Genband

TORONTO, ONTARIO--(Marketwire - Feb. 24, 2010) - Nortel* Networks Corporation (OTCBB:NRTLQ) today announced that, it, its principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), will not proceed to auction and will work towards closing the asset sale agreements with GENBAND, Inc. (GENBAND) which were previously announced on December 23, 2009. The agreements provide for the sale of substantially all of the global assets of Nortel's Carrier VoIP and Application Solutions (CVAS) business for a purchase price of US$282 million, subject to balance sheet and other adjustments currently estimated at approximately US$100 million for a net purchase price of approximately US$182 million.

Under the terms of the agreements, GENBAND's purchase will include substantially all product platforms, all patents predominantly used, and other IP exclusively used in Nortel's CVAS business, including softswitching, gateways, SIP applications, and TDM products and services. The agreement will also provide for the transition of substantially all of Nortel's CVAS customer contracts to GENBAND.

GENBAND has teamed with One Equity Partners (OEP) and other existing shareholders to secure the Nortel CVAS assets.

The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on March 3, 2010, and in Israel. Nortel will work diligently with GENBAND to close the sale in the second quarter of 2010, subject to the timing of regulatory approvals.

A significant majority of CVAS employees will have the opportunity to continue employment with GENBAND. This includes those employees assigned to the CVAS business in certain EMEA jurisdictions who will transfer automatically to GENBAND by operation of law. The sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments. U.S. and Canadian antitrust clearance for the sale has been obtained.

"Uniting our two businesses will create one of the industry's strongest Carrier VoIP players, in terms of market share, customer base and portfolio," said Samih Elhage, president, CVAS, Nortel. "Joining forces with GENBAND will allow us to continue to provide a highly reliable solution and service offering to service providers and enterprises across the globe. I am also pleased that a significant majority of Nortel's employees, who have been an integral part of our long-standing #1 position in the Carrier VoIP market, will have the opportunity to continue their innovative work with GENBAND."

"This acquisition will combine softswitch and application leadership with media, session and security gateway leadership - creating the industry's most comprehensive Carrier VoIP portfolio," said Charles D. Vogt, president and CEO, GENBAND. "This move will put GENBAND in a unique position to cost-effectively transform today's legacy switching infrastructure for customers around the world. We look forward to integrating Nortel's CVAS products and welcoming their talented CVAS employees to GENBAND, as we continue to support the industry's migration from TDM to IP, IP to IP and fixed to fixed-mobile convergence, all of which are market accelerators over the next five years."

"Nortel and GENBAND will accelerate the integration planning and execution work to make this transition as smooth as possible for our customers. In addition, throughout the completion of this transaction, we will continue to deliver on our customer commitments and provide the highest levels of customer service that Nortel CVAS customers have come to expect from our team." Elhage added.

Nortel's CVAS business is the recognized leader in the Carrier VoIP space, having shipped more than 121 million Carrier VoIP and Multimedia ports, including over 10 million SIP lines to leading carriers globally. Nortel has consistently been ranked as the #1 Global Carrier VoIP and Softswitch leader since 2002. Nortel's CVAS business has customer deployments in all continents with leading carriers and provides VoIP solutions to 80 percent of IDC's worldwide listing of top 20 carriers (by revenue).

As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

About Nortel

For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain statements in this press release may contain words such as "could", "expects", "may", "should", "will", "anticipates", "believes", "intends", "estimates", "targets", "plans", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates.