For more information:

 Media Relations
MediaRelations@nortel-canada.com 

 Nortel Announces Cease Trade Order
Issued by Alberta Securities Commission

TORONTO – Nortel* Networks Corporation (“NNC”) [OTC: NRTLQ] and Nortel Networks Limited (“NNL”) announced that they have received notice from the Alberta Securities Commission (“ASC”) that the ASC has issued a cease trade order (“CTO”), dated May 13, 2013, in respect of the securities of NNC and NNL for their failure to file certain periodic disclosure documents.

The CTO prohibits trading and purchasing of any securities of NNC or NNL, effective as of May 13, 2013, other than (i) trades or purchases for nominal consideration for the purposes of permitting a security holder to crystallize a tax loss (a “tax loss trade”); or (ii) trades or purchases of notes of either NNC or NNL to or by an entity that qualifies as an “accredited investor” as that term is defined under applicable Canadian securities laws (an “accredited investor trade”). The aforementioned exceptions are subject to the further qualifications that: (1) in the case of a tax loss trade, a copy of the CTO is provided to the purchaser and the seller receives a written acknowledgement from the purchaser that the securities acquired remain subject to the CTO; and (2) in the case of an accredited investor trade in notes of NNC or NNL, the purchaser will be deemed (by reason of the issuance of this news release and the posting of the CTO on the Restructuring Document Centre website of Ernst & Young Inc., as monitor of NNC and NNL in their Canadian creditor protection proceedings, at http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&redirect=1) to have received notification of the terms of the CTO and deemed to have acknowledged to the seller that the notes acquired remain subject to the CTO. The full text of the CTO accompanies this news release marked as Annex A.

Annex A

ALBERTA SECURITIES COMMISSION
CEASE TRADE ORDER

Citation: Nortel Networks, Re, 2013 ABASC 200                                                    Date: 20130513

Nortel Networks Corporation and Nortel Networks Limited

Background

1. Nortel Networks Corporation (NNC) and Nortel Networks Limited (NNL) (collectively,the Issuers) are reporting issuers under the Securities Act, R.S.A. 2000, c. S-4 (the Act) and have failed to file the following periodic disclosure pursuant to section 146 of the Act:

(a) annual audited financial statements, annual management’s discussion and analysis, and certification of annual filings for the year ended 31 December 2012; and

(b) interim unaudited financial statements, interim management’s discussion and analysis, and certification of interim filings for the interim period ended 31 September 2012.

2. Pursuant to an Authorization Order dated 31 October 2012, the undersigned is authorized to make orders under section 33.1 of the Act.

Decision

3. Under section 33.1 of the Act, it is ordered that trading and purchasing cease in respect of any security of the Issuers, except for the trades and purchases identified below, until this order has been revoked or varied.

4. This order does not apply to the following trades and purchases:

(a) a trade to and a purchase by a person’or company in a Security of either of the Issuers for nominal consideration for the purpose of permitting security holders of the Issuer to crystallize any losses for tax purposes provided that, prior to such trade and purchase, suchperson or company:

(i) receives a copy of this order; and

(ii) provides written acknowledgment to the seller that the securities of the Issuer remain subject to this order in accordance With its terms following such trade and purchase; or

(b) a trade and purchase of:

(i) NNC, U.S. $575,006,000 principal amount of 1.75% convertible senior notes due 2012 and U.S. $575,000,000 principal amount of 2.125% convertible senior notes due 2014 (collectively, the NNC Notes); or

(ii) NNL, U.S. $1,000,000,000 principal amount of floating rate senior notes due 2011, U.S. $550,000,000 principal amount of 10.125% senior notes due 2013, U.S. $1,125,000,000 principal amount of 10.750% senior notes due 2016 and U.S. $200,000,000 principal amount of 6.875% notes due 2023 (collectively, the NNL Notes);

to or by a person or company who is an “accredited investor” as defined in National Instrument 45-106 Prospectus and Registration Exemptions, provided that, prior to such trade and purchase either:

 (iii) such person or company receives a copy of this order and provides written acknowledgment to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade and purchase; or 

(iv) the Issuers shall have issued a news release disclosing the terms of this order and Ernst & Young Inc. (the Monitor) shall have posted a copy of this order on its website, in which case each such person or company is deemed to have received notification of the terms of this order and is deemed to have acknowledged to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade and purchase:

 13 May 2013

 ”original signed by”
Jonathan Taylor
Manager, CD Compliance & Market Analysis

For more information:

Media Relations
MediaRelations@nortel-canada.com 

Nortel Announces Cease Trade Orders
Issued by Manitoba Securities Commission

TORONTO – Nortel* Networks Corporation (NNC) [OTC: NRTLQ] and Nortel Networks Limited (NNL) announced that they have received notice from the Manitoba Securities Commission (“MSC”) that the MSC has issued cease trade orders (“CTOs”), dated January 25, 2013, in respect of the securities of NNC and NNL.

