exv10w10



 







Confidential Portions in Exhibit C omitted and filed separately with the Securities and

Exchange Commission. Bullet points denote omissions.




Exhibit 10.10




	 	 	 	 	 
	UNITED STATES DISTRICT COURT
	 	 	 	 
	SOUTHERN DISTRICT OF NEW YORK
	 	 	 	 
	 
	 	 	 	 
	 
 In
re NORTEL NETWORKS CORP.

	 	x
	 	Civil Action No. 01-CV-1855 (RMB)
	SECURITIES LITIGATION

	 	:	 	 
	 

	 	:	 	 
	 

	 	:	 	 
	 
 

	 	:
	 	CLASS ACTION
	This Document Relates To:

	 	:	 	 
	 

	 	:	 	 
	ALL ACTIONS.

	 	:	 	 
	 

	 	x	 	 
	 
 
	 	 	 	 





STIPULATION AND AGREEMENT OF SETTLEMENT (NORTEL I)




     This Stipulation and Agreement of Settlement (the “Stipulation”) is submitted in the
above-captioned In re Nortel Networks Corp. Securities Litigation, Consolidated Civil Action No. 01
Civ. 1855 (RMB) (the “Nortel I U.S. Action”), pursuant to Rule 23 of the Federal Rules of Civil
Procedure. Subject to the approval of the United States District Court for the Southern District
of New York, this Stipulation is entered into between Lead Plaintiff and Class Representative
Ontario Public Service Employees’ Union Pension Plan Trust Fund (“OPTrust”) (hereinafter “Lead
Plaintiff’), on behalf of itself and the U.S. Global Class (as defined herein), and defendant
Nortel Networks Corporation (“Nortel”), by and through their respective counsel.



     The following separate class actions in British Columbia, Ontario and Quebec, raising claims
on behalf of persons who purchased Nortel Securities (as defined herein), are also being settled
contemporaneously as part of a single settlement of those actions and the Nortel I U.S. Action on
the terms herein: Association de Protection des Epargnants et Investisseurs du Quebec v.
Corporation Nortel Networks, Superior Court of Quebec, District of Montreal, No: 500-06-000126-017



 









 





(the “Quebec A.P.E.1.Q. Action”), Frohlinger v. Nortel Networks Corporation et al.,
Ontario Superior Court of Justice, Court File No. 02-CL-4605 (Ont. Sup.Ct. J.) (the “Ontario
Frohlinger Action”); and Jeffery et al. v. Nortel Networks Corporation et al., Supreme Court of
British Columbia, Vancouver Registry Court File No. S015159 (B.C.S.C.) (the “B.C. Jeffery Action”)
(collectively, the “Nortel Canadian Actions”).



     A separate class action brought on behalf of persons who purchased Nortel common stock or call
options on Nortel common stock or wrote (sold) put options on Nortel common stock from April 24,
2003 through April 27, 2004, inclusive (the “Nortel II Class Period”), captioned In re Nortel
Networks Corp. Securities Litigation, Master File No. 05-MD-1659 (LAP) (the “Nortel II U.S.
Action”), is also pending in the United States District Court for the Southern District of New York
and is being settled contemporaneously herewith.



     Also being settled contemporaneously herewith are the following separate class actions brought
in Ontario and Quebec as part of a single settlement including the Nortel II U.S. Action: Gallardi
et al. v. Nortel Networks Corp. et al., Ontario Superior Court of Justice, Court File No.
05-CV-285606CP (the “Ontario Gallardi Action”); and Skarstedt v. Corporation Nortel Networks,
Superior Court of Quebec, District of Montreal, No: 500-06-000277-059 (the “Quebec Skarstedt
Action”) (collectively, the “Nortel II Canadian Actions”).



     It is a condition to the Settlement (as defined herein) that the Nortel I U.S. Action and the
Nortel I Canadian Actions (collectively, the “Nortel I Actions”), as well as the Nortel II U.S.
Action and the Nortel II Canadian Actions (collectively, the “Nortel II Actions”) be settled
contemporaneously and that the Settlement and the settlement of the Nortel II Actions be approved
by all of the respective courts.




2









 





     WHEREAS:




     A. Beginning on February 16, 2001, several putative class actions on behalf of persons who
purchased Nortel common stock or call options on Nortel common stock or wrote (sold) put options on
Nortel common stock during the period October 24, 2000 through February 15, 2001, inclusive, were
filed against Nortel, John Roth, Clarence Chandran and Frank Dunn (the “Individual Defendants”)
alleging violations of Sections 10(b) and 20(a) of the (United States) Securities Exchange Act of
1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder and subsequently
consolidated by order of the United States District Court for the Southern District of New York,
entered October 16, 2001, under the caption In re Nortel Networks Corp. Securities Litigation,
Consolidated Civil Action No. 01 Civ. 1855 (RMB);



     B. On January 18, 2002, Lead Plaintiff filed its Second Consolidated Amended Class Action
Complaint (the “Complaint”) alleging that Nortel with the participation of the Individual
Defendants made materially false and misleading statements and omissions in Nortel’s financial
reports, in violation of United States Generally Accepted Accounting Principles (“GAAP”), and in
other public documents disseminated to the investing public by Nortel, in the course of fulfilling
its reporting obligations as a public company, thereby artificially inflating the price of the
Nortel Securities and damaging members of the U.S. Global Class;



     C. The Complaint also alleges that during the Class Period, Nortel with the participation of
the Individual Defendants materially misrepresented Nortel’s revenues and earnings in public
reports and statements disseminated to the investing public. The Complaint further alleges that
these material misrepresentations resulted in Nortel’s issuance of financial statements, and other
public statements regarding Nortel’s future business prospects, which violated Section 10(b) of the
Exchange Act, Rule 106-5 promulgated thereunder and Section



3









 




20(a) of the Exchange Act. The Complaint further alleges that, as a result of Defendants’
materially false and misleading statements, the price of Nortel common stock was artificially
inflated during the Class Period, thereby causing damage to members of the U.S. Global Class who
purchased Nortel common stock or call options on Nortel common stock or who wrote (sold) put
options on Nortel common stock during the Class Period;




     D. Nortel, on behalf of Clarence Chandran, Frank Dunn, John A. Roth and itself, filed a motion
to dismiss the Complaint. By Decision and Order dated January 3, 2003, the Court denied
Defendants’ motion to dismiss the Complaint;



     E. On March 21, 2003, Lead Plaintiff moved to certify the Nortel I U.S. Action as a class
action and to certify OPTrust as class representative for that action;



     F. By Order dated September 5, 2003, the United States District Court for the Southern
District of New York certified the Nortel I U.S. Action to proceed as a class action and certified
OPTrust as the class representative on behalf of a class “consisting of all persons and entities
who, during the period October 24, 2000 and continuing through and including February 15, 2001,
purchased Nortel common stock or call options or wrote (sold) Nortel put options, and who suffered
damages thereby, including, but not limited to, those persons who traded in Nortel Securities on
the New York Stock Exchange and/or Toronto Stock Exchange.” Excluded from the class are the
Defendants, members of any of the Individual Defendants’ immediate families, any entity in which
any Defendant has a controlling interest or is a parent or subsidiary of or is controlled by
Nortel, and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of the defendants. A notice of the pendency of this action as a class
action (the “Notice of Pendency”) dated March 10, 2004 was mailed to potential



4









 







class members beginning on April 12, 2004 and a summary notice was published once in English
in the national edition of The Wall Street Journal, on April 12, 2004, twice in English in
the national editions of The National Post and The Globe and Mail, on April 12,
2004 and April 15, 2004, twice in English in the Toronto Star, The Vancouver Sun,
and The Vancouver Province on April 12, 2004 and April 15, 2004, and once in French in
La Presse on April 15, 2004. Over 591,700 individual copies of the Notice of Pendency were
mailed. 1,638 requests for exclusion from the class were received and were filed with the United
States District Court for the Southern District of New York (see Affidavit of Jack R.
DiGiovanni dated July 2, 2004). A list of those 1,638 persons and entities who requested exclusion
is annexed hereto as Tab 1 to Exhibit J;



     G. On July 17, 2002, the Ontario Frohlinger Action was commenced in the Ontario Superior Court
of Justice against Nortel and other defendants through the issuance of a Statement of Claim. On
September 15, 2003, the claim was amended and a Fresh As Amended Statement of Claim was filed.
That claim was subsequently amended pursuant to the Order of the Honourable Justice Winkler dated
June 8, 2004 and a Second Fresh As Amended Statement of Claim was filed on January 13, 2005. The
claim alleged that Nortel with the participation of certain of its officers negligently made
materially false and misleading statements and omissions in Nortel’s financial reports and public
statements, which had the effect of artificially inflating the price of Nortel’s securities during
the Class Period, thereby causing damage to members of the class. The claim further alleged that
Nortel and certain of its officers breached corporate and securities legislation, including the
Canada Business Corporations Act, the Ontario Securities Act and the Canadian Competition Act;



5









 





     H. The plaintiffs in the Ontario Frohlinger Action filed with the Ontario Superior Court of
Justice and delivered to the defendants their motion for certification in July 2004. Counsel in
the Ontario Frohlinger Action have attended a number of case conferences before Justice Winkler as
the proceeding moved towards a certification hearing;



     I. On September 17, 2001, the B.C. Jeffery Action was commenced by the plaintiffs in the
Supreme Court of British Columbia and has proceeded before the Honourable Justice Groberman. The
B.C. Jeffery Action alleges that Nortel and the other defendants named therein breached the British
Columbia Securities Act when they made materially false, inaccurate and misleading statements when
they issued revenue and earnings guidance for the fourth quarter and fiscal year 2000 and the first
quarter and fiscal year 2001. The plaintiffs and defendants in that action have made a number of
appearances before Mr. Justice Groberman in the conduct of that action;



     J. On February 22, 2001, the Quebec A.P.E.I.Q. Action was commenced in the Superior Court of
Quebec against Nortel through the issuance of a Motion for Authorization to Institute a Class
Action. The claim essentially alleges that representations made by Nortel in a press release dated
January 18, 2001, as to its financial results, were false. On May 11, 2001, Nortel filed a Motion
to Dismiss the Petitioner’s Motion for Authorization to Institute a Class Action based on the
factual allegations lacking substantial connection to Quebec and the inclusion of the putative
class in Quebec in the Ontario Frohlinger Action. The Motion to Dismiss the Quebec A.P.E.I.Q.
Action was heard on November 6, 2001, and the court deferred any determination on the Motion to the
judge who would hear the Motion for Authorization to Institute a Class Action. Nortel sought leave
to appeal this decision but the Quebec Court of Appeal refused leave to appeal;



6









 





     K. Following the announcement of the settlement agreement in principle in February 2006 to
settle the Nortel I Actions and the Nortel II Actions as part of a global settlement, Lead
Plaintiffs Counsel and Nortel’s Counsel have worked with plaintiffs’ counsel in the Nortel 1
Canadian Actions and the Nortel 11 Actions to coordinate the settlement process to obtain approvals
of the global settlement by the United States District Court for the Southern District of New York
(the “Court”) and by the applicable Canadian courts, and plaintiffs’ counsel in the Nortel II
Actions and the Nortel I Canadian Actions have been consulted and participated in the drafting of
this Stipulation and other settlement documents;



     L. Defendants in the Nortel I Actions deny any wrongdoing whatsoever, and this Stipulation
shall in no event be construed or deemed to be evidence of or an admission or concession on the
part of any defendant with respect to any claim of any fault or liability or wrongdoing or damage
whatsoever, or any infirmity in the defenses that the defendants have asserted;



     M. The parties to this Stipulation recognize that the Norte11 U.S. Action has been filed by
the Lead Plaintiff and defended by the Defendants in good faith, that the Nortel 1 U.S. Action is
being voluntarily settled after advice of counsel, and that the terms of the Settlement are fair,
reasonable and adequate. This Stipulation shall not be construed or deemed to be a concession by
Lead Plaintiff or any Class Member of any infirmity in the claims asserted in the Nortel I U.S.
Action or any other action;



     N. Lead Plaintiff’s Counsel has conducted investigations relating to the claims and the
underlying events and transactions alleged in the Nortel 1 U.S. Action. Lead Plaintiffs Counsel
has analyzed the evidence adduced during pretrial discovery and has researched the



7









 







applicable law with respect to the claims of the Lead Plaintiff and the U.S. Global Class
against the Defendants and the potential defenses thereto;



     O. The parties recognize that the claims asserted in either of the Nortel I Actions or the
Nortel Il Actions, if proved by the plaintiffs in those actions, could have exposed Nortel to
substantial damages awards. Accordingly, the parties considered that a resolution of the Nortel I
Actions and the Nortel II Actions was advisable from the point of view of all parties;



     P. With the assistance of the Honorable Robert W. Sweet, United States District Court Judge,
acting as a special mediator, the Lead Plaintiff in the Nortel I U.S. Action and the Lead
Plaintiffs in the Nortel H U.S. Action, directly and by their counsel, have conducted discussions
and arm’s-length negotiations with Nortel’s Counsel with respect to a global compromise and
settlement of the Nortel I Actions and the Nortel II Actions and with a view to settling the issues
in dispute and achieving the best relief possible consistent with the interests of the overall
classes in the Nortel I Actions and the Nortel II Actions;



     Q. Nortel considers that, in order for it to achieve an end to litigation, it is a necessary
condition to the settlement of the Nortel I U.S. Action that as part of the Settlement the
applicable Canadian Courts approve the Settlement with respect to the Nortel I Canadian Actions and
that the Settlement be similarly conditional on the approval of the separate settlement reached
with respect to the Nortel II Actions;



     R. Based upon their investigation and pretrial discovery as set forth above, Lead Plaintiff
and its counsel have concluded that the terms and conditions of this Stipulation are fair,
reasonable and adequate to Lead Plaintiff and the U.S. Global Class, and are in their best
interests, and Lead Plaintiff has agreed to settle the claims raised in the Nortel I U.S. Action



8









 







pursuant to the terms and provisions of this Stipulation, after considering (a) the
substantial benefits that the members of the U.S. Global Class will receive from settlement of the
Nortel I U.S. Action, (b) the attendant risks of litigation, and (c) the desirability of permitting
the Settlement to be consummated as provided by the terms of this Stipulation; and



     S. Unless Nortel registers the Gross Settlement Shares (as defined herein), Nortel will issue
the Gross Settlement Shares in reliance on the exemption from registration under the (United
States) Securities Act of 1933, 15 U.S.C. §77c(a)(1), as amended, pursuant to Section 3(a)(l0)
thereunder based on the Courts’ approval of the fairness of the terms and conditions of the
Settlement following a fairness hearing open to everyone to whom any Gross Settlement Shares would
be issued in the proposed Settlement, with adequate notice thereof having been given to all those
persons. In Canada, Nortel intends to issue the Gross Settlement Shares in reliance upon the
Exemptive Relief (as defined herein) granted by the applicable securities regulatory authorities.
However, if Nortel determines that such Exemptive Relief is unlikely to be granted, Nortel would
qualify the Gross Settlement Shares by a prospectus filed in each Canadian province and territory.



     NOW THEREFORE, without any admission or concession on the part of Lead Plaintiff of any lack
of merit of the Nortel I U.S. Action whatsoever, and without any admission or concession of any
liability or wrongdoing or lack of merit in the defenses whatsoever by Defendants, it is hereby
STIPULATED AND AGREED, by and between the parties to this Stipulation, through their respective
counsel, subject to approval of the respective Courts pursuant to, as the case may be, Rule 23(e)
of the (United States) Federal Rules of Civil Procedure, Article 1025 of the Quebec Code of Civil
Procedure, Section 29 of the Ontario Class Proceedings Act, 1992 and Section 35 of the British
Columbia Class Proceedings Act, in



9









 







consideration of the benefits flowing to the parties hereto from the Settlement herein set
forth, that all Settled Claims (as defined herein), as against the Released Parties (as defined
herein), and all Settled Defendants’ Claims (as defined herein) shall be compromised, settled,
released and dismissed with prejudice, upon and subject to the following terms and conditions:



DEFINITIONS





     1. As used in this Stipulation, the following terms shall have the following meanings:




          (a) “A.P.E.I.Q.” means Association de Protection des Epargnants et Investisseurs du
Quobec.




          (b) “Authorized Claimant” means a Class Member who submits a timely and valid Proof of
Claim form to the Claims Administrator.




          (c) “British Columbia Class Counsel” means Klein Lyons.




          (d) “B.C. Jeffery Action” means Jeffery et al. v. Nortel Networks Corporation et al.,
Supreme Court of British Columbia, Vancouver Registry Court File No. S015159.




          (e) “British Columbia Class” means the class to be certified in the B.C. Jeffery
Action, for the purposes of settlement only, comprised of all persons and entities who,
while residing in British Columbia at the time, purchased Nortel common stock or call
options on Nortel common stock or wrote (sold) put options on Nortel common stock during the
period between October 24, 2000 through February 15, 2001, inclusive. Excluded from the
British Columbia Class are the Defendants, members of



10









 







any of the Individual Defendants’ immediate families, any entity in which any Defendant
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel, and
the officers, directors, affiliates, legal representatives, heirs, predecessors, successors
or assigns of any of the Defendants. Also excluded from the British Columbia Class are any
putative members of the British Columbia Class who exclude themselves by timely filing a
request for exclusion in accordance with the requirements set forth in the Notice.




          (f) Columbia Class Counsel and Quebec Class Counsel.




          (g) “Canadian Classes” means the Ontario National Class, the British Columbia Class and
the Quebec Class.




          (h) “Canadian Courts” means the Superior Court of Quebec, the Ontario Superior Court of
Justice and the Supreme Court of British Columbia.




          (i) “Canadian Representative Plaintiffs” means Andre Dussault, A.P.E.I.Q., Leslie
Frohlinger, Janie Jeffery and Ronald Mensing.




          (j) “Cash Settlement Amounts” means the amounts specified in ¶[4(a), (b) and (e)
hereof.




          (k) “Claims Administrator” means The Garden City Group, Inc. (“GCG”), which shall
administer the Settlement.




          (l) “Class” means all members of the U.S. Global Class and the Canadian Classes.




          (m) “Class Member” means a member of the Class.



11









 






          (n) “Class Distribution Order” has the meaning defined in ¶ 9 hereof.




          (o) “Class Period” means, for the purposes of this Settlement only, the period of time
between October 24, 2000 through February 15, 2001, inclusive.




          (p) “Court” means the United States District Court for the Southern District of New
York.




          (q) “Courts” means the United States District Court for the Southern District of New
York, the Ontario Superior Court of Justice, the Superior Court of
Quebec and the Supreme
Court of British Columbia.




          (r) “Defendants” means Nortel and the Individual Defendants.




          (s) “Derivative Application” means the application brought in Indiana Electrical
Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v. Nortel
Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059 for leave
pursuant to the Canada Business Corporations Act to commence a representative action in the
name of and on behalf of Nortel against certain of the Released Parties.




          (t) “Effective Date” means the date upon which the Settlement contemplated by this
Stipulation shall become effective, as set forth in ¶ 24 hereof.




          (u) “Escrow Agents” means (i) with respect to the escrow agreement dated as of April 2,
2006 and the terms of this Stipulation, Milberg Weiss Bershad & Schulman LLP and their
successors, in each case acting as agents for the Class, and (ii)



12









 







with respect to the escrow agreement dated as of May 31, 2006 and the terms of this
Stipulation, Milberg Weiss Bershad & Schulman LLP and Koskie Minsky LLP, and their
successors, in each case acting as agents for the Class, such successors in both (i) and
(ii) to be agreed upon by Plaintiffs’ Counsel and the parties to the existing escrow
agreements, as approved by the Courts, if necessary. Such parties shall use reasonable
efforts to identify and appoint a successor escrow agent(s) as soon as is practicable.




          (v) “Exemptive Relief’ has the meaning defined in ¶ 24(i)(1) hereof.




          (w) “Final” or “Finality”, with respect to the Judgments (as defined herein), means:
(a) if no appeal is filed, the expiration date of the time provided for under the
corresponding rules of the applicable court or legislation for filing or noticing of any
appeal from the Courts’ Judgments approving the Settlement; or (b) if there is an appeal
from the Judgments, the date of (i) final dismissal of any appeal from the Judgments, or the
final dismissal of any proceeding on certiorari or otherwise to review the Judgments; or
(ii) the date of final affirmance on an appeal of the Judgments, the expiration of the time
to file a petition for a writ of certiorari or other form of review, or the denial of a writ
of certiorari or other form of review of the Judgments, and, if certiorari or other form of
review is granted, the date of final affirmance of the Judgments following review pursuant
to that grant. Any proceeding or order, or any appeal or petition for a writ of certiorari
or other form of review pertaining solely to (i) any application for attorneys’ fees, costs
or expenses, and/or (ii) the plan of allocation, shall not in any way delay or preclude the
Judgments from becoming Final.




          (x) “GCG” means The Garden City Group, Inc.



13









 






          (y) “Gross Cash Settlement Fund” means the cash amounts paid or to be paid to the
Escrow Agents pursuant to l 4(a), (b), and (e) hereof, which consists of (i) Two Hundred
Ninety Million, One Hundred Sixty-Two Thousand, Four Hundred and Twenty-Eight United States
Dollars and Forty-Eight Cents (US$290,162,428.48), being the sum of Two Hundred Eighty-Seven
Million, Five Hundred Thousand United States Dollars (US$287,500,000) plus Two Million, Six
Hundred Sixty-Two Thousand, Four Hundred and Twenty-Eight United States Dollars and
Forty-Eight Cents (US$2,662,428.48), paid to the Escrow Agents by Nortel on June 1, 2006,
plus (ii) Two Hundred Fifteen Million United States Dollars (US$215,000,000) paid by
Nortel’s insurers, plus (iii) one-quarter of any actual gross recovery by Nortel as a result
of the action referenced in ¶ 4(e) hereof, plus (iv) any interest on or other income or
gains in respect of the amounts in (i), (ii), (iii) and (iv) earned while such amounts are
held by the Escrow Agents, less (v) Sixty Six Million, Four Hundred Ninety-Five Thousand
United States Dollars (US$66,495,000) and the interest thereon transferred to the escrow
agent in the Nortel II Actions for the benefit of the Nortel II Class (pursuant to ¶ 4(c)
hereof).




          (z) “Gross Settlement Fund” means the Gross Cash Settlement Fund plus the Gross
Settlement Shares.




          (aa) “Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel to be
issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance with ¶4(d)
hereof.




          (bb) “Individual Defendants” means Clarence Chandran, Frank Dunn, and John A. Roth.



14









 






          (cc) “Judgment” or “Judgments” means the proposed judgments and orders to be entered by
the respective Courts approving the Settlement substantially in the forms attached hereto as
Exhibits B and D — F.




          (dd) “Lead Plaintiff’ or “OPTrust” means Ontario Public Service Employees’ Union
Pension Plan Trust Fund.




          (ee) “Lead Plaintiff’s Counsel” means the law firm of Milberg Weiss Bershad & Schulman
LLP, with the assistance of the Canadian law firm Koskie Minsky LLP.




          (ff) “Net Cash Settlement Fund” has the meaning defined in ¶ 5 hereof.




          (gg) “Net Settlement Shares” has the meaning defined in ¶ 4(d) hereof.




          (hh) “Net Settlement Fund” means the Net Cash Settlement Fund and the Net Settlement
Shares.




          (ii) “Nortel” means Nortel Networks Corporation.




          (jj) “Nortel I Actions” means the Nortel I Canadian Actions and the Nortel I U.S.
Action.




          (kk) “Nortel I Canadian Actions” means the B.C. Jeffery Action, the Ontario Frohlinger
Action and the Quebec A.P.E.I.Q. Action.




          (ll) “Nortel I Defendants” means Norte’, Clarence Chandran, Frank Dunn, John Roth, F.
William Conner, Chahram Bolouri, William R. Hawe, and Deloitte & Touche LLP.



15









 






          (mm) “Nortel I U.S. Action” means In re Norte’ Networks Corp. Securities Litigation,
Consolidated Civil Action No. 01 CV-1855 (RMB).




          (nn) “Nortel II Actions” means the Nortel II Canadian Actions and the Nortel II U.S.
Action.




          (oo) “Nortel II Canadian Actions” mean the Quebec Skarstedt Action and the Ontario
Gallardi Action.




          (pp)
“Nortel II Class” means all persons and entities who purchased Nortel common stock
or call options on Nortel common stock or wrote (sold) put
options on Nortel common stock
during the period between April 24, 2003 through April 27, 2004, inclusive, and for purposes
of the Nortel II U.S. Action, who suffered damages thereby, including, but not limited to,
those persons or entities who traded in Nortel Securities on the New York Stock Exchange
and/or the Toronto Stock Exchange. Excluded from the Nortel II Class are (i) the defendants
Nortel, Frank Dunn, Douglas C. Beatty, Michael J. Gollogly, John Edward Cleghorn, Robert
Ellis Brown, Robert Alexander Ingram, Guylaine Saucier, and Sherwood Hubbard Smith, Jr.;
(ii) James Kinney (Finance Chief for Nortel’s Wireless Networks Division, Richardson,
Texas), Ken Taylor (Vice President for Nortel’s Enterprise Networks Division, Raleigh, North
Carolina), Craig Johnson (Finance Director for Nortel’s Wireline Networks Division,
Richardson, Texas), Doug Hamilton (Finance Director for Nortel’s Optical Networks Group,
Montreal, Quebec), Michel Gasnier (Vice President of Finance for Europe), Robert Ferguson
(Vice President of Finance for China), and William Bowrey (Controller for Asia); (iii)
members of the immediate family of each of the defendants named above



16









 







and/or any of the individuals referenced above; (iv) any entity in which any defendant
named above and/or any of the individuals referenced above has a controlling interest; (v)
any parent, subsidiary or affiliate of Nortel; (vi) any person who was an officer or
director of Nortel or any of its subsidiaries or affiliates during the Nortel II Class
Period; and (vii) the legal representatives, heirs, predecessors, successors or assigns of
any of the excluded persons or entities. Also excluded from the Nortel II Class are any
putative members of the Nortel II Class who exclude themselves by timely filing a request
for exclusion in accordance with the requirements set forth in the Nortel II Notice.




          (qq) “Nortel H Class Period” means, for purposes of this Settlement only, the period of
time between April 24, 2003 through April 27, 2004, inclusive.




          (rr) “Nortel II U.S. Action” means In re Nortel Networks Corp. Securities Litigation,
Master File No. 05-MD-1659 (LAP).




          (ss) “Nortel II Notice” means the Notice of Pendency and Certification of Class Actions
and Proposed Settlements, Motions for Attorneys’ Fees and Settlement Fairness Hearings,
which is to be sent to members of the Nortel II Class.




          (tt) “Nortel common stock” or “common stock of Nortel” means common shares without
nominal or par value in the authorized capital of Nortel.




          (uu) “Nortel Securities” means Nortel common stock or call options on Nortel common
stock or put options on Nortel common stock.



17









 






          (vv) “Nortel’s Counsel” means the law firms of Shearman & Sterling LLP in the United
States and Lenczner Slaght Royce Smith Griffin LLP and Ogilvy Renault LLP in Canada.




          (ww) “Notice” means the Notice of Certification in Canada and Proposed Settlements of
Class Actions, Motions for Attorneys’ Fees and Settlement Fairness Hearings, which is to be
sent to members of the Class substantially in the form attached hereto as Tab 1 to Exhibit
A.




          (xx) “Notice of Pendency” means the notice dated March 10, 2004 that was mailed to
Class Members beginning on April 12, 2004 notifying them of the pendency of the Nortel 1
U.S. Action, attached hereto as Exhibit J.




          (yy) “Ontario Gallardi Action” means Gallardi v. Nortel Networks Corporation et al.,
Ontario Superior Court of Justice, Court File No. 05-CV-285606CP.




          (zz) “Ontario Frohlinger Action” means Frohlinger v. Nortel Networks Corporation et
al., Ontario Superior Court of Justice, Court File No. 02-CL-4605.




          (aaa) “Ontario National Class” means the class to be certified, for the purposes of
settlement only, by the Ontario Superior Court of Justice in the Ontario Frohlinger Action
comprising all persons or entities, except members of the British Columbia Class and the
Quebec Class, who, while residing in Canada at the time, purchased Nortel common stock or
call options on Nortel common stock or wrote (sold) put options on Nortel common stock
during the period between October 24, 2000 through February 15, 2001, inclusive. Excluded
from the Ontario National Class are the



18









 







Defendants, members of any of the Individual Defendants’ immediate families, any entity
in which any Defendant has a controlling interest or which is a parent or subsidiary of or
is controlled by Nortel, and the officers, directors, affiliates, legal representatives,
heirs, predecessors, successors or assigns of any of the Defendants. Also excluded from the
Ontario National Class are any putative members of the Ontario National Class who exclude
themselves by timely filing a request for exclusion in accordance with the requirements set
forth in the Notice.




          (bbb) “Ontario National Class Counsel” means Rochon Genova LLP and Lerners LLP.




          (ccc) “Opt-out Threshold” has the meaning set forth in ¶ 23 and in the Supplemental
Agreement.




          (ddd) “OPTrust” or “Lead Plaintiff” means Ontario Public Service Employees’ Union
Pension Plan Trust Fund.




          (eee) “Order for Notice and Hearing” means the proposed order preliminarily approving
the Settlement and directing notice thereof to the Class substantially in the form attached
hereto as Exhibit A.




          (fff) “Plaintiffs’ Counsel” means Lead Plaintiffs Counsel, Canadian Class Counsel and
any other counsel representing Class Members.




          (ggg) “Proof of Claim” means the form substantially in the form attached as Tab 2 to
Exhibit A hereto.



19









 






          (hhh) “Publication Notice” means the summary notice of proposed Settlement and hearing
for publication substantially in the form attached as Tab 3 to Exhibit A.




          (iii) “Quebec A.P.E.I.Q. Action” means Association de Protection des Epargnants et
Investisseurs du Quebec v. Corporation Nortel Networks, Superior Court of Quebec, District
of Montreal, No: 500-06-000126-017.




          (jjj) “Quebec Class” means the class to be authorized by the Superior Court of Quebec
in the Quebec A.P.E.I.Q. Action comprised of all persons who, while residing in Quebec at
the time, purchased Nortel common stock or call options on Norte/ common stock or wrote
(sold) put options on Nortel common stock during the period between October 24, 2000 through
February 15, 2001, inclusive. Excluded from the Class are the Defendants, members of any of
the Individual Defendants’ immediate families, any entity in which any Defendant has a
controlling interest or is a parent or subsidiary of or is controlled by Nortel, and the
officers, directors, affiliates, legal representatives, heirs, predecessors, successors or
assigns of any of the Defendants. Also excluded from the Quebec Class are any putative
members of the Quebec Class who exclude themselves by timely filing a request for exclusion
in accordance with the requirements set forth in the Notice.




          (kkk) “Quebec Class Counsel” means Belleau Lapointe S.A. and Unterberg, Labelle, Lebeau
S.E.N.C.




          (lll) “Quebec Skarstedt Action” means Skarstedt v. Corporation Nortel Networks,
Superior Court of Quebec, District of Montreal, No: 500-06-000277-059.



20









 






          (mmm) “Released Parties” means any and all of the Nortel I Defendants, their past or
present subsidiaries, parents, principals, affiliates, general or limited partners or
partnerships, successors and predecessors, heirs, assigns, officers, directors, agents,
employees, attorneys, advisors, investment advisors, investment bankers, underwriters,
insurers, co-insurers, re-insurers, accountants, auditors, consultants, administrators,
executors, trustees, personal representatives, immediate family members and any person,
firm, trust, partnership, corporation, officer, director or other individual or entity in
which any Nortel I Defendant has a controlling interest or which is related to or affiliated
with any of the Nortel I Defendants, and the legal representatives, heirs, executors,
administrators, trustees, successors in interest or assigns of the Nortel l Defendants.




          (nnn) “Settled Claims” means any and all claims, debts, demands, rights or causes of
action, suits, matters, and issues or liabilities whatsoever (including, but not limited to,
any claims for damages, interest, attorneys’ fees, expert or consulting fees, and any other
costs, expenses or liability whatsoever), whether based on United States or Canadian
federal, state, provincial, local, statutory or common law or any other law, rule or
regulation, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated,
at law or in equity, matured or unmatured, whether class or individual in nature, including
both known claims and Unknown Claims (as defined herein), (i) that have been asserted in any
of the Nortel I Actions against any of the Released Parties, or (ii) that could have been
asserted in any forum by the Class Members against any of the Released Parties, that arise
out of or are based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Nortel I Actions and
that relate to the purchase of Nortel common stock or call



21









 







options on Nortel common stock or the writing (sale) of put options on Nortel common
stock during the Class Period, or (iii) any oppression or other claims under the Canada
Business Corporations Act, R.S.C. 1985, c. C-44, as amended, that arise out of or are based
upon the allegations, transactions, facts, matters or occurrences, representations or
omissions, set forth or referred to in the Nortel I Actions. “Settled Claims” does not mean
or include claims, if any, against the Released Parties arising under the (United States)
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq.
(“ERISA”) that are not common to all Class Members and which ERISA claims are the subject of
an action pending before the Judicial Panel on Multidistrict Litigation, denominated In re
Nortel Networks Securities and “ERISA” Litigation, MDL Docket No. 1537. “Settled Claims”
further does not include: (a) the action in Rohac et al. v. Nortel Networks Corp. et al.,
Ontario Superior Court of Justice, Court File No. 04-CV-3268 and (b) the Derivative
Application.




          (ooo) “Settled Defendants’ Claims” means any and all claims, rights or causes of action
or liabilities whatsoever, whether based on United States or Canadian federal, state,
provincial, local, statutory or common law or any other law, rule or regulation, including
both known claims and Unknown Claims, that have been or could have been asserted in the
Nortel I Actions or any forum by the Nortel I Defendants or any of them or the successors
and assigns of any of them against any of the Lead Plaintiff, Canadian Representative
Plaintiffs, any Class Members or their attorneys and that arise out of or relate in any way
to the institution, prosecution, or settlement of the Nortel I Actions (except Settled
Defendants’ Claims does not include all claims, rights or causes of action or liabilities
whatsoever related to the enforcement of the Settlement, including,



22









 







without limitation, any of the terms of this Stipulation or orders or judgments issued
by the Courts in connection with the Settlement, confidentiality obligations or in respect
of the Derivative Application).




          (ppp) “Settlement” means the global settlement of the Nortel T Actions contemplated by
this Stipulation.




          (qqq) “Settlement Amount” means (i) Two Hundred Ninety Million, One Hundred Sixty-Two
Thousand, Four Hundred and Twenty-Eight United States Dollars and Forty-Eight Cents (US$290,162,428.48) as set out in ¶ 4(a) hereof; (ii) Two Hundred Fifteen Million United States
Dollars (US$215,000,000) as set out in ¶ 4(b) hereof; (iii) the Gross Settlement Shares
issued by Nortel as set out in ¶ 4 (d) hereof; and (iv) one-quarter of any actual gross
recovery by Nortel referenced in ¶ 4(e) hereof as a result of the action referenced therein;
less (v) Sixty-Six Million, Four Hundred and Ninety-Five Thousand United States Dollars
(US$66,495,000) as set out in ¶ 4(c) hereof.




          (rrr) “Stipulation” means this Stipulation and Agreement of Settlement.




          (sss) “Taxes” means (i) any and all applicable taxes, duties and similar charges
imposed by a government authority (including any estimated taxes, interest or penalties)
arising in any jurisdiction, if any (A) with respect to the income or gains earned by or in
respect of the Gross Cash Settlement Fund, including, without limitation, any taxes that may
be imposed upon Nortel or their counsel with respect to any income or gains earned by or in
respect of the Gross Cash Settlement Fund for any period while it is held by the Escrow
Agents during which the Gross Cash Settlement Fund does not qualify as a Qualified
Settlement Fund for federal or state income tax purposes; (B) with



23









 







respect to the Gross Settlement Shares, if issued to the Escrow Agents, prior to their
distribution to the Authorized Claimants or Lead Plaintiff’s Counsel; or (C) by way of
withholding as required by applicable law on any distribution by the Escrow Agents or the
Claims Administrator of any portion of the Gross Settlement Fund to Authorized Claimants and
other persons entitled hereto pursuant to this Stipulation; and (ii) any and all expenses,
liabilities and costs incurred in connection with the taxation of the Gross Settlement Fund
(including without limitation, expenses of tax attorneys and accountants). For the purposes
of paragraph (A) hereof, taxes imposed on Nortel shall include amounts equivalent to taxes
that would be payable by Nortel but for the existence of relief from taxes by virtu: of loss
carryforwards or other tax attributes, determined by Nortel, acting reasonably, and accepted
by the Escrow Agents, acting reasonably.




          (ttt) “Unknown Claims” means any and all Settled Claims which any of the Lead
Plaintiff, Canadian Representative Plaintiffs, or Class Members does not know or suspect to
exist in his, her or its favor at the time of the release of the Released Parties and any
Settled Defendants’ Claims which any Nortel I Defendant does not know or suspect to exist in
his, her or its favor, as of the Effective Date, which if known by him, her or it might have
affected his, her or its decision(s) with respect to the Settlement. With respect to any
and all Settled Claims and Settled Defendants’ Claims, the parties stipulate and agree that,
upon the Effective Date, the Lead Plaintiff, Canadian Representative Plaintiffs and the
Nortel I Defendants shall expressly waive, and each Class Member shall be deemed to have
waived, and by operation of the Judgments shall have expressly waived, any and all
provisions, rights and benefits conferred by any law of any state, province or territory of
the United States or Canada, or principle of common



24









 







law or otherwise, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542,
which provides:




A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.


Lead Plaintiff, Canadian Representative Plaintiffs and Nortel acknowledge, and Class Members by
operation of law shall be deemed to have acknowledged, that the inclusion of “Unknown Claims” in
the definition of Settled Claims and Settled Defendants’ Claims was separately bargained for and
was a key element of the Settlement.





          (uuu) “U.S. Global Class” means all persons and entities who purchased Nortel common
stock or call options on Nortel common stock or wrote (sold) put options on Nortel common
stock during the period between October 24, 2000 through February 15, 2001, inclusive, and
who suffered damages thereby, including, but not limited to, those persons or entities who
traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock
Exchange. Members of the Canadian Classes who suffered damages are included within the
definition of U.S. Global Class, unless otherwise excluded by this definition. Excluded
from the U.S. Global Class are the Defendants, members of the immediate families of any of
the Individual Defendants, any entity in which any Defendant has a controlling interest or
is a parent or subsidiary of or is controlled by Nortel, and the officers, directors,
affiliates, legal representatives, heirs, predecessors, successors or assigns of any of the
Defendants. Excluded from the U.S. Global Class are any putative members of the U.S. Global
Class who previously requested exclusion in response to the Notice of Pendency, as listed on
Tab 1 to Exhibit J annexed hereto, save if they are also members of any of the Canadian
Classes and do not elect to exclude themselves from such Canadian Classes (in which case
they shall be



25









 







eligible to share in the proceeds of and will be bound by the terms of the Settlement).
Also excluded from the U.S. Global Class are any putative members of the CIass who exclude
themselves by timely requesting exclusion in accordance with the requirements set forth in
the Notice.



SCOPE AND EFFECT OF SETTLEMENT





     2. The obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Nortel I U.S. Action as part of the Settlement and any and all Settled
Claims as against all Released Parties and any and all Settled Defendants’ Claims.




     3. (a) Upon the Effective Date of the Settlement, Lead Plaintiff, Canadian
Representative Plaintiffs (as confirmed in separate agreements) and all Class Members on
behalf of themselves, their personal representatives, heirs, executors, administrators,
trustees, successors and assigns, with respect to each and every Settled Claim, release and
forever discharge, and are forever enjoined from prosecuting, any Settled Claims against any
of the Released Parties, and shall not institute, continue, maintain or assert, either
directly or indirectly, whether in the United States, Canada or elsewhere, on their own
behalf or on behalf of any class or any other person, any action, suit, cause of action,
claim or demand against any Released Party or any other person who may claim any form of
contribution or indemnity (save for a contractual indemnity) from any Released Party in
respect of any Settled Claim or any matter related thereto, at any time on or after the
Effective Date.




          (b) Upon the Effective Date of this Settlement, defendants Nortel, Clarence Chandran
and John Roth, on behalf of themselves, their personal



26









 







representatives, heirs, executors, administrators, trustees, successors and assigns,
release and forever discharge each and every one of the Settled Defendants’ Claims, and are
forever enjoined from prosecuting the Settled Defendants’ Claims against Lead Plaintiff, all
Class Members and their respective counsel.




          (c) Notwithstanding the provisions of ¶ 3(a) hereof, in the event that any of the
Released Parties asserts against the Lead Plaintiff, any Class Member or their respective
counsel, any claim that is a Settled Defendants’ Claim, then Lead Plaintiff, such Class
Member or counsel shall be entitled to use and assert such factual matters included within
the Settled Claims only against such Released Party in defense of such claim but not for the
purposes of asserting any claim against any Released Party.



THE SETTLEMENT CONSIDERATION





     4. In consideration for the release and discharge provided for in ¶ 3(a) hereof, Nortel
shall (i) pay or cause to be paid the Settlement Amount, as prescribed in ¶ 4(a) — (e),
hereof; and (ii) adopt the corporate governance enhancements as prescribed in ¶ 4(f) hereof.




          (a) On June 1, 2006, Nortel paid to the Escrow Agents as agents for the benefit of the
Class: Two Hundred Ninety Million, One Hundred Sixty-Two Thousand, Four Hundred and
Twenty-Eight United States Dollars and Forty-Eight Cents (U.S.$290,162,428.48) being an
amount computed as the sum of (i) Two Hundred Eighty-Seven Million, Five Hundred Thousand
United States Dollars (U.S.$287,500,000), and (ii) Two Million, Six Hundred Sixty-Two
Thousand, Four Hundred and Twenty-Eight United States Dollars and Forty-Eight Cents



27









 






(US$2,662,428.48), which is an amount equal to the interest that would have been earned
on the amount in (i) above from March 23, 2006 if invested at the compounded rate for 90-day
United States Treasury securities.




          (b) Nortel’s insurance carriers have paid to the Escrow Agents as agents for the
benefit of the Class the sum of Two Hundred Fifteen Million United States Dollars
(U.S.$215,000,000) (the “Insurers’ Nortel I Cash Settlement Amount”).




          (c) Pursuant to an allocation agreement between the Lead Plaintiff in the Nortel I U.S.
Action and the lead plaintiffs in the Nortel II U.S. Action, the Escrow Agents transferred
Sixty-Six Million, Four Hundred Ninety Five Thousand United States Dollars (US$66,495,000),
plus interest thereon from April 3, 2006 to the date of the transfer at the same interest
rate earned on the Gross Cash Settlement Fund, from the Gross Cash Settlement Fund to the
escrow agent in the Nortel II Actions.




          (d) In addition, in payment of that part of the Settlement Amount described in part
(iii) of the definition thereof, and at a time or times subsequent to the Effective Date,
Nortel will, following receipt of the written instructions referred to below (which written
instructions shall be deliverable only after the Effective Date), as promptly as possible
using every commercially reasonable effort, issue and deliver the Gross Settlement Shares in
whole or in part and from time to time (any such shares referred to herein as “Settlement
Shares”) as instructed in writing by Lead Plaintiffs Counsel, on notice to and in
consultation with Canadian Class Counsel, which instructions, as relate to Authorized
Claimants, shall include proportionate distributions to all Authorized Claimants based on
the determinations made by the Claims



28









 







Administrator and approved by the Class Distribution Order. Upon receipt of such
instructions, Nortel will cause its transfer agent to issue certificates evidencing such
Settlement Shares registered in the respective names of the Authorized Claimants (or, if
acceptable to Nortel, through “book-entry” registration of such Settlement Shares) and, to
the extent applicable, Plaintiffs’ Counsel (as awarded in accordance with ¶ 8 hereof) and in
such amounts as set forth in such instructions, and deliver such certificates and/or notices
to such Authorized Claimants and Plaintiffs’ Counsel, as applicable. The reasonable costs
and expenses of such physical delivery and extraordinary or expedited services, if any, of
the transfer agent shall be paid out of the Gross Cash Settlement Fund. The Gross
Settlement Shares issued and delivered by Nortel pursuant to this Settlement shall be freely
tradeable upon receipt by the Authorized Claimants and Plaintiffs’ Counsel, subject to (i)
under U.S. securities laws, (A) the approvals required under U.S. state securities or “blue
sky” laws referred to in ¶ 24(i)(4) hereof and (B) such limitations on resale as may be
applicable with respect to Authorized Claimants who are “affiliates” of Nortel within the
meaning of such securities laws, and (ii) such limitations on resale as may be applicable
under Canadian securities laws or as contemplated by the Exemptive Relief. At the time of
issuance and delivery, the Gross Settlement Shares shall be listed for trading on the New
York Stock Exchange and the Toronto Stock Exchange, subject to official notice of issuance.
Nortel shall at no cost to the Class either register the Gross Settlement Shares or confirm
that it has received the written opinion of counsel substantially to the effect that the
issuance and delivery to the Authorized Claimants and Plaintiffs’ Counsel of the Gross
Settlement Shares are exempt from registration under the (United States) Securities Act of
1933, 15 U.S.C. § 77c(a)(1), as amended, pursuant to



29









 







Section 3(a)(10) thereunder. Nortel shall also, at no cost to the Class, either
qualify the Gross Settlement Shares pursuant to a prospectus filed under all applicable
Canadian provincial and territorial securities legislation or confirm that it has received
the written opinion of Canadian counsel substantially to the effect that the issuance and
delivery to the Authorized Claimants and Plaintiffs’ Counsel of the Gross Settlement Shares
in Canada are exempt from the dealer registration and prospectus requirements of all
applicable Canadian provincial and territorial securities legislation and that the first
trade in any such province or territory of Gross Settlement Shares shall not be subject to
the prospectus requirements of the securities legislation of such province or territory
provided that the conditions on resale set forth in the Exemptive Relief are satisfied.
Nortel understands that such written opinions may be relied upon by Nortel’s transfer agent.
From the date hereof until the date or dates Nortel issues the Gross Settlement Shares upon
Lead Plaintiff’s Counsel’s written instructions as aforesaid, the Gross Settlement Shares
shall be appropriately adjusted to account for any stock splits, stock consolidations, stock
dividends, return of capital, extraordinary distributions, recapitalization or sale of all
or substantially all of Nortel’s assets or, by Nortel using every commercially reasonable
effort to cause a counterparty to agree to the adjustment contemplated by this ¶ 4(d), any
conversion or exchange of Nortel’s outstanding shares of common stock into other shares,
securities or property resulting from an amalgamation or merger. The Gross Settlement
Shares, less any Settlement Shares awarded to Plaintiffs’ Counsel pursuant to ¶ 8 hereof
(the “Net Settlement Shares”), shall be distributed to Authorized Claimants.



30









 






          (e) In addition to the payment of those parts of the Settlement Amounts described in
¶4(a), (b) and (d) above, Nortel will also contribute to the Gross Cash Settlement Fund by
payment to the Escrow Agents, one-quarter of the amount of any actual gross recovery
(including the value of any monetary benefit that Nortel might receive from the defendants
by way of forgiveness or cancellation of any monetary debt owed by Nortel to such
defendants), excluding court-awarded attorneys’ fees and expenses, if any, in the existing
action commenced by Nortel against Frank Dunn, Douglas Beatty and Michael Gollogly in the
Ontario Superior Court of Justice bearing Court File No. 05-CV-283095PD1.




          (f) Within sixty (60) days after the Effective Date, Nortel shall adopt the corporate
governance enhancements described in Appendix A of the Notice.




     5. (a) The Gross Cash Settlement Fund shall be used to pay (i) the Notice and
Publication Notice and administration costs referred to in ¶ 7 hereof, (ii) the attorneys’
fee and expense award referred to in ¶ 8 hereof, and (iii) the remaining administration
expenses referred to in ¶ 9 hereof. The balance of the Gross Cash Settlement Fund after the
above payments and payment of any Taxes (as defined herein) shall be the Net Cash Settlement
Fund. The Net Cash Settlement Fund shall be transferred following the Effective Date by the
Escrow Agents to the Claims Administrator for distribution to Authorized Claimants as
provided in ¶¶ 10-12 hereof. Any sums required to be held in escrow hereunder shall be held
by the Escrow Agents as agents for the Class. All funds held by the Escrow Agents shall be
deemed to be in the custody of the Courts until such time as the funds shall be distributed
to Authorized Claimants or paid to the persons paying the same pursuant to this Stipulation
and/or



31









 







further order of the Courts. The Escrow Agents shall invest any funds in excess of
U.S.$l 00,000 in short term United States Agency or Treasury Securities (or a mutual fund
invested solely in such instruments), and shall collect and reinvest all interest accrued
thereon. Any funds held in escrow in an amount of less than U.S.$100,000 may be held in a
bank account insured by the Federal Deposit Insurance Corporation (“FDIC”). The parties
hereto agree that the Gross Cash Settlement Fund is intended to be a Qualified Settlement
Fund within the meaning of Treasury Regulation § 1.468B-1, and that the Escrow Agents, as
administrator of the Gross Cash Settlement Fund within the meaning of Treasury Regulation
§1.468B-2(k)(3), shall be responsible for filing tax returns and any other tax reporting for
or in respect of the Gross Settlement Fund and paying from the Gross Cash Settlement Fund
any Taxes owed with respect to the Gross Settlement Fund. The parties hereto agree that the
Gross Cash Settlement Fund shall be treated as a Qualified Settlement Fund from the earliest
date possible, and agree to any relation-back election required to treat the Gross Cash
Settlement Fund as a Qualified Settlement Fund from the earliest date possible. Nortel
agrees to provide promptly to the Escrow Agents the statement described in Treasury
Regulation § 1.468B-3(e).




          (b) All Taxes (as defined herein) shall be paid out of the Gross Cash Settlement Fund,
shall be considered to be a cost of administration of the Settlement and shall be timely
paid by the Escrow Agents without prior Order of the Courts. The Gross Settlement Fund or
the Escrow Agents shall, to the extent required by law, be obligated to withhold from any
distributions to Authorized Claimants and other persons entitled thereto pursuant to this
Stipulation any funds necessary to pay Taxes including the establishment of adequate
reserves for Taxes as well as any amount that may be required



32









 







to be withheld under Treasury Reg. 1.468B-2(1)(2) or otherwise under applicable law in
respect of such distributions. Further, the Gross Settlement Fund shall indemnify and hold
harmless the Nortel I Defendants and their counsel for Taxes (including, without Iimitation,
taxes payable by reason of any such indemnification payments).




          (c) Furthermore, to the extent (without prejudice or admission of any kind) that the
Fonds d’aide aux recours collectifs (Class Action Assistance Fund (the “Fund”)) of Quebec is
entitled under Quebec law to any portion of the Gross Cash Settlement Fund and/or the Gross
Settlement Shares regarding claims by Quebec residents with respect to either of these
compensatory items, any relevant payments (whether in cash or shares) will be set aside by
the Claims Administrator on behalf of and paid over to the Fund from the amounts otherwise
allocable to such Quebec residents, it being agreed and understood that none of the Nortel I
Defendants or Released Parties shall bear any responsibility for any such payment of cash or
shares.




          (d) None of the Nortel I Defendants, the Released Parties or their respective counsel
shall have any responsibility for or liability whatsoever with respect to (i) any act,
omission or determination of Lead Plaintiff’s Counsel, the Escrow Agents or the Claims
Administrator, or any of their respective designees or agents, in connection with the
administration of the Settlement or otherwise; (ii) the management, investment or
distribution of the Gross Cash Settlement Fund; (iii) the Plan of Allocation; (iv) the
determination, administration, calculation or payment of any claims asserted against the
Gross Settlement Fund; (v) any losses suffered by, or fluctuations in the value of, the
Gross Settlement Fund; or (vi) the payment or withholding of any Taxes, expenses and/or



33









 







costs incurred in connection with the taxation of the Gross Settlement Fund or the
filing of any returns.




          (e) Authorized Claimants shall provide any and all such information that the Claims
Administrator may reasonably require and is required by applicable law in respect of Taxes
and filings and reportings for and in respect of Taxes, before any distributions are made to
Authorized Claimants as contemplated hereby and the Claims Administrator may, without
liability to the Authorized Claimants, delay such distributions unless and until such
information is provided in the form required by the Claims Administrator.



ADMINISTRATION





     6. The Claims Administrator shall administer the Settlement subject to the concurrent
jurisdictions of the Courts for all members of the Canadian Classes and for all other Class
Members subject solely to the jurisdiction of the Court. To the extent reasonably necessary
to effectuate the terms of the Settlement, Nortel shall provide to the Claims Administrator,
without charge, all information from Nortel’s transfer records concerning the identity of
Class Members and their transactions.




     7. (a) The Escrow Agents, acting solely in their capacity as escrow agent, shall be
subject to the jurisdiction of the Courts.




          (b) The Escrow Agents may pay from the Gross Cash Settlement Fund, without further
approval from Nortel, all reasonable costs and expenses associated with identifying and
notifying the Class Members and effecting mailing of the Notice and Proof of Claim and
publication of the Publication Notice to the Class, and the



34









 







administration of the Settlement, including without limitation, the actual costs of
printing and mailing the Notice and Proof of Claim, publication of the Publication Notice,
reimbursements to nominee owners for forwarding the Notice and Proof of Claim to their
beneficial owners, and the administrative expenses incurred and fees charged by the Claims
Administrator in connection with providing notice and processing the submitted claims. In
the event that the Settlement is terminated, as provided for herein, notice and
administration costs paid or accrued in connection with this paragraph shall not be returned
to the persons who paid the Cash Settlement Amounts.




          (c) The Escrow Agents may rely upon any notice, certificate, instrument, request, paper
or other document reasonably believed by them to be genuine and to have been made, sent or
signed by an authorized signatory in accordance with this Stipulation, and shall not be
liable for (and will be indemnified from the Gross Cash Settlement Fund and held harmless
from and against) any and all claims, actions, damages, costs (including reasonable
attorneys’ fees) and expenses claimed against or incurred by the Escrow Agents for any
action taken or omitted by the Escrow Agents, consistent with the terms hereof and the terms
of separate escrow agreements between Nortel and the insurers and the Escrow Agents, in
connection with the performance by the Escrow Agents of their duties as Escrow Agents
pursuant to the provisions of this Stipulation or order of the Courts, except for their
gross negligence or willful misconduct. If the Escrow Agents are uncertain as to their
duties hereunder, the Escrow Agents may (i) request that Lead Plaintiffs and Canadian
Representative Plaintiffs (and, prior to the Effective Date, Nortel) sign a document which
states the action or non-action to be taken by the Escrow Agents or (ii) commence an
Interpleader action in a federal court in the



35









 







Southern District of New York and be reimbursed out of the monies held in the Gross
Cash Settlement Fund for their costs and expenses (including reasonable attorneys’ fees).
In the event the Settlement is terminated, as provided for herein, indemnified amounts and
expenses incurred by the Escrow Agents in connection with this paragraph shall not be
returned to the persons who paid the Settlement Amounts.



ATTORNEYS’ FEES AND EXPENSES





     8. Lead Plaintiff’s Counsel will apply to the United States District Court for the
Southern District of New York for an award of attorneys’ fees and reimbursement of expenses
payable from both the Gross Cash Settlement Fund and Gross Settlement Shares. Canadian
Class Counsel will apply to their corresponding Canadian Courts for an award of their
counsel fees and reimbursement of expenses to be paid from the Gross Cash Settlement Fund
and Gross Settlement Shares. All Plaintiffs’ Counsel shall further provide to their
respective Courts, as part of the motion for approval of the Settlement, all necessary
information required by their respective courts concerning the total award of attorneys’
fees and reimbursement of expenses to be payable from the Gross Cash Settlement Fund and
Gross Settlement Shares. The total amount of shares awarded as attorneys’ fees and
reimbursement of expenses may amount to no more than one-third of the Gross Settlement
Shares, and in fact shall be substantially less. Such amounts as are awarded by the United
States District Court for the Southern District of New York to Lead Plaintiff’s Counsel or
from the Canadian Courts to Canadian Class Counsel from the Gross Cash Settlement Fund shall
be payable by the Escrow Agents immediately upon award, notwithstanding the existence of any
timely filed objections thereto, or potential for appeal therefrom, or collateral attack on
the Settlement or any part thereof, subject to



36









 







Plaintiff’s Counsel’s obligations to make appropriate refunds or repayments to the
Gross Cash Settlement Fund plus accrued interest at the same rate as is earned by the Gross
Cash Settlement Fund, if and when, as a result of any appeal and/or further proceedings on
remand, or successful collateral attack, the fee or cost award is reduced or reversed. Such
amounts as are awarded to Plaintiffs’ Counsel by the Courts from the Gross Settlement Shares
shall be payable to Plaintiffs’ Counsel at the first date on which the Effective Date has
occurred and the award of attorneys’ fees is Final. If the fee award is paid prior to the
Effective Date, then any counsel receiving such fees shall provide undertakings satisfactory
to Nortel and the respective court to repay such fees if the Settlement is not finally
approved on appeal or the fee award is later modified or reversed for any reason.



CLASS DISTRIBUTION ORDER/ADMINISTRATION EXPENSES





     9. Lead Plaintiffs Counsel and Canadian Class Counsel will apply respectively to the
United States District Court for the Southern District of New York, and with respect to the
claims of Canadian Class Members to the Canadian Courts, on notice to Nortel’s Counsel, for
an order (the “Class Distribution Order”) approving the Claims Administrator’s
administrative determinations concerning the acceptance and rejection of the claims
submitted herein, and approving any fees and expenses not previously applied for relating to
the administration of the Settlement, including the fees and expenses of the Claims
Administrator, the reasonable costs and expenses of the physical delivery of the Gross
Settlement Shares and any extraordinary or expedited services of the transfer agent with
respect to such physical delivery, and, only if the



37









 







Effective Date has occurred, directing payment of the Net Settlement Fund to Authorized
Claimants.



DISTRIBUTION TO AUTHORIZED CLAIMANTS





     10. The Claims Administrator shall determine each Authorized Claimant’s Rro rata share
of the Net Settlement Fund based upon each Authorized Claimant’s Recognized Claim (as
defined in the Plan of Allocation described in the Notice annexed hereto as Tab 1 to Exhibit
A).




     11. It is understood and agreed by the parties that the proposed Plan of Allocation,
including, but not limited to, any adjustments to any Authorized Claimant’s claim set forth
herein, is not part of the Stipulation and is to be considered by the Courts separately from
the Courts’ consideration of fairness, reasonableness and adequacy of the Settlement, and
any order or proceeding relating to the Plan of Allocation shall not operate to terminate or
cancel the Stipulation or affect the Finality of the Courts’ Judgments approving the
Stipulation and the Settlement set forth herein, or any other orders entered pursuant to the
Stipulation.




     12. Each Authorized Claimant shall be allocated a Ero rata share of the Net Settlement
Fund based on his, her or its recognized claim compared to the total recognized claims of
all Authorized Claimants. This is not a claims-made settlement. Neither Nortel nor its
insurers shall be entitled to receive any of the Gross Settlement Fund following the
Effective Date. The Nortel 1 Defendants shall have no involvement in reviewing or
challenging claims.



38









 





ADMINISTRATION OF THE SETTLEMENT





     13. Any Class Member who does not submit a valid Proof of Claim will not be entitled to
receive any of the proceeds from the Net Settlement Fund but will otherwise be bound by all
of the terms of this Stipulation and the Settlement, including the terms of the Judgments to
be entered in the Actions and the releases provided for herein, and will be barred from
bringing any action against the Released Parties concerning the Settled Claims.




     14. The Claims Administrator shall process the Proofs of Claim and, after the Effective
Date and entry of the Class Distribution Order, Lead Plaintff’s Counsel in conjunction with
Canadian Class Counsel shall give to Nortel the written instructions to issue and deliver
the Gross Settlement Shares in accordance with ¶ 4(d) hereof and the Claims Administrator
shall distribute the Net Cash Settlement Fund to Authorized Claimants, and Nortel shall
cause the transfer agent to distribute the Net Settlement Shares to Authorized Claimants.
Except for Nortel’s obligation to pay or cause to be paid the Cash Settlement Amounts to the
Escrow Agents in accordance with ¶ 4(a), (b) and (e) hereof, and to cooperate in the
production of information with respect to the identification of Class Members from Nortel’s
shareholder transfer records, as provided herein, and to issue and deliver the Gross
Settlement Shares in accordance with ¶ 4(d) hereof, Nortel I Defendants shall have no
liability, obligation or responsibility for the administration of the Settlement or
disbursement of the Net Settlement Fund. Lead Plaintiffs Counsel or Canadian Class Counsel,
as the case may be, shall have the right, but not the obligation, to advise the Claims
Administrator to waive what Lead Plaintiff’s Counsel, or, with respect to claims of the
Canadian Class Members, Canadian Class Counsel, deem to be



39









 







formal or technical defects in any Proofs of Claim submitted in the interests of
achieving substantial justice.




     15. For purposes of determining the extent, if any, to which a Class Member shall be
entitled to be treated as an Authorized Claimant, the following conditions shall apply:




          (a) Each Class Member shall be required to submit a Proof of Claim (see attached Tab 2
to Exhibit A), supported by such documents as are designated therein, including proof of the
transactions claimed and the losses incurred thereon or such other documents or proof as the
Claims Administrator, in its discretion, may deem acceptable;




          (b) All Proofs of Claim must be submitted by the date specified in the Notice unless
such period is extended by Order of the United States District Court for the Southern
District of New York or, in the case of a member of Canadian Class, the applicable Canadian
Court that certified the Canadian Class. Any Class Member who fails to submit a Proof of
Claim by such date shall be forever barred from receiving any payment pursuant to the
Settlement (unless, by court Order, a later submitted Proof of Claim by such Class Member is
approved), but shall in all other respects be bound by all of the terms of this Stipulation
and the Settlement, including the terms of the Judgments to be entered in the Nortel I
Actions, and the releases provided for herein, and will be barred from bringing any action
against the Released Parties concerning the Settled Claims. Provided that it is received
before the first motion for the Class Distribution Order is filed, a Proof of Claim shall be
deemed to have been submitted when posted, if received with a postmark indicated on the
envelope and if mailed by first-class mail and



40









 







addressed in accordance with the instructions thereon. In all other cases, the Proof
of Claim shall be deemed to have been submitted when actually received by the Claims
Administrator;




          (c) Each Proof of Claim shall be submitted to and reviewed by the Claims Administrator,
which shall determine in accordance with this Stipulation and the approved Plan of
Allocation the extent, if any, to which each claim shall be allowed, subject to review by
the Courts pursuant to subparagraph (e) below;




          (d) Proofs of Claim that do not meet the submission requirements may be rejected.
Prior to rejection of a Proof of Claim, the Claims Administrator shall communicate with the
claimant in order to attempt to remedy the curable deficiencies in the Proof of Claim
submitted. The Claims Administrator shall notify, in a timely fashion and in writing, each
claimant whose Proof of Claim they propose to reject in whole or in part, setting forth the
reasons therefor, and shall indicate in such notice that the claimant whose claim is to be
rejected has the right to a review by the United States District Court for the Southern
District of New York or, in the case of a member of a Canadian Class the applicable Canadian
Court that certified the Canadian Class if the claimant so desires and complies with the
requirements of subparagraph (e) below; and




          (e) If any claimant whose claim has been rejected in whole or in part desires to
contest such rejection, the claimant must, within twenty (20) days after the date of mailing
of the notice required in subparagraph (d) above, serve upon the Claims Administrator a
notice and statement of reasons indicating the claimant’s grounds for contesting the
rejection along with any supporting documentation, and requesting a final



41









 







review thereof by the United States District Court for the Southern District of New
York or, in the case of a member of a Canadian Class the applicable Canadian Court that
certified the Canadian Class. If a dispute concerning a claim cannot be otherwise resolved,
Lead Plaintiffs Counsel or Canadian Class Counsel shall thereafter present the request for
review to the respective court or to such court’s designee.




     16. The administrative determinations of the Claims Administrator accepting and
rejecting claims shall be presented to the United States District Court for the Southern
District of New York, and with respect to the claims of Canadian Class Members to the
Canadian Courts, on notice to Nortel’s Counsel, for approval in the Class Distribution
Order.




     17. Each claimant shall be deemed to have submitted to the jurisdiction of the United
States District Court for the Southern District of New York and, in the case of members of
the Canadian Classes with respect to such claimant’s claim the Canadian Court that certified
the applicable Canadian Class, and the claim will be subject to investigation and discovery
under the (United States) Federal Rules of Civil Procedure, or under applicable Canadian
rules with respect to members of the Canadian Classes, provided that such investigation and
discovery shall be limited to that claimant’s status as a Class Member and the validity and
amount of such claimant’s claim. No discovery shall be allowed on the merits of the Nortel
I Actions or the Settlement in connection with processing of the Proofs of Claim.




     18. Payment pursuant to the Settlement shall be deemed final and conclusive against all
Class Members. All Class Members whose claims are not approved pursuant



42









 







to the Class Distribution Order shall be barred from participating in distributions
from the Net Settlement Fund, but otherwise shall be bound by all of the terms of this
Stipulation and the Settlement, including the terms of the Judgments to be entered in the
Nortel I Actions, and the releases provided for herein, and will be barred from bringing any
action against the Released Parties concerning the Settled Claims.




     19. All proceedings with respect to the administration, processing and determination of
claims described by ¶ 15 hereof, and the determination of all controversies relating
thereto, including disputed questions of law and fact with respect to the validity of
claims, shall be subject to the jurisdiction of the United States District Court for the
Southern District of New York or, in the case of a Canadian Class Member, the jurisdiction
of the applicable Canadian Court that certified the Canadian Class.




     20. The Net Cash Settlement Fund shall be distributed to Authorized Claimants by the
Claims Administrator, and the Net Settlement Shares shall be issued and distributed to
Authorized Claimants in accordance with ¶ 4(d) hereof, only after the Effective Date and
after all Claims have been processed, and all claimants whose Claims have been rejected or
disallowed, in whole or in part, have been notified and provided the opportunity to contest
with the Claims Administrator such rejection or disallowance.



TERMS OF ORDER FOR NOTICE AND HEARING





     21. (a) Promptly after this Stipulation has been fully executed, Lead Plaintiff’s
Counsel and Nortel’s Counsel jointly shall apply to the United States District Court for the
Southern District of New York for entry of an Order for Notice and Hearing, substantially in
the form annexed hereto as Exhibit A.



43









 






          (b) Promptly after this Stipulation has been fully executed, the Canadian
Representative Plaintiffs shall apply to the respective Canadian Courts for, and Nortel
shall consent to, orders for certification of the Nortel I Canadian Actions (for settlement
purposes only and on terms acceptable to Nortel) substantially in the form annexed hereto as
Exhibits D — F and for directions approving the Notice.




          (c) The mailing or publication of the Notice and Publication Notice shall not occur
until all such orders of the Courts have been obtained, and in the event that any of the
Courts require changes in the Notice or the Publication Notice, after such changes are also
approved by the other Courts.



TERMS OF ORDER AND FINAL JUDGMENT





     22. (a) If the Settlement contemplated by this Stipulation is approved by the United
States District Court for the Southern District of New York, Plaintiffs Lead Counsel and
Nortel’s Counsel shall request that a Judgment be entered substantially in the form annexed
hereto as Exhibit B.




          (b) If the Settlement contemplated by this Stipulation is approved by the Canadian
Courts, Nortel’s counsel and Canadian Class Counsel jointly shall apply to the respective
Canadian Courts for entry of Judgments substantially in the forms annexed hereto as Exhibits
G — I.



SUPPLEMENTAL AGREEMENT




     23. Simultaneously herewith, Lead Plaintiffs Counsel, Canadian Class Counsel and
Nortel’s Counsel are executing a “Supplemental Agreement” setting forth certain conditions
under which this Settlement may be terminated by Nortel if potential



44









 







Class Members who purchased in excess of a certain number of shares of Nortel
Securities traded during the Class Period exclude themselves from the Class (the “Opt-out
Threshold”). Unless otherwise directed by the Courts, the Supplemental Agreement may be
filed with the Opt-out Threshold redacted. Notwithstanding the foregoing, the Opt-out
Threshold may be disclosed to the Courts for purposes of the approval of the Settlement, as
may be required by the Courts, but such disclosure shall be carried out to the fullest
extent possible in accordance with the practices of the respective Courts so as to maintain
the Opt-out Threshold as confidential. In the event of a termination of this Settlement
pursuant to the Supplemental Agreement, this Stipulation shall become null and void and of
no further force and effect, with the exception of the provisions of ¶ 28 which shall
continue to apply. Notwithstanding the foregoing, the Stipulation shall not become null and
void as a result of the election by Nortel to exercise its option to withdraw from the
Stipulation pursuant to the Supplemental Agreement until the conditions set forth in the
Supplemental Agreement have been satisfied. The Supplemental Agreement is attached hereto
as Exhibit C, with the Opt-out Threshold redacted.



EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION





     24. The “Effective Date” of Settlement shall be the date when all the following
conditions of settlement shall have occurred:




          (a) approval by the United States District Court for the Southern District of New York
of the Settlement, following notice to the Class and a hearing, as prescribed by Rule 23 of
the (United States) Federal Rules of Civil Procedure;



45









 






          (b) entry by the United States District Court for the Southern District of New York of
a Judgment, substantially in the form set forth in Exhibit B annexed hereto, and the
expiration of any time for appeal or review of such Judgment, or, if any appeal is filed,
after such Judgment is upheld on appeal in all material respects and is no longer subject to
review upon appeal or review by writ of certiorari, or, in the event that the United States
District Court for the Southern District of New York enters an order and final Judgment in a
form other than that provided above (“Alternative U.S. Judgment”) and none of the parties
hereto elect to terminate this Settlement, the date that such Alternative U.S. Judgment
becomes Final;




          (c) approval of the Settlement by the Ontario Superior Court of Justice in the Ontario
Frohlinger Action, following notice to the Ontario National Class and a hearing pursuant to
the Ontario Class Proceedings Act, 1992;




          (d) entry by the Ontario Superior Court of Justice in the Ontario Frohlinger Action of
a Judgment, substantially in the form set forth in Exhibit G annexed hereto, and the
expiration of any time for appeal or review of any and all of such Judgment, or, if any
appeal is filed, after any such judgment is upheld on appeal in all material respects and is
no longer subject to review upon appeal or otherwise, or, in the event that the Ontario
Superior Court of Justice enters an order and final judgment in a form other than that
provided above (“Alternative Ontario Judgment”) and none of the parties hereto elect to
terminate this Settlement pursuant to ¶ 25(d) hereof, within 30 days of the Ontario Superior
Court of Justice entering the Alternative Ontario Judgment, the date that such Alternative
Ontario Judgment becomes Final;



46









 






          (e) approval of the Settlement by the Superior Court of Quebec in the Quebec A.P.E.I.Q.
Action, following notice to the Quebec Class and a hearing pursuant to the Quebec Code of
Civil Procedure;




          (f) entry by the Superior Court of Quebec in the A.P.E.I.Q. Action of a Judgment,
substantially in the form set forth in Exhibit H annexed hereto, and the expiration of any
time for appeal or review of any and all of such Judgments, or, if any appeal is filed,
after any such Judgment is upheld on appeal in all material respects and is no longer
subject to review upon appeal or otherwise, or, in the event that the Superior Court of
Quebec enters an order and final judgment in a form other than that provided above
(“Alternative Quebec Judgment”) and none of the parties hereto elect to terminate this
Settlement pursuant to ¶ 25(d) hereof within 30 days of the Superior Court of Quebec
entering an Alternative Quebec Judgment, the date that such Alternative Quebec Judgment
becomes Final;




          (g) approval of the Settlement by the Supreme Court of British Columbia in the B.C.
Jeffery Action, following notice to the British Columbia Class and a hearing pursuant to the
British Columbia Class Proceedings Act;




          (h) entry by the of Supreme Court of British Columbia in the B.C. Jeffery Action of a
Judgment, substantially in the form set forth in Exhibit I annexed hereto, and the
expiration of any time for appeal or review of any and all of such Judgments, or, if any
appeal is filed, after any such Judgment is upheld on appeal in all material respects and is
no longer subject to review upon appeal or otherwise, or, in the event that the Supreme
Court of British Columbia enters an order and final judgment in a



47









 







form other than that provided above (“Alternative B.C. Judgment”) and none of the
parties hereto elect to terminate this Settlement pursuant to ¶ 25(d) hereof within 30 days
of the Supreme Court of British Columbia entering the Alternative B.C. Judgment, the date
that such Alternative B.C. Judgment becomes Final;




          (i) Nortel shall have used every commercially reasonable effort to cause (1), (2), (3)
and (4) below to have been obtained and Nortel shall have received, in form and substance
satisfactory to it:




	 	(1)	 	either (A) an MRRS decision document issued
pursuant to National Policy 12-201 — Mutual Reliance Review System for
Exemptive Relief Applications, or any successor, replacement or
amending regulatory instrument (“NI 12-201”) exempting the issuance,
delivery and distribution of the Gross Settlement Shares in accordance
with the terms of the Settlement from the dealer registration and
prospectus requirements of all applicable Canadian provincial and
territorial securities legislation, and imposing only those limitations
on resale of Gross Settlement Shares in any Canadian province or
territory that are substantially equivalent to those set forth in
subsection (3) of section 2.6 of National Instrument 45-102 — Resale of
Securities, together with all necessary comparable exemptive relief
issued by each of the non-principal regulators (as such term is defined
for the purposes of NI 12-201) that have opted out of the system for
the application for the aforementioned MRRS decision document (the
“Exemptive




48









 






	 	 	 	Relief’), which Exemptive Relief shall be in form and substance
satisfactory to Lead Plaintiff’s Counsel acting reasonably; or (B) a
final MRRS decision document issued pursuant to National Policy
43-201 – Mutual Reliance Review System for Prospectuses and Annual
Information Forms, or any successor, replacement or amending
regulatory instrument, (“NI 43-201”) evidencing that a receipt has
been obtained for a final prospectus of Nortel relating to the Gross
Settlement Shares in each Canadian province and territory where any
Settlement Shares may be distributed, together with all necessary
receipts for such final prospectus issued by each of the
non-principal regulators (as such term is defined for purposes of NI
43-201) that have opted out of the Mutual Reliance Review System for
such prospectus;






	 	(2)	 	(A) should it be necessary, a “no action”
letter from the United States Securities and Exchange Commission with
respect to the issuance, delivery and distribution of the Gross
Settlement Shares in accordance with the terms of the Settlement
pursuant to the exemption from registration set forth in Section
3(a)(10) under the (United States) Securities Act of 1933, 15 U.S.C. §
77c(a)(I), as amended (the “Securities Act”) (if necessary, the “No
Action Letter”); or (B) if a No Action Letter should be necessary and
not be obtained, Nortel shall register the Gross Settlement Shares and
notice of effectiveness shall have been received confirming that the




49









 






	 	 	 	registration statement registering the Gross Settlement Shares under
the Securities Act and filed with the United States Securities and
Exchange Commission had been declared effective by such Commission;






	 	(3)	 	all required approvals from the New York Stock
Exchange and the Toronto Stock Exchange with respect to the issuance,
delivery and distribution of the Gross Settlement Shares in accordance
with the terms of the Settlement (the “Stock Exchange Approvals”); and
	 
	 	(4)	 	all required approvals under U.S. state
securities or “blue sky” laws with respect to the issuance, delivery
and distribution of the Gross Settlement Shares in accordance with the
terms of the Settlement, including those with respect to the states of
Arizona and New York (“Blue Sky Approvals”);






          (j) all conditions, if any, of the Exemptive Relief, the No Action Letter, the Stock
Exchange Approvals and the Blue Sky Approvals, to the issuance and distribution of the Gross
Settlement Shares, have been satisfied; and




          (k) expiration of the time to exercise the termination rights provided in ¶ 25 hereof.




     25. Lead Plaintiff, the Canadian Representative Plaintiffs and Nortel shall each have
the right to terminate the Settlement and thereby this Stipulation by providing written
notice of their or its election to do so (“Termination Notice”) to one another



50









 







hereto within thirty (30) days of any of the following: (a) the United States District
Court for the Southern District of New York declining to enter the Order for Notice and
Hearing in any material respect; (b) any one of the Canadian Courts declining to enter
orders, in any material respect, in the form of the notice set forth in Exhibits D — F; (c)
any one of the Courts refusing to approve this Settlement as set forth in this Stipulation
for one or more of the Nortel I Actions; (d) any one of the Courts declining to enter the
corresponding Judgment for that court in any material respect; (e) the date upon which a
Judgment is modified or reversed in any material respect by any level of appellate court;
(f) the date upon which an Alternative Judgment is modified or reversed in any material
respect by any level of appellate court; and (g) the date upon which the settlement in the
Nortel II Actions is terminated; or (h) the conditions set forth in ¶ 24 (i) and 24(j)
hereof not having been satisfied prior to forty-five (45) calendar days after the latter of
(i) entry of the last Final Judgment contemplated in ¶ 24 hereof or (ii) entry of the last
final judgment in the Nortel II Actions.




     26. Notwithstanding anything else in this Stipulation, Nortel may, in accordance with
the terms set for in the Supplemental Agreement, and in its sole and unfettered discretion,
elect in writing to terminate the Settlement and this Stipulation if the Opt-out Threshold
is exceeded or as otherwise provided in the Supplemental Agreement.




     27. In the event that there is non-delivery by Nortel of any of the Net Settlement
Shares required to be delivered hereunder in accordance with ¶ 4(d) hereof, then Lead
Plaintiff and the Canadian Representative Plaintiffs shall consult with one another and, in
the event of consensus, may apply jointly to the Courts for orders at their



51









 







option either terminating this Settlement as it applies to the Class, directing
specific performance of Nortel’s obligation to issue and/or deliver such shares, or obtain
such other available relief. In the event of non-consensus between Lead Plaintiff and the
Canadian Representative Plaintiffs, each shall apply forthwith to their respective courts,
on notice to one another, for an order either terminating this Settlement as it applies to
their class, directing specific performance of Nortel’s obligation to issue and/or deliver
such shares, or obtain such other available relief. It is agreed that in the event that an
Order is obtained on such an application from one court terminating the Settlement for one
class, the Settlement shall be terminated for the balance of the Class and orders to that
effect shall be sought on consent from the remaining Courts.




     28. Except as otherwise provided herein, in the event the Settlement is terminated, the
parties to this Stipulation shall be deemed to have reverted to their respective status in
the Nortel 1 Actions immediately prior to the execution of this Stipulation and, except as
otherwise expressly provided, the parties shall proceed in all respects as if this
Stipulation and any related orders had not been entered. Furthermore, an amount equal to
the Cash Settlement Amounts previously paid by Nortel and/or Nortel’s Insurers, as the case
may be, shall be paid to Norte/ and/or Nortel’s Insurers as the case may be, less the amount
transferred to the Nortel II escrow agent, together with any interest or other income earned
thereon or in respect thereof, less any Taxes paid or due with respect to such income, less
any amounts required to be paid to the Escrow Agents pursuant to the relevant escrow
agreement, and less any reasonable costs of administration and notice actually incurred and
paid or payable from the Cash Settlement Amount (as described in 1 7 hereof), less any
applicable withholding taxes.



52









 





NO ADMISSION OF WRONGDOING





     29. This Stipulation, whether or not consummated, and any proceedings taken pursuant to
it:




          (a)
shall not be offered or received against any of the Nortel I Defendants as evidence
of or construed as or deemed to be evidence of any presumption, concession, or admission by
any of those defendants with respect to the truth of any fact alleged by any of the
plaintiffs or the validity of any claim that has been or could have been asserted in the
Nortel I Actions or in any litigation, or the deficiency of any defense that has been or
could have been asserted in the Nortel I Actions or in any litigation, or of any liability,
negligence, fault, or wrongdoing of the Nortel I Defendants;




          (b) shall not be offered or received against the Nortel I Defendants as evidence of a
presumption, concession or admission of any fault, misrepresentation or omission with
respect to any statement or written document approved or made by any of the Nortel I
Defendants;




          (c) shall not be offered or received against the Nortel I Defendants as evidence of a
presumption, concession or admission with respect to any liability, negligence, fault or
wrongdoing, or in any way referred to for any other reason as against any of the Nortel I
Defendants, in any other civil, criminal or administrative action or proceeding, other than
such proceedings as may be necessary to effectuate the provisions of this Stipulation;
provided, however, that if this Stipulation is approved by the Courts, Nortel I Defendants
may refer to it to effectuate the liability protection granted them hereunder;



53









 






          (d) shall not be construed against any of the Nortel I Defendants as an admission or
concession that the consideration to be given hereunder represents the amount which could be
or would have been recovered after trial;




          (e) shall not be construed as or received in evidence as an admission, concession or
presumption against Lead Plaintiff, Canadian Representative Plaintiffs or any of the Class
Members that any of their claims are without merit, or that any defenses asserted by the
Nortel I Defendants have any merit, or that damages recoverable under the Nortel I Actions
would not have exceeded the Gross Settlement Fund; and




          (f) shall not be construed as or received in evidence as an act of attornment to the
jurisdiction of any court by Lead Plaintiffs or Canadian Representative Plaintiffs by reason
of their participation or the participation of their respective counsel in proceedings taken
pursuant to the Stipulation to approve the Settlement.



MISCELLANEOUS PROVISIONS





     30. All of the exhibits attached hereto are hereby incorporated by reference as though
fully set forth herein.




     31. Nortel warrants as to itself that, as to the payments made by or on its behalf, at
the time of such payment that it made or caused to be made pursuant to 14 hereof, it was not
insolvent, nor did nor will the payment required to be made by or on behalf of it, render it
insolvent, within the meaning of and/or for the purposes of the (United States) Bankruptcy
Code, including §§ 101 and 547 thereof. This warranty is made by Nortel and not by Nortel’s
Counsel.



54









 






     32. If a case is commenced in respect of any portion of the Settlement Amount (or any
insurer contributing funds to the Insurers’ Nortel I Cash Settlement Amount on behalf of any
Nortel I Defendant) under Title 1 1 of the United States Code (Bankruptcy), or a trustee,
receiver or conservator is appointed under any similar law, and in the event of the entry of
a final order of a court of competent jurisdiction determining the transfer of money to the
Gross Cash Settlement Fund or issuance of any Gross Settlement Shares or any portion thereof
by or on behalf of such defendant to be a preference, voidable transfer, fraudulent transfer
or similar transaction and any portion thereof is required to be returned, and such amount
is not promptly deposited to the Gross Cash Settlement Fund or such shares are not issued by
others, then, at the election of Lead Plaintiffs in respect of the Nortel I U.S. Action, and
with respect to the Nortel I Canadian Actions at the election of Canadian Representative
Plaintiffs, the parties shall jointly apply to the respective courts, as the case may be, to
vacate and set aside the releases given and Judgments entered in favor of the Nortel I
Defendants pursuant to this Stipulation, and which releases shall be null and void, and the
parties shall be restored to their respective positions in the Nortel I Actions as of the
date a day prior to the date of this Stipulation and any cash amounts in the Gross Cash
Settlement Fund and any Gross Settlement Shares previously issued by Nortel shall be
returned as provided in ¶ 28 hereof.




     33. The parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Class Members against
the Released Parties with respect to the Settled Claims. Accordingly, Lead Plaintiff,
Canadian Representative Plaintiffs and Nortel agree not to assert in any forum that the
Nortel I Actions were brought by the plaintiffs or defended by defendants



55









 







in those actions in bad faith or without a reasonable basis. The parties hereto shall
assert no claims of any violation of Rule 11 of the Federal Rules of Civil Procedure
relating to the prosecution, defense, or settlement of the Nortel I Actions. The parties
agree that the amount paid and the other terms of the Settlement were negotiated at arm’s
length in good faith by the parties, and reflect a settlement that was reached voluntarily
after consultation with experienced legal counsel.




     34. This Stipulation may not be modified or amended, nor may any of its provisions be
waived, except by a writing signed by all parties hereto or their successors-in-interest.




     35. The headings herein are used for the purpose of convenience only and are not meant
to have legal effect.




     36. The administration and consummation of the Settlement as embodied in this
Stipulation shall be under the authority of the United States District Court for the
Southern District of New York and that Court shall retain jurisdiction for the purpose of
entering orders providing for awards of attorneys’ fees and expenses to Lead Plaintiff’s
Counsel and enforcing the terms of this Stipulation. Notwithstanding the foregoing, the
Canadian Courts shall retain concurrent jurisdiction with respect to the administration,
consummation and enforcement of the Settlement as embodied in this Stipulation and with
respect to members of the corresponding Canadian Classes and shall retain jurisdiction for
the purposes of entering orders providing for counsel fees and expenses to Canadian Class
Counsel.



56









 






     37. The waiver by one party of any breach of this Stipulation by any other party shall
not be deemed a waiver of any other prior or subsequent breach of this Stipulation.




     38. This Stipulation and its exhibits, the Supplemental Agreement, the various escrow
agreements governing the cash contributions by Nortel and its insurers toward the
Settlement, and the contemporaneous agreements with respect to Canadian Representative
Plaintiffs confirming the application of this Stipulation to the Nortel I Canadian Actions
constitute the entire agreement concerning the Settlement of the Nortel I Actions, and no
representations, warranties, or inducements have been made by any party hereto concerning
this Stipulation, its exhibits and the Supplemental Agreement other than those contained and
memorialized in such documents.




     39. This Stipulation may be executed in one or more counterparts. All executed
counterparts and each of them shall be deemed to be one and the same instrument.




     40. This Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the parties hereto.




     41. The construction and interpretation of this Stipulation and the Supplemental
Agreement shall be governed by the internal laws of the State of New York without regard to
conflicts of laws, except to the extent that federal law of the United States requires that
federal law governs.



57









 






     42. This Stipulation shall not be construed more strictly against one party than
another merely by virtue of the fact that it, or any part of it, may have been prepared by
counsel for one of the parties, it being recognized that it is the result of arm’s-length
negotiations between the parties and all parties have contributed substantially and
materially to the preparation of this Stipulation.




     43. All counsel and any other person executing this Stipulation, the Supplemental
Agreement and any of the exhibits hereto, or any related settlement documents, warrant and
represent that they have the full authority to do so and that they have the authority to
take appropriate action required or permitted to be taken pursuant to the Stipulation to
effectuate its terms.



58









 






     44. Lead Plaintiff, Canadian Representative Plaintiffs and Nortel agree to cooperate fully
with one another in seeking Court approval of the Order for Notice and Hearing, the
Stipulation and the Settlement, and to promptly agree upon and execute all such other
documentation as may be reasonably required to obtain fmal approval by the Courts of the
Settlement.



DATED: June 20, 2006




	 	 	 	 	 
	 	MILBERG WEISS BERSUAD

& SCHULMAN LLP

 	 
	 	By:  	/s/ George A. Bauer
 	 
	 	 	George A. Bauer III (GB-2919) 	 
	 	 	One Pennsylvania Plaza

New York, New York 10119-0165

Telephone: (212) 594-5300

Facsimile: (212) 868-1229

Lead Plaintiff’s Counsel 
	 
	 
	 	SHEARMAN & STERLING LLP

 	 
	 	By:  	/s/ Stuart J. Baskin
 	 
	 	 	Stuart J. Baskin (SB-9936)
Tai H. Park (TP-2607)
Marc D. Ashley (MA-8896)

	 
	 	
599 Lexington Avenue

New York, New York  10022-6069

Telephone: (212) 848-4000

Facsimile: (212) 848-7179



Nortel’s Counsel 	 
	 




59









 








EXHIBIT A




UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK




	 	 	 	 	 
	 

	 	x	 	 
	 

In re NORTEL NETWORKS CORP.

	 	:
	 	 Civil
Action No. 01-CV-1855 (RMB)
	SECURITIES LITIGATION

	 	:	 	 
	 

	 	:	 	 
	This Document Relates To:

	 	:
	 	CLASS ACTION
	 

	 	:	 	 
	     ALL ACTIONS.

	 	:	 	 
	 

	 	x	 	 
	 


	 	 	 	 






PRELIMINARY ORDER FOR NOTICE AND HEARING IN CONNECTION

WITH SETTLEMENT PROCEEDINGS




     WHEREAS, on June 20, 2006, the parties to the above-entitled action (the “Action”) entered
into a Stipulation and Agreement of Settlement (the “Stipulation”) which is subject to review under
Rule 23 of the (United States) Federal Rules of Civil Procedure and which, together with the
exhibits thereto, sets forth the terms and conditions for the proposed settlement of the claims
alleged in the Complaint on the merits and with prejudice; and the Court having read and considered
the Stipulation and the accompanying documents; and the parties to the Stipulation having consented
to the entry of this Order; and all capitalized terms used herein having the meanings defined in
the Stipulation; and



     WHEREAS, pursuant to Rules 23(a) and 23(b)(3) of the (United States) Federal Rules of Civil
Procedure and by Order dated September 5, 2003, this Action was certified as a class action on
behalf of all persons and entities who, during the period October 24, 2000 and continuing through
and including February 15, 2001, purchased Nortel Networks Corporation (“Nortel”) common stock or
call options on Nortel common stock or wrote (sold) put options on Nortel common stock
(collectively “Nortel Securities”), and who suffered damages thereby, including,



 









 







but not limited to, those persons or entities who traded in Nortel Securities on the New York
Stock Exchange and/or the Toronto Stock Exchange. Excluded from the U.S. Global Class are the
defendants, members of any of the individual defendants’ immediate families, any entity in which
any of the defendants has a controlling interest or is a parent or subsidiary of or is controlled
by Nortel, and the officers, directors, affiliates, ‘legal representatives, heirs, predecessors,
successors or assigns of any of the defendants. Pursuant to the Notice of Pendency of Class Action
(the “Notice of Pendency”) previously given to the members of the U.S. Global Class, U.S. Global
Class Members were given the opportunity to exclude themselves from the U.S. Global Class. 1,638
persons and entities elected to exclude themselves from the Class. Those persons and entities were
listed in the Affidavit of Jack B. DiGiovanni filed July 6, 2004.



     WHEREAS, the Stipulation provides for the settlement and dismissal of the Canadian class
proceedings identified in the Stipulation (the “Canadian Class Actions”) and approval of the
Settlement in the courts before which the Canadian Class Actions are pending (the “Canadian
Courts”) is also being sought; and



     WHEREAS, it is a condition to the effectiveness of the proposed Settlement herein that
additional putative class actions identified in the Stipulation brought against Nortel and certain
of the defendants herein in this District and in Canadian Courts (the “Nortel I/11 Actions”) also
be settled and dismissed.



     NOW, THEREFORE, IT IS HEREBY ORDERED, this                      day of                      2006 that:



     1. A hearing (the “Settlement Fairness Hearing”) pursuant to Rule 23(e) of the (United States)
Federal Rules of Civil Procedure is hereby scheduled to be held before the Court on
                                        , 2006, at ___:                     ___.m. for the following purposes:



2









 





          (a) to determine whether the proposed Settlement is fair, reasonable, and adequate, and should
be approved by the Court;




          (b) to determine whether the Judgment as provided under the Stipulation should be entered,
dismissing the Complaint filed herein, on the merits and with prejudice, and to determine whether
the release by the U.S. Global Class of the Settled Claims, as set forth in the Stipulation, should
be provided to the Released Parties (as those terms are defined in the Stipulation);




          (c) to determine whether the proposed Plan of Allocation for the proceeds of the Settlement is
fair and reasonable, and should be approved by the Court;




          (d) to consider Lead Plaintiff’s Counsel’s application for an award of attorneys’ fees and for
reimbursement of expenses to Plaintiffs’ Counsel; and




          (e) to rule upon such other matters as the Court may deem appropriate.




     2. The Court recognizes and acknowledges that one consequence of the approval of the
Settlement at the Settlement Fairness Hearing, which shall be open to everyone to whom any Gross
Settlement Shares would be issued in the proposed Settlement, with adequate notice to be given to
all those persons, is that, pursuant to Section 3(a)(l0) of the (United States) Securities Act of
1933, as amended, 15 U.S.C. § 77c(a)(1), the Gross Settlement Shares may be distributed to Class
Members (and to Plaintiffs’ Counsel as may be awarded by the respective Courts) without
registration and compliance with the prospectus delivery requirements of the U.S. securities laws
as the Gross Settlement Shares will be exempt from registration under the (United States)
Securities Act of 1933, 15 U.S.C. § 77c(a)(1), as amended, pursuant to Section 3(a)(10) thereunder.
The Court further acknowledges that Nortel will rely on such 3(a)(10) exemption



3









 







(and Nortel will not register the Gross Settlement Shares under the (United States) Securities
Act of 1933) based on the Court’s approval of the fairness of the Settlement.



     3. The Court reserves the right to approve the Settlement with or without modification and
with or without further notice of any kind. The Court further reserves the right to enter its
Judgment approving the Stipulation and dismissing the Complaint on the merits and with prejudice
regardless of whether it has approved the Plan of Allocation or awarded attorneys’ fees and
expenses.



     4. The Court approves the form, substance and requirements of the Notice of Certifications in
Canada and Proposed Settlements of Class Actions, Motions for Attorneys’ Fees and Settlement
Fairness Hearings (the “Notice”) and the Proof of Claim form, annexed hereto as Tabs I and 2,
respectively.



     5. The Court approves the appointment of The Garden City Group Inc. (“GCG”) as the Claims
Administrator. Upon approval of the Notice and the Proof of Claim and the appointment of GCG as
the Claims Administrator by each of the Canadian Courts (“Canadian Courts’ Approval”), the Claims
Administrator shall cause the Notice and the Proof of Claim, substantially in the forms annexed
hereto as Tabs 1 and 2, to be mailed, by first class mail, postage prepaid, on or before
                                         days after entry of the last order, whether by this Court, the Court in the Nortel
II U.S. Action, or any of the Canadian Courts, approving the issuance of the Notice, to all U.S.
Global Class Members who can be identified with reasonable effort. Notices that are addressed to
persons or entities in Quebec shall be accompanied by a French language version of the Notice and
Proof of Claim forms. Nortel shall cooperate in making Nortel’s transfer records and shareholder
information available to the Claims Administrator no later than                                          days following
entry of this Order for the purpose



4









 







of identifying and giving notice to the U.S. Global Class. The Claims Administrator shall use
reasonable efforts to give notice to nominee purchasers such as brokerage firms and other persons
or entities who purchased Nortel common stock during the Class Period as record owners but not as
beneficial owners. Such nominee purchasers are directed, within seven (7) days of their receipt of
the Notice, to either forward copies of the Notice and Proof of Claim to their beneficial owners or
to provide the Claims Administrator with lists of the names and addresses of the beneficial owners,
and the Claims Administrator is ordered to send the Notice and Proof of Claim promptly to such
identified beneficial owners. Nominee purchasers who elect to send the Notice and Proof of Claim
to their beneficial owners shall send a statement to the Claims Administrator confirming that the
mailing was made as directed. Additional copies of the Notice shall be made available to any
record holder requesting such for the purpose of distribution to beneficial owners, and such record
holders shall be reimbursed from the Gross Settlement Fund, upon receipt by the Claims
Administrator of proper documentation, for the reasonable expense of sending the Notice and Proofs
of Claim to beneficial owners. Lead Plaintiff’s Counsel shall, at or before the Settlement
Fairness Hearing, file with the Court proof of mailing of the Notice and Proof of Claim.



     6. The Claims Administrator or the ‘Escrow Agent or their agents are authorized and directed
to prepare any tax returns required to be filed on behalf of or in respect of the Gross Settlement
Fund and to cause any Taxes due and owing to be paid from the Gross Settlement Fund, and to
otherwise perform all obligations with respect to Taxes and any reporting or filings in respect
thereof as contemplated by the Stipulation, without further order of the Court.



5









 





     7. Lead Plaintiffs Counsel shall submit their papers in support of final approval of the
Settlement and application for attorneys’ fees and reimbursement of expenses by no later than
forty-five (45) calendar days after the date set for mailing of the Notice.



     8. The Court approves the form of Publication Notice of the Pendency of this class action and
the proposed settlement in substantially the form and content annexed hereto as Tab 3 and directs
that Lead Plaintiffs Counsel shall cause the Publication Notice to be published in Canada in
accordance with the Notice Plan attached hereto as Tab 4, and the Publication Notice shall also be
published in the U.S. on two different dates in the national editions of The Wall Street Journal,
USA Today, and The New York Times, once in Investor’s Business Daily, and once over the PR
Newswire, which publications shall begin within seven (7) calendar days of the mailing of the
Notice and in accordance with the Notice Plan. Lead Plaintiffs Counsel shall, at or before the
Settlement Fairness Hearing, file with the Court proof of the publication of the Publication
Notice.



     9. The form and content of the Notice, and the method set forth herein of notifying the Class
of the Settlement and its terms and conditions, meet the requirements of Rule 23 of the (United
States) Federal Rules of Civil Procedure, Section 21 D(a)(7) of the (United States) Securities
Exchange Act of 1934, as amended, 15 U.S.C. 78u-4(a)(7), including by the (United States) Private
Securities Litigation Reform Act of 1995 (the “PSLRA”), Rule 23.1 of the Local Rules of the
Southern and Eastern Districts of New York, and due process, constitute the best notice practicable
under the circumstances, and shall constitute due and sufficient notice to all persons and entities
entitled thereto.



6









 





     10. In order to be entitled to participate in the Net Settlement Fund, in the event the
Settlement is effected in accordance with the terms and conditions set forth in the Stipulation,
each Class Member shall take the following actions and be subject to the following conditions:



          (a) A properly executed Proof of Claim (the “Proof of Claim”), substantially in the form
attached hereto as Tab 2, must be submitted to the Claims Administrator, at the Post Office Box
indicated in the Notice, postmarked not later than 120 calendar days after the date set for the
mailing of the Notice. Such deadline may be further extended by court order. Each Proof of Claim
shall be deemed to have been submitted when postmarked (if properly addressed and mailed by first
class mail, postage prepaid) provided such Proof of Claim is actually received prior to the motion
for an order of the Court approving distribution of the Net Settlement Fund. Any Proof of Claim
submitted in any other manner shall be deemed to have been submitted when it was actually received
at the address designated in the Notice.




          (b) The Proof of Claim submitted by each Class Member must satisfy the following conditions:
(i) it must be properly completed, signed and submitted in a timely manner in accordance with the
provisions of the preceding subparagraph; (ii) it must be accompanied by adequate supporting
documentation for the transactions reported therein, in the form of broker confirmation slips,
broker account statements, an authorized statement from the broker containing the transactional
information found in a broker confirmation slip, or such other documentation as is deemed adequate
by the Claims Administrator; (iii) if the person executing the Proof of Claim is acting in a
representative capacity, a certification of his current authority to act on behalf of the Class
Member must be included in the Proof of Claim; and (iv) the Proof of Claim must be complete and
contain no material deletions or modifications of any of the printed matter contained therein and
must be signed under penalty of perjury.




7









 








          (c) As part of the Proof of Claim, each Class Member shall submit to the jurisdiction of the
applicable Court as set out in the Stipulation with respect to the claim submitted, and shall
(subject to effectuation of the Settlement) release all Settled Claims as provided in the
Stipulation.




     11. Pursuant to Rule 23(e)(3) of the (United States) Federal Rules of Civil Procedure, a new
opportunity to request exclusion shall be given to individual Class Members who had an earlier
opportunity to request exclusion but did not do so. U.S. Global Class Members shall be bound by
all determinations and judgments in this Action, whether favorable or unfavorable, unless such
persons request exclusion from the Class in a timely and proper manner, as hereinafter provided. A
U.S. Global Class Member wishing to make such request shall mail the request in written form by
first class mail postmarked no later than sixty (60) calendar days after the date set for the
mailing of the Notice to the address designated in the Notice. Such request for exclusion shall
clearly indicate the name, address and telephone number of the person seeking exclusion, that the
sender requests to be excluded from the U.S. Global Class, and must be signed by such person. Such
persons requesting exclusion are also directed to state: the date(s), price(s), and number(s) of
shares of all purchases and sales of Nortel common stock, call options on Nortel common stock and
put options on Nortel common stock during the Class Period. The request for exclusion shall not be
effective unless it provides the required information and is made within the time stated above, or
the exclusion is otherwise accepted by the Court.



     12. Except for persons and entities who are also Canadian Class Members and who have not
requested exclusion from the classes certified in the Canadian Class Actions, the persons and
entities who requested exclusion from the U.S. Global Class in response to the



8









 







Notice of Pendency are excluded from the U.S. Global Class and shall not be entitled to submit
any Proof of Claim forms and shall not be entitled to receive any payment out of the Net Settlement
Fund as described in the Stipulation and in the Settlement Notice. Persons and entities who are
also Canadian Class Members and who requested exclusion from the U.S. Global Class for purposes of
this Action in response to the Notice of Pendency may submit Proof of Claim forms and shall be
entitled to receive payments out of the Net Settlement Fund herein unless they also request
exclusion from the applicable class in the Canadian Class Actions.



     13. Comments and/or objections to the Settlement, the Plan of Allocation, or the application
by Lead Plaintiffs Counsel for an award of attorneys’ fees and reimbursement of expenses and any
supporting papers should be mailed, on or before sixty (60) calendar days after the date set for
the mailing of the Notice, to GCG at the address set forth in the Notice. Attendance at the
hearing is not necessary; however, persons wishing to be heard orally in opposition to the approval
of the Settlement, the Plan of Allocation, and/or the request by Lead Plaintiff’s Counsel for
attorneys’ fees are required to indicate in their written objection their intention to appear at
the hearing. Persons who intend to object to the Settlement, the Plan of Allocation, and/or Lead
Plaintiffs Counsel’s application for an award of attorneys’ fees and expenses and desire to present
evidence at the Settlement Fairness Hearing must include in their written objections the identity
of any witnesses they may call to testify and exhibits they intend to introduce into evidence at
the Settlement Fairness Hearing. U.S. Global Class Members do not need to appear at the hearing or
take any other action to indicate their approval.



     14. Lead Plaintiffs’ Counsel shall submit their reply papers, if any, in support of final
approval of the Settlement and application for attorneys’ fees and reimbursement of expenses by no
later than seventy-five (75) calendar days after the date set for mailing of the Notice.



9









 





     15. Any U.S. Global Class Member who does not object to the Settlement and/or the Plan of
Allocation, and any Class Member who does not object to Lead Plaintiff’s Counsel’s application for
an award of attorneys’ fees and reimbursement of litigation expenses in the manner prescribed in
the Notice shall be deemed to have waived such objection and shall forever be foreclosed from
making any objection to the fairness, adequacy or reasonableness of the proposed Settlement, the
Order and Final Judgment to be entered approving the Settlement, the Plan of Allocation or the
application by Lead Plaintiff’s Counsel for an award of attorneys’ fees and reimbursement of
expenses.



     16. Pending final determination of whether the Settlement should be approved, the Lead
Plaintiff, all U.S. Global Class Members, and each of them, and anyone who acts or purports to act
on their behalf, shall not institute, commence or prosecute any action which asserts Settled Claims
against any Released Party. The foregoing shall not be interpreted to apply to proceedings in
respect of the seeking of approval of the Settlement in the Canadian Courts.



     17. As provided in the Stipulation, Lead Plaintiff’s Counsel may pay the Claims Administrator
the reasonable fees and costs associated with giving notice to the Class and the review of claims
and administration of the Settlement out of the Gross Settlement Fund without further order of the
Court.



     18. If (a) the Settlement is terminated by Nortel pursuant to ¶ 26 of the Stipulation; (b) any
specified condition to the Settlement set forth in the Stipulation is not satisfied and Lead
Plaintiff’s Counsel, Canadian Representative Plaintiffs’ Counsel or Nortel elect to terminate the
Settlement as provided in ¶ 25 of the Stipulation; or (c) if the Settlement is terminated pursuant
to ¶ 27 of the Stipulation, then, in any such event the terms of ¶ 28 of the Stipulation including



10









 







any amendment(s) thereof, shall apply, and this Preliminary Order shall be null and void, of
no further force or effect, and without prejudice to any party, and may not be introduced as
evidence or referred to in any actions or proceedings by any person or entity, and each party shall
be restored to his, her or its respective position as it existed immediately prior to the execution
of the Stipulation.



     19. The Court retains jurisdiction over the Action to consider all further matters arising out
of or connected with the Settlement.




			
	Dated:	 	New York, New York

                    , 2006





	 	 	 	 	 
	 

	 	 

UNITED STATES DISTRICT JUDGE
	 	 






11









 







EXHIBIT A-1



NOTICE OF CERTIFICATIONS IN CANADA AND PROPOSED
SETTLEMENTS OF CLASS ACTIONS, MOTIONS FOR ATTORNEYS’
FEES AND SETTLEMENT FAIRNESS HEARINGS (NORTEL I NOTICE)



This Notice relates to the following actions (the “Nortel I Actions”):





	•	 	In Re Nortel Networks Corp. Securities
Litigation, Consolidated Civil Action
No.: 2001-CV-1855 (RMB) in the United
States District Court for the Southern
District of New York;
	 
	•	 	Frohlinger v. Nortel Networks
Corporation et al, Court File No.:
02-CL-4605 in the Ontario Superior
Court of Justice;
	 
	•	 	Association de Protection des
Epargnants et Investisseurs du Quebec
v. Corporation Nortel Networks, No.:
500-06-000126-017 in the Superior
Court of Quebec; and
	 
	•	 	Jeffery et al. v. Nortel Networks
Corporation et al., Court File No.:
S015159 in the Supreme Court of
British Columbia.





If you bought Nortel Networks Corporation (“Nortel”) common stock or call options on Nortel common

stock, or you wrote (sold) put options on Nortel common stock, during the period October 24, 2000

through February 15, 2001, inclusive (the “Class Period”), your rights may be affected by class

action lawsuit(s) and you may be entitled to a payment from a proposed class action settlement.




Courts in the United States and Canada have authorized this notice.

This is not a solicitation from a lawyer.





	 	•	 	The “Settlement” described herein will provide total proceeds worth approximately $                    ,
including $438,667,428 in cash, plus 314,333,875 shares of
common stock of Nortel (“Settlement Shares”), having an aggregate market value as of [date]
of approximately $                    , for the benefit of the Class described herein
(See response to question 1 below defining the “Class” and “Class Members”). Unless
otherwise stated, all dollar amounts referenced herein are in U.S. dollars.
	 
	 	•	 	In addition, Nortel will adopt the corporate governance provisions described in Appendix
A of this Notice. Nortel will also contribute to the Class one-quarter of the recovery, if
any, it obtains in existing litigation by Nortel against certain former senior corporate
officers.
	 
	 	•	 	The Settlement resolves lawsuits over whether Nortel misled investors about its historic
and future earnings during the Class Period. The Settlement is contingent upon court
approval of the settlement of several related actions against Nortel and other defendants
in the United States and Canada.
	 
	 	•	 	Your legal rights are affected whether you act or do not act. Read this notice
carefully.





YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:




 









 









	 	 	 
	SUBMIT A CLAIM FORM BY

[November 30, 2006]

	 	The only way to get a distribution from the Net
Settlement Fund and Net Settlement Shares.
	 
	 	 
	EXCLUDE YOURSELF

(Opt-out of the Class)

BY [September 15, 2006]

	 	Get no payment. This is the only option that
allows you to ever be part of any other lawsuit
against Nortel and the other Released Parties
about the Settled Claims (as those terms are
defined herein at question 12) .
	 
	 	 
	OBJECT

BY [September 15, 2006]

	 	Write to the Courts) about why you do not like the
Settlement, Plan of Allocation, or Attorneys’ Fee
Applications. See responses to questions 18, 20
and 22 below.
	 
	 	 
	GO TO HEARINGS

	 	Ask to speak in Court(s) about the Settlement,
Plan of Allocation, or Attorneys’ Fee
Applications. See responses to questions 18, 20
and 22 below.
	 
	 	 
	DO NOTHING

	 	Get no payment. Give up rights.







	 	•	 	These rights and options — and the deadlines to exercise them — are explained in this
notice.
	 
	 	•	 	The Courts in charge of the various U.S. and Canadian actions subject to this Settlement
still have to decide whether to approve the Settlement. Payments will be made if all of
the Courts approve the Settlement and after appeals, if any, are resolved. Please be
patient.





Le
present avis est aussi disponible en francais. Vous pouvez
l’obtenir sans frais en vous adressant a
[Claim administrator + Web site] on a Belleau Lapointe.



