initial purchasers.
99.1	Press release issued by NNC on May 28, 2008.

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EX-4.1

NORTEL NETWORKS LIMITED

as Issuer,

NORTEL NETWORKS CORPORATION

AND

NORTEL NETWORKS INC.

as Guarantors,

AND

THE BANK OF NEW YORK

as Trustee

THIRD SUPPLEMENTAL INDENTURE

Dated as of May 28, 2008

to

Indenture Dated as of July 5, 2006

THIRD SUPPLEMENTAL INDENTURE dated as of May 28, 2008 (this “Third Supplemental Indenture”) to the Indenture dated as of July 5, 2006 among Nortel Networks Limited (together with any successors, “NNL” or the “Issuer”), a Canadian corporation having its principal place of business at 195 The West Mall, Toronto, Ontario, Canada M9C 5K1, Nortel Networks Corporation (together with any successors, “NNC”), a Canadian corporation having its principal place of business at 195 The West Mall, Toronto, Ontario, Canada M9C 5K1, and Nortel Networks Inc. (together with any successors, “NNI” and, together with NNC, the “Guarantors”), a Delaware corporation having its principal place of business at 2221 Lakeside Boulevard, Richardson, Texas, U.S.A. 75082, and The Bank of New York (the “Trustee”), a New York corporation authorized to conduct a banking business, having its Corporate Trust Office at 101 Barclay Street 4 East, New York, New York, U.S.A. 10286 (the “Original Indenture,” and, as supplemented by the First Supplemental Indenture dated as of July 5, 2006 (the “First Supplemental Indenture”), among the parties hereto, the Second Supplemental Indenture dated as of May 1, 2007 (the “Second Supplemental Indenture”) among the parties hereto and this Third Supplemental Indenture, the “Indenture”).

     WHEREAS, the Issuer, the Guarantors and the Trustee have heretofore executed and delivered the Original Indenture, the First Supplemental Indenture and the Second Supplemental Indenture;

     WHEREAS, the Issuer, pursuant to the Original Indenture and the First Supplemental Indenture, issued, and the Guarantors guaranteed, its 10.750% Senior Notes due 2016 (the “2016 Fixed Rate Notes”);

     WHEREAS, Section 310 of the Original Indenture provides that from time to time the Issuer may create and issue Additional Debt Securities, carrying the Guarantees executed by the Guarantors, on terms and conditions substantially similar to those of the 2016 Fixed Rate Notes, which Additional Debt Securities shall increase the aggregate principal amount of the 2016 Fixed Rate Notes and shall have the right to vote together with Holders of the 2016 Fixed Rate Notes as one class;

     WHEREAS, Article Nine of the Original Indenture provides, among other things, that the Issuer, the Guarantors and the Trustee may enter into indentures supplemental to the Original Indenture to, among other things, provide for the form or terms of Additional Debt Securities;

     WHEREAS, the Issuer has duly authorized the creation of an additional issue of the Original 2016 Fixed Rate Notes under the Original Indenture (the “Additional Original 2016 Fixed Rate Notes”), and an issue of securities evidencing the same continuing indebtedness and with substantially identical terms (except that such securities shall be registered under the Securities Act and shall not have a provision for additional interest pursuant to the 2008 Registration Rights Agreement) in exchange for such Debt Securities (the “Additional 2016 Fixed Rate Exchange Notes,” and together with the Additional Original 2016 Fixed Rate Notes, the “Additional 2016 Fixed Rate Notes”), to be consolidated and form a single series with the 2016 Fixed Rate Notes, and the terms and provisions of which are to be as specified in this Third Supplemental Indenture;

     WHEREAS, each Guarantor has duly authorized its guarantee of the Additional 2016 Fixed Rate Notes and to provide therefor, each of the Guarantors has duly authorized the execution and delivery of this Third Supplemental Indenture and its Guarantee under the terms set forth herein; and

     WHEREAS, all acts and things necessary to make the Additional 2016 Fixed Rate Notes, when executed by the Issuer, endorsed by the Guarantors and authenticated and delivered by the Trustee as provided in the Original Indenture, the valid and binding obligations of the Issuer and the Guarantors and to constitute a valid and binding supplemental indenture according to its terms binding on the Issuer and the Guarantors have been done and performed;

     NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:

SECTION 1. Issuance of Additional 2016 Fixed Rate Notes.

     (a) Pursuant to Section 310 of the Original Indenture, there is hereby authorized Additional Debt Securities of the Debt Securities designated in the First Supplemental Indenture as the “10.750% Senior Notes due 2016” issuable by NNL and guaranteed by NNC and NNI. The Additional 2016 Fixed Rate Notes will be consolidated to form a single series with, and be fully fungible with, the 2016 Fixed Rate Notes, except that the Additional 2016 Fixed Rate Notes will initially not be fungible for trading purposes with, and will initially bear different CUSIP and ISIN numbers than, the 2016 Fixed Rate Notes.

     (b) The Additional 2016 Fixed Rate Notes shall be initially issued as one or more Global Securities in the form specified in Exhibit A to this Third Supplemental Indenture, shall have the terms set forth therein and shall be entitled to the benefits of the other provisions of the Original Indenture as modified by the First Supplemental Indenture (to the extent applicable to the 2016 Fixed Rate Notes), the Second Supplemental Indenture and this Third Supplemental Indenture and specified herein. The Depository Trust Company (“DTC”) and its nominees and any successor corporation of DTC and such successor’s nominees are hereby designated as the Depositary for the Global Securities representing the Additional 2016 Fixed Rate Notes.

SECTION 2. Definitions.

     (a) Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned thereto in the Original Indenture and the First Supplemental Indenture, as applicable. Except insofar as herein otherwise expressly provided, all the definitions, terms and conditions of the Original Indenture, the First Supplemental Indenture (to the extent applicable to the 2016 Fixed Rate Notes) and the Second Supplemental Indenture shall remain in full force and effect. The Original Indenture, the First Supplemental Indenture (to the extent applicable to the 2016 Fixed Rate Notes) and the Second Supplemental Indenture shall be read, taken and considered as one and the same instrument for all purposes related to the Additional 2016 Fixed Rate Notes.

     (b) Solely for purposes of this Third Supplemental Indenture and the Additional 2016 Fixed Rate Notes and except as otherwise expressly provided or unless the context otherwise

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requires, the following terms shall have the indicated meanings (such meanings shall apply equally to both the singular and plural forms of the respective terms):

     “2008 Registration Rights Agreement” means the registration rights agreement dated as of the date of this Third Supplemental Indenture among the Issuer, the Guarantors and the Initial Purchasers.

     “Clearstream Luxembourg” means Clearstream Banking, S.A., or the successor to its securities clearance and settlement operations.

     “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system, or its successor in such capacity.

     “Global Security Legend” means the legend set forth in Section 5(a)(i) below.

     “Initial Purchasers” means [ ].

     “Regulation S Global Security” means a Regulation S Temporary Global Security or Regulation S Permanent Global Security, as applicable.

     “Regulation S Permanent Global Security” means a permanent Regulation S Global Security, bearing the Global Security Legend and issued in a principal amount equal to the outstanding principal amount of the Regulation S Temporary Global Security upon expiration of the Restricted Period or such lesser portion thereof as to which the certificate required pursuant to Section 4(b) of this Third Supplemental Indenture shall have been received.

     “Regulation S Temporary Global Security” means a temporary Regulation S Global Security bearing the Global Security Legend, the Restricted Debt Securities Legend and the Regulation S Temporary Global Security Legend and issued in a principal amount equal to the outstanding principal amount of the Additional 2016 Fixed Rate Notes initially sold pursuant to Regulation S.

     “Regulation S Temporary Global Security Legend” means the legend set forth in Section 5(c) below.

     “Resale Restriction Termination Date” means, for any Restricted Debt Security (or beneficial interest therein) the date on which the Issuer instructs the Trustee in writing to remove the Restricted Debt Securities Legend from the Restricted Debt Securities in accordance with the procedures described in this Third Supplemental Indenture (which instruction is expected to be given on or about the one-year anniversary of the issuance of such Restricted Debt Security).

SECTION 3. Original Indenture

     (a) Section 301(i) of the Original Indenture shall, for purposes of the Additional 2016 Fixed Rate Notes only, be replaced with the following:

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“(i) Debt Securities originally offered and sold outside the United States in reliance on Regulation S will be issued in the form of one or more Regulation S Temporary Global Securities, each of which shall be exchangeable for a Regulation S Permanent Global Security, as provided in the applicable supplemental indenture.”

     (b) Section 306(c)(ii) of the Original Indenture shall, for purposes of the Additional 2016 Fixed Rate Notes only, be replaced with the following:

“(ii) the Issuer executes and delivers to the Trustee and Security Registrar an Officers’ Certificate stating that such Global Security shall be so exchangeable; provided that beneficial interests in a Regulation S Temporary Global Security may not be exchanged for Certificated Securities prior to the later of (1) the expiration of the applicable Restricted Period and (2) the receipt of the certificates required by Section 4(b)(i)(A) of the Third Supplemental Indenture dated as of May 28, 2008 (the “Third Supplemental Indenture”) among the Issuer, the Guarantors and the Trustee.”

     (c) Section 308(c)(iv) of the Original Indenture shall, for purposes of the Additional 2016 Fixed Rate Notes only, be replaced with the following:

“(iv) such Certificated Securities (or beneficial interests) are transferred, replaced or exchanged after the Resale Restriction Termination Date therefor and, in the case of any such Restricted Debt Security, the Issuer has complied with the applicable procedures for delegending in accordance with Section 6 of the Third Supplemental Indenture; or”

     (d) Exhibit B to the Original Indenture shall, for purposes of the Additional 2016 Fixed Rate Notes only, be replaced with Exhibit B attached hereto.

     (e) The following provision shall be inserted at the end of Section 308 of the Original Indenture, for purposes of the Additional 2016 Fixed Rate Notes only:

“(f) The following provisions contained in this subsection (f) shall apply with respect to any proposed transfer of an interest in a Regulation S Temporary Global Security, during the applicable Restricted Period: If (1) the owner of a beneficial interest in such Regulation S Temporary Global Security wishes to transfer such interest (or portion thereof) to a QIB pursuant to Rule 144A and (2) such QIB wishes to hold its interest in the Debt Securities through a beneficial interest in a Rule 144A Global Security, then (x) upon receipt by the Security Custodian and Security Registrar of:

(i)	instructions from the DTC participant holding such interest in the Regulation S Temporary Global Security directing the Security Custodian and Security Registrar to credit or cause to be credited a beneficial interest in a Rule 144A Global Security equal to the principal amount of the interest in such Regulation S Temporary Global Security to be transferred, and
(ii)	a certificate in the form of Exhibit C from the transferor,

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and (y) in compliance with the requirements of Section 308(b)(i), if applicable, and (z) subject to the rules and procedures of the Depositary, the Security Custodian and Security Registrar shall increase the Rule 144A Global Security and decrease the Regulation S Temporary Global Security by such amount in accordance with the foregoing.

For the avoidance of doubt, transfers made in accordance with this Section 308(f) shall be considered in compliance with, and as contemplated by, Section 308(b)(i).

(g) No interest in a Regulation S Temporary Global Security will be transferred to a holder of an interest in the Regulation S Permanent Global Security except pursuant to and in compliance with Section 4 of the Third Supplemental Indenture.”

SECTION 4. Temporary Regulation S Global Securities.

     (a) Additional 2016 Fixed Rate Notes that are Regulation S Debt Securities shall be issued initially in the form of one or more Regulation S Temporary Global Securities, which shall be delivered to the Security Custodian and registered in the name of the Depositary or the nominee of the Depositary, duly executed by the Issuer and authenticated by the Trustee as provided in the Original Indenture.

     (b) Following (i) the termination of the Restricted Period and (ii) the receipt by the Trustee of (A) a certification in the form of Exhibit D-1 hereto to the effect that Euroclear or Clearstream Luxembourg, as applicable (or, alternatively, by each DTC participant thereof), has received a certificate in the form of Exhibit D-2 of non-United States beneficial ownership of 100% of the aggregate principal amount of each Regulation S Temporary Global Security (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial interest in a Rule 144A Global Security bearing the Restricted Debt Securities Legend, all as contemplated by Section 308 of the Original Indenture) and (B) an Officers’ Certificate in the form of Exhibit E hereto from the Issuer, the Trustee shall remove the Regulation S Temporary Global Security Legend from the Regulation S Temporary Global Security, following which beneficial interests in the Regulation S Temporary Global Security shall automatically be deemed exchanged for beneficial interests in the Regulation S Permanent Global Security.

     (c) The aggregate principal amount of a Regulation S Temporary Global Security and a Regulation S Permanent Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interests as provided in the Original Indenture.

     (d) For the avoidance of doubt, the Regulation S Temporary Global Security Legend shall not be removed if less than 100% of the aggregate principal amount of each Regulation S Temporary Global Security is certified, pursuant to clause (b) above, as being beneficially owned by non-United States persons or United States persons who purchased such Regulation S Temporary Global Securities in transactions which did not require registration under the Securities Act.

SECTION 5. Legends.

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     (a) Global Security Legends. (i) Each Global Security representing Additional 2016 Fixed Notes shall bear the legend set forth in Section 307(a)(i) of the Original Indenture.

          (ii) For so long as DTC is the Depositary for a Global Security representing Additional 2016 Fixed Notes, such Global Security shall bear the legend set forth in Section 307(a)(ii) of the Original Indenture.

     (b) Securities Act Legends. Additional 2016 Fixed Rate Notes that are Restricted Debt Securities or their Successor Debt Securities shall, in lieu of the legend set forth in Section 307(b) of the Original Indenture, bear a Restricted Debt Securities Legend substantially in the form set forth below:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) ON WHICH THE ISSUER INSTRUCTS THE TRUSTEE THAT THIS RESTRICTIVE LEGEND SHALL BE DEEMED REMOVED (WHICH INSTRUCTION IS EXPECTED TO BE GIVEN ON OR ABOUT THE ONE-YEAR ANNIVERSARY OF THE ISSUANCE OF THIS SECURITY), ONLY (A) TO THE ISSUER OR A GUARANTOR, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,

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SUBJECT TO THE ISSUER’S AND ANY GUARANTOR’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND SHALL BE DEEMED REMOVED WITHOUT FURTHER ACTION OF THE ISSUER, THE TRUSTEE OR ANY HOLDER AT SUCH TIME AS THE ISSUER INSTRUCTS THE TRUSTEE IN WRITING TO REMOVE SUCH LEGEND IN ACCORDANCE WITH THE THIRD SUPPLEMENTAL INDENTURE.”

     (c) Regulation S Temporary Global Security Legend. Any Regulation S Temporary Global Security representing Additional 2016 Fixed Rate Notes shall bear the Regulation S Temporary Global Security Legend substantially in the form set forth below:

“THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.”

     (d) Canadian Securities Legend. Each Global Security representing Additional 2016 Fixed Rate Notes shall bear a legend in substantially the form set forth in Section 307(c) of the Original Indenture unless the Security Registrar receives an Officers’ Certificate confirming that such legend is not required.

SECTION 6. Applicable Procedures for Delegending.