Unlike the CTOs issued in December 2012 by the Ontario Securities Commission and the Autorité des marchés financiers, which orders remain in effect, the CTOs issued by the MSC do not contain any permitted trading exceptions for tax loss trades or trades to purchasers who are accredited investors as defined under applicable Canadian securities laws.  Accordingly, all trading in Manitoba in securities of both NNC and NNL is prohibited with effect as of January 25, 2013.

FOR IMMEDIATE RELEASE:                                                                                  

For more information:

Media Relations
MediaRelations@nortel-canada.com

Nortel Announces Permanent Cease Trade Order

TORONTO – Nortel* Networks Corporation (NNC) [OTC: NRTLQ] and Nortel Networks Limited (NNL) announced that, further to their announcement of December 11, 2012, a permanent cease trade order (the “CTO”) has been issued on December 24, 2012 by the Ontario Securities Commission. Other than being issued a permanent basis, the CTO is substantially similar to the temporary cease trade order issued by the OSC on December 11, 2012.

The CTO prohibits all trading in securities of both NNC and NNL, effective immediately, other than for: (i) trades made for nominal consideration for the purpose of permitting a security holder to crystallize a tax loss (a “tax loss trade”); or (ii) trades in notes of either NNC or NNL to an entity that qualifies as an “accredited investor” as that term is defined under applicable Canadian securities laws (an “accredited investor trade”). The aforementioned exceptions are subject to the further qualifications that: (1) in the case of a tax loss trade, a copy of the CTO is provided to the purchaser and the seller receives a written acknowledgement from the purchaser that the securities acquired remain subject to the CTO; and (2) in the case of an accredited investor trade in notes of NNC or NNL, the purchaser will be deemed (by reason of the issuance of this news release and the posting of the CTO on the Restructuring Document Centre of Ernst & Young Inc., as monitor, at http://documentcentre.eycan.com/Pages/ Main.aspx?SID=89&Redirect=1) to have received notification of the terms of the CTO and deemed to have acknowledged to the seller that the notes acquired remain subject to the CTO.

 The full text of the CTO accompanies this news release marked as Annex A.

NNC and NNL expect that other Canadian provincial or territorial securities regulators will issue permanent cease trade orders similar to the CTO.

About Nortel

For more information, visit Nortel on the Web at www.nortel-canada.com.

ANNEX A

IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (THE “ACT”)

AND

IN THE MATTER OF

NORTEL NETWORKS CORPORATION AND NORTEL NETWORKS LIMITED

ORDER
(Paragraphs 127(1)2)

WHEREAS on December 11, 2012, 

NORTEL NETWORKS CORPORATION (NNC) AND NORTEL NETWORKS LIMITED (NNL)
(the “Reporting Issuers”)

and the Reporting Issuers’ transfer agent were notified that the Director made an order under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act on the 11^th day of December, 2012 that all trading in the securities of the Reporting Issuers, whether direct or indirect, cease immediately for a period of fifteen days from the date of the order, subject to certain permitted exceptions therein (the “Temporary Order”);

AND WHEREAS the Reporting Issuers issued a press release on January 14, 2009 which announced that the Reporting Issuers (and certain of their Canadian subsidiaries) had initiated creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (the CCAA proceeding). Pursuant to an Order of the Ontario Superior Court of Justice dated January 14, 2009 issued in connection with the CCAA proceeding (the Initial Order), Ernst & Young Inc. was appointed by the Court as Monitor to assist the Reporting Issuers through their restructuring process;

AND WHEREAS the Reporting Issuers issued a press release on August 9, 2012 that announced that the Monitor had determined that the expense and resources required to comply with ongoing public disclosure requirements could no longer be justified and that consequently the Reporting Issuers would no longer be able to comply with their periodic reporting requirements and would discontinue preparing and filing quarterly and annual financial statements and all other periodic disclosure documents under applicable Canadian laws effective as of the filing deadlines for third quarter reporting obligations;

