TORONTO -- Nortel Networks Corporation (NYSE:NT) (TSX:NT) today announced an agreement whereby it will sell certain assets relating to its optical components business to Bookham Technology plc (LSE:BHM) (Nasdaq:BKHM) for 61 million common shares of Bookham Technology plc, nine million warrants with a strike price of one-third pence (the value of the common shares and warrants is based on an October 4, 2002 closing price of US$0.69 cents per share) and debt of US$50 million. Bookham Technology will also pay Nortel Networks a US$10 million cash reimbursement for certain restructuring expenses incurred in connection with this transaction."This transaction is an important step in our path to profitability and our strategy to focus on the delivery of high performance, cost-effective optical network solutions for our customers," said Brian McFadden, president, Optical Networks, Nortel Networks. "This strategic relationship with Bookham Technology will enable Nortel Networks to maintain its supply of best in class optical components from a world-class supplier. We are excited about this relationship and our ability to jointly collaborate on next generation components, and we expect that it will drive innovation and customer-responsive solutions for both companies."Under the terms of the agreement, Nortel Networks will sell the transmitter and receiver business located in Paignton, U.K., Ottawa, Canada, and Harlow, U.K., and the pump laser and amplifiers business located in Paignton, U.K., Zurich, Switzerland, and Poughkeepsie, New York. The assets include patents, other intellectual property and trademarks. The transaction also includes a 3-year supply agreement for minimum purchases of approximately $120 million for the first 18 months. Approximately 1,000 employees will have the opportunity to continue their employment with Bookham Technology after redundancies are addressed and existing customer contracts will be assumed by Bookham Technology. The transaction is expected to close in the fourth quarter of 2002. As a condition of the sale in Europe, all necessary employee consultation requirements must also be satisfied. The completion of the transaction is also subject to customary regulatory approvals and a vote by the shareholders of Bookham Technology.In a separate release:OXFORDSHIRE, U.K. -- Bookham Technology plc (LSE: BHM, Nasdaq: BKHM) (“Bookham”or the “Company”), a leading provider of integrated optical components andsubsystems for fibre optic communication networks, announced today that ithas entered into an agreement to acquire the Optical Transmitter andReceiver and Optical Amplifier Businesses of Nortel Networks Corporation(“Nortel”) (the “Combination”). As part of the Combination, NortelNetworksLimited, a subsidiary of Nortel, has also agreed to enter into a US$120.0million (£76.5 million)* supply agreement with Bookham. The Combinationissubject, inter alia, to approval by Bookham’s shareholders at anExtraordinary General Meeting to be held on 5 November 2002 ("EGM").The Company believes that the economies of scale generated by the creationof the new enlarged group will facilitate increased cost efficiencies.Furthermore, as part of an independent entity, there will be greateropportunity for the components generated from the Optical Transmitter andReceiver and Optical Amplifier Businesses to be sold to other leadingsystems manufacturers who may not previously have purchased componentsfromNortel, as Nortel is one of their competitors. Finally, by integratingtheOptical Transmitter and Receiver and the Optical Amplifier Businesses'products with Bookham’s own active and passive solutions, Bookham willtakea significant step towards becoming a leading worldwide provider ofopticalcomponents, modules and sub-systems and thus towards meeting its customers'desire to have fewer suppliers offering a broader range of products.Bookham will acquire the assets of the Optical Transmitter and ReceiverandOptical Amplifier Businesses excluding cash balances and accountsreceivable, but including inventory valued at £195.7 million on a grossbasis and £36.5 million on a net basis (after reserves for excess andobsolescence). Bookham has purchased these assets free from trade debtorsand all other indebtedness. Substantially all of the employees of theOptical Transmitter and Receiver and Optical Amplifier Businesses will bejoining Bookham as part of the Combination.The consideration will be the issue to Nortel of:o 61,000,000 new ordinary shares of Bookham (“Ordinary Shares”) (which,immediately following completion of the Combination (“Completion”), wouldrepresent approximately 29.78 per cent of the issued share capital of theCompany);o Warrants over 9,000,000 new Ordinary Shares of Bookham (the “Warrants”);o 3 - 5 year Loan Notes to the value of US$50 million (£31.9 million).Bookham will also pay to Nortel on Completion US$10.0 million (£6.4million)for restructuring expenses incurred by Nortel in connection with theCombination.Nortel Networks Limited has agreed to purchase a minimum of US$120.0million(£76.5 million) of optical components and related services from Bookhamovera period of six quarters from completion of the Combination (“Completion”).In addition, over the three years following Completion, Nortel NetworksLimited has agreed to purchase from Bookham agreed percentages on aproduct-by-product basis of its total requirements for the opticalcomponents products that are currently being supplied to Nortel by theOptical Transmitter and Receiver and Optical Amplifier Businesses, subjectto certain performance criteria.Nortel Networks Corp.Bookham Technology plc