     (a) Promptly after one year has elapsed following (i) the date of original issuance of Additional 2016 Fixed Rate Notes or (ii) if the Issuer has issued any Additional Debt Securities with the same terms and the same CUSIP number as the Additional 2016 Fixed Rate Notes under Section 310 of the Original Indenture within one year following the last date of original issuance of Additional 2016 Fixed Rate Notes, the last date of original issuance of such Additional Debt Securities, if the Additional 2016 Fixed Rate Notes (including any Additional Debt Securities with the same terms and the same CUSIP number as the Additional 2016 Fixed Rate Notes) are freely tradable pursuant to Rule 144 under the Securities Act (or otherwise) without volume restrictions by Holders who are not Affiliates of the Issuer, the Issuer shall:

1. instruct the Trustee in writing to remove the Restricted Debt Securities Legend described in Section 5 above from the Additional 2016 Fixed Rate Notes by delivering to the Trustee a certificate in the form of Exhibit F, and upon such instruction the Restricted Debt Securities Legend shall be deemed removed from any Global Securities representing such Additional 2016 Fixed Rate Notes without further action on the part of Holders;

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2.	notify Holders of the Additional 2016 Fixed Rate Notes that the Restricted Debt Securities Legend has been removed or deemed removed; and
3.	notify the Trustee by delivering to the Trustee a certificate in the form of Exhibit F attached hereto and instruct DTC to change the CUSIP number for the Additional 2016 Fixed Rate Notes to the unrestricted CUSIP number.

In no event will the failure of the Issuer to provide any notice set forth in this paragraph or of the Trustee to remove the Restricted Debt Securities Legend constitute a failure by the Issuer to comply with any of its covenants or agreements set forth in the Indenture for purposes of Section 501 of the Original Indenture or otherwise. Any Restricted Debt Security (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of such Restricted Debt Security for exchange to the Security Registrar in accordance with the provisions of Article Three of the Original Indenture, be exchanged for a new Debt Security or Debt Securities, of like tenor and aggregate principal amount, which shall not bear the Restricted Debt Securities Legend required by Article Three of the Original Indenture and this Section 6. The Issuer shall notify the Trustee in writing upon the occurrence of the Resale Restriction Termination Date and promptly after a Registration Statement with respect to the Debt Securities, if any, has been declared effective under the Securities Act.

     (b) Notwithstanding any provision of Sections 5 or 6 herein or Section 308 of the Original Indenture to the contrary, in the event that Rule 144 as promulgated under the Securities Act (or any successor rule) is amended to change the one-year holding period thereunder (or the corresponding period under any successor rule), from and after receipt by the Trustee of the Officers’ Certificate and Opinion of Counsel provided for in Section 308(c)(iii) of the Original Indenture, (i) each reference in this Section 6 to “one year” and in the Restricted Debt Securities Legend set forth in Section 5(c) to “ONE YEAR” shall be deemed for all purposes hereof to be references to such changed period, and (ii) all corresponding references in the Debt Securities (including the definition of Resale Restriction Termination Date) and the Restricted Debt Securities Legends thereon shall be deemed for all purposes hereof to be references to such changed period, provided that such changes shall not become effective if they are otherwise prohibited by, or would otherwise cause a violation of, the then-applicable federal securities laws. The provisions of this Section 6(b) will not be effective until such time as the Opinion of Counsel and Officers’ Certificate have been received by the Trustee hereunder. This Section 6 shall apply to successive amendments to Rule 144 (or any successor rule) changing the holding period thereunder.

SECTION 7. Amendments

     (a) The preamble of the Original Indenture is hereby amended by replacing each reference to “101 Barclay Street 21W” with “101 Barclay Street 4 East.”

     (b) The preamble of the Original Indenture is hereby amended by replacing each reference to “4008 Chapel Hill — Nelson Highway, Research Triangle Park, North Carolina, U.S.A. 27709” with “2221 Lakeside Boulevard, Richardson, Texas, U.S.A. 75082.”

8

     (c) Clause (i) of the definition of Permitted Funded Debt set forth in the Original Indenture is hereby amended and restated in its entirety to read as follows: “(i) additional Funded Debt of NNC, the Issuer and/or any Subsidiary of NNC in an aggregate outstanding principal amount not to exceed, after giving effect to the relevant transaction, $250,000,000;”.

SECTION 8. Governing Law.

     This Third Supplemental Indenture and each of the Additional 2016 Fixed Rate Notes shall be governed by, and construed in accordance with, the laws of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

SECTION 9. No Recourse Against Others.

     No recourse for the payment of the principal of, premium, if any, or interest on any of the Additional 2016 Fixed Rate Notes, or payment under any of the Guarantees, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor contained in this Third Supplemental Indenture, or in any of the Additional 2016 Fixed Rate Notes or Guarantees, or because of the creation of any indebtedness represented thereby shall be had against any incorporator or against any past, present or future partner, shareholder, other equityholder, officer, director, employee or controlling person, as such, of the Issuer, any Guarantor or of any successor Person thereof, either directly or through the Issuer, any Guarantor or any successor Person thereof, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that all such liability is hereby expressly waived and released as condition of, and as a consideration for, the execution of this Third Supplemental Indenture and the issuance of the Additional 2016 Fixed Rate Notes and the Guarantees.

SECTION 10. Counterparts.

     This Third Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one and the same instrument.

9

     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the day, month and year first above written.

NORTEL NETWORKS LIMITED, as Issuer
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Gordon A. Davies
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

NORTEL NETWORKS CORPORATION, as Guarantor
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Gordon A. Davies
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

NORTEL NETWORKS INC., as Guarantor
By:	/s/ Lynn C. Egan
	Name:	Lynn C. Egan
	Title:	Assistant Secretary

THE BANK OF NEW YORK, as Trustee
By:	/s/ Vanessa Mack
	Name:	Vannessa Mack
	Title:	Vice President

10

EXHIBIT A

10.750% Senior Notes due 2016

[Insert the Global Security Legend, if applicable, pursuant to Section 5 of the Third Supplemental Indenture —

THIS IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”) OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[If a Restricted Debt Security or its Successor Debt Securities, then insert the following legend (the “Restricted Debt Security Legend”) pursuant to Section 5 of the Third Supplemental Indenture —

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) ON WHICH THE ISSUER INSTRUCTS THE

A-1

TRUSTEE THAT THIS RESTRICTIVE LEGEND SHALL BE DEEMED REMOVED (WHICH INSTRUCTION IS EXPECTED TO BE GIVEN ON OR ABOUT THE ONE-YEAR ANNIVERSARY OF THE ISSUANCE OF THIS SECURITY), ONLY (A) TO THE ISSUER OR A GUARANTOR, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND ANY GUARANTOR’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND SHALL BE DEEMED REMOVED WITHOUT FURTHER ACTION OF THE ISSUER, THE TRUSTEE OR ANY HOLDER AT SUCH TIME AS THE ISSUER INSTRUCTS THE TRUSTEE IN WRITING TO REMOVE SUCH LEGEND IN ACCORDANCE WITH THE THIRD SUPPLEMENTAL INDENTURE.]

[If this Security is a Regulation S Temporary Global Security issued during the Restricted Period therefor, then insert the following legend (the “Regulation S Temporary Global Security Legend”) pursuant to Section 5 of the Third Supplemental Indenture —

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.]

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[Insert the Canadian Securities Legend, if applicable, pursuant to Section 5 of the Third Supplemental Indenture —

UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN CANADA BEFORE [INSERT DATE THAT IS FOUR MONTHS PLUS ONE DAY AFTER THE ISSUE DATE].]

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CUSIP/CINS                     ^†

No.       $                    

NORTEL NETWORKS LIMITED (together with any successors, the “Issuer”), a Canadian corporation, promises to pay to CEDE & CO. or registered assigns, the principal sum of                                               DOLLARS on July 15, 2016 (which principal sum may from time to time be reduced or increased as appropriate to reflect exchanges, redemptions, repurchases and transfers of interest, but which, when taken together with the aggregate principal sum of all other Additional 2016 Fixed Rate Notes (as defined in the Third Supplemental Indenture referred to below), shall not exceed $675,000,000 at any time, subject to increase as provided in Section 5 on the reverse of this Note).

Interest Payment Dates: January 15 and July 15.

Regular Record Dates: January 1 and July 1.

† At such time as the Company notifies the Trustee to remove the legend set forth in the fourth paragraph hereof pursuant to Section 6 of the Third Supplemental Indenture, the CUSIP number for this Security shall be deemed to be CUSIP No.                     .

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed as of the date below.

Dated:                               , 2008

NORTEL NETWORKS LIMITED
By:
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

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GUARANTEE
OF
NORTEL NETWORKS CORPORATION
AND
NORTEL NETWORKS INC.

For value received, each Guarantor hereby unconditionally and irrevocably guarantees, jointly and severally to the Holder of this Note upon which this Guarantee is endorsed and to the Trustee on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, interest and Additional Amounts, if any, on this Note, when and as the same shall become due and payable, whether on the Stated Maturity Date, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the indenture dated as of July 5, 2006 among Nortel Networks Limited, as issuer, Nortel Networks Corporation and Nortel Networks Inc., as guarantors, and The Bank of New York, as trustee (the “Original Indenture” and, as supplemented by the First Supplemental Indenture dated as of July 5, 2006, the Second Supplemental Indenture dated as of May 1, 2007 and the Third Supplemental Indenture dated as of May 28, 2008 (the “Third Supplemental Indenture”), in each case, among Nortel Networks Limited, as issuer, Nortel Networks Corporation and Nortel Networks Inc., as guarantors, and The Bank of New York, as trustee, the “Indenture”). In case of the failure of Nortel Networks Limited, a corporation organized under the laws of Canada (herein called the “Issuer,” which term includes any successor Person under the Indenture), punctually to make any such payment of principal, premium, if any, or interest, and Additional Amounts, if any, each Guarantor, for so long as this Guarantee shall be in effect, hereby agrees to cause any such payment to be made to or to the order of the Trustee punctually when and as the same shall become due and payable, whether on the Stated Maturity Date or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

Each Guarantor hereby agrees that its obligations hereunder shall be as if it were the principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of this Note or the Indenture, any failure to enforce the provisions of this Note or the Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of this Note or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to this Note or the indebtedness evidenced and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on this Note or as otherwise described in Section 203 of the Original Indenture.

The Guarantee of each Guarantor hereunder shall be automatically and unconditionally released on the terms set forth in Section 203(b) of the Original Indenture.

A-6

Each Guarantor shall be subrogated to all rights of the Holder of this Note and the Trustee against the Issuer in respect of any amounts paid to such Holder by such Guarantor pursuant to the provisions of this Guarantee; provided that no such Guarantor shall be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Notes of the same series issued under the Indenture shall have been paid in full.

Each Guarantor hereby agrees that its obligations hereunder shall be direct, unconditioned and unsubordinated and will rank equally and ratably without preference and at least equally with other senior unsecured obligations of such Guarantor, except to the extent prescribed by law. The Holder of a guaranteed Note will be entitled to payment under this Guarantee without taking any action whatsoever against the Issuer.

No reference herein to the Indenture and no provision of this Guarantee or of the Indenture shall alter or impair the guarantees of the Guarantors, which are absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, the Note upon which this Guarantee is endorsed.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of this Note shall have been manually executed by or on behalf of the Trustee under the Indenture.

All terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

This Guarantee shall be governed by and construed in accordance with the laws of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

A-7

Executed and dated the date on the face hereof.

NORTEL NETWORKS CORPORATION
By:
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

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Executed and dated the date on the face hereof.

NORTEL NETWORKS INC.
By:
	Name:
	Title:

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This is one of the Additional 2016 Fixed Rate Notes issued under the within-mentioned Indenture.

THE BANK OF NEW YORK,      as Trustee
By:
	Authorized Signatory

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Back of Note
10.750% Senior Notes due 2016

     Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1.	Interest. Nortel Networks Limited, a Canadian corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”), promises to pay interest on the principal amount of this Note at the rate per annum shown above. The Issuer will pay interest semiannually on January 15 and July 15 of each year commencing on July 15, 2008 (or, if any such day is not a Business Day, the next succeeding Business Day) (each, an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid on the Notes or, if no interest has been paid, from May 28, 2008. Interest will be computed on the basis of a 360-day year of twelve 30-day months.
	[If Original Note, then insert—The Issuer agrees to pay Additional Interest, if any, on the principal amount of this Note as and to the extent set forth in the 2008 Registration Rights Agreement.]
	Solely for purposes of disclosure pursuant to the Interest Act (Canada) and without affecting the calculation of interest on the Notes, the yearly rate of interest for any portion of an interest period of less than a full calendar year is the percent rate per annum noted on the Notes multiplied by the actual number of days in the calendar year in which interest is paid divided by the number of days in such portion of the interest period.
2.	Guarantees. This Note is entitled to the benefits of the certain senior, unsecured Guarantees of the Guarantors. Reference is hereby made to Article II of the Original Indenture and to the Guarantees endorsed on this Note for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders. The Guarantee of each Guarantor hereunder shall be automatically and unconditionally released on the terms set forth in Section 203(b) of the Original Indenture.
3.	Method of Payment. By no later than 11:00 a.m. (New York City time) on the date on which any principal of or interest on any Note is due and payable, the Issuer shall irrevocably deposit with the Trustee or the Paying Agent (as defined below) money sufficient to pay such principal and/or interest. The Issuer will pay interest (except Defaulted Interest) on the principal amount of the Notes on each January 15 and July 15 to the Persons who are registered Holders of Notes at the close of business on the January 1 or July 1 next preceding the Interest Payment Date even if Notes are canceled or repurchased after the Regular Record Date and on or before the Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in

A-11

Dollars of the United States that at the time of payment is legal tender for payment of public and private debts. The Issuer will make all payments in respect of a Note (including principal and interest) in Dollars at the office of the Trustee. At the Issuer’s option, however, the Issuer may make such payments by mailing a check to the registered address of each Holder thereof as such address shall appear on the Security Register or, with respect to Notes represented by a Global Note, by wire transfer of immediately available funds to the accounts specified by the Depositary or its nominee. If a payment date is a date other than a Business Day, payment may be made at that place on the next succeeding day that is a Business Day and no interest shall accrue for the intervening period.

4.	Paying Agent and Security Registrar. Initially, The Bank of New York, the Trustee under the Indenture, will act as paying agent (in such capacity, the “Paying Agent”) and registrar (in such capacity, the “Security Registrar”). The Issuer may change any Paying Agent or the Security Registrar without notice to any Holder. The Issuer or any of its Subsidiaries may act in any such capacity.
5.	Indenture. The Issuer issued the Notes under an Indenture dated as of July 5, 2006 (the “Original Indenture”) among Nortel Networks Limited, as Issuer, Nortel Networks Corporation and Nortel Networks Inc., as Guarantors, and the Trustee as supplemented by the First Supplemental Indenture dated as of July 5, 2006 (the “First Supplemental Indenture”), the Second Supplemental Indenture dated as of May 1, 2007 (the “Second Supplemental Indenture”) and the Third Supplemental Indenture dated as of May 28, 2008 (the “Third Supplemental Indenture”), in each case, among Nortel Networks Limited, as Issuer, Nortel Networks Corporation and Nortel Networks Inc., as Guarantors, and The Bank of New York, as Trustee. The Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture is referred to herein as the “Indenture.” The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Trust Indenture Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are obligations of the Issuer. The Notes represented hereby are Additional 2016 Fixed Rate Notes (as defined in the Third Supplemental Indenture), which shall constitute part of a single series with the 2016 Fixed Rate Notes issued under the First Supplemental Indenture. Subject to the conditions set forth in the Indenture and without the consent of the Holders, the Issuer may issue Additional Debt Securities. All Notes of a series, including any Exchange Debt Securities or Additional Debt Securities, will be treated as a single class of securities under the Indenture.
6.	Optional Redemption. (a) At any time prior to July 15, 2011, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at a Redemption Price equal to 100% of the principal amount plus the 2016 Applicable Premium as of, and accrued and unpaid interest, if any, to, the

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Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).

