Nortel receives new waiver from Export Development Canada related to its delay in filing reports with the SEC

June 1, 2004

2 Min Read

TORONTO -- Nortel NetworksCorporation (NYSE:NT)(TSX:NT) today announced that its principaloperating subsidiary, Nortel Networks Limited ("NNL"), has obtained anew waiver from Export Development Canada ("EDC") of certain defaultsunder the EDC performance-related support facility (the "EDC SupportFacility") related to the delay by NNL in meeting its filing obligationswith the U.S. Securities and Exchange Commission (the "SEC").

With the prior waiver obtained on March 29, 2004, scheduledto expire tomorrow, NNL has obtained a new waiver from EDC that duringthe waiver period maintains the existing uncommitted support availableunder the EDC Support Facility and reclassifies the previously committedportion of the EDC Support Facility as uncommitted support.

The EDC Support Facility provides up to US$750 million insupport of which, prior to the new waiver, US$300 million was forcommitted support and, as of May 28, 2004, approximately US$105 millionof such committed support was unused. As of May 28, 2004, there wasapproximately US$328 million of outstanding support utilized under theEDC Support Facility.

The waiver will remain in effect until the earliest ofcertain events including:

  • the date on which both NNL and the Company have filedtheir respective 2003 Annual Reports on Form 10-K (the "2003 Annual Reports") and the Q1 2004 Quarterly Reports on Form 10-Q (the "First Quarter Reports") with the SEC;

  • Aug. 30, 2004; or

  • at the election of EDC and on no less than one and nomore than three business days' written notice to NNL, July 30, 2004.

The waiver also applies to certain other breaches by NNLwhich have arisen or may arise under the EDC Support Facility inrelation to the delayed filings and the planned restatements andrevisions to 2003 and prior year financial results.

There can be no assurance that EDC will provide anyadditional support under the uncommitted EDC Support Facility.Notwithstanding the new waiver, the Company and NNL are providing noassurance that they will file their respective 2003 Annual Reports andFirst Quarter Reports within the waiver period or, if they fail to doso, that NNL would receive any further waivers or any extensions of thewaiver beyond its scheduled expiry date. If the waiver announced todaywere terminated or expired prior to the filing of such Annual Reportsand First Quarter Reports, EDC would have the right at such time torequire NNL to cash collateralize the support outstanding under the EDCSupport Facility and to exercise its rights against the collateral underNNL's related security agreements.

Nortel Networks Ltd.

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