Hitachi to Buy Nortel's Packet Core

TORONTO -- Nortel* Networks Corporation [OTC: NRTLQ] today announced that its principal operating subsidiary, Nortel Networks Limited, and one of its other subsidiaries, Nortel Networks Inc., have entered into an agreement with Hitachi, Ltd. for the sale of certain assets associated with the development of next generation packet core network components (excluding legacy packet core components for Nortel's GSM and UMTS businesses) for a purchase price of US$10 million. Under the agreement, the assets include software to support the transfer of data over existing wireless networks and the next generation of wireless communications technology, including relevant non-patent intellectual property, equipment and other related tangible assets, as well as a non-exclusive license of certain relevant patents and other intellectual property.

Consummation of the transaction is subject to approval by the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice as well as the satisfaction of regulatory and other customary conditions. The sale is expected to close in 2009.

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.

Nortel Networks Ltd.