SUMMARY NOTICE




          Statement of Plaintiff Recovery



Pursuant to the Settlement described herein, a Settlement Fund consisting of $438,667,428 in cash
has been established, and 314,333,875 shares of Nortel common stock, will be provided for the
benefit of the Class. Lead Plaintiff estimates that there were approximately 868 million shares of
Nortel common stock traded during the Class Period which may have been damaged. Lead Plaintiff
estimates that the average recovery per damaged share of Nortel common stock purchased during the
Class Period under the Settlement is 50.50 in cash and 0.362 Settlement Shares, per damaged
share1 before deduction of court-awarded attorneys’ fees and expenses, and the costs of
administration. Class Members who transacted in options on Nortel common stock






 




			
	1	 	An allegedly damaged share might have been
traded more than once during the Class Period, and the indicated average
recovery would be the total for all purchasers of that share.




2










 









may also receive a payment from the Settlement Fund, but the various terms of those options and
available records concerning such option transactions do not permit a useful estimate to be
provided concerning the number of affected options or the recovery on those option transactions.



See response to question 9 below concerning payments to Class Members. A Class Member’s actual
recovery will be determined in accordance with the Plan of Allocation
set forth on page ___ below.




          Statement of Potential Outcome of Case



The parties strongly disagree on both liability and damages and do not agree on the average amount
of damages per share that would be recoverable if plaintiffs were to have prevailed on each claim
alleged.



Plaintiffs estimated that the potential damages to the Classes in the Nortel I Actions and in
certain similar actions relating to a later class period (see response to question 8 below
describing these “Nortel II Actions”) could well have been in excess of the Gross Settlement Fund
(as defined in response to question 1 below). The defendants deny that they are liable to the
plaintiffs or the Class and deny that plaintiffs or the Class have suffered any damages.




          Statement of Attorneys’ Fees and Costs Sought



As more fully described in response to question 17 below, plaintiffs’ counsel are moving before
their respective Courts for awards of attorneys’ fees and for reimbursement of expenses incurred in
the prosecution of their Actions as follows:





	 	•	 	Lead Plaintiffs’ Counsel in the U.S. Action are moving for an award to counsel of
attorneys’ fees in cash and shares in an amount not to exceed ten percent (10%) of the
Gross Settlement Fund, and for reimbursement of expenses incurred in connection with the
prosecution of the U.S. Action in an amount not to exceed $5 million.
	 
	 	•	 	Ontario National Class Counsel will move before the Ontario Court for approval of an
award to them of counsel fees in cash and shares in an amount not to exceed point seven
percent (0.7%) of the Gross Settlement Fund, and for reimbursement of expenses incurred in
connection with the prosecution of the Ontario National Action in an amount not to exceed
$225,000.
	 
	 	•	 	Quebec Class Counsel will move before the Quebec Court for approval of an award to them
of counsel fees in cash and shares in an amount not to exceed point forty five percent
(0.45%) of the Gross Settlement Fund, and for reimbursement of expenses incurred in
connection with the prosecution of the Quebec Action in an amount not to exceed $150,000.
	 
	 	•	 	British Columbia Class Counsel will move before the British Columbia Court for approval
of an award to them of counsel fees in cash and shares in an amount not to exceed point
twenty five percent (0.25%) of the Gross Settlement Fund, and for reimbursement of expenses
incurred in connection with the prosecution of the British Columbia Action in an amount not
to exceed $100,000.




3









 










The total requested attorneys fees and litigation expenses would amount to an average of 6.4¢ in
cash and 0.041 Settlement Shares, per damaged share in total for fees and expenses. Application
will also be made for reimbursement to the Lead Plaintiff Ontario Public Service Employees’ Union
Pension Plan Trust Fund for an amount not to exceed $30,000 for reimbursement of their reasonable
costs and expenses (including lost wages) directly relating to its representation of the “U.S.
Global Class” (as defined in response to question 1 below). Application may also be made by one of
the plaintiffs in the Quebec Action for an award of $150,000.




          Further Information



Further information may be obtained by contacting the following counsel:





	 	•	 	For the U.S. Action: Lead Plaintiff’s Counsel: George A. Bauer III, Esq.,
Milberg Weiss Bershad & Schulman LLP, One Pennsylvania Plaza, New York, New York
10119-0165; or Murray Gold, Koskie Minsky LLP, 20 Queen Street West, Suite 900,
Toronto, Ontario M5H 3R3.
	 
	 	•	 	For the Ontario National Action: Ontario National Class Counsel: Joel P. Rochon,
Rochon Genova LLP, 121 Richmond Street West, Suite 900, Toronto, Ontario M5H 2K1.
	 
	 	•	 	For the Quebec Action: Quebec Class Counsel: Daniel Belleau, Belleau Lapointe,
S.A., 306 Place D’Youville, B-10, Montreal, Quebec H2Y 2B6.
	 
	 	•	 	For the British Columbia Action: British Columbia Class Counsel: David Klein,
Klein Lyons, 1100-1333 West Broadway, Vancouver, British Columbia V6H 4C1.





          Reasons for the Settlement



Plaintiffs’ principal reason for the Settlement is the benefit to be provided to the Class now.
This benefit must be compared to the risk that no recovery might be achieved after a contested
trial and likely appeals, possibly years into the future, and the further significant risk that
even if the plaintiffs and the Class successfully obtained a substantial judgment (after years of
additional litigation and appeals) the defendants might not be able to pay an amount significantly
greater than the value of the Gross Settlement Fund.



Lead Plaintiff and Lead Plaintiffs Counsel, in consultation with their investment banking and
economic damages experts, considered the Company’s current and anticipated financial condition, and
also considered the extent of the Company’s applicable insurance and the likely depletion of that
insurance as a result of continued litigation, both of which, in their view, limited the amount
that might have been recovered for the U.S. Global Class after trial.




[END OF COVER PAGE]





4









 








WHAT THIS NOTICE CONTAINS




Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	SUMMARY NOTICE	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Statement of Plaintiff Recovery
	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Statement of Potential Outcome of Case
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Statement of Attorneys’ Fees and Costs Sought
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Further Information
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Reasons for the Settlement
	 	 	4	 
	 
	 	 	 	 	 	 
	BASIC INFORMATION	 	 	8	 
	 
	 	 	 	 	 	 
	 

	 	1. Why did I get this notice package?
	 	 	8	 
	 
	 	 	 	 	 	 
	 

	 	2. What are these lawsuits about?
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	3. Why are these class actions?
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	4. Why is there a Settlement?
	 	 	11	 
	 
	 	 	 	 	 	 
	WHO IS IN THE SETTLEMENT	 	 	11	 
	 
	 	 	 	 	 	 
	 

	 	5. How do I know if I am part of the Settlement?
	 	 	11	 
	 
	 	 	 	 	 	 
	 

	 	6. Are there exceptions to being included?
	 	 	12	 
	 
	 	 	 	 	 	 
	 

	 	7. What if I am still not sure I am included?
	 	 	12	 
	 
	 	 	 	 	 	 
	THE SETTLEMENT BENEFITS — WHAT YOU GET	 	 	13	 
	 
	 	 	 	 	 	 
	 

	 	8. What does the Settlement provide?
	 	 	13	 
	 
	 	 	 	 	 	 
	 

	 	9. How much will my payment be?
	 	 	13	 
	 
	 	 	 	 	 	 
	HOW YOU GET A PAYMENT — SUBMITTING A PROOF OF CLAIM FORM	 	 	14	 
	 
	 	 	 	 	 	 
	 

	 	10. How can I get a payment?
	 	 	14	 
	 
	 	 	 	 	 	 
	 

	 	11. When will I get my payment?
	 	 	14	 
	 
	 	 	 	 	 	 
	 

	 	12. What am I giving up to get a payment or stay in the Class?
	 	 	14	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	REQUESTING EXCLUSION (“OPTING OUT”) FROM THE SETTLEMENT	 	 	16	 
	 
	 	 	 	 	 	 
	 

	 	13. How do I get out of the proposed Settlement?
	 	 	16	 
	 
	 	 	 	 	 	 
	 

	 	14. If I do not exclude myself, can I sue Nortel and the other Released
Parties for the same thing later?
	 	 	17	 
	 
	 	 	 	 	 	 
	 

	 	15. If I exclude myself, can I get a payment from the proposed Settlement?
	 	 	17	 
	 
	 	 	 	 	 	 
	NOTICE REGARDING PERSONS OR ENTITIES
WHO PREVIOUSLY REQUESTED EXCLUSION FROM THE U.S. GLOBAL CLASS
	 	 	17	 
	 
	 	 	 	 	 	 
	THE LAWYERS REPRESENTING YOU	 	 	18	 
	 
	 	 	 	 	 	 
	 

	 	16. Do I have a lawyer in this case?
	 	 	18	 
	 
	 	 	 	 	 	 
	 

	 	17. How will the lawyers and the Class Representatives be paid?
	 	 	18	 
	 
	 	 	 	 	 	 
	OBJECTING TO THE SETTLEMENT, PLAN OF ALLOCATION AND APPLICATIONS FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	18. How do I tell the Courts that I do not like the Settlement, the
proposed Plan of Allocation, and/or any of the applications for attorneys’ fees
and reimbursement of litigation expenses?
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	19. What is the difference between objecting and excluding?
	 	 	21	 
	 
	 	 	 	 	 	 
	THE SETTLEMENT FAIRNESS HEARINGS	 	 	21	 
	 
	 	 	 	 	 	 
	 

	 	20. When and where will the Courts decide whether to approve the proposed
Settlement?
	 	 	22	 
	 
	 	 	 	 	 	 
	 

	 	21. Do I have to come to any of the Settlement Fairness Hearings?
	 	 	22	 
	 
	 	 	 	 	 	 
	 

	 	22. May I speak at the Settlement Fairness Hearings?
	 	 	23	 
	 
	 	 	 	 	 	 
	IF YOU DO NOTHING	 	 	23	 
	 
	 	 	 	 	 	 
	 

	 	23. What happens if I do nothing at all?
	 	 	23	 
	 
	 	 	 	 	 	 
	GETTING MORE INFORMATION	 	 	23	 
	 
	 	 	 	 	 	 
	 

	 	24. Are there more details about the proposed Settlement?
	 	 	23	 
	 
	 	 	 	 	 	 
	 

	 	25. How do I get more information?
	 	 	24	 
	 
	 	 	 	 	 	 
	PLAN OF ALLOCATION OF SETTLEMENT PROCEEDS AMONG CLASS MEMBERS	 	 	24	 






6









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES	 	 	28	 
	 
	 	 	 	 	 	 
	NORTEL: CORPORATE GOVERNANCE PROVISIONS	 	 	30	 






7









 






BASIC INFORMATION




1. Why did I get this notice package?



You or someone in your family may have purchased Nortel common stock or call options on Nortel
common stock, or wrote (sold) put options on Nortel common stock during the period between October
24, 2000 through February 15, 2001, inclusive. Such purchasers may be members of the Classes in
the Nortel I Actions (as defined below) and are generally referred to herein as “Class Members” and
are collectively referred to as the “Class.” Class Members include members of the “U.S. Global
Class,” the “Ontario National Class,” the “Quebec Class,” and/or the “British Columbia Class.”



The Courts have directed that this Notice be sent to Class Members because they have a right to
know about their options prior to the Courts deciding whether to approve the settlement of these
lawsuits, and to understand how a class action lawsuit may generally affect their rights. If the
Courts approve the Settlement, and after any objections and appeals are resolved, an administrator
appointed by the Courts will make the payments that the Settlement allows.



This package explains the lawsuits, the Settlement, Class Members’ legal rights, what benefits are
available, who is eligible for them, and how to get them.



The Courts in charge of the Nortel I Actions are as follows:




	 	 	 
	Court	 	Action
	United States District Court for the
Southern District of New York (“U.S.
Court”)

	 	In re Nortel Networks Corp.
Securities Litigation,
Consolidated Civil Action No.
01-CV-1855 (RMB) (“U.S.
Action”)
	 
	 	 
	Ontario Superior Court of Justice
(“Ontario Court”)

	 	Frohlinger v. Nortel Networks
Corporation et al., Court File
No. 02-CL-4605 (“Ontario
National Action”)
	 
	 	 
	Superior Court of Quebec, District of
Montreal (“Quebec Court”)

	 	Association de Protection des
Epargnants et Investisseurs du
Quebec v. Corporation Nortel
Networks, No :
	 

	 	500-06-000126-017 (“Quebec
Action”)
	 
	 	 
	British Columbia Supreme Court (“B.C.
Court”)

	 	Jeffery et al. v. Nortel
Networks Corporation et al.,
Vancouver Registry, Court File
No. S015159 (“British Columbia Action”)





The entities who sued are called the plaintiffs, and the company and the persons they sued, Nortel
and certain of its officers and directors, are called the defendants.




 









 







The Settlement in the U.S. Action resolves the claims on behalf of persons and entities, wherever
located, who bought Nortel common stock or call options on Nortel common stock or who wrote (sold)
put options on Nortel common stock during the period October 24, 2000 through February 15, 2001,
inclusive, and suffered damages thereby, including, but not limited to, those persons or entities
who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock Exchange
(the “U.S. Global Class”). In addition, the Settlement covers the three Canadian actions referred
to above (the “Canadian Actions”). The Settlement in the Canadian Actions resolve the claims on
behalf of the following persons and entities:





	 	•	 	Ontario National Class: All persons or entities, except members of the Quebec Class or
British Columbia Class, who while residing in Canada at the time, purchased Nortel common
stock or call options on Nortel common stock, or wrote (sold) put options on Nortel common
stock, during the period between October 24, 2000 through February 15, 2001, inclusive.
	 
	 	•	 	Quebec Class: All persons, who, while residing in Quebec at the time, purchased Nortel
common stock or call options on Nortel common stock, or wrote (sold) put options on Nortel
common stock, during the period between October 24, 2000 through February 15, 2001,
inclusive.
	 
	 	•	 	British Columbia Class: All persons or entities, who, while residing in British Columbia
at the time, purchased Nortel common stock or call options on Nortel common stock, or wrote
(sold) put options on Nortel common stock, during the period between October 24, 2000
through February 15, 2001, inclusive.




Members of the classes certified in the Canadian Actions who suffered damages as a result of their
Class Period transactions in Nortel securities are also members of the U.S. Global Class.



Regardless of how many classes you are a member of, you will not be entitled to recover more than
once for your claim.




2. What are these lawsuits about?



Nortel is a Canadian corporation with its principal executive offices located in Brampton, Ontario,
Canada and has offices located throughout the United States and Canada. Nortel filed annual,
quarterly and other reports with the Ontario Securities Commission and the (United States)
Securities and Exchange Commission (the “SEC”) and its common stock is listed and traded on both
the Toronto Stock Exchange and the New York Stock Exchange under the symbol NT. Nortel is engaged
in the business of providing networking and communication services to customers located in over 150
countries.



On January 18, 2002, Lead Plaintiff in the U.S. Action filed a Second Consolidated Amended Class
Action Complaint (the “Complaint”) alleging that the defendants made materially false and
misleading statements and omissions in Nortel’s financial reports concerning its revenue and
earnings and the value of its receivables, in violation of (United States) Generally Accepted
Accounting Principles (“GAAP”), and in other public documents disseminated to the investing public,
thereby artificially inflating the price of the securities of Nortel and damaging members of the
U.S. Global Class.




9









 







The Complaint alleges that during the Class Period, the defendants materially misrepresented
Nortel’s revenues and earnings and the value of Nortel’s receivables in public reports and
statements disseminated to the investing public. The Complaint further alleges that these material
misrepresentations resulted in Nortel’s issuance of financial statements, and other public
statements regarding Nortel’s future business prospects, which violated Section 10(b) of the
(United States) Securities Exchange Act of 1934, as amended (the “Exchange Act”), 15 U.S.C. §
78j(b), Rule 10b-5 promulgated thereunder, 17 C.F.R. §240.10b-5, and Section 20(a) of the Exchange
Act, 15 U.S.C. § 78t(a). The Complaint further alleges that, as a result of defendants’ materially
false and misleading statements, the price of Nortel common stock was artificially inflated during
the Class Period, thereby causing damage to members of the U.S.’ Global Class who purchased Nortel
common stock or call options on Nortel common stock, or who wrote (sold) put options on Nortel
common stock, during the Class Period. Lead Plaintiff’s Counsel obtained and analyzed millions of
pages of documents and took the depositions of some twelve fact witnesses.



Similar factual allegations and claims are made in the Canadian Actions under Canadian law.



The defendants deny that they violated any laws or did anything wrong. Defendants believe that
their actions were proper under the U.S. federal securities laws and applicable Canadian law,
assert that they are not liable to the plaintiffs or the Class, and have asserted several
affirmative defenses to the allegations in the Complaints.




3. Why are these class actions?



In a class action, one or more people, called class representatives, sue on behalf of people who
have similar claims. All these people are a class or class members. Bringing a case, such as this
one, as a class action allows uniform adjudication of many similar claims of persons and entities
that might be economically too small to bring in individual actions. One court resolves the issues
for all class members, except for those who exclude themselves from the class.



In these Nortel I Actions the class representatives are:




	 	 	 
	Nortel I Action

	 	Class Representatives
	 
	 	 
	U.S. Action

	 	Ontario Public Service Employees’ Union Pension Plan Trust Fund
	 
	 	 
	Ontario National Action

	 	Leslie Frohlinger
	 
	 	 
	Quebec Action

	 	Association de Protection des Epargants et Investisseurs du
Quebec and Andre Dussault
	 
	 	 
	British Columbia Action

	 	Janie Jeffery and Ronald Mensing






10









 






4. Why is there a Settlement?



The parties recognized that the claims asserted in the Nortel I Actions, as well as in the Nortel
II Actions, if ultimately proved by the plaintiffs in those actions, could have resulted in
Judgments that exposed defendants to substantial damage awards. Plaintiffs recognized that, even
if they were successful in obtaining judgments against Nortel and the other defendants, there was a
significant risk that such judgments would not be fully collectible. Nortel recognized that the
continued defense of the Nortel I Actions and the Nortel II Actions would require significant
attention of its management and would distract Nortel from pursuing its business affairs, and that
a plaintiffs’ judgment could be a very significant impediment to Nortel’s future success.
Accordingly, the parties considered that a resolution of the Nortel I Actions and the Nortel II
Actions was advisable.



The Courts have not finally decided in favor of the plaintiffs or the defendants. Instead, all
parties agreed to a settlement. That way, they avoid the risks and cost of trial, the people
affected will get compensation, and Nortel will be released of burdensome and distracting
litigation that potentially could be a significant impediment to Nortel’s future success. The
Class Representatives and their counsel think the Settlement is fair, reasonable and adequate, and
in the best interests of, all Class Members.




WHO IS IN THE SETTLEMENT



To see if you will get cash and Nortel common stock from this Settlement, you first have to decide
if you are a Class Member.




5. How do I know if I am part of the Settlement?



The U.S. Court decided for all purposes of the U.S. Action that everyone who fits the following
description is a Class Member: all persons and entities who purchased Nortel common stock, who
purchased call options on Nortel common stock or who wrote (sold) put options on Nortel common
stock (the “Nortel Securities’) during the period between October 24, 2000 through February 15,
2001, inclusive (the “Class Period’) and who suffered damages thereby, including, but not limited
to, those persons or entities who traded in Nortel Securities on the New York Stock Exchange and/or
the Toronto Stock Exchange. The U.S. Global Class is not limited to U.S. residents.



The three Canadian Courts generally decided for the purposes of the proposed Settlement that
everyone residing in Canada who fits the following description will be Class Members: all persons
and entities who purchased Nortel common stock, who purchased call options on Nortel common stock
or who wrote (sold) put options on Nortel common stock during the period between October 24, 2000
through February 15, 2001, inclusive. To determine which specific Canadian Class you might be part
of, please see the definitions of Ontario National Class, Quebec Class and British Columbia Class
above in the response to question 1. Unlike the requirements for membership in the U.S. Global
Class, there is no requirement for you to have suffered damages to be a member of Ontario National
Class, Quebec Class or British Columbia Class.




11









 








6. Are there exceptions to being included?



Excluded from the Class are: Nortel, Clarence Chandran, Frank Dunn and John A. Roth, members of
any of those individuals’ immediate families, any entity in which Nortel, Clarence Chandran, Frank
Dunn or John A. Roth has a controlling interest or is a parent or subsidiary of or is controlled by
Nortel, Clarence Chandran, Frank Dunn or John A. Roth, and the officers, directors, affiliates,
legal representatives, heirs, predecessors, successors or assigns of any of the defendants (the
“Excluded Persons”).



A prior notice of the pendency of the U.S. Action as a class action (the “Notice of Pendency”)
dated March 10, 2004 was mailed to U.S. Global Class Members beginning on April 12, 2004 and a
summary notice was published. If you submitted a request for exclusion in accordance with the
requirements in the Notice of Pendency, then you are excluded from the U.S. Global Class. Persons
and entities who are members of the Classes certified in the Canadian Actions (see response to
question 1 above) and who previously requested exclusion from the U.S. Global Class in the U.S.
Action may nevertheless submit Proof of Claim forms and shall be entitled to share in the
Settlement’s proceeds unless they opt out of the Classes certified in the Canadian Actions. Such
persons and entities will be included in, and bound by, the Settlement in the Canadian Actions
unless they also now opt out (request exclusion) from the Canadian Actions. Persons and entities
who previously requested exclusion and are NOT members of the Classes certified in the Canadian
Actions remain excluded from the U.S. Global Class and do not have to take any action to exclude
themselves at this time and may not share in the settlement proceeds.



If one of your mutual funds owned shares of Nortel common stock during the Class Period, that alone
does not make you a Class Member. You are a Class Member only if you directly purchased shares of
Nortel common stock, purchased call options on Nortel common stock, or wrote (sold) put options on
Nortel common stock, during the Class Period. Contact your broker to see if you purchased shares
of Nortel common stock, purchased call options on Nortel common stock, or wrote (sold) put options
on Nortel common stock, during the Class Period.



If you sold Nortel common stock, sold call options on Nortel common stock, or purchased put options
on Nortel common stock during the Class Period that alone does not make you a Class Member. You
are a Class Member only if you purchased Nortel common stock, purchased call options on Nortel
common stock, or wrote (sold) put options on Nortel common stock during the Class Period.




7. What if I am still not sure I am included?



If you are still not sure whether you are included, you can ask for free help. You can call
1-800-                    -                                        or visit [www.
                    .com]
for more information. Or you can fill out and return the Proof of Claim form described in response
to question 10 below, to see if you qualify. Note, however, that if you return a Proof of Claim
form you will be releasing all your “Settled Claims” against the “Released Parties.” (See response
to question 12 below.)




12









 








THE SETTLEMENT BENEFITS — WHAT YOU GET




8. What does the Settlement provide?



In exchange for the Settlement and/or dismissal of the Nortel I Actions, Nortel and its insurers
agreed to create cash settlement funds for the benefit of the Class herein consisting of
$438,667,428 in cash, which is earning interest, and Nortel agreed to issue 314,333,875 Settlement
Shares of its common stock, having an aggregate market value as of [date] of [$], to be divided,
after fees and expenses as awarded by the Courts, among all Class Members who submit valid Proof of
Claim forms. Nortel has also agreed to share with the Class 25% of any actual gross recovery
obtained in existing litigation against certain former Nortel officers (the “Contingent Recovery”).
The cash, Settlement Shares, and Contingent Recovery, and any interest or dividends earned
thereon, are referred to as the “Gross Settlement Fund.”



In addition, Nortel will adopt the corporate governance provisions in Appendix A to this Notice.



A separate lawsuit, In re Nortel Networks Corp. Securities Litigation, Master File No. 05-MD-1659
(LAP) (S.D.N.Y.) and related Canadian actions in Ontario and Quebec (the “Nortel II Actions”), are
also being settled on behalf of investors who purchased Nortel common stock or call options on
Nortel common stock, or wrote (sold) put options on Nortel common stock, during the period between
April 24, 2003 through April 27, 2004, inclusive (the “Nortel II Class Period”), including, but not
limited to, those persons or entities who traded in such Nortel securities on the New York Stock
Exchange and/or the Toronto Stock Exchange. The settlement in the Nortel II Actions will provide
$370,157,418 in cash and 314,333,875 Settlement Shares to the members of the Classes in the Nortel
II Actions. It is a condition of both the Settlement in the Nortel I Actions and the settlement in
the Nortel II Actions that the Settlement be approved by each of the Courts in all of the actions.
The Settlement is also contingent upon appropriate securities regulatory and stock exchange
approvals.



9. How much will my payment be?



The amount of your payment and Settlement Shares will depend on the number of valid Proof of Claim
forms that Class Members send in, how many shares of Nortel common stock you bought, the number of
call options on Nortel common stock you bought, and the number of put options on Nortel common
stock you wrote (sold), and when you bought and sold them.



The value of the Settlement Shares is expected to fluctuate over time and is not guaranteed. No
representation can be made as to what the value of the Settlement Shares may be at the time the
Settlement Shares are distributed to Class Members who submitted acceptable Proofs of Claim. Class
Members receiving Settlement Shares who may be deemed to be “affiliates” of Nortel, within the
meaning of (United States) federal securities laws, would be subject to certain limitations on the
resale of Settlement Shares as provided in Rule 145 under the (United States) Securities Act of
1933, as amended, 15 U.S.C. § 77c(a)(1). Any Class Member who might be deemed to be an affiliate
should consult with counsel as to these limitations. In addition, the resale of the Settlement
Shares in Canada may be subject to certain limitations under Canadian securities laws, which may
affect some Class Members.




13









 







You can calculate your Recognized Claim in accordance with the formula shown below in the Plan of
Allocation. It is unlikely that you will get a payment for all of your Recognized Claim. After
all Class Members have sent in their Proof of Claim forms, the payment you get in cash and Nortel
common stock will be part of the Net Cash Settlement Fund and a part of the Net Settlement Shares
equal to your Recognized Claim divided by the total of everyone’s Recognized Claims. See the Plan
of Allocation on page [                    ] for more information on how your Recognized Claim will
be determined. Payments to members of the Quebec Class may be subject to deductions pursuant to
Quebec law payable to the Fonds d ‘aide aux recours collectifs of Quebec.




HOW YOU GET A PAYMENT — SUBMITTING A PROOF OF CLAIM FORM




10. How can I get a payment?



To qualify for a payment, you must send in a Proof of Claim form. A Proof of Claim form is being
circulated with this Notice. You may also get a Proof of Claim form on the Internet at [www.                    
..com]. Read the instructions carefully, fill out the Proof of Claim form,
include all the documents the form asks for, sign it, and mail it, by first class mail, postmarked
no later than                                         , 2006.




11. When will I get my payment?



The U.S. Court will hold a hearing on                                         , 2006, to decide
whether to approve the Settlement. Settlement approval hearings will be held in the Canadian
Actions on dates shown below in the response to question 20. The Courts in the Nortel II Actions
will also hold hearings in the same time frame as these hearings. Approval of settlement of the
Nortel II Actions is also a condition to the Settlement of these actions. If all the Courts
approve the Settlement, there may be appeals. It is always uncertain whether these appeals can be
resolved, and resolving them can take time, perhaps more than a year. It also takes time for all
the Proofs of Claim to be processed. After conclusion of the approval hearings, any appeals, and
claims processing, the funds and Settlement Shares will be distributed. Please be patient.




12. What am I giving up to get a payment or stay in the Class?



Unless you validly request exclusion (“opt out”), you are staying in the Class, and that means
that, upon the “Effective Date,” you will release all “Settled Claims” (as defined below) against
the “Released Parties” (as defined below).



“Settled Claims” means any and all claims, debts, demands, rights or causes of action, suits,
matters, and issues or liabilities whatsoever (including, but not limited to, any claims for
damages, interest, attorneys’ fees, expert or consulting fees, and any other costs, expenses or
liability whatsoever), whether based on United States or Canadian federal, state, provincial,
local, statutory or common law or any other law, rule or regulation, whether fixed or contingent,
accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured,
whether class or individual in nature, including both known claims and Unknown Claims (as defined
herein), (i) that have been asserted in any of the Nortel I Actions against any of the


14









 






Released Parties, or (ii) that could have been asserted in any forum by the Class Members against
any of the Released Parties, that arise out of or are based upon the allegations, transactions,
facts, matters or occurrences, representations or omissions involved, set forth, or referred to in
the Nortel I Actions and that relate to the purchase of Nortel common stock or call options on
Nortel common stock or the writing (sale) of put options on Nortel common stock during the Class
Period, or (iii) any oppression or other claims under the Canada Business Corporations Act, R.S.C.
1985, c. C-44, as amended, that arise out of or are based upon the allegations, transactions,
facts, matters or occurrences, representations or omissions, set forth or referred to in the Nortel
I Actions. “Settled Claims” does not mean or include claims, if any, against the Released Parties
arising under the (United States) Employee Retirement Income Security Act of 1974, as amended, 29
U.S.C. § 1001, et seq. (“ERISA”) that are not common to all Class Members and which ERISA claims
are the subject of an action pending before the Judicial Panel on Multidistrict Litigation,
denominated In re Nortel Networks Securities and “ERISA” Litigation, MDL Docket No. 1537. “Settled
Claims” further does not include: (a) the action in Rohac et al. v. Nortel Networks Corp. et al.,
Ontario Superior Court of Justice, Court File No. 04-CV-3268 and (b) the application brought in
Indiana Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v.
Nortel Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059, for leave
pursuant to the Canada Business Corporations Act to commence a representative action in the name of
and on behalf of Nortel against certain of the Released Parties.



“Released Parties” means any and all of the defendants in the Nortel I Actions (namely: Nortel,
Clarence Chandran, Frank Dunn, John Roth, F. William Conner, Chahram Bolouri, William R. Hawe, and
Deloitte & Touche LLP), their past or present subsidiaries, parents, principals, affiliates,
general or limited partners or partnerships, successors and predecessors, heirs, assigns, officers,
directors, agents, employees, attorneys, advisors, investment advisors, investment bankers,
underwriters, insurers, co-insurers, re-insurers, accountants, auditors, consultants,
administrators, executors, trustees, personal representatives, immediate family members and any
person, firm, trust, partnership, corporation, officer, director or other individual or entity in
which any of the defendants in the Nortel I Actions has a controlling interest or which is related
to or affiliated with any of the defendants in the Nortel I Actions, and the legal representatives,
heirs, executors, administrators, trustees, successors in interest or assigns of the defendants in
the Nortel I Actions.



“Unknown Claims” means any and all Settled Claims which any of the Lead Plaintiff, Canadian
Representative Plaintiffs, or Class Members do not know or suspect to exist in his, her or its
favor at the time of the release of the Released Parties, which if known by him, her or it might
have affected his, her or its decision(s) with respect to the Settlement. With respect to any and
all Settled Claims, the parties stipulate and agree that, upon the Effective Date, the Lead
Plaintiff, Canadian Representative Plaintiffs shall expressly waive, and each Class Member shall be
deemed to have waived, and by operation of the Judgments shall have expressly waived, any and all
provisions, rights and benefits conferred by any law of any state, province or territory of the
United States or Canada, or principle of common law, which is similar, comparable, or equivalent to
Cal. Civ. Code § 1542, which provides:





A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing



15









 







the release, which if known by him must have materially affected his
settlement with the debtor.


Lead Plaintiff, Canadian Representative Plaintiffs and Nortel acknowledge, and Class Members by
operation of law shall be deemed to have acknowledged, that the inclusion of “Unknown Claims” in
the definition of Settled Claims was separately bargained for and was a key element of the
Settlement.



In addition, upon the Effective Date of the Settlement, all Class Members on behalf of themselves,
their personal representatives, heirs, executors, administrators, trustees, successors and assigns,
with respect to each and every Settled Claim, release and forever discharge, and be forever
enjoined from prosecuting, any Settled Claims against any of the Released Parties, and shall not
institute, continue, maintain or assert, either directly or indirectly, whether in the United
States, Canada or elsewhere, on their own behalf or on behalf of any class or any other person, any
action, suit, cause of action, claim or demand against any Released Party or any other person who
may claim any form of contribution or indemnity (save for a contractual indemnity) from any
Released Party in respect of any Settled Claim or any matter related thereto, at any time on or
after the Effective Date.



The “Effective Date” will occur when Orders entered by all the Courts approving the Settlement in
the Nortel I Actions and the Nortel II Actions become final and not subject to appeal and when all
conditions of the Stipulation have been met.



If you remain a member of the Class, the applicable Court’s orders will apply to you and legally
bind you.




REQUESTING EXCLUSION (“OPTING OUT”) FROM THE SETTLEMENT



If you do not want a payment from this Settlement, but you want to keep any right you may have on
your own to sue or continue to sue Nortel and the other Released Parties about the Settled Claims,
then you must take steps to get out of the Class. This process is called excluding yourself from
— or is sometimes referred to as “opting out” of— the Class. Nortel may withdraw from and
terminate the Settlement if persons or entities who would otherwise be Class Members, and who
purchased in excess of a certain amount of Nortel common stock, opt out of the Class.




13. How do I get out of the proposed Settlement?



To opt out of the Class, you must send a signed letter by mail stating that you “request exclusion
from the Class in the Nortel I Securities Litigation” Your letter should include the date(s),
price(s), and number(s) of shares of all purchases and sales of Nortel common stock and/or Nortel
common stock options during the Class Period. In addition, be sure to include your name, address,
telephone number, and your signature. You must mail your exclusion request by first class mail
postmarked no later than                     , 2006 to:




16









 








Nortel I Securities Litigation Exclusions

c/o The Garden City Group, Inc. Claims Administrator

P.O. Box 0000

City, ST 00000-0000



You cannot exclude yourself by telephone or by e-mail. If you ask to be excluded, you will not get
any settlement payment, and you cannot object to the Settlement. You will not be legally bound by
anything that happens in these Nortel I Actions, and you may be able to sue (or continue to sue)
Nortel and the other Released Parties in the future.




14. If I do not exclude myself, can I sue Nortel and the other Released Parties for the same
thing later?



No. Unless you exclude yourself, you give up any rights to sue Nortel and the other Released
Parties for any and all Settled Claims. If you have a pending lawsuit, speak to your lawyer in
that case immediately. You must exclude yourself from the Class to continue your own lawsuit.
Remember, the exclusion deadline is                                         , 2006.




15. If I exclude myself, can I get a payment from the proposed Settlement?



No. If you exclude yourself, do not send in a Proof of Claim form to ask for any money or shares.
But, you may exercise any right you may have to sue, continue to sue, or be part of a different
lawsuit against Nortel and the other Released Parties.




NOTICE REGARDING PERSONS OR ENTITIES WHO PREVIOUSLY REQUESTED

EXCLUSION FROM THE U.S. GLOBAL CLASS



The U.S. Court previously certified the U.S. Action to proceed as a class action on behalf of the
U.S. Global Class. As described in the prior Notice of Pendency, Class Members were previously
provided the opportunity to exclude themselves from the U.S. Global Class.



Persons and entities who requested exclusion in connection with the prior Notice of Pendency are
advised as follows:



Except with respect to persons and entities who are members of the Classes certified in the
Canadian Actions, persons and entities who previously requested exclusion from the U.S. Global
Class are excluded from the U.S. Global Class and may not submit a Proof of Claim or participate in
the Settlement.



Persons and entities who are members of the Classes certified in the Canadian Actions and who
previously requested exclusion will nevertheless be included in, and bound by, the Settlement in
the Canadian Actions unless they also now opt out (request exclusion) from such Canadian Actions.



Persons and entities who are members of the Classes certified in the Canadian Actions and who
previously requested exclusion may nevertheless submit Proof of Claim forms and shall be


17









 






entitled to receive payments out of the Net Settlement Fund herein unless they also now opt out of
such Canadian Actions.




THE LAWYERS REPRESENTING YOU




16. Do I have a lawyer in this case?



The following firms represent Class Members:





	 	•	 	For the U.S. Action: Lead Plaintiffs Counsel: Milberg Weiss Bershad & Schulman
LLP, One Pennsylvania Plaza, New York, New York 10119-0165; assisted by Koskie
Minsky LLP, 20 Queen Street West, Suite 900, Toronto, Ontario M5H 3R3. On May 18,
2006 in the United States District Court for the Central District of California
(Los Angeles), Milberg Weiss Bershad & Schulman LLP and two of its partners, David
J. Bershad and Steven G. Schulman, were named as defendants in an indictment based
on allegations that are unrelated to the present case. Milberg Weiss Bershad &
Schulman LLP and the two partners have publicly stated that they are innocent and
intend to fight the charges.
	 
	 	•	 	For the Ontario National Action: Rochon Genova LLP, 121 Richmond Street West,
Suite 900, Toronto, Ontario M5H 2K1 and Lerners LLP, 130 Adelaide Street West,
Suite 2400, Toronto, Ontario M5H 3P5;
	 
	 	•	 	For the Quebec Action: Belleau Lapointe, S.A., 306 Place D’Youville, B-10,
Montreal, Quebec H2Y 2B6, assisted by Unterberg Labelle Lebeau s.e.n.c, 1980
Sherbrooke west, H3H 1E8;
	 
	 	•	 	For the British Columbia Action: Klein Lyons, 1100-1333 West Broadway,
Vancouver, British Columbia V6H 4C1.




These lawyers are called Class Counsel. You will not be separately charged for these lawyers. The
U.S. Court will determine the amount of lawyers’ fees and expenses to be awarded to the law firms
in the U.S. Action. The Ontario Court will determine the amount of lawyers’ fees and expenses to
be awarded to the law firms in the Ontario National Action. The Quebec Court will determine the
amount of lawyers’ fees and expenses to be awarded to the law firms in the Quebec Action. The B.C.
Court will determine the amount of lawyers’ fees and expenses to be awarded to the law firms in the
British Columbia Action. All lawyers’ fees and expenses awarded by the respective Courts will be
paid from the Gross Settlement Fund. Class Members may, but are not required to, hire their own
lawyers at their own expense.




17. How will the lawyers and the Class Representatives be paid?



Plaintiffs’ counsel are moving before their respective Courts for awards of fees and for
reimbursement of expenses incurred in the prosecution of their Actions as follows:




18









 







Lead Plaintiffs Counsel in the U.S. Action, including all the firms listed in this sub-paragraph,
are moving before the U.S. Court for an award to counsel of attorneys’ fees in the amount not to
exceed ten percent (10%) of the Gross Settlement Fund after deducting litigation expenses awarded
by the U.S. Court, and for reimbursement of expenses incurred in connection with the prosecution of
the U.S. Action in an amount not to exceed $5 million. Lead Plaintiffs Counsel are applying
pursuant to the terms of a retainer agreement negotiated and entered into with Lead Plaintiff
Ontario Public Service Employees’ Union Pension Plan Trust Fund, a sophisticated institutional
investor. The retainer agreement requires Lead Plaintiffs Counsel to obtain the approval of the
Trustees of the Ontario Public Service Employees’ Union Pension Plan Trust Fund for a fee
application prior to submission of the application to the Court. Lead Plaintiffs Counsel, Milberg
Weiss Bershad & Schulman LLP, formerly known as Milberg Weiss Bershad Hynes & Lerach LLP, was
appointed as Lead Counsel for Plaintiff and the U.S. Global Class and has continuously acted as a
lead counsel since the inception of the U.S. Action. The Ontario law firm of Koskie Minsky LLP is
regular pension counsel to the Lead Plaintiff, the Ontario Public Service Employees’ Union Pension
Plan Trust Fund, and has worked for the Lead Plaintiff and the U.S. Global Class in the U.S. Action
generally, and in foreign discovery-related proceedings taken in the Province of Ontario, including
through letters rogatory. In addition, a number of other law firms, including the New York law
firms of Abraham, Fruchter & Twersky LLP (formerly Fruchter & Twersky LLP), Weiss & Lurie (formerly
Weiss & Yourman), Lovell Stewart Halebian, LLP, Wechsler Harwood LLP (formerly Wechsler Harwood
Halebian & Feffer, LLP), and Murray, Frank & Sailer LLP, and the Philadelphia law firm of the Law
Offices of Bernard M. Gross, P.C. have provided substantial assistance to Lead Plaintiffs Counsel.
Compensation for all of these firms are included in the above fee application. Lead Plaintiffs
Counsel have fee sharing agreements with Koskie Minsky LLP and Abraham, Fruchter & Twersky LLP
relating to the prosecution of the U.S. Action. None of the law firms referenced above has advised
the Lead Plaintiff with respect to its review of a proposed fee application or its determination as
to whether the Lead Plaintiff should approve a proposed fee application, including the amount
thereof, in whole or in part.



Ontario National Class Counsel will move before the Ontario Court for approval of an award to them
of counsel fees in cash and shares in an amount not to exceed point seven percent (0.7%) of the
Gross Settlement Fund, and for reimbursement of expenses incurred in connection with the
prosecution of the Ontario National Action in an amount not to exceed $225,000.



Quebec Class Counsel will move before the Quebec Court for approval of an award to them of counsel
fees in cash and shares in an amount not to exceed point forty five percent (0.45%) of the Gross
Settlement Fund and for reimbursement of expenses incurred in connection with the prosecution of
the Quebec Action in an amount not to exceed $150,000, plus fees due to professional advisors not
to exceed $150,000. Quebec counsel are applying for the above fees pursuant to the terms of a retainer
agreement entered into with A.P.E.I.Q/MEDAC, an association for the protection of Quebec investors.



British Columbia Class Counsel will move before the British Columbia Court for approval of an award
to them of counsel fees in cash and shares in an amount not to exceed point twenty five percent
(0.25%) of the Gross Settlement Fund, and for reimbursement of expenses incurred in connection with
the prosecution of the British Columbia Action in an amount not to exceed $100,000.




19









 







Plaintiffs’ counsel, without further notice to the Class, may subsequently apply to the appropriate
Court for fees and expenses incurred in connection with administering and distributing the
settlement proceeds to the members of the Class and any proceedings subsequent to the hearings.



Application is also be made for reimbursement to the Lead Plaintiff Ontario Public Service
Employees’ Union Pension Plan Trust Fund for an amount not to exceed $30,000 for reimbursement of
their reasonable costs and expenses (including lost wages) directly relating to its representation
of the U.S. Global Class. Application may also be made by one of the plaintiffs in the Quebec
Action for an award of $150,000.




OBJECTING TO THE SETTLEMENT, PLAN OF ALLOCATION AND

APPLICATIONS FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF

LITIGATION EXPENSES



If you are a Class Member, you can tell the Courts that you do not agree with the Settlement, or
some part of it, the proposed Plan of Allocation, and/or any of the applications for attorneys’
fees and reimbursement of litigation expenses.





	18.	 	How do I tell the Courts that I do not like the Settlement, the proposed Plan of Allocation,
and/or any of the applications for attorneys’ fees and reimbursement of litigation expenses?




Any Class Member, no matter where he, she or it resides, can object to the Settlement, or any of
its terms, to the proposed Plan of Allocation, and/or to any of the applications by plaintiffs’
counsel for awards of fees and expenses. You may write to the Claims Administrator setting out
your objection. You may give reasons why you think the Settlement terms or arrangements, the
proposed Plan of Allocation, and/or any of the applications for attorneys’ fees or expenses, should
not be approved by the Courts addressing those matters. The Claims Administrator will provide
copies of your objections to each of the Courts and to counsel for all the parties. The Courts
will consider your views if you provide your objection to the Claims Administrator within the
deadline identified and you are a member of the class certified by the Court. However, it is in
the discretion of each of the Courts whether to consider the objections filed by members of the
other classes not certified by that Court.



Although it is up to each Court whether to hear the oral objections of persons who are members of
other classes not certified by that Court, if you are a member of one or more of the classes
described herein, and you wish to present your views in person or through a lawyer to a particular
Court, you should follow the procedures for submitting objections set for in this response and in
the response to question 22 below.



To object to the Settlement, the proposed Plan of Allocation and/or any of the applications for
attorneys’ fees and expenses in these Nortel I Actions, you should send a signed letter stating
that you object to the Settlement, the proposed Plan of Allocation and/or the applications by one
or more of plaintiffs’ counsel for awards of attorneys’ fees and expenses in the In re Nortel I
Securities Litigation,. Be sure to include your name, address, telephone number, and your
signature, identify the date(s), price(s), and number(s) of shares of all purchases and sales of
Nortel common stock and/or Nortel common stock options you made during the period





20










 






October 24, 2000 through February 15, 2001, inclusive, and state the reasons why you object to the
Settlement, the Plan of Allocation and/or the application by Lead Plaintiffs Counsel for an award
of attorneys’ fees and expenses. Your objection must be mailed to the Claims Administrator at the
following address, on or before _____________, 2006:




Nortel I Securities Litigation Objections

c/o The Garden City Group, Inc., Claims Administrator

P.O. Box

                     , ___                     



You do not need to go to any of the Settlement Fairness Hearings to have your written objection
considered by the appropriate Court(s). At the Settlement Fairness Hearings, any Class Member who
has not previously submitted a request for exclusion from the Class and who has complied with the
procedures set out in this response and the response to question 22 below for filing with the
Court(s) and providing to the counsel for plaintiffs and defendants a statement of an intention to
appear at the Settlement Fairness Hearing(s) may also appear and be heard, to the extent allowed by
the applicable Court(s), to state any objection to the Settlement, the Plan of Allocation or
plaintiffs’ counsel’s motions for an award of legal fees and reimbursement of expenses. Any such
objector so appearing may appear in person or arrange, at that objector’s expense, for a lawyer to
represent the objector at the Hearing(s).



Any Class Member who does not object to the Settlement, the Plan of Allocation, and/or any
application for an award of attorneys’ fees and reimbursement of litigation expenses in the manner
prescribed above shall be deemed to have waived such objection and shall forever be foreclosed from
making any objection to the fairness, adequacy or reasonableness of the proposed Settlement, the
Order and Final Judgment to be entered approving the Settlement, the Plan of Allocation or the
applications for awards of attorneys’ fees and reimbursement of expenses.




19. What is the difference between objecting and excluding?



Objecting is simply telling the Court that you do not like something about the proposed Settlement.
You can object only if you stay in the Class. Excluding yourself is telling the Court that you do
not want to be part of the Class. If you exclude yourself, you have no basis to object because the
case no longer affects you.




THE SETTLEMENT FAIRNESS HEARINGS




     The Courts will hold hearings to decide whether to approve the proposed Settlement. You may attend
and you may ask to speak, but you do not have to.



21









 





20. When and where will the Courts decide whether to approve the proposed Settlement?



The Courts will hold Settlement Fairness/Approval Hearings as follows:





	 	•	 	in the U.S. Action: at ___.: ___ ___m. on___day,                    , 2006, at the United States District Court for the
Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl
Street, New York, NY.
	 
	 	•	 	in the Ontario National Action: at ___.: ___ ___m. on___day,                    , 2006 , at the Ontario Superior Court
of Justice, 361 University Avenue, Toronto, Ontario.
	 
	 	•	 	in the Quebec Action: at ___.: ___ ___m. on___day,                    , 2006, at the Superior Court of Quebec, District
of Montreal, 1 Notre-Dame East, Montreal, Quebec.
	 
	 	•	 	in the British Columbia Action at___.: ___ ___m. on___day,                    , 2006, at the Supreme Court of British
Columbia, 800 Smithe Street, Vancouver, British Columbia.




At these hearings, each Court will consider whether the Settlement is fair and reasonable and
satisfies the legal requirements in each jurisdiction. At the Settlement Fairness Hearings, each
Court also will consider the proposed Plan of Allocation for the proceeds of the Settlement. In
addition, the U.S. Court will consider the fee and expense application by plaintiffs’ counsel in
the U.S. Action, and the respective Canadian Courts will consider the fee and expense applications
by plaintiffs’ counsel in the Canadian Actions. The Courts will take into consideration any
written objections filed in accordance with the instructions shown at the response to question 18.
The Courts also may listen to people who have properly indicated, within the deadline identified
above, an intention to speak at the hearing(s); however, decisions regarding the conduct of the
hearing(s) will be made by the appropriate Court. See response to question 22 for more information
about speaking at the hearing(s). After each hearing, each Court will decide whether to approve
the Settlement. If the Courts approve the Settlement, each Court may also decide how much to pay
to plaintiffs’ counsel appearing in the Nortel I or Nortel II Action before it. Only the U.S.
Court will decide the amount of fees and expenses to be awarded to plaintiffs’ counsel in the U.S.
Action, and only the respective Canadian Courts will decide the amount of fees and expenses to be
awarded to plaintiffs’ counsel in the Canadian Actions. It is not known how long these decisions
will take.



You should be aware that any of the Courts may change the date(s) and time(s) of the Settlement
Fairness Hearings. Thus, if you want to come to any of the hearings, you should check with
plaintiffs’ counsel before coming, to be sure that the date(s) and/or time(s) have not changed.



21. Do I have to come to any of the Settlement Fairness Hearings?



No. Plaintiffs’ counsel will answer questions any of the Courts may have. However, you are
welcome to come at your own expense. If you send an objection, you do not have to come to Court to
talk about it. As long as you filed your written objection on time, the Court(s) will consider it.
You may also pay your own lawyer to attend, but it is not necessary. Class Members do not need to
appear at any hearing or take any other action to indicate their approval.




22









 








22. May I speak at the Settlement Fairness Hearings?



If you object to the Settlement, the Plan of Allocation and/or the application(s) by any counsel
for an award of attorneys’ fees and expenses, you may ask the appropriate Court for permission to
speak at the Settlement Fairness Hearing(s). To do so, you must include with your objection (see
question 18 above) a statement stating that it is your “Notice of Intention to Appear” in the
appropriate Nortel I Action. Persons who intend to object to the Settlement, the Plan of
Allocation, and/or plaintiffs’ counsel’s applications for awards of legal fees and reimbursement of
expenses and desire to present evidence at the Settlement Fairness Hearing(s) must include in their
written objections the identity of any witnesses they may call to testify and exhibits they intend
to introduce into evidence at the Settlement Fairness Hearing(s). You may not be entitled to speak
at the Settlement Fairness Hearing(s) if you excluded yourself from the Class, if you are not a
member of the class in which the Court is holding the Settlement Fairness Hearing, or if you have
not provided written notice of your intention to speak at the Settlement Fairness Hearing(s) by the
deadline identified, and in accordance with the procedures described in response to question 18 and
this response.




IF YOU DO NOTHING




23. What happens if I do nothing at all?



If you do nothing, you will get no money or shares from this Settlement, and you will be precluded
from starting a lawsuit, continuing with a lawsuit, or being part of any other lawsuit against
Nortel and the other Released Parties about the Settled Claims, ever again. To share in the Net
Settlement Fund you must submit a Proof of Claim form (see question 10). To start, continue or be
a part of any other lawsuit against Nortel and the other Released Parties about the Settled Claims
you must have properly excluded yourself from the Class in accordance with the procedures set forth
in this Notice (see questions 13 — 15).




GETTING MORE INFORMATION




24. Are there more details about the proposed Settlement?



This Notice summarizes the proposed Settlement. More details are set forth in a Stipulation and
Agreement of Settlement dated                     , 2006 (the “Stipulation”). You can get a
copy of the Stipulation by writing to appropriate Class Counsel, as set forth in “Further
Information,” above, by visiting [www.                    .com], or by contacting the
Claims Administrator at:




Nortel I Securities Litigation Settlement

c/o The Garden City Group, Inc., Claims Administrator

P.O. Box 0000

City, ST 00000-0000

1-800-                     -                                         toll free

[www.                                        .com]




23









 







where you will find answers to common questions about the Settlement, a Proof of Claim form, plus
other information to help you determine whether you are a Class Member and whether you are eligible
for a payment.




25. How do I get more information?



For even more detailed information concerning the matters involved in this Nortel I Action,
reference is made to the pleadings, to the Stipulation and Settlement Agreements, to the Orders
entered by the respective Courts and to the other papers filed in the Nortel I Actions, which may
be inspected, during regular business hours, as follows:





	 	•	 	In the U.S. Action: at the Office of the Clerk, United States District Court for the
Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl
Street, New York, NY.
	 
	 	•	 	In the Ontario National Action: at the Civil Court Office, Ontario Superior Court of
Justice, 393 University Avenue, 10th Floor, Toronto, Ontario.
	 
	 	•	 	In the Quebec Action: at the Office of the Special Clerk, Superior Court of Quebec, 1
Notre-Dame East, Montreal, Quebec.
	 
	 	•	 	In the British Columbia Action at the Supreme Court of British Columbia, 800 Smithe
Street, Vancouver, British Columbia.





PLAN OF ALLOCATION OF SETTLEMENT PROCEEDS

AMONG CLASS MEMBERS



The $438,667,428 total Cash Settlement Amount and the interest earned thereon, and the 314,333,875
Settlement Shares of Nortel common stock shall be the Gross Settlement Fund. The Gross Settlement
Fund, less all taxes, approved costs, fees and expenses (the “Net Settlement Fund”) shall be
distributed to members of the Class who submit acceptable Proofs of Claim (“Authorized Claimants”).



The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the cash and
Settlement Shares in the Net Settlement Fund based upon each Authorized Claimant’s “Recognized
Claim.” The Recognized Claim formula is not intended to be an estimate of the amount of what a
Class Member might have been able to recover after a trial; nor is it an estimate of the amount
that will be paid to Authorized Claimants pursuant to the settlement. The Recognized Claim formula
is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized
Claimants.



The proposed Plan of Allocation generally measures the amount of loss that a Class Member can claim
under the Settlement for the purpose of making pro-rata allocations of the cash and Settlement
Shares in the Net Settlement Fund to Class Members who submit acceptable Proofs of Claim. The
following proposed Plan of Allocation reflects plaintiffs’ allegations that the price of Nortel
common stock was inflated artificially during the Class Period due to misrepresentations regarding
Nortel’s revenue and earnings. On October 24, 2000 after the market close, Nortel issued a press
release announcing financial results for the third-quarter of 2000 and that for 2001, it
anticipated growth in revenues and earnings per share from operations


24









 






in the 30% to 35% range. On February 15, after the market closed, Nortel lowered its guidance for
the year 2001, indicating, in contrast to prior reports, that revenues would grow 15% and earnings
would grow 10%, and that it would reduce its workforce. The reaction in the marketplace was swift.
Nortel’s stock price dropped from its $29.75 closing price on the New York Stock Exchange on
February 15, 2001 to trade as low as $19.00 per share on February 16, 2001. Lead Plaintiff
estimated that approximately $8.18 per share or 27.5%2 of the $29.75 closing price on
February 15, 2001 represented the artificial inflation caused by the Defendants’ alleged
misrepresentations. (Note: Nortel’s common stock price did not bounce back in the 90 day period
following the end of the Class Period, so no reduction of the claimed damages is required under the
(United States) Private Securities Litigation Reform Act.)



