For additionalinformation with respect to certain of these and other factors, seeNortel’s Quarterly Report on Form 10-Q for the quarter ended March 31,2009 and Annual Report on Form 10-K for the year ended December 31, 2008and other securities filings with the United States Securities andExchange Commission. McGuire.”Despite market challenges, we are seeing modest deal flow in thetransportation sector in the first half of 2009. Creditors’ Committee, or otherthird parties; raise capital to satisfy claims, including Nortel’sability to sell assets to satisfy claims against us; maintain R&Dinvestments; realize full or fair value for any assets or business thatare divested; utilize net operating loss carryforwards and certain othertax attributes in the future; avoid the substantive consolidation ofNNI’s assets and liabilities with those of one or more other U.S. These statements are based on Nortel’scurrent expectations, estimates, forecasts and projections about theoperating environment, economies and markets in which Nortel operates.These statements are subject to important assumptions, risks anduncertainties that are difficult to predict, and the actual outcome maybe materially different. Nortel’s technologies aredesigned to help eliminate today’s barriers to efficiency, speed andperformance by simplifying networks and connecting people to theinformation they need, when they need it. Our next-generationtechnologies, for both service provider and enterprise networks, supportmultimedia and business-critical applications. Thestatements herein are not intended to constitute, nor should they berelied upon as, tax advice to any particular seller or purchaser of NNCcommon shares or NNL preferred shares.About NortelNortel delivers communications capabilities that make the promise ofBusiness Made Simple a reality for our customers.

Also, purchasers of Nortel shares from non-residents may havean obligation to remit 25% of the purchase price to the Canada RevenueAgency. Parties to sales of Nortel shares involving a non-resident sellershould consult their tax advisors or the Canada Revenue Agency. The Company and NNL appliedto delist their shares from trading on the Toronto Stock Exchange (TSX)and delisting occurred on June 26, 2009 at the close of trading.As a result of the TSX delisting, certain sellers of Nortel shares whoare not residents of Canada for purposes of the Income Tax Act (Canada)may be liable for Canadian tax and may be subject to tax filingrequirements in Canada as a result of the sale of such shares after June26, 2009. The stalking horse asset and share sale agreementand the EMEA asset sale agreement are also subject to purchase priceadjustments under certain circumstances.Share Value; Certain Potential Tax Consequences of TSX DelistingAs previously announced in the Company’s news release of June 19, 2009,Nortel does not expect that the Company’s common shareholders or the NNLpreferred shareholders will receive any value from the creditorprotection proceedings and expects that the proceedings will result inthe cancellation of these equity interests. In some EMEA jurisdictions, this transaction is subjectto information and consultation with employee representatives prior tofinalization of the terms of sale.In addition to the processes and approvals outlined above, consummationof the transaction is subject to the satisfaction of regulatory and otherconditions and the receipt of various approvals, including governmentalapprovals in Canada and the United States and the approval of the courtsin France and Israel.

Following completion of thebidding process, final approval of the U.S. and Canadian courts will berequired.In relation to the EMEA entities to which they are appointed, the UKJoint Administrators have the authority, without further court approval,to enter into the EMEA asset sale agreement on behalf of those relevantNortel entities. Bankruptcy Code.A similar motion for the approval of the bidding procedures will be filedwith the Ontario Superior Court of Justice. Weremain committed to serving them without interruption through thisprocess and, as we move forward, we pledge to communicate our progress tothe greatest extent possible.”Chuck Saffell, Chief Executive Officer of Nortel Government Solutions,said: “Nortel Government Solutions has built a robust product andservices business for U.S Federal government customers. If successfullyconcluded, this agreement will offer Avaya the opportunity to continue togrow this business and bring further value to customers.”Details of Sale ProcessNortel will file the stalking horse asset and share sale agreement withthe United States Bankruptcy Court for the District of Delaware alongwith a motion seeking the establishment of bidding procedures for anauction that allows other qualified bidders to submit higher or otherwisebetter offers, as required under Section 363 of the U.S.

They value ouremployees and technology platforms and are appreciative of our servicelevels which are at multi-year highs.”"Today’s agreements underscore the value of Enterprise Solutions and theinvestments we have made in enterprise telephony, unified communicationsand data networking core competencies. The CDMA and LTE Access stalkinghorse asset sale agreement announced on June 19th, and today’s agreementsaround our Enterprise business are solid proof of that value. Thisrepresents the best path forward, and we are advancing in our discussionswith interested parties for our other businesses.”"The many customers I have spoken with have been highly supportive of ourefforts and transparency throughout this process. We have determined that the sale of our businesses maximizesvalue while preserving innovation platforms, customer relationships andjobs to the greatest extent possible.