AND WHEREAS on November 23, 2012 the Ontario Superior Court of Justice ordered that the stay of proceedings granted in favour of the Monitor and the Reporting Issuers in the Initial Order be lifted solely for the purpose of permitting the issuance of cease trade orders by the appropriate securities regulatory authorities;

AND WHEREAS in information provided to the Ontario Securities Commission on September 21, 2012 the Reporting Issuers confirmed that in addition to common and preferred shares, the Reporting Issuers had the following securities outstanding:

(a)    in the case of NNC, U.S. $575,000,000 principal amount of 1.75% convertible senior notes due 2012 and U.S. $575,000,000 principal amount of 2.125% convertible senior notes due 2014 (collectively, the NNC Notes); and

(b)   in the case of NNL, U.S. $1,000,000,000 principal amount of floating rate senior notes due 2011, U.S. $550,000,000 principal amount of 10.125% senior notes due 2013, U.S. $1,125,000,000 principal amount of 10.750% senior notes due 2016 and U.S. $200,000,000 principal amount of 6.875% notes due 2023 (collectively, the NNL Notes);

AND WHEREAS the Temporary Order was made because the Reporting Issuers failed to file the following continuous disclosure materials as required by Ontario securities law (collectively, the “Default”):

a)                  interim financial statements for the nine-month period ended September 30, 2012;

b)                  management’s discussion and analysis relating to the interim financial statements for the nine-month period ended September 30, 2012; and

c)                  certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings;

AND WHEREAS the Reporting Issuers and the Reporting Issuers’ transfer agent were notified that a hearing (the “Hearing”) would be held to determine if it would be in the public interest to make an order under paragraph 2 of subsection 127(1) of the Act that all trading in the securities of the Reporting Issuers, whether direct or indirect, cease permanently or for such period as is specified in the order;

AND WHEREAS the Reporting Issuers were notified that if the Reporting Issuers intended to attend at the Hearing, the Reporting Issuers were requested to notify the Director of the Reporting Issuers’ intention to attend in writing, in which case the Hearing would be held before the Commission;

AND WHEREAS the Reporting Issuers were further notified that if the Reporting Issuers failed to notify the Director of the Reporting Issuers’ intention to be present at the Hearing, then the Hearing would be held before the Director without the Reporting Issuers present;

AND WHEREAS the Reporting Issuers having failed to notify the Director of the Reporting Issuers’ intention to attend at the Hearing, the Hearing was held before the Director on the 24^th  day of December, 2012;

AND UPON no one appearing at the Hearing on behalf of the Reporting Issuers;

AND UPON hearing the evidence of staff of the Ontario Securities Commission and the Director being satisfied that the Default continues;

IT IS ORDERED pursuant to paragraph 2 of subsection 127(1) of the Act that, effective immediately,  

1. subject to paragraph 2 hereof, all trading in the securities of the Reporting Issuers, whether direct or indirect, shall cease until further order by the Director;
2. this order does not apply to the following trades: 

(a)           a trade to a person or company in a security of either of the Reporting Issuers for nominal consideration for the purpose of permitting security holders of a Reporting Issuer to crystallize any losses for tax purposes provided that, prior to such trade, such person or company:

(i)            receives a copy of this order; and

(ii)           provides written acknowledgment to the seller that the securities of the Reporting Issuer remain subject to this order in accordance with its terms following such trade; or

(b)           a trade of NNC Notes or NNL Notes to a person or company who is an “accredited investor” as defined in National Instrument 45-106 Prospectus and Registration Exemptions, provided that, prior to such trade either:

(i)            such person or company receives a copy of this order and provides written acknowledgment to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade; or

(ii)           the Reporting Issuers shall have issued a news release disclosing the terms of this order and the Monitor shall have posted a copy of this order on its website, in which case each such person or company is deemed to have received notification of the terms of this order and is deemed to have acknowledged to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade. 

DATED at Toronto this 24^TH day of December, 2012.

Ontario Securities Commission

“Lisa Enright”
______________________________
Lisa Enright
Manager, Corporate Finance Branch

As a result of the Canadian filing defaults, a temporary cease trade order (“CTO”) was issued on December 12, 2012 by Authorité Des Marchés Financiers (the “AMF”). The CTO is substantially similar to the cease trade order issued by the Ontario Securities Commission on December 11, 2012.  The CTO prohibits all trading in securities of both NNC and NNL, effective immediately, other than for: (i) trades made for nominal consideration for the purpose of permitting a security holder to crystallize a tax loss (a “tax loss trade”); or (ii) trades in notes of either NNC or NNL to an entity that qualifies as an “accredited investor” as that term is defined under applicable Canadian securities laws (an “accredited investor trade”).  The aforementioned exceptions are subject to the further qualifications that: (1) in the case of a tax loss trade, a copy of the CTO is provided to the purchaser and the seller receives a written acknowledgement from the purchaser that the securities acquired remain subject to the CTO; and (2) in the case of an accredited investor trade in notes of NNC or NNL, the purchaser will be deemed (by reason of the issuance of this news release and the posting of the CTO on the Restructuring Document Centre of Ernst & Young Inc., as monitor, at http://documentcentre.eycan.com/Pages/ Main.aspx?SID=89&Redirect=1) to have received notification of the terms of the CTO and deemed to have acknowledged to the seller that the notes acquired remain subject to the CTO.  The full text of the CTO accompanies this news release marked as Annex A.

The temporary CTO is scheduled to expire 15 days from the date of its issue unless extended by the AMF.  NNC and NNL understand that the AMF will convene a hearing before the expiration date of the CTO for the purpose of making the CTO permanent.

NNC and NNL expect that other Canadian provincial or territorial securities regulators will issue cease trade orders similar to the CTO.

Annex A

DÉCISION N^o : 2012-FIIC-0256

DOSSIERS N^o : 17622 et 2226

Objet : Corporation Nortel Networks et Corporation Nortel Networks Limitée (les « émetteurs ») Interdiction d’opérations sur valeurs et préavis en vertu de l’article 318 de la Loi sur les valeurs mobilières, L.R.Q., c. V-1.1

Les émetteurs n’ont pas déposé auprès de l’Autorité des marchés financiers leurs états financiers intermédiaires, leur rapport de gestion intermédiaire et leurs attestations intermédiaires de la période terminée le 30 septembre 2012 exigés par les articles 4.3, 4.4 et

5.1 du Règlement 51-102 sur les obligations d’information continue (le « Règlement 51-102 ») et par l’article 5.1 du Règlement 52-109 sur l’attestation de l’information présentée dans les documents annuels et intermédiaires des émetteurs (le « Règlement 52-109 »);

Vu que les émetteurs sont sous la protection de la Loi sur les arrangements avec les créanciers des compagnies (la « LACC ») depuis le 14 janvier 2009 et que, dans son ordonnance initiale, la Cour supérieure de justice de l’Ontario (la « Cour ») a nommé Ernst & Young Inc. à titre de contrôleur pour assister les émetteurs dans leur processus de restructuration en vertu de la LACC;

Vu que les émetteurs avaient publié un communiqué le 9 août 2012 annonçant que le contrôleur avait déterminé que les dépenses et les ressources nécessaires pour se conformer aux exigences de divulgation publique pourraient ne plus être justifiées et que, par conséquent, les émetteurs ne pourront plus être en mesure de se conformer aux exigences d’information périodique et pourront cesser de préparer et de déposer des états financiers trimestriels et annuels ainsi que d’autres documents d’information périodique en vertu de la législation canadienne applicable, et ce, à compter de la date d’échéance pour le dépôt de leurs états financiers du troisième trimestre;

Vu que la Cour a ordonné le 23 novembre 2012 de lever la suspension de procédures à l’égard des émetteurs en vigueur depuis l’ordonnance initiale pour permettre aux autorités en valeurs mobilières concernées de prononcer une interdiction d’opérations sur valeurs à l’égard des émetteurs;

Vu les articles 265, 267 et 318 de la Loi sur les valeurs mobilières, L.R.Q., c. V-1.1 (la « Loi »);

Vu les pouvoirs délégués conformément à l’article 24 de la Loi sur l’Autorité des marchés financiers, L.R.Q., c. A-33.2;

En conséquence, l’Autorité des marchés financiers :

interdit à Corporation Nortel Networks et Corporation Nortel Networks Limitée, à leurs porteurs de titres, à tous les courtiers et à leurs représentants, ainsi qu’à toute autre personne, toute activité reliée à des opérations sur les valeurs des émetteurs parce que ceux-ci ne se sont pas conformés aux obligations de dépôt de leurs états financiers intermédiaires, leur rapport de gestion intermédiaire et leurs attestations intermédiaires de la période terminée le 30 septembre 2012 prévues au Règlement 51-102 et au Règlement 52-109.

