Airspan Acquires Nortel Sub

BOCA RATON, Fla.-- Airspan Networks, Inc., a leading worldwide provider of broadband fixed wireless DSL networks, announced today that it has signed a term sheet with Nortel Networks(a) to acquire Nortel Networks' Fixed Wireless Access business. Final closing will be subject to negotiation and signing of definitive agreements, and other standard closing conditions (including consultation with affected employees in the United Kingdom). The parties expect to close the transaction before the end of 2003. The Nortel Networks Fixed Wireless Access business has installed more fixed wireless access lines in 3.5 GHz than any other manufacturer, including a deployment in Mexico, one of the largest single 3.5GHz fixed wireless access networks in the world.

In accordance with the term sheet, the purchase price of approximately $12.9 million will be paid in cash at closing. In addition, under the Term Sheet, Nortel Networks will transfer to Airspan customer prepaid deposits (which at closing are expected to exceed $11 million), and Airspan will assume the obligation to supply these prepaid orders. The company expects the transaction to have an immediate positive earnings and cash impact, and to add substantially to Airspan's revenues going forward.

When the transaction is closed, Airspan will acquire Nortel Networks existing assets associated with the manufacture, development and support of the fixed wireless product line sold by Nortel Networks under the "Proximity"(TM) trade name, including certain intellectual property rights. Nortel Networks employees directly employed in the Proximity business will transfer to Airspan at the closing of the transaction. These new employees will bring to Airspan considerable experience in the commercialization and roll out of fixed wireless access networks. They will continue to be based in England and Florida, USA. In addition, Airspan will also assume Nortel Networks current manufacturing obligations for the assembly and final testing of Proximity products.

Since Proximity was first deployed in 1996, Nortel Networks has installed almost 500,000 million lines with 15 operators in 14 countries, including deployments in Mexico, Canada, Australia, Turkey and the United States. As part of the acquisition, Airspan will assume existing Nortel contracts with those operators, including a major contract with a Mexican operator, which currently has more than 300,000 voice and data subscribers on its Proximity access network, one of the largest single 3.5 GHz fixed wireless access networks in operation today.

"This signing represents a major milestone for the growth of Airspan," said Eric Stonestrom, chief executive officer of Airspan Networks. "The acquisition of Nortel Networks fixed wireless access business will solidify Airspan's position as the market and technical leader in the fixed wireless market. Proximity will complement the other Airspan AS40x0 products and the lower cost, IP-centric broadband WipLL products. We will now have a strong presence in every major market in the world, along with the increased revenue opportunities that come with the servicing of such well-recognized customers and major deployments that we are adding to our customer l base in more than 60 countries. The potential to sell our broader product line across a wider customer base is substantial. This transaction will also have a positive effect on cash flow and profitability."

Airspan Networks

Nortel Networks Corp.