“Recognized Claims” will be calculated for purposes of the Settlement as follows:



To the extent a claimant had a gain from his, her or its overall transactions in Nortel common
stock and/or Nortel put and call options during the Class Period, the value of the Recognized Claim
will be zero. Such claimants will in any event be bound by the Settlement. You may wish to
consider this when deciding to opt out.




Common Stock Purchases:




               (a) For shares of Nortel common stock purchased during the period October 24, 2000 through
February 15, 2001, inclusive, and




               (1) Sold at a loss on or before the close of trading on February 15, 2001, an
Authorized Claimant’s “Recognized Claim” shall mean 2.75% (10%3 of 27.5%) of the
difference between the purchase price paid (including commissions, etc.) (the “PPP”) minus
the sales proceeds received (net of commissions, etc.) (the “SPR”);




               (2) Held after the close of trading on February 15, 2001 an Authorized Claimant’s
“Recognized Claim” shall mean 27.5% of the purchase price paid (including commissions, etc.)
to purchase the shares.



Call Option Purchases: 





     (i) No claim will be recognized for any Nortel call options purchased during the Class
Period that were not owned as of the close of trading on February 15, 2001.




     (ii) For Nortel call options purchased during the Class Period and owned as of the
close of trading on February 15, 2001, an Authorized Claimant’s “Recognized Claim”





 




			
	2	 	Nortel’s price actual decline was
approximately 33% but eliminating the day’s general market decline, 27.5%
is attributed by Lead Plaintiff to the removal of the alleged artificial
inflation.
	 
	3	 	Class members who sold Nortel Common Stock at
a loss prior to the close of trading on February 15, 2001 would face a
potential defense that their loss was not related to the alleged
misrepresentation because the same alleged misrepresentations affected both
their purchase and sale. The discount to 10% reflects this greater difficulty
such Class Members would face.




25









 









shall be the lesser of: (a) 50%4 of the difference, if a loss,
between (x) the amount paid for the call options during the Class Period (including
brokerage commissions and transaction charges)(the “PPP”) and (y) the sum for which said
call options were subsequently sold at a loss (after brokerage commissions and transaction
charges)(or $0.00 if the call option expired while still owned by the Authorized Claimant)
(the “SPR”); or (b) $4.09 per share covered by such call option contracts (50% of the $8.18
maximum per share claim for this loss).




     (iii) No loss shall be recognized based on a sale or writing of any call option that
was subsequently repurchased.



     (iv) Shares of Nortel acquired during the Class Period through the exercise of a call
option shall be treated as a purchase on the date of exercise for the exercise price plus
the cost of the call option, and any Recognized Claim arising from such transaction shall be
computed as provided for other purchases of common stock.



Put Option Sales: 




     (i) No claim will be recognized for any Nortel put options sold (written) during the
Class Period that were not the obligation of the claimant as of the close of trading on
February 15, 2001.



     (ii) For Nortel put options sold (written) during the Class Period, which were the
obligation of the Authorized Claimant at the close of trading on February 15, 2001, an
Authorized Claimant’s “Recognized Claim” shall be the lesser of: (a) the difference, if a
loss, between (x) the amount received for writing the put options during the Class Period
(net of brokerage commissions and transaction charges) (the “SPR”) and (y) the sum for which
said put options were re-purchased at a loss5 after the close of trading on
February 15, 2001 (including brokerage commissions and transaction charges) (the “PPP”); or
(b) $8.09 per share covered by such put option contracts.



     (iii) For Nortel put options written during the Class Period that were “put” to the
Authorized Claimant (i.e. exercised), the Authorized Claimant’s “Recognized Claim” shall
be calculated as a purchase of common stock as shown above, and as if the sale of the put
option were instead a purchase of Nortel common stock on the date of the sale of the put
option, and the “purchase price paid” shall be the strike price less the proceeds received
on the sale of the put option.



     (iv) No loss shall be Recognized based on a sale of any put option that was previously
purchased.



*****************






 




			
	4	 	This discount reflects the fact that a
purchase of a call option includes the payment of a time premium.
	 
	5	 	For Nortel put options sold (written) during
the Class Period that expired unexercised, an Authorized Claimant’s
“Recognized Claim” shall be $0.00.




26









 









The total recovery payable to Authorized Claimants from transactions in call or put options shall
not exceed five percent (5%) of the Net Settlement Fund.



In the event a Class Member has more than one purchase or sale of Nortel common stock and/or Nortel
common stock options, all purchases and sales shall be matched on a First In First Out (“FIFO”)
basis, Class Period sales will be matched first against any Nortel shares and/or options held at
the beginning of the Class Period, and then against purchases in chronological order, beginning
with the earliest purchase made during the Class Period. Purchases and sales of Nortel common
stock and options shall be deemed to have occurred on the “contract” or “trade” date as opposed to
the “settlement” or “payment” date. The receipt or grant by gift, devise or operation of law of
Nortel common stock and/or options during the Class Period shall not be deemed a purchase or sale
of these Nortel securities for the calculation of an Authorized Claimant’s Recognized Claim nor
shall it be deemed an assignment of any claim relating to the purchase of such Nortel securities
unless specifically provided in the instrument of gift or assignment.



Each Authorized Claimant shall be allocated pro rata shares of the cash and Settlement Shares in
the Net Settlement Fund based on his, her or its Recognized Claim as compared to the total
Recognized Claims of all Authorized Claimants. Each Authorized Claimant shall be paid an amount
determined by multiplying the total cash or Settlement Shares, respectively, in the Net Settlement
Fund, by a fraction the numerator of which shall be his, her or its “Recognized Claim” and the
denominator of which shall be the Total Recognized Claims of all Authorized Claimants. This
computation weighs each Class Member’s claim against every other Class Member’s claim. Each
Authorized Claimant will receive pro rata shares of the cash and Settlement Shares in the Net
Settlement Fund based on his, her or its Recognized Claim.



The amount of a Class Member’s Recognized Claim as computed above is not intended to be an estimate
of what a Class Member might have been able to recover at trial, and it is not an estimate of the
amount that will be paid pursuant to this Settlement. Instead, this computation is only a method
to weight Class Members’ claims against one another. Each Authorized Claimant will receive pro
rata shares of the cash and Settlement Shares in the Net Settlement Fund based on his, her or its
Recognized Claim.



To the extent a Claimant had a gain from his, her or its overall transactions in Nortel common
stock and/or Nortel put and call options during the Class Period, the value of the Recognized Claim
will be zero. Such claimants will in any event be bound by the Settlement. To the extent that a
Claimant suffered an overall loss on his, her or its overall transactions in Nortel common stock
and/or options during the Class Period, but that loss was less than the Recognized Claim calculated
above, then the Recognized Claim shall be limited to the amount of the actual loss.



For purposes of determining whether a Claimant had a gain from his, her or its overall transactions
in Nortel common stock during the Class Period or suffered a loss, the Claims Administrator shall:
(i) total the amount the Claimant paid for all Nortel common stock and Nortel options purchased
during the Class Period, and the cost or amount paid to repurchase or close after the Class Period
any Nortel put options written by the Claimant during the Class Period that were open obligations
of the Claimant at the end of the Class Period (the “Total Purchase Amount”); (ii) match any sales
of Nortel common stock or options during the Class Period first against the Claimant’s opening
position in the stock (the proceeds of those sales will


27









 






not be considered for purposes of calculating gains or losses); (iii) total the amount received for
sales of the remaining shares of Nortel common stock and any options sold during the Class Period
(the “Sales Proceeds”); and (iv) ascribe a $19.00 per share holding value for the number of shares
of Nortel common stock purchased during the Class Period and still held at the end of the Class
Period and add the value at the end of Class Period of any call options still held by the Claimant
at the end of the Class Period (“Holding Value”). The difference between (x) the Total Purchase
Amount ((i) above) and (y) the sum of the Sales Proceeds ((iii) above) and the Holding Value ((iv)
above) will be deemed a Claimant’s gain or loss on his, her or its overall transactions in Nortel
common stock during the Class Period.



Class Members who do not submit acceptable Proofs of Claim will not share in the settlement
proceeds. Class Members who do not either submit a request for exclusion or submit an acceptable
Proof of Claim will nevertheless be bound by the Settlement and the Judgment of the applicable
Court dismissing the applicable Action.



Distributions will be made to Authorized Claimants after all claims have been processed and after
the Courts have finally approved the Settlement. If any funds remain in the Net Settlement Fund by
reason of un-cashed distributions or otherwise, then, after the Claims Administrator has made
reasonable and diligent efforts to have Class Members who are entitled to participate in the
distribution of the Net Settlement Fund cash their distributions, any balance remaining in the Net
Settlement Fund one (1) year after the initial distribution of such funds shall be re-distributed
to Class Members who have cashed their initial distributions and who would receive at least $10.00
from such re-distribution, after payment of any unpaid costs or fees incurred in administering the
Net Settlement Fund for such re-distribution. If after six months after such re-distribution any
funds shall remain in the Net Settlement Fund, then such balance shall be contributed
proportionally to United States and Canadian non-sectarian, not-for-profit organizations designated
by plaintiffs’ counsel (and in the case of any relevant settlement shares, by transfer of such
shares to such organization) after notice to the Courts and subject to the direction, if any, by
the Courts.



Plaintiffs, Defendants, their respective counsel, and all other Released Parties shall have no
responsibility for or liability whatsoever for the investment or distribution of the Settlement
Fund, the Net Settlement Fund, the Plan of Allocation or the determination, administration,
calculation, or payment of any Proof of Claim or non-performance of the Claims Administrator, the
payment or withholding of taxes owed by the Settlement Fund, or any losses incurred in connection
therewith.



Any payment required to be made to the Fonds d’aide aux recours collectifs of Quebec shall be paid
by the Claims Administrator from the funds allocable to such members of the Quebec Class.




SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES



If you purchased Nortel common stock or call options on Nortel common stock, or wrote (sold) put
options on Nortel common stock during the period between October 24, 2000 through February 15,
2001, inclusive for the beneficial interest of a person or organization other than yourself, the
United States District Court has directed that, WITHIN SEVEN (7) DAYS OF YOUR RECEIPT OF THIS
NOTICE, you either (a) provide to the Claims Administrator the


28









 






name and last known address of each person or organization for whom or which you purchased or sold
such stock and/or options during such time period or (b) request additional copies of this Notice
and the Proof of Claim form, which will be provided to you free of charge, and within seven (7)
days mail the Notice and Proof of Claim form directly to the beneficial owners of such stock and/or
options. If you choose to follow alternative procedure (b), the Court has directed that, upon such
mailing, you send a statement to the Claims Administrator confirming that the mailing was made as
directed. You are entitled to reimbursement from the Gross Settlement Fund of your reasonable
expenses actually incurred in connection with the foregoing, including reimbursement of postage
expense and the cost of ascertaining the names and addresses of beneficial owners. Those expenses
will be paid upon request and submission of appropriate supporting documentation. All
communications concerning the foregoing should be addressed to the Claims Administrator:




Nortel I Securities Litigation Settlement

c/o The Garden City Group, Inc., Claims Administrator

P.O. Box                     

                    ,____                      

(800)_______ -                     




Dated:                                         , 2006




By Order of the Courts





29









 







APPENDIX “A”



NORTEL: CORPORATE GOVERNANCE PROVISIONS



Corporate Governance Enhancements




     A. The following are the corporate governance enhancements that Nortel Networks Corporation
(“Nortel”) has agreed to implement:



     1) Nortel will amend its Statement of Governance Guidelines (the “Governance Statement”) to
explicitly provide that the non-executive Chair (the “Chair”) of Nortel’s Board of Directors (the
“Board”) shall have adequate support staff to carry out the Chair’s responsibilities.



     2) Nortel will amend its Governance Statement and the mandates of the Board and the Board
committees to explicitly provide for in camera or executive sessions at every Board and Board
committee meeting, whether such meetings are conducted in-person or telephonically.



     3) The Board will adopt a formal policy in 2006 to provide guidance to directors on the number
of outside public boards on which a director may serve. The Board may take into account various
factors in making its determination, including number of meetings and work plan of additional
boards, committee memberships, industry and geographic location.



     4) Nortel will amend the fourth page, first non-indented paragraph, first sentence of the
current mandate of Nortel’s Compensation and Human Resources Committee (formerly the Joint
Leadership Resources Committee, the “CHRC”) to read:




Subject as hereinafter provided, the committee shall have sole authority over the engagement
of compensation consultants, including over the terms and conditions of such engagements.



     5) Nortel will disclose in its annual proxy circular and proxy statement the names of
comparator companies used for purpose of pay setting and performance comparisons.



     6) The CHRC will include the results of comparator companies in determining its compensation
practices and philosophy in consultation with the independent compensation consultants to the CHRC.



     7) The CHRC intends to establish its compensation structures and policies in line with best
practices. The CHRC will consult with its independent compensation consultants regularly to review
the current state of affairs on best practices in the various areas of executive and other employee
compensation, including with respect to the relative balance between annual and long-term
compensation.



     8) The CHRC will not utilize pro forma or adjusted financial metrics to assess performance and
pay incentives except in extraordinary circumstances, and in consultation with the independent
compensation consultants to the CHRC and Nortel’s Audit Committee.



 









 





     9) The CHRC will disclose in Nortel’s annual proxy circular and proxy statement pay for
performance measures and the time period(s) used to assess management’s performance, except that
confidential or competitive information will not be disclosed.



     10) The CHRC will require that all executives’ employment agreements include a clawback
provision that entitles the company to take back compensation, or declare compensation not owed, in
the case of fraud.



     11) Nortel will amend the mandate of the Board to formalize the Board’s current practice of
electing the Chair on an annual basis.



     12) Nortel will require that all committees of the Board must meet at least once a year.



     13) Any material deviation from Nortel’s Governance Statement will be disclosed in the Report
on Governance in the annual proxy circular and proxy statement.


B. The following are either current practices of Nortel or practices that Nortel was in the process
of adopting at the time that negotiations with Lead Plaintiffs as to corporate governance
enhancements began, and which Lead Plaintiffs have demanded be memorialized as part of this
Settlement, and which Nortel has either implemented or has agreed to implement:




     1) Commencing with 2006, Nortel will prepare a forward agenda for the Board, as well as each
committee of the Board, at the beginning of each fiscal year. Each forward agenda will identify
the decisions and actions to be presented to the Board or committee for the ensuing year as
prescribed by the mandate of the Board or of the applicable committee.



     2) Nortel currently conducts an annual assessment of the Board, its committees, individual
directors and the Chair and reports those results to the Board. Nortel will describe this review
process in its annual proxy circular and proxy statement.



     3) Nortel’s Nominating and Governance Committee (formerly the Committee on Directors, the
“Committee”) will adopt, each year, general procedures which the Committee will follow for the
purpose of identifying Board candidates. These procedures will be sufficiently flexible to permit
the Committee to respond to current circumstances as well as to the requirements of the Canada
Business Corporations Act, the stock exchanges and applicable securities laws regarding the
election and appointment of directors. These procedures will be adopted for candidate
identification and the appointment of new directors to the Board.



     4) Nortel is in the process of amending the Committee’s mandate to explicitly identify that
the Committee is responsible for director succession planning.



     5) Nortel is in the process of formalizing and expanding its director orientation and
education program.



     6) The CHRC generally will not grant enhanced pension arrangements except in extraordinary
circumstances and in consultation with its independent compensation consultants.



31









 





     7) The CHRC agrees with the policy of not layering incentive plans on top of other incentive
plans by reason of an unlikely payout under another existing plan.


C. Lead Plaintiffs are invited to address the chairman of Nortel’s Board and the Committee no later
than four months after the Effective Date with respect to certain additional governance proposals,
who will in turn discuss those proposals with the Board. The Board will then consider those
proposals in good faith and act accordingly.




32









 







EXHIBIT A-2



PROOF OF CLAIM AND RELEASE




	 
	This Proof of Claim and Release relates to the following actions (the “Nortel I Actions”):







	•	 	In Re Nortel Networks Corp. Securities Litigation, Consolidated Civil Action No.:
2001-CV-1855 (RMB) in the United States District Court for the Southern District
of New York;






	•	 	Frohlinger v. Nortel Networks Corporation et al, Court File No.: 02-CL-4605 in
the Ontario Superior Court of Justice;






	•	 	Association de Protection des Épargnants et Investisseurs du Québec v.
Corporation Nortel Networks, No.: 500-06-000126-017 in the Superior Court of
Quebec; and






	•	 	Jeffery et al. v. Nortel Networks Corporation et al., Court File No.: S015159 in
the Supreme Court of British Columbia.





DEADLINE FOR SUBMISSION:                                                             , 2006.




IF YOU PURCHASED NORTEL NETWORKS CORPORATION (“NORTEL”) COMMON STOCK OR CALL OPTIONS
ON NORTEL COMMON STOCK OR WROTE (SOLD) PUT OPTIONS ON NORTEL COMMON STOCK (“NORTEL
SECURITIES”) DURING THE PERIOD BETWEEN OCTOBER 24, 2000 THROUGH FEBRUARY 15, 2001,
INCLUSIVE (“CLASS PERIOD”), YOU MAY BE A “CLASS MEMBER” ENTITLED TO SHARE IN THE
PROCEEDS OF A SETTLEMENT.




NOTE: If you also purchased Nortel common stock or call options on Nortel common
stock or wrote (sold) put options on Nortel common stock during the period between
April 24, 2003 through April 27, 2004, inclusive] then you should have also received
another Notice and you should also submit a separate Proof of Claim for those
securities on the [COLOR] Proof of Claim form relating to a separate class action
covering that time period (copies of that [COLOR] form are available from [Claims
Administrator]. This [ANOTHER COLOR] Proof of Claim should be submitted with
respect to only your purchases during the October 24, 2000 through February 15,
2001, inclusive,] time period.




Excluded from the Class are Norte!, Clarence Chandran, Frank Dunn and John A. Roth
(the defendants”), members of any of the individual defendants’ immediate families,
any entity in which any defendant has a controlling interest or is a parent or
subsidiary of or is controlled by the company, and the officers, directors,
affiliates, legal representatives, heirs, predecessors, successors or assigns of any
of the defendants




IF YOU ARE A CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT THIS FORM IN ORDER TO BE
ELIGIBLE FOR ANY SETTLEMENT BENEFITS.




YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BY FIRST CLASS MAIL,
POSTMARKED NO LATER THAN                     , 2006 TO THE FOLLOWING ADDRESS:



 









 





In re Nortel I Securities Litigation

c/o [Claims Administrator]

Claims Administrator

Post Office Box _____

                    , __                     





YOUR FAILURE TO SUBMIT YOUR CLAIM BY                     , 2006 WILL SUBJECT YOUR CLAIM
TO REJECTION AND PRECLUDE YOUR RECEIVING ANY MONEY IN CONNECTION WITH THE SETTLEMENT
OF THIS LITIGATION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURTS OR TO ANY OF
THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN
SUBMITTED. SUBMIT YOUR CLAIM ONLY TO THE CLAIMS ADMINISTRATOR.



2









 





CLAIMANT’S STATEMENT




     1. I purchased Nortel Networks Corporation (“Nortel”) common stock and/or call options on
Nortel common stock and/or wrote (sold) put options on Nortel common stock during the period
between October 24, 2000 through February 15, 2001, inclusive. (Do not submit this Proof of Claim
if you did not purchase Nortel common stock or call options or write (sell) put options on Nortel
common stock during this period.)



     2. By submitting this Proof of Claim, I state that I believe in good faith that I am a Class
Member as defined above and in the Notice of Certifications in Canada and Proposed Settlements of
Class Actions, Motions for Attorneys’ Fees and Settlement Fairness Hearings (the “Notice”), or am
acting for such person; that I am not a defendant in any of the Actions or anyone excluded from the
Class; that I have read and understand the Notice; that I believe that I am entitled to receive a
share of the Net Settlement Fund as described in the Notice; that I elect to participate in the
proposed Settlement described in the Notice; and that I have not filed a request for exclusion. (If
you are acting in a representative capacity on behalf of a Class Member (e.g., as an executor,
administrator, trustee, or other representative), you must submit evidence of your current
authority to act on behalf of that Class Member. Such evidence would include, for example, letters
testamentary, letters of administration, or a copy of the trust documents.)



     3. I consent to the jurisdiction of the Courts with respect to all questions concerning the
validity of this Proof of Claim. I understand and agree that my claim may be subject to
investigation and discovery under the applicable rules of civil procedure, provided that such
investigation and discovery shall be limited to my status as a Class Member and the validity and
amount of my claim. No discovery shall be allowed on the merits of the Actions or the Settlement
in connection with processing of the Proofs of Claim.



     4. I have set forth where requested below all relevant information with respect to each of my
purchases and sales of Nortel common stock and/or call options and/or put options during the
periods indicated, I agree to furnish additional information (including transactions in other
Nortel securities) to the Claims Administrator, as required by it, to support this claim and my
entitlement to a distribution if requested to do so. I understand that my failure to comply with
this provision may result in a delay of my distribution, or the rejection of my claim.



     5. I have enclosed photocopies of the stockbroker’s confirmation slips, stockbroker’s
statements, or other documents evidencing each purchase, sale or retention of Nortel common stock





3









 






options listed below in support of my claim. (IF ANY SUCH DOCUMENTS ARE NOT IN YOUR
POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKER BECAUSE THESE DOCUMENTS
ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.)




     6. I understand that the information contained in this Proof of Claim is subject to such
verification as the Claims Administrator may request or as the Courts may direct, and I agree to
cooperate in any such verification. (The information requested herein is designed to provide the
minimum amount of information necessary to process most simple claims. The Claims Administrator
may request additional information as required to efficiently and reliably calculate your
Recognized Claim and any applicable withholding taxes. In some cases the Claims Administrator may
condition acceptance of the claim based upon the production of additional information, including,
where applicable, information concerning transactions in any derivatives of the subject securities
such as options.)



     7. Upon the occurrence of the Effective Date (as described in the Notice), my signature hereto
will constitute a full and complete release, remise and discharge by me and my heirs, executors,
administrators, predecessors, successors, and assigns (or, if I am submitting this Proof of Claim
on behalf of a corporation, a partnership, estate or one or more other persons, by it, him, her or
them, and by its, his, her or their heirs, executors, administrators, predecessors, successors, and
assigns) of each of the “Released Parties” of all “Settled Claims,” including “Unknown Claims”, as
these terms are defined in the Notice.



     8. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions
may request, or may be requested, to submit information regarding their transactions in electronic
files. All Claimants MUST submit a manually signed paper Proof of Claim form listing all their
transactions whether or not they also submit electronic copies. If you wish to file your claim
electronically, you must contact the Claims Administrator at 1-(800) ___ - ___or visit their
website at www.___.com to obtain the required file layout. No electronic files will be
considered to have been properly submitted unless the Claims Administrator issues to the Claimant a
written acknowledgment of receipt and acceptance of electronically submitted data.



     9. Statement of Claim



     Name(s) of Beneficial Owner(s):


                                        

Name




4









 







                                                            

Joint Owner’s Name (if any)




     Residence Address of Beneficial Owner(s):


                                                            

Street No.




	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 

	 	City
	 	State / Province
	 	Zip Code / Postal Code






     Mailing Address of Beneficial Owner(s) (if different);



	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Street No.	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 

	 	City
	 	State / Province
	 	Zip Code / Postal Code
	 
	 	 	 	 	 	 
	 

	 	( ) ________________
	 	( ) ________________	 	 
	 

	 	Telephone No. (Day)
	 	Telephone No. (Night)	 	 
	 
	 	 	 	 	 	 
	 

	 	Check one:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	___ Individual
	 	___ Corporation	 	 
	 

	 	___ Joint Owners
	 	___ IRA/RRSP	 	 
	 

	 	___ Estate
	 	___ Other ___ (specify)	 	 






     Citizenship: USA



	 	 	 	 	 	 	 
	 

	 	___ USA
	 	___ Canadian
	 	___ Other







	 	 	Place of residence at the time you purchased Norte! common stock or call options on
Nortel common stock or wrote (sold) put options on Nortel common stock:





	 	 	 	 	 	 
	 

	 	 
	 	 	 
	 

	 	State / Province
	 	Country	 







	 	 	If the Place of residence indicated above is Quebec, and if you are a legal person
established for a private interest, a partnership or an association, indicate
whether, at any time during the I2-month period preceding February 18, 2005, more
than 50 employees were under your direction or control. /___/





FOR NORTEL COMMON STOCK:




     10. At the close of business on October 23, 2000, I owned ___ shares of Nortel common
stock (If none, write “0” or “Zero”) (must be documented if other than zero).



     11. I made the following purchases of Nortel common stock during the period October 24, 2000
through February 15, 2001, inclusive. (Persons who received Nortel common stock during this period
other than by purchase are not eligible to submit claims for those transactions.):



5









 







	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate Cost
	Date(s) of Purchase	 	Number of Shares of	 	Purchase Price Per	 	(including
	(List Chronologically)	 	Common Stock	 	Share of Common	 	commissions, taxes,
	(Month/Day/Year)	 	Purchased	 	Stock	 	and fees)
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     






     12. 1 made the following sales of Nortel common stock during the period October 24, 2000
through February 15, 2001, inclusive:



	 	 	 	 	 	 	 
	Date(s) of Sale	 	 	 	 	 	Amount Received
	(List Chronologically)	 	Number of Shares of	 	Sale Price Per Share	 	(net of commissions,
	(Month/Day/Year)	 	Common Stock Sold	 	of Common Stock	 	taxes, and fees)
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	$                     






     13. At the close of trading on February 15, 2001, I owned ___ shares of Nortel
common stock (If none, write “0” or “Zero” ) (must be documented if other than zero).



FOR CALL OPTIONS ON NORTEL COMMON STOCK:




     14. At the close of business on October 23, 2000, I owned the following call options on Nortel
common stock (must be documented if other than zero.):



	 	 	 	 	 	 	 	 	 
	Date Purchased	 	 	 	 	 	 	 	 
	(List Chronologically)	 	 	 	 	 	Expiration Date	 	 
	(Month/Day/Year)	 	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	Aggregate Cost
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	 
	___/___/___

	 	                    
	 	$                     
	 	___/___/___	 	 
	___/___/___

	 	                    
	 	$                     
	 	___/___/___	 	 
	___/___/___

	 	                    
	 	$                     
	 	___/___/___	 	 






     15. I made the following purchases of call options on Nortel common stock during the
period between October 24, 2000 through February 15, 2001, inclusive:



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate Cost
	Date of Purchase	 	 	 	 	 	 	 	 	 	(including
	(List Chronologically)	 	 	 	 	 	Expiration Date	 	 	 	commissions, taxes,
	(Month/Day/Year)	 	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	Price Paid Per Share	 	and fees)
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     






6









 






     16. 1 made the following sales of call options on Nortel common stock during the period
October 24, 2000 through February 15, 2001, inclusive:



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Amount Received
	Date of Sale	 	 	 	 	 	 	 	 	 	(net of
	(List Chronologically)	 	 	 	 	 	Expiration Date	 	Sale Price	 	commissions,
	(Month/Day/Year)	 	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	Per Share	 	taxes, and fees)
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     






     17. I exercised the following call options on Nortel common stock during the period
between October 24, 2000 through February 15, 2001, inclusive:



	 	 	 	 	 	 	 
	Date of Exercise	 	 	 	Expiration Date	 	 
	(Month/Day/Year)	 	Strike Price	 	(Month/Day/Year)	 	Number of Contracts
	___/___/___

	 	$                     
	 	___/___/___
	 	                    
	___/___/___

	 	$                     
	 	___/___/___
	 	                    
	___/___/___

	 	$                     
	 	___/___/___
	 	                    
	___/___/___

	 	$                     
	 	___/___/___
	 	                    






     18. At the close of business on February 15, 2001, I still owned the following call
options on Nortel common stock:



	 	 	 	 	 
	 	 	 	 	Expiration Date
	Number of Contracts	 	Strike Price	 	(Month/Day/Year)
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___






FOR PUT OPTIONS ON NORTEL COMMON STOCK:




     19. At the close of business on October 23, 2000, I was obligated on the following put options
on Nortel common stock:



	 	 	 	 	 
	 	 	 	 	Expiration Date
	Number of Contracts	 	Strike Price	 	(Month/Day/Year)
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___






7









 






     20. I wrote (sold) put options on Nortel common stock during the period between October
24, 2000 through February 15, 2001, inclusive, as follows:



	 	 	 	 	 	 	 	 	 	 	 
	Date of Writing	 	 	 	 	 	 	 	 	 	Amount Received
	(Sale) (List	 	 	 	 	 	 	 	 	 	(net of
	Chronologically)	 	 	 	 	 	Expiration Date	 	Sale Price	 	commissions, taxes,
	(Month/Day/Year)	 	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	Per Share	 	and fees)
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     






     21. I made the following re-purchases of put options on Nortel common stock which I wrote
(sold) during the period between October 24, 2000 through February 15, 2001, inclusive (include all
re-purchases no matter what the date):



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Aggregate Cost
	Date of Purchase	 	 	 	 	 	 	 	 	 	(including
	(List Chronologically)	 	 	 	 	 	Expiration Date	 	Price Paid	 	commissions, taxes,
	(Month/Day/Year)	 	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	Per Share	 	and fees)
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     
	___/___/___

	 	                    
	 	$                     
	 	___/___/___
	 	$                     
	 	$                     






     22. The following put options on Nortel common stock which I wrote (sold) during the
period between October 24, 2000 through February 15, 2001, inclusive were exercised by the holders
thereof and assigned to me(include all re-purchases no matter what the date):



	 	 	 	 	 	 	 
	 	 	 	 	Expiration Date	 	Date of Exercise
	Number of Contracts	 	Strike Price	 	(Month/Day/Year)	 	(Month/Day/Year)
	                    

	 	$                     
	 	___/___/___
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	 	___/___/___






     23. At the close of business on February 15, 2001, I was obligated on the following put
options on Nortel common stock:



	 	 	 	 	 
	 	 	 	 	Expiration Date
	Number of Contracts	 	Strike Price	 	(Month/Day/Year)
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___
	                    

	 	$                     
	 	___/___/___







8










 





IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS PHOTOCOPY THIS PAGE




     24. Request for Taxpayer Identification Number:



     For tax purposes, enter the appropriate tax identification number below for the Beneficial
Owner(s). For most United States individuals, this is your Social Security Number. For most United
States entities other than individuals, this is your Taxpayer Identification Number. For most
Canadian individuals, this is your Social Insurance Number. For most Canadian entities other than
individuals, this is your Business Number. If you fail to provide this information, your claim may
be rejected.



	 	 	 	 	 	 	 
	 

	 	Individuals:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Social Security Number
	 	or
	 	Social Insurance Number
	 
	 	 	 	 	 	 
	 

	 	Estates, Trusts, Corporations, etc.:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Taxpayer Identification Number
	 	 	 	Business Number/Trust Number
	 
	 	 	 	 	 	 
	 

	 	Certification	 	 	 	 






     U.S. Persons and Entities,: /___/ I (We) certify that 1 am (we are) NOT subject to
backup withholding under the provisions of Section 3406 (a)(1)(c) of the Internal Revenue Code
because: (a) I am (We are) exempt from backup withholding, or (b) I (We) have not been notified by
the I.R.S. that I am (we are) subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the I.R.S. has notified me (us) that I am (we are) no longer subject
to backup withholding.


NOTE: If you have been notified by the I.R.S. that you are subject to backup withholding, please
strike out the language that you are not subject to backup withholding in the certification above.




     Canadian or Other Non-U.S. Persons and Entities: /___/ The beneficial owner is not a
U.S. person and the income to which this form relates, if any, is not effectively connected with
the conduct of a trade or business in the United States.



9









 





     UNDER THE PENALTIES OF PERJURY, I (WE) CERTIFY THAT ALL OF THE INFORMATION I (WE) PROVIDED ON
THIS PROOF OF CLAIM FORM IS TRUE, CORRECT AND COMPLETE.



	 	 	 
	 

	 	Signature of Claimant (If this claim is being
made on behalf of Joint Claimants, then
each must sign)
	 
	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	(Title/Capacity of person(s) signing, e.g. beneficial
purchaser(s), president, executor, administrator,
trustee, etc.)






     Date:                                         



10









 





     THIS PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN                     , 2006, AND MUST BE
MAILED TO:



In re Nortel I Securities Litigation

c/o [Claims Administrator]

Claims Administrator

Post Office Box ___

                    , __ _____




     A Proof of Claim received by the Claims Administrator shall be deemed to have been submitted
when posted, if mailed by                                         , 2006, and if a postmark is indicated on the
envelope and it is mailed first class, and addressed in accordance with the above instructions. In
all other cases, a Proof of Claim shall be deemed to have been submitted when actually received by
the Claims Administrator.



     You should be aware that it will take a significant amount of time to process fully all of the
Proofs of Claim and to administer the Settlement. This work will be completed as promptly as time
permits, given the need to investigate and tabulate each Proof of Claim. Please notify the Claims
Administrator of any change of address.



REMINDER CHECKLIST



1.     o     Please be sure to sign this Proof of Claim on page [___]. If this Proof of Claim is submitted on
behalf of joint claimants, then both claimants must sign.



2.     o     Please remember to attach supporting documents. Do NOT send any stock certificates. Keep copies
of everything you submit.



3.     o     Do NOT use highlighter on the Proof of Claim or any supporting documents.



4.     o     If you move after submitting this Proof of Claim, please notify the Claims Administrator of the
change in your address.





11









 







NOTE: RECEIPT ACKNOWLEDGMENT NEEDED



The Claims Administrator will send a written confirmation of its receipt of your Proof of Claim. Do
not assume your claim is submitted until you receive written confirmation of its receipt. Your
claim is not deemed fully filed until the Claims Administrator sends you written confirmation of
its receipt of your Proof of Claim. If you do not receive an acknowledgement postcard within thirty
(30) days of your mailing the Proof of Claim, then please call the Claims Administrator toll free
at                                         .




12









 





EXHIBIT A-3




NORTEL I SECURITIES LITIGATION




SUMMARY NOTICE OF PROPOSED SETTLEMENT, CERTIFICATION OF

CANADIAN ACTIONS, MOTIONS FOR LEGAL FEES AND SETTLEMENT

FAIRNESS HEARINGS




THIS NOTICE MAY AFFECT YOUR RIGHTS, PLEASE READ CAREFULLY



TO ALL PERSONS OR ENTITIES WHO PURCHASED NORTEL NETWORKS CORPORATION (“NORTEL”) COMMON STOCK OR CALL OPTIONS ON
NORTEL COMMON STOCK OR WROTE (SOLD) PUT OPTIONS ON NORTEL COMMON STOCK (COLLECTIVELY “NORTEL SECURITIES”) DURING THE
PERIOD OCTOBER 24, 2000 THROUGH FEBRUARY 15, 2001 (THE “CLASS PERIOD”), INCLUSIVE, INCLUDING, BUT NOT LIMITED TO,
THOSE PERSONS WHO TRADED IN NORTEL SECURITIES ON THE NEW YORK STOCK EXCHANGE AND/OR THE TORONTO STOCK EXCHANGE.





NOTICE OF PROPOSED SETTLEMENT



This Summary Notice is directed to all members of the Classes described below, and is given pursuant to Rule 23 of
the United States Federal Rules of Civil Procedure and various Canadian provincial class proceedings legislation. The
proposed Settlement is more fully described in the “Notice of Certification in Canada and Proposed Settlements of
Class Actions, Motions for Legal Fees and Settlement Fairness Hearings (Nortel I Notice)” (the “Long-Form Notice”)
which is currently being mailed to known Class Members. If you have not yet received a copy of the Long-Form Notice
you should request one from the Claims Administrator identified In the section below entitled “For More Information.”



Briefly, this Summary Notice advises you, among other things, of a proposed settlement in the following class actions
in the United States and Canada:





	•	 	In Re Nortel Networks Corp. Securities Litigation, Consolidated Civil Action No.: 2001-CV-1855 (RMB) in the
United States District Court for the Southern District of New York (“New York Court”) (“U.S. Action”);
	 
	•	 	Frohlinger v. Nortel Networks Corporation et at, Court File No.: 02-CL—4605 In the Ontario Superior Court of
Justice (“Ontario Court”) (“Ontario National Action”);
	 
	•	 	Association de Protection des Éspargnants et Investisseurs du Québec v. Corporation Nortel Networks, No.:
500-06-000126-017 in the Superior Court of Quebec (“Quebec Court”) (“Quebec Action”); and
	 
	•	 	Jeffery et al. v. Nortel Networks Corporation, et al., Court File No.: S015159 in the Supreme Court of
British Columbia (“B.C. Court”) (“B.C. Action”).




The Ontario National Action, the Quebec Action and the B.C. Action are collectively referred to as the “Canadian
Nortel I Actions”. The U.S. Action and the Canadian Nortel I Actions are collectively referred to as the “Nortel I
Actions”.



TERMS OF PROPOSED SETTLEMENT



The Settlement will provide total proceeds consisting of approximately $438,667,428 in cash, plus 314,333,875 shares
of Nortel common stock for the benefit of members of the Classes. In addition, Nortel will adopt certain corporate
governance enhancements. The Settlement resolves lawsuits over whether Nortel misled investors about its historic and
future earnings during the Class Period. The Settlement is contingent on approval by the Courts In the Nortel I
Actions and in







Nortel I Securities Litigation Exclusions

c/o The Garden City Group, Inc. Claims Administrator

P.O. Box 0000

City, ST 00000-0000



If you previously requested exclusion from the Global Class and are not a member of any of the Classes certified in
the Canadian Actions, then you are already excluded from the Settlement and may not receive any money or shares of
Nortel common stock from the Settlement.



If you are a member of any of the Classes certified in the Canadian Actions and you previously requested exclusion
from the Global Class in the U.S. Action, then you may now either (I) submit a Proof of Claim form and be included in
the Settlement, or (ii) opt-out of the Classes certified In the Canadian Actions and be excluded from the Settlement.
If you do nothing you will be Included in the Classes certified in the Canadian Actions and be bound by the
Settlement, but you will not receive any money or shares of Nortel common stock.



Requests for exclusion, to be effective, must be post-marked no later than [September 15, 2006]. If you exclude
yourself from the Classes, you will not be bound by any judgment or other orders made in the Nortel I Actions, will
not be able to participate in the Settlement, and will retain any rights you may have as against the defendants. Do
rd request exclusion if you wish to participate In the Settlement.



NOTICE OF SETTLEMENT FAIRNESS/APPROVAL HEARINGS



As noted, in order for the Settlement to become effective, it must be approved by the New York Court, the Ontario
Court, the Quebec Court and the B.C. Court, each of which must be satisfied that the Settlement is fair, reasonable,
adequate and in the best interests of Class Members. Dates for the Settlement Fairness/Approval Hearings have been
scheduled with the respective courts as follows:





	•	 	in the U.S. Action: at ___:___.m. on day, ___, 2006, at the United States District Court for the
Southern District of New York, Daniel Patrick Moynihan United States Courthouse,
500 Pearl Street, New York, NY.
	 
	•	 	in the Ontario National Action: at ___:___.m. on day, ___, 2006, at the Ontario Superior Court of
Justice, 381 University Avenue, Toronto, Ontario.
	 
	•	 	in the Quebec Action: at ___:___.m. on day, ___, 2006, at the Superior Court of Quebec, District of
Montreal, 1 Notre-Dame East, Montreal, Quebec.
	 
	•	 	In the British Columbia Action at ___:___.m. on day, ___, 2006, at the Supreme Court of British Columbia, 800










 









 






certain related actions against Nortel in the United States and Canada (the ‘Nortel II Actions”) for which there is a
separate notice. The Settlement Is further subject to certain regulatory approvals. The Settlement constitutes a full
and final resolution of claims and causes of action raised by members of the Classes in the Nortel I Actions and
encompassed In the Settlement.



NOTICE OF CERTIFICATION OF CLASSES



The U.S. Action was certified in 2004 to proceed as a class action on behalf of persons and entities, wherever
located, who bought Nortel common stock or call options on Nortel common stock or who wrote (sold) put options on
Nortel common stock during the period October 24, 2000 through February 15, 2001, inclusive, and suffered damages
thereby, including, but not limited to, those persons or entities who traded in Nortel Securities on the New York
Stock Exchange and/or the Toronto Stock Exchange (the “U.S. Global Class”).



The Canadian Nortel I Actions have now been certified for settlement purposes on behalf of Canadian Class Members.
The Ontario Court, the Quebec Court and the B.C. Court have certified the following classes for settlement purposes:





Ontario National Class: All persons or entities, except members of the Quebec Class or British Columbia Class,
who, while residing in Canada at the time, purchased Nortel common stock or call options on Nortel common
stock, or wrote (sold) put options on Nortel common stock, during the period between October 24, 2000 through
February 15, 2001, inclusive.




Quebec Class: All persons, who, while residing in Quebec at the time, purchased Nortel common stock or call
options on Nortel common stock, or wrote (sold) put options on Nortel common stock, during the period between
October 24, 2000 through February 15, 2001, inclusive.




British Columbia Class: All persons or entities, who, while residing in British Columbia at the time, purchased
Nortel common stock or call options on Nortel common stock, or wrote (sold) put options on Nortel common stock,
during the period between October 24. 2000 through February 15, 2001, inclusive.


As described in detail in the Long-Form Notice, certain persons and entities are excluded from the above Classes.



OPTING-OUT OF THE CLASS



If you are a member of any of the Classes you will be bound by the terms of the Settlement, if approved, and you will
not be able to bring or maintain any other claim or legal proceedings against the defendants In connection with the
allegations raised In the Nortel I Actions, unless you exclude yourself (“opt-out”). If you are a member of any of
the Classes and wish to exclude yourself from the Settlement, you must make a request for exclusion in writing. In
order to be valid, each such request for exclusion must set forth the name and address of the person or entity
requesting exclusion, must expressly state that such person or entity requests exclusion from the Classes, and must
be signed by such person or entity. Requests for exclusion must be mailed to:








Smithe Street, Vancouver, British Columbia.


If you are a member of any of the Classes and you do not oppose the Settlement, you need not appear at the Settlement
Fairness/Approval Hearings to indicate your approval. If you are a member of any of the Classes and you wish to
comment on or make an objection to the terms of the Settlement, you should send your name, address and brief reasons
for the objection to the Claims Administrator as set forth in the Long-Form Notice prior to [September 15, 2006[ You
will be entitled to appear at the Settlement Fairness/Approval Hearings and be heard if you wish to do so.



At the Settlement Fairness Hearing, plaintiffs’ counsel will apply to the respective Courts for awards of legal fees
and for reimbursement of expenses Incurred in prosecuting the Nortel I Actions.



PROOF OF CLAIM REQUIRED TO SHARE IN SETTLEMENT PROCEEDS



In order to receive any of the money or shares of Nortel common stock being made available through the Settlement you
must submit a Proof of Claim form by [November 30, 20061. Proof of Claim forms may be obtained by contacting the
Clams Administrator at the addresses shown below.



FOR MORE INFORMATION



If you have not yet received the full printed Long-Form Notice and Proof of Claim form, you may obtain copies of
these documents by contacting the Claims Administrator. As there will be no further notices sent directly to members
of the Classes, you should keep yourself apprised of all developments and updates by regularly contacting the Claims
Administrator or by visiting:




Nortel I Securities Litigation Settlement

c/o The Garden City Group, Inc., Claims Administrator

P.O. Box 0000, City, ST 00000-0000

1-800-___toll free

[www. .com]



If there is a discrepancy between this Summary Notice and the Long-Form Notice, the latter prevails.




PLAINTIFFS’ COUNSEL




     For the U.S. Action: Lead Plaintiffs Counsel: George A. Bauer III, Esq., Milberg Weiss Bershad & Schulman LLP,
One Pennsylvania Plaza, New York, New York 10119-0165; or Murray Gold, Koskie Minsky LLP, 20 Queen Street West,
Suite 900, Toronto, Ontario M5H 3R3.



     For the Ontario National Action: Ontario National Class Counsel: Joel P. Rochon, Rochon Genova LLP, 121 Richmond
Street West, Suite 900, Toronto, Ontario M5H 2K1.



     For the Quebec Action: Quebec Class Counsel: Daniel Belleau, Belleau Lapointe, S.A., 306 Place D’Youville, B-10,
Montreal, Quebec H2Y 2B6.



     For the British Columbia Action: British Columbia Class Counsel: David Klein, Klein Lyons, 1100-1333 West
Broadway, Vancouver, British Columbia V6H 4C1.







This Summary Notice has been approved by the
United States District Court for the Southern
District of New York, the Ontario Superior Court of
Justice, the Superior Court of Quebec and the
Supreme Court of British Columbia














2









 








EXHIBIT A-4




LOGO

The Garden City Group, Inc.




Nortel I and II Canadian Actions




Proposed Legal Notification Campaign




Prepared by:

Jeanne C. Finegan, APR June 19, 2006





 









 








Table of Contents




	 	 	 	 	 	 	 
	INTRODUCTION	 	 	1	 
	 
	 	 	 	 	 	 
	1.
	 	Legal Notice Communication Methodology	 	 	1	 
	 
	 	 	 	 	 	 
	2.
	 	Multi-National Legal Notice Experience	 	 	3	 
	 
	 	 	 	 	 	 
	3.
	 	Media Rationale Overview	 	 	3	 
	 
	 	 	 	 	 	 
	4.
	 	Direct Mail	 	 	3	 
	 
	 	 	 	 	 	 
	5.
	 	Publication	 	 	5	 
	 
	 	 	 	 	 	 
	6.
	 	Notice Program Strategy	 	 	6	 
	 
	 	 	 	 	 	 
	7.
	 	Publication Analysis	 	 	8	 
	 
	 	 	 	 	 	 
	8.
	 	Frequency Rationale	 	 	10	 
	 
	 	 	 	 	 	 
	9.
	 	Prominent Ad Position, Formatting and “Plain Language”	 	 	10	 
	 
	 	 	 	 	 	 
	10.
	 	Internet Banner Advertising	 	 	11	 
	 
	 	 	 	 	 	 
	11.
	 	Media Relations	 	 	11	 
	 
	 	 	 	 	 	 
	12.
	 	Toll Free Information Line	 	 	11	 
	 
	 	 	 	 	 	 
	13.
	 	Web Site	 	 	12	 
	 
	 	 	 	 	 	 
	14.
	 	Conclusion	 	 	12	 
	 
	 	 	 	 	 	 
	15.
	 	Budget Overview	 	 	12	 
	 
	 	 	 	 	 	 
	16.
	 	Publication Summary	 	 	12	 
	 
	 	 	 	 	 	 
	17.
	 	Media Definitions	 	 	14	 
	 
	 	 	 	 	 	 
	18.
	 	Syndicated Research Definitions	 	 	15	 
	 
	 	 	 	 	 	 
	Exhibit 1	 	 	16	 
	 
	 	 	 	 	 	 
	Exhibit 2	 	 	32	 






i









 





Introduction




Since 1984, The Garden City Group, Inc. (GCG) has established a history of providing successful
class action settlement services. Originally a practice unit of KPMG Peat Marwick, the company is
now a wholly owned subsidiary of Crawford & Company, the world’s largest risk adjusting firm (NYSE
symbols CRD.A/CRD/B).



For over 20 years, GCG has specialized in the design and implementation of Class Action
notification campaigns. GCG’s team has designed and implemented large domestic and international
campaigns as well as highly focused local campaigns for class action proceedings. GCG has also
handled the notice and administration of some of the largest securities settlements of all time.
Our recent experience includes the $6.2 billion WorldCom case (where we have processed nearly one
million claims); the $1.1 billion Royal Ahold case (which included mailing notice to class members
in more than 100 countries); and the $1 billion IPO settlement where we mailed more than 17 million
notices.



Jeanne C. Finegan, Senior Vice President, GCG




Jeanne Finegan, APR, has more than 20 years of communications and advertising experience. She is a
nationally recognized expert in legal notice programs, both in Federal and State courts. Finegan
has lectured and published extensively on various aspects of legal noticing. Her articles have
been published in The National Law Journal, The ABA’s Class Action Litigation
Reporter, and The International Risk Management Institute, among others. She has
provided expert testimony before Congress on issues of notice and served the Consumer Product
Safety Commission (CPSC) as an expert to determine ways in which the Commission can increase the
effectiveness of its product recall campaigns. She is accredited (APR) in Public Relations by the
Universal Accreditation Board, a program administered by the Public Relations Society of America.



Finegan has designed and implemented many of the nation’s largest and high profile legal notice
communication programs. Her multi-national experience includes some of the most high-profile
restructuring communications programs involving international Notice. She has designed legal
notices for a wide range of class actions and consumer matters that include product liability,
construction defect, antitrust, medical/pharmaceutical, human rights, civil rights,
telecommunication, media, environment, securities, banking, insurance, and bankruptcies. Attached
hereto as Exhibit l is Finegan’s comprehensive curriculum vitae.



1. Legal Notice Communication Methodology1




Within the context of “Expert Opinion,” two U.S. Supreme Court decisions, Daubert v. Merrell
Dow Pharmaceuticals, 509 U.S. 579 (1993), and Kumho Tire Co. v. Carmichael, 526 U.S.
137 (1999), suggest that when we design a media plan for submission to a court for approval, as
experts, we must: 1) Apply a technique that can be tested by peers; and 2) Use industry accepted
methodology. Therefore, the following legal notice proposal was developed using a scientific





 




			
	1	 	The Canadian plan was calculated based on data
provided by the Print Measurement Bureau (PMB) and The Newspaper Audience
Databank (NADbank).




 









 










method accepted within the advertising industry for modeling target class members by their
demography and media consumption habits.



Most importantly, in formulating a program for delivering “Appropriate Notice,” we have been
mindful of the natural justice and fair process concerns expressed by the Canadian courts, as well
as of the factors listed in the Ontario Class Proceedings Act, S.O. 1992, c. 6, s. 17, the
applicable British Columbia statute (R.S.B.C. 1996, c. 50, s. 19), and the relevant provisions in
the Quebec Code of Civil Procedure.



The purpose of this document is to fully describe our methodology for modeling a target audience
and then appropriately selecting the methods of communication that will best reach them, including
direct mail, published notice, third-party outreach, and media relations. It is our intention to
provide to the Courts of Canada a well-formulated notice plan that defines the target audience by
its demography and media consumption habits, as well as the percentage reached by this campaign and
how frequently the target audience will have the opportunity to see the message as calculated by
accepted advertising industry practice.



Our analysis is designed to be rigorous and well calculated based on available research and
scientific analysis. However, as with all social sciences, it should be noted that there is no one
absolute formula for reaching these conclusions. The calculation of human behavior and media
consumption is not an exact science, but instead it is a combination of science and judgment based
upon knowledge and experience with advertising industry methodologies that are traditionally
utilized in designing legal notice programs.



This proposal is submitted in connection with the Norte] I and Nortel II United States and Canadian
class actions.2 This proposal addresses only the Canadian outreach effort. Adhering to
the highest communication and outreach standards, this Notice Program is based on a scientific
methodology that is used throughout the advertising industry and one which has been embraced by
Courts in the United States and in Canada. Therefore, GCG has designed a Notice Program to
“reach”3 the greatest practicable number of class members.





 




			
	2	 	The Nortel I Settlement includes three actions
covered by Canadian Law: (i) Law, et al., v. Norte/ Networks Corp., et
al., Ontario Superior Court of Justice Commercial List, Court file No.
02-CL-4605 (the “Ontario Action”); (ii) Jeffrey, et al., v.
Norte, Networks Corp., et al., Supreme Court of British Columbia, No.
S015159 Vancouver Registry (the “British Columbia Action”);
and (iii) Association de Protection des Epargnants et Investissuers du
Quebec v. Norte/ Networks Corp., Superior Court, District of Montreal No.:
500-06-000 126-017 (the “Quebec Proceeding”).
	 
	 	 	The Norte/ 11 Settlement includes two actions governed by Canadian
law: (i) Gallardi v. Norte! Networks Corp., Ontario Superior Court of
Justice Commercial List, Court No. 05-CV-285606CP (the “Ontario
Action”); Skarstedt v. Nortel Networks Corp., Superior Court,
District of Montreal, No. 500-06-000277-059 (the “Quebec
Proceeding”).
	 
	 	 	These five actions/proceedings are collectively referred to herein as the
Canadian Actions.
	 
	3	 	Reach is the number or percentage of
different persons exposed to a specific media schedule.




2









 










2. Multi-National Legal Notice Experience




GCG’s ground breaking multi-national efforts are commonly cited by Legal Notice Experts. Our
benchmark international cases (see In re: Vancouver Women’s Health Collective Society v. A.H.
Robins Co., 820 F.2d 1359 (4th Cir. 1987), and In re: Lindsey v. Dow Corning Corp., Civil Action
No. CV 94-P-11558-S), have been cited as international legal notice standards. As demonstrated
below, GCG is particularly qualified to develop and implement a legal notice program that will
effectively and efficiently reach the targeted potential class members in a manner that is similar
in scope and form to other multi-national court-approved notice programs.



In re Vancouver Women’s Health Collective Soc’y v. A. H. Robins Co., 820 F.2d 1359, 1364
(4th Cir. 1987). In an appellate opinion, the Honorable Robert R. Merhige, Jr., Senior District
Judge found that [**15] “ the notification program used by Robins was, under the circumstances,
reasonable. The evidence indicates that every news outlet in the world received the information.
Similarly, there is fairly strong evidence that the news was broadly disseminated worldwide. A
battery of world health and welfare organizations also disseminated the information. It appears to
this court that the extensive notification program was a success.”



Lindsey. et al., v. Dow Corning Corp., et al., Civil Action No. CV 94-P-11558-S. In an
order approving the Notice of Settlement, United States District Judge Samuel J Pointer, Jr.,
stated, “Indeed, the efforts to provide information to such persons must be viewed as among the
most extensive and complete ever undertaken.” The court finds and concludes that, under these
circumstances, the notice program, with all its components, satisfies constitutional requirements
and, in the words of Rule 23, constitutes “the best notice practicable under the circumstances,
including individual notice to all members who can be identified through reasonable effort.



Other samples of our international experience are included as Exhibit 2.



3. Media Rationale Overview




GCG has designed a Notice Program that is consistent with other United States Court-ordered
multi-national notice programs and with the various Canadian class action statutes. In formulating
a program for delivering “Appropriate Notice” that meets the concepts of natural justice and fair
process we are guided by sound principles of communication. We are utilizing nationally syndicated
Canadian media research bureaus to provide both demographic and media consumption habits of the
Canadian population, These data are used by Canadian advertising agencies as the basis to select
media most appropriate to reach specific target audiences.