La présente décision ne s’applique pas aux opérations suivantes :

a)    une opération visée réalisée par une personne pour une valeur symbolique sur les titres des émetteurs afin de permettre aux porteurs de titres des émetteurs de matérialiser des pertes fiscales, pourvu que, avant l’opération visée, la personne :

(i)            reçoive une copie de la présente décision;

(ii)           remette au vendeur une reconnaissance écrite que les titres des émetteurs demeurent soumis à l’interdiction et aux conditions prévues dans la présente décision après l’opération visée;

DOSSIERS N^o : 17622 et 2226

b)    une opération visée réalisée par une personne qui est un « investisseur qualifié » au sens du Règlement 45-106 sur les dispenses de prospectus et d’inscription sur : i) les deux billets de Corporation Nortel Networks de 575 000 000 $ US de premier rang convertibles à 1,75 % et 2,125 % échéant respectivement en 2012 et en 2014 (les « billets de CNN »); et ii) les billets de Corporation Nortel Networks Limitée de 1 000 000 000 $ US de premier rang à taux variable échéant en 2011, de 550 000 000 $ US de premier rang à 10,125 % échéant en 2013, de 1 125 000 000 $ US de premier rang à 10,750 % échéant en 2016, et de 200 000 000 $ US à 6,875 % échéant en 2023 (les « billets de CNNL »), pourvu que, avant l’opération visée :

(A)          la personne reçoive une copie de la présente décision et remette au vendeur une reconnaissance écrite que les billets de CNN ou les billets de CNNL (le cas échéant) demeurent soumis à l’interdiction et aux conditions prévues dans la présente décision après l’opération visée;

(B)          les émetteurs publient un communiqué divulguant les conditions de la présente décision et que le contrôleur dépose une copie de la présente décision sur son site Web, de sorte que chaque personne est réputée avoir été informée des conditions de la présente décision et le vendeur est réputé avoir été informé que les billets de CNN ou les billets de CNNL (le cas échéant) demeurent soumis à l’interdiction et aux conditions prévues dans la présente décision après l’opération visée.

L’interdiction est prononcée le 12 décembre 2012.

 Josée Deslauriers

Directrice principale des fonds d’investissement et de l’information continue

 La présente décision est valable pour une période de 15 jours. Toute personne dont les droits sont affectés par cette décision peut, dans les 6 jours de sa réception, présenter des observations à l’Autorité des marchés financiers en les transmettant au Secrétariat.

Préavis en vertu de l’article 318 de la Loi sur les valeurs mobilières

Soyez avisé qu’à la date d’échéance de la présente interdiction, le 27 décembre 2012, l’Autorité des marchés financiers a l’intention de prononcer une nouvelle interdiction d’opérations sur valeurs en vertu de l’article 265 de la Loi visant les titres de Corporation Nortel Networks et Corporation Nortel Networks Limitée parce qu’ils n’ont pas déposé leurs états financiers intermédiaires, leur rapport de gestion intermédiaire et leurs attestations intermédiaires de la période terminée le 30 septembre 2012 exigés par les articles 4.3, 4.4 et 5.1 du Règlement 51-102 et par l’article 5.1 du Règlement 52-109.

Soyez informé que vous avez la possibilité de présenter vos observations ou de produire des documents auprès de l’Autorité des marchés financiers avant que celle-ci ne prononce la nouvelle interdiction d’opérations sur valeurs. Pour ce faire, vous devez communiquer avec le Secrétariat de l’Autorité des marchés financiers.

Corporation Nortel Networks et Corporation Nortel Networks Limitée
Ernst & Young Inc., à titre de contrôleur
222 Bay Street
P.O. Box 251
Toronto, Ontario M5K 1J7
c.c. : Société de fiducie Computershare du Canada

As a result of the Canadian filing defaults, a temporary cease trade order (“CTO”) was issued today by the Ontario Securities Commission (“OSC”). The CTO prohibits all trading in securities of both NNC and NNL, effective immediately, other than for: (i) trades made for nominal consideration for the purpose of permitting a security holder to crystallize a tax loss (a “tax loss trade”); or (ii) trades in notes of either NNC or NNL to an entity that qualifies as an “accredited investor” as that term is defined under applicable Canadian securities laws (an “accredited investor trade”). The aforementioned exceptions are subject to the further qualifications that: (1) in the case of a tax loss trade, a copy of the CTO is provided to the purchaser and the seller receives a written acknowledgement from the purchaser that the securities acquired remain subject to the CTO; and (2) in the case of an accredited investor trade in notes of NNC or NNL, the purchaser will be deemed (by reason of the issuance of this news release and the posting of the CTO on the Restructuring Document Centre of Ernst & Young Inc., as monitor, at http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&Redirect=1) to have received notification of the terms of the CTO and deemed to have acknowledged to the seller that the notes acquired remain subject to the CTO. The full text of the CTO accompanies this news release marked as Annex A.

