"Nortel Networks is a world leader in the Optical Internet and CoreTek's pioneering technology will help us maintain and extend that lead by bringing new dimensions of speed, performance and intelligence to the Optical Internet" said Greg Mumford, president, Optical Networks, Nortel Networks.

As a result of the acquisition, each outstanding share of CoreTek series B preferred stock and common stock was converted into a right to receive 0.627815 Nortel Networks common shares and each outstanding share of CoreTek series A preferred stock was converted into the right to receive 6.27815 Nortel Networks common shares, for a total of approximately 14.5 million Nortel Networks common shares. Approximately 3.4 million Nortel Networks common shares were reserved for issuance in respect of CoreTek options assumed by Nortel Networks. In addition, up to approximately US$363 million in Nortel Networks common shares may be issued to former CoreTek shareholders and optionholders upon CoreTek achieving certain business objectives. The acquisition was effected by the merger of a wholly-owned subsidiary of Nortel Networks with and into CoreTek.

More than 75 percent of North American Internet backbone traffic travels across Nortel Networks systems. In 1999, Nortel Networks set the standard for speed with its 80 Gpbs line rate OPTera* technology, and in bandwidth with the OPTera 1600G, which transmits 160 colors of light across a 10 Gbps system, for total capacity of 1.6 terabits per second (Tpbs).

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 make acquisitions and/or 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; the impact of consolidations in the telecommunications industry, the uncertainties of the Internet; stock market volatility; the ability of Nortel Networks to recruit and retain qualified employees; and the impact of increased provision of customer financing by Nortel Networks. 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.