We are confident that class members will be provided with multiple opportunities to see this Notice
through: 1) Mailed notice to all reasonably identifiable class members who purchased Nortel stock
during the class period; 2) Publication in Canada in appropriate magazines and newspapers; 3)
Internet banner ads; 4) Media relations; 5) a Toll-free information line; and 6) a Web site.



4. Direct Mail




In securities class actions in the United States, the long-accepted practice for disseminating
notice to the class members is through direct mailings. However, there is never one defined



3









 







mailing list of class members. Rather, we need to cull together a complete list from various
sources. The first step is to mail notice to all record holders of the subject company’s publicly
traded securities during the Class Period. This list is provided to us by the company’s transfer
agent. These record holders, however, are usually just the tip of the iceberg in terms of the
potential class members that we reach. The overwhelming majority of class members are found
through the network of brokerage firms, banks and other third-party nominees whose clients and/or
customers may have purchased a company’s stock during the appropriate Settlement Class Period.
These firms hold stock in street name on behalf of their customers and, through the years, have
developed specialized departments to respond to requests for class member lists.



During its 20-year history of performing class action settlement administration, GCG has built and
maintained a proprietary database of the largest brokerage firms, banks, institutions and other
nominees (the “Broker Database”). This Broker Database is continually monitored and updated as
brokerage firms change addresses, go out of business and/or come into existence. Currently, GCG
has more than 2,500 such firms in its U.S. database and thousands more in its international
database.



After notice is mailed, these brokerage firms respond in one of two ways. First, many firms
provide us with lists of clients believed to be class members (i.e., they purchased the requisite
security during the applicable time period). These lists come in the forms of electronic feeds of
data as well as hard-copy labels and other formats. GCG, in turn, updates its database records for
the appropriate case to reflect these names and addresses and then mails the notice (and usually a
claim form) to these individuals and entities. Other nominee firms, ostensibly due to privacy
concerns, do not provide names of their clients, but rather, request copies of the notice packet in
bulk so that they can forward notice directly to their clients.



In large cases such as this, GCG conducts follow-up telephone campaigns with these nominee firms to
make certain that they have received the notice and that they have complied with the requirements
described therein. To help ensure compliance, we will also ask these nominee firms to submit to us
a compliance certificate, which basically confirms that they searched their records and provided us
with names and addresses of potential class members and/or that they actually mailed the notice
packets that they requested. We expect to employ this methodology of direct mail notice in both
the United States and Canada in connection with the Nortel I and Nortel II Settlements. GCG’s
database already contains names and addresses of 185 of the largest Canadian nominees to be
targeted for all securities mailings. This list was updated through extensive research only a few
months ago in connection with another large international settlement. GCG has experience receiving
names and requests from these firms in Canada and we are, therefore, confident that we can rely on
their participation in this case. We have also worked in the past with Dun & Bradstreet to
purchase additional lists of banks and brokerage firms in countries outside the United States. We
will work with them to determine whether they have names and addresses that genuinely supplement
our Canadian nominee mailings.



However, because we cannot reasonably expect the Canadian brokerage firms to be as comfortable with
this process as are the firms in the U.S. – because plainly there is not yet the volume of
securities class actions settlements in Canada that exists in the U.S. — we are buttressing this
direct mail program with a very comprehensive notice publication program,




4









 







which is described below. We expect that this media program will be at least comparable, if not more fulsome than the program developed for the U.S.




5. Publication




The Canadian Notice plan is calculated based on data provided by The Print Measurement Bureau
(PMB). PMB is Canada’s leading nationally syndicated media research bureau, which provides data on
publication readership, product usage and demographic information. PMB is widely accepted by the
top advertising agencies. Additionally, the Canadian plan incorporates data provided by The
Newspaper Audience Databank (NADbank). NADbank studies newspapers on a market-by-market basis.



Based on my over 20 years of experience in the field of advertising, public relations and marketing
communications, I believe that this syndicated research provides a valid basis for determining the
multimedia characteristics of specific target audiences.



The closest definition that PMB provides on which to base our research for the Nortel Legal Notice
Program is “People who own common or preferred stock.” Based on this definition, we have conducted
an extensive analysis of the demographics of the target audience in Canada for their tendencies to
read various magazines and newspapers.



Based on this data, the media program alone is estimated to reach 84.22 percent of “Canadians who
own common or preferred stock,” with an average frequency of 3.82 times.4



Demographic highlights of our target audience are summarized in a snap shot below.



Demographic Profile – Canada




Target: People who own common or preferred stock




	 	 	 	 	 
	Men
	 	 	62.38	%
	Women
	 	 	37.62	%
	 
	 	 	 	 
	Age 35-64
	 	 	67.15	%
	 
	 	 	 	 
	Own Home
	 	 	87.84	%
	 
	 	 	 	 
	Employed
	 	 	66.00	%
	Employed Full Time
	 	 	62.99	 
	 
	 	 	 	 
	HHI $75K-$150K
	 	 	57.10	%
	HHI $50K+
	 	 	79.72	%
	 
	 	 	 	 
	English Canada
	 	 	76.64	%
	French Canada
	 	 	23.36	%








 




			
	4	 	Detailed explanations of reach and frequency
are found on the Definitions page.




5









 











	 	 	 	 	 
	Married
	 	 	77.44	%
	 
	 	 	 	 
	Ontario
	 	 	40.29	%
	Quebec
	 	 	25.90	%
	British Columbia
	 	 	13.59	%
	Albert
	 	 	10.37	%
	Manitoba/Saskatchewan
	 	 	5.69	%






Source: PMB 2006 Two-Year Readership Database





6. Notice Program Strategy




Demographic profiles have been used for many years by advertising agencies as the standard practice
for defining media objectives and selecting media. Demographics provide insight regarding a target
audience’s age, ethnicity, preferred language, income, population size and geographical
distribution. Additionally, data provided by PMB goes beyond basic demographics by analyzing
lifestyle characteristics, including media usage habits. These lifestyle characteristics and
demographic descriptions are segmented into distinct cluster types. Each cluster uniquely
describes demographics, attitudes, and consumer behavior. For the purposes of targeting a legal
notice program, these clusters describe media usage patterns, and are used to define the extent of
a medium’s usage within a given cluster.



Based on this research, we have developed an approach utilizing broad-reaching publications and
more vertically targeted business publications that we know the target has a likelihood of reading.
Moreover, our research indicates over 22 percent of the Canadian population speak French. The
chart below identifies the percentage of French and/or English spoken by province.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Canadian Province	 	 	English	 	 	French	 	 	Total Population	 	 	% Speak French	 
	Newfoundland and
Labrador
	 	 	 	500,065	 	 	 	2,180	 	 	 	508,075	 	 	 	0.43	%
	Prince Edward Island	 	 	 	125,215	 	 	 	5,670	 	 	 	133,385	 	 	 	4.25	%
	Nova Scotia	 	 	 	834,315	 	 	 	34,155	 	 	 	897,570	 	 	 	3.81	%
	New Brunswick	 	 	 	465,720	 	 	 	236,775	 	 	 	719,710	 	 	 	32.90	%
	Quebec	 	 	 	572,085	 	 	 	5,788,655	 	 	 	7,125,580	 	 	 	81.24	%
	Ontario	 	 	 	8,079,500	 	 	 	493,630	 	 	 	11,285,550	 	 	 	4.37	%
	Manitoba	 	 	 	836,980	 	 	 	44,775	 	 	 	1,103,700	 	 	 	4.06	%
	Saskatchewan	 	 	 	625,865	 	 	 	18,035	 	 	 	963,150	 	 	 	1.87	%
	Alberta	 	 	 	2,405,935	 	 	 	59,735	 	 	 	2,941,150	 	 	 	2.03	%
	British Colombia	 	 	 	2,865,300	 	 	 	56,100	 	 	 	3,868,875	 	 	 	1.45	%
	Yukon Territory	 	 	 	24,840	 	 	 	890	 	 	 	28,525	 	 	 	3.12	%
	Northwest Territories	 	 	 	28,985	 	 	 	965	 	 	 	37,105	 	 	 	2.60	%
	Nunavut	 	 	 	7,370	 	 	 	400	 	 	 	26,665	 	 	 	1.50	%
	Total	 	 	 	17,572,175	 	 	 	6,741,965	 	 	 	29,639,040	 	 	 	22.75	%






	 	 	 	 	 
	Total French Speakers
	 	 	6,741,965	 
	% French Speakers of Total Pop.
	 	 	22.75	%






6










 









 




			
	*	 	Includes people who speak English & French and other languages





Source: Census 2001



Therefore, we have included a number of French general circulation magazines and newspapers geared
toward the French speaking population in Canada, most particularly in Quebec.



Additionally, we analyzed total circulation and Readers Per Copy “RPC” of a publication in order to
understand its total readership. While this number does not factor out duplication, it is
illustrative as to the extent of the program. Also this number only includes these consumer
publications, and does not include the multiple other methods of communications we are using, i.e.
direct mail, and media relations efforts. These additional methods of communication will only
further increase readership.



PMB research indicates that the magazines detailed below are the most appropriate to reach the
largest percentage of this target. The magazines used in this Legal Notice program are published
in either French and/or English and deliver the broadest appropriate reach of “people who own
common or preferred stock.”



Canadian Magazines Selected for this Legal Notice Program




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Canadian Business

	 	BI-Weekly
	 	E
	 	 	92,000	 	 	 	11.8	 	 	 	1,085,600	 	 	1/2
Page
	 	 	1	 
	Maclean’s

	 	Weekly
	 	E
	 	 	822,000	 	 	 	7.1	 	 	 	5,836,200	 	 	1/2
Page	 	 	2	 
	L’actualite

	 	Monthly
	 	F
	 	 	191,000	 	 	 	6.0	 	 	 	1,146,000	 	 	Full Page	 	 	1	 
	Report on Business Magazine (Globe & Mail)

	 	Monthly
	 	E
	 	 	288,000	 	 	 	5.0	 	 	 	1,440,000	 	 	1/2 Parke
	 	 	1	 
	Financial Post Business Magazine

	 	Monthly
	 	E
	 	 	221,000	 	 	 	5.9	 	 	 	1,303,900	 	 	1/2
Page
	 	 	1	 
	Time Canada

	 	Weekly
	 	E
	 	 	239,000	 	 	 	11.5	 	 	 	2,748,500	 	 	1/2
Page
	 	 	1	 
	MoneySense

	 	7X/Year
	 	E
	 	 	115,000	 	 	 	8.2	 	 	 	943,000	 	 	1/2
Page
	 	 	1	 
	Reader’s Digest (English Edition)

	 	Monthly
	 	E
	 	 	1,990,000	 	 	 	7.2	 	 	 	14,328,000	 	 	Full Page
	 	 	2	 
	Reader’s Digest (French Edition)

	 	Monthly
	 	F
	 	 	250,000	 	 	 	5.2	 	 	 	1,300,000	 	 	Full Page
	 	 	1	 
	Canadian Living

	 	Monthly
	 	E
	 	 	538,000	 	 	 	8.2	 	 	 	4,411,600	 	 	1/2 Page
	 	 	1	 
	Coup de Pouce

	 	Monthly
	 	F
	 	 	230,000	 	 	 	6.2	 	 	 	1,426,000	 	 	Full Page
	 	 	1	 
	Canadian Geographic

	 	Monthly
	 	E
	 	 	230,000	 	 	 	17.8	 	 	 	4,094.000	 	 	1/2 Page
	 	 	1	 
	Chatelaine (English Edition)

	 	Monthly
	 	E
	 	 	697,000	 	 	 	6.4	 	 	 	4,460,800	 	 	1/2
Page
	 	 	1	 
	Chatelaine (French Edition)

	 	Monthly
	 	F
	 	 	209,000	 	 	 	6.2	 	 	 	1,295,800	 	 	Full Page
	 	 	1	 
	The National Post (Wed)

	 	Daily
	 	E
	 	 	248,000	 	 	 	3.4	 	 	 	843,200	 	 	1/4
Page
	 	 	1	 
	The National Post (Sat)

	 	Daily
	 	E
	 	 	268,000	 	 	 	2.6	 	 	 	696,800	 	 	1/4
Page
	 	 	1	 
	The
Globe and Mall
(Daily — Report on Business Section)

	 	Daily
	 	E
	 	 	322,000	 	 	 	4.1	 	 	 	1,320,200	 	 	1/4
Page
	 	 	1	 
	The
Globe and Mail
(Sat — Report on Business Section)

	 	Daily
	 	E
	 	 	402,000	 	 	 	3.2	 	 	 	1,286,400	 	 	1/4
Page	 	 	1	 








 




			
	*	 	Unit Size will depend on final size of Summary Notices.




7










 










The Notice program includes publication in the two largest national newspapers in Canada, The
National Post, and The Globe and Mail. To increase the overall reach and effectiveness of this
plan, GCG has added newspapers in the top 10 Census markets. The Legal Notice will appear on both
the highest day of circulation as well as the day business editorial is the most highly
concentrated.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Toronto Star
	 	Toronto (Ontario)	 	E	 	2	 	114 Page	 	Sat.	 	 	673,663	 	 	Wed.	 	 	462,985	 
	Toronto Sun
(Mon-Fri),
	 	Toronto (Ontario)	 	E	 	2	 	1/2 Page Tab	 	Sun.	 	 	337,000	 	 	Mon.	 	 	194,000	 
	Le Journal de
Montreal (Mon-Fri)
	 	Montreal (Quebec)	 	F	 	2	 	Full Page Tab,	 	Sat.	 	 	321,000	 	 	Wed.	 	 	268,000	 
	Montreal Gazette
	 	Montreal (Quebec)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	153,016	 	 	Wed.	 	 	136,818	 
	La Presse
	 	Montreal (Quebec)	 	F	 	1	 	1/2 Page	 	Sat.	 	 	277,935	 	 	N/A	 	 	N/A	 
	The Vancouver Sun
	 	Vancouver (British	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	Columbia)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	230,526	 	 	Wed.	 	 	173,145	 
	Ottawa Citizen
	 	Ottawa- Hull	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	(Ontario-Quebec)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	156,657	 	 	Wed.	 	 	127,792	 
	La Droll
	 	Ottawa-Hull	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	(Ontario-Quebec)	 	F	 	1	 	112 Page	 	Sat.	 	 	39,889	 	 	N/A	 	 	N/A	 
	Calgary Herald
	 	Calgary (Alberta)	 	E	 	2	 	1/4 Page	 	Fri.	 	 	140,728	 	 	Wed.	 	 	116,671	 
	Edmonton Journal
	 	Edmonton (Alberta)	 	E	 	2	 	1/4 Pale	 	Fri.	 	 	143,312	 	 	Wed.	 	 	125,827	 
	Le Journal de Quebec
	 	Quebec (Quebec)	 	F	 	2	 	Full Page Tab	 	Sat.	 	 	122,863	 	 	Wed.	 	 	98,165	 
	Quebec City Le Solon
	 	Quebec (Quebec)	 	F	 	1	 	1/2 Page	 	Sat.	 	 	112,660	 	 	N/A	 	 	N/A	 
	The Hamilton
Spectator
	 	Hamilton (Ontario)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	122,572	 	 	Wed.	 	 	105,643	 
	Winnipeg Free Press
	 	Winnipeg (Manitoba)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	164,106	 	 	Wed.	 	 	119,392	 
	The London Free
Press
	 	London (Ontario)	 	E	 	2	 	1/4 Page	 	Sat.	 	 	112,182	 	 	Mon.	 	 	92,476	 
	Subtotal:
	 	 	 	 	 	27	 	 	 	 	 	 	3,108,109	 	 	 	 	 	2,020,914	 








 




			
	*	 	Unit Size will depend on final size of Summary Notices.





Additionally, we are further enhancing the Notice Program by adding the largest general
circulation newspaper in each of the Canadian provinces.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Moncton Times & Transcript
	 	New Brunswick	 	E	 	1	 	1/4 Page	 	Saturday	 	 	45,500	 
	L’Acadie Nouvelle
	 	Moncton	 	 	 	 	 	 	 	 	 	 	 	 
		 	(New Brunswick)	 	F	 	1	 	1/2 Page	 	Saturday	 	 	20,436	 
	The Guardian
	 	Prince Edward Island	 	E	 	1	 	1/4 Page	 	Saturday	 	 	20,746	 
	The Halifax Chronicle Herald
	 	Nova Scotia	 	E	 	1	 	1/4 Page	 	Saturday	 	 	111,501	 
	The Star Phoenix
	 	Saskatchewan	 	E	 	1	 	1/4 Page	 	Friday	 	 	60,499	 
	Nunavut News/North
	 	Nunavet	 	E	 	1	 	1/2 Pale Tab	 	Monday	 	 	6,213	 
	Yukon News
	 	Yukon	 	E	 	1	 	1/2 Page Tab	 	Friday	 	 	7,850	 
	NWT/News North
	 	Northwest Territories	 	E	 	1	 	1/2 Page Tab	 	Monday	 	 	9,672	 
	The Telegram
	 	Newfoundland	 	E	 	1	 	1/4 Page 	 	Saturday	 	 	55,031	 
	Subtotal:
	 	 	 	 	 	9	 	 	 	 	 	 	337,448	 








 




			
	*	 	Unit Size will depend on final size of Summary Notices.





All unit sizes and pricing presented in this proposal are subject to change depending on the
final text of the Summary Notices.



7. Publication Analysis




We have previously identified one way to measure media, which is reach. Reach refers to those
people who actually are exposed to a message. Two other media measures of a publication are



8










 




coverage (i.e., potential exposure through a given publication) and index against a target.
Coverage is the percentage of the target audience that reads a magazine. For example, as shown in
the chart below, Canadian Business reaches an estimated 10.78 percent of “people who own
common or preferred stock.” Canadian Living reaches an estimated 19.01 percent of this target. It
should be noted that the overall average estimated reach is calculated through a random duplication
formula widely accepted in the advertising industry.




Index is an indicator of the tendency of a consumer to read a certain publication. An index of 100
is a mean. An index greater than 100 indicates a percentage greater than the average tendency to
read a publication. For example an index of 110 would mean that the target is 10 percent more
likely than the average person to read a publication.



The chart below lists each publication by its reach of those who own common or preferred stock.
The magazines selected for this Class either reach a significant percentage of the target audience
or they index well. As the chart below indicates, the selected Canadian publications are well read
by those who own common or preferred stock. For example, Canadian Business is 176 percent
more likely to be read by our target audience of “those who own common or preferred stock” than the
average Canadian.



% Coverage and Composition Index




Target: Own Common or Preferred Stock




	 	 	 	 	 	 	 	 	 
	Canadian Business
	 	 	10.78	%	 	 	(276	)
	Maclean’s
	 	 	14.19	%	 	 	(135	)
	L’aduafte
	 	 	6.69	%	 	 	(161	)
	Report on Business Magazine (Globe & Mail)
	 	 	14.52	%	 	 	(279	)
	Financial Post Business Magazine
	 	 	13.39	%	 	 	(285	)
	Time Canada
	 	 	12.05	%	 	 	(121	)
	MoneySense
	 	 	7.63	%	 	 	(224	)
	Readers Digest (English Edition)
	 	 	26.10	%	 	 	(100	)
	Reader’s Digest (French Edition)
	 	 	6.02	%	 	 	(129	)
	Canadian Living
	 	 	19.01	%	 	 	(120	)
	Coup de Pouce
	 	 	5.76	%	 	 	(112	)
	Canadian Geographic
	 	 	14.79	%	 	 	(100	)
	Chatelaine (English Edition)
	 	 	17.87	%	 	 	(111	)
	Chatelaine (French Edition)
	 	 	5.62	%	 	 	(121	)
	The National Post (Wed)
	 	 	9.37	%	 	 	(309	)
	The National Post (Sat)
	 	 	8.23	%	 	 	(322	)
	The Globe and Mall Daily — Report on Business Section
	 	 	12.25	%	 	 	(256	)
	The Globe and Mail (Sat — Report on Business Section)
	 	 	11.65	%	 	 	(254	)






Source: PMB 2006 Two-Year Readership Database




We have selected broad reaching magazines for this Legal Notice program. Additionally, we are
using ad sizes that will be noticed by potential class members, while maintaining cost efficiency.
In that regard, we are recommending certain ad unit sizes. For example, we are recommending



9










 





half-page ads or larger in the magazines, depending on final length of Summary Notice(s) .
According to Magazine Dimensions 2005, “Studies show that a typical reader of a monthly
publication looks at or reads the issue about three times over a 12-week interval. So the vast
majority of the audience can be assumed to have scanned all ads (via page openings)
regardless of ad size or color.”



8. Frequency Rationale




Why do we need to expose the target audience to the Legal Notice more than once? Author Michael J.
Naples, suggests an answer. He has found a relationship between frequency and message
communication success. Among his conclusions: “The weight of evidence suggests strongly that an
exposure frequency of at least two (2x) within a purchase cycle is an effective level.” Effective
Frequency: The Relationship Between Frequency and Advertising Effectiveness – Association of
National Advertisers, New York, New York 1988.



The table below reviews correlation between various factors and recommended frequency in a notice
program.



	 	 	 	 	 	 	 
	 	 	High	 	Moderate	 	Low
	Factor	 	Frequency	 	Frequency	 	Frequency
	 
	 	 	 	 	 	 
	Complexity of Message		Complex		Less Complex		Simple
	 						
	Level of Interest in Message		Low		Medium		High
	 						
	Competitive Activity		Heavy		Moderate		Light
	 						
	Predisposition of Audience		Negative		Neutral		Positive





Source – Guide to Media Research - American Association of Advertising Agencies (AAAA)
Research 2001.



9. Prominent Ad Position, Formatting and “Plain Language”




The concept of “plain language” in Notice is one that has received much attention. Plain language
is simply a more conversational form of communication. The same style is used when reporting the
news. The concept, now integrated into Legal Notice practice, is one that has received note from
various authorities. For additional information, please visit www.sc.gov/public/home.nsf;
www.plainengligh.co.uk and www.plainlanguagenetwork.org.



The published Notice will be formatted in a manner consistent with these and other guidelines,
including Federal Judiciary’s guidelines on easy to read, plain language notice.



As noted in a RAND Study, the Louisiana-Pacific Inner Seal Siding Notice (1995) was actually one of
the first published plain language notices. It was co-written by Jeanne Finegan. The RAND study
suggested that the plain language text from the L-P notice was more likely than other notices to
attract the attention of class members.5





 




			
	5	 	Deborah R. Hensler et al., CLASS ACTION
DILEMAS, PURSUING PUBLIC GOALS FOR PRIVATE GAIN. RAND (2000).




10










 










Consistent with the Federal Judiciary’s guidelines, the black and white Notice will have a bold
headline and will call attention, by way of bold type, to important details, such as class
definitions, how individuals can obtain more information by way of mail, toll-free numbers or a web
address, relevant dates and deadlines, and other salient points. We will make a best effort to
request prominent positioning in the magazines, namely right hand page, as far forward as possible.



10. Internet Banner Advertising




Banner advertising is recognized as an effective method of increasing brand recall and product
interest. It is also highly cost-efficient as a means of generating brand awareness. GCG will
design a banner advertisement for placement on specific heavily trafficked areas on each of the
Internet portals. These banners will be targeting finance executives within Investments &
Securities.



We would place banner advertising on financial focused websites such as Canada, Sympatico MSN
Finance Channel in English & French, Sympatico MSN — Hotmail targeted to financial executives in
English & French, Yahoo, National Post Online, Globe & Mail – Globelnvester.com, and AOL Money &
Technology network targeting Canada. The precise sites will be chosen at the time of the media
buy.



11. Media Relations




GCG will design a media relations campaign that includes distribution of a press release over PR
Newswire including Canadian news wires. The press release will be broadly distributed to the
media, as well as focused directly to the securities industry. The press release will alert the
media of the details of the case, giving them the opportunity to report on the case and provide
additional media exposure by way of news stories to their audiences.



12. Toll Free Information Line




Complementing the Notice Program will be GCG’s ancillary telephone support and website established
especially for this case. The summary notice will direct class members to the toll-free telephone
number and the website URL for additional information about the settlement.



GCG is able to offer automated information about different aspects of the settlement through our
Interactive Voice Response (IVR) platform. We will provide (in both French and English)
information about deadlines, class members’ rights, background of the case, how to submit a claim,
and other pertinent information. In addition to this automated platform we will use our call
center facility to set up dedicated operators for this settlement. Our call center’s main
operational site is in Sarasota, Florida. However, we have many other available locations from
which we run cases. Here, we anticipate using our Montreal site, where we have the capacity to use
more than 100 seats (far more than needed). All of the Representatives in this facility are
bilingual (English and French Canadian) professional (most have earned a college degree), and have
extensive customer service experience.



Regarding connectivity to our IVR
platform, all of our domestic toll free numbers automatically include
“Extended Call
Coverage” (ECC) which provides connectivity from Canada and all of



11









 




the U.S. Territories without any additional set up. In addition, the transfer of a call from the
IVR to a representative in Montreal will be seamless as the infrastructure is already in place.
Our IVR has limitless capacity and can be customized to accommodate any foreign language
requirement.




13. Web Site




We also intend to create a case-specific web site that provides answers to frequently asked
questions as well as postings of all relevant settlement-related documents. Class members will be
able to access and download copies of the notices and the claim forms and will have access to
relevant Court orders. This web site may be accessed by anyone in Canada or the U.S. and will be
available in English and French.



14. Conclusion




Based on our experience in planning and implementing class action Notice it is our judgment that
this broad reaching Notice program is reasonably calculated, using appropriate tools and
methodology accepted in the advertising industry, to effectively reach targeted class members in
Canada.



15. Budget Overview




Below is a cost summary of the proposed Canadian Notice Program:



	 	 	 	 	 
	National Publications*
	 	$	277,817.17	 
	Local Newspapers — Highest Circ Day*
	 	$	96,303.59	 
	Local Newspapers — Best Business Day*
	 	$	78,096.92	 
	Local
Newspapers — Additional*
	 	$	12,817.74	 
	Internet Banner Advertising
	 	$	95,855.33	 
	Media Outreach
	 	$	1,985.00	 
	Affidavits
	 	$	6,600.00	 
	Total
	 	$	569,475.75	*






To the extent we are asked to place separate ads for Nortel I and Nortel II, the cost will
essentially double. Pricing above based on 2006 pricing and current exchange rate. Subject to
change based on exchange rate at time of buy.



16. Publication Summary





Canadian Business




Provides news, opinion and community for business leaders, entrepreneurs and investors in Canada.
Bi-Weekly.





 




			
	*	 	* Final pricing will ultimately depend on the
size of the final approved Summary Notice(s).




12









 










Maclean’s




Publishes the latest in health, education, personal finance, entertainment, personalities, politics
and sports, plus thought-provoking columnists and special reports. Weekly.



L’actualite




Covers news and culture in Canada. Monthly.



Report On Business Magazine (Globe & Mail)




Considered the most comprehensive compilation of economic news in Canada. Standard Report on
Business sections are typically fifteen to twenty pages and include the listings of major Canadian,
US, and international stocks, bonds, and currencies. Monthly.



Financial Post Business Magazine




Consistently provides context, analysis and understanding to current trends, companies and issues
that are shaping the economy and Canadians’ lives. Topics include corporate strategies, profiles
of top political and business leaders with articles aimed at the broader interests of its upscale
audience. Monthly.



Time Canada




Provides analysis and viewpoints. Provides insight and big-picture perspective on the most
important news of the day, at home and around the world. It covers the transformational issues
affecting society — socially, politically, economically and culturally. Weekly.



MoneySense




Covers personal finance in Canada. Each issue contains insightful and informative columns and
articles to help consumers make the most of their money. 7x a Year.



Reader’s Digest




(English Edition)




Puts the world in perspective through a fusion of timely original editorial and select excerpts of
the best journalism in print. It informs, entertains and inspires people to take action at a time
when mass media prominently shapes the culture. Monthly.



Reader’s Digest




(French Edition)




French edition of the publication. Monthly.



13









 





Canadian Living




Provides readers with smart solutions for everyday living. The place to turn to first for
I-can-do-it recipes for midweek family suppers and elegant entertaining, up-to-the-minute health
and wellness information, and practical parenting and family advice-plus inspiring fashion, beauty
and home decor ideas that make real sense in busy lives. Daily.



Coup de Pouce




Committed to helping women and their families living in Quebec, it delivers a wealth of information
and practical advice. Editorial covers food, health, beauty and fashion, parenting, travel and
home. Monthly.



Canadian Geographic




Delivers unmatched coverage of issues related to Canada and its people, all brought to vivid life
through stunning photography and unforgettable writing. Monthly.



Chatelaine




(English Edition)




Covers a variety of women’s interests, from fashion and relationships to health information,
profiles of successful women and journalism on social and political issues relevant to women.
Monthly.



Chatelaine




(French Edition)




French edition of the publication. Monthly.



The National Post




A major Canadian English language national newspaper based in Toronto. Daily.



The Globe and Mail




Often considered the newspaper of record in Canada, it is a major Canadian English language
national newspaper based in Toronto. Daily.



17. Media Definitions




REACH – The number of different people (or homes) exposed to an advertisement one or more
times. Reach is expressed as an estimated percentage of the defined target population that has an
opportunity to see the ad.



FREQUENCY – The average number of exposures received by the people who were reached by the
media schedule.



14









 





GROSS IMPRESSIONS – The sum of audiences for all vehicles (such as newspapers and/or
magazines) on an advertising schedule.



READERS-PER-COPY (RPC) – The average number of readers-per-copy of a publication is
computed by dividing the total number of different people who read or looked into an average issue
of a magazine by the magazine’s total circulation. This number is based upon the assumption that
readers will “pass along” their copy of a magazine for others to read as well.



18. Syndicated Research Definitions




PMB Print Measurement Bureau is Canada’s leading syndicated study for single-source data on
print readership, non–print media exposure, product usage and lifestyles. Its reputation is based
on over 30 years of accurate, in-depth measurement of Canadian consumer behavior.



PMB is a non-profit organization, representing the interests of Canadian publishers advertising
agencies, advertisers and other companies.



The first national PMB study was conducted in 1973. Since then, it has grown to the point where it
now uses an annual sample of 24,000 to measure the readership of over 120 publications and consumer
usage of over 2,500 products and brands. The PMB 2006 study is based on 25,165 interviews
conducted over 24 months (October 2003 — September 2005). *See www.pmb.ca/public/e/index.htm.



INTERACTIVE MARKET SYSTEMS (IMS) — IMS is the leading international provider of information
systems and solutions for the media industry. IMS provides media planning and analysis software
for both industry and proprietary research. One function of IMS software is to run a reach and
frequency report based on formula models such as IMS Modal and Metheringham. These formulas create
a reach and frequency estimate.



NADbank — The NADbank 2005 study is the most comprehensive data source for market level
data on newspaper readership, retail shopping and product category data in Canada.



15









 





Exhibit 1















 








JEANNE C. FINEGAN, APR




BIOGRAPHY




     Jeanne Finegan, Senior Vice President of The Garden City Group, Inc., has more than 20 years
of communications and advertising experience. She is a nationally recognized expert in class
action, bankruptcy and mass tort notification campaigns. Finegan, is accredited (APR) in Public
Relations by the Universal Accreditation Board, a program administered by the Public Relations
Society of America.



     She has provided expert testimony before Congress on issues of notice. Additionally, she has
provided expert testimony in both State and Federal Courts regarding notification campaigns and
conducted media audits of proposed notice programs for their adequacy under Fed R. Civ. P. 23(c)(2)
and similar state class action statutes.



     She has lectured, published and has been cited extensively on various aspects of legal
noticing, product recall and crisis communications and has served the Consumer Product Safety
Commission (CPSC) as an expert to determine ways in which the Commission can increase the
effectiveness of its product recall campaigns.



     Finegan has developed and implemented many of the nation’s largest and most high profile legal
notice communication and advertising programs. In the course of her class action experience,
Courts have recognized the merits of, and admitted expert testimony based on, her scientific
evaluation of the effectiveness of notice plans. She has designed legal notices for a wide range
of class actions and consumer matters that include product liability, construction defect,
anti-trust, medical/pharmaceutical, human rights, civil rights, telecommunication, media,
environment, securities, banking, insurance, mass tort, restructuring and product recall.



Her work includes:



     In re: UAW v General Motors Corporation, Case No: 05-73991 Class Action, United States
District Court Eastern District of Michigan Southern Division (2006).



     In re: Wicon, Inc. v. Cardservlce International, Inc., BC 320215 Class Action Superior
Court of the State of California for the County of Los Angeles (2004).



     In re: Varacallo, et al. v. Massachusetts Mutual Life Insurance Company, et al., Civil
Action No. 04-2702 (JLL), United States District Court for the District of New Jersey (2004).




     (Preliminary Approval Order at 9). ... the Court found that ... “all of the
notices are written in simple terminology, are readily understandable by Class
Members, and comply with the Federal Judicial Center’s illustrative class action
notices.”




     ... By working with a nationally syndicated media research, firm, (Finegan’s
firm] was able to define a target audience for the MassMutual Class Members, which
provided a valid basis for determining the magazine and



17









 






newspaper preferences of the Class Members. (Id at 5.2). ... The Court
agrees with Class Counsel that this was more than adequate.



     In re: John’s Manville (Statutory Direct Action Settlement,, Common Law Direct Action and
Hawaii Settlement) Index No 82-11656 (BRL) United States Bankruptcy Court Southern District of
New York (2004). The nearly half-billion dollar settlement constituted three separate notification
programs, which targeted all persons, who had asbestos claims whether asserted or unasserted,
against the Travelers Indemnity Company.




     In the Findings of Fact and Conclusions of a Clarifying Order Approving the
Settlements, the Honorable Chief Judge Burton R. Lifland said:




     “As demonstrated by Findings of Fact, the Statutory Direct Action Settlement
notice program was reasonably calculated under all circumstances to apprise the
affected individuals of the proceedings and actions taken involving their interests,
Mullane v. Cent. Hanover Bank & Trust Co; 339 U.S. 306, 314 (1950), such
program did apprise the overwhelming majority of potentially affected claimants and
far exceeded the minimum notice required The Court concludes that mailing direct
notice via U.S. Mail to law firms and directly to potentially affected claimants, as
well as undertaking an extensive print media and Internet campaign met and exceeded
the requirements of due process. The Court’s conclusion in this regard is
buttressed by the results over 26,000 phone calls, 20,000 requests for information
8,000 website visits and 4,000 users registered to download documents. The results
simply speak for themselves.”




     In re: Wilson v. Massachusetts Mutual Life Insurance Company, Case No. D-101-CV
98-02814 (First Judicial District Court County of Santa Fe State of New Mexico 2002.) This
was a nationwide notification program that included all persons in the United States who
owned, or had owned, a life or disability insurance policy with Massachusetts Mutual Life
Insurance Company and had paid additional charges when paying their premium on an
installment bases. The class was estimated to exceed 1.6 million individuals.




     (www.insuranceclassclaims.com/).




In granting preliminary approval to the settlement agreement, the Honorable Art
Encinias commented:




     “The Notice Plan was the best practicable and reasonably calculated,
under the circumstances of the action. ...land) that the notice meets or
exceeds all applicable requirements of law, including Rule 1-023(C)(2) and
(3) and 1-023(E), NMRA 2001, and the requirements of federal and/or state
constitutional due process and any other applicable law.”




In re: Deke, et al. v. Cardservice International, Case No. BC 271679
Superior Court of the State of California for the County of Los Angeles. (2004)



18










 






     In the Final Order dated March 1, 2004, The Honorable Charles W. McCoy
commented:




     “The Class Notice satisfied the requirements of California Rules of
Court 1856 and 1859 and due process and constituted the best notice
practicable under the circumstances. ”




In re: Sager v. blamed Corp. and McGhan Medical Breast Implant Litigation,
Case No. 01043771, Superior Court of the State of California County of Santa
Barbara. (2004).




     In the Final Judgment and Order, dated March 30, 2004, the Honorable Thomas P.
Anderle stated:




     “Notice provided was the best practicable under the circumstances.”




In re: Florida Microsoft Antitrust Litigation Settlement. Index number
99-27340 CA 11, 11t Judicial District Court of Miami — Dade County, Florida. (2003)
In the Final Order Approving the Fairness of the Settlement, The Honorable Henry H.
Harnage said:




     “The Class Notice ... was the best notice practicable under the
circumstances and fully satisfies the requirements of due process, the
Florida Rules of Civil Procedure, and any other applicable rules of the
Court.”




In re: Montana Microsoft Antitrust Litigation Settlement. No. DCV 2000 219,
Montana First Judicial District Court – Lewis & Clark Co. (2003).




In re: South Dakota Microsoft Antitrust Litigation Settlement. Civ. No.
00-235, State of South Dakota county of Hughes in the circuit Court Sixth Judicial
Circuit.




In re: Kansas Microsoft Antitrust Litigation Settlement. Case No. 99C 17089
Division No. 15 Consolidated Cases, District Court of Johnson County, Kansas Civil
Court Department.




In the Final Order and Final Judgment, the Honorable Allen Slater stated:




     “The Class Notice provided was the best notice practicable under the
circumstances and fully complied in all respects with the requirements of
due process and of the Kansas State. Annot. 00-22.3.”




     In re: North Carolina Microsoft Antitrust Litigation Settlement, No.
00-CvS-4073 (Wake) 00-CvS-1246 (Lincoln), State of North Carolina, Wake and Lincoln Counties
in the General Court of Justice Superior Court Division North Carolina Business Court.




     In the multiple state cases, Plaintiffs generally allege that Microsoft unlawfully used
anticompetitive means to maintain a monopoly in markets for certain software, and that as a
result, it overcharged consumers who licensed its MS-DOS, Windows, Word,



19









 






Excel and Office software. The multiple legal notice programs targeted both individual
users and business users of this software. The scientifically designed notice programs took
into consideration both media usage habits and demographic characteristics of the targeted
class members.




     In re: MCI Non-Subscriber RatePavers Litigation, MDL Docket No. 1275, (District
Court for Southern District of Illinois 2001) . The advertising and media notice program
was designed with the understanding that the litigation affects all persons or entities who
were customers of record for telephone lines presubscribed to MCl/World Corn, and were
charged the higher non-subscriber rates and surcharges for direct-dialed long distance calls
placed on those lines. (www.rateclaims.com).




     After a hearing to consider objections to the terms of the settlement, The Honorable
David R. Herndon stated:




“As further authorized by the Court, GMs. Finegan’s company/ ... published the
Court-approved summary form of notice in eight general-interest magazines
distributed nationally; approximately 900 newspapers throughout the United States
and a Puerto Rico newspaper. In addition, /Ms. Finegan ‘s company) caused the
distribution of the Court-approved press release to over 2,500 news outlets
throughout the United States... The manner in which notice was distributed was more
than adequate...”




     In re: Sparks v. AT&T Corporation, Case No. 96-LM-983 (In the Third Judicial
Circuit, Madison County, Illinois.) The litigation concerned all persons in the United
States who leased certain AT&T telephones during the 1980’s. Finegan designed and
implemented a nationwide media program designed to target all persons who may have leased
telephones during this time period, a class that included a large percentage of the entire
population of the United States.




     In granting final approval to the settlement, the Court commented:




     “The Court further finds that the notice of the proposed settlement was
sufficient and furnished Class Members with the information they needed to evaluate
whether to participate in or opt out of the proposed settlement. The Court
therefore concludes that the notice of the proposed settlement met all requirements
required by law, including all Constitutional requirements.”




     In re: Pigford v. Glickman and U.S. Department of Agriculture, Case No. CA No.
97-19788 (PLF), (District Court for the District of Columbia 1999). This was the largest
civil rights case to settle in the United States in over 40 years. The highly publicized,
nation-wide paid media program was designed to alert all present and past African-American
farmers of the opportunity to recover monetary damages against the U.S. Department of
Agriculture for alleged loan discrimination.




     In his Opinion, the Honorable Paul L. Friedman commented on the notice program by
saying:



20









 






     “The parties also exerted extraordinary efforts to reach class members through
a massive advertising campaign in general and African American targeted publications
and television stations.”




Judge Friedman continued:




     “The Court concludes that class members have received more than adequate notice
and have had sufficient opportunity to be heard on the fairness of the proposed
Consent Decree.”




     In re: SmithKline Beecham Clinical Billing Litigation, Case No. CV. No.
97-L-1230 (Illinois Third Judicial District Madison County, 2001.) Finegan designed and
developed a national media and Internet site notification program in connection with the
settlement of a nationwide class action concerning billings for clinical laboratory testing
services.




     In re: MacGregor v. Schering-Plough Corp., Case No. EC248041 (Superior Court of
the State of California in and for the County of Los Angeles 2001). This nationwide
notification was designed to reach all persons who had purchased or used an aerosol inhaler
manufactured by Schering-Plough. Because no mailing list was available, notice was
accomplished entirely through the media program.




     In re: Swiss Banks Holocaust Victim Asset Litigation, Case No. CV-96-4849,
(Eastern District of New York 1999). Finegan managed the design and implementation of the
Internet site on this historic case. The site was developed in 21 native languages. It is
a highly secure data gathering tool and information hub, central to the global outreach
program of Holocaust survivors. (www.swissbankclaims.com/).




     In re: Louisiana-Pacific Inner-Seal Siding Litigation, Civil Action Nos.
879-JE, and 1453-JE U.S.D.C., (District of Oregon 1995 and 1999). Under the terms of the
Settlement, three separate Notice programs were to be implemented at three-year intervals
over a period of six years. In the first Notice campaign, Finegan implemented the print
advertising and Internet components of the Notice program.




     In approving the legal notice communication plan, the Honorable Robert E. Jones stated:




     “The notice given to the members of the Class fully and accurately informed the
Class members of all material elements of the settlement...(through a broad and
extensive multi-media notice campaign.”




     In reference to the third-year Notice program for Louisiana Pacific, Special Master
Hon. Judge Richard Unis, commented:




     “In approving the third year notification plan for the Louisiana-Pacific
Inner-SeaFM Siding litigation, the court referred to the notice as `...well
formulated to conform to the definition set by the court as adequate and reasonable
notice.”




     Indeed, I believe the record should also reflect the Court’s appreciation to
Ms. Finegan for all the work she’s done, ensuring that noticing was done



21









 






correctly and professionally, while paying careful attention to overall costs.
“Her understanding of various notice requirements under Fed R. Civ. P. 23, helped to
insure that the notice given in this case was consistent with the highest standards
of compliance with Rule 23(d)(2).




     In re; Thomas A. Foster and Linda E. Foster v. ABTco Sidin ‘ Litigation, Case
No. 95-151-M, (Circuit Court of Choctaw County, Alabama 2000). This litigation focused on
past and present owners of structures sided with Abitibi-Price siding. The notice program
that Finegan designed and implemented was national in scope.




     In the Order and Judgment Finally approving settlement, Judge J. Lee McPhearson said:




     “The Court finds that the Notice Program conducted by the Parties provided
individual notice to all known Class Members and all Class Members who could be
identified through reasonable efforts and constitutes the best notice practicable
under the circumstances of this Action. This finding is based on the overwhelming
evidence of the adequacy of the notice program ...The media campaign involved broad
national notice through television and print media, regional and local newspapers,
and the Internet (see id ¶59-11) The result: over 90 percent of Abitibi and ABTco
owners are estimated to have been reached by the direct media and direct mail
campaign.”




     In re: Exxon Valdez Oil Spill Litigation, Case No. A89-095-CV (HRH)
(Consolidated) U.S. District Court for the District of Alaska (1997, 2002). Finegan
designed and implemented two media campaigns to notify native Alaskan residents, trade
workers, fisherman, and others impacted by the oil spill of the litigation and their rights
under the settlement terms.




     In re: Georgia-Pacific Toxic Explosion Litigation Case No. 98 CVCO5-3535,
(Court of Common Pleas Franklin County, Ohio 2001). Finegan designed and implemented a
regional notice program that included network affiliate television, radio and newspaper.
The notice was designed to alert adults living near a Georgia-Pacific plant that they had
been exposed to an air born toxic plume and their rights under the terms of the class action
settlement.




     In the Order and Judgement finally approving the settlement the Honorable Jennifer L.
Bunner said:




     “...Notice of the settlement to the Class was the best notice practicable under
the circumstances, including individual notice to all members who can be identified
through reasonable effort. The Court finds that such effort exceeded even
reasonable effort fort and that the Notice complies wills the requirements of Civ.
R. 23(C).




     In re: Johns Manville Phenolic Foam Litigation Case No. CV 96-10069, (District
Court for the District of Massachusetts 1999). The nationwide multi-media legal notice
program was designed to reach all Persons who own any structure, including an industrial
building, commercial building, school, condominium, apartment house,



22









 






home, garage or other type of structure located in the United States or its
territories, in which Johns Manville PFRI was installed, in whole or in part, on top of a
metal roof deck.




     In re: James Hardie Roofing Litigation Case No. CV. No. 00-2-17945-65SEA
(Superior Court of Washington in and for King County 2002). The nationwide legal notice
program included advertising on television, in print and on the Internet. It was national
in scope and designed to reach all persons who own any structure with JHBP roofing products.




     In the Final Order and Judgement the Honorable Steven Scott stated:




     “The notice program required by the Preliminary Order has been fully carried
out.... land was’ extensive. The notice provided fully and accurately informed the
Class Members of all material elements of the proposed Settlement and their
opportunity to participate in or be excluded from it; was the best notice
practicable under the circumstances; was valid, due and sufficient notice to all
Class Members; and complied fully with Civ. R. 23, the United States Constitution,
due process, and other applicable law.”




     In re: First Alert Smoke Alarm Litigation, Case No. CV-98-C-1546-W (UWC),
(District Court for the Northern District of Alabama Western Division 2000). Finegan
designed and implemented a nationwide legal notice and public information program. The
public information program is scheduled to run over a two-year period to inform those with
smoke alarms of the performance characteristics between photoelectric and ionization
detection. The media program includes network and cable television, magazine and specialty
trade publications.




     In the Findings and Order Preliminarily Certifying the Class, The Honorable C.W. Clemon
wrote that the notice plan:




     “...Constitutes due, adequate and sufficient notice to all Class Members; and
meets or exceeds all applicable requirements of the Federal Rules of Civil
Procedure, the United States Constitution (including the Due Process Clause), the
Alabama State Constitution, the Rules of the Court, and any other applicable law.”




     In re: American Cvanamid, Civil Action CV-97-0581-BH-M United States District
court for the Southern District of Alabama 2001. The media program targeted those Farmers
who had purchased crop protection chemicals manufactured by American Cyanamid.




     In the Final Order and Judgment, the Honorable Charles R. Butler Jr. wrote:




     “The Court finds that the form and method of notice used to notify the
Temporary Settlement Class of the Settlement satisfied the requirements of Fed R.
Civ. P. 23 and due process, constituted the best notice practicable under the
circumstances, and constituted due and sufficient notice to all potential members of
the Temporary Class Settlement.”



23









 






     In re: Bristow v Fleetwood Enterprises Litigation Case No Civ 00-0082-S-EJL
(District Court for the District of Idaho 2001). Finegan designed and implemented a legal
notice campaign targeting present and former employees of Fleetwood Enterprises, Inc., or
its subsidiaries who worked as hourly production workers at Fleetwood’s. housing, travel
trailer, or motor home manufacturing plants. The comprehensive notice campaign included
print, radio and television advertising.




     In re: New Orleans Tank Car Leakage Fire Litigation, Case No 87-16374. (Civil
District Court for the Parish of Orleans, State of Louisiana 2000) T his case resulted in
one of the largest settlements in US History. This campaign consisted of a media relations
and paid advertising program to notify individuals of their rights under the terms of the
settlement.




     In re: Garria Spencer v. Shell Oil Company, Case No. CV 94-074, District Court,
Harris County Texas (1995). The nation wide notification program was designed to reach
individuals who owned real property or structures in the United States which contained
polybutylene plumbing with acetyl insert or metal insert fittings.




     In re: Rene Rosales v. Fortune Insurance Company, Case No 99-04588 CA (41)
Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida (2000).
Finegan provided expert testimony in this matter. She conducted an audit on behalf of
intervening attorneys for the proposed notification to individuals insured with personal
injury insurance. Based upon the audit; Ms. Finegan testified that the proposed notice
program was inadequate. The Court agreed and signed an Order Granting Intervenors’
Objections to Class Action settlement...The Honorable Jose M. Rodriques said:




     “The Court finds that Ms. Finegan is qualified as an expert on class notice and
effective media campaigns. The Court finds that her testimony is credible and
reliable.”




     Based in part on Finegan’s testimony, the Court ruled in favor of the intervening
parties and disapproved the parties’ original settlement agreement, vacating the order of
preliminary approval.




     In re: Hurd Millwork Heat MirrorTm Litigation Case No. CV-772488, (Superior
Court of the State of California for the County of Santa Clara 2000). This nationwide
multi-media notice program was designed to reach class members with failed heat mirror seals
on windows and doors, and alert them as to the actions that they needed to take to receive
enhanced warranties or window and door replacement.




     In re: Laborers District Counsel of Alabama Health and Welfare Fund v Clinical
Laboratory Services. Inc, Case No. CV-97-C-629-W (Northern District of Alabama 2000.)
Finegan designed and developed a national media and Internet site notification program in
connection with the settlement of a nationwide class action concerning alleged billing
discrepancies for clinical laboratory testing services.




     In re: StarLink Corn Products Liability Ligations Case No. 01 C 1181, (Northern
District of Illinois, Eastern Division 2002). Finegan designed and



24









 






implemented a nationwide notification program designed to alert potential class members
of the terms of the settlement.




     In re: Albertson’s Back Pay Litigation, Case No. 97-0159-S-BLW, U.S. District
Court of Idaho (1997). Finegan designed and developed a secure Internet site, where
claimants could seek case information confidentially.




     In re: Georgia Pacific Hardboard Siding Recovering Program, Case No.
CV-95-3330-RG, Circuit Court for the County of Mobile, State of Alabama (1997). Finegan
designed and implemented a multi-media legal notice program, which was designed to reach
class members with failed G-P siding and alert them of the pending matter. Notice was
provided through advertisements which aired on national cable networks, magazines of
nationwide distribution, local newspaper, press releases and trade magazines.




     In re: Diet Drum Litigation, Finegan has worked on many state notification
programs and worked as a consultant to the National Diet Drug Settlement Committee on
notification issues.




     In re: ABS II Pipes Litigation, Case No. 3126, Contra Costa Superior Court,
State of California (1998 and 2001). The Court approved regional notification program
designed to alert those individuals who owned structures with the pipe, that they were
eligible to recover the cost of replacing the pipe. (www.abspipes.com/).




     In re: Avenue A Inc. Internet Privacy Litigation District Court for the Western
District of Washington Case No: COO-1964C.




     In re: Lorazepam and Clorazepate Antitrust Litigation, MDL No. 1290 (TFH)
United States District Court for the District of Columbia.




     In re: Providian Financial Corporation ERISA Litigation Case No C-01-5027
United States District Court for the Northern District of California.




     In re: H & R Block., et al Tax Refund Litigation State of Maryland Circuit
Court for Baltimore City Case No. 97195023/CC4111




     In re: American Premier Underwriters, Inc. U.S. Railroad Vest Corp. Boone
Circuit Court – Boone County, Indiana. Cause No: 06C01-9912




     In re: Sprint Corporation Optical Fiber Litigation District Court of
Leavenworth Co, Kansas Case No: 9907 CV 284




     In re: Shelter Mutual Insurance Company Litigation District Court in and for
Canadian Co. State of Oklahoma Case No. CJ-2002-263




     In re: Conseco, Inc. Securities Litigation Southern District of Indiana
Indianapolis Division Case No: IP-00-0585-C Y/S CA



25









 






     In re: National Treasury Employees Union, et al United States Court of Federal
Claims Case No: 02-128C




     In re: City of Miami Parking Litigation Circuit Court of the 11 m Judicial
Circuit in and for Miami Dade County, Florida Case Nos: 99-21456 CA-10, 99-23765 — CA-10.




     In re: Prime Co. Incorporated DB/A/Prime Co. Personal Communications, United
States Court Eastern District of Texas Beaumont Division — Civil Action No. L I :01 CV65 8.




     In re: Alsea Veneer v. State of OreRon A.A., Case No. 88C-11289-88C-11300.



A Sample of Finegan’s Bankruptcy Experience —




     Finegan has designed and implemented literally hundreds of domestic and international
bankruptcy notice programs. A sample case list includes the following:




     In re: United Airlines, Case No. 02-B-48191 (Bnkr. N.D Illinois Eastern
Division) Finegan worked with United and its restructuring attorneys to design and implement
global legal notice programs. The notice was published in 11 countries and translated into
6 languages. Finegan worked closely with legal counsel and UAL’s advertising team to select
the appropriate media and to negotiate the most favorable advertising rates.
(www.pd-ual.com/).




     In re: Enron, Case No. 01-16034 (Bankr. S.D.N.Y.) Finegan worked with Enron and
its restructuring attorneys to publish various legal notices.




     In re: Dow Corning, Case No. 95-20512 (Bankr. E.D. Mich.) Finegan originally
designed the information website. This Internet site is a major information hub that has
various forms in 15 languages.




     In re: Harnischfeger Industries, Case No. 99-2171 (RJW) Jointly Administered
U.S. Bankr., District of Delaware. Finegan designed and implemented 6 domestic and
international notice programs for this case. The notice was translated into 14 different
languages and published in 16 countries.




     In re: Keene Corporation, Case No. 93B 46090 (SMB) U.S. Bankr. Eastern District
of Missouri, Eastern Division. Finegan designed and implemented multiple domestic
bankruptcy notice programs including notice on the plan of reorganization directed to all
creditors and all Class 4 asbestos-related claimants and counsel.




     In re: Lamonts, Case No. 00-00045 U.S. Bankr. Western District of Washington.
Finegan designed an implemented multiple bankruptcy notice programs.




     In re: Monet Group Holdings, Case Nos. 00-I936 (MFW) U.S. Bankr. District of
Delaware. Finegan designed and implemented a bar date notice.



26










 






     In re: Laclede Steel Company, Case No 98-53121-399 US Bankr. CT, Eastern
District of MO, Eastern Division. Finegan designed and implemented multiple bankruptcy
notice programs.




     In re: Columbia Gas Transmission Corporation, Case No. 91-804 Bankr., Southern
District of New York; Finegan developed multiple nation-wide legal notice notification
programs for this case.