The temporary CTO is scheduled to expire 15 days from the date of its issue unless extended by the OSC. NNC and NNL understand that the OSC will convene a hearing before the expiration date of the CTO for the purpose of making the CTO permanent.

NNC and NNL expect that other Canadian provincial or territorial securities regulators will issue cease trade orders similar to the CTO.

Annex A

IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (THE “ACT”)

AND

IN THE MATTER OF

NORTEL NETWORKS CORPORATION AND NORTEL NETWORKS LIMITED

T E M P O R A R Y O R D E R
(Paragraphs 127(1)2 and subsection 127(5))

WHEREAS Nortel Networks Corporation (NNC) and Nortel Networks Limited (NNL) (and together, the “Reporting Issuers”) are reporting issuers in Ontario;

AND WHEREAS the Reporting Issuers issued a press release on January 14, 2009 which announced that the Reporting Issuers (and certain of their Canadian subsidiaries) had initiated creditor protection proceedings under the Companies’ Creditors Arrangement Act (Canada) (the CCAA proceeding). Pursuant to an Order of the Ontario Superior Court of Justice dated January 14, 2009 issued in connection with the CCAA proceeding (the Initial Order), Ernst & Young Inc. was appointed by the Court as Monitor to assist the Reporting Issuers through their restructuring process;

AND WHEREAS the Reporting Issuers issued a press release on August 9, 2012 that announced that the Monitor had determined that the expense and resources required to comply with ongoing public disclosure requirements could no longer be justified and that consequently the Reporting Issuers would no longer be able to comply with their periodic reporting requirements and would discontinue preparing and filing quarterly and annual financial statements and all other periodic disclosure documents under applicable Canadian laws effective as of the filing deadlines for third quarter reporting obligations;

AND WHEREAS on November 23, 2012 the Ontario Superior Court of Justice ordered that the stay of proceedings granted in favour of the Monitor and the Reporting Issuers in the Initial Order be lifted solely for the purpose of permitting the issuance of cease trade orders by the appropriate securities regulatory authorities;

AND WHEREAS in information provided to the Ontario Securities Commission on September 21, 2012 the Reporting Issuers confirmed that in addition to common and preferred shares, the Reporting Issuers had the following securities outstanding:

(a) in the case of NNC, U.S. $575,000,000 principal amount of 1.75% convertible senior notes due 2012 and U.S. $575,000,000 principal amount of 2.125% convertible senior notes due 2014 (collectively, the NNC Notes); and

(b) in the case of NNL, U.S. $1,000,000,000 principal amount of floating rate senior notes due 2011, U.S. $550,000,000 principal amount of 10.125% senior notes due 2013, U.S. $1,125,000,000 principal amount of 10.750% senior notes due 2016 and U.S. $200,000,000 principal amount of 6.875% notes due 2023 (collectively, the NNL Notes)

AND WHEREAS the Reporting Issuers failed to file the following continuous disclosure materials as required by Ontario securities law:

(a) interim financial statements for the nine-month period ended September 30, 2012;

(b) management’s discussion and analysis relating to the interim financial statements for the nine-month period ended September 30, 2012; and

(c) certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings;

AND WHEREAS the Director is of the opinion that it is in the public interest to make an order that trading in the securities of the Reporting Issuers cease, subject to certain permitted exceptions described herein;

AND WHEREAS the Director is of the opinion that the length of time required to conclude a hearing could be prejudicial to the public interest;

IT IS ORDERED pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act that, effective immediately,

1 subject to paragraph 2 hereof, all trading in the securities of the Reporting Issuers, whether direct or indirect, shall cease for a period of 15 days from the date of this order;

2 this order does not apply to the following trades:

(a) a trade to a person or company in a security of either of the Reporting Issuers for nominal consideration for the purpose of permitting security holders of a Reporting Issuer to crystallize any losses for tax purposes provided that, prior to such trade, such person or company:

(i) receives a copy of this order; and

(ii) provides written acknowledgment to the seller that the securities of the Reporting Issuer remain subject to this order in accordance with its terms following such trade; or

(b) a trade of NNC Notes or NNL Notes to a person or company who is an “accredited investor” as defined in National Instrument 45-106 Prospectus and Registration Exemptions, provided that, prior to such trade either:

(i) such person or company receives a copy of this order and provides written acknowledgment to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade; or

(ii) the Reporting Issuers shall have issued a news release disclosing the terms of this order and the Monitor shall have posted a copy of this order on its website, in which case each such person or company is deemed to have received notification of the terms of this order and is deemed to have acknowledged to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade.

