3Com Extends Worldwide Leadership in High-Speed Network Connectivity by Acquiring Alteon Websystems' Gigabit Ethernet NIC Business From Nortel Networks.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 15, 2000

In a bold move that positions 3Com as a worldwide leader in high-speed network connectivity, 3Com Corporation (Nasdaq:COMS) today announced it has reached an agreement to acquire the Gigabit Ethernet network interface card (NIC) business of Alteon WebSystems, a wholly owned subsidiary of Nortel Networks Corporation (NYSE:NT) (TSE:NT) for US$110 million in cash. Alteon WebSystems was among the first to ship Gigabit Ethernet solutions that run over today's copper cabling and with this acquisition 3Com emerges as a worldwide leader in this segment. This acquisition extends 3Com's leadership into the next generation of high-performance wired and wireless solutions that will span server, desktop and mobile computing platforms.

The Gigabit Ethernet segment is exploding, with growth rates of more than 300 percent per year and an estimated 50 million network connections shipping in 2004, according to market research firm Cahners-Instat Group. This growth, according to industry analysts, is driven by the increased use of high-bandwidth connections for mission-critical networked applications such as enterprise resource planning, e-commerce and streaming media over the current copper wiring infrastructure.

Today's announcement also builds on the November 6 announcement of 3Com's largest set of commercial networking products in the company's history. That announcement included six new, easy-to-use models of stackable 10/100/1000 Mbps switches offering industry-leading price-performance.

"Just as new PC applications are written to exploit advances in computing performance, networked applications will also be developed to leverage the bandwidth expansion made possible by Gigabit Ethernet technology," said Tom Werner, vice president and general manager of 3Com's Business Connectivity Group. "A decade from now nearly every PC will ship with Gigabit connectivity and 3Com intends to be the established leader."

"With more than two decades of leadership and innovation in the network connectivity market, 3Com understands how to develop and sell simple yet rich connections," said Dominic Orr, president of Nortel Networks' new Content Networking Business Unit. "Selling the world's leading Gigabit Ethernet adapter business to 3Com gives us the assurance that our customers will be well provided for under 3Com's proven stewardship."

Transaction Terms

The transaction, which is structured as an asset sale, is subject to customary regulatory approval and is scheduled to close in December 2000. 3Com will purchase the Alteon NIC business and license certain Gigabit Ethernet-related technology and intellectual property from Alteon. No personnel will transfer from Alteon or Nortel Networks to 3Com in connection with this transaction. The total consideration is US$110 million in cash. 3Com will record a one-time charge of approximately US$20 to US$25 million for in-process R&D related to this acquisition in its fiscal third quarter ending March 2, 2001.

Alteon pioneered the Gigabit Ethernet field, having shipped the world's first Gigabit Ethernet products in February 1997. The company was also the first to demonstrate 1000BASE-T products in May 1999 and shipped one of the world's first tri-speed 10/100/1000 Mbps copper adapters. To date, Alteon has shipped more than 120,000 Gigabit Ethernet NICs worldwide. According to IDC, Alteon is one of the world's leading suppliers of Gigabit Ethernet NICs.

About Nortel Networks

Nortel Networks acquired Alteon WebSystems, Inc. in October 2000. Alteon is now part of Nortel Networks Content Networking Business.

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 personalization, collaboration, communications and commerce. Visit us at www.nortelnetworks.com and www.alteonwebsystems.co

About 3Com Corporation

3Com simplifies how people connect to information and services through easy-to-use, connectivity products solutions for consumers and commercial organizations. The company also provides access infrastructures and IP services platforms for network service providers. For further information, visit www.3com.com or the press site at www.3com.com/pressbox.

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.

Note to Editors: 3Com is a registered trademark of 3Com Corporation. Nortel Networks and Alteon are trademarks of Nortel Networks. All other brand and product names may be trademarks of the respective companies with which they are associated.