(b) At any time on or after July 15, 2011, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at the Redemption Prices (expressed as percentages of the principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed to the applicable Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period beginning on July 15 of the years indicated below:

Year	Redemption
	Price
2011		105.375	%
2012		103.583	%
2013		101.792	%
2014 and each year thereafter		100.000	%

(c)

A notice of redemption complying with Section 1104(a) of the Original Indenture shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its address set forth in the Securities Register. Notes in denominations greater than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date, interest shall cease to accrue on Notes or portions thereof called for redemption as long as the Issuer has deposited with the Paying Agent funds finally collected in satisfaction of the applicable Redemption Price.

(d)

Any redemption pursuant to this Section 6 shall be in accordance with the procedures of Article Eleven of the Original Indenture.

7. Optional Redemption with Qualified Equity Proceeds. (a) At any time, or from time to time, on or prior to July 15, 2009, the Issuer may, at its option, use Qualified Equity Proceeds to redeem up to 35% of the original aggregate principal amount of the Notes plus any Additional Debt Securities, in whole at any time or in part from time to time, at a Redemption Price equal to 110.750% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the applicable Redemption Date; provided that the Issuer makes such redemption not more than 90 days after the receipt by the Issuer of such Qualified Equity Proceeds.

(b) A notice of redemption complying with Section 1104(a) of the Original Indenture shall be mailed at least 30 days but not more than 60 days before

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the Redemption Date to each Holder whose Notes are to be redeemed at its address as set forth in the Securities Register. Notes in denominations greater than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date, interest shall cease to accrue on Notes or portions thereof called for redemption as long as the Issuer has deposited with the Paying Agent funds in satisfaction of the applicable Redemption Price.

8.	Redemption for Changes in Applicable Withholding Taxes. The Notes of each series are also subject to redemption in whole, but not in part, at the Issuer’s option at any time in cash, on not less than 30 nor more than 60 days’ notice to the Holders, at a price equal to 100% of the aggregate principal amount, together with accrued and unpaid interest to the date fixed for redemption and all Additional Amounts then due or becoming due on the Redemption Date, in the event the Issuer or a Guarantor is, has become or would become obligated to pay, on the next date on which any amount would be payable, by the Issuer or the Guarantor, as the case may be, with respect to the Notes of such series, any Additional Amount as a result of an actual or proposed change or amendment in the laws (including any regulations promulgated thereunder) or treaties of any jurisdiction (including Canada or any province or territory thereof) or any change in or new or different position regarding the application, interpretation or administration of such laws, treaties or regulations (including a holding, judgment or order by a court of competent jurisdiction), which change is announced or becomes effective on or after the Issue Date and provided that the Issuer delivers to the Trustee an Opinion of Counsel attesting to such change or amendment. For greater certainty, the provisions of this Section 8 shall only apply to any series of Notes in the case of a Guarantor if the Guarantee of such Guarantor has been called and such Guarantor is required under its Guarantee to make payments of principal, interest or premium, if any, in respect of such series of Notes.
9.	No Mandatory Redemption. The Issuer shall not be required to make mandatory redemption payments with respect to the Notes.
10.	Offer to Repurchase. (a) If a Change of Control occurs, the Issuer shall make a Change of Control Offer to each Holder to purchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder’s Notes at a purchase price, in cash, equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, up to but excluding the date of purchase (the “Change of Control Payment”). Within 30 days following the date upon which the Change of Control occurs, the Issuer must send, or cause the Trustee to send, by first-class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date (the “Change of Control Payment Date”), which must be no earlier than 30 days nor later than 60 days after the date such notice is mailed, other than as may be required to comply with any applicable laws. Each Holder who accepts the Change of Control Offer will be

A-14

required to deliver the form entitled “Option of Holder to Elect Purchase” on the reverse of this Note completed and specifying the portion (in integral multiples of $1,000) of such Holder’s Notes that it agrees to sell to the Issuer pursuant to the Change of Control Offer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date.

11.	Denominations, Transfer, Exchange. The Notes are issued in registered form without coupons in denominations of $2,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.
12.	Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.
13.	Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then-outstanding Notes and any existing default or non-compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then-outstanding Notes (including any Additional Debt Securities), voting as a single class. Without the consent of any Holder of Notes, the Indenture or the Notes may be amended or supplemented to the extent permitted under Section 901 of the Original Indenture.
14.	Defaults and Remedies. (a) This Note shall be subject to the following Events of Default: (i) the failure to pay the principal of the Notes when such principal becomes due and payable, whether at Maturity, upon redemption or otherwise; (ii) the failure to pay interest on the Notes when the same becomes due and payable and the Default continues for a continuous period of 30 days; (iii) a Default by NNC, the Issuer, or during any period in which NNI is a Guarantor, NNI, in the performance or observance of any of their respective covenants, agreements or other obligations set forth in the Original Indenture for a continuous period of 90 days after the Issuer or such Guarantor receives written notice specifying the Default (and demanding that such Default be remedied) from the Holders of at least 25% of the outstanding principal amount of the Notes (including any Additional Debt Securities); (iv) a decree, judgment or order by a court having jurisdiction in the premises shall have been entered adjudging the Issuer or any Guarantor a bankrupt or insolvent or approving as properly filed a petition

A-15

seeking reorganization, readjustment, arrangement, composition or similar relief for the Issuer or any Guarantor under any bankruptcy, insolvency or other similar applicable law and such decree, judgment or order of a court having jurisdiction in the premises for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Issuer or such Guarantor, as the case may be, of a substantial part of its property, or for the winding up or liquidation of its affairs, shall have remained in force for a period of 60 consecutive days; or any substantial part of the property of the Issuer or such Guarantor shall be sequestered or attached and shall not be returned to the possession of the Issuer or such Guarantor or released from such attachment whether by filing of a bond, or stay or otherwise within 60 consecutive days thereafter; (v) the Issuer or any Guarantor shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization, readjustment, arrangement, composition or similar relief under any bankruptcy, insolvency or other similar applicable law or the Issuer or such Guarantor shall consent to the filing of any such petition, or shall consent 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 shall make an assignment for the benefit of creditors, or shall be unable, or admit in writing its inability, to pay its debts generally as they become due, or corporate action shall be taken by the Issuer or such Guarantor in furtherance of any of the aforesaid actions; (vi) a Default by NNC, the Issuer or, during any period in which NNI is a Guarantor, NNI, under a single obligation in respect of Funded Debt that exceeds on its face $100,000,000 in principal amount which results in such Funded Debt becoming or being declared due and payable prior to the date on which it would otherwise become due and payable and such acceleration shall not be rescinded or annulled within 10 days after written notice (i) specifying such Default, and (ii) stating that such notice is a “Notice of Default” hereunder, shall have been given to such defaulting entity by Holders of at least 25% of the outstanding principal amount of the Notes; (vii) any Guarantee ceases to be in full force and effect (other than in accordance with the terms of the Original Indenture) or any Guarantor denies or disaffirms its obligations under its Guarantee; (viii) a failure by the Issuer to make a Change of Control Offer; and (ix) one or more judgments in an aggregate amount in excess of $100,000,000 shall have been rendered against the Issuer, NNC or, during any period in which NNI is Guarantor, NNI, and such judgments remain undischarged, unpaid in accordance with its or their respective terms or unstayed for a period of 90 days after such judgment or judgments become final and non-appealable.

(b) If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Outstanding Notes (including any Additional Debt Securities) may declare the principal amount of, premium, if any, and any accrued and unpaid interest, including Additional Interest, if any, on all the Notes (including any Additional Debt Securities) to be due and payable immediately, by a notice in writing to the Issuer and the Guarantors, and to the Trustee if given by the Holders, and upon any such declaration such principal

A-16

amount, together with accrued interest thereon shall become immediately due and payable.

(c) Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest) if it determines that withholding notice is in their interest.

15.	Defeasance. The Issuer and/or the Guarantors may defease and be discharged from any and all obligations with respect to this Note or the Guarantees, as applicable, or be released from its obligations with respect to certain covenants applicable to this Note in accordance with the terms of the Indenture.
16.	No Recourse Against Others. A director, officer, employee, incorporator or stockholder of the Issuer, as such, shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.
17.	Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
18.	Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
19.	CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
20.	Governing Law. This Note shall be governed by, and construed in accordance with, the law of the State of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

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21. Submission to Jurisdiction; Waiver of Immunities. The Issuer and the Guarantors have agreed that any suit, action or proceeding against the Issuer or the Guarantors brought by any Holder or the Trustee arising out of or based upon the Indenture, the Notes or the Guarantees may be instituted in any state or federal court in the Borough of Manhattan, The City of New York, New York, United States, and any appellate court from any thereof. The Issuer and the Guarantors have irrevocably submitted to the non-exclusive jurisdiction of such courts for such purpose and waived, to the fullest extent permitted by law, trial by jury and any objection any of them may now or hereafter have to the laying of venue of any such proceeding, and any claim any of them may now or hereafter have that any proceeding in any such court is brought in an inconvenient forum.

The Issuer shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: Nortel Networks Limited, 195 The West Mall, Toronto, Ontario, Canada M9C 5K1, Attention: Corporate Secretary.

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Assignment Form

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
	(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                              , as agent, to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

Date:                                        

Your Signature:

(Sign exactly as your name appears on
the face of this Note)

Signature Guarantee:                                        

A-19

Option of Holder to Elect Purchase upon a Change of Control

If you want to elect to have this Note purchased by the Issuer pursuant to Section 10 of the terms set forth on the reverse of this Note (the “Terms”), check the appropriate box below:

[   ] The undersigned Holder hereby elects to have the Issuer purchase its Note pursuant to Section 10 of the Terms.

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 10 of the Terms, state the amount you elect to have purchased:

$                                        

Date:                                        

Your Signature:

(Sign exactly as your name appears on
the face of this Note)

Tax Identification No.:

Signature Guarantee:                                        

A-20

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY*

The following exchanges of a part of this Global Security for an interest in another Global Security or for a Certificated Security, or exchanges of a part of another Global Security or Certificated Security for an interest in this Global Security, have been made:

			Principal Amount
	Amount of	Amount of	of this Global	Signature of
	decrease in	increase in	Security	authorized officer
	Principal Amount	Principal Amount	following such	of
	of this	of this	decrease	Trustee or
Date of Exchange	Global Security	Global Security	(or increase)	Note Custodian

* This schedule should be included only if the Note is issued in global form.

A-21

EXHIBIT B

FORM OF REGULATION S/RULE 144 CERTIFICATE

(For transfers pursuant to Section 308(a) of the Original Indenture of Additional
2016 Fixed Rated Notes that are Restricted Debt Securities)

The Bank of New York,
as Trustee
101 Barclay St., 4 East
New York, New York 10286
Attention: Corporate Trust Administration

Re: 10.75% Senior Notes due 2016
of Nortel Networks Limited
(the “Debt Securities”)

     Reference is made to the indenture dated as of July 5, 2006 (the “Original Indenture,” and, as supplemented by the First Supplemental Indenture dated as of July 5, 2006, the Second Supplemental Indenture dated as of May 1, 2007 and the Third Supplemental Indenture dated as of May 28, 2008, in each case, among NNL, NNC, NNI and the Trustee, the “Indenture”) among Nortel Networks Limited (together with any successors, “NNL” or the “Issuer”), Nortel Networks Corporation (together with any successors, “NNC”) and Nortel Networks Inc. (together with any successors, “NNI” and, together with NNC, the “Guarantors”), and The Bank of New York, as trustee (the “Trustee”). Terms used herein and defined in the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the “Securities Act”), are used herein as so defined.

     This certificate relates to U.S. $                     principal amount of Debt Securities, which are evidenced by the following certificate(s) (the “Specified Debt Securities”):

CUSIP No(s).

CERTIFICATE No(s).

     The person in whose name this certificate is executed below (the “Undersigned”) hereby certifies that either (i) it is the sole beneficial owner of the Specified Debt Securities or (ii) it is acting on behalf of all the beneficial owners of the Specified Debt Securities and is duly authorized by them to do so. Such beneficial owner or owners are referred to herein collectively as the “Owner.” If the Specified Debt Securities are represented by a Global Security, they are held through the Depositary or a Participant in the name of the Undersigned, as or on behalf of the Owner. If the Specified Debt Securities are not represented by a Global Security, they are registered in the name of the Undersigned, as or on behalf of the Owner.

     The Owner has requested that the Specified Debt Securities be transferred to a Person (the “Transferee”) who will take delivery in the form of a Regulation S Debt Security. In connection with such transfer, the Owner hereby certifies that, unless such transfer is being effected pursuant to an effective registration statement under the Securities Act, it is being

B-1

effected in accordance with Rule 904 or Rule 144 under the Securities Act and with all applicable securities laws of the states of the United States and other jurisdictions. Accordingly, the Owner hereby further certifies as follows:

     (a) Rule 904 Transfers. If the transfer is being effected in accordance with Rule 904:

(i)	the Owner is not a distributor of the Debt Securities, an Affiliate of the Company or any Guarantor or any such distributor or a Person acting on behalf of any of the foregoing;
(ii)	the offer of the Specified Debt Securities was not made to a Person in the United States;
(iii)	either:

(1)	at the time the buy order was originated, the Transferee was outside the United States or the Owner and any Person acting on its behalf reasonably believed that the Transferee was outside the United States, or
(2)	the transaction is being executed in, on or through the facilities of the Eurobond market, as regulated by the Association of International Bond Dealers, or another designated offshore securities market and neither the Owner nor any Person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States;

(iv)	no directed selling efforts have been made in the United States by or on behalf of the Owner or any Affiliate thereof;
(v)	if the Owner is a dealer in securities or has received a selling concession, fee or other remuneration in respect of the Specified Debt Securities, and the transfer is to occur during the Restricted Period, then the requirements of Rule 904(c)(1) have been satisfied; and
(vi)	the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

     (b) Rule 144 Transfers. If the transfer is being effected pursuant to Rule 144, the transfer is occurring after a holding period of at least six months (computed in accordance with paragraph (d) of Rule 144) has elapsed since the Specified Debt Securities were last acquired from the Company or a Guarantor or from an Affiliate of the Company or a Guarantor, whichever is later, the Company or a Guarantor is, and has been for a period of at least 90 days immediately before such transfer, subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and has filed all required reports thereunder in accordance with Rule 144(c)(1) and the Owner is not, and during the preceding three months, has not been, an Affiliate of the Company or Guarantor.