DATED at Toronto this 11th day of December, 2012.

ONTARIO SECURITIES COMMISSION

“Jo-Anne Matear”

Jo-Anne Matear
Manager, Corporate Finance Branch

The materials filed in the CCAA proceedings are available on the Restructuring Document Centre of Ernst & Young Inc. (the “Monitor”) at http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&Redirect=1 or by contacting the Monitor directly at 1-866-942-7177.

This follows Nortel’s announcement on August 9, 2012 that the Monitor, after taking into account several factors arising from the advanced stage of the CCAA proceedings, had determined the expense and resources required to comply with NNC and NNL’s quarterly and annual public reporting requirements could no longer be justified from the standpoint of the best interest of their creditors. Consequently, NNC and NNL will discontinue preparing and filing quarterly and annual financial statements and all other periodic disclosure documents under applicable Canadian and U.S. securities laws effective as of the filing deadlines for their third quarter reporting obligations, being November 14, 2012 in the United States and November 29, 2012 in Canada.

As indicated in the August 9, 2012 announcement, the Boards of Directors and executive officers including the Chief Financial Officer of NNC, NNL and the other Applicants have resigned effective today, upon the issuance of the Order. Two of these former executive officers will continue as employees of NNL and pursuant to the Order are designated authorized representatives of each of the Applicants to act on behalf of the Applicants for the continued day-to-day operation of the Applicants, solely as the Monitor may direct. The principal remaining activities include completion of the creditor claims processes, resolution of the sale proceeds allocation dispute and approval and implementation of a plan of arrangement.

Financial Presentation and Q2 2012 Results

• Consolidated results include the results of operations and financial position of Nortel Networks Corporation, its principal operating subsidiary Nortel Networks Limited, and their subsidiaries in the Asia, CALA, and EMEA regions other than those included in the U.S. or EMEA deconsolidated subsidiaries.
• Cash balance as of June 30, 2012 was $668 million, compared to $724 million as of March 31, 2012, plus restricted cash balance of $7.6 billion consisting primarily of divestiture and IP proceeds.

Discontinuance of Future Periodic Financial Reporting

• Nortel Networks Corporation and Nortel Networks Limited to discontinue preparing and filing quarterly and annual financial statements and related MD&A
• Canadian Securities Administrators are expected to issue cease trade orders in respect of NNC and NNL securities to take effect upon passing of Q3 2012 filing deadline
• Canadian Directors and Officers to step down, Monitor to seek court approval for enhanced decision-making authority.

TORONTO – Nortel* Networks Corporation (NNC) [OTC: NRTLQ] announced its results for the second quarter of 2012.  Results were prepared in accordance with United States generally accepted accounting principles (GAAP) in U.S. dollars.

NNC and Nortel Networks Limited (NNL) also announced today that Ernst & Young Inc., the court-appointed monitor (Monitor) in Nortel’s creditor protection proceedings under the Companies’ Creditors Arrangement Act (CCAA), after taking into account several factors arising from the advanced stage of the CCAA proceedings, has determined that the expense and resources required to comply with NNC and NNL’s quarterly and annual public reporting requirements can no longer be justified from the standpoint of the best interest of their creditors. Consequently, NNC and NNL will no longer be able to comply with their periodic reporting requirements and will discontinue preparing and filing quarterly and annual financial statements and all other periodic disclosure documents under applicable Canadian and U.S. securities laws effective as of the filing deadlines for their third quarter reporting obligations, being November 14, 2012 in the United States and November 29, 2012 in Canada.

Generally, when an issuer ceases to file its periodic disclosure documents in circumstances such as NNC and NNL’s, the Canadian Securities Administrators will issue orders prohibiting trading in securities of the relevant issuer effective from and after the filing deadline under Canadian securities laws (so-called cease trade orders). NNC and NNL will be making submissions to the Canadian Securities Administrators that cease trade orders expected to be issued in respect of the securities of NNC and NNL include certain permitted trading exceptions. However, there can be no assurance that the regulatory authorities will make such orders on the terms requested by NNC and NNL and, in particular, permit any trading exceptions.

