The acquisition was effected by the merger of a wholly-owned subsidiary of Nortel Networks with and into Clarify. As a result of the merger, each outstanding share of Clarify common stock was converted into a right to receive 1.3 Nortel Networks common shares. Clarify common stock will no longer trade on The NASDAQ Stock Market. Nortel Networks issued approximately 31.7 million common shares in connection with the merger.

"Today marks a major milestone in Nortel Networks' series of successful industry-leading acquisitions," said Bill Conner, president of Enterprise Solutions, Nortel Networks. "Clarify's leadership in eBusiness solutions combined with Nortel Networks' high performance Internet technologies creates a new powerhouse serving both enterprises and carriers."

"Companies require both unified network solutions and eBusiness software designed to deliver a total customer experience, improve loyalty and increase return on relationship," said Tony Zingale, president and CEO of Clarify. "With the acquisition complete, we are ready to hit the ground running to deliver new solutions and innovations. With our combined expertise and leadership, we are uniquely positioned to serve our customers."

Clarify stockholders who held their shares directly will receive a notice in the mail describing the process to exchange their Clarify common stock certificates for Nortel Networks common share certificates. Clarify stockholders whose shares were held through intermediaries such as banks or brokers will receive information about their holdings from those institutions.

Founded in 1990, Clarify Inc., a Nortel Networks' company, is a leading provider of eBusiness solutions for the front office. Clarify eFrontOffice combines customer relationship management and eBusiness capabilities in a single solution allowing companies to quickly deploy e-business sales, marketing and service initiatives. Clarify is the choice of leading corporations including Best Buy, British Telecommunications, Compaq, E*Trade, First USA, General Electric, giggo.com, Gillette, H&R Block, Microsoft, and Prudential. Clarify has strategic alliances with Cap Gemini, eLoyalty, Ernst & Young and PricewaterhouseCoopers.

Nortel Networks is a global leader in telephony, data, eBusiness, and wireless solutions for the Internet. The Company had 1999 U.S. GAAP revenues of US$21.3 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet through Unified Networks* that promise a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price and product competition; the dependence on new product development; the impact of rapid technological and market change; the ability of Nortel Networks to integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; unanticipated impact of Year 2000 issues; and the impact of consolidations in the telecommunications industry. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.