Natural Convergence Announces Patrick Smith As New Chairman

Company Adds Extensive Industry Experience to Board of Directors

OTTAWA, Ontario, August 26, 2004 -Natural Convergence, a supplier of VoIP (Voice over IP) application software for Service Providers, today announced the appointment of Patrick Smith, formerly Senior Vice President, Systems Integration and Technology Planning at Sprint, to Chairman of the Board. The company is also pleased to announce the appointment of Steve Carson, previously CFO at AT&T, to Vice-Chair of the Board as well as both Paul Butcher, President and COO of Mitel Networks and David Folk, Managing General Partner, Jefferson Partners, as Directors of the Board.

The strategic appointment of these individuals with extensive industry experience follows Natural Convergence's recent announcement of the successful completion of its Series B financing round worth CDN$12M. The investment was lead by Boston-based VIMAC Ventures, LLC and included follow-on investment from all existing investors including Jefferson Partners, BDC Venture Capital, Desjardins Venture Capital, Primaxis Technology Ventures, RBQ Inc., and Purple Angel. Telecommunications industry leader Terry Matthews also joined as a strategic investor through investment firm Wesley Clover. 

Additionally, long-standing board member and newly appointed Senior Vice President at Cognos, Neal Hill, continues on the board as a Director. Neal will represent the interests of lead investor VIMAC Ventures, LLC.

"We are pleased to welcome four highly qualified and industry-recognized individuals to our Board," says David Cork, COO of Natural Convergence. "Patrick, Steve, and Paul bring a wealth of telecom expertise from both the carrier and enterprise worlds. David's experience building successful IT companies from a VC perspective is also a strong asset for Natural Convergence. Together, they add a new dimension to the Board that will lead us through our transformation from a start-up company to a profitable organization."

"Natural Convergence has developed a unique and profitable carrier product to bring the benefits of broadband IP to the large and underserved small business market," says Patrick Smith. "The company emphasis has shifted to building the strategic partnerships that will lead to success in the carrier marketplace. I'm excited about Natural Convergence's near-term prospects and market timing."

From 1994 to 2001, Smith served as the Senior Vice President of Systems Integration and Technology Planning for Sprint's Information Technology division. During his tenure, he was responsible for company-wide technical architecture decisions; and provided the technology vision and leadership for Sprint's entry into the Managed Services business, now one of the major profit growth areas within the organization. Prior to joining Sprint, Smith held the position of CTO at both Comdisco and SHL Systemhouse.

Carson has spent over 30 years as a financial and operational officer in the telecommunications and professional services industries, most notably as CFO of AT&T's world-wide consumer long distance business; as well as CFO of AT&T Network Systems (now Lucent Technologies); President, COO and CFO of Claremont Technology Group; and President and COO of Castek Inc. His financial and operational experience have allowed Carson to lead and transform early development stage companies through financing, operational excellence and execution, and scalable business models.

Currently President and Chief Operating Officer of Mitel Networks, Butcher brings more than 20 years of marketing and executive management experience to the Natural Convergence board. He has played a vital role in Mitel's success in IP telephony, increasing IP sales from 10 per cent to over 50 percent of the organization's annual revenue during his time as COO. As Senior Vice President of Mitel Communications Systems, he directed the development and delivery of converged voice and data communications systems and applications for enterprises.

During his seven years with VIMAC Ventures, LLC, Hill lead and participated in over 45 rounds of venture financing, lending his expertise in deal origination, evaluation, and portfolio management for selected portfolio groups. Hill has a strong training in assessing future industry trends and looking around the bends of technology currents. For three years, Hill held the position of Vice President of Marketing at Cognos Incorporated during a successful turnaround for the $500 million leader in business intelligence software. Today he is the organization's Senior Vice President.

As co-founder and Managing General Partner at Jefferson Partners, Folk has spent nearly 20 years making investments in the areas of venture capital and merchant banking. His main focus has been on the formation and management of private equity and venture funds targeted at emerging growth companies. Folk thrives on the challenge of helping portfolio companies build top teams and connecting them with top advisors and partners to will lead them to success.

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About Natural Convergence

Natural Convergence Inc. develops and markets innovative software applications that empower carriers and service providers to rapidly deploy hosted VoIP services. Our silhouette feature server is designed specifically for the small business market, combining powerful technology with familiar functionality to replace their aging key systems. The bottom line is a highly differentiated, flexible and profitable VoIP service that carriers can offer their small business customers as part of a compelling services bundle. Natural Convergence was founded in April 2001 with offices in Allen, TX and headquarters in Ottawa, Canada. For more details, visit www.naturalconvergence.com or call 613.725.2030.

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