In light of the foregoing, the directors and officers of NNC and NNL have indicated that they will step down from their positions with NNC and NNL upon the issuance of a court order under the CCAA that the Monitor will be seeking to extend its powers. Such order would allow the Monitor to exercise any powers that may be properly exercised by a board of directors and to terminate the engagement of NNC and NNL’s external auditors.

Following the third quarter filing deadlines, as a means of keeping the public informed of material developments during the remainder of the CCAA proceedings, and until otherwise determined by the Monitor, NNC and NNL will endeavour to continue to comply with the material change disclosure requirements under Canadian securities laws, to the extent practicable in the circumstances, and to file on SEDAR (the electronic filing system of the Canadian Securities Administrators) all court reports of the Monitor except for such reports, or portions thereof, in respect of which confidential treatment has been requested. All other continuous and current disclosure filings of NNC and NNL will be discontinued.

The materials filed in the CCAA proceedings are also available on the Monitor’s Restructuring Document Centre at www.ey.com/ca/nortel or by contacting the Monitor directly at 1-866-942-7177. Documents filed by the U.S. Debtors with the U.S. Court including monthly operating reports and other general information about the Chapter 11 proceedings are available at http://chapter11.epiqsystems.com/nortel.The content of these websites is not a part of this press release.

Q2 2012 Financial Results

Nortel’s consolidated results include the results of operations and financial position of NNC, its principal operating subsidiary NNL, and their subsidiaries in the Asia, CALA, and EMEA regions other than those included in the U.S. or EMEA deconsolidated subsidiaries. As of June 1, 2010, and October 1, 2010, the EMEA Subsidiaries and U.S. Subsidiaries, respectively, were deconsolidated and accounted for under the cost method of accounting. As a result of and following the divestitures of our businesses, only the residual contracts not transferred with the businesses are included in Nortel’s financial results. As a result of the business sales, Nortel currently has one reportable segment, being the consolidated entity, as its chief operating decision maker reviews financial and operating results on that basis.

Our historical financial performance is not indicative of our future financial performance.

Financial Summary

Nortel’s overall financial performance in the second quarter of 2012 reflects the sale of all of its businesses in prior quarters.

• Revenues in the second quarter of nil.
• SG&A expense in the second quarter of $25 million, a decrease of 52.8 percent from the year ago quarter.
• Cash balance as of June 30, 2012 was $668 million, compared to $724 million as of March 31, 2012. Restricted cash balance of $7.6 billion consisting primarily of divestiture and patents and patent applications sales proceeds.

Revenues

Revenues were nil in the second quarter of 2012 compared to $1 million for the second quarter of 2011, related to remaining customer contracts.

SG&A

A focus on reducing costs resulted in lower SG&A expense compared to the year ago quarter. SG&A expense was $25 million in the second quarter of 2012, compared to $53 million for the second quarter of 2011.

Net Loss

The Company reported a net loss in the second quarter of 2012 of $131 million, compared to a net loss of $115 million in the second quarter of 2011.

The net loss in the second quarter of 2012 included interest expense of $86 million, other expense – net of $8 million comprised primarily of a currency exchange loss of $8 million, and reorganization items of $6 million.

Reorganization items of $6 million were primarily comprised of professional fees of $10 million and $7 million related to the settlement of certain creditor claims, partially offset by $9 million related to gains on divestitures.

The net loss in the second quarter of 2011 included interest expense of $80 million, partially offset by other operating income – net of $18 million primarily related to billings under transition services agreements, other income – net of $9 million comprised primarily of a currency exchange gain, and reorganization items of $7 million.

Reorganization items of $7 million were primarily comprised of gains on divestitures of $37 million related primarily to the sale of the GDNT assets and additional escrow proceeds related to the divestiture of the Optical Networking and Carrier Ethernet business, partially offset by professional fees of $21 million.

Cash

The cash balance as of June 30, 2012 was $668 million, compared to a cash balance of $724 million as of March 31, 2012. Restricted cash was $7.6 billion primarily related to the business divestiture and IP proceeds. The cash balance decreased primarily due to cash outflows related to general operations, the negative impact of foreign currency fluctuations on cash and cash equivalents, and dividends paid by NNL subsidiaries to noncontrolling interests.

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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.Statement of Operations

The materials filed in the CCAA proceedings are available on the Restructuring Document Centre of Ernst & Young Inc. (the “Monitor”) at http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&Redirect=1 or by contacting the Monitor directly at 1-866-942-7177.