FREMONT, CA--(Marketwire - Aug 27, 2012) - Network Equipment Technologies, Inc. ("NET"), a wholly owned subsidiary of Sonus Networks, Inc. ("Sonus") (NASDAQ: [ SONS ]), announced today that, pursuant to the terms of the Indenture (as amended, the "Indenture") governing NET's 3.75% Convertible Senior Notes due 2014 (CUSIP No. 641208 AC7) (the "Notes"), NET will offer to purchase the Notes, subject to the terms and conditions of NET's Fundamental Change Company Notice, dated August 27, 2012 (the "Notice"), the Indenture and the Notes (the "Offer").

On August 24, 2012, the previously announced merger (the "Merger") of Navy Acquisition Subsidiary, Inc., a direct wholly owned subsidiary of Sonus ("Merger Sub"), with and into NET, with NET becoming a direct wholly owned subsidiary of Sonus, was consummated. The consummation of the Merger constituted a "Fundamental Change" under the Indenture. Pursuant to the Indenture, as a result of the occurrence of a "Fundamental Change" under the Indenture, each holder of Notes has the right to require NET to purchase its Notes, as follows:

• A Fundamental Change under the Indenture occurred on August 24, 2012 as a result of the consummation of the Merger. At the effective time of the Merger (the "Effective Time"), each share of NET common stock issued and outstanding immediately prior to the Effective Time (other than shares owned by (1) Sonus, Merger Sub or any other direct or indirect wholly owned subsidiary of Sonus, (2) NET or any direct or indirect wholly owned subsidiary of NET or (3) stockholders who had properly exercised and perfected appraisal rights under Delaware law) was converted automatically into the right to receive $1.35 per share in cash (the "Merger Consideration"), without interest.
  
  
• A form of Fundamental Change Purchase Notice is attached as an exhibit to the Notice. To accept the Offer, holders of Notes must deliver their Notes through the transmittal procedures of The Depositary Trust Company ("DTC"), as described in the Notice, at or prior to 11:59 p.m., New York City time, on Tuesday, October 9, 2012 (the "Expiration Time"), which is the third business day immediately preceding the Fundamental Change Purchase Date (as defined below). A holder who tenders through DTC need not submit a physical Fundamental Change Purchase Notice to the Paying Agent for the Notes if the holder complies with the transmittal procedures of DTC.
  
  
• All Notes tendered and accepted for payment in the Offer will be purchased on Friday, October 12, 2012 (the "Fundamental Change Purchase Date"), which is the date that is 33 business days after the date of the Notice.
  
  
• NET will pay a purchase price (the "Fundamental Change Purchase Price") in cash equal to 100% of the principal amount of the Notes (or portions thereof) being purchased, plus accrued and unpaid interest to, but excluding, the Fundamental Change Purchase Date. The amount of accrued and unpaid interest per $1,000 principal amount of Notes from June 15, 2012, the last interest payment date prior to the Fundamental Change Purchase Date, to, but excluding, the Fundamental Change Purchase Date is expected to be approximately $12.08.
  
  
• The name and address of the Paying Agent for the Notes are as follows:
  
  

General Noteholder Inquiry Number: 1-800-934-6802.

The name and address of the Conversion Agent for the Notes are as follows:

General Noteholder Inquiry Number: 1-800-934-6802.

• Holders of Notes may currently convert their Notes, at their option, at a Conversion Rate of approximately $99.05 in cash per $1,000 principal amount of Notes. Other than the effects of the supplemental indenture described below, there has been and will be no adjustment to the conversion rate resulting from the Fundamental Change. The right of holders to require NET to purchase their Notes in the Offer is separate from the right of holders to convert their Notes. Holders who elect to convert their Notes will receive less cash than holders who accept the Offer. 
  
  
• Notes that have been tendered for purchase in the Offer may be converted only if those Notes have subsequently been withdrawn in accordance with the terms of the Notice.
  
  
• Notes must be surrendered to the Paying Agent to collect the Fundamental Change Purchase Price.
  
  
• The Fundamental Change Purchase Price for any Note tendered and not withdrawn pursuant to the Offer will be promptly paid following the later of the Fundamental Change Purchase Date and the time of surrender of that Note.
  
  
• To accept the Offer, holders of Notes must deliver their Notes through the transmittal procedures of DTC, as described in the Notice, at or prior to the Expiration Time.
  
  
• If a holder of Notes has submitted a Fundamental Change Purchase Notice, it may withdraw the Fundamental Change Purchase Notice at any time at or prior to the close of business on the business day immediately preceding the Fundamental Change Purchase Date by delivering a valid written notice of withdrawal in the form attached as an exhibit to the Notice in accordance with the Indenture. All Notes tendered in the Offer that were delivered through the transmittal procedures of DTC may be withdrawn only through the procedures of DTC at or prior to the Expiration Time. Holders who withdraw through DTC need not submit a physical notice of withdrawal to the Paying Agent if those holders comply with the withdrawal procedures of DTC. If tendered Notes are properly withdrawn, NET will not be obligated to purchase those Notes.
  
  
• Unless NET defaults in making payment of the Fundamental Change Purchase Price, interest on Notes surrendered for purchase by NET will cease to accrue on and after the Fundamental Change Purchase Date.
  
  
• The CUSIP number of the Notes is 641208 AC7.
  
  

Prior to the consummation of the Merger, as described above, the conversion rate for the Notes was 73.3689 shares of NET common stock per $1,000 principal amount of Notes. 

On August 24, 2012, the effective date of the Merger, NET and U.S. Bank National Association, the trustee under the Indenture, entered into a supplemental indenture to amend the Indenture to fix the conversion value for the Notes. As set forth in the supplemental indenture, the conversion value for Notes that are converted at any time after August 24, 2012 is fixed at the right to receive the Merger Consideration for each share of NET common stock into which the holder of Notes is entitled to convert its Notes, and upon conversion of Notes by a holder following the Merger, NET will pay to the holder cash in an amount equal to the amount the holder would have received as Merger Consideration had the holder converted its Notes into NET common stock immediately prior to the Merger at the Conversion Rate then in effect. 

Pursuant to the supplemental indenture and at the conversion rate of 73.3689 shares of NET common stock per $1,000 principal amount of Notes, the Notes are currently convertible into approximately $99.05 in cash per $1,000 principal amount of Notes.

In contrast, for Notes that you tender pursuant to the Offer, NET estimates that the amount you will be entitled to receive, including accrued and unpaid interest to, but excluding, the Fundamental Change Purchase Date, will be approximately $1,012.08 per $1,000 principal amount of Notes, based on a Fundamental Change Purchase Date of October 12, 2012. Accordingly, it may not be in your economic interest to convert your Notes.

A holder of Notes who tenders through DTC need not submit a physical Fundamental Change Purchase Notice to the Paying Agent if the holder complies with the transmittal procedures of DTC.

About Network Equipment Technologies, Inc.:

Network Equipment Technologies, Inc. (NET) delivers high performance networking equipment optimized for real-time communications. For more than a quarter of a century, NET has delivered solutions for multi-service networks requiring high degrees of versatility, security and performance. Today, the company is focused on providing secure real-time communications for unified communications (UC), SIP trunking, enterprise mobility, and IP-based multi-service networking. NET is headquartered in Fremont, CA and has 13 offices worldwide including the U.S., the U.K., France, the Middle East, China, Japan, and Australia. The company sells its solutions to enterprise and government customers through a direct sales force and an international network of resellers and distributors. NET is a wholly owned subsidiary of Sonus Networks, Inc.

Forward-Looking Statements:

This press release contains forward-looking statements, including statements about the expected timing and completion of the Offer described above, within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that such statements are based on current expectations, forecasts and assumptions that involve risks and uncertainty that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could affect such results include changes in conditions of the market for the company's products, the company's ability to renegotiate contracts, demand for the company's surplus real estate, and the need to maintain or replace certain skills or capabilities. Network Equipment Technologies disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.