Exhibit 10.2

CASH COLLATERAL AGREEMENT

THIS AGREEMENT is made as of the 18 ^th  day of June, 2009 among NORTEL NETWORKS LIMITED (the “ Principal ”) and EXPORT DEVELOPMENT CANADA (“ EDC ”).

RECITALS:

WHEREAS , pursuant to a Second Amended and Restated Master Facility Agreement dated as of December 14, 2007 between the Principal and EDC (the “ Facility Agreement ”), EDC agreed to provide Support for the benefit of the Principal and its affiliates, subject to the terms and conditions of the Facility Agreement;

WHEREAS the Principal commenced a voluntary proceeding seeking relief including an initial order (as amended, the “ Initial Order ”) under the Companies’ Creditors Arrangement Act (Canada) (the “ CCAA Proceeding ”) and the Principal’s subsidiaries have commenced administration proceedings in the United Kingdom and restructuring proceedings under Chapter 11 of the United States Bankruptcy Code;

WHEREAS the Principal and EDC entered into an Agreement dated as of January 14, 2009, as amended by the Amended and Restated Short-Term Support Agreement dated as of February 10, 2009, by and between the Principal and EDC, as further amended by the Second Amended and Restated Short-Term Support Agreement dated as of April 24, 2009 by and between the Principal and EDC (collectively, the “ Original Agreement ”), pursuant to which EDC agreed, among other things, that, until July 30, 2009, new Support would continue to be made available to the Principal under the Facilities, to an aggregate maximum amount of USD 30 million; and

WHEREAS the Principal and EDC have further amended the terms and conditions of the Original Agreement as of the date hereof;

NOW THEREFORE for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenants, acknowledges, represents and warrants to and in favour of each other as follows:

The Principal confirms the validity and truth of the facts set forth in the Recitals to this Cash Collateral Agreement, which have the same force and effect as if repeated herein at length.

Capitalized terms used in this Agreement and not otherwise defined herein have the meanings given to them in the Initial Order, the Facility Agreement and the Original

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Agreement. Unless the context otherwise requires, in this Agreement the following terms are used with their corresponding defined meanings:

“Agreement” means this agreement. The terms “ this Agreement ”, “ hereof ”, “ hereunder ” and similar expressions refer to this Agreement and not to any particular Article, Section, Subsection, paragraph, clause or other portion of this Agreement. Each reference to a “Schedule” in this Agreement is a reference to a Schedule attached to this Agreement which shall form an integral part hereof.

“ Business Day ” means a day which is not a Saturday or a Sunday on which banks and trust companies are generally open for business in Toronto, Canada.

“ Collateral ” means (i) the Support Collateral, (ii) the Deposit, and (iii) all proceeds of personal property described in this definition and subject to the security hereby constituted.

“ Collateral Delivery Account ” means a U.S. dollar account of EDC at Royal Bank of Canada’s branch located at 151 O’Connor Street, Ottawa, ON identified as 00006-4015906 (SWIFT ROYCCAT2).

“ Deposit ” has the meaning ascribed thereto in Schedule B of the Original Agreement.

“ Fees and Expenses Letter ” means the fees and expenses letter dated January 27, 2009 by EDC as agreed to and accepted by the Principal January 28, 2009.

“ Lien ” means (i) any right of set-off intended to secure the payment or performance of an obligation, (ii) any interest in property created by way of mortgage, pledge, charge, lien, assignment by way of security, hypothecation, security interest, hire purchase agreement, conditional sale agreement, sale/lease back transaction, deposit arrangement, title retention, capital lease or discount, factoring or securitization arrangement on recourse terms, (iii) any statutory deemed trust or lien, (iv) any preference, priority, adverse claim, levy, execution, seizure, attachment, garnishment or other encumbrance which binds property, and (v) any agreement to grant any of the rights or interests described in clauses (i) to (iv) inclusive of this definition.

“ Obligations ” means all of the Principal’s present and future payment, reimbursement and indemnity obligations owing to EDC under the Original Agreement and the Fees and Expenses Letter. For greater clarity, Obligations shall not include Unsecured Renewal Support (as defined in the Original Agreement).

“ Security ” means any and all Liens granted by the Principal to EDC in this Agreement.

“ Support Collateral ” means the funds transferred by the Principal to EDC pursuant to Sections 5 and 6 hereof.

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Extended Meanings

To the extent the context so admits, in this Agreement the following words and expressions shall be given the extended meanings set out opposite them:

an “ agreement ” – any agreement, oral or written, simple contract or specialty, bond, bill of exchange, indenture, instrument or undertaking.

an “ asset ” – any undertaking, business, property (real, personal or mixed, tangible or intangible) goodwill or other asset.

an “ authorization ” – any authorization, approval, conse