     In re: U.S.H. Corporation of New York, et al., and (BRL) Bank Southern District
of New York; she designed and implemented a bar date advertising notification campaign.




     In re: Best Products Co., Inc., Bankr. Case No. 96-35267-T, Eastern District of
Virginia; she implemented a national legal notice program that included multiple advertising
campaigns for notice of sale, bar date, disclosure and plan confirmation.




     In re: Lodgian, Inc., et al – Southern District Court of New York Case No.
16345 (BRL) Factory Card Outlet – 99-685 (JCA), 99-686 (JCA)




     In re: International Total Services, Inc., et al. – Eastern District Court of
New York, Case No: 01-21812, 01-21818, 01-21820, 01-21882, 01-21824, 01-21826, 01-21827 (CD)
Under Case No: 01-21812




     In re: Decora Industries, Inc and Decora, Incorporated, District of Delaware
Case No: 00-4459 and 00-4460 (JJF)




     In re: Genesis Health Ventures, Inc., et al — District of Delaware Case No.
002692 (PJW)




     In re: Telephone Warehouse, Inc., et al — District of Delaware Case No. 00-2105
through 00-2110 (MFW)




     In re: United Companies Financial Corporation. et al,., District of Delaware
Case No. 99-450 (MFW) through 99-461 (MFW)




     In re: Caldor. Inc. New York, The Caldor Corporation. Caldor, Inc. CT, et al.
Southern District of New York Case No: 95-B44080 (JLG)




     In re: Physicians Health Corporation, et al. District of Delaware Case No:
00-4482 (MFW)




     In re: GC Companies., et al. District of Delaware Case Nos: 00-3897 through
00-3927 (MFW)




     In re: Heilig-Meyers Company, et al. Eastern District of Virginia (Richmond
Division) Case Nos: 00-34533 through 00-34538.



27










 





Product Recall and Crisis Communication




     Reser’s Fine Foods – Reser’s is a nationally distributed brand and manufacturer of
food products through giants such as Albertsons, Costco, Food Lion, WinnDixie, Ingles, Safeway and
Walmart, Finegan designed an enterprise wide crisis communication plan that included communications
objectives, crisis team roles and responsibilities, crisis response procedures, regulatory
protocols, definitions of incidents that require various levels of notice, target audiences, and
threat assessment protocols. Finegan worked with the company through two nationwide, high profile
recalls, conducting extensive media relations efforts.



Background




     Prior to joining The Garden City Group, Inc., Finegan co-founded Huntington Advertising, a
nationally recognized leader in legal notice communications. After Fleet Bank purchased her firm
in 1997; she grew the company into one of the nation’s leading legal notice communication agencies.



     Prior to that, Finegan spearheaded Huntington Communications, (an Internet development
company) and The Huntington Group, Inc., (a public relations firm). As a partner and consultant,
she has worked on a wide variety of client marketing, research, advertising, public relations and
Internet programs. During her tenure at the Huntington Group, client projects included advertising
(media planning and buying), shareholder meetings, direct mail, public relations (planning,
financial communications) and community outreach programs. Her past client list includes large
public and privately held companies: Code-A-Phone Corp., Thrifty-Payless Drug Stores, Hyster-Yale,
The Portland Winter Hawks Hockey Team, U.S. National Bank, U.S. Trust Company, Morley Capital
Management, and Durametal Corporation.



     Prior to Huntington Advertising, Finegan worked as a consultant and public relations
specialist for a West Coast-based Management and Public Relations Consulting firm.



     Additionally, Finegan has experience in news and public affairs. Her professional background
includes being a reporter, anchor and public affairs director for KWJJ/KJIB radio in Portland,
Oregon, as well as reporter covering state government for KBZY radio in Salem, Oregon. Finegan
worked as an assistant television program/promotion manager for KPDX directing $50 million in
programming. Additionally she was the program/promotion manager at and KECH-22 television.



     Finegan’s multi-level communication background gives her a thorough, hands-on understanding of
media, the communication process, and how it relates to creating effective and efficient legal
notice campaigns.



Articles



Co-Author, “Approaches to Notice in State Court Class Actions,” – For The Defense, Vol. 45,
No. 11 — November, 2003.




28









 








Citation – “Recall Effectiveness Research: A Review and Summary of the Literature on
Consumer Motivation and Behavior” U.S. Consumer Product Safety Commission, CPSC-F-02-1391, p.10,
Heiden Associates – July 2003.



Author, “The Web Offers Near, Real-Time Cost Efficient Notice,” – American Bankruptcy
Institute — ABI Journal, Vol. XXII, No. 5. — 2003.



Author, “Determining Adequate Notice in Rule 23 Actions,” – For The Defense, Vol. 44, No. 9
— September, 2002,



Author, Legal Notice, What You Need To Know and Why, — Monograph, July 2002.



Co-Author, “The Electronic Nature of Legal Noticing,” — The American Bankruptcy Institute
Journal -Vol. XXI, No. 3, April 2002.



Author, “Three Important Mantras for CEO’s and Risk Managers in 2002” — International Risk
Management Institute — irmi.com/ January 2002.



Co-Author, “Used the Bat Signal Lately” — The National Law Journal, Special Litigation
Section — February 19, 2001.



Author, “How Much is Enough Notice” — Dispute Resolution Alert, Vol. 1, No. 6. March 2001.



Author, “Monitoring the Internet Buzz” – The Risk Report, Vol. XXIII, No. 5, fan. 200I.



Author, “High-Profile Product Recalls Need More Than the Bat Signal” — International Risk
Management Institute – irmi.com/July 2001.



7:o-Author, “Do you know what 100 million people are buzzing about today? Risk and
Insurance Management – March 2001.



Quoted Article: “Keep Up with Class Action” Kentucky Courier Journal – March 3, 2000.



Author, “The Great Debate — How Much is Enough Legal Notice?” American Bar Association —
Class Actions and Derivatives Suits Newsletter, Winter edition 999.



29









 





Speaker/Expert Panelist/Presenter




	 	 	 
	Practicing Law Institute

	 	Faculty Panelist – CLE
Presentation -11`h Annual Consumer
Financial Services Litigation.
Presentation: Class Action
Settlement Structures – Evolving
Notice Standards in the Internet
Age. New York/Boston (simulcast),
NY March 2006; Chicago, IL April
2006 and San Francisco, CA May
2006.
	 
	 	 
	U.S. Consumer Product
Safety Commission

	 	Ms. Finegan participated as an
Expert to the Consumer Product
Safety Commission to discuss ways
in which the CPSC could enhance
and measure the recall process.
As an expert panelist, Ms Finegan
discussed how the CPSC could
better motivate consumers to take
action on recalls and how
companies could scientifically
measure and defend their outreach
efforts. Bethesda MD, September
2003.
	 
	 	 
	Weil, Gotshal & Manges

	 	CLE presentation “A Scientific
Approach to Legal Notice
Communication” New York, June
2003.
	 
	 	 
	Sidley & Austin

	 	CLE presentation “A Scientific
Approach to Legal Notice
Communication” Los Angeles, May
2003.
	 
	 	 
	Kirkland & Ellis

	 	Speaker to restructuring group
addressing “The Best Practicable
Methods to Give Notice in a Tort
Bankruptcy.” Chicago, April 2002.
	 
	 	 
	Georgetown University Law Center Mass

Tort Litigation Institute

	 	CLE White Paper: What are the best
practicable methods to give
notice?

Dispelling the communications myth
— A notice disseminated is a
notice communicated. Faculty –
Mass Tort Litigation Institute -
Washington D.C., November 1, 2001.
	 
	 	 
	American Bar Association

	 	How to Bullet-Proof Notice
Programs and what communication
barriers present due process
concerns in legal notice.
Presentation to the ABA Litigation
Section Committee on Class Actions
& Derivative Suits — Chicago, IL,
August 6, 2001.
	 
	 	 
	McCutchin, Doyle, Brown & Enerson

	 	Speaker to litigation group in San
Francisco and simulcast to four
other McCutchin locations,
addressing the definition of
effective notice and barriers to
communication that affect due
process in legal notice. San
Francisco, CA — June 2001.






30










 






	 	 	 
	Marylhurst University

	 	Guest lecturer on public relations
research methods. Portland, OR -
February 2001.
	 
	 	 
	University of Oregon

	 	Guest speaker to MBA candidates on
quantitative and qualitative
research for marketing and
communications programs.
Portland, OR — May 2001.
	 
	 	 
	Judicial Arbitration & Mediation

Services (JAMS)

	 	Speaker on the definition of
effective notice. San Francisco
and Los Angeles, CA — June 2000.
	 
	 	 
	International Risk Management Institute

	 	Expert Commentator on Crisis and
Litigation Communications.
www.irmi.com/
	 
	 	 
	The American Bankruptcy Institute

Journal (ABI)

	 	Past Contributing Editor – Beyond
the Quill. www.abi.org/.






Memberships and Professional Credentials




APR — Accredited Public Relations — The Universal Board of Accreditation Public Relations Society
of America.


Member Portland Advertising Federation



Member of the Public Relations Society





31









 







Exhibit 2





 









 







GCG’s Sample Multi-National experience



In re Federal-Mogul Global Inc., No. 01-10578 (AMW) (Bankr. D. Del. 2003). The worldwide
notice program for the Federal-Mogul Bankruptcy case was published in 127 countries, 307
publications, and 69 languages. In addition, the notice was published in 28 major publications in
United Kingdom and in 14 major publications in the United States.
(http://www.fmoplan.com/).



Complexities: The Class consisted of multiple sets of demographics; both white collar and blue
collar workers. We analyzed the media and media habits of these populations in the involved
countries and published the notice as was necessary to reach both groups effectively. A
four-tiered rationale was tailored, so that notice was distributed in an effective manor.
Countries were assigned to a tier according to their level of business with Federal Mogul.



In Re Western Union Money Transfer Litig., Master File No. CV 01 0335 (CPS) (E.D.N.Y 2002).
The court approved a worldwide settlement and notice program. The Legal Notice was published in
more than 160 publications, in more than 80 countries and in more than 20 languages, it is one of
the largest international notice programs ever. (http://www.cruzlitigation.com/).



Complexities: The web site was developed in 20 native languages.



This notice program was developed after thorough analysis of the data relating to the amount of and
number of transactions conducted around the world. Publications in countries were determined by
the volume of money and transactions both inbound from and outbound to the United States. For
example, when it was shown that a large amount of money was transferred from the United States to
Guatemala, ethnic publications catering specifically to the Guatemalan populations in the United
States were used. Also the reverse was true, when large amounts of money were transferred to the
United States from other countries, we analyzed the widely circulated, well read publications in
those countries. This complex analysis and implementation effectively reached all the targeted
populations.



In re: Swiss Banks Holocaust Victim Asset Litigation Case No. CV-96-4849, (E.D.N.Y. 1999).
Finegan managed the design and implementation of the Internet site. The site was developed in 21
native languages. It is a highly secure data gathering tool and information hub, central to the
global outreach program of Holocaust survivors. The website can be viewed at
www.swissbankclaims.com/.



Complexities: The web site had to be developed in 21 native languages. The site also had to be
designed to work under the lowest common browser. The site was tested across more than 100
different platforms so that a wide range of visitors could easily access this site. Because of the
sensitive nature of the information collected on this site, extraordinary security measures had to
be established and actively managed to protect it from intrusion and to this day cannot be fully
disclosed.



At several points during the notice campaign the site was used as a platform for real-time press
conference coverage at four sites simultaneously. Press conferences were held in New York, Tel
Aviv, Paris and Budapest.





33









 







In re: Mexico Money Transfer Litigation Settlement, 164 F. Supp. 2d 1002 (N.D. Ill. 2000).
(need to bring up the text) This case involved the alleged failure of Western Union and Money Gram
to pass along currency conversion discounts to their customers and to post the currency conversion
rates in stores. GCG was extensively involved in helping the corporate defendants identify
settlement options and related costs.



(http://www.gardencitygroup.com/cases/pdf/WES/WESNotice,pdf)



Complexities; The challenges in this case were numerous in light of the sheer volume of data from
the money transfer companies (approximately 47 million records). GCG designed and formatted
bilingual notices and claim forms and implemented an extremely complex notice program that included
United States and Mexico radio, TV, and newspapers, as well as an 800-number telephone support
system in Mexico and the United States. Extensive tracking and reporting of all activities was
required for each of three defendants. We recently implemented the claims phase of this settlement
with the completed mailing of over 5,000,000 claim forms. Once the processing of claims is
complete later this spring, we will begin mailing thousands of coupons to approved claimants. As a
follow-up to this settlement, we have just recently initiated the notice phase of a settlement
entitled Amorsolo v. Western Union Financial Services, Ina This case of over 3.2 million
California-only class members mimics the process described above. GCG is responsible for
implementing all phases of the settlement.




34









 







EXHIBIT B




UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK




	 	 	 	 	 
	
 


	 	x	 	 
	In re NORTEL NETWORKS CORP.

	 	:
	 	Civil Action No. 01-CV-1855 (RMB)
	SECURITIES LITIGATION

	 	:	 	 
	 

	 	:	 	CLASS ACTION
	
 


	 	:
	 	 
	This Document Relates To:

	 	:	 	 
	 

	 	:	 	 
	ALL ACTIONS

	 	:	 	 
	 

	 	:	 	 
	
 


	 	x	 	 
	
 


	 	 	 	 






ORDER AND FINAL JUDGMENT




     On the                      day of                     , 2006, a hearing
having been held before this Court to determine: (1) whether the terms and conditions of the
Stipulation and Agreement of Settlement dated                     , 2006 (the
“Stipulation”) are fair, reasonable and adequate for the settlement of all claims asserted by the
U.S. Global Class against the Defendants in the Complaint now pending in this Court under the above
caption, including the release of the Defendants and the Released Parties, and should be approved;
(2) whether judgment should be entered dismissing the Complaint on the merits and with prejudice in
favor of the Defendants and as against all persons or entities who are members of the U.S. Global
Class herein who have not requested exclusion therefrom; (3) whether to approve the Plan of
Allocation as a fair and reasonable method to allocate the settlement proceeds among the members of
the U.S. Global Class; and (4) whether and in what amount to award Lead Plaintiffs Counsel fees and
reimbursement of expenses. The Court having considered all matters submitted to it at the hearing
and otherwise; and it appearing that a notice of the hearing substantially in the form approved by
the Court (including French language versions sent to addresses in Quebec, Canada)



 









 




was mailed to all persons or entities reasonably identifiable, who purchased common stock of
Nortel Networks Corporation (“Nortel”), or call options on Nortel common stock, or wrote (sold) put
options on Nortel common stock during the period between October 24, 2000 through February 15,
2001, inclusive (the “Class Period”), except those persons or entities excluded from the definition
of the U.S. Global Class or who previously excluded themselves from the U.S. Global Class, as shown
by the records of Nortel’s transfer agent, and the records compiled by the Claims Administrator in
connection with its previous mailing of the Notice of Pendency, at the respective addresses set
forth in such records, and that a summary notice of the hearing substantially in the form approved
by the Court was published pursuant to the Notice Plan as set forth in the Affidavit of                     ,
and the Court having considered and determined the fairness and reasonableness
of the award of attorneys’ fees and expenses requested by Lead Plaintiff’s Counsel; and all
capitalized terms used herein having the meanings as set forth and defined in the Stipulation.




     NOW, THEREFORE, IT IS HEREBY ORDERED THAT:



     1. The Court has jurisdiction over the subject matter of the Action, the Lead Plaintiff, all
U.S. Global Class Members, and the Defendants.



     2. The Court finds that the prerequisites for a class action under (United States) Federal
Rules of Civil Procedure 23(a) and (b)(3) have been satisfied in that: (a) the number of U.S.
Global Class Members is so numerous that joinder of all members thereof is impracticable; (b) there
are questions of law and fact common to the U.S. Global Class; (c) the claims of the U.S. Global
Class Representatives are typical of the claims of the U.S. Global Class they seek to represent;
(d) the Class Representatives have and will fairly and adequately represent the interests of the
U.S. Global Class; (e) the questions of law and fact common to the members of



2









 







the U.S. Global Class predominate over any questions affecting only individual members of the
U.S. Global Class; and (f) a class action is superior to other available methods for the fair and
efficient adjudication of the controversy.



     3. Pursuant to Rule 23 of the (United States) Federal Rules of Civil Procedure this Court
hereby finally certifies this action as a class action on behalf of all persons and entities who
purchased Nortel common stock, or purchased call options on Nortel common stock, or wrote (sold)
put options on Nortel common stock (collectively, “Nortel Securities”) during the period between
October 24, 2000 through February 15, 2001, inclusive, and who suffered damages thereby, including,
but not limited to, those persons or entities who traded in Nortel Securities on the New York Stock
Exchange and/or the Toronto Stock Exchange. Excluded from the U.S. Global Class are Defendants,
members of any of the Individual Defendants’ immediate families, any entity in which any Defendant
has a controlling interest or is a parent or subsidiary of or is controlled by the Company, and the
officers, directors, affiliates, legal representatives, heirs, predecessors, successors or assigns
of any of the Defendants. Also excluded from the U.S. Global Class for this Action are the persons
and/or entities who previously excluded themselves as listed on Exhibit 1 annexed hereto, and those
who have now requested exclusion from the U.S. Global Class by filing a request for exclusion as
listed on Exhibit 2 annexed hereto.



     4. Notice of the pendency of this Action as a class action and of the proposed Settlement was
given to all U.S. Global Class Members who could be identified with reasonable effort. The form
and method of notifying the U.S. Global Class of the pendency of the action as a class action and
of the terms and conditions of the proposed Settlement met the requirements of Rule 23 of the
(United States) Federal Rules of Civil Procedure, Section 21D(a)(7) of the (United



3









 







States) Securities Exchange Act of 1934, 15 U.S.C. 78u-4(a)(7), as amended, including by the
(United States) Private Securities Litigation Reform Act of 1995 (the “PSLRA”), Rule 23.1 of the
Local Rules of the Southern and Eastern Districts of New York, due process, and any other
applicable law, constituted the best notice practicable under the circumstances, and constituted
due and sufficient notice to all persons and entities entitled thereto.



     5. The Settlement is approved as fair, reasonable and adequate. Subject to the terms and
provisions of the Stipulation and the conditions therein being satisfied, the parties are directed
to consummate the Settlement.



     6. The Gross Settlement Shares are to be issued solely in exchange for bona fide outstanding
claims. All parties to whom it is proposed to issue such securities have had the right to appear
at the hearing on the fairness of the Settlement and adequate notice has been given to all such
parties. The Court recognizes and acknowledges that one consequence of its approval of the
Settlement at the Settlement Fairness Hearing is that, pursuant to Section 3(a)(10) of the (United
States) Securities Act of 1933, as amended, 15 U.S.C. § 77c(a)(1), the Gross Settlement Shares may
be distributed to Class Members (and to Plaintiffs’ Counsel as may be awarded by the respective
Courts for attorneys’ fees) without registration and compliance with the prospectus delivery
requirements of the U.S. securities laws as the Gross Settlement Shares will be exempt from
registration under the (United States) Securities Act of 1933, 15 U.S.C. § 77c(a)(1), as amended,
pursuant to Section 3(a)(10) thereunder. The Court also acknowledges that Nortel will rely on such
3(a)(10) exemption (and Nortel will not register the Gross Settlement Shares under the (United
States) Securities Act of 1933) based on this Court’s approval of the fairness of the Settlement.



4









 





     7. The Complaint, which the Court finds was filed on a good faith basis in accordance with the
Private Securities Litigation Reform Act and Rule 11 of the (United States) Federal Rules of Civil
Procedure based upon all publicly available information, is hereby dismissed in its entirety with
prejudice and without costs, except as provided in the Stipulation, as against the Defendants.



     8. Lead Plaintiff and each U.S. Global Class Member who has not validly opted out, whether or
not such U.S. Global Class Member executes and delivers a Proof of Claim, on behalf of themselves,
their heirs, executors, administrators, successors and assigns, are hereby permanently barred and
enjoined from instituting, commencing or prosecuting any and all claims, debts, demands, rights or
causes of action or liabilities whatsoever (including, but not limited to, any claims for damages,
interest, attorneys’ fees, expert or consulting fees, and any other costs, expenses or liability
whatsoever), whether based on federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or
un-liquidated, at law or in equity, matured or un-matured, whether class or individual in nature,
including both known claims and Unknown Claims, (i) that have been asserted in this Action by the
U.S. Global Class Members or any of them against any of the Released Parties, or (ii) that could
have been asserted in any forum by the U.S. Global Class Members or any of them against any of the
Released Parties which arise out of or are based upon the allegations, transactions, facts, matters
or occurrences, representations or omissions involved, set forth, or referred to in the Complaint
and which relate to the purchase of Nortel common stock or call options on Nortel common stock or
the sale of put options on Nortel common stock during the Class Period, or (iii) any oppression or
other claims under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended, that
arise out of or are based upon



5










 







the allegations, transactions, facts, matters or occurrences, representations or omissions
during the Class Period, set forth or referred to in the Nortel I Actions, (the “Settled Claims”),
against any and all of the Defendants, their past or present subsidiaries, parents, principals,
affiliates, general or limited partners or partnerships, successors and predecessors, heirs,
assigns, officers, directors, agents, employees, attorneys, advisors, investment advisors,
investment bankers, underwriters, insurers, co-insurers, re-insurers, attorneys, accountants,
auditors, consultants, administrators, executors, trustees, personal representatives, immediate
family members and any person, firm, trust, partnership, corporation, officer, director or other
individual or entity in which any Defendant has a controlling interest or which is related to or
affiliated with any of the Defendants, and the legal representatives, heirs, executors,
administrators, trustees, successors in interest or assigns of the Defendants (the “Released
Parties”); provided, however, that “Settled Claims” does not mean or include (a) claims, if any,
against the Released Parties arising under the (United States) Employee Retirement Income Security
Act of 1974, as amended, 29 U.S.C. § 1001, et seq. (“ ERISA”) which are not common to all U.S.
Global Class Members and which are the subject of an action pending before the Judicial Panel on
Multidistrict Litigation, denominated In re Nortel Networks Securities and “ERISA” Litigation, MDL
Docket No, 1537; (b) the action in Rohac, et al. v. Nortel Networks Corporation, et al., Court File
No. 04-CV-3268 (Ont. Sup. Ct. J.); and (c) the application brought in Indiana Electrical Workers
Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v. Nortel Networks Corporation,
Ontario Superior Court of Justice, Court File No. 49059, for leave pursuant to the Canada Business
Corporations Act to commence a representative action in the name of and on behalf of Nortel against
certain of the Released Parties (the “Derivative Application”). Each U.S. Global Class Member who
has not validly opted out has fully, finally, and forever released,



6









 





-12-


relinquished, and discharged all Settled Claims against the Released Parties and each such
U.S. Global Class Member is bound by this judgment, including without limitations, the release of
claims as set forth in the Stipulation. The Settled Claims are hereby compromised, settled,
released, discharged and dismissed as against the Released Parties on the merits and with prejudice
by virtue of the proceedings herein and this Order and Final Judgment.



     9. Defendants Nortel, Clarence Chandran and John Roth, and the successors and assigns of any
of them, are hereby permanently barred and enjoined from instituting, commencing or prosecuting any
and all claims, rights or causes of action or liabilities whatsoever, whether based on federal,
state, provincial, local, statutory or common law or any other law, rule or regulation, including
both known claims and unknown claims, that have been or could have been asserted in the Action or
any forum by the Defendants or any of them or the successors and assigns of any of them against any
of the Lead Plaintiff, U.S. Global Class Members or their attorneys, which arise out of or relate
in any way to the institution, prosecution, or settlement of the Action (except for claims to
enforce the Settlement, confidentiality obligations or in respect of the Derivative Application)
(the “Settled Defendants’ Claims”). The Settled Defendants’ Claims of all the Released Parties are
hereby compromised, settled, released, discharged and dismissed on the merits and with prejudice by
virtue of the proceedings herein and this Order and Final Judgment. In the event that any of the
Released Parties asserts against the Lead Plaintiff, any U.S. Global Class Member or their
respective counsel, any claim that is a Settled Defendants’ Claim, then Lead Plaintiff, such U.S.
Global Class Member or counsel shall be entitled to use and assert such factual matters included
within the Settled Claims only against such Released Party in defense of such claim but not for the
purposes of asserting any claim against any Released Party.



7









 





     10. Pursuant to the PSLRA, the Released Parties are hereby discharged from all claims for
contribution by any person or entity other than by Released Parties, whether arising under state,
provincial, federal or common law, based upon, arising out of, relating to, or in connection with
the Settled Claims of the U.S. Global Class or any U.S. Global Class Member. Accordingly, to the
full extent provided by the PSLRA, the Court hereby bars all claims for contribution: (a) against
the Released Parties by any person or entity other than the Released Parties; and (b) by the
Released Parties against any person or entity other than the Released Parties.



     11. Neither this Order and Final Judgment, the Stipulation, nor any of its terms and
provisions, nor any of the negotiations or proceedings connected with it, nor any of the documents
or statements referred to therein shall be:



          (a) offered or received against the Defendants as evidence of or construed as or deemed to be
evidence of any presumption, concession, or admission by any of the Defendants with respect to the
truth of any fact alleged by any of the plaintiffs or the validity of any claim that has been or
could have been asserted in the Action or in any litigation, or the deficiency of any defense that
has been or could have been asserted in the Action or in any litigation, or of any liability,
negligence, fault, or wrongdoing of the Defendants;




          (b) offered or received against the Defendants as evidence of a presumption, concession or
admission of any fault, misrepresentation or omission with respect to any statement or written
document approved or made by any Defendant;




          (c) offered or received against the Defendants as evidence of a presumption, concession or
admission with respect to any liability, negligence, fault or wrongdoing, or in any way referred to
for any other reason as against any of the Defendants, in any other civil, criminal




8









 







or administrative action or proceeding, other than such proceedings as may be necessary to
effectuate the provisions of the Stipulation; provided, however, that Defendants may refer to it to
effectuate the liability protection granted them hereunder;




          (d) construed against the Defendants as an admission or concession that the consideration to
be given hereunder represents the amount which could be or would have been recovered after trial;
or




          (e) construed as or received in evidence as an admission, concession or presumption against
Lead Plaintiff or any of the U.S. Global Class Members that any of their claims are without merit,
or that any defenses asserted by the Defendants have any merit, or that damages recoverable under
the Complaint would not have exceeded the Gross Settlement Fund.




     12. The Plan of Allocation is approved as fair and reasonable, and Plaintiff s Counsel and the
Claims Administrator are directed to administer the Stipulation in accordance with its terms and
provisions.



     13. The Court finds that all parties and their counsel have complied with each requirement of
Rule 11 of the (United States) Federal Rules of Civil Procedure as to all proceedings herein.



     14. Lead Plaintiffs Counsel in this Action are hereby awarded attorneys’ fees in the amount of
                    % of the Gross Cash Settlement Fund (net of litigation expenses awarded in the next
sentence), and                     % of the Gross Settlement Shares, which amounts the Court finds to be fair and
reasonable. Lead Plaintiffs Counsel are hereby awarded $                     in reimbursement of
expenses, which expenses shall be paid to Plaintiffs Lead Counsel from the Gross Cash Settlement
Fund with interest from the date such Gross Cash Settlement Fund was funded to the date of payment
at the same net rate that the Gross Cash Settlement Fund earns. The award of



9









 







attorneys’ fees shall be allocated among plaintiffs’ counsel in a fashion which, in the
opinion of Plaintiffs Lead Counsel, fairly compensates such counsel for their respective
contributions in the prosecution and settlement of the Action.



     15. The fees and expenses of plaintiffs’ counsel in the Canadian Actions, as determined by the
Canadian Courts shall be paid from the Gross Settlement Fund.



     16. Lead Plaintiff Ontario Public Service Employees’ Union Pension Plan Trust Fund (“OPTrust”)
is hereby awarded $                    . Such award is for reimbursement of the Lead
Plaintiffs reasonable costs and expenses (including lost wages) directly related to its
representation of the U.S. Global Class.



     17. In making this award of attorneys’ fees and reimbursement of expenses to be paid from the
Gross Settlement Fund, the Court has considered and found that:



          (a) the Settlement has created a cash fund of $438,667,428 that is already on deposit earning
interest, and will also provide for the benefit of the Class 314,333,875 shares of Nortel common
stock;




          (b) The Settlement will entitle the Class to receive one-quarter of any actual gross recovery
by Nortel in the existing litigation by Nortel against Frank Dunn, Douglas Beatty and Michael
Gollogly (including the value of any monetary benefit that Nortel might receive from the defendants
by way of forgiveness or cancellation of any monetary debt owed by Nortel to such defendants),
excluding attorneys’ fees and expenses awarded by the court, if any;




          (c) Nortel has agreed to adopt the corporate governance enhancements described in Appendix A
to Tab 1 to Exhibit A of the Stipulation;




          (d) Over                      copies of the Notice were disseminated to putative Class
Members indicating that Lead Plaintiffs Counsel were moving for attorneys’ fees in the amount




10









 




of up to 10% of the Gross Settlement Fund less litigation expenses awarded by the Court, and
for reimbursement of expenses in an amount of approximately $5 million, and [              
] objections were filed against the terms of the proposed Settlement or the ceiling on the fees
and expenses requested by Lead Plaintiffs Counsel contained in the Notice;




          (e) Lead Plaintiffs Counsel have conducted the litigation and achieved the Settlement with
skill, perseverance and diligent advocacy;




          (f) The action involves complex factual and legal issues and was actively prosecuted over 6
years and, in the absence of a settlement, would involve further lengthy proceedings with uncertain
resolution of the complex factual and legal issues;




          (g) Had Lead Plaintiffs Counsel not achieved the Settlement there would remain a significant
risk that Lead Plaintiff and the Class may have recovered less or nothing from the Defendants;




          (h) Lead Plaintiff’s Counsel have devoted over                      hours, with a lodestar value
of $                    , to achieve the Settlement; and




          (i) The amount of attorneys’ fees awarded and expenses reimbursed from the Settlement Fund are
fair and reasonable and consistent with awards in similar cases.




     18. Any appeal or any challenge affecting the approval of (a) the Plan of Allocation submitted
by Lead Plaintiffs Counsel and/or (b) this Court’s approval regarding any attorneys’ fees and
expense application shall in no way disturb or affect the finality of the other provisions of this
Final Judgment.



     19. Jurisdiction is hereby retained over the parties and the U.S. Global Class Members for all
matters relating to this Action, including the administration, interpretation, effectuation or
enforcement of the Stipulation and this Order and Final Judgment, and including



11









 







any application for fees and expenses incurred in connection with administering and
distributing the settlement proceeds to the members of the U.S. Global Class.



     20. In the event that the Settlement does not become Final in accordance with the terms of the
Stipulation, or is terminated pursuant to ¶ 27 of the Stipulation, this judgment shall be rendered
null and void to the extent provided by and in accordance with the Stipulation and shall be vacated
and in such event all orders entered and released by and in accordance with the Stipulation.



     21. Without further order of the Court, the parties may agree to reasonable extensions of time
to carry out any of the provisions of the Stipulation.



     22. There is no just reason for delay in the entry of this Order and Final Judgment and
immediate entry by the Clerk of the Court is expressly directed pursuant to Rule 54(b) of the
(United States) Federal Rules of Civil Procedure.



Dated: New York, New York

                                   , 2006




	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	[Insert Judge Name: Honorable                     ]	 	 
	 

	 	UNITED STATES DISTRICT JUDGE	 	 







12









 







Confidential Portions omitted and filed separately with the Securities and Exchange Commission. Bullet points denote omissions.




EXHIBIT C




SUPPLEMENTAL AGREEMENT – NORTEL I




     Pursuant to ¶ 23 of the Nortel 1 Stipulation and Agreement of Settlement dated June 20, 2006
(the “Stipulation”) between the Lead Plaintiff and Norte/ in In re Norte/ Networks Corp. Securities
Litigation, Consolidated Civil Action No. 01 Civ 1855 (RMB), as also adopted and ratified by
Canadian Class Counsel in the Nortel I Canadian Actions, the terms under which Nortel may withdraw
from and terminate the Stipulation are as follows:



     1. All capitalized terms used, but not defined herein, shall have the meanings ascribed to
them in the Stipulation.



     2. Norte/ shall have the option, but not the obligation, to terminate the Settlement in the
event that the aggregate number of shares of Norte’ common stock purchased during the Class Period
by Class Members who would otherwise be entitled to participate as members of the Class, but who
timely and validly request exclusion, equals or exceeds [•] (the “Opt-out Threshold”) of the total
number of shares of Norte/ common stock purchased during the Class Period.



     3. It is expressly understood and agreed that, for the purposes of calculating the Opt-out
Threshold in ¶ 2, the only persons and entities who will be included in the calculation are those
persons and entities who are Class Members, excluding those persons or entities who previously
requested exclusion in response to the Notice of Pendency, as listed on Tab 1 to Exhibit J annexed
to the Stipulation, whether or not they are Class Members.



     4. Nortel shall further have the option, but not the obligation, to terminate the Settlement
in the event that the aggregate number of shares of Nortel common stock purchased



-1-









 





Confidential Portions omitted and filed separately with the Securities and Exchange Commission. Bullet points denote omissions.



during the Nortel
II Class Period by members of the Nortel II Class who would otherwise be entitled to participate as
members of the Nortel II Class, but who timely and validly request
exclusion, equals or exceeds [•]
of the total number of shares of Nortel common stock purchased during the Nortel II Class Period




     5. Lead Plaintiff and Nortel, with the cooperation of Canadian Class Counsel, shall make every
effort to ensure that the first settlement fairness hearing in any of the Nortel I Actions shall be
scheduled no earlier than fifteen (15) calendar days after the last date for exclusion in any of
the Nortel I Actions.



     6. Subject to the dates for exclusion and the terms of ¶ 5, the Preliminary Approval Order
shall provide that requests for exclusion shall be received at least fifteen (15) calendar days
prior to the date of the Settlement Fairness Hearing before the United States District Court for
the Southern District of New York (“U.S. Settlement Fairness Hearing”) specified in the Notice.
Upon receiving any request(s) for exclusion pursuant to the Notice, the Claims Administrator shall
promptly (or in no event fewer than ten (10) calendar days prior to the U.S. Settlement Fairness
Hearing date) notify Plaintiffs’ Counsel and Nortel’s Counsel of such request(s) for exclusion.
Upon receiving any request(s) for exclusion pursuant to the Notice, Nortel’s Counsel shall promptly
notify Plaintiffs Counsel and the Claims Administrator of such request(s) for exclusion.



     7. If Nortel elects to exercise either of the options set forth in ¶ 2 or ¶ 4 hereof, written
notice of such election must be provided to Plaintiffs’ Counsel at least five (5) calendar days
prior to the U.S. Settlement Fairness Hearing.



     8. In the event that Nortel files a written notice of its intent to terminate the Settlement
pursuant to ¶ 7 hereof, Nortel may withdraw its election by providing written notice



-2-









 





Confidential Portions omitted and filed separately with the Securities and Exchange Commission. Bullet points denote omissions.



of such
withdrawal to Plaintiffs’ Counsel no later than 5:00 P.M. Eastern Time on the day prior to the U.S.
Settlement Fairness Hearing, or by such later time as shall be agreed upon in writing as between
Lead Plaintiff’s Counsel and Nortel’s Counsel, on notice to Canadian Class Counsel.




     9. If Nortel elects to withdraw from the Stipulation pursuant to ¶ 2 or ¶ 4 hereof,
Plaintiffs’ Counsel may, within five (5) calendar days of receipt of such notice of intention to
withdraw from the Settlement (or such longer period as shall be agreed upon in writing between Lead
Plaintiff’s Counsel and Nortel’s Counsel), review the validity of any request for exclusion and may
attempt to cause retraction or withdrawal of any such request for exclusion. If, within the five
(5) calendar day period (or longer period agreed upon in writing), Plaintiffs’ Counsel succeed in
causing the filing of retractions or withdrawals (which retractions and withdrawals shall be in
form and substance acceptable to Nortel’s Counsel) of a sufficient number of requests for exclusion
such that the number of shares represented by the remaining requests for exclusion does not
constitute grounds for withdrawal as specified in ¶ 2 or ¶ 4 above, then any withdrawal from the
Stipulation by Nortel shall automatically be deemed to be a nullity. To retract or withdraw a
prior request for exclusion, a Class Member or member of the Nortel II class must file a signed
written notice with either the United States District Court for the Southern District of New York
or, in the case of Canadian Class Members, the Canadian Court that certified the Canadian Class to
which the Class Member belongs, stating that the person or entity retracts or withdraws his, her or
its request for exclusion and that the person or entity agrees to be bound by the Settlement and
the Judgments in these Nortel I or Nortel II Actions as the case may be; provided, however, that
the filing of such written notice signed by the Class Member or member of the Nortel II class may
be effected by Plaintiffs’ Counsel on written direction by the Class Member or member of the Nortel
II Class. Upon receipt of such written notice from such a Class



-3-









 





Confidential Portions omitted and filed separately with the Securities and Exchange Commission. Bullet points denote omissions.



Member or member of the Nortel II
class, Plaintiffs’ Counsel shall provide a copy of such written notice to Nortel’s Counsel.




     10. If Nortel elects to withdraw from the Stipulation in accordance with ¶ 2 or ¶ 4 of this
Supplemental Agreement and such withdrawal is not nullified in accordance with ¶ 8
of this Supplemental Agreement, the Stipulation shall be withdrawn and terminated and deemed
null and void, and the provisions of ¶ 28 of the Stipulation shall apply.



     11. The Parties intend that the Opt-out Threshold in this Supplemental Agreement be maintained
as confidential. Subject to orders of the Courts, the Supplemental Agreement shall not be filed
with the Courts in such a manner so as to disclose publicly the Opt-out Threshold itself prior to
the deadline for submitting requests for exclusion unless a dispute arises as to its terms.
Notwithstanding the foregoing, the Opt-out Threshold may be disclosed to the Courts, as may be
required by the Courts, for purposes of approval of the Settlement, but such disclosure shall be
carried out to the fullest extent possible in accordance with the practices of the respective
Courts so as to maintain the confidentiality of the Opt-out Threshold.


DATED: June 20, 2006




	 	 	 	 	 	 	 
	 	 	MILBERG WEISS BERSHAD & SCHULMAN LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ George A. Bauer	 	 
	 

	 	 	 	 

George A. Bauer III (GB-2919)
	 	 
	 	 	One Pennsylvania Plaza	 	 
	 	 	New York, New York 10119-0165	 	 
	 	 	Telephone: (212) 594-5300	 	 
	 	 	Facsimile: (212) 868-1229	 	 
	 
	 	 	 	 	 	 
	 	 	Lead Plaintiff’s Counsel	 	 






-4-









 





Confidential Portions omitted and filed separately with the Securities and Exchange Commission. Bullet points denote omissions.




	 	 	 	 	 	 	 
	 	 	SHEARMAN & STERLING LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/  Stuart J. Baskin	 	 
	 

	 	 	 	 

Stuart J. Baskin (SB-9936)
	 	 
	 

	 	 	 	Tai H. Park (TP-2607)	 	 
	 

	 	 	 	Marc D. Ashley (MA-8896)	 	 
	 	 	599 Lexington Avenue	 	 
	 	 	New York, New York 10022-6069	 	 
	 	 	Telephone: (212) 848-4000	 	 
	 	 	Facsimile: (212) 848-7179	 	 
	 
	 	 	 	 	 	 
	 	 	Nortel’s Counsel	 	 






-5-










 





EXHIBIT D




Court File No. 02-CL-4605




ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST




	 	 	 	 	 
	THE HONOURABLE SENIOR REGIONAL

	 	 )
	 	                    DAY, THE           DAY
	 

	 	 )	 	 
	JUSTICE WINKLER

	 	 )
	 	OF JUNE, 2006






BETWEEN:




LESLIE FROHLINGER




Plaintiff




- and -




NORTEL NETWORKS CORPORATION, JOHN ANDREW ROTH,

FRANK DUNN, F. WILLIAM CONNER, CHAHRAM BOLOURI,

WILLIAM R. HAWE and DELOITTE & TOUCHE LLP




Defendants




Proceedings under the Class Proceeding Act, 1992




ORDER




     THIS MOTION made by the Plaintiff for an Order certifying this action as a class proceeding
for the purpose of settlement, approving the notice to class members and other declaratory relief
was heard this day at the Court House, 361 University Avenue, Toronto, Ontario.



     ON READING the materials filed, including the Settlement Agreement (defined herein), and on
hearing the submissions of counsel for the Plaintiff and counsel for the Defendants:


1. THIS COURT ORDERS AND DECLARES that for the purposes of this Order the following definitions
apply and are incorporated into this Order:




 









 








-2-





	 	(a)	 	“British Columbia Action” means the proceeding in the Supreme Court of British
Columbia, Jeffery et al v. Nortel Networks Corporation et al., Court File No. S0151590,
Vancouver Registry;
	 
	 	(b)	 	“British Columbia Class” means all persons and entities, except Excluded
Persons who, while resident in British Columbia at the time, purchased Nortel common
stock or call options on Nortel common stock or wrote (sold) put options on Nortel
common stock during the Class Period;
	 
	 	(c)	 	“British Columbia Court” means the Supreme Court of British Columbia;
	 
	 	(d)	 	“Claims Administrator” means the entity approved by this Court pursuant to
paragraph 11 to administer the Settlement;
	 
	 	(e)	 	“Class Members” means members of the British Columbia Class, the Ontario
National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(f)	 	“Class Period” means the period of time between October 24, 2000 through
February 15, 2001, inclusive;
	 
	 	(g)	 	“Courts” means the Ontario Court, the British Columbia Court, the Quebec Court
and the U.S. Court;
	 
	 	(h)	 	“Defendants” means the persons and entities named as defendants in the Ontario
National Action;
	 
	 	(i)	 	“Escrow Agents” has the meaning set forth in the Stipulation;
	 
	 	(j)	 	“Excluded Persons” means Nortel and the Individuals, members of any of the
Individuals’ immediate families, any entity in which Nortel or any of the Individuals
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel,
and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of Nortel and the Individuals;
	 
	 	(k)	 	“Gross Cash Settlement Fund” has the meaning set forth in the Stipulation;
	 
	 	(l)	 	“Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel to
be issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance with
paragraph 4(d) of the Stipulation;
	 
	 	(m)	 	“Individuals” means Clarence Chandran, Frank Dunn and John Andrew Roth;
	 
	 	(n)	 	“Nortel” means the Defendant, Nortel Networks Corporation;
	 
	 	(o)	 	“Nortel I Actions” means the Ontario National Action, the Quebec Action, the
British Columbia Action and the U.S. Action;
	 
	 	(p)	 	“Nortel I Defendants” means the Defendants and Clarence Chandran;




 









 











-3-





	 	(q)	 	“Notice” means the notice to the classes in the Nortel I Actions substantially
in the form attached as Schedule “B” to this Order;
	 
	 	(r)	 	“Notice Plan” means the plan for the publication and dissemination of the
Notice, Publication Notice and Proof of Claim by the Claims Administrator, attached as
Schedule “D” to this Order;
	 
	 	(s)	 	“Ontario National Action” means this proceeding which raises claims in the
nature of negligence, negligent and/or reckless misrepresentation, and alleges breaches
of the Canada Business Corporations Act, Competition Act and Ontario Securities Act,
for which relief is sought through an award of damages;
	 
	 	(t)	 	“Ontario National Class” means the class certified for the purpose of
settlement in the Ontario National Action pursuant to paragraph 3 of this Order;
	 
	 	(u)	 	“Ontario National Class Counsel” means Rochon Genova LLP and Lerners LLP;
	 
	 	(v)	 	“Ontario National Class Counsel Fees” means the fees, disbursements, costs,
GST, and other applicable taxes or charges of Ontario National Class Counsel;
	 
	 	(w)	 	“Ontario National Class Member” means a member of the Ontario National Class
who does not opt out of the Ontario National Class in the manner set forth in this
Order;
	 
	 	(x)	 	“Proof of Claim” means the form substantially in the form attached as Schedule
“C” to this Order;
	 
	 	(y)	 	“Publication Notice” means the summary notice of certification and proposed
settlement, and of the hearing of the Settlement Approval Motion, substantially in the
form attached as Schedule “E” to this Order;
	 
	 	(z)	 	“Quebec Action” means the proceeding in the Superior Court of Quebec (District
of Montreal), Association de Protection des Epargnants et Investisseurs du Quebec v.
Corporation Nortel Networks, No: 500-06-000126-017;
	 
	 	(aa)	 	“Quebec Class” means all persons, except Excluded Persons who, while resident
in Quebec at the time, purchased Nortel common stock or call options on Nortel common
stock or wrote (sold) put options on Nortel common stock during the Class Period;
	 
	 	(bb)	 	“Quebec Court” means the Superior Court of Quebec;
	 
	 	(cc)	 	“Released Parties” means any and all of the Nortel I Defendants, their past or
present subsidiaries, parents, principals, affiliates, general or limited partners or
partnerships, successors and predecessors, heirs, assigns, officers, directors, agents,
employees, attorneys, advisors, investment advisors, investment bankers, underwriters,
insurers, co-insurers, re-insurers, accountants, auditors, consultants,




 









 











-4-





	 	 	 	administrators,
executors, trustees, personal representatives, immediate family members and any person,
firm, trust, partnership, corporation, officer, director or other individual or entity
in which any Nortel I Defendant has a controlling interest or which is related to or
affiliated with any of the Nortel I Defendants, and the legal representatives, heirs,
executors, administrators, trustees, successors in interest or assigns of the Nortel I
Defendants;
	 
	 	(dd)	 	“Representative Plaintiffs” means, collectively, the representative or lead
plaintiffs in each of the Nortel I Actions;
	 
	 	(ee)	 	“Settled Claims” means any and all claims, debts, demands, rights or causes of
action, suits, matters, and issues or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys’ fees, expert or consulting
fees, and any other costs, expenses or liability whatsoever), whether based on United
States or Canadian federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, at law or in equity, matured or un-matured, whether class
or individual in nature, including both known claims and Unknown Claims, (i) that have
been asserted in any of the Nortel I Actions against any of the Released Parties, or
(ii) that could have been asserted in any forum by the Class Members in the Nortel I
Actions, or any of them, against any of the Released Parties, that arise out of or are
based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Nortel I
Actions and that relate to the purchase of Nortel common stock or call options or the
sale of Nortel put options during the Class Period or (iii) any oppression or other
claims under the Business Corporations Act, R.S.C. 1985, c. C-44, as amended, that
arise out of or are based upon the allegations, transactions, facts, matters or
occurrences, representations or omissions, set forth or referred to in the Nortel I
Actions. “Settled Claims” does not mean or include claims, if any, against the
Released Parties arising under the United States Employee Retirement Income Security
Act of 1974, as amended, 29 U.S.C. § 1001, et seq. (“ERISA”) that are not common to all
Class Members and which ERISA claims are the subject of an action pending before the
Judicial Panel on Multidistrict Litigation, denominated In re Nortel Networks
Securities and “ERISA’ Litigation, MDL Docket No. 1537. “Settled Claims” further does
not include; (a) the action in Rohac et al v. Nortel Networks et al, Ontario Superior
Court of Justice, Court File No. 04-CV-3268; and (b) the application brought in Indiana
Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund
v. Nortel Networks Corporation, Ontario Superior Court of Justice, Court File No.
49059, for leave pursuant to the Canada Business Corporations Act to commence a
representative action in the name of and on behalf of Nortel against certain of the
Released Parties;
	 
	 	(ff)	 	“Settlement Agreement” means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulation attached thereto,
entered into between the Plaintiff herein and Nortel, through their counsel dated June
20, 2006, which is attached to this Order as Schedule “A”;




 









 











-5-





	 	(gg)	 	“Settlement” means the proposed settlement of the Nortel I Actions pursuant to
the terms set forth in the Settlement Agreement adopting and ratifying the Stipulation;
	 
	 	(hh)	 	“Settlement Approval Motion” means the motion for final approval of the
Settlement by this Court to be heard at the date, time and location described in
paragraph 6 of this Order;
	 
	 	(ii)	 	“Stipulation” means the Stipulation and Agreement of Settlement attached to the
Settlement Agreement as Schedule “A”;
	 
	 	(jj)	 	“Supplemental Agreement” means the agreement referred to in paragraph 23 of the
Stipulation setting forth certain conditions under which the Settlement may be
terminated by Nortel if potential Class Members who purchase in excess of a certain
number of Nortel common stock or options on Nortel common stock during the Class Period
exclude themselves from the Class;
	 
	 	(kk)	 	“Unknown Claims” means any and all Settled Claims which any of the
Representative Plaintiffs, or Class Members does not know or suspect to exist in his,
her or its favour at the time of the release of the Released Parties, which if known by
him, her or it might have affected his, her or its decision(s) with respect to the
Settlement;
	 
	 	(ll)	 	“U.S. Action” means the proceeding in the U.S. Federal District Court for the
Southern District of New York, Consolidated Civil Action No. 2001-CV-1855 (RMB),
certified by that Court as a class action on September 5, 2003,
	 
	 	(mm)	 	“U.S. Court” means the U.S. Federal District Court for the Southern District of
New York;
	 
	 	(nn)	 	“U.S. Global Class” means all persons, except Excluded Persons, who purchased
Nortel common stock or call options on Nortel common stock or wrote (sold) put options
on Nortel common stock (collectively, “Nortel Securities”) during the Class Period, and
who suffered damages thereby, including, but not limited to, those persons or entities
who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock
Exchange. Excluded from this class are any putative class members who previously
requested exclusion in response to a notice dated March 10, 2004 that was mailed to
members of this class beginning on April 12, 2004 notifying them of the pendency of the
U.S. Action.




2. THIS COURT ORDERS that the Ontario National Action be certified as a class proceeding for the
purpose of settlement.



3. THIS COURT ORDERS that the Ontario National Class be defined as:




 









 








-6-





All persons and entities, except Excluded Persons and members of the
British Columbia Class and the Quebec Class, who, while resident in
Canada at the time, purchased Nortel common stock or call options on
Nortel common stock or wrote (sold) put options on Nortel common
stock during the Class Period.


4. THIS COURT ORDERS that Leslie Frohlinger be and is hereby appointed as the representative
plaintiff for the Ontario National Class.



5. THIS COURT ORDERS that the Ontario National Action is certified as a class proceeding for the
purpose of settlement on the basis of the following common issue:





Did Nortel make false or misleading statements or omissions
concerning its financial performance or its revenue and earnings
guidance during the Class Period?


6. THIS COURT ORDERS that the Settlement Approval Motion and the motion by Ontario National Class
Counsel for approval of Ontario National Class Counsel Fees shall be heard by this Court on a date
to be set by the Registrar, approximately 90 days from the date set herein for the mailing of the
notice at the Court House at 361 University Avenue, Toronto, Ontario.



7. THIS COURT ORDERS that each potential member of the Ontario National Class who elects to opt out
of the Ontario National Class must do so by writing a letter, signed by such person, clearly
requesting exclusion and indicating the name, address and telephone number of the person seeking to
opt out and the date(s), price(s), and number(s) of shares of all purchases of Nortel common stock
or call options on Nortel common stock and of all put options of Nortel common stock written (sold)
during the Class Period, and sending it by first class mail post marked no later than 60 days after the date set herein for mailing of the notice, to the address
indicated in the Notice.



8. THIS COURT ORDERS that any potential member of the Ontario National Class who does not opt out
in accordance with paragraph 7 of this Order shall be bound by any future




 









 








-7-



Orders in the Ontario
National Action, and shall be bound by the terms of the Settlement if approved by each of the
Courts in each of the Nortel I Actions.



9. THIS COURT ORDERS that potential members of the Ontario National Class who, prior to the date of
this Order, opted out of, or requested exclusion from, the U.S. Action will be members of the
Ontario National Class and shall be bound by any future Orders in the Ontario National Action and
by the terms of the Settlement, unless they opt out of the Ontario National Class in accordance
with paragraph 7 of this Order.



10. THIS COURT ORDERS that any potential member of the Ontario National Class who opts out of the
Ontario National Class in accordance with paragraph 7 of this Order may no longer participate in
the Settlement or any continuation of the Nortel I Actions, shall not be entitled to file a Proof
of Claim as provided in paragraph 20 of this Order, shall not be entitled to receive any payment
out of the Settlement and shall not be entitled to object to the approval of the Settlement as
provided in paragraph 22 of this Order.



11. THIS COURT ORDERS that The Garden City Group, Inc is hereby appointed and approved as the
Claims Administrator, and shall be subject to the jurisdiction of this Court for all matters
relating to the Ontario National Action, including the administration, interpretation, effectuation
or enforcement of the Settlement Agreement and this Order.



12. THIS COURT ORDERS that the Escrow Agents, acting in their capacity as escrow agents, shall be
subject to the jurisdiction of this Court in respect of the Gross Cash Settlement Fund.



13. THIS COURT ORDERS that the form and content of the Notice, substantially in the form attached
hereto as Schedule “B”, is hereby approved.




 









 








-8-



14. THIS COURT ORDERS that the form and content of the Proof of Claim form, substantially in the
form attached hereto as Schedule “C”, is hereby approved.



15. THIS COURT ORDERS that the plan of dissemination of the Notice substantially in the manner
described in the Notice Plan attached to this Order as Schedule “D” is hereby approved.



16. THIS COURT ORDERS that upon approval of the Notice and the Proof of Claim and the appointment
of The Garden City Group, Inc. as the Claims Administrator by the Courts, the Claims Administrator
shall cause the Notice and the Proof of Claim, substantially in the forms attached as Schedules “B”
and “C” to this Order, to be mailed, by first class mail, postage prepaid, on or before 14 days
after entry of the last order by any of the courts in the Nortel I actions and the Nortel II
actions (as defined in the stipulation) approving the notice applicable to that proceeding, to all
members of the Ontario National Class who can be identified with reasonable effort, in accordance
with the Notice Plan.



17. THIS COURT ORDERS that additional copies of the Notice shall be made available to any record
holder requesting such for the purpose of distribution to beneficial owners, and such record
holders shall be reimbursed from the Gross Settlement Fund (as defined in the Stipulation), upon
receipt by the Claims Administrator of proper documentation, for the reasonable expense of sending
the Notice and Proof of Claim to beneficial owners.



18. THIS COURT ORDERS that Ontario National Class Counsel shall, at or before the hearing of the
Settlement Approval Motion, file with the Court proof of mailing of the Notice and Proof of Claim.