B-2

     This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer, the Guarantors and the Initial Purchasers of the Debt Securities.

Dated:
	(Print the name of the Undersigned, as such term is defined in the third paragraph of this certificate.)
	By:
	Name:
	Title:
	(If the Undersigned is a corporation, partnership or fiduciary, the title of the person signing on behalf of the Undersigned must be stated.)

B-3

EXHIBIT C

FORM OF TRANSFER CERTIFICATE FOR TRANSFER OF INTERESTS IN
REGULATION S DEBT SECURITIES TO QIBS DURING RESTRICTED PERIOD

(For transfers pursuant to Section 308(f) of the Original Indenture, as supplemented by the Third Supplemental Indenture, of Additional 2016 Fixed Rated Notes that are Regulation S Debt Securities during the Restricted Period)

The Bank of New York,
as Trustee
101 Barclay St., 4 East
New York, New York 10286
Attention: Corporate Trust Administration

Re: 10.75% Senior Notes due 2016
of Nortel Networks Limited
(the “Debt Securities”)

     Reference is made to the indenture dated as of July 5, 2006 (the “Original Indenture,” and, as supplemented by the First Supplemental Indenture dated as of July 5, 2006, the Second Supplemental Indenture dated as of May 1, 2007 and the Third Supplemental Indenture dated as of May 28, 2008, in each case, among NNL, NNC, NNI and the Trustee, the “Indenture”) among Nortel Networks Limited (together with any successors, “NNL” or the “Issuer”), Nortel Networks Corporation (together with any successors, “NNC”) and Nortel Networks Inc. (together with any successors, “NNI” and, together with NNC, the “Guarantors”), and The Bank of New York, as trustee (the “Trustee”). Terms used herein and defined in the Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the “Securities Act”), are used herein as so defined.

     This certificate relates to U.S. $                     principal amount of Debt Securities, which are evidenced by the following certificate(s) (the “Specified Debt Securities”):

CUSIP No(s).

CERTIFICATE No(s).

     The person in whose name this certificate is executed below (the “Undersigned”) hereby certifies that either (i) it is the sole beneficial owner of the Specified Debt Securities or (ii) it is acting on behalf of all the beneficial owners of the Specified Debt Securities and is duly authorized by them to do so. Such beneficial owner or owners are referred to herein collectively as the “Owner.” The Specified Debt Securities are represented by a Global Security and are held through the Depositary or a Participant in the name of the Undersigned, as or on behalf of the Owner.

     The Owner has requested that the Specified Debt Securities be transferred to a Person (the “Transferee”) who will take delivery in the form of a Rule 144A Global Security. In connection with such transfer, the Owner hereby certifies that, unless such transfer is being

C-1

effected pursuant to an effective registration statement under the Securities Act, it is being effected in accordance with Rule 144A under the Securities Act and with all applicable securities laws of the states of the United States and other jurisdictions. Accordingly, the Owner hereby further certifies that at the time the buy order was originated:

(a)	the Transferee was purchasing the Debt Securities for its own account or the account of a QIB, in a transaction meeting the requirements of Rule 144A, and
(b)	the Owner and any Person acting on its behalf reasonably believed that, the Transferee, as well as any such account, is a “qualified institutional buyer” within the meaning of Rule 144A.

     This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer, the Guarantors and the Initial Purchasers of the Debt Securities.

Dated:
	(Print the name of the Undersigned, as such term is defined in the third paragraph of this certificate.)
	By:
	Name:
	Title:
	(If the Undersigned is a corporation, partnership or fiduciary, the title of the person signing on behalf of the Undersigned must be stated.)

C-2

EXHIBIT D-1

FORM OF NON-U.S. BENEFICIAL OWNERSHIP CERTIFICATION BY EUROCLEAR
OR CLEARSTREAM LUXEMBOURG

[Date]

[Depositary of [Euroclear][Clearstream Luxembourg]]

The Bank of New York
101 Barclay Street, Floor 4 East
New York, New York 10286
Attention: Corporate Trust Administration]

Re: 10.750% Senior Notes due 2016
of Nortel Networks Limited
(the “Debt Securities”)

     This is to certify with respect to $___[principal amount] of the Debt Securities that, except as set forth below, we have received in writing, by tested telex or by electronic transmission, from member organizations appearing in our records as persons being entitled to a portion of such [principal amount] (our “Member Organizations”) certifications with respect to such portion, substantially to the effect set forth in Exhibit D-2 to the Third Supplemental Indenture relating to the Debt Securities.

     We further certify:

(a)	that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the Regulation S Temporary Global Security excepted in such certifications; and
(b)	that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.

     We understand that this certification is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you, Nortel Networks Limited, Nortel Networks Corporation or Nortel Networks Inc. to produce this certification to any interested party in such proceedings.

D-I-1

Dated:
	Yours faithfully,
	[Euroclear][Clearstream Luxembourg]
By

D-I-2

EXHIBIT D-2

FORM OF NON-U.S. BENEFICIAL OWNERSHIP CERTIFICATION
BY MEMBER ORGANIZATION

[Date]

[Euroclear or Clearstream Luxembourg, as applicable]

Re: 10.750% Senior Notes due 2016
of Nortel Networks Limited
(the “Debt Securities”)

     This is to certify that as of the date hereof, and except as set forth below, the Debt Securities held by you for our account are beneficially owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased the Debt Securities in transactions which did not require registration under the Securities Act of 1933, as amended (the “Securities Act”). As used in this paragraph the term “U.S. person” has the meaning given to it by Regulation S under the Securities Act.

     We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Debt Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.

     This certification excepts and does not relate to $                     of such interest in the above Debt Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of a Regulation S Permanent Global Security (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.

     We understand that this certification is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in which this certification is or would be relevant, we irrevocably authorize you, Nortel Networks Limited, Nortel Networks Corporation or Nortel Networks Inc. or the Trustee or Security Registrar for the Debt Securities to produce this certification to any interested party in such proceedings.

     Date:           . (Not earlier than 15 days prior to the end of the Restricted Period).

By:
	[Agent Member]
	As Beneficial Owner(s), or as agent for, the Beneficial Owner(s) of the Debt Securities to which this certificate relates.

D-2-1

EXHIBIT E

FORM OF OFFICERS’ CERTIFICATE

NORTEL NETWORKS LIMITED

OFFICERS’ CERTIFICATE

July 7, 2008

          Reference is made to (i) that certain indenture dated as of July 5, 2006 (the “Original Indenture” and, as supplemented by the First Supplemental Indenture dated as of July 5, 2006, the Second Supplemental Indenture dated May 1, 2007 and the Third Supplemental Indenture (as defined below), the “Indenture”), among Nortel Networks Limited (the “Corporation”), a Canadian corporation, Nortel Networks Corporation (“NNC”), a Canadian corporation, Nortel Networks Inc. (“NNI” and, together with NNC, the “Guarantors”), a Delaware corporation, and The Bank of New York, as Trustee and (ii) that certain third supplemental indenture dated as of May 28, 2008 (the “Third Supplemental Indenture”) among the Corporation, the Guarantors and The Bank of New York, as Trustee. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Indenture. The undersigned officers of the Corporation, to the best of their knowledge after reasonable investigation, hereby state on behalf of the Corporation, in accordance with Section 4(b) of the Third Supplemental Indenture, that:

          (i) in accordance with Rule 903(b)(3)(ii)(B) of Regulation S, the 40-day distribution compliance period for the Additional 2016 Fixed Rate Notes that are Regulation S Debt Securities issued under the Original Indenture and the Third Supplemental Indenture has terminated; and

          (ii) the Regulation S Temporary Global Security Legend described in Section 5(c) of the Third Supplemental Indenture and set forth on the Regulation S Temporary Global Security shall be deemed removed from such Regulation S Temporary Global Security, in accordance with the terms and conditions of such Regulation S Temporary Global Security and as provided in the Third Supplemental Indenture, without further action on the part of Holders other than as set forth in Section 4(b)(ii)(A) of the Third Supplemental Indenture, following which beneficial interests in the Regulation S Temporary Global Security shall automatically be deemed exchanged for beneficial interests in the Regulation S Permanent Global Security pursuant to the rules and procedures of the Depositary.

[Remainder of page intentionally left blank]

E-1

          IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the date first above written.

NORTEL NETWORKS LIMITED
By:
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

E-2

EXHIBIT F

FORM OF FREE TRANSFERABILITY CERTIFICATE

Dear Sir/Madam:

     In accordance with Section 6 of the Third Supplemental Indenture dated as of May 28, 2008 (the “Third Supplemental Indenture”) to the indenture dated as of July 5, 2006 among Nortel Networks Limited (the “Company”), Nortel Networks Corporation (“NNC”) and Nortel Networks Inc. (“NNI”), and The Bank of New York, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture dated as of July 5, 2006 among the Company, NNC, NNI and the Trustee, the Second Supplemental Indenture dated as of May 1, 2007, among the Company, NNC, NNI and the Trustee, and the Third Supplemental Indenture, the “Indenture”), pursuant to which the additional 10.750% Senior Notes due 2016 (the “Additional Debt Securities”) were issued, we hereby instruct you that:

(1) the restrictive legends described in Section 5(b) of the Third Supplemental Indenture and set forth on the Additional Debt Securities that are Restricted Debt Securities shall be deemed removed from the Additional Debt Securities, in accordance with the terms and conditions of such Additional Debt Securities and as provided in the Third Supplemental Indenture, without further action on the part of Holders; and

(2) the restricted CUSIP number for the Additional Debt Securities shall be deemed removed from such Restricted Debt Securities and replaced with an unrestricted CUSIP number set forth therein, in accordance with the terms and conditions of the Additional Debt Securities and as provided in the Third Supplemental Indenture, without further action on the part of Holders.

     Capitalized terms used but not defined herein shall have the meanings set forth in the Indenture.

Very truly yours, Nortel Networks Limited
By:
	Name:
	Title:

By:
	Name:
	Title:

E-3

EX-10.1

U.S.$675,000,000 10.750% Senior Notes due 2016

NORTEL NETWORKS LIMITED

Purchase Agreement

May 21, 2008

[                    ]
[                    ]
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o [                    ]
[                    ]
New York, New York [          ]

Ladies and Gentlemen:

     Nortel Networks Limited, a Canadian corporation (the “Company”), proposes to issue and sell to the several Initial Purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), for whom you are acting as representatives (the “Representatives”), U.S.$675,000,000 aggregate principal amount of its 10.750% Senior Notes due 2016 (the “Notes”). The Notes will be issued pursuant to an Indenture, dated as of July 5, 2006, among the Company, Nortel Networks Corporation, a Canadian corporation (“NNC”) and Nortel Networks Inc., a Delaware corporation (“NNI” and, together with NNC, the “Guarantors”), and The Bank of New York, as trustee (the “Trustee”), as supplemented by the first supplemental indenture as of July 5, 2006 and the second supplemental indenture as of May 1, 2007 (the “Original Indenture”) and as further supplemented by a third supplemental indenture to be entered into by and between the Company, the Guarantors and the Trustee on the Closing Date (as defined below), as it may be further amended or supplemented from time to time (the “Indenture”), and will be guaranteed on an unsecured senior basis by the Guarantors (the “Guarantees” and, together with the Notes, the “Securities”). The Company and the Guarantors are referred to herein together as the “Issuers”. The Securities and the Issuers’ $450,000,000 principal amount 10.750% Senior Notes due 2016 previously issued under the Indenture will be treated as a single class of securities under the Indenture.

     The Securities will be sold to the Initial Purchasers without being registered under the United States Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption therefrom, and without the filing of a prospectus with any securities regulatory authority in Canada (each, a “Canadian Securities Regulator” and, together, the “Canadian Securities Regulators”) under the securities laws, rules and regulations of any province or territory of Canada (collectively, the “Canadian Securities Laws”), in reliance upon exemptions from the prospectus requirements of the applicable Canadian Securities Laws. The Company has prepared a preliminary offering memorandum (including, with respect to sales in British Columbia, Mani-

1

toba, Ontario, Alberta, Saskatchewan and Quebec (collectively, the “Relevant Provinces”), the preliminary Canadian offering memorandum (the “Canadian Preliminary Offering Memorandum”)) dated May 21, 2008 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum (including, with respect to sales in the Relevant Provinces, a Canadian offering memorandum (the “Canadian Offering Memorandum”)), dated the date hereof (the “Offering Memorandum”), setting forth information concerning the Company, the Guarantors and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of this Agreement. The Issuers hereby confirm that they have authorized the use of the Preliminary Offering Memorandum, the other Time of Sale Information (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Preliminary Offering Memorandum. References herein to the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum shall be deemed to refer to and include all documents incorporated by reference therein.

     At or prior to the time when sales of the Securities were first made (which is on the date of this Agreement) (the “Time of Sale”), the following information shall have been prepared (collectively, the “Time of Sale Information”): the Preliminary Offering Memorandum, as supplemented and amended by the written communications listed on Annex A hereto.

     Holders of the Securities (including the Initial Purchasers and their direct and indirect transferees) will be entitled to the benefits of a Registration Rights Agreement to be dated the Closing Date (as defined below) and substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Issuers will agree, subject to the terms and conditions of the Registration Rights Agreement, to file with the United Sates Securities and Exchange Commission (the “Commission”) (i) one or more registration statements (collectively, the “Exchange Offer Registration Statement”) registering the issuance of senior notes of the Company (the “Exchange Notes”) and the guarantees of the Guarantors (the “Exchange Notes Guarantees” and, together with the Exchange Notes, the “Exchange Securities”) evidencing the same continuing indebtedness as and which are identical in all material respects to the Notes and the Guarantees, respectively (except that the Exchange Securities will not contain terms with respect to transfer restrictions in the United States), and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the “Shelf Registration Statement”).

     Each Issuer hereby confirms its agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

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     1. Purchase and Resale of the Securities.

     (a) The Issuers agree to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuers the respective principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal to 99.00% of the aggregate principal amount thereof, plus accrued interest, if any, from May 28, 2008 to the Closing Date. The Issuers will pay the several Initial Purchasers a commission equal to 1.875% of the respective principal amounts of the Notes set forth opposite the names of the several Initial Purchasers in Schedule 1 hereto. The Issuers will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

     (b) The Issuers acknowledge and agree that the Initial Purchasers are acting solely in the capacity of arm’s length contractual counterparties to the Issuers with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or as agents of, any Issuer or any other person. Additionally, no Initial Purchaser is advising any Issuer or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuers shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Initial Purchasers shall have no responsibility or liability to the Issuers with respect thereto. Any review by the Initial Purchasers of the Issuers, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Initial Purchasers and shall not be on behalf of the Issuers.

     (c) The Issuers understand that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Time of Sale Information. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

     (i) it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a “QIB”) and an accredited investor within the meaning of Rule 501(a) under the Securities Act and National Instrument 45-106-Prospectus and Registration Exemptions (“NI 45-106”) of Canada;

     (ii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act (“Regulation D”) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and

     (iii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except:

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     (A) within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; and

     (B) in accordance with the restrictions set forth in Annex C hereto and in Canada, to residents of Canada, who are accredited investors within the meaning of NI 45-106, in transactions which are exempt from the prospectus requirements of applicable Canadian Securities Laws.

