TORONTO - Nortel Networks* [NYSE/TSE: NT] announced the completion of a plan of arrangement pursuant to which Nortel Networks acquired Architel* Systems Corporation, a leader in software systems that allow service providers to rapidly provision Internet and other next-generation Internet Protocol (IP) services. This acquisition brings together the capabilities of Architel and Nortel Networks Preside to create the industry's most comprehensive solutions for enabling service commerce. With these solutions, service providers can deliver new IP services to their customers with greater speed, quality and reliability, helping them realize the business opportunities promised by the high-performance Internet.

The plan of arrangement was overwhelmingly approved by the shareholders of Architel on Monday, June 26, 2000 and received Court approval on Thursday June 29, 2000. As a result of the plan of arrangement, a subsidiary of Nortel Networks was amalgamated with Architel and Architel became a wholly-owned subsidiary of Nortel Networks.

Each outstanding common share of Architel has been exchanged for .38682 Nortel Networks Common Shares, for a total of approximately 6,028,277 Nortel Networks common shares. Approximately, 859,285 Nortel Networks common shares were reserved for issuance in respect of options to purchase common shares of Architel, which have been assumed by Nortel Networks.

"This acquisition provides us with first mover advantage in the market for the critical software and service-enabling solutions needed to create and run the high performance Internet, " said Steve Nicolle, vice president of Service Ware Solutions, Nortel Networks. "Preside and Architel represent a market making combination that will enable service providers to leverage opportunities afforded by the high performance Internet faster."

Nortel Networks Preside delivers service-enabling software solutions that manage the network infrastructure and give service providers the ability to rapidly create and deliver valued, profit-generating services to their customers.

Nortel Networks is a global Internet and communications leader with capabilities spanning Optical, Wireless, Local Internet and eBusiness. 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, promising a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com

*Nortel Networks, the Nortel Networks logo, and the Globemark are trademarks of Nortel Networks. Architel is a trademark of Architel Systems Corporation.