19. THIS COURT ORDERS that the form of Publication Notice in substantially the form and content
attached hereto as Schedule “E” is hereby approved, and directs that Claims




 









 








-9-



Administrator shall
cause the Publication Notice to be published in accordance with the Notice Plan, which publication
shall begin within ten (10) days of the mailing of the Notice, and Ontario National Class Counsel
shall, at or before the hearing of the Settlement Approval Motion, file with this Court proof of
the publication of the Publication Notice.



20. THIS COURT ORDERS that in order to be entitled to participate in the Net Settlement Fund (as
defined in the Stipulation), each Ontario National Class Member shall take the following actions
and be subject to the following conditions:





	 	(a)	 	A properly executed Proof of Claim, substantially in the form attached hereto
as Schedule “C”, must be submitted to the Claims Administrator, at the Post Office Box
indicated in the Notice, postmarked not later than 120 days after the date set herein
for the mailing of the notice. Such deadline may be further extended by order of this
Court.
	 
	 	(b)	 	Each Proof of Claim shall be deemed to have been submitted when postmarked (if
properly addressed and mailed by first class mail, postage prepaid) provided such Proof
of Claim is actually received prior to the motion for an order of this Court approving
distribution of the Net Settlement Fund (as defined in the Stipulation).
	 
	 	(c)	 	Any Proof of Claim submitted in any other manner shall be deemed to have been
submitted when it was actually received at the address designated in the Notice.




21. THIS COURT ORDERS that the Proof of Claim submitted by each Ontario National Class Member must
satisfy the following conditions:





	 	(a)	 	it must be properly completed, signed and submitted in a timely manner in
accordance with the provisions of the preceding paragraph;
	 
	 	(b)	 	it must be accompanied by adequate supporting documentation for the
transactions reported therein, in the form of broker confirmation slip, broker
account statements, an authorized statement from the broker containing the
transactional information found in a broker confirmation slip, or such other
documentation as is deemed adequate by the Claims Administrator;
	 
	 	(c)	 	if the person executing the Proof of Claim is acting in a representative
capacity, a certification of his current authority to act on behalf of the Ontario
National Class Member must be included in the Proof of Claim; and




 









 











-10-





	 	(d)	 	the Proof of Claim must be complete and contain no material deletions or
modifications of any of the printed matter contained therein and must be signed under
penalty of perjury.




22. THIS COURT ORDERS that, as part of the Proof of Claim, each Ontario National Class Member shall
submit to the jurisdiction of this Court with respect to the claim submitted, and shall (subject to
the approval of the Settlement by the Courts) release all Settled Claims against the Released
Parties.



23. THIS COURT ORDERS that Ontario National Class Members who wish to file with the Court an
objection or comment to the Settlement or to the approval of Ontario National Class Counsel Fees
shall deliver a written submission to the Claims Administrator at the address indicated in the
Notice, no later than 60 days after the date set herein for the mailing of the notice, and the
Claims Administrator shall file all such submissions with the Court prior to the hearing of the
Settlement Approval Motion.



24. THIS COURT ORDERS that if (a) the Settlement is terminated by Nortel pursuant to the
Supplemental Agreement and paragraph 26 of the Stipulation; (b) any specified condition to the
Settlement set forth in the Stipulation is not satisfied and any of the Representative Plaintiffs
or Nortel elect(s) to terminate the Settlement as provided in paragraph 25 in the Stipulation; or
(c) is terminated pursuant to paragraph 27 of the Stipulation, then: (i) this Order, including the
certification of the action as a class proceeding for the purpose of settlement, shall be set aside
and be of no further force or effect, and without prejudice to any party; (ii) each party to the
Ontario National Action shall be restored to his, her or its respective position in the litigation
as it existed immediately prior to the execution of the Settlement Agreement; and (iii) this Action
shall be decertified as a class proceeding pursuant to Section 10 of the Class Proceedings Act,
1992, without prejudice to the Plaintiffs ability to reapply for certification.




 









 








-11-



25. THIS COURT ACKNOWLEDGES having been notified that a determination of fairness of the Settlement
at the Settlement Approval Hearing will be relied upon by Nortel for an exemption, pursuant to
Section 3(a)(l0) of the United States Securities Act of 1933, as amended, 15 U.S.C. § 77c(a)(1), to
enable the Gross Settlement Shares to be distributed to Class Members, and to counsel for the
Representative Plaintiffs as may be awarded by the respective Courts, without registration and
compliance with the prospectus delivery requirements of U.S. securities laws.



26. THIS COURT DECLARES that Schedule “A” hereto satisfies the requirements of subsections 8(1)(c)
and (d) of the Class Proceedings Act, 1992.




 









 








	 	 	 	 	 	 	 	 
	LESLIE FROHLINGER.

	 	 	 	NORTEL NETWORKS CORPORATION
	 	 	Court File No: 02-CL-4605
	Plaintiff

	 	and
	 	et al.	 	 	 
	 

	 	 	 	Defendants	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	ONTARIO
	 

	 	 	 	 	 	 	SUPERIOR COURT OF JUSTICE
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	Proceeding commenced at Toronto
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	ORDER
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 






 









 









EXHIBIT E




	 	 	 
	CANADA

	 	(CLASS ACTION)
	 
	 	 
	PROVINCE OF QUEBEC

	 	SUPERIOR COURT
	DISTRICT OF MONTREAL
	 	 
	 

	 	 
	 
	 	 
	NO.: 500-06-000126-017

	 	ASSOCIATION DE PROTECTION DES
	 
	 	 
	 

	 	ÉPARGNANTS ET INVESTISSEURS DU
	 
	 	 
	 

	 	QUEBEC (A.P.E.I.Q.)
	 
	 	 
	 

	 	Petitioner
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	ANDRÉ DUSSAULT
	 
	 	 
	 

	 	Designated person
	 
	 	 
	 

	 	v.
	 
	 	 
	 

	 	CORPORATION NORTEL NETWORKS
	 
	 	 
	 

	 	Respondent
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	FONDS D’AIDE AUX RECOURS
	 
	 	 
	 

	 	COLLECTIFS
	 
	 	 
	 

	 	Mis en cause
	 
	 	 
	 

	 	 





ORDER




     THIS MOTION made by the Petitioner for a Judgment authorizing the bringing of the class action
for the purpose of settlement pursuant to the Stipulation and Agreement of Settlement (the
“Settlement Agreement”) entered into between the Petitioner and the Respondent was heard this day.









 



2


     ON READING the materials filed, including the Settlement Agreement (defined herein), and on
hearing the submissions of counsel for the Petitioner and counsel for the Respondent:



     1. THIS COURT ORDERS AND DECLARES that for the purposes of this Order the following definitions
apply and are incorporated into this Order:




	 	(a)	 	“British Columbia Action” means the proceeding in the Supreme Court of British
Columbia, Jeffery et al. v. Nortel Networks Corporation et al., Court File No. SO
151590, Vancouver Registry;
	 
	 	(b)	 	“British Columbia Class” means all persons and entities, except Excluded
Persons who, while resident in British Columbia at the time, purchased Nortel common
stock or call options on Nortel common stock or wrote (sold) put options on Nortel
common stock during the Class Period;
	 
	 	(c)	 	“British Columbia Court” means the Supreme Court of British Columbia;
	 
	 	(d)	 	“Claims Administrator” means the entity approved by this Court pursuant to
paragraph 11 to administer the Settlement;
	 
	 	(e)	 	“Class Members” means members of the British Columbia Class, the Ontario
National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(f)	 	“Class Period” means the period of time between October 24, 2000 through
February 15, 2001, inclusive;
	 
	 	(g)	 	“Courts” means the Ontario Court, the British Columbia Court, the Quebec Court
and the U.S. Court;
	 
	 	(h)	 	“Defendant” means the Respondent, Corporation Nortel Networks;
	 
	 	(i)	 	“Escrow Agents” has the meaning set forth in the Stipulation;
	 
	 	(j)	 	“Excluded Persons” means Nortel and the Individuals, members of any of the
Individuals’ immediate families, any entity in which Nortel or any of the Individuals
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel,
and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of Nortel and the Individuals;
	 
	 	(k)	 	“Gross Cash Settlement Fund” has the meaning set forth in the Stipulation;
	 
	 	(l)	 	“Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel to
be issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance with
paragraph 4(d) of the Stipulation;
	 
	 	(m)	 	“Individuals” means Clarence Chandran, Frank Dunn and John Andrew Roth;










 



3


	 	(n)	 	“Nortel” means the Respondent, Corporation Nortel Networks;
	 
	 	(o)	 	“Nortel I Actions” means the Ontario National Action, the Quebec Action, the
British Columbia Action and the U.S. Action;
	 
	 	(p)	 	“Nortel I Defendants” means the Defendant and Clarence Chandran;
	 
	 	(q)	 	“Notice” means the global notice to the classes in the Nortel I Actions
substantially in the form attached as Schedule “B” to this Order, as approved in
paragraph 13 of this Order;
	 
	 	(r)	 	“Notice Plan” means the plan for the publication and dissemination of the
Notice, Publication Notice and Proof of Claim by the Claims Administrator, attached as
Schedule “D” to this Order;
	 
	 	(s)	 	“Ontario Court” means the Ontario Superior Court of Justice;
	 
	 	(t)	 	“Ontario National Action” means the proceeding in the Ontario Superior Court of
Justice, Frohlinger v. Nortel Networks Corporation et al., Court File No. 02-CL-4605;
	 
	 	(u)	 	“Ontario National Class” means all persons and entities, except Excluded
Persons and except members of the British Columbia Class and the Quebec Class, who,
while resident in Canada at the time, purchased Nortel common stock or call options on
Nortel common stock or wrote (sold) put options on Nortel common stock during the Class
Period;
	 
	 	(v)	 	“Proof of Claim” means the form substantially in the form attached as Schedule
“C” to this Order, as approved in paragraph 14 of this Order;
	 
	 	(w)	 	“Publication Notice” means the summary notice of certification and proposed
settlement, and of the hearing of the Settlement Approval Motion, substantially in the
form attached as Schedule “E” to this Order, as approved in paragraph 19 of this Order;
	 
	 	(x)	 	“Quebec Action” means this proceeding;
	 
	 	(y)	 	“Quebec Class” means all persons, except Excluded Persons who, while resident
in Quebec at the time, purchased Nortel common stock or call options on Nortel common
stock or wrote (sold) put options on Nortel common stock during the Class Period;
	 
	 	(z)	 	“Quebec Class Counsel” means Belleau Lapointe, S.A., and Unterberg, Labelle,
Lebeau S.E.N.C.;
	 
	 	(aa)	 	“Quebec Class Counsel Fees” means the fees, disbursements, costs, GST, and
other applicable taxes or charges of Quebec Class Counsel;










 



4


	 	(bb)	 	“Quebec Class Member” means a member of the Quebec Class who does not opt out
of the Quebec Class in the manner set forth in this Order;
	 
	 	(cc)	 	“Quebec Court” means the Superior Court of Quebec;
	 
	 	(dd)	 	“Released Parties” means any and all of the Nortel I Defendants, their past or
present subsidiaries, parents, principals, affiliates, general or limited partners or
partnerships, successors and predecessors, heirs, assigns, officers, directors, agents,
employees, attorneys, advisors, investment advisors, investment bankers, underwriters,
insurers, co-insurers, re-insurers, attorneys, accountants, auditors, consultants,
administrators, executors, trustees, personal representatives, immediate family members
and any person, firm, trust, partnership, corporation, officer, director or other
individual or entity in which any Nortel I Defendant has a controlling interest or
which is related to or affiliated with any of the Nortel I Defendants, and the legal
representatives, heirs, executors, administrators, trustees, successors in interest or
assigns of the Nortel I Defendants;
	 
	 	(ee)	 	“Representative Plaintiffs” means, collectively, the representative or lead
plaintiffs in each of the Nortel I Actions;
	 
	 	(ff)	 	“Settled Claims” means any and all claims, debts, demands, rights or causes of
action, suits, matters, and issues or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys’ fees, expert or consulting
fees, and any other costs, expenses or liability whatsoever), whether based on United
States or Canadian federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, at law or in equity, matured or un-matured, whether class
or individual in nature, including both known claims and Unknown Claims, (i) that have
been asserted in any of the Nortel I Actions against any of the Released Parties, or
(ii) that could have been asserted in any forum by the Class Members in the Nortel I
Actions, or any of them, against any of the Released Parties, that arise out of or are
based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Nortel I
Actions and that relate to the purchase of Nortel common stock or call options or the
sale of Nortel put options during the Class Period or (iii) any oppression or other
claims under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended,
that arise out of or are based upon the allegations, transactions, facts, matters or
occurrences, representations or omissions, set forth or referred to in the Nortel I
Actions. Settled Claims does not mean or include claims, if any, against the Released
Parties arising under the United States Employee Retirement Income Security Act of
1974, as amended, 29 U.S.C. § 1001, et seq. (“ERISA”) that are not common to all Class
Members and which ERISA claims are the subject of an action pending before the Judicial
Panel on Multidistrict Litigation, denominated In re Nortel Networks Securities and
“ERISA’ Litigation, MDL Docket No. 1537. Settled Claims farther does not include: (a)
the action in Rohac et al v. Nortel Networks et al, Ontario Superior Court of Justice,
Court File No. 04-CV-3268; and (b) the application brought in










 



5


	 	 	 	Indiana Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and 397
Pension Fund v. Nortel Networks Corporation, Ontario Superior Court of Justice,
Court File No. 49059, for leave pursuant to the Canada Business Corporations Act to
commence a representative action in the name of and on behalf of Nortel against
certain of the Released Parties and others;
	 
	 	(gg)	 	“Settlement Agreement” means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulation attached thereto,
entered into between the Petitioner herein and Nortel, through their counsel dated June
___, 2006, which is attached to this Order as Schedule “A”;
	 
	 	(hh)	 	“Settlement” means the proposed settlement of the Nortel I Actions pursuant to
the terms set forth in the Settlement Agreement adopting and ratifying the Stipulation;
	 
	 	(ii)	 	“Settlement Approval Motion” means the motion for final approval of the
Settlement by this Court to be heard at the date, time and location described in
paragraph 6 of this Order;
	 
	 	(jj)	 	“Stipulation” means the Stipulation and Agreement of Settlement attached to the
Settlement Agreement as Schedule “A”;
	 
	 	(kk)	 	“Supplemental Agreement” means the agreement referred to in paragraph 23 of the
Stipulation setting forth certain conditions under which the Settlement may be
terminated by Nortel if potential Class Members who purchase in excess of a certain
number of Nortel common stock or options on Nortel common stock during the Class Period
exclude themselves from the Class;
	 
	 	(ll)	 	“Unknown Claims” means any and all Settled Claims which any of the
Representative Plaintiffs, or Class Members does not know or suspect to exist in his,
her or its favour at the time of the release of the Released Parties, which if known by
him, her or it might have affected his, her or its decision(s) with respect to the
Settlement;
	 
	 	(mm)	 	“U.S. Action” means the proceeding in the U.S. Federal District Court for the
Southern District of New York, Consolidated Civil Action No. 2001-CV-1855 (RMB),
certified by that Court as a class action on September 5, 2003;
	 
	 	(nn)	 	“U.S. Court” means the U.S. Federal District Court for the Southern District of
New York; and
	 
	 	(oo)	 	“U.S. Global Class” means all persons, except Excluded Persons, who purchased
Nortel common stock or call options on Nortel common stock or wrote (sold) put options
on Nortel common stock (collectively, “Nortel Securities”) during the Class Period, and
who suffered damages thereby, including, but not limited to, those persons or entities
who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock
Exchange. Excluded from this class are any putative class members who previously
requested exclusion in










 



6


	 	 	 	response to a notice dated March 10, 2004 that was mailed to members of this class
beginning on April 12, 2004 notifying them of the pendency of the U.S. Action.




2. THIS COURT ORDERS that the bringing of the Quebec Action as a class action be authorized for the
purpose of settlement.



3. THIS COURT ORDERS that the Quebec Class be defined as:





All persons, except Excluded Persons who, while resident in
Quebec at the time, purchased Nortel common stock or call
options on Nortel common stock or wrote (sold) put options on
Nortel common stock during the Class Period.


4. THIS COURT ORDERS that the Association de protection des épargnants et investisseurs du Québec
(A.P.E.I.Q.) and Andre Dussault be and are hereby appointed as the Representatives for the Quebec
Class.



5. THIS COURT ORDERS that the bringing of the Quebec Action as a class action is authorized for the
purpose of settlement only, on the basis of the following common issue:





Did Nortel make false or misleading statements or omissions
concerning its financial performance or its revenue and earnings
guidance during the Class Period?


6. THIS COURT ORDERS that the Settlement Approval Motion and the motion by Quebec Class Counsel for
approval of Quebec Class Counsel Fees shall be heard by this Court on, ___2006, at
___:___.m. at the Montreal Court House, located at 1, Notre-Dame Street East, Montreal, Quebec.



7. THIS COURT ORDERS that each potential member of the Quebec Class who elects to opt out of the
Quebec Class must do so by writing a letter, signed by such person, requesting exclusion and
clearly indicating the name, address and telephone number of the person seeking to opt out and the
date(s), price(s), and number(s) of shares of all purchases of Nortel common stock or call options
on Nortel common stock and of all put options of Nortel common stock










 



7



written (sold) during the Class Period, and sending it by first class mail post marked no later
than ___, 2006, to the address indicated in the Notice.



8. THIS COURT ORDERS that any potential member of the Quebec Class who does not opt out in
accordance with paragraph 7 of this Order shall be bound by any future Orders in the Quebec Action,
and shall be bound by the terms of the Settlement if approved by each of the Courts in each of the
Nortel I Actions.



9. THIS COURT ORDERS that potential members of the Quebec Class who, prior to the date of this
Order, opted out of, or requested exclusion from, the U.S. Action will be members of the Quebec
Class and shall be bound by any future Orders in the Quebec Action and by the terms of the
Settlement, unless they opt out of the Quebec Class in accordance with paragraph 7 of this Order.



10. THIS COURT ORDERS that any potential member of the Quebec Class who opts out of the Quebec
Class in accordance with paragraph 7 of this Order may no longer participate in the Settlement or
any continuation of the Nortel I Actions, shall not be entitled to file a Proof of Claim as
provided in paragraph 20 of this Order, shall not be entitled to receive any payment out of the
Settlement and shall not be entitled to object to the approval of the Settlement as provided in
paragraph 22 of this Order.



11. THIS COURT ORDERS that The Garden City Group, Inc. is hereby appointed and approved as the
Claims Administrator, and shall be subject to the jurisdiction of this Court for all matters
relating to the Quebec Action, including the administration, interpretation, effectuation or
enforcement of the Settlement Agreement and this Order.










 



8



12. THIS COURT ORDERS that the Escrow Agents, acting in their capacity as escrow agents, shall be
subject to the jurisdiction of this Court in respect of the Gross Cash Settlement Fund.



13. THIS COURT ORDERS that the form and content of the Notice, substantially in the form attached
hereto as Schedule “B”, is hereby approved.



14. THIS COURT ORDERS that the form and content of the Proof of Claim form, substantially in the
form attached hereto as Schedule “C”, is hereby approved.



15. THIS COURT ORDERS that the plan of dissemination of the Notice in the manner described in the
Notice Plan attached to this Order as Schedule “D”, is hereby approved.



16. THIS COURT ORDERS that upon approval of the Notice and the Proof of Claim and the appointment
of The Garden City Group, Inc. as the Claims Administrator by the Courts, the Claims Administrator
shall cause the Notice and the Proof of Claim, substantially in the forms attached as Schedules “B”
and “C” to this Order, to be mailed, by first class mail, postage prepaid, on or before ___,
2006, to all of the Quebec Class Members who can be identified with reasonable effort, in
accordance with the Notice Plan.



17. THIS COURT ORDERS that additional copies of the Notice shall be made available to any record
holder requesting such for the purpose of distribution to beneficial owners, and such record
holders shall be reimbursed from the Gross Settlement Fund (as defined in the Stipulation), upon
receipt by the Claims Administrator of proper documentation, for the reasonable expense of sending
the Notice and Proof of Claim to beneficial owners.



18. THIS COURT ORDERS that Quebec Class Counsel shall, at or before the hearing of the Settlement
Approval Motion, file with the Court proof of mailing of the Notice and Proof of Claim.










 



9



19. THIS COURT ORDERS that the form of Publication Notice in substantially the form and content
attached hereto as Schedule “E” is hereby approved, and directs that Claims Administrator shall
cause the Publication Notice to be published in accordance with the Notice Plan, which publication
shall begin within ten (10) days of the mailing of the Notice, and Quebec Class Counsel shall, at
or before the hearing of the Settlement Approval Motion, file with this Court proof of the
publication of the Publication Notice.



20. THIS COURT ORDERS that in order to be entitled to participate in the Net Settlement Fund (as
defined in the Stipulation), each Quebec Class Member shall take the following actions and be
subject to the following conditions:





	 	(a)	 	A properly executed Proof of Claim, substantially in the form attached hereto
as Schedule “C”, must be submitted to the Claims Administrator, at the Post Office Box
indicated in the Notice, postmarked not later than ___, 2006. Such deadline may
be further extended by order of this Court.
	 
	 	(b)	 	Each Proof of Claim shall be deemed to have been submitted when postmarked (if
properly addressed and mailed by first class mail, postage prepaid) provided such Proof
of Claim is actually received prior to the motion for an order of this Court approving
distribution of the Net Settlement Fund (as defined in the Stipulation).
	 
	 	(c)	 	Any Proof of Claim submitted in any other manner shall be deemed to have been
submitted when it was actually received at the address designated in the Notice.




21. THIS COURT ORDERS that the Proof of Claim submitted by each Quebec Class Member must satisfy
the following conditions:





	 	(a)	 	it must be properly completed, signed and submitted in a timely manner in
accordance with the provisions of the preceding paragraph;
	 
	 	(b)	 	it must be accompanied by adequate supporting documentation for the
transactions reported therein, in the form of broker confirmation slips, broker account
statements, an authorized statement from the broker containing the transactional
information found in a broker confirmation slip, or such other documentation as is
deemed adequate by the Claims Administrator;
	 
	 	(c)	 	if the person executing the Proof of Claim is acting in a representative
capacity, a certification of his current authority to act on behalf of the Quebec Class
Member must be included in the Proof of Claim; and










 



10


	 	(d)	 	the Proof of Claim must be complete and contain no material deletions or
modifications of any of the printed matter contained therein and must be signed under
penalty of perjury.




22. THIS COURT ORDERS that, as part of the Proof of Claim, each Quebec Class Member shall submit to
the jurisdiction of this Court with respect to the claim submitted, and shall (subject to the
approval of the Settlement by the Courts) release all Settled Claims against the Released Parties.



23. THIS COURT ORDERS that Quebec Class Members who wish to file with the Court an objection or
comment to the Settlement or to the approval of Quebec Class Counsel Fees shall deliver a written
submission to the Claims Administrator at the address indicated in the Notice, no later than ,
2006, and the Claims Administrator shall file all such submissions with the Court prior to the
hearing of the Settlement Approval Motion.



24. THIS COURT ORDERS that if (a) the Settlement is terminated by Nortel pursuant to the
Supplemental Agreement and paragraph 26 of the Stipulation; (b) any specified condition to the
Settlement set forth in the Stipulation is not satisfied and any of the Representative Plaintiffs
or Nortel elect(s) to terminate the Settlement as provided in paragraph 25 in the Stipulation; or
(c) is terminated pursuant to paragraph 27 of the Stipulation, then: (i) this Order, including the
authorization of the bringing of the Quebec Action as a class action for the purpose of settlement,
shall be set aside and be of no further force or effect, and without prejudice to any party; (ii)
each party to the Quebec Action shall be restored to his, her or its respective position in the
litigation as it existed immediately prior to the execution of the Settlement Agreement; and (iii)
this Action authorizing the bringing of the class action shall be annulled pursuant to the Code of
Civil Procedure, without prejudice to the Petitioner’s ability to reapply for certification.



25. THIS COURT ACKNOWLEDGES having been notified that a determination of fairness of the Settlement
at the Settlement Approval Hearing will be relied upon by Nortel for










 



11



an exemption, pursuant to Section 3(a)(10) of the United States Securities Act of 1933, as amended,
15 U.S.C. § 77c(a)(1), to enable the Gross Settlement Shares to be distributed to Class Members,
and to counsel for the Representative Plaintiffs as may be awarded by the respective Courts,
without registration and compliance with the prospectus delivery requirements of U.S. securities
laws.




	 	 	 
	 

	 	 
	 
	 	 
	Date

	 	J.C.S.













 









Nortel I – Certification Order




EXHIBIT F




No. S015159

Vancouver Registry




IN THE SUPREME COURT OF BRITISH COLUMBIA




BETWEEN:




JANIE JEFFERY and RONALD MENSING




Plaintiffs




AND:




NORTEL NETWORKS CORPORATION, JOHN A. ROTH,

FRANK A. DUNN, F. WILLIAM CONNOR and CHAHRAM BOLOURI




Defendants




Brought under the Class Proceedings Act, R.S.B.C. 1996, c.50




ORDER




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	THE HONOURABLE
	 	 	)	 	 	                     DAY THE
	BEFORE

	 	 	)	 	 	 	 	 	)	 	 	       DAY
	 

	 	 	)	 	 	MR. JUSTICE GROBERMAN
	 	 	)	 	 	OF JUNE, 2006






     THE APPLICATION of the Plaintiffs for an Order certifying this action as a class proceeding
for the purpose of settlement, approving the notice to Class Members, and other declaratory relief
coming on for hearing at Vancouver, British Columbia on the ___day of June 2006 AND ON HEARING
___, counsel for the Plaintiff, and on hearing ___, counsel for the
Defendant ___, and on hearing ___, counsel for the Defendant
___AND ON READING the materials filed, including the Settlement Agreement (defined
herein).




	1.	 	THIS COURT ORDERS AND DECLARES that for the purposes of this Order the following definitions
apply and are incorporated into this Order:






	 	(a)	 	“British Columbia Action” means this proceeding;
	 
	 	(b)	 	“British Columbia Class” means the class certified for the purpose of
settlement in the British Columbia Action pursuant to paragraph 3 of this Order;
	 
	 	(c)	 	“British Columbia Class Counsel” means Klein Lyons.










 




Nortel I – Certification Order




 -2-








	 	(d)	 	“British Columbia Class Counsel Fees” means the fees, disbursements, costs,
GST, and other applicable taxes or charges of British Columbia Class Counsel;
	 
	 	(e)	 	“British Columbia Class Member” means a member of the British Columbia Class
who does not opt out of the British Columbia Class in the manner set forth in this
Order;
	 
	 	(f)	 	“British Columbia Court” means the Supreme Court of British Columbia;
	 
	 	(g)	 	“Claims Administrator” means the entity approved by this Court pursuant to
paragraph 11 to administer the Settlement;
	 
	 	(h)	 	“Class Members” means members of the British Columbia Class, the Ontario
National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(i)	 	“Class Period” means the period of time between October 24, 2000 through
February 15, 2001, inclusive;
	 
	 	(j)	 	“Courts” means the British Columbia Court, the Ontario Court, the Quebec Court
and the U.S. Court;
	 
	 	(k)	 	“Defendants” means Nortel and the persons named as defendants in the British
Columbia Action;
	 
	 	(l)	 	“Escrow Agents” has the meaning set forth in the Stipulation;
	 
	 	(m)	 	“Excluded Persons” means Nortel and the Individuals, members of any of the
Individuals’ immediate families, any entity in which Nortel or any of the Individuals
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel,
and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of Nortel and the Individuals;
	 
	 	(n)	 	“Gross Cash Settlement Fund” has the meaning set forth in the Stipulation;
	 
	 	(o)	 	“Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel to
be issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance with
paragraph 4(d) of the Stipulation;
	 
	 	(p)	 	“Individuals” means Clarence Chandran, Frank Dunn and John Andrew Roth;
	 
	 	(q)	 	“Nortel” means the Defendant, Nortel Networks Corporation;
	 
	 	(r)	 	“Nortel I Actions” means the Ontario National Action, the Quebec Action, the
British Columbia Action and the U.S. Action;
	 
	 	(s)	 	“Nortel I Defendants” means the Defendants William R. Hawe, Clarence Chandran,
and Deloitte & Touche LLP;










 




Nortel I – Certification Order




 -3-








	 	(t)	 	“Notice” means the notice to the classes in the Nortel I Actions substantially
in the form attached as Schedule “B” to this Order;
	 
	 	(u)	 	“Notice Plan” means the plan for the publication and dissemination of the
Notice, Publication Notice and Proof of Claim by the Claims Administrator, attached as
Schedule “D” to this Order;
	 
	 	(v)	 	“Ontario Court” means the Ontario Superior Court of Justice;
	 
	 	(w)	 	“Ontario National Action” means the proceeding in the Ontario Superior Court of
Justice, Frohlinger v. Nortel Networks Corporation et al., Ontario Court File No.
02-CL-4605;
	 
	 	(x)	 	“Ontario National Class” means all persons and entities, except Excluded
Persons and members of the British Columbia Class and the Quebec Class who, while
resident in Canada at the time, purchased Nortel common stock or call options on Nortel
common stock or wrote (sold) put options on Nortel common stock during the Class
Period;
	 
	 	(y)	 	“Proof of Claim” means the form substantially in the form attached as Schedule
“C” to this Order;
	 
	 	(z)	 	“Publication Notice” means the summary notice of certification and proposed
settlement, and of the hearing of the Settlement Approval Motion, substantially in the
form attached as Schedule “E” to this Order;
	 
	 	(aa)	 	“Quebec Action” means the proceeding in the Superior Court of Quebec (District
of Montreal), Association de Protection des Epargnants et Investisseurs du Québec v.
Corporation Nortel Networks, No: 500-06-000126-017;
	 
	 	(bb)	 	“Quebec Class” means all persons, except Excluded Persons who, while resident
in Quebec at the time, purchased Nortel common stock or call options on Nortel common
stock or wrote (sold) put options on Nortel common stock during the Class Period;
	 
	 	(cc)	 	“Quebec Court” means the Superior Court of Quebec;
	 
	 	(dd)	 	“Released Parties” means any and all of the Nortel I Defendants, their past or
present subsidiaries, parents, principals, affiliates, general or limited partners or
partnerships, successors and predecessors, heirs, assigns, officers, directors, agents,
employees, attorneys, advisors, investment advisors, investment bankers,
underwriters, insurers, co-insurers, re-insurers, attorneys, accountants, auditors,
consultants, administrators, executors, trustees, personal representatives,
immediate family members and any person, firm, trust, partnership, corporation,
officer, director or other individual or entity in which any Nortel I Defendant has
a controlling interest or which is related to or affiliated with any of the Nortel I










 




Nortel I – Certification Order




 -4-


	 	 	 	Defendants, and the legal representatives, heirs, executors, administrators,
trustees, successors in interest or assigns of the Nortel I Defendants;






	 	(ee)	 	“Representative Plaintiffs” means, collectively, the representative or lead
plaintiffs in each of the Nortel I Actions;
	 
	 	(ff)	 	“Settled Claims” means any and all claims, debts, demands, rights or causes of
action, suits, matters, and issues or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys’ fees, expert or consulting
fees, and any other costs, expenses or liability whatsoever), whether based on United
States or Canadian federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, at law or in equity, matured or un-matured, whether class
or individual in nature, including both known claims and Unknown Claims, (i)
that have been asserted in any of the Nortel I Actions against any of the Released
Parties, or (ii) that could have been asserted in any forum by the Class
Members in the Nortel I Actions, or any of them, against any of the Released Parties,
that arise out of or are based upon the allegations, transactions, facts, matters or
occurrences, representations or omissions involved, set forth, or referred to in the
Nortel I Actions and that relate to the purchase of Nortel common stock or call options
or the sale of Nortel put options during the Class Period or (iii) any oppression or
other claims under the Business Corporations Act, R.S.C. 1985, c. C-44, as amended,
that arise out of or are based upon the allegations, transactions, facts, matters or
occurrences, representations or omissions, set forth or referred to in the Nortel I
Actions. “Settled Claims” does not mean or include claims, if any, against the Released
Parties arising under the United States Employee Retirement Income Security Act of
1974, as amended, 29 U.S.C. § 1001, et seq. (“ERISA”) that are not common to all Class
Members and which ERISA claims are the subject of an action pending before the Judicial
Panel on Multidistrict Litigation, denominated In re Nortel Networks Securities and
“ERISA’ Litigation, MDL Docket No. 1537. “Settled Claims” further does not include (a)
the action in Rohac et al v. Nortel Networks et al, Ontario Superior Court of Justice,
Court File No. 04-CV-3268; and (b) “the application brought in Indiana Electrical
Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v. Nortel
Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059, for
leave pursuant to the Canada Business Corporations Act to commence a representative
action in the name of and on behalf of Nortel against certain of the Released Parties
and others;
	 
	 	(gg)	 	“Settlement Agreement” means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulation attached thereto,
entered into between the Plaintiffs herein and Nortel, through their counsel, dated
June  , 2006, which is attached to this Order as Schedule “A”;
	 
	 	(hh)	 	“Settlement” means the proposed settlement of the Nortel I Actions pursuant to
the terms set forth in the Stipulation;










 




Nortel I – Certification Order




 -5-








	 	(ii)	 	“Settlement Approval Motion” means the motion for final approval of the
Settlement by this Court to be heard at the date, time and location described in
paragraph 6 of this Order;
	 
	 	(jj)	 	“Stipulation” means the Stipulation and Agreement of Settlement attached to the
Settlement Agreement as Schedule “A”;
	 
	 	(kk)	 	“Supplemental Agreement” means the agreement referred to in paragraph 23 of the
Stipulation setting forth certain conditions under which the Settlement may be
terminated by Nortel if potential Class Members who purchase in excess of a certain
number of Nortel common stock or options on Nortel common stock during the Class Period
exclude themselves from the Class;
	 
	 	(ll)	 	“Unknown Claims” means any and all Settled Claims which any of the
Representative Plaintiffs, or Class Members does not know or suspect to exist in his,
her or its favour at the time of the release of the Released Parties which if known by
him, her or it might have affected his, her or its decision(s) with respect to the
Settlement;
	 
	 	(mm)	 	“U.S. Action” means the proceeding in the U.S. Federal District Court for the
Southern District of New York, Consolidated Civil Action No. 2001-CV-1855 (RMB),
certified by that Court as a class action on September 5, 2003;
	 
	 	(nn)	 	“U.S. Court” means the U.S. Federal District Court for the Southern District of
New York;
	 
	 	(oo)	 	“U.S. Global Class” means all persons, except Excluded Persons, who purchased
Nortel common stock or call options on Nortel common stock or wrote (sold) put options
on Nortel common stock (collectively, “Nortel Securities”) during the Class Period, and
who suffered damages thereby, including, but not limited to, those persons or entities
who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock
Exchange. Excluded from this class are any putative class members who previously
requested exclusion in response to a notice dated March 10, 2004 that was mailed to
members of this class beginning on April 12, 2004 notifying them of the pendency of the
U.S. Action.






	2.	 	THIS COURT ORDERS that the British Columbia Action be certified as a class proceeding for the
purpose of settlement.





3. THIS COURT ORDERS that the British Columbia Class be defined as:




All persons and entities, except Excluded Persons who, while
resident in British Columbia at the time, purchased Nortel
common stock or call options on Nortel common stock or









 




Nortel I – Certification Order




 -6-



wrote
(sold) put options on Nortel common stock during the Class
Period.




	4.	 	THIS COURT ORDERS that Janie Jeffery and Ronald Mensing are appointed as the representative
plaintiffs for the British Columbia Class.






	5.	 	THIS COURT ORDERS that the British Columbia Action is certified as a class proceeding for
settlement purposes only, on the basis of the following common issue:






Did Nortel make false or misleading statements or omissions
concerning its financial performance or its revenue and earnings
guidance during the Class Period?




	6.	 	THIS COURT ORDERS that the Settlement Approval Motion and the motion by British Columbia
Class Counsel for approval of British Columbia Class Counsel Fees shall be heard by this Court
on ___, 2006, at___:___.m. at the Supreme Court of British Columbia, 800 Smithe
Street, Vancouver, British Columbia.






	7.	 	THIS COURT ORDERS that each potential member of the British Columbia Class who elects to opt
out of the British Columbia Class must do so by writing a letter, signed by such person,
clearly requesting exclusion and indicating the name, address and telephone number of the
person seeking to opt out and the date(s), price(s), and number(s) of shares of all purchases
of Nortel common stock or call options on Nortel common stock and of all put options of Nortel
common stock written (sold) during the Class Period, and
sending it by first class mail post marked no later than , 2006 to the address indicated in
the Notice.






	8.	 	THIS COURT ORDERS that any potential member of the British Columbia Class who does not opt
out in accordance with paragraph 7 of this Order shall be bound by any 










 




Nortel I – Certification Order




 -7-


	 	 	future Orders in the
British Columbia Action, and shall be bound by the terms of the Settlement if approved by each
of the Courts in the Nortel I Actions.






	9.	 	THIS COURT ORDERS that potential members of the British Columbia Class who, prior to the date
of this Order, opted out of, or requested exclusion from, the U.S. Action will be members of
the British Columbia Class and shall be bound by any future Orders in the British Columbia
Action and by the terms of the Settlement, unless they opt out of the British Columbia Class
in accordance with paragraph 7 of this Order.
	 
	10.	 	THIS COURT ORDERS that any potential member of the British Columbia Class who opts out of the
British Columbia Class in accordance with paragraph 7 of this Order may no longer participate
in the Settlement or any continuation of the Nortel I Actions, shall not be entitled to file a
Proof of Claim as provided in paragraph 21 of this Order, shall not be entitled to receive any
payment out of the Settlement, and shall not be entitled to object to the approval of the
Settlement as provided in paragraph 23 of this Order.
	 
	11.	 	THIS COURT ORDERS that The Garden City Group, Inc. is hereby appointed and approved as the
Claims Administrator, and shall be subject to the jurisdiction of this Court for all matters
relating to the British Columbia Action, including the administration, interpretation,
effectuation or enforcement of the Settlement Agreement and this Order.






	12.	 	THIS COURT ORDERS that the Escrow Agents, acting in their capacity as escrow agents, shall be
subject to the jurisdiction of this Court in respect of the Gross Cash Settlement Fund.
	 
	13.	 	THIS COURT ORDERS that the form and content of the Notice, substantially in the form attached
hereto as Schedule “B”, is hereby approved.










 




Nortel I – Certification Order



 -8-


	14.	 	THIS COURT ORDERS that the form and content of the Proof of Claim form, substantially in the
form attached hereto as Schedule “C”, is hereby approved.
	 
	15.	 	THIS COURT ORDERS that the plan of dissemination of the Notice in the manner described in the
Notice Plan attached to this Order as Schedule D”, is hereby approved.
	 
	16.	 	THIS COURT ORDERS that upon approval of the Notice and the Proof of Claim and the appointment
of The Garden City Group, Inc. as the Claims Administrator by the Courts, the Claims
Administrator shall cause the Notice and the Proof of Claim, substantially in the forms
attached as Schedules “B” and “C” to this Order, to be mailed, by first class mail, postage
prepaid, on or before ___, 2006 to all members of the British Columbia Class who can be
identified with reasonable effort, in accordance with the Notice Plan.
	 
	17.	 	THIS COURT ORDERS that additional copies of the Notice shall be made available to any record
holder requesting such for the purpose of distribution to beneficial owners, and such record
holders shall be reimbursed from the Gross Settlement Fund (as defined in the Stipulation),
upon receipt by the Claims Administrator of proper documentation, for the reasonable expense
of sending the Notice and Proof of Claim to beneficial owners.
	 
	18.	 	THIS COURT ORDERS that British Columbia Class Counsel shall, at or before the hearing of the
Settlement Approval Motion, file with the Court proof of mailing of the Notice and Proof of
Claim.
	 
	19.	 	THIS COURT ORDERS that the form of Publication Notice in substantially the form and content
attached hereto as Schedule “E” is hereby approved and directs that the Claims Administrator
shall cause the Publication Notice to be published in accordance










 




Nortel I – Certification Order




 -9-


	 	 	with the Notice Plan, which
publication shall begin within ten (10) days of the mailing of the Notice, and British
Columbia Class Counsel shall, at or before the hearing of the Settlement Approval Motion, file
with this Court proof of the publication of the Publication Notice.






	20.	 	THIS COURT ORDERS that in order to be entitled to participate in the Net Settlement Fund (as
defined in the Stipulation), each British Columbia Class Member shall take the following
actions and be subject to the following conditions:






	 	(a)	 	A properly executed Proof of Claim, substantially in the form attached hereto
as Schedule “C”, must be submitted to the Claims Administrator, at the Post Office Box
indicated in the Notice, postmarked not later than ___, 2006. Such deadline
may be further extended by order of this Court.
	 
	 	(b)	 	Each Proof of Claim shall be deemed to have been submitted when postmarked (if
properly addressed and mailed by first class mail, postage prepaid) provided such Proof
of Claim is actually received prior to the motion for an order of this Court approving
distribution of the Net Settlement Fund (as defined in the Stipulation).
	 
	 	(c)	 	Any Proof of Claim submitted in any other manner shall be deemed to have been
submitted when it was actually received at the address designated in the Notice.






	21.	 	THIS COURT ORDERS that the Proof of Claim submitted by each British Columbia Class Member
must satisfy the following conditions:






	 	(a)	 	it must be properly completed, signed and submitted in a timely manner in
accordance with the provisions of the preceding paragraph;
	 
	 	(b)	 	it must be accompanied by adequate supporting documentation for the
transactions reported therein, in the form of broker confirmation slips, broker account
statements, an authorized statement from the broker containing the transactional
information found in a broker confirmation slip, or such other documentation as is
deemed adequate by the Claims Administrator;
	 
	 	(c)	 	if the person executing the Proof of Claim is acting in a representative
capacity, a certification of his current authority to act on behalf of the British
Columbia Class Member must be included in the Proof of Claim; and











 





Nortel I – Certification Order



 -10-


	 	(d)	 	the Proof of Claim must be complete and contain no material deletions or
modifications of any of the printed matter contained therein and must be signed under
penalty of perjury.






	22.	 	THIS COURT ORDERS that, as part of the Proof of Claim, each British Columbia Class Member
shall submit to the jurisdiction of this Court with respect to the claim submitted, and shall
(subject to the approval of the Settlement by the Courts), release all Settled Claims against
the Released Parties.






	23.	 	THIS COURT ORDERS that British Columbia Class Members who wish to file with the Court an
objection to or comment on the Settlement or to the approval of British Columbia Class Counsel
Fees, shall deliver a written submission to the Claims Administrator at the address indicated
in the Notice, no later than ___, 2006, and the Claims Administrator shall file all
such submissions with the Court prior to the hearing of the Settlement Approval Motion.






	24.	 	THIS COURT ORDERS that if (a) the Settlement is terminated by Nortel pursuant to the
Supplemental Agreement and paragraph 26 of the Stipulation or (b) any specified condition to
the Settlement set forth in the Stipulation is not satisfied and any of the Representative
Plaintiffs or Nortel elect(s) to terminate the Settlement as provided in paragraph 25 in the
Stipulation; or (c) is terminated pursuant to paragraph 27 of the Stipulation, then: (i) this
Order, including the certification of the British Columbia Action
as a class proceeding for the purpose of the settlement, shall be set aside and be of no
further force or effect, and without prejudice to any party; (ii) each party to the British
Columbia Action shall be restored to his, her or its respective position in the litigation
as it existed immediately prior to the execution of the Settlement Agreement; and (iii) this
action shall be decertified as a class proceeding pursuant to Section 10 of the Class










 




Nortel I – Certification Order




 -11-


	 	 	Proceedings Act, RSBC, 1996, c.50, without prejudice to the Plaintiffs’ ability to reapply
for certification.






	25.	 	THIS COURT ACKNOWLEDGES having been notified that a determination of fairness of the
Settlement at the Settlement Approval Hearing will be relied upon by Nortel for an exemption,
pursuant to Section 3(a)(10) of the United States Securities Act of 1933, as amended, 15
U.S.C. § 77c(a)(1), to enable the Gross Settlement Shares to be distributed to Class Members,
and to counsel for the Representative Plaintiffs as may be awarded by the respective Courts,
without registration and compliance with the prospectus delivery requirements of U.S.
securities laws





	 	 	 
	 

	 	BY THE COURT
	 
	 	 
	 

	 	DEPUTY DISTRICT REGISTRAR
	Approved as to form:
	 	 
	 
	 	 
	 	 	 
	Solicitor for the Plaintiffs
	 	 
	 
	 	 
	 	 	 
	Solicitor for the Defendants
	 	 
	Nortel Networks Corporation,
	 	 
	John A. Roth, F. William Conner
	 	 
	and Chahram Bolouri
	 	 
	 
	 	 
	 	 	 
	Solicitor for the Defendant, Frank Dunn
	 	 












 




 -12-


Certification Order




No. S015159

Vancouver Registry




IN THE SUPREME COURT OF BRITISH

COLUMBIA




     BETWEEN:



JANIE JEFFERY and RONALD MENSING




Plaintiffs




     AND:



NORTEL NETWORKS CORPORATION, JOHN A

ROTH,

FRANK A. DUNN, F. WILLIAM CONNOR and

CHAHRAM BOLOURI




Defendants



 




ORDER




 












 







EXHIBIT G




Court File No. 02-CL-4605




ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST




	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 
	THE HONOURABLE SENIOR REGIONAL

	 	 	)	 	 	DAY, THE
	 	DAY
	 

	 	 	)	 	 	 	 	 
	JUSTICE WINKLER

	 	 	)	 	 	OF                     ,2006	 	 






BETWEEN:



LESLIE FROHLINGER




Plaintiff




- and -




NORTEL NETWORKS CORPORATION, JOHN ANDREW ROTH,

FRANK DUNN, F. WILLIAM CONNER, CHAHRAM BOLOURI,

WILLIAM R. HAWE and DELOITTE & TOUCHE LLP




Defendants



Proceedings under the Class Proceeding Act, 1992




ORDER




     THIS MOTION made by the Plaintiff for an Order approving the Settlement Agreement and
Confirmation of Stipulation and Agreement of Settlement (the “Settlement Agreement”) entered into
between the Plaintiff and the Defendant, Nortel Networks Corporation, approving Ontario National
Class Counsel Fees and for declaratory relief, was heard this day at 361 University Avenue,
Toronto, Ontario.



     ON READING the materials filed, including the Settlement Agreement attached to this Order as
Schedule “A”, and on hearing the submissions of counsel for the Plaintiff and counsel for the
Defendants:


1. THIS COURT DECLARES
that for the purposes of this Order the following definitions apply and are incorporated into
this Order:






 









 





-2-




	 	(a)	 	“British Columbia Action” means the proceeding in Supreme Court of
British Columbia, Jeffery et al v. Nortel Networks Corporation et al, Court File No.
S0151590, Vancouver Registry;
	 
	 	(b)	 	“British Columbia Class” means all persons and entities, except Excluded
Persons who, while resident in British Columbia at time, purchased Nortel common stock
or call options on Nortel common stock or wrote (sold) put options on Nortel common
stock during the Class Period;
	 
	 	(c)	 	“Canadian Actions” means the Ontario National Action, the British Columbia
Action and the Quebec Action;
	 
	 	(d)	 	“Certification Order” means the Order certifying this action as a class
proceeding dated June ___, 2006;
	 
	 	(e)	 	“Claims Administrator” means The Garden City Group, Inc.;
	 
	 	(f)	 	“Class Members” means members of the British Columbia Class, the Ontario
National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(g)	 	“Class Period” means the period of time between October 24, 2000 through
February 15, 2001, inclusive;
	 
	 	(h)	 	“Courts” means this Court, the Supreme Court of British Columbia, the
Superior Court of Quebec and the United States Federal District Court for the Southern
District of New York;
	 
	 	(i)	 	“Defendants” means the persons and entities named as defendants in the
Ontario National Action;
	 
	 	(j)	 	“Derivative Application” means the application brought in Indiana Electrical
Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v. Nortel
Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059, for
leave pursuant to the Canada Business Corporations Act to commence a representative
action in the name of and on behalf of Nortel against certain of the Released Parties;
	 
	 	(k)	 	“Effective Date” means the date upon which the Settlement contemplated by the
Settlement Agreement shall become effective, as provided in paragraph 24 of the
Stipulation;
	 
	 	(l)	 	“Escrow Agent” has the meaning set forth in the Stipulation;













 




-3-


	 	(m)	 	“Excluded Persons” means Nortel and the Individuals, members of any of the
Individuals’ immediate families, any entity in which Nortel or any of the Individuals
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel,
and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of Nortel and the Individuals;
	 
	 	(n)	 	“Gross Settlement Fund” has the meaning set forth in the Stipulation;
	 
	 	(o)	 	“Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel
to be issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance
with paragraph 4(d) of the Stipulation;
	 
	 	(p)	 	“Individuals” means Clarence Chandran, Frank Dunn and John Andrew Roth;
	 
	 	(q)	 	“Nortel” means the Defendant, Nortel Networks Corporation;
	 
	 	(r)	 	“Nortel I Actions” means the Ontario National Action, the British Columbia
Action, the Quebec Action and the U.S. Action;
	 
	 	(s)	 	“Nortel I Defendants” means the Defendants and Clarence Chandran;
	 
	 	(t)	 	“Nortel II Actions” means the following proceedings in Canada and the U.S.:






	 	(i)	 	Peter Gallardi v. Nortel Networks Corporation et al., in the Ontario
Superior Court of Justice, Toronto, Court File No. 05-CV-285606 CP;
	 
	 	(ii)	 	Clifford W. Skarstedt v. Corporation Nortel Networks, in the
Superior Court of Quebec, District of Montreal, No: 500-06-000277-059; and
	 
	 	(iii)	 	In re Nortel Networks Corp. Securities Litigation, in the United
States Federal District Court for the Southern District of New York, Master
File No. 05-MD-1659 (LAP);






	 	(u)	 	“Ontario National Action” means this proceeding which raised claims in the
nature of negligence, negligent and/or reckless misrepresentation, and alleges
breaches of the Canada Business Corporations Act, Competition Act and Securities Act,
for which relief was sought through an award of damages;




 









 





-4-


	 	(v)	 	“Ontario National Class Counsel” means Rochon Genova LLP and Lerners LLP;
	 
	 	(w)	 	“Ontario National Class Counsel Fees” means the fees, disbursements, costs,
GST, and other applicable taxes or charges of Ontario National Class Counsel, as
approved by this Court in this Order;
	 
	 	(x)	 	“Ontario National Class” means all persons and entities, except Excluded
Persons and except members of the British Columbia Class and the Quebec Class, who,
while resident in Canada at the time, purchased Nortel common stock or call options on
Nortel common stock or wrote (sold) put options on Nortel common stock during the
Class Period;
	 
	 	(y)	 	“Ontario National Class Member” means a member of the Ontario National Class
who has not opted out of the Ontario National Class in accordance with the
Certification Order;
	 
	 	(z)	 	“Other Actions” means actions or proceedings, other than the Proceedings,
relating to Settled Claims commenced by an Ontario National Class Member against one
or more Released Parties;
	 
	 	(aa)	 	“Plan of Allocation” means the plan of allocation set forth in the Notice of
Certification in Canada and Proposed Settlements of Class Actions, Motion for
Attorneys’ Fees and Settlement Fairness Hearings and attached as Schedule “B” to this
Order;
	 
	 	(bb)	 	“Proceedings” means the Ontario National Action, the Quebec Action, the
British Columbia Action, the U.S. Action and the Nortel II Actions;
	 
	 	(cc)	 	“Quebec Action” means the proceeding in the Superior Court of Quebec
(District of Montreal), Association de Protection des Epargnants et Investisseurs du
Québec v. Corporation Nortel Networks, No: 500-06-000126-017;
	 
	 	(dd)	 	“Quebec Class” means all persons, except Excluded Persons who, while
resident in Quebec at the time, purchased Nortel common stock or call options on
Nortel common stock or wrote (sold) Nortel put options on Nortel common stock during
the Class Period;
	 
	 	(ee)	 	“Released Parties” means any and all of the Nortel I Defendants, their past
or present subsidiaries, parents, principals, affiliates, general or




 









 




-5-








	 	 	 	limited partners
or partnerships, successors and predecessors, heirs, assigns, officers, directors,
agents, employees, attorneys, advisors, investment advisors, investment bankers,
underwriters, insurers, co-insurers, re-insurers, accountants, auditors, consultants,
administrators, executors, trustees, personal representatives, immediate family
members and any person, firm, trust, partnership, corporation, officer, director or
other individual or entity in which any Nortel I Defendant has a controlling interest
or which is related to or affiliated with any of the Nortel I Defendants, and the
legal representatives, heirs, executors, administrators, trustees, successors in
interest or assigns of the Nortel 1 Defendants;
	 
	 	(ff)	 	“Representative Plaintiffs” means, collectively, the representative or lead
plaintiffs in each of the Canadian Actions and the U.S. Action;
	 
	 	(gg)	 	“Settled Claims” means any and all claims, debts, demands, rights or causes
of action, suits, matters, and issues or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys’ fees, expert or consulting
fees, and any other costs, expenses or liability whatsoever), whether based on United
States or Canadian federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, at law or in equity, matured or un-matured, whether class
or individual in nature, including both known claims and Unknown Claims, (i) that have
been asserted in any of the Nortel I Actions against any of the Released Parties, or
(ii) that could have been asserted in any forum by the Class Members in the Nortel I
Actions, or any of them, against any of the Released Parties, that arise out of or are
based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Nortel I
Actions and that relate to the purchase of Nortel common stock or call options or the
sale of Nortel put options during the Class Period or (iii) any oppression or other
claims under the Business Corporations Act, R.S.C. 1985, c. C-44, as amended, that
arise out of or are based upon the allegations, transactions, facts, matters or
occurrences, representations or omissions,
set forth or referred to in the Nortel I Actions. “Settled Claims” does not mean
or include claims, if any, against the Released Parties arising under the United
States Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §
1001, et seq. (“ERISA”) that are not common to all Class Members and which ERISA
claims are the subject of an action pending before the Judicial Panel on
Multidistrict Litigation, denominated In re Nortel Networks Securities and “ERISA’
Litigation, MDL Docket




 









 





-6-


	 	 	 	No. 1537. Settled Claims also does not include: (a) the
action in Rohac et al v. Nortel Networks et al, Ontario Superior Court of Justice,
Court File No. 04-CV-3268; and (b) the Derivative Application;
	 
	 	(hh)	 	“Settled Defendants’ Claims” means any and all claims, rights or causes of
action or liabilities whatsoever, whether based on federal, provincial, local,
statutory or common law or any other law, rule or regulation, including both known
claims and Unknown Claims, that have been or could have been asserted in the Nortel I
Actions or any forum by the Nortel I Defendants or any of them or the successors and
assigns or any of them against the Representative Plaintiffs, any Class Member, or
their counsel, and that arise out of or relate in any way to the institution,
prosecution, or settlement of the Nortel I Actions (except Settled Defendants’ Claims
does not include all claims, rights or causes of action or liabilities whatsoever
related to the enforcement of the Settlement including, without limitation, any of the
terms of the Stipulation or orders or judgments issued by the Courts in connection
with the Settlement, confidentiality obligations or in respect of the Derivative
Application);
	 
	 	(ii)	 	“Settlement Agreement” means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulation attached as
Schedule “A” thereto, entered into between the Plaintiff herein and Nortel, through
their counsel, dated as of June 20, 2006, attached to this Order as Schedule “A”;
	 
	 	(jj)	 	“Settlement” means the proposed settlement of the Nortel I Actions pursuant
to the terms set forth in the Settlement Agreement adopting and ratifying the
Stipulation;
	 
	 	(kk)	 	“Stipulation” means the Stipulation and Agreement of Settlement attached to
the Settlement Agreement as Schedule “A”;
	 
	 	(ll)	 	“Supplemental Agreement” means the agreement referred to in paragraph 23 of
the Stipulation setting forth certain conditions under which the Settlement may be
terminated by Nortel if potential Class
Members who purchase in excess of a certain number of Nortel common stock or
options on Nortel common stock during the Class Period exclude themselves from the
Class;
	 
	 	(mm)	 	“Unknown Claims” means any and all Settled Claims which any of the
Representative Plaintiffs, or Class Members does not know or suspect to exist in his,
her or its favour at the time of the release of the Released




 









 




-7-








	 	 	 	Parties and any Settled
Defendants’ Claims which any Nortel I Defendant does not know or suspect to exist in
his, her or its favour, which if known by him, her or it might have affected his, her
or its decision(s) with respect to the Settlement;
	 
	 	(nn)	 	“U.S. Action” means the proceeding in the United States Federal District
Court for the Southern District of New York, In re Nortel Networks Corp. Securities
Litigation, Consolidated Civil Action No. 01-CV-1855 (RMB), certified as a class
action on September 5, 2003; and
	 
	 	(oo)	 	“U.S. Global Class” means all persons, except Excluded Persons, who
purchased Nortel common stock or call options on Nortel common stock or wrote (sold)
put options on Nortel common stock (collectively, “Nortel Securities”) during the
Class Period, and who suffered damages thereby, including, but not limited to, those
persons or entities who traded in Nortel Securities on the New York Stock Exchange
and/or the Toronto Stock Exchange. Excluded from this class are any putative class
members who previously requested exclusion in response to a notice dated March 10,
2004 that was mailed to members of this class beginning on April 12, 2004 notifying
them of the pendency of the U.S. Action.