     (d) Each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and 6(g) (to the extent such opinions relate to exemptions from registration and prospectus requirements under applicable law), counsel for the Company and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (c) above and Annex C hereto, and each Initial Purchaser hereby consents to such reliance.

     (e) Each Issuer acknowledges and agrees that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser so long as otherwise in compliance with the terms and conditions of this Agreement.

     (f) Each Initial Purchaser severally and not jointly represents and covenants that (i) it has taken reasonable precautions to ensure that passwords to any website containing the Electronic Roadshow are not provided to any prospective investor in the Securities that is a resident in, or acting on behalf of an entity resident in, any of the provinces or territories of Canada and (ii) in order to obtain access to the Electronic Roadshow on any website on which the Electronic Roadshow is made available to potential investors, each potential investor is required to confirm electronically that it is not a resident in, or acting on behalf of an entity resident in, any of the provinces or territories of Canada.

     2. Payment and Delivery.

     (a) Payment for and delivery of the Securities will be made at the offices of Cleary Gottlieb Steen & Hamilton LLP at 9:30 A.M., New York City time, on May 28, 2008, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date”.

     (b) Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Representatives against delivery to

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the nominee of The Depository Trust Company, for the account of the Initial Purchasers, of global notes representing the Securities (collectively, the “Global Notes”), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Company. The Global Notes will be made available for inspection by the Representatives not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

     3. Representations and Warranties of the Issuers. The Issuers represent and warrant, jointly and severally, to, and agree with, the Initial Purchasers as of the Time of Sale and the Closing Date that:

     (a) Preliminary Offering Memorandum, Time of Sale Information and Offering Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the Time of Sale Information, taken as a whole, at the Time of Sale, did not, and at the Closing Date will not, and the Offering Memorandum, as of its date and as of the Closing Date will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuers make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representatives expressly for use in the Preliminary Offering Memorandum, the other Time of Sale Information or the Offering Memorandum, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described in Section 7(b) below.

     (b) Additional Written Communications. The Company (including its agents and representatives, other than the Initial Purchasers in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company or its agents and representatives (other than a communication referred to in clauses (i), (ii) and (iii) below) an “Issuer Written Communication”) other than (i) the Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on Annex A hereto, including a term sheet substantially in the form of Annex B hereto, which constitute part of the Time of Sale Information, and (iv) the Electronic Roadshow and any other written communications, in each case used in accordance with Section 4(c). Each such Issuer Written Communication, when taken together with the Time of Sale Information, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in each such Issuer Written Communication in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the

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Company in writing by such Initial Purchaser through the Representatives expressly for use in any Issuer Written Communication.

     (c) Incorporated Documents. Except as otherwise disclosed therein, the documents incorporated by reference in the Time of Sale Information and the Offering Memorandum, when filed with the Commission and the Canadian Securities Regulators, conformed or will conform, as the case may be, in all material respects to the applicable requirements of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations of the Commission thereunder and applicable Canadian Securities Laws, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     (d) Financial Statements. The consolidated financial statements and the related notes thereto of NNC and its subsidiaries included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and applicable Canadian Securities Laws and present fairly the consolidated financial position of NNC and its subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis throughout the periods covered thereby; the other financial information included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum has been derived from the accounting records of NNC and its subsidiaries and presents fairly the information shown thereby; and the “Summary consolidated financial data of NNC” set forth in the Time of Sale Information and the Offering Memorandum is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements from which it has been derived.

     (e) No Material Adverse Change. Since the date of the most recent consolidated financial statements of NNC included or incorporated by reference in the Time of Sale Information and the Offering Memorandum (exclusive of any amendment or supplement thereto on or after the date of this Agreement), except in each case as otherwise disclosed in, incorporated by reference in or contemplated by the Time of Sale Information and the Offering Memorandum; (i) there has not been any change in the capital stock or long-term debt of NNC and its consolidated subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by NNC on any class of its capital stock, or any material adverse change, or any event that could reasonably be expected to result in a material adverse change in the business, properties, senior management, financial condition, stockholders’ equity or results of operations of NNC and its subsidiaries taken as a whole; (ii) none of NNC or any of its subsidiaries has entered into

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any transaction or agreement or incurred any liability or obligations, direct or contingent, in each case, that is material to NNC and its subsidiaries taken as a whole; and (iii) none of NNC or any of its subsidiaries has sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, in each case, that is material to NNC and its subsidiaries, taken as a whole.

     (f) Organization and Good Standing. The Issuers (i) have each been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization and (ii) have all corporate power and authority necessary to conduct their businesses as described in the Time of Sale Information and the Offering Memorandum, except where the failure to have such power or authority would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business, properties, senior management, financial condition, stockholders’ equity or results of operations of NNC and its subsidiaries taken as a whole or on the performance by the Issuers of their obligations under the Securities (a “Material Adverse Effect”).

     (g) Capitalization. NNC has an authorized capitalization as set forth in the Time of Sale Information and the Offering Memorandum.

     (h) Due Authorization. Each Issuer has the corporate power and authority to execute and deliver this Agreement, the Notes, the Indenture (including the Guarantees set forth therein), the Exchange Securities and the Registration Rights Agreement (the “Transaction Documents”), as applicable, and to perform its obligations hereunder and thereunder.

     (i) The Indenture. (x) The Original Indenture has been duly authorized, executed and delivered by each Issuer and constitutes and (y) the execution and delivery of the Indenture (as supplemented by a third supplemental indenture to be entered into by and between the Company, the Guarantors and the Trustee on the Closing Date) has been duly authorized by each Issuer and assuming due authorization thereof by the other parties thereto, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute, a legal, valid and binding obligation of each Issuer enforceable against each such Issuer in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights (including applicable non-U.S. laws or governmental actions) and to general principles of equity (it being understood that the enforceability thereof in Canada may be limited by the Currency Act (Canada), which precludes Canadian courts from awarding a judgment for an amount expressed in a currency other than Canadian Dollars and to the extent that any requirement to pay interest at a greater rate after than before default may not be enforceable in Canada if the same is construed by a Canadian court to constitute a penalty) (collectively, the “Enforceability Ex-

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ceptions”); and the Original Indenture conforms, and on the Closing Date the Indenture (as supplemented by a third supplemental indenture to be entered into by and between the Company, the Guarantors and the Trustee on the Closing Date) will conform, in all material respects, to the requirements of the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

     (j) The Notes and the Guarantees. The issuance and sale of the Notes have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, the Notes will be duly issued and will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the execution and delivery of each Guarantee has been duly authorized by the applicable Guarantor and, when duly endorsed by such Guarantor as provided in the Indenture, each Guarantee will constitute a valid and binding agreement of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to the Enforceability Exceptions.

     (k) The Exchange Securities. On the Closing Date, (i) the issuance of the Exchange Notes, if required to be issued, will have been duly authorized by the Company and, when the Exchange Notes have been duly executed, authenticated, issued and delivered in exchange for the Notes as contemplated by the Registration Rights Agreement and the Indenture, the Exchange Notes will be duly issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and (ii) the execution and delivery of the Exchange Note Guarantees, if required to be delivered, will have been duly authorized by the applicable Guarantor and, when duly endorsed by such Guarantor as contemplated by the Registration Rights Agreement and the Indenture, each Exchange Note Guarantee of a Guarantor will constitute a valid and binding agreement of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to the Enforceability Exceptions.

     (l) Purchase and Registration Rights Agreements. The execution and delivery of this Agreement has been duly authorized by each Issuer; it has been duly executed and delivered by each Issuer; and the Registration Rights Agreement has been duly authorized by each Issuer and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and binding agreement of each such Issuer enforceable against each such Issuer in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy considerations.

     (m) Descriptions of the Transaction Documents. The Indenture and each of the Registration Rights Agreement, the Securities and the Exchange Securities will con-

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form in all material respects to the description thereof, contained in the Time of Sale Information and the Offering Memorandum.

     (n) No Violation or Default. None of the Issuers is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred and is continuing that, with notice or lapse of time or both, would constitute such a default, under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Issuer is bound or to which any of the property or assets of such Issuer is subject; or (iii) in violation of any applicable law or statute or any applicable judgment, order, rule or regulation of any relevant court or arbitrator or governmental or regulatory authority, except, in each case as otherwise disclosed in, incorporated by reference in or contemplated by the Time of Sale Information and the Offering Memorandum, and except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

     (o) No Order or Proceedings. There is no order, ruling or direction of any Canadian Securities Regulator which would deny the benefit of an exemption otherwise provided for under applicable Canadian Securities Laws with respect to the distribution of the Securities or the Exchange Securities, and no proceedings which would reasonably be expected to result in any such order or ruling have been instituted or are pending or, to the knowledge of the Issuers, threatened.

     (p) No Conflicts. The execution, delivery and performance by each Issuer of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities and compliance by each Issuer with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents by each Issuer will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any Issuer pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any Issuer is a party or by which any Issuer is bound or to which any of the property or assets of any Issuer is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of any Issuer, or (iii) result in the violation of any applicable law or statute or any applicable judgment, order, rule or regulation of any relevant court or arbitrator or governmental or regulatory authority; except, in the case of clauses (i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

     (q) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority in the United States or Canada is required for the execution, delivery and performance by each Issuer of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities and compliance by each Issuer with the terms

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thereof and the consummation of the transactions contemplated by the Transaction Documents and, if required, the issuance and delivery of the Exchange Securities in exchange for the Notes, except for (i) such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws in connection with the purchase and resale of the Securities by the Initial Purchasers, (ii) notices to be filed by the Company under s.12 of the Securities Act (Quebec), (iii) the delivery of the requisite number of copies of the Offering Memorandum to, and the filing of the required reports in the prescribed form and executed in accordance with applicable securities laws of the Relevant Provinces, together with the requisite filing fees and, in the case of British Columbia, the requisite fee checklist, (iv) with respect to the Exchange Securities, such consents, approvals, authorizations, orders and registrations or qualifications as may be required under the Securities Act, and applicable state securities laws, as contemplated by the Registration Rights Agreement, (v) such consents, approvals, authorizations, orders and registrations or qualifications as may be required with respect to the Exchange Securities, under applicable provincial securities laws and Part VIII of the Canada Business Corporations Act, and (vi) with respect to the filing of a shelf registration statement, if required, as contemplated in the Registration Rights Agreement, such consents, approvals, authorizations, orders and registrations or qualifications as may be required under Part VIII of the Canada Business Corporations Act.

     (r) Legal Proceedings. Except as described in, incorporated by reference in or contemplated by the Time of Sale Information and the Offering Memorandum, (i) there is no litigation, arbitration, legal proceeding or governmental or regulatory investigation involving NNC or any of its subsidiaries that, if determined adversely to NNC or such subsidiary, would individually or in the aggregate, have a Material Adverse Effect, and (ii) to the knowledge of the Issuers, no such litigation, arbitration, proceeding or investigation is pending or threatened.

     (s) Independent Accountants. (i) KPMG LLP who have certified certain consolidated financial statements of NNC and its subsidiaries and the Company and its subsidiaries for the fiscal year ended December 31, 2007 are independent public accountants with respect to NNC and its consolidated subsidiaries and the Company and its consolidated subsidiaries within the rules of the Public Company Accounting Oversight Board and (ii) Deloitte & Touche LLP, who have certified certain consolidated financial statements of NNC and its subsidiaries and the Company and its subsidiaries for fiscal years prior to 2007, were, during the period of their engagement as NNC’s auditors, independent public accountants with respect to NNC and its consolidated subsidiaries and the Company and its consolidated subsidiaries within the rules of the Public Company Accounting Oversight Board.

     (t) Title to Intellectual Property. Except as disclosed in the Time of Sale Information and the Offering Memorandum, NNC and its subsidiaries maintain its Material Intellectual Property (as defined below) in a commercially reasonable, prudent manner

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consistent with its past practices and with respect to any Material Intellectual Property that has been infringed, misappropriated or diluted, in each case in a material respect, by a third party, NNC or the relevant subsidiary has, unless NNC or such subsidiary has reasonably determined that such action would be of negligible value, economic or otherwise, taken commercially reasonable steps consistent with its past practices to sue for infringement, misappropriation or dilution and recovered any and all damages for such infringement, misappropriation or dilution, and/or taken such other actions as NNC or such subsidiary reasonably deemed appropriate under the circumstances to protect such Material Intellectual Property.

     “Material Intellectual Property” means, at the time of determination, any intellectual property that is one of the 100 most valuable items of intellectual property owned by NNC and its subsidiaries taken as a whole at such time to the business of NNC and its subsidiaries taken as a whole, as such business is presently conducted or proposed to be conducted, as reasonably determined by NNC and its subsidiaries, acting in their reasonable discretion.

     (u) Investment Company Act. No Issuer is, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Time of Sale Information and the Offering Memorandum, no Issuer will be, an “investment company” or an entity “controlled” by an “investment company” within the meaning of the United States Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, “Investment Company Act”).

     (v) Disclosure Controls. Except as disclosed or incorporated by reference in the Time of Sale Information and the Offering Memorandum, NNC and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by NNC in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to NNC’s management as appropriate to allow timely decisions regarding required disclosure. NNC and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 under the Exchange Act.

     (w) Accounting Controls. Except as disclosed or incorporated by reference in the Time of Sale Information and the Offering Memorandum, NNC and its subsidiaries maintain a system of “internal control over financial reporting” (as defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by, or under the supervision of, NNC’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of fi-

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nancial statements for external purposes in accordance with generally accepted accounting principles. Except as disclosed or incorporated by reference in the Time of Sale Information and the Offering Memorandum, NNC and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in each of the Time of Sale Information and the Offering Memorandum, as of December 31, 2007 and, to the knowledge of the Issuers, as of the Time of Sale and the Closing Date, there has been no material weakness in NNC’s internal control over financial reporting.

     (x) No Unlawful Payments. NNC and the Company each has policies and procedures in effect that prohibit the following activities by any director, officer, agent, employee or other person associated with or acting on behalf of either of them or any of their respective subsidiaries: (i) the use of corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) the violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (iv) any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment.

