TORONTO -- Nortel (NYSE:NT)(TSX:NT) has entered into a settlement agreement with Arbinet-thExchange, Inc. to resolve a lawsuit originally brought by Nortel against Arbinet in July 2004. The lawsuit claimed that Arbinet infringed copyrights and misappropriated trade secrets by using, without authorization, proprietary software of Nortel. Nortel also claimed that Arbinet exceeded the permitted usage level under its Right to Use License and failed to meet its contractual obligations to Nortel with regard to the purchase of certain switching systems.

As part of the settlement, Arbinet will pay an undisclosed amount to Nortel. Nortel has agreed to dismiss the lawsuit, which was pending in the United States District Court, Eastern District of Virginia, Alexandria Division.

Nortel Networks Ltd.