     (y) Solvency. Except as disclosed in or incorporated by reference in the Time of Sale Information and the Offering Memorandum, including without limitation in the risk factor titled “NNC’s Guarantee may be unenforceable, subordinated or limited in scope under the insolvency and creditor protection laws of Canada” and “NNI’s Guarantee may be unenforceable under U.S. federal and state fraudulent conveyance statutes”, immediately after the Closing Date, each Issuer (after giving effect to the issuance of the Securities and the other transactions related thereto as described in the Time of Sale Information and the Offering Memorandum) will be Solvent. As used in this paragraph, the term “Solvent” means, (A) with respect to NNI on a particular date, that on such date (i) the fair market value of the assets of NNI, at a fair valuation viewing NNI as a going concern, exceeds its debts and liabilities, subordinated, contingent or otherwise (in each case determined on a consolidated basis); (ii) the present fair saleable value of the property of NNI exceeds the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise (in each case determined on a consolidated basis) as such debts and other liabilities become absolute and matured; (iii) NNI will be able to pay its debts and liabilities, subordinated, contingent or otherwise as such debts and liabilities become absolute and matured; and (iv) NNI will not have unreasonably small capital with which to conduct the business in which it is engaged as such busi-

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ness is now conducted and proposed to be conducted after the Closing Date; and (B) with respect to NNC or the Company on a particular date, (i) the aggregate property of NNC or the Company at fair valuation, or if disposed of at a fairly conducted sale under legal process, is sufficient to enable payment of all its obligations, due and accruing due; (ii) the property of NNC or the Company is, at a fair valuation, greater than the total amount of liabilities, including contingent liabilities, of NNC or the Company, as applicable; (iii) NNC or the Company has not ceased paying its current obligations in the ordinary course of business as they generally become due; and (iv) NNC or the Company is not for any reason unable to meet its obligations as they generally become due; in each case, it being understood that the Issuers cannot be certain as to how a court would apply the foregoing standards to any contingent liabilities in determining whether the relevant Issuer was solvent at the relevant time.

     (z) No Broker’s Fees. Neither NNC nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against NNC or any of its subsidiaries or any Initial Purchaser for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

     (aa) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the same class as securities listed on a U.S. national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system; and each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

     (bb) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent (other than the Initial Purchasers, as to which no representation is made), sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

     (cc) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of (A) any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or (B) in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act, or (ii) engaged in any directed selling efforts with respect to the Securities within the meaning of Regulation S under the Securities Act (“Regulation S”), and all such persons have complied with the offering restrictions requirements of Regulation S.

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     (dd) Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 1(c) (including Annex C hereto) and their compliance with their agreements set forth therein, and except in connection with the transactions contemplated by the Registration Rights Agreement, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, to register the Securities under the Securities Act or to comply with the prospectus requirements under applicable Canadian Securities Laws.

     (ee) No Stabilization. None of the Issuers has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

     (ff) Margin Rules. Neither the issuance, sale and delivery of the Notes nor the application of the proceeds thereof by the Company as described in the Time of Sale Information and the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

     (gg) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained or incorporated by reference in the Time of Sale Information and the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

     (hh) Statistical and Market Data. Nothing has come to the attention of the Issuers that has caused the Issuers to believe that the statistical and market-related data included or incorporated by reference in the Time of Sale Information and the Offering Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.

     (ii) Sarbanes-Oxley Act. With respect to the period subsequent to the filing of NNC’s Annual Report on Form 10-K for the year ended December 31, 2007, except as disclosed in or incorporated by reference in the Time of Sale Information and the Offering Memorandum, to the knowledge of NNC, there is and has been no failure on the part of NNC or its subsidiaries or their respective directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the United States Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

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     4. Further Agreements of the Issuers. The Issuers jointly and severally covenant and agree with each Initial Purchaser that:

     (a) Delivery of Copies. The Company will deliver, without charge, to the Initial Purchasers as many copies of the Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the Offering Memorandum (including all amendments and supplements thereto) as the Representatives may reasonably request.

     (b) Offering Memorandum, Amendments or Supplements. Before finalizing the Offering Memorandum or making or distributing any amendment or supplement to any of the Time of Sale Information or the Offering Memorandum or filing with the Commission any document that will be incorporated by reference therein, the Company will furnish to the Representatives and counsel for the Initial Purchasers a copy of the proposed Offering Memorandum or such amendment or supplement or document to be incorporated by reference therein, for review, and will not distribute any such proposed Offering Memorandum, amendment or supplement or file any such document with the Commission to which the Representatives reasonably object.

     (c) Additional Written Communications. Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication, the Company will furnish to the Representatives and counsel for the Initial Purchasers a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Representatives reasonably object.

     (d) Notice to the Representatives. The Company will advise the Representatives promptly, and confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which any of the Time of Sale Information, taken as a whole, any Issuer Written Communication, taken together with the Time of Sale Information, or the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when such Time of Sale Information, Issuer Written Communication or the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or suspending any such qualification of the Securi-

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ties and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.

     (e) Ongoing Compliance of the Offering Memorandum and Time of Sale Information. If at any time prior to the earlier of (x) completion of the initial offering of the Securities and (y) the date that is six months following the Closing Date, (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with law, the Company will promptly notify the Initial Purchasers thereof and promptly prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented (including such document to be incorporated by reference therein) will not, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with law.

     (f) Canadian Reports. The Issuers will file, within the time periods prescribed by the applicable Canadian Securities Laws, such documents and reports as may be required to be filed by the Issuers with Canadian Securities Regulators under the applicable Canadian Securities Laws relating to the private placement of Securities by the Initial Purchasers; provided that the Initial Purchasers have delivered a request to effect such filings together with such information as to permit the Issuers to do so, and the Issuers will pay any filing fee prescribed with respect thereto.

     (g) Blue Sky Compliance. The Company will arrange for the qualification of the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for the offering and resale of the Securities; provided that none of the Issuers shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

     (h) Clear Market. During the period from the date hereof through and including the date that is 30 days after the date hereof, the Issuers will not, without the prior written consent of the Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities (other than any equity linked or convertible securities or any inter-

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company debt or any related external coupon stripping transactions) issued or guaranteed by any of the Issuers and having a tenor of more than one year.

     (i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities as described in the Time of Sale Information and the Offering Memorandum under the heading “Use of proceeds”.

     (j) Supplying Information. While the Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuers will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

     (k) PORTAL and DTC. The Company will assist the Initial Purchasers in arranging for the Securities to be designated Private Offerings, Resales and Trading through Automated Linkages (“PORTAL”) Market securities in accordance with the rules and regulations adopted by the Financial Industry Regulatory Authority (“FINRA”) relating to trading in the PORTAL Market and for the Securities to be eligible for clearance and settlement through The Depository Trust Company (“DTC”).

     (l) No Resales by the Company. Until the Securities are Freely Tradeable (as such term is defined in the Registration Rights Agreement) or the issuance of the Exchange Securities, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act.

     (m) No Integration. None of the Company, any of its affiliates (as defined in Rule 501(b) of Regulation D) or any person acting on behalf of the Company or such affiliate will, directly or through any agent (other than the Initial Purchasers, as to which no covenant is given), sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

     (n) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of (A) any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or (B) in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act, or (ii) engage in any

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directed selling efforts with respect to the Securities within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S. The Company and its affiliates will not provide access to the Electronic Roadshow (as defined in Annex A) to any prospective investor in the Securities that is a resident in, or acting on behalf of an entity resident in, any of the provinces or territories of Canada (it being understood that no covenant is made by the Company with respect to any action taken by any Initial Purchaser).

     (o) No Stabilization. None of the Issuers will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

     (p) The Issuers agree that each Note, or an ownership statement issued under a direct registration statement or other electronic book entry system acceptable to the Ontario Securities Commission with respect to a Note, will bear the following legend:

UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THIS SECURITY IN CANADA BEFORE [the date that is four months and one day following the closing date of the distribution of the Notes].

     5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby represents and agrees that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell or the solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum and the Offering Memorandum, (ii) a written communication that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Offering Memorandum or the Offering Memorandum, (ii) any written communication listed on Annex A or prepared pursuant to Section 4(c) above (including the Electronic Roadshow), (iv) any written communication prepared by such Initial Purchaser and approved by the Company in advance in writing or (v) any written communication relating to or that contains the terms of the Securities and/or other information that was included (including through incorporation by reference) in the Preliminary Offering Memorandum or the Offering Memorandum.

     6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance in all material respects by each Issuer of their respective covenants and other obligations hereunder and to the following additional conditions:

     (a) Representations and Warranties. The representations and warranties of each Issuer contained herein shall be true and correct at the Time of Sale and on and as of the Closing Date; and the statements of each Issuer and their respective officers made in

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any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.

     (b) No Downgrade. Subsequent to the Time of Sale, (i) no downgrading shall have occurred in the rating accorded the Securities or any other debt securities or preferred stock issued or guaranteed by any Issuer by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by any Issuer (other than an announcement with positive implications of a possible upgrading).

     (c) No Material Adverse Change. Subsequent to the Time of Sale, no event or condition of a type described in Section 3(e) hereof shall have occurred or shall exist, which event or condition is not described in or contemplated by the Time of Sale Information (excluding any amendment or supplement thereto or any document filed with the Commission after the Time of Sale and incorporated by reference therein) and the Offering Memorandum (excluding any amendment or supplement thereto or any document filed with the Commission after the date hereof and incorporated by reference therein) and the effect of which in the reasonable judgment of the Representatives, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement and the Offering Memorandum.

     (d) Officers’ Certificate. The Representatives shall have received on and as of the Closing Date a certificate, on behalf of NNC, of either (A) the chief executive officer and the chief financial officer of NNC or (B) one of the aforesaid officers and any one of the Corporate Secretary, the Controller or the Treasurer of NNC (i) confirming that such officers have reviewed the Time of Sale Information and the Offering Memorandum and, to the best knowledge of such officers after reasonable investigation, the representations set forth in Section 3(a) and 3(b) hereof are true and correct, (ii) confirming that the other representations and warranties of the Issuers in this Agreement are true and correct (in each case, if not qualified as to materiality or Material Adverse Effect, in all material respects) and that the Issuers have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date in all material respects and (iii) to the effect set forth in paragraphs (b) and (c) above.

     (e) Comfort Letters. On the date of this Agreement and on the Closing Date, each of KPMG LLP and Deloitte & Touche LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchasers and the Board of Directors of each of the Issuers, in form and substance reasonably satisfactory to the Representative, containing state-

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ments and information of the type customarily included in accountants’ “comfort letters” to initial purchasers with respect to the financial statements and certain financial information contained or incorporated by reference in the Time of Sale Information and the Offering Memorandum.

     (f) Opinion of Counsel for the Company. Gordon A. Davies, Esq., Deputy General Counsel and Corporate Secretary of NNC and the Company, Cleary Gottlieb Steen & Hamilton LLP, special U.S. counsel for the Issuers, and Ogilvy Renault LLP, Canadian counsel for the Issuers, shall have furnished to the Representatives, at the request of the Company, their written opinion or letter, as the case may be, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Annexes D-1, D-2 and D-3, respectively, hereto.

     (g) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The Representatives shall have received on and as of the Closing Date an opinion and 10b-5 statement from Cahill Gordon & Reindel llp, counsel for the Initial Purchasers, and an opinion from Blake, Cassels & Graydon LLP, Canadian counsel for the Initial Purchasers, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

     (h) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any United States federal or Canadian federal, state, provincial, territorial or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees; and no injunction or order of any United States federal or Canadian federal, state, provincial, territorial or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees.

     (i) Good Standing. The Representatives shall have received on and as of the Closing Date evidence reasonably satisfactory to the Representative of the good standing of the Issuers in their respective jurisdictions of organization and the jurisdictions of their principal executive offices, in each case in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions.

     (j) Registration Rights Agreement. The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement that shall have been executed and delivered by a duly authorized officer of each Issuer.

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     (k) PORTAL and DTC. The Securities shall have been approved by the FINRA for trading in the PORTAL Market and shall be eligible for clearance and settlement through DTC.

     (l) Additional Documents. On or prior to the Closing Date, the Issuers shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.

     All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers.

     7. Indemnification and Contribution.

     (a) Indemnification of the Initial Purchasers. The Issuers, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser, its affiliates, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, any of the other Time of Sale Information, the Electronic Roadshow, any Issuer Written Communication or the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in subsection (b) below.

     (b) Indemnification of the Issuers. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless each Issuer, each of the Issuer’s officers and directors and each person, if any, who controls any Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representatives expressly for use in any of the Time of Sale Information and the Offering Memorandum (or any amendment or supplement thereto), it being understood and agreed that the only such informa-

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tion consists of: the information contained in (a) the Preliminary Offering Memorandum and the Offering Memorandum in the third paragraph, the third sentence of the eighth paragraph and the sixth sentence of the twelfth paragraph and the fifteenth paragraph under the caption “Plan of distribution” and the names of the Initial Purchasers on the cover page; provided, however, that the Initial Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company’s failure to amend or supplement any of the Time of Sale Information or the Offering Memorandum pursuant to Section 4(b).

     (c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraphs (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraphs (a) or (b) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time after notice of the action to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Initial Purchaser, its affiliates, directors and officers and any control persons of such Initial Purchaser shall be designated in writing by the Representatives and any such separate firm for the Issuers, their respective officers and directors and any control persons

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of the Issuers shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent (which consent shall not be unreasonably withheld), but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

     (d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuers on the one hand and the Initial Purchasers on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Issuers on the one hand and the Initial Purchasers on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Issuers on the one hand and the Initial Purchasers on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total discounts and commissions received by the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the aggregate offering price of the Securities. The relative fault of the Issuers on the one hand and the Initial Purchasers on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by any Issuer or by the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

     (e) Limitation on Liability. The Issuers and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such In-

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demnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Initial Purchaser be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 7 are several in proportion to their respective purchase obligations hereunder and not joint.

     (f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     8. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange, the NASDAQ Global Market, the Toronto Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or guaranteed by any Issuer shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by New York, Ontario, United States federal or Canadian federal authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States or Canada, that, in the reasonable judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.

     9. Defaulting Initial Purchaser.

     (a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such Securities on such terms. If other persons become obligated or agree to purchase the Securities of a defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or the Company may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Initial Purchasers may be necessary in the Time of Sale Information, the Offering Memorandum or in any other document or arrange-

24

ment, and the Company agrees to promptly prepare any amendment or supplement to the Time of Sale Information or the Offering Memorandum that effects any such changes. As used in this Agreement, the term “Initial Purchaser” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Securities that a defaulting Initial Purchaser agreed but failed to purchase.

     (b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder plus such Initial Purchaser’s pro rata share (based on the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made.

     (c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchasers. Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Issuers, except that the Issuers will continue to be liable for the payment of expenses as set forth in Section 10(a) hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in effect.

     (d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have to the Company, the Guarantor or any non-defaulting Initial Purchaser for damages caused by its default.

     10. Payment of Expenses.

     (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Issuers, jointly and severally, agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities; (ii) the costs incident to the preparation and printing of the Preliminary Offering Memorandum, any other Time of Sale Information and the Offering Memorandum (including any amendment or supplement thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Issuers’ counsel and independent accountants; (v) the reasonable fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of

25

the Securities under the laws of such jurisdictions as the Representatives may reasonably designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the reasonable related fees and expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (viii) all expenses and application fees incurred in connection with the application for the inclusion of the Securities on the PORTAL Market and the approval of the Securities for book-entry transfer by DTC; and (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors, including all air travel expenses relating thereto (but excluding any expenses associated with accommodations of any employees of the Initial Purchasers in connection with any such “road show” presentation and any expenses associated with any meals in connection with any such “road show” presentation).

     (b) If (i) this Agreement is terminated pursuant to Section 8(ii), (ii) the Company for any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the Securities for any reason permitted under this Agreement, the Issuers, jointly and severally, agree to reimburse the Initial Purchasers for all out-of-pocket costs and expenses (including the reasonable fees and expenses of their counsel) reasonably incurred by the Initial Purchasers in connection with this Agreement and the offering contemplated hereby.

     11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Representatives and the other parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Initial Purchaser and the respective officers and directors of the Issuers referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor merely by reason of such purchase.

     12. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Issuers, and the Initial Purchasers contained in this Agreement or made by or on behalf of the Issuers, or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Issuers or the Initial Purchasers.

     13. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “written communication” has the meaning set forth in Rule 405 under the Securities Act.

26

     14. Miscellaneous.

     (a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Initial Purchasers shall be given to the Representatives c/o [                    ], [                    ], New York, New York [          ] (fax: [          ]); Attention: [                ], with a copy to Corey Wright, Esq., Cahill Gordon & Reindel llp, 80 Pine Street, New York, New York 10005 (fax: (212) 269-5420). Notices to the Company shall be given to it at 195 The West Mall, Toronto, Ontario, Canada M9C 5K1 (fax: (905) 863-7386) (or such other address and fax number as shall be furnished to the Representatives); Attention: Gordon A. Davies, with a copy to Craig B. Brod, Esq. and Sandra L. Flow, Esq., Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza, New York, New York 10006 (fax: (212) 225-3999).

     (b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

     (c) Judgment Currency. The Issuers shall, jointly and severally, indemnify each Initial Purchaser, their respective affiliates, each person, if any, who controls any of such parties within the meaning of the Securities Act or the Exchange Act and each of their respective officers, directors, employees and agents against any loss incurred by such party as a result of any judgment or order being given or made in favor of such party for any amount due under this Agreement and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as a result of any negative variance between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the spot rate of exchange in The City of New York at which such party on the date of payment of such judgment or order is able to purchase United States dollars with the amount of the Judgment Currency actually received by such party. The foregoing indemnity shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “spot rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, United States dollars.

     (d) Consent to Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement, the Transactions Documents or the transactions contemplated hereby or thereby may be brought in any federal or New York State court located in New York City, New York County, and each of the Issuers hereby consents to the non-exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venues of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient form. Process in any such suit, action or proceeding may be served on any of the Issuers anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing,

27

each Issuer agrees that service of process on any such Issuer as provided in clause (b) above shall be deemed effective service of process on such Issuer.

     (e) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

     (f) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

     (g) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

28

     If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours, NORTEL NETWORKS LIMITED
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Paviter S. Binning
	Name:	Paviter S. Binning
	Title:	Executive Vice-President and Chief Financial Officer

NORTEL NETWORKS CORPORATION
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Paviter S. Binning
	Name:	Paviter S. Binning
	Title:	Executive Vice-President and Chief Financial Officer

NORTEL NETWORKS INC.
By:	/s/ Lynn C. Egan
	Name:	Lynn C. Egan
	Title:	Assistant Secretary

29

Accepted: May 21, 2008

[                    ]

For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.

BY: [                    ],

By: /s/ Authorized Signatory          Authorized Signatory

30

Schedule 1

	Principal Amount
Initial Purchaser	of Notes
[                    ]	$	202,500,000
[                    ]	$	202,500,000
[                    ]	$	67,500,000
[                    ]	$	67,500,000
[                    ]	$	45,000,000
[                    ]	$	45,000,000
[                    ]	$	45,000,000
Total	$	675,000,000

31

Annex A

Additional Time of Sale Information

     A pricing term sheet containing the terms of the securities and certain other information substantially in the form of Annex B.

A-1

Annex B

Pricing supplement dated May 21, 2008
CONFIDENTIAL

This supplement to the preliminary offering memorandum dated May 21, 2008 should be read together with the preliminary offering memorandum before making a decision in connection with an investment in the Notes and the related Guarantees. The information in this supplement supersedes the information contained in the preliminary offering memorandum to the extent that it is inconsistent therewith. Defined terms used but not defined herein have the meaning ascribed to them in the preliminary offering memorandum.

Issuers:		Nortel Networks Limited
Guarantors:		Nortel Networks Corporation and initially Nortel Networks Inc.
Security Description:		Senior Notes add-on
Distribution:		144A/Reg S with Registration Rights triggered if Notes not freely tradeable on the fifth business day after the 1 year anniversary of the Issue Date
Face:		$675,000,000
Gross Proceeds:		$668,250,000
Coupon:		10.750%
Maturity:		July 15, 2016
Offering Price:		99.00%
Yield to Maturity:		10.933%
Ratings:		B3/B-
Interest Pay Dates:		July 15 and January 15
Beginning:		July 15, 2008
Clawback:		Up to 35% at 110.75%
Until:		July 15, 2009
Optional redemption:		Makewhole call at T+50bps prior to July 15, 2011, then:
		On or after:	Price:
		July 15, 2011	105.375%
		July 15, 2012	103.583%
		July 15, 2013	101.792%
		July 15, 2014 and thereafter	100.000%
Change of control:		Putable at 101% of principal plus accrued interest
CUSIP:		656569AL4
		Reg S: C65614AD8
ISIN:		USC65614AD80
Denominations/Multiple:		2,000x1,000
Trade Date:		May 21, 2008
Settlement Date:	(T+4)	May 28, 2008
Use of Proceeds:		The net proceeds of the offering of the Notes, together with available cash, will be used to redeem the $675.0 million of 2008 Convertible Notes
Bookrunners:		[                    ]
		[                    ]
Co-Managers:		[                    ]

B-1

[                    ]

[                    ]

[                    ]

[                    ]

B-2

Annex C

Restrictions on Offers and Sales Outside the United States

     In connection with offers and sales of Securities outside the United States:

     (a) Each Initial Purchaser acknowledges that the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act.

     (b) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

     (i) Such Initial Purchaser has offered and sold the Securities, and will offer and sell the Securities, (A) as part of its distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date, only in accordance with Regulation S under the Securities Act (“Regulation S”) or Rule 144A or any other available exemption from registration under the Securities Act and, with respect to offers and sales in the Relevant Provinces, only to accredited investors within the meaning of NI 45-106 in transactions which are exempt from the prospectus requirements of applicable Canadian Securities Laws.

     (ii) None of such Initial Purchaser or any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities, and all such persons have complied and will comply with the offering restrictions requirement of Regulation S.

     (iii) At or prior to the confirmation of sale of any Securities sold in reliance on Regulation S, such Initial Purchaser will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases Securities from it during the distribution compliance period a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities and the date of original issuance of the Securities, except in accordance with

C-1

Regulation S or Rule 144A or any other available exemption from registration under the Securities Act. Terms used above have the meanings given to them by Regulation S”.

     (iv) Such Initial Purchaser has not entered and will not enter into any contractual arrangement with any distributor with respect to the distribution of the Securities, except for any such arrangements with its affiliates or with the prior written consent of the Company.

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in this Agreement have the meanings given to them by Regulation S.

     (c) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that, in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of the Securities to the public in that Relevant Member State at any time:

     (i) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

     (ii) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

     (iii) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of paragraph (c), the expression an “offer of the Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the term “Prospectus Directive” means

C-2

Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

     (d) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”) of the United Kingdom) received by it in connection with the issue or sale of the Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company or the Guarantors; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

     (e) Each Initial Purchaser acknowledges that no action has been or will be taken by the Company that would permit a public offering of the Securities, or possession or distribution of any of the Time of Sale Information, the Offering Memorandum or any other offering or publicity material relating to the Securities, in any country or jurisdiction where action for that purpose is required.

     (f) Each Initial Purchaser severally and not jointly represents and covenants that (i) it has taken reasonable precautions to ensure that passwords to any website containing the Electronic Roadshow are not provided to any prospective investor in the Securities that is a resident in, or acting on behalf of an entity resident in, any of the provinces or territories of Canada and (ii) in order to obtain access to the Electronic Roadshow on any website on which the Electronic Roadshow is made available to potential investors, each potential investor is required to confirm electronically that it is not a resident in, or acting on behalf of an entity resident in, any of the provinces or territories of Canada.

C-3

Annex D-1

[Form of Opinion and Letter of Gordon A. Davies, Esq.,
Deputy General Counsel of NNC and the Company]

D-1-1

Annex D-2

[Form of Opinion and Letter of Cleary Gottlieb Steen & Hamilton LLP, Special U.S. Counsel to the Issuers]

D-2-1

Annex D-3

[Form of Opinion of Ogilvy Renault LLP, Canadian Counsel for the Issuers]

D-3-1

Exhibit A

[Form of Registration Rights Agreement]

1

EX-10.2

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT dated May 28, 2008 (the “Agreement”) is entered into by and among Nortel Networks Limited, a Canadian corporation (the “Company”), Nortel Networks Corporation, a Canadian corporation (“NNC”) and Nortel Networks Inc., a Delaware corporation (“NNI” and, together with NNC, the “Guarantors”), [                    ] (“[          ]”) and the several Initial Purchasers listed in Schedule 1 hereto (together with [          ], the “Initial Purchasers”).

     The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement dated May 21, 2008 (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of U.S.$675,000,000 aggregate principal amount of its 10.750% Senior Notes due 2016 (the “Securities”) which will be guaranteed on an unsecured senior basis by NNC and, initially, NNI. The Securities are of the same class as the $450,000,000 million aggregate principal amount of the Company’s 10.750% Senior Notes due 2016 issued on July 5, 2006 (the “Outstanding Notes”) but will initially not be fungible for trading purposes with the Outstanding Notes. As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

     “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

     “Closing Date” shall mean the Closing Date as defined in the Purchase Agreement.

     “Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

     “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from time to time.

     “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

     “Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

     “Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.

     “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “Exchange Securities” shall mean senior notes issued by the Company and guaranteed by the Guarantors under the Indenture evidencing the same continuing indebtedness as, and containing terms substantially identical to, the Securities (except that the Exchange Securities will not be subject to restric-

1

tions on transfer or to any increase in annual interest rate for failure to comply with this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

     “FINRA” shall mean the Financial Industry Regulatory Authority.

     “Free Writing Prospectus” shall mean any free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the Exchange Offer or the Shelf Registration.

     “Freely Tradable” shall mean, with respect to a Security, a Security that at any time of determination (i) is freely transferable without volume restrictions by holders that are not affiliates of the Company in accordance with Rule 144 (or any similar provision then in force) under the Securities Act of 1933 or otherwise, (ii) does not bear a restrictive legend, and (iii) does not bear a restricted CUSIP number.

     “Guarantors” shall have the meaning set forth in the preamble and shall also include any Guarantor’s successors.

     “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

     “Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

     “Indenture” shall mean the Indenture relating to Outstanding Notes and the Securities dated as of July 5, 2006 among the Company, the Guarantors and The Bank of New York, as trustee, as supplemented by supplemental indentures dated as of July 5, 2006 and May 1, 2007 and as further supplemented by a supplemental indenture entered into by and between the Company, the Guarantors and the trustee on the date hereof, and as the same may be further amended or supplemented from time to time in accordance with the terms thereof.

     “Initial Purchasers” shall have the meaning set forth in the preamble.

     “Inspector” shall have the meaning set forth in Section 3(a)(xiv) hereof.

     “Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

     “Issuers” shall mean the Company and the Guarantors.

     “[          ]” shall have the meaning set forth in the preamble.

     “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of the outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, any Registrable Securities owned directly or indirectly by the Company or any of its affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount; and provided further, that if the Company shall issue any additional Securities under the Indenture prior to consummation

2

of the Exchange Offer, if applicable, the effectiveness of any Shelf Registration Statement or the Registrable Securities otherwise becoming Freely Tradable, such additional Securities and the Registrable Securities to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Registrable Securities has been obtained.

     “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

     “Person” shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

     “Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble.

     “Registrable Securities” shall mean the Securities; provided that the Securities shall cease to be Registrable Securities on the earliest to occur of (i) the date on which a Registration Statement with respect to such Securities has become effective under the Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) the date on which such Securities cease to be outstanding under the Indenture or (iii) the date on which such Securities are Freely Tradable.

     “Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or FINRA registration and filing fees, (ii) all reasonable fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of one counsel for any Underwriters or one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers) in connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any Free Writing Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements and any other documents relating to the performance of and compliance with this Agreement, (iv) any fees charged by rating agencies for rating the Exchange Securities or Registrable Securities, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties), (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of the independent public accountants of the Company and the Guarantors, including the expenses of any special audits or “comfort” letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

3

     “Registration Statement” shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “Registration Trigger Date” means the fifth Business Day following the one-year anniversary of the date hereof.

     “SEC” shall mean the United States Securities and Exchange Commission.

     “Securities” shall have the meaning set forth in the preamble.

     “Securities Act” shall mean the United States Securities Act of 1933, as amended from time to time.

     “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

     “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

     “Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

     “Staff” shall mean the staff of the SEC.

     “Trust Indenture Act” shall mean the United States Trust Indenture Act of 1939, as amended from time to time.

     “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

     “Underwriter” shall have the meaning set forth in Section 3(e) hereof.

     “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public.

     2. Registration Under the Securities Act. (a) To the extent not prohibited by any applicable law or applicable interpretations of the Staff, with respect to any Securities that on the Registration Trigger Date are Registrable Securities, the Company and the Guarantors shall use their reasonable best efforts to (i) cause to be filed with the SEC an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities and (ii) have such Registration Statement remain effective until 180 days after the closing of the Exchange Offer. The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration State-

4

ment becomes effective and use their reasonable best efforts to complete the Exchange Offer not later than 45 days after such effective date.

     The Company and the Guarantors shall commence the Exchange Offer by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:

     (i) that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange;

     (ii) the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the “Exchange Dates”);

     (iii) that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;

     (iv) that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to (A) surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B) effect such exchange otherwise in compliance with the applicable procedures of the depositary for such Registrable Security, in each case prior to the close of business on the last Exchange Date; and

     (v) that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Securities exchanged or (B) effecting such withdrawal in compliance with the applicable procedures of the depositary for the Registrable Securities.

     As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (iii) it is not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of the Company or any Guarantor, (iv) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will deliver a Prospectus (or, to the extent permitted by law, otherwise make a Prospectus available) in connection with any resale of such Exchange Securities, and (v) it is not an Initial Purchaser holding Registrable Securities that have, or are reasonably likely to have, the status of an unsold allotment to an initial distribution.

     As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

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     (i) accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and

     (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities which shall evidence the same continuing indebtedness and be equal in principal amount to the principal amount of the Registrable Securities surrendered by such Holder.

The Company and the Guarantors shall use their reasonable best efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law, regulation, rule or applicable interpretations of the Staff.

     (b) In the event that (i) the Company and the Guarantors would otherwise be required to consummate an Exchange Offer Registration pursuant to Section 2(a) hereof but determine that such Exchange Offer Registration is not available or may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law, regulation, rule or applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other reason completed by the 45^th day following the Registration Trigger Date or (iii) any Initial Purchaser shall so request (a “Shelf Request”) in connection with any offer or sale of Registrable Securities that, in the opinion of counsel for the Initial Purchasers, are not Freely Tradable on the Registration Trigger Date, the Company and the Guarantors shall use their reasonable best efforts to cause to be filed as soon as practicable after such determination, date or request, as the case may be, a Shelf Registration Statement providing for the sale of all the Registrable Securities by the Holders thereof and to have such Shelf Registration Statement become effective; provided that in no event shall the Company and the Guarantors have any obligation to file such Shelf Registration Statement at any time prior to the Registration Trigger Date.

     In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use their reasonable best efforts to file and have become effective both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer.

     In the event that the Company and the Guarantors are required to file a Shelf Registration Statement, the Company and the Guarantors agree to use their reasonable best efforts to keep the Shelf Registration Statement continuously effective until no Securities covered by such Shelf Registration Statement constitute Registrable Securities (the “Shelf Effectiveness Period”). The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement, the related Prospectus and any Free Writing Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder of Registrable Securities with respect to information relating to such Holder, and to use their reasonable best efforts to cause any such amendment to become effective, if required, and such Shelf Registration Statement, Prospectus or Free Writing Prospectus, as the case may be, to become usable as soon as thereafter practi-

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cable. The Company and the Guarantors agree to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.

     (c) The Company and the Guarantors shall pay all Registration Expenses in connection with any registration pursuant to Section 2(a) or Section 2(b) hereof. Each Holder shall pay all underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

     (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC. A Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC or is automatically effective upon filing with the SEC pursuant to Rule 462 under the Securities Act.

     In the event that (i) an Exchange Offer Registration Statement is required pursuant to Section 2(a) hereof and (x) such Exchange Offer Registration Statement does not become effective on or prior to the Registration Trigger Date or (y) the Exchange Offer is not completed within 45 days after the date on which the Exchange Offer Registration Statement becomes effective, or (ii) a Shelf Registration Statement is required in accordance with Section 2(b) hereof and such Shelf Registration Statement (x) does not become effective on or prior to the Registration Trigger Date or (y) becomes effective but ceases to be effective or the Prospectus contained therein ceases to be usable at any time during the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than 45 days (whether or not consecutive) in any 12-month period (any event referred to in the foregoing clauses (i) or (ii) a “Registration Default”), then, in each case, the interest rate on the Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the earlier of the date such Registration Default is cured or the date on which no Securities constitute Registrable Securities, up to a maximum of 1.00% per annum of additional interest.

     (e) Without limiting the remedies available to the Initial Purchasers and the Holders, the Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply with their obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company’s and the Guarantors’ obligations under Section 2(a) and Section 2(b) hereof.

     (f) The Company represents, warrants, and covenants that it (including its agents and representatives, other than the Initial Purchasers in their capacity as such) will not make any offer to buy the Securities or the Exchange Securities, other than by way of a Prospectus, Registration Statement, Shelf Registration Statement, or any Free Writing Prospectus or Issuer Information used or referred to by the Company in connection with the Exchange Offer or Shelf Registration Statement.

     3. Registration Procedures. (a) In connection with their obligations pursuant to Section 2(a) and Section 2(b) hereof, if a Registration Statement is required to be filed pursuant to such sections, the Company and the Guarantors shall as expeditiously as possible:

     (i) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (x) shall be selected by the Company and the Guarantors,

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(y) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the Holders thereof and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use their reasonable best efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 hereof;

     (ii) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities, if any;

     (iii) to the extent any Free Writing Prospectus is used, file with the SEC any Free Writing Prospectus that is required to be filed by the Company or the Guarantors with the SEC in accordance with the Securities Act and to retain any Free Writing Prospectus not required to be filed;

     (iv) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, to counsel for the Initial Purchasers and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus or Free Writing Prospectus, and any amendment or supplement thereto, in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and the Company and the Guarantors consent to the use of such Prospectus, preliminary Prospectus or such Free Writing Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the Holders of Registrable Securities and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus, preliminary Prospectus or such Free Writing Prospectus or any amendment or supplement thereto in accordance with applicable law;

     (v) use their reasonable best efforts to register or qualify as soon as practicable the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement becomes effective; cooperate with such Holders in connection with any filings required to be made with FINRA; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by such Holder; provided that neither the Company nor any Guarantor shall be required to (1) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (2) file any general consent to service of process in any such jurisdiction or (3) subject itself to taxation in any such jurisdiction if it is not so subject;

     (vi) in the case of a Shelf Registration, notify each Holder of Registrable Securities and one counsel (plus one Canadian counsel) for the Initial Purchasers promptly and, if requested by any such Holder or counsel, confirm such advice in writing (1) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, when any Free Writing Prospectus has been filed or any amendment or supplement to

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the Prospectus or any Free Writing Prospectus has been filed, (2) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement, Prospectus or any Free Writing Prospectus for additional information after the Registration Statement has become effective, (3) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (4) if, between the applicable effective date of a Shelf Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to an offering of such Registrable Securities cease to be true and correct in all material respects or if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (5) of the happening of any event during the period a Shelf Registration Statement is effective that makes any statement made in such Shelf Registration Statement or the related Prospectus or any Free Writing Prospectus untrue in any material respect or that requires the making of any changes in such Shelf Registration Statement or Prospectus or any Free Writing Prospectus in order to make the statements therein not misleading and (6) of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement or any amendment or supplement to the Prospectus or any Free Writing Prospectus would be appropriate;

     (vii) use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or, in the case of a Shelf Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an amendment to such Shelf Registration Statement on the proper form, at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order or such resolution;

     (viii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities included in such Shelf Registration Statement, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested);

     (ix) in the case of a Shelf Registration, cooperate with the Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names (consistent with the provisions of the Indenture) as such Holders may reasonably request at least one Business Day prior to the closing of any sale of Registrable Securities;

     (x) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(a)(vi)(5) hereof, use their reasonable best efforts to prepare and file with the SEC a supplement or post-effective amendment to such Shelf Registration Statement or the related Prospectus or any Free Writing Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered (or, to the extent permitted by law, made available) to purchasers of the Registrable Securities, such Prospectus or Free Writing Prospectus, as the case may be, will not contain any untrue statement of a material fact or

9

omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company and the Guarantors shall notify the Holders of Registrable Securities to suspend use of the Prospectus or any Free Writing Prospectus, as the case may be, as promptly as practicable after the occurrence of such an event, and such Holders hereby agree to suspend use of the Prospectus or any Free Writing Prospectus, as the case may be, until the Company and the Guarantors have amended or supplemented the Prospectus or any Free Writing Prospectus, as the case may be, to correct such misstatement or omission;

     (xi) a reasonable time prior to the filing of any Registration Statement, any Prospectus, any Free Writing Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or to a Free Writing Prospectus, provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable Securities included in such Shelf Registration Statement); and the Company and the Guarantors shall not, at any time after initial filing of a Registration Statement until completion of the offering contemplated thereby, use or file any Prospectus, any Free Writing Prospectus, any amendment of or supplement to a Registration Statement, a Prospectus or a Free Writing Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities included in such Shelf Registration Statement) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel shall reasonably object;

     (xii) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be (which shall, to the extent practicable, be the same CUSIP as the exchange securities issued in exchange for the Outstanding Notes) not later than the initial effective date of a Registration Statement;

     (xiii) in the case of a Shelf Registration, make available for inspection by a representative of the Holders of the Registrable Securities (an “Inspector”), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement and one firm of accountants designated by the Company and one counsel (plus one Canadian counsel) designated by such Underwriter, at reasonable times and in a reasonable manner, all pertinent financial and other records, documents and properties of the Company and its subsidiaries and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, counsel or accountant in connection with a Shelf Registration Statement; provided that if any such information is identified by the Company or any Guarantor as being confidential or proprietary, each Person receiving such information shall take such actions as are reasonably necessary to protect the confidentiality of such information to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of any Inspector, Holder or Underwriter;

     (xiv) in the case of a Shelf Registration, use their reasonable best efforts to cause all Registrable Securities to be listed on any securities exchange or any automated quotation system on which similar securities issued or guaranteed by the Company or any Guarantor are then listed if requested by the majority of the Holders whose Registrable Securities are covered by such Shelf Registration Statement, to the extent such Registrable Securities satisfy applicable listing requirements;

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     (xv) if reasonably requested by any Holder of Registrable Securities covered by a Shelf Registration Statement, promptly include in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be so included in such filing; and

     (xvi) in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those requested by the Holders of a majority in principal amount of the Registrable Securities covered by the Shelf Registration Statement) in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering and in such connection, (1) to the extent possible, make such representations and warranties to the Holders and any Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus, any Free Writing Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested, (2) obtain opinions of counsel to the Company and the Guarantors (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders of a majority in principal amount of the Registrable Securities being sold and such Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (3) obtain “comfort” letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder (to the extent permitted by applicable professional standards) and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings, including but not limited to financial information contained in any preliminary Prospectus, Prospectus or Free Writing Prospectus and (4) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (1) above and to evidence compliance with any customary conditions contained in an underwriting agreement.

     (b) In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company such information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing, and the Company and the Guarantors may exclude from such registration the Registrable Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.

     (c) Each Holder of Registrable Securities covered in a Shelf Registration Statement and each Broker-Dealer that may resell Exchange Securities by delivering a Prospectus in accordance with Section 4 hereof agrees that, upon receipt of any notice from the Company and the Guarantors of the happening of any event of the kind described in Section 3(a)(vi)(2) through 3(a)(vi)(6) hereof, such Holder or Broker-

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Dealer will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement or Exchange Securities pursuant to the Prospectus included in the Exchange Offer Registration Statement, as applicable, until such Holder’s or Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus and any Free Writing Prospectus contemplated by Section 3(a)(x) hereof and, if so directed by the Company and the Guarantors, such Holder or Broker-Dealer will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Holder’s possession, of the Prospectus and any Free Writing Prospectus covering such Registrable Securities or Exchange Securities, as applicable, that is current at the time of receipt of such notice.

     (d) If the Company and the Guarantors shall give any notice pursuant to Section 3(c) hereof to suspend the disposition of Registrable Securities or Exchange Securities, as applicable, pursuant to a Shelf Registration Statement or the Prospectus included in the Exchange Offer Registration Statement, as applicable, the Company and the Guarantors shall extend the period during which such Shelf Registration Statement or the Prospectus included in the Exchange Offer Registration Statement, as applicable, shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders of such Registrable Securities or Broker-Dealers holding Exchange Securities shall have received copies of the supplemented or amended Prospectus or any Free Writing Prospectus necessary to resume such dispositions or shall have been advised in writing by the Company and the Guarantors that such dispositions may be resumed. The Company and the Guarantors may give any such notice only twice during any 365-day period and any such suspensions shall not exceed 45 days for each suspension and there shall not be more than two suspensions in effect during any 365-day period.

     (e) The Holders of Registrable Securities covered by a Shelf Registration Statement who desire to do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten Offering, the investment bank or investment banks and manager or managers (each an “Underwriter”) that will administer the offering will be selected by the Holders of a majority in principal amount of the Registrable Securities included in such Underwritten Offering.

     4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities.

     The Company and the Guarantors understand that it is the Staff’s position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.

     (b) In light of the above, and notwithstanding the other provisions of this Agreement, the Company and the Guarantors agree to amend or supplement the Prospectus contained in any Exchange Offer Registration Statement for a period of up to 180 days after the last Exchange Date (as such period

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may be extended pursuant to Section 3(d) of this Agreement), if requested by the Initial Purchasers or by one or more Participating Broker-Dealers, in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above. The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent permitted by law, make available) during such period in connection with the resales contemplated by this Section 4.

     5. Indemnification and Contribution. (a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), that arise out of, or are based upon, (1) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or (2) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, any Free Writing Prospectus used in violation of this Agreement or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser or information relating to any Holder furnished to the Company in writing through [          ] or any selling Holder expressly for use therein. In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement, any Prospectus, any Free Writing Prospectus or any Issuer Information.

     (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless each of the Company, the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement, any Prospectus and any Free Writing Prospectus.

     (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying Per-

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son”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 5 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 5. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (or if the Holders, to the Majority Holders) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person, and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person (or if the Holders, to the Majority Holders); or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm (x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of such Initial Purchaser shall be designated in writing by [          ], (y) for any Holder, its directors and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other cases shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

     (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits

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referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

     (e) The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 5, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 5 are several and not joint.

     (f) The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

     (g) The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement.

     6. General.

     (a) No Inconsistent Agreements. The Company and the Guarantors represent, warrant and agree that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.

     (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Majority Holders of the outstanding Registrable Securities affected by such amend-

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ment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof that adversely affects the rights of any Holder of Registrable Securities shall be effective as against any such Holder unless consented to in writing by such Holder. Any amendments, modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties hereto.

     (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.

     (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement.

     (e) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder.

     (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

     (g) Headings. The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof.

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     (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

     (i) Miscellaneous. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

NORTEL NETWORKS LIMITED
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Gordon A. Davies
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

NORTEL NETWORKS CORPORATION
By:	/s/ Michael W. McCorkle
	Name:	Michael W. McCorkle
	Title:	Treasurer

By:	/s/ Gordon A. Davies
	Name:	Gordon A. Davies
	Title:	Deputy General Counsel and Corporate Secretary

NORTEL NETWORKS INC.
By:	/s/ Lynn C. Egan
	Name:	Lynn C. Egan
	Title:	Assistant Secretary

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Confirmed and accepted as of the date first above written:

[                    ]
For itself and on behalf of the
several Initial Purchasers listed in Schedule 1 hereto
By:	/s/	Authorized Signatory
		Authorized Signatory

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Schedule 1

Initial Purchasers

[                         ]

[                         ]

[                         ]

[                         ]

[                         ]

[                         ]

[                         ]

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EX-99.1

Exhibit 99.1

News Release

FOR IMMEDIATE RELEASE May 28, 2008

Nortel Completes US$675 Million Senior Notes Offering
To Redeem 4.25% Convertibles Notes due 2008

TORONTO — Nortel Networks^* Corporation [NYSE/TSX: NT] today announced the closing of the previously announced offering by its principal direct operating subsidiary, Nortel Networks Limited (“NNL”), of $675 million aggregate principal amount of 10.750% senior unsecured notes due 2016 (the “Notes”) in the United States to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”), to persons outside of the United States pursuant to Regulation S under the Securities Act, and to accredited investors in Canada pursuant to applicable private placement exemptions. The Notes are fully and unconditionally guaranteed by Nortel Networks Corporation (“NNC”) and initially guaranteed by NNC’s indirect subsidiary, Nortel Networks Inc (“NNI”), and are part of the same class as NNL’s previously issued $450 million aggregate principal amount of 10.750% senior notes due 2016.

NNL expects that the net proceeds from the sale of the Notes will be approximately $655 million, after deducting commissions and other offering expenses. Nortel plans to use these net proceeds, together with available cash, to redeem at par the $675 million outstanding principal amount of NNC’s 4.25% convertible senior notes due September 1, 2008. NNC has issued a notice with respect to the redemption, on June 16, 2008, of the 4.25% convertible senior notes.

The Notes and related guarantees have not been registered under the Securities Act or the securities laws of any other place and may not be offered or sold within the United States or to, or for the account or benefit of, a U.S. person except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and applicable securities laws in other jurisdictions. The Notes and the related guarantees will initially not be fungible for trading purposes with the currently outstanding 10.750% senior notes due 2016. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes and the related guarantees, nor shall there be any sale of the Notes and the related guarantees in any jurisdiction in which such offer, solicitation or sale is unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

-end-

* Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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