2. THIS COURT DECLARES that the Settlement Agreement is fair, reasonable and in the best
interests of the Ontario National Class.



3. THIS COURT ORDERS that the Settlement Agreement attached to this Order as Schedule “A” is hereby
approved pursuant to s. 29 of the Class Proceedings Act, 1992.



4. THIS COURT DECLARES
that the Settlement Agreement is binding upon the representative Plaintiff, upon all Ontario
National Class Members, and upon the Defendants, including those persons who are minors or mentally
incapable, and that the requirements of Rules 7.04(1) and 7.08(4) of the Rules of Civil Procedure
are dispensed with in respect of the Ontario National Action.



5. THIS COURT ORDERS that, upon the Effective Date, the Plaintiff herein and each of the Ontario
National Class Members, on behalf of themselves, their personal representatives,


 









 




-8-


 heirs, executors,
administrators, trustees, successors and assigns, are hereby permanently barred and enjoined from
instituting, commencing or prosecuting any Settled Claims against the Released Parties.



6. THIS COURT ORDERS AND DECLARES that, upon the Effective Date, the Plaintiff herein and each of
the Ontario National Class Members, on behalf of themselves, their personal representatives, heirs,
executors, administrators, trustees, successors and assigns shall release and shall be conclusively
deemed to have fully, finally and forever released the Released Parties from the Settled Claims.



7. THIS COURT ORDERS that, upon the Effective Date, the Plaintiff herein and each of the Ontario
National Class Members and their respective personal representatives, heirs, executors,
administrators, trustees, successors and assigns, shall not institute, continue, maintain or
assert, either directly or indirectly, whether in the United States, Canada or elsewhere, on their
own behalf or on behalf of any class or any other person, any action, suit, cause of action, claim
or demand against any Released Party or any other person who may claim any form of contribution or
indemnity (save
for a contractual indemnity) from any Released Party in respect of any Settled Claim or any matter
related thereto, at any time on or after the Effective Date, and are enjoined from doing so.



8. THIS COURT ORDERS that, upon the Effective Date, the defendants Nortel, Chahram Bolouri, F.
William Conner, William Hawe and John Roth on behalf of themselves and their personal
representatives, heirs, executors, administrators, trustees, successors and assigns, are hereby
permanently barred and enjoined from prosecuting a Settled Defendants’ Claim against the Plaintiff
herein, the Ontario National Class Members or Ontario National Class Counsel. In


 









 




-9-


the event that
any of the Released Parties assert against the Plaintiff, any Ontario National Class Member or the
Ontario National Class Counsel, any claim that is a Settled Defendants’ Claim, then the Plaintiff,
such Ontario National Class Member or Ontario National Class Counsel, as the case may be, shall be
entitled to use and assert such factual matters included within the Settled Claims only against
such Released Party in defence of such claim but not for the purposes of asserting any claim
against any Released Party.



9. THIS COURT ORDERS AND DECLARES that each Ontario National Class Member shall consent and shall
be deemed to have consented to the dismissal of any Other Actions he, she or it has commenced
against the Released Parties, without costs and with prejudice.



10. THIS COURT ORDERS
that neither this Order, the Settlement Agreement, the Stipulation, nor any of their terms and
provisions, nor any of the negotiations or proceedings connected with it, nor any of the documents
or statements referred to therein shall be:





	 	(a)	 	offered or received against the Defendants as evidence of or construed
as or deemed to be evidence of any presumption, concession, or admission by any of the
Nortel I Defendants with respect to the truth of any fact alleged in the Statement of
Claim, as amended, or the validity of any claim that has been or could have been
asserted in the Ontario National Action or in any litigation, or the deficiency of any
defence that has been or could have been asserted in the Ontario National Action or in
any litigation, or of any liability, negligence, fault, or wrongdoing of the
Defendants;
	 
	 	(b)	 	offered or received against the Defendants as evidence of a presumption,
concession or admission of any fault, misrepresentation or omission with respect to
any statement or written document approved or made by any Defendant;
	 
	 	(c)	 	offered or received against the Defendants as evidence of a presumption,
concession or admission with respect to any liability, negligence, fault or
wrongdoing, or in any way referred to for any other reason as against any of the
Defendants, in any other civil, criminal or administrative action or




 









 




-10-








	 	 	 	proceeding, other
than such proceedings as may be necessary to enforce and give effect to the provisions
of the Settlement Agreement (provided, however, that Defendants may refer to it to
effectuate the release and liability protection granted them hereunder);
	 
	 	(d)	 	construed against the Defendants as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have
been recovered after trial; or
	 
	 	(e)	 	construed as or received in evidence as an admission, concession or
presumption against the Plaintiff or any of the Ontario National Class Members that
any of their claims are without merit, or that any defences asserted by the Defendants
have any merit, or that damages recoverable under the Statement of Claim, as amended,
would not have exceeded the amounts set forth under the Settlement Agreement.




11. THIS COURT ORDERS
that the Plan of Allocation is approved as fair and reasonable.



12.
THIS COURT ORDERS that Ontario National Class Counsel Fees in the amount of $___ in
cash, and ___ shares, which includes $ ___ for disbursements, and which amounts
this Court finds to be fair and reasonable, are hereby approved.



13. THIS COURT ORDERS that the Ontario National Class Counsel Fees shall be paid out of the Gross
Settlement Fund.



14. THIS COURT ORDERS that this Court shall retain jurisdiction over the parties herein, the
Ontario National Class Members, the Claims Administrator and the Escrow Agent for all matters
relating to the Ontario National Action, including the administration, interpretation, effectuation
or enforcement of the Settlement Agreement and this Order, and including any application for fees
and expenses by the Ontario National Class Counsel and the Claims Administrator incurred in
overseeing and administering the Settlement, in distributing settlement


 









 




-11-


 proceeds to the Ontario
National Class Members, and in complying with the terms of this Order and the Certification Order.



15. THIS COURT ORDERS that, on notice to the Court but without further order of the Court, the
parties to the Settlement Agreement may agree to reasonable extensions of time to carry out any of
the provisions of the Settlement Agreement.



16. THIS COURT ORDERS AND DECLARES
that the Released Parties have no responsibility for and no liability whatsoever with respect
to the administration of the Settlement.



17. THIS COURT RECOGNIZES & ACKNOWLEDGES that: (i) one of the effects of its determination that the
Settlement Agreement is fair is that, pursuant to Section 3(a)(l0) of the United States Securities
Act of 1933, as amended, 15 U.S.C. § 77c(a)(l), the Gross Settlement Shares may be distributed to
Class Members, and to counsel for the plaintiffs in the Norte! I Actions as may be awarded by the
respective Courts for counsel fees, without registration and compliance with the prospectus
delivery requirements of U.S. securities laws; and (ii) Nortel will rely on such Section 3(a)(10)
exemption (and Nortel will not register the Gross Settlement Shares under the United States
Securities Act of 1933) based on this Court’s approval of the fairness of the Settlement.



18. THIS COURT DECLARES that all Ontario National Class Members to whom it is proposed to issue
Gross Settlement Shares have had the right to appear at the hearing on the fairness of the
Settlement Agreement, and that adequate notice of this hearing has been provided to Ontario
National Class Members in accordance with the terms of the Certification Order.



19. THIS COURT ORDERS that if (a) the Settlement Agreement is terminated by Nortel pursuant to the
Supplemental Agreement and paragraph 26 of the Stipulation; (b) any specified


 









 






 condition to the
Settlement set forth in the Stipulation is not satisfied and any of the Representative Plaintiffs
or Nortel elect(s) to
terminate the Settlement Agreement as provided in paragraph 25 of the Stipulation; or (c) is
otherwise terminated pursuant to paragraph 27 of the Stipulation, then, in any such event:





	 	(a)	 	this Order (except for paragraphs 1, 10, 14, 16, 17, 18 and 19 herein)
shall be set aside, be of no further force or effect, and be without prejudice to any
party;
	 
	 	(b)	 	the Certification Order (except for paragraph 24), shall be set aside and be
of no further force or effect, and without prejudice to any party;
	 
	 	(c)	 	the Ontario National Action shall be immediately decertified as a class
proceeding pursuant to Section 10 of the Class Proceedings Act, 1992, without
prejudice to the Plaintiff’s ability to reapply for certification; and
	 
	 	(d)	 	each party to the Ontario National Action shall be restored to his, her or
its respective position as it existed immediately prior to the execution of the
Settlement Agreement.




20. THIS COURT ORDERS AND ADJUDGES that any appeal or challenge affecting the approval of the
Plan of Allocation or this Court’s approval of Ontario National Class Counsel Fees shall in no way
disturb or affect the balance of this Order and shall be deemed to be separate and apart from the
balance of this Order.



21. THIS COURT ORDERS AND ADJUDGES that, upon the Effective Date, the Ontario National Action be
and is hereby dismissed against the Defendants with prejudice and without costs.



 










 









 








	 	 	 	 	 	 	 	 
	LESLIE FROHLINGER	 	And	 	NORTEL NETWORKS CORPORATION	 	 	Court File No: 02-CL-4605
	Plaintiff	 	 	 	et al.	 	 	 
	 	 	 	 	Defendants	 	 	 
	 	 	 	 
	 

	 	 	 	 	 	 	ONTARIO
	 

	 	 	 	 	 	 	SUPERIOR COURT OF JUSTICE
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	Proceeding commenced at Toronto
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	ORDER
	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 






 









 







EXHIBIT H




	 	 	 	 	 
	CANADA

	 	                         (CLASS ACTION)	 	 
	 
	 	 	 	 
	PROVINCE OF QUEBEC

	 	SUPERIOR COURT	 	 
	DISTRICT OF MONTREAL

	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	NO.: 500-06-000126-017

	 	ASSOCIATION DE PROTECTION DES	 	 
	 
	 	 	 	 
	 

	 	ÉPARGNANTS ET INVESTISSEURS DU	 	 
	 
	 	 	 	 
	 

	 	QUEBEC (A.P.E.I.Q.)	 	 
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	ANDRÉ DUSSAULT	 	 
	 
	 	 	 	 
	 

	 	               Representatives	 	 
	 
	 	 	 	 
	 

	 	v.	 	 
	 
	 	 	 	 
	 

	 	CORPORATION NORTEL NETWORKS	 	 
	 
	 	 	 	 
	 

	 	               Defendant	 	 
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	FONDS D’AIDE AUX RECOURS	 	 
	 

	 	COLLECTIFS	 	 
	 
	 	 	 	 
	 

	 	               Mis en cause	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






ORDER




          THIS MOTION made by the Representatives for an Order approving the Settlement Agreement and
Confirmation of Stipulation of Agreement of Settlement (the “Settlement Agreement”) entered into
between the Representatives and the Defendant, Corporation Nortel Networks, approving Quebec Class
Counsel Fees and for declaratory relief, was heard this day.




1









 








          ON READING the materials filed, including the Settlement Agreement attached to this Order
as Schedule “A”, and on hearing the submissions of counsel for the Representatives and counsel for
the Defendant:



1. THIS COURT ORDERS AND DECLARES that for the purposes of this Order the
following definitions apply and are incorporated into this Order:





	 	(a)	 	“Authorization Order” means the Order authorizing the bringing
of the class action for the purpose of settlement dated June ___2006;
	 
	 	(b)	 	“British Columbia Action” means the proceeding in Supreme Court
of British Columbia, Jeffery et al. v. Nortel Networks Corporation et al.,
Court File No. S0151590, Vancouver Registry;
	 
	 	(c)	 	“British Columbia Class” means all persons and entities, except
Excluded Persons who, while resident in British Columbia at the time, purchased
Nortel common stock or call options on Nortel common stock or wrote (sold) put
options on Nortel common stock during the Class Period ;
	 
	 	(d)	 	“Canadian Actions” means the Ontario National Action, the
British Columbia Action and the Quebec Action;
	 
	 	(e)	 	“Claims Administrator” means the The Garden City Group, Inc.;
	 
	 	(f)	 	“Class Members” means the members of the British Columbia
Class, the Ontario National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(g)	 	“Class Period” means the period of time between October 24,
2000 through February 15, 2001, inclusive;
	 
	 	(h)	 	“Courts” means this Court, the Supreme Court of British
Columbia, the Ontario Supreme Court of Justice and the United States Federal
District Court for the Southern District of New York;
	 
	 	(i)	 	“Defendant” means Corporation Nortel Networks;
	 
	 	(j)	 	“Derivative Application” means the application brought in
Indiana Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and
397 Pension Fund v. Nortel Networks Corporation, Ontario Superior Court of
Justice, Court File No. 49059, for leave pursuant to the Canada Business
Corporations Act to commence a representative action in the name of and on
behalf of Nortel against certain of the Released Parties;




2









 






	 	(k)	 	“Effective Date” means the date upon which the Settlement
contemplated by the Settlement Agreement shall become effective, as provided in
paragraph 24 of the Stipulation;
	 
	 	(l)	 	“Escrow Agent” has the meaning set forth in the Stipulation;
	 
	 	(m)	 	“Excluded Persons” means Nortel and the Individuals, members of
any of the Individuals’ immediate families, any entity in which Nortel or any
of the Individuals has a controlling interest or is a parent or subsidiary of
or is controlled by Nortel, and the officers, directors, affiliates, legal
representatives, heirs, predecessors, successors or assigns of any of Nortel
and the Individuals;
	 
	 	(n)	 	“Gross Settlement Fund” has the meaning set forth in the
Stipulation;
	 
	 	(o)	 	“Gross Settlement Shares” means 314,333,875 shares of common
stock of Nortel to be issued by Nortel, pursuant to the Settlement, as may be
adjusted in accordance with paragraph 4(d) of the Stipulation;
	 
	 	(p)	 	“Individuals” means Clarence Chandran, Frank Dunn and John
Andrew Roth;
	 
	 	(q)	 	“Nortel” means the Defendant, Corporation Nortel Networks;
	 
	 	(r)	 	“Nortel I Actions” means the Ontario National Action, the
British Columbia Action, the Quebec Action and the U.S. Action;
	 
	 	(s)	 	“Nortel I Defendants” means the Defendant and Clarence
Chandran;
	 
	 	(t)	 	“Nortel II Actions” means the following proceedings in Canada
and the U.S.:






	 	(i)	 	Peter Gallardi v. Nortel Networks Corporation
et al., in the Ontario Superior Court of Justice, Toronto, Court File
No. 05-CV-285606 CP;
	 
	 	(ii)	 	Clifford W. Skarstedt v. Corporation
Nortel Networks, in the Superior Court of Quebec, District of Montreal,
No. 500-06-000277-059 and
	 
	 	(iii)	 	In re Nortel Networks Corp. Securities
Litigation, in the U.S. Federal District Court for the Southern
District of New York, Master File No. 05-MD-1659 (LAP);






	 	(u)	 	“Ontario National Action” means the proceeding in the Ontario Superior
Court of Justice, Frohlinger v. Nortel Networks Corporation et al., Court File
No. 02-CL-4605;
	 
	 	(v)	 	“Ontario National Class” means all persons and entities, except
Excluded Persons and except members of the British Columbia Class





3









 











	 	 	 	and the Quebec Class, who, while resident in Canada at the time, purchased
Nortel common stock or call options on Nortel common stock or wrote (sold)
put options on Nortel common stock during the Class Period;
	 
	 	(w)	 	“Other Actions” means actions or proceedings, other than the
Proceedings, relating to Settled Claims commenced by a Quebec Class Member
against one or more Released Parties;
	 
	 	(x)	 	“Plan of Allocation” means the plan of allocation set forth in
the Notice of Certification in Canada and Proposed Settlements of Class
Actions, Motion for Attorneys’ Fees and Settlement Fairness Hearings and
attached as Schedule “B” to this Order;
	 
	 	(y)	 	“Proceedings” means the Ontario National Action, the Quebec
Action, the British Columbia Action, the U.S. Action and the Nortel II Actions;
	 
	 	(z)	 	“Quebec Action” means this proceeding;
	 
	 	(aa)	 	“Quebec Class” means all persons, except Excluded Persons who,
while resident in Quebec at the time, purchased Nortel common stock or call
options on Nortel common stock or wrote (sold) Nortel put options on Nortel
common stock during the Class Period;
	 
	 	(bb)	 	“Quebec Class Counsel” means Belleau Lapointe, S.A., and
Unterberg, Labelle, Lebeau S.E.N.C.;
	 
	 	(cc)	 	“Quebec Class Counsel Fees” means the fees, disbursements, costs, GST, and
other applicable taxes or charges of Quebec Class Counsel, as approved by this
Court in this Order;
	 
	 	(dd)	 	“Quebec Class Member” means a member of the Quebec Class who
has not opted out of the Quebec Class in accordance with the Authorization
Order;
	 
	 	(ee)	 	“Released Parties” means any and all of the Nortel I Defendants, their past or present
subsidiaries, parents, principals, affiliates, general or limited partners or partnerships,
successors and predecessors, heirs, assigns, officers, directors, agents, employees, attorneys,
advisors,
investment advisors, investment bankers, underwriters, insurers, co-insurers,
re-insurers, accountants, auditors, consultants, administrators, executors,
trustees, personal representatives, immediate family members and any person,
firm, trust, partnership, corporation, officer, director or other individual or
entity in which any Nortel I Defendant has a controlling interest or which is
related to or affiliated with any of the Nortel I Defendants, and the legal
representatives, heirs, executors, administrators, trustees, successors in
interest or assigns of the Nortel I Defendants;




4









 












	 	(ff)	 	“Representative Plaintiffs” means, collectively, the representative or
lead plaintiffs in each of the Canadian Actions and the U.S. Action;
	 
	 	(gg)	 	“Settled Claims” means any and all claims, debts, demands,
rights or causes of action, suits, matters, and issues or liabilities
whatsoever (including, but not limited to, any claims for damages, interest,
attorneys’ fees, expert or consulting fees, and any other costs, expenses or
liability whatsoever), whether based on United States or Canadian federal,
state, provincial, local, statutory or common law or any other law, rule or
regulation, whether fixed or contingent, accrued or unaccrued, liquidated or
unliquidated, at law or in equity, matured or un-matured, whether class or
individual in nature, including both known claims and Unknown Claims, (i) that
have been asserted in any of the Nortel I Actions against any of the Released
Parties, or (ii) that could have been asserted in any forum by the Class
Members in the Nortel I Actions, or any of them, against any of the Released
Parties, that arise out of or are based upon the allegations, transactions,
facts, matters or occurrences, representations or omissions involved, set
forth, or referred to in the Nortel I Actions and that relate to the purchase
of Nortel common stock or call options or the sale of Nortel put options during
the Class Period or (iii) any oppression or other claims under the Canada
Business Corporations Act, R.S.C. 1985, c. C-44, as amended, that arise out of
or are based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions, set forth or referred to in the Nortel I Actions.
Settled Claims does not mean or include claims, if any, against the Released
Parties arising under the United States Employee Retirement Income Security Act
of 1974, as amended, 29 U.S.C. § 1001, et seq. (“ERISA”) that are not common to
all Class Members and which ERISA claims are the subject of an action pending
before the Judicial Panel on Multidistrict Litigation, denominated In re Nortel
Networks Securities and “ERISA’ Litigation, MDL Docket No. 1537. Settled
Claims also does not include: (a) the action in Rohac et al. v. Nortel Networks
et al., Ontario Superior Court of Justice, Court File No. 04-CV-3268; and (b)
the Derivative Application;
	 
	 	(hh)	 	“Settled Defendants’ Claims” means any and all claims, rights
or causes of action or liabilities whatsoever, whether based on federal,
provincial, local, statutory or common law or any other law, rule or
regulation, including both known claims and Unknown Claims, that have been or
could have been asserted in the Nortel I Actions or any forum by the Nortel I
Defendants or any of them or the successors and assigns or any of them against
the Representative Plaintiffs, any Class Member, or their counsel, and that
arise out of or relate in any way to the institution, prosecution, or
settlement of the Nortel I Actions (except Settled Defendants’ Claims does not
include all claims, rights or causes of action or liabilities whatsoever
related to the enforcement of the Settlement including, without limitation, any
of the terms of the Stipulation or orders




5









 






	 	 	 	or judgments issued by the Courts in connection with the Settlement,
confidentiality obligations or in respect of the Derivative Application);
	 
	 	(ii)	 	“Settlement Agreement” means the Settlement Agreement and
Confirmation of Stipulation and Agreement of Settlement, including the
Stipulation attached as Schedule “A” thereto, entered into between the
Representatives and Nortel, through their counsel, dated as of June ___,
2006, attached to this Order as Schedule “A”;
	 
	 	(jj)	 	“Settlement” means the proposed settlement of the Nortel I Actions
pursuant to the terms set forth in the Settlement Agreement adopting and
ratifying the Stipulation;
	 
	 	(kk)	 	“Stipulation” means the Stipulation and Agreement of Settlement
attached to the Settlement Agreement as Schedule “A”;
	 
	 	(ll)	 	“Supplemental Agreement” means the agreement referred to in
paragraph 23 of the Stipulation setting forth certain conditions under which
the Settlement may be terminated by Nortel if potential Class Members who
purchase in excess of a certain number of Nortel common stock or options on
Nortel common stock during the Class Period exclude themselves from the Class;
	 
	 	(mm)	 	“Unknown Claims” means any and all Settled Claims which any of
the Representative Plaintiffs, or Class Members does not know or suspect to
exist in his, her or its favour at the time of the release of the Released
Parties and any Settled Defendants’ Claims which any Nortel I Defendant does
not know or suspect to exist in his, her or its favour, which if known by him,
her or it might have affected his, her or its decision(s) with respect to the
Settlement;
	 
	 	(nn)	 	“U.S. Action” means the proceeding in the United States Federal District Court for the
Southern District of New York, In re Nortel Networks Corp. Securities Litigation, Consolidated Civil Action No. 2001-CV-1855
(RMB), certified as a class action on September 5, 2003;
	 
	 	(oo)	 	“U.S. Global Class” means all persons, except Excluded Persons, who
purchased Nortel common stock or call options on Nortel common stock or wrote
(sold) put options on Nortel common stock (collectively, “Nortel Securities”)
during the Class Period, and who suffered damages thereby, including, but not
limited to, those persons or entities who traded in Nortel Securities on the
New York Stock Exchange andlor the Toronto Stock Exchange. Excluded from this
class are any putative class members who previously requested exclusion in
response to a notice dated March 10, 2004 that was mailed to members of this
class beginning on April 12, 2004 notifying them of the pendency of the U.S.
Action.










6









 










2. THIS COURT DECLARES that the Settlement Agreement is fair, reasonable and in the best
interests of the Quebec Class.



3. THIS COURT ORDERS that the Settlement Agreement attached to this Order as Schedule “A” is hereby
approved pursuant to Article 1025 of the Code of Civil Procedure.



4. THIS COURT DECLARES that the Settlement Agreement is binding upon the Representatives, upon all
Quebec Class Members, and upon the Defendant, including those persons who are minors or mentally
incapable.



5. THIS COURT ORDERS that, upon the Effective Date, the Representatives herein and each of the
Quebec Class Members, on behalf of themselves, their personal representatives, heirs, executors,
administrators, trustees, successors and assigns, are hereby permanently barred and enjoined from
instituting, commencing or prosecuting any Settled Claims against the Released Parties.



6. THIS COURT ORDERS AND DECLARES that, upon the Effective Date, each of their personal
representatives, heirs, executors, administrators, trustees, successors and assigns shall release
and shall be conclusively deemed to have fully, finally and forever released the Released Parties
from the Settled Claims.



7. THIS COURT ORDERS that, upon the Effective Date, each of the Representatives herein and each of
the Quebec Class Members and their respective personal representatives, heirs, executors,
administrators, trustees, successors and assigns, shall not institute, continue, maintain or
assert, either directly or indirectly, whether in the United States, Canada or elsewhere, on their
own behalf or on behalf of any class or any other person, any action, suit,


7









 






cause of action, claim or demand against any Released Party or any other person who may claim any
form of contribution or indemnity (save for a contractual indemnity) from any Released Party in
respect of any Settled Claim or any matter related thereto, at any time on or after the Effective
Date, and are enjoined from doing so.



8. THIS COURT ORDERS that, upon the Effective Date, the Defendant Nortel, on behalf of itself and
its personal representatives, heirs, executors, administrators, trustees, successors and assigns,
is hereby permanently barred and enjoined from prosecuting a Settled Defendants’ Claim
against any of the Representatives herein, the Quebec National Class Members or Quebec Class
Counsel. In the event that any of the Released Parties asserts against the Representatives, any
Quebec Class Member or the Quebec Class Counsel any claim that is a Settled Defendants’ Claim, then
the Representatives, such Quebec Class Member or Quebec Counsel, as the case may be, shall be
entitled to use and assert such factual matters included within the Settled Claims only against
such Released Party in defence of such claim but not for the purposes of asserting any claim
against any Released Party.



9. THIS COURT ORDERS AND DECLARES that each Quebec Class Member shall consent and shall be
deemed to have consented to the dismissal of any Other Actions he, she or it has commenced against
the Released Parties, without costs and with prejudice.



10. THIS COURT ORDERS that neither this Order, the Settlement Agreement, the Stipulation, nor any
of their terms and provisions, nor any of the negotiations or proceedings connected with it, nor
any of the documents or statements referred to therein shall be:





	 	(a)	 	offered or received against the Defendant as evidence of or
construed as or deemed to be evidence of any presumption, concession, or
admission by the Defendant with respect to the truth of any fact alleged in the
Quebec Action or the validity of any claim that has been or could have been
asserted in the Quebec Action or in any litigation, or the deficiency of any
defence that has been or could have been asserted in the Quebec Action or





8









 











	 	 	 	in any litigation, or of any liability, negligence, fault, or wrongdoing of
the Defendant;
	 
	 	(b)	 	offered or received against the Defendant as evidence of a
presumption, concession or admission of any fault, misrepresentation or
omission with respect to any statement or written document approved or made by
the Defendant;
	 
	 	(c)	 	offered or received against the Defendant as evidence of a
presumption, concession or admission with respect to any liability, negligence,
fault or wrongdoing, or in any way referred to for any other reason as against
the Defendant, in any other civil, criminal or administrative action or
proceeding, other than such proceedings as may be necessary to enforce and give
effect to the provisions of the Settlement Agreement (provided, however, that
Defendant may refer to it to effectuate the release and liability protection
granted them hereunder);
	 
	 	(d)	 	construed against the Defendant as an admission or concession
that the consideration to be given hereunder represents the amount which could
be or would have been recovered after trial; or
	 
	 	(e)	 	construed as or received in evidence as an admission,
concession or presumption against Representatives or any of the Quebec Class
Members that any of their claims are without merit, or that any defences
asserted by the Defendant have any merit, or that damages recoverable under the
Quebec Action would not have exceeded the amounts set forth under the
Settlement Agreement.




11. THIS COURT ORDERS that the Plan of Allocation is approved as fair and reasonable.



12. THIS COURT ORDERS 
that Quebec Class Counsel Fees in the amount of $                      in cash, and
                    
shares, which includes $                      for disbursements, and which amounts this Court
finds to be fair and reasonable, are hereby approved.



13. THIS COURT ORDERS that the Quebec Class Counsel Fees shall be paid out of the Gross Settlement
Fund.



14. THIS COURT ORDERS that this Court shall retain jurisdiction over the parties herein, the Quebec
Class Members, the Claims Administrator and the Escrow Agent for all matters relating to the Quebec
Action, including the administration, interpretation, effectuation or


9









 






enforcement of the Settlement Agreement and this Order, and including any application for fees and
expenses by the Quebec Class Counsel and the Claims Administrator incurred in overseeing and
administering the Settlement, in distributing settlement proceeds to the Quebec Class Members, and
in complying with the terms of this Order and the Authorization Order.



15. THIS COURT ORDERS that, on notice to the Court but without further order of the Court, the
parties to the Settlement Agreement may agree to reasonable extensions of time to carry out any of
the provisions of the Settlement Agreement.



16. THIS COURT ORDERS AND DECLARES that the Released Parties have no responsibility for and no
liability whatsoever with respect to the administration of the Settlement.



17. THIS COURT RECOGNIZES & ACKNOWLEDGES that: (i) one of the effects of its determination that the
Settlement Agreement is fair is that, pursuant to Section 3(a)(l0) of the United States Securities
Act of 1933, as amended, 15 U.S.C. § 77c(a)(1), the Gross Settlement Shares may be distributed to
Class Members, and to counsel for the plaintiffs in the Nortel I Actions as may be awarded by the
respective Courts for counsel fees, without registration and compliance with the prospectus
delivery requirements of U.S. securities laws; and (ii) Nortel will rely on such Section 3(a)(10)
exemption (and Nortel will not register the Gross Settlement Shares under the United States
Securities Act of 1933) based on this Court’s approval of the fairness of the Settlement.



18. THIS COURT DECLARES that all Quebec Class Members to whom it is proposed to issue Gross
Settlement Shares have had the right to appear at the hearing on the fairness of the Settlement
Agreement, and that adequate notice of this hearing has been provided to Class Members in
accordance with the terms of the Authorization Order.




10









 








19. THIS COURT ORDERS that if (a) the Settlement Agreement is terminated by Nortel pursuant to
the Supplemental Agreement and paragraph 26 of the Stipulation; (b) any specified condition to the
Settlement set forth in the Stipulation is not satisfied and any of the Representative Plaintiffs
or Nortel elect(s) to terminate the Settlement Agreement as provided in paragraph 25 of the
Stipulation; or (c) is otherwise terminated pursuant to paragraph 27 of the Stipulation, then, in
any such event:





	 	(a)	 	this Order (except for paragraphs 1, 10, 14, 16, 17, 18 and 19 herein)
shall be set aside, be of no further force or effect, and without prejudice to
any party;
	 
	 	(b)	 	the Authorization Order (except for paragraph 24), shall be set
aside, of no further force or effect, and without prejudice to any party;
	 
	 	(c)	 	the judgment authorizing the bringing of the class action shall
be annulled pursuant to the Code of Civil Procedure; and
	 
	 	(d)	 	each party to the Quebec Action shall be restored to his, her
or its respective position as it existed immediately prior to the execution of
the Settlement Agreement.




20. THIS COURT ORDERS AND ADJUDGES that any appeal or challenge, to the extent that any such right
exists, affecting the approval of the Plan of Allocation or this Court’s approval of Quebec Counsel
Fees shall in no way disturb or affect the balance of this Order and shall be deemed to be separate
and apart from the balance of this Order.



21. THIS COURT ORDERS AND ADJUDGES that, upon the Effective Date, the Quebec National Action be and
is hereby dismissed against the Defendant with prejudice and without costs.




					
	 


	 	 

	 	 
	Date

	 	J.C.S	 	 







11









 







EXHIBIT I




No. S015159

Vancouver Registry




IN THE SUPREME COURT OF BRITISH COLUMBIA




BETWEEN:




JANIE JEFFERY and RONALD MENSING




Plaintiffs




AND:




NORTEL NETWORKS CORPORATION, JOHN A ROTH,

FRANK A. DUNN, F. WILLIAM CONNOR and CHAHRAM BOLOURI




Defendants




Brought under the Class Proceedings Act, R.S.B.C. 1996, c.50




ORDER




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	THE HONOURABLE	 	 	)	 	 	          DAY
	 	 
	BEFORE

	 	 	)	 	 	
	 	 	)	 	 	THE           DAY	 	 
	 

	 	 	)	 	 	MR. JUSTICE GROBERMAN
	 	 	)	 	 	OF JUNE, 2006	 	 






THE APPLICATION of the Plaintiffs for an Order approving the Settlement Agreement and Confirmation
of Stipulation and Agreement of Settlement (the “Settlement Agreement”) entered into between the
Plaintiffs and the Defendant, Nortel Networks Corporation, approving British Columbia Class Counsel
Fees and for declaratory relief, coming on for hearing at Vancouver, British Columbia on the ___
day of June 2006 AND ON HEARING                     ,counsel for the Plaintiff, and on hearing
                     counsel for the Defendants and on hearing                     , counsel for the Defendant
                    , AND ON READING the materials filed, including the Settlement Agreement attached
to this Order as Schedule “A:




	1.	 	THIS COURT DECLARES that for the purposes of this Order the following definitions apply and
are incorporated into this Order:






	 	(a)	 	“British Columbia Action” means this proceeding;
	 
	 	(b)	 	“British Columbia Class” means all persons and entities, except Excluded
Persons who, while resident in British Columbia at the time, purchased Nortel





1









 











	 	 	 	common stock or call options on Nortel common stock or wrote (sold) put options on
Nortel common stock during the Class Period;
	 
	 	(c)	 	“British Columbia Class Counsel” means Klein Lyons;
	 
	 	(d)	 	“British Columbia Class Counsel Fees” means the fees, disbursements, costs,
GST, and other applicable taxes or charges of British Columbia Class Counsel as
approved by this Court in this order;
	 
	 	(e)	 	“British Columbia Class Member” means a member of the British Columbia Class
who has not opted out of the British Columbia Class in accordance with the
Certification Order;
	 
	 	(f)	 	“Canadian Actions” means the Ontario National Action, the British Columbia
Action and the Quebec Action;
	 
	 	(g)	 	“Certification Order” means the Order certifying this action as a class
proceeding dated June ___, 2006;
	 
	 	(h)	 	“Claims Administrator” means The Garden City Group, Inc.;
	 
	 	(i)	 	“Class Members” means the members of the British Columbia Class, the Ontario
National Class, the Quebec Class and the U.S. Global Class;
	 
	 	(j)	 	“Class Period” means the period of time between October 24, 2000 through
February 15, 2001, inclusive;
	 
	 	(k)	 	“Courts” means this Court, the Ontario Supreme Court of Justice, the Superior
Court of Quebec and the United States Federal District Court for the Southern District
of New York;
	 
	 	(l)	 	“Defendants” means Nortel and the persons named as defendants in the British
Columbia Action;
	 
	 	(m)	 	“Derivative Application” means the application brought in Indiana Electrical
Workers Pension Trust Fund IBEW and Laborers Local 100 and 397 Pension Fund v. Nortel
Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059, for
leave pursuant to the Canada Business Corporations Act to commence a representative
action in the name of and on behalf of Nortel against certain of the Released Parties;
	 
	 	(n)	 	“Effective Date” means the date upon which the Settlement contemplated by the
Settlement Agreement shall become effective, as provided in paragraph 24 of the
Stipulation;
	 
	 	(o)	 	“Escrow Agent” has the meaning set forth in the Stipulation;




2









 












	 	(p)	 	“Excluded Persons” means Nortel and the Individuals, members of any of the
Individuals’ immediate families, any entity in which Nortel or any of the Individuals
has a controlling interest or is a parent or subsidiary of or is controlled by Nortel,
and the officers, directors, affiliates, legal representatives, heirs, predecessors,
successors or assigns of any of Nortel and the Individuals;
	 
	 	(q)	 	“Gross Settlement Fund” has the meaning set forth in the Stipulation;
	 
	 	(r)	 	“Gross Settlement Shares” means 314,333,875 shares of common stock of Nortel to
be issued by Nortel, pursuant to the Settlement, as may be adjusted in accordance with
paragraph 4(d) of the Stipulation;
	 
	 	(s)	 	“Individuals” means Clarence Chandran, Frank Dunn and John Andrew Roth;
	 
	 	(t)	 	“Nortel” means the Defendant, Nortel Networks Corporation;
	 
	 	(u)	 	“Nortel I Actions” means the Ontario National Action, the British Columbia
Action, the Quebec Action and the U.S. Action;
	 
	 	(v)	 	“Nortel I Defendants” means the Defendants William R. Hawe, Clarence Chandran,
and Deloitte & Touche LLP;;
	 
	 	(w)	 	“Nortel II Actions” means the following proceedings in Canada and the U.S.:






	 	(i)	 	Peter Gallardi v. Nortel Networks Corporation et al., in the
Ontario Superior Court of Justice, Toronto, Court File No. 05-CV-285606 CP;
	 
	 	(ii)	 	Clifford W. Skarstedt v. Corporation Nortel Networks in the
Superior Court of Quebec, District of Montreal, No: 500-06-000277-059; and
	 
	 	(iii)	 	In re Nortel Networks Corp. Securities Litigation, in the
United States Federal District Court for the Southern District of New York,
Master File No. 05-MD-1659 (LAP);






	 	(x)	 	“Ontario National Action” means the proceeding in the Ontario Superior Court of
Justice, Frohlinger v. Nortel Networks Corporation et al., Ontario Court File No.
02-CL-4605;
	 
	 	(y)	 	“Ontario National Class” means all persons and entities, except Excluded
Persons and except members of the British Columbia Class and the Quebec Class, who,
while resident in Canada at the time, purchased Nortel common stock or call options on
Nortel common stock or wrote (sold) put options on Nortel common stock during the Class
Period;
	 
	 	(z)	 	“Other Actions” means actions or proceedings, other than the Proceedings,
relating to Settled Claims commenced by a British Columbia Class Member against one or
more Released Parties;




3









 












	 	(aa)	 	“Plan of Allocation” means the plan of allocation set forth in the Notice of
Certification in Canada and Proposed Settlements of Class Actions, Motion for
Attorneys’ Fees and Settlement Fairness Hearings and attached as Schedule “B” to this
Order;
	 
	 	(bb)	 	“Proceedings” means the Ontario National Action, the Quebec Action, the British
Columbia Action, the U.S. Action and the Nortel II Actions;
	 
	 	(cc)	 	“Quebec Action” means the proceeding in the Superior Court of Quebec (District
of Montreal), Association de Protection des Epargnants et Investisseurs du Quebec v.
Corporation Nortel Networks, No: 500-06-000126-017;
	 
	 	(dd)	 	“Quebec Class” means all persons, except Excluded Persons who, while resident
in Quebec at the time, purchased Nortel common stock or call options on Nortel common
stock or wrote (sold) Nortel put options on Nortel common stock during the Class
Period;
	 
	 	(ee)	 	“Released Parties” means any and all of the Nortel I Defendants, their past or
present subsidiaries, parents, principals, affiliates, general or limited partners or
partnerships, successors and predecessors, heirs, assigns, officers, directors, agents,
employees, attorneys, advisors, investment advisors, investment bankers, underwriters,
insurers, co-insurers, re-insurers, accountants, auditors, consultants, administrators,
executors, trustees, personal representatives, immediate family members and any person,
firm, trust, partnership, corporation, officer, director or other individual or entity
in which any Nortel I Defendant has a controlling interest or which is related to or
affiliated with any of the Nortel I Defendants, and the legal representatives, heirs,
executors, administrators, trustees, successors in interest or assigns of the Nortel I
Defendants;
	 
	 	(ff)	 	“Representative Plaintiffs” means, collectively, the representative or lead
plaintiffs in each of the Canadian Actions and the U.S. Action;
	 
	 	(gg)	 	“Settled Claims” means any and all claims, debts, demands, rights or causes of
action, suits, matters, and issues or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys’ fees, expert or consulting
fees, and any other costs, expenses or liability whatsoever), whether based on United
States or Canadian federal, state, provincial, local, statutory or common law or any
other law, rule or regulation, whether fixed or contingent, accrued or unaccrued,
liquidated or unliquidated, at law or in equity, matured or un-matured, whether class
or individual in nature, including both known claims and Unknown Claims, (i) that have
been asserted in any of the Nortel I Actions against any of the Released Parties, or
(ii) that could have been asserted in any forum by the Class Members in the Nortel I
Actions, or any of them, against any of the Released Parties, that arise out of or are
based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Nortel I
Actions and that relate to the purchase of Nortel common stock or call options or the
sale of Nortel put options during the Class





4









 











	 	 	 	Period or (iii) any oppression or other claims under the Business Corporations Act,
R.S.C. 1985, c. C-44, as amended, that arise out of or are based upon the
allegations, transactions, facts, matters or occurrences, representations or
omissions, set forth or referred to in the Nortel I Actions. “Settled Claims” does
not mean or include claims, if any, against the Released Parties arising under the
United States Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
§ 1001, et seq. (“ERISA”) that are not common to all Class Members and which ERISA
claims are the subject of an action pending before the Judicial Panel on
Multidistrict Litigation, denominated In re Nortel Networks Securities and “ERISA”
Litigation, MDL Docket No. 1537. Settled Claims also does not include: (a) the
action in Rohac et al v. Nortel Networks et al, Ontario Superior Court of Justice,
Court File No. 04-CV-3268; and (b) the Derivative Application;
	 
	 	(hh)	 	“Settled Defendants’ Claims” means any and all claims, rights or causes of
action or liabilities whatsoever, whether based on federal, provincial, local,
statutory or common law or any other law, rule or regulation, including both known
claims and Unknown Claims, that have been or could have been asserted in the Nortel I
Actions or any forum by the Nortel I Defendants or any of them or the successors and
assigns or any of them against the Representative Plaintiffs, any Class Member, or
their counsel, and that arise out of or relate in any way to the institution,
prosecution, or settlement of the Nortel I Actions (except Settled Defendants’ Claims
does not include all claims, rights or causes of action or liabilities whatsoever
related to the enforcement of the Settlement including, without limitation, any of the
terms of the Stipulation or orders or judgment issued by the Courts in connection with
the Settlement, confidentiality obligations or in respect of the Derivative
Application);
	 
	 	(ii)	 	“Settlement Agreement” means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulation attached as Schedule
“A” thereto, entered into between the Plaintiffs herein and Nortel, through their
counsel, dated as of June 20, 2006, attached to this Order as Schedule “A”;
	 
	 	(jj)	 	“Settlement” means the proposed settlement of the Nortel I Actions pursuant to
the terms set forth in the Stipulation;
	 
	 	(kk)	 	“Stipulation” means the Stipulation and Agreement of Settlement attached to the
Settlement Agreement as Schedule “A”;
	 
	 	(ll)	 	“Supplemental Agreement” means the agreement referred to in paragraph 23 of the
Stipulation setting forth certain conditions under which the Settlement may be
terminated by Nortel if potential Class Members who purchase in excess of a certain
number of Nortel common stock or options on Nortel common stock during the Class Period
exclude themselves from the Class;




5









 












	 	(mm)	 	“Unknown Claims” means any and all Settled Claims which any of the
Representative Plaintiffs, or Class Members does not know or suspect to exist in his,
her or its favour at the time of the release of the Released Parties and any Settled
Defendants’ Claims which any Nortel I Defendant does not know or suspect to exist in
his, her or its favour, which if known by him, her or it might have affected his, her
or its decision(s) with respect to the Settlement;
	 
	 	(nn)	 	“U.S. Action” means the proceeding in the United States Federal District Court
for the Southern District of New York, in re Nortel Networks Corp. Securities
Litigation, Consolidated Civil Action No. 0I-CV-1855 (RMB), certified as a class action
on September 5, 2003; and
	 
	 	(oo)	 	“U.S. Global Class” means all persons, except Excluded Persons, who purchased
Nortel common stock or call options on Nortel common stock or wrote (sold) put options
on Nortel common stock (collectively, “Nortel Securities”) during the Class Period, and
who suffered damages thereby, including, but not limited to, those persons or entities
who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock
Exchange. Excluded from this class are any putative class members who previously
requested exclusion in response to a notice dated March 10, 2004 that was mailed to
members of this class beginning on April 12, 2004 notifying them of the pendency of the
U.S. Action.






	2.	 	THIS COURT DECLARES that the Settlement Agreement is fair, reasonable and in the best
interests of the British Columbia Class.
	 
	3.	 	THIS COURT ORDERS that the Settlement Agreement attached to this Order as Schedule “A” is
hereby approved pursuant to s. 35 of the Class Proceedings Act, RSBC 1996, c.50.
	 
	4.	 	THIS COURT DECLARES that the Settlement Agreement is binding upon the representative
Plaintiffs, upon all British Columbia Class Members, and upon the Defendants, including those
persons who are miners or mentally incapable and that the requirements of Rule 6 of the Rules
of Court are dispensed with in respect of the British Columbia Action.
	 
	5.	 	THIS COURT ORDERS that, upon the Effective Date, the representative Plaintiffs herein and
each of the British Columbia Class Members, on behalf of themselves, their personal
representatives, heirs, executors, administrators, trustees, successors and assigns,





6









 











	 	 	are hereby permanently barred and enjoined from instituting, commencing or prosecuting any
Settled Claims against the Released Parties.
	 
	6.	 	THIS COURT ORDERS AND DECLARES that, upon the Effective Date, each of the representative
Plaintiffs and each of the British Columbia Class Members, on behalf of themselves, their
personal representatives, heirs, executors, administrators, trustees, successors and assigns
shall release and shall be conclusively deemed to have fully, finally and forever released the
Released Parties from the Settled Claims.
	 
	7.	 	THIS COURT ORDERS that, upon the Effective Date, each of the representative Plaintiffs and
each of the British Columbia Class Members and their respective personal representatives,
heirs, executors, administrators, trustees, successors and assigns, shall not institute,
continue, maintain or assert, either directly or indirectly, whether in the United States,
Canada or elsewhere, on their own behalf or on behalf of any class or any other person, any
action, suit, cause of action, claim or demand against any Released Party or any other person
who may claim any form of contribution or indemnity (save for a contractual indemnity) from
any Released Party in respect of any Settled Claim or any matter related thereto, at any time
on or after the Effective Date, and are enjoined from doing so.
	 
	8.	 	THIS COURT ORDERS that, upon the Effective Date, the defendants, Nortel, Chahram Bolouri, F.
William Conner and John Roth on behalf of themselves and their personal representatives,
heirs, executors, administrators, trustees, successors and assigns, are hereby permanently
barred and enjoined from prosecuting a Settled Defendants’ Claim against the Plaintiffs
herein, the British Columbia Class Members or British Columbia Class Counsel. In the event
that any of the Released Parties asserts against the Plaintiffs, any British Columbia Class
Member or the British Columbia Class Counsel any claim that is a Settled Defendants’ Claim,
then the Plaintiffs, such British Columbia Class Member or British Columbia Counsel, as the
case may be, shall be entitled to use and assert such factual matters included within the
Settled Claims only against such Released Party in defence of such claim but not for the
purposes of asserting any claim against any Released Party.




7









 






	9.	 	THIS COURT ORDERS AND DECLARES that each British Columbia Class Member shall consent and
shall be deemed to have consented to the dismissal of any Other Actions he, she or it has
commenced against the Released Parties, without costs and with prejudice.
	 
	10.	 	THIS COURT ORDERS that neither this Order, the Settlement Agreement, the Stipulation, nor any
of their terms and provisions, nor any of the negotiations or proceedings connected with it,
nor any of the documents or statements referred to therein shall be:






	 	(a)	 	offered or received against the Defendants as evidence of or construed as or
deemed to be evidence of any presumption, concession, or admission by any of the
Defendants with respect to the truth of any fact alleged in the Statement of Claim or
the validity of any claim that has been or could have been asserted in the British
Columbia Action or in any litigation, or the deficiency of any defence that has been or
could have been asserted in the British Columbia Action or in any litigation, or of any
liability, negligence, fault, or wrongdoing of the Defendants;
	 
	 	(b)	 	offered or received against the Defendants as evidence of a presumption,
concession or admission of any fault, misrepresentation or omission with respect to any
statement or written document approved or made by any Defendant;
	 
	 	(c)	 	offered or received against the Defendants as evidence of a presumption,
concession or admission with respect to any liability, negligence, fault or wrongdoing,
or in any way referred to for any other reason as against any of the Defendants, in any
other civil, criminal or administrative action or proceeding, other than such
proceedings as may be necessary to enforce and give effect to the provisions of the
Settlement Agreement (provided, however, that Defendants may refer to it to effectuate
the release and liability protection granted them hereunder);
	 
	 	(d)	 	construed against the Defendants as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have
been recovered after trial; or
	 
	 	(e)	 	construed as or received in evidence as an admission, concession or presumption
against the representative Plaintiffs or any of the British Columbia Class Members that
any of their claims are without merit, or that any defences asserted by the Defendants
have any merit, or that damages recoverable under the Statement of Claim would not have
exceeded the amounts set forth under the Settlement Agreement.






	11.	 	THIS COURT ORDERS that the Plan of Allocation is approved as fair and reasonable.




8









 






	12.	 	THIS COURT ORDERS that British Columbia Class Counsel Fees in the amount of $                     in
cash, and
                     shares, which includes $                     for disbursements and which
amounts this Court finds to be fair and reasonable, are hereby approved.
	 
	13.	 	THIS COURT ORDERS that the British Columbia Class Counsel Fees shall be paid out of the Gross
Settlement Fund.
	 
	14.	 	THIS COURT ORDERS that this Court shall retain jurisdiction over the parties herein, the
British Columbia Class Members, the Claims Administrator and the Escrow Agent for all matters
relating to the British Columbia Action, including the administration, interpretation,
effectuation or enforcement of the Settlement Agreement and this Order, and including any
application for fees and expenses by the British Columbia Class Counsel and the Claims
Administrator incurred in overseeing and administering the Settlement in distributing
settlement proceeds to the British Columbia Class Members and in complying with the terms of
this Order and the Certification Order.
	 
	15.	 	THIS COURT ORDERS that on notice to the Court but without further order of the Court, the
parties to the Settlement Agreement may agree to reasonable extensions of time to carry out
any of the provisions of the Settlement Agreement.
	 
	16.	 	THIS COURT ORDERS AND DECLARES that the Released Parties have no responsibility for and no
liability whatsoever with respect to the administration of the Settlement.
	 
	17.	 	THIS COURT RECOGNIZES & ACKNOWLEDGES that: (i) one of the effects of its determination that
the Settlement Agreement is fair is that, pursuant to Section 3(a)(10) of the United States
Securities Act of 1933, as amended, 15 U.S.C. ~ 77c(a)(l), the Gross Settlement Shares may be
distributed to Class Members, and to counsel for the plaintiffs in the Nortel I Actions as may
be awarded by the respective Courts, without registration and compliance with the prospectus
delivery requirements of U.S. securities laws; and (ii) Nortel will rely on such Section
3(a)(10) exemption (and Nortel will not register the




9









 






	 	 	Gross Settlement Shares under the United States Securities Act of 1933) based on this
Court’s approval of the fairness of the Settlement.
	 
	18.	 	THIS COURT DECLARES that all British Columbia Class Members to whom it is proposed to issue
Gross Settlement Shares have had the right to appear at the hearing on the fairness of the
Settlement Agreement, and that adequate notice of this hearing has been provided to British
Columbia Class Members in accordance with the terms of the Certification Order.
	 
	19.	 	THIS COURT ORDERS that if (a) the Settlement is terminated by Nortel pursuant to the
Supplemental Agreement and paragraph 26 of the Stipulation; (b) any specified condition to the
Settlement set forth in the Stipulation is not satisfied and any of the Representative
Plaintiffs or Nortel elect(s) to terminate the Settlement as provided in paragraph 25 of the
Stipulation; or (c) is otherwise terminated pursuant to paragraph 27 of the Stipulation, then,
in any such event:






	 	(a)	 	this Order (except for paragraphs 1, 10, 14, 16, 17, 18 and 19 herein) shall be
set aside, be of no further force or effect, and be without prejudice to any party;
	 
	 	(b)	 	the Certification Order (except for paragraph 24), shall be set aside and be of
no further force or effect, and be without prejudice to any party;
	 
	 	(c)	 	the British Columbia Action shall be immediately decertified as a class
proceeding pursuant to Section 10 of the Class Proceedings Act, RSBC 1996, c.50 without
prejudice to the Plaintiffs’ ability to reapply for certification;
	 
	 	(d)	 	each party to the British Columbia Action shall be restored to his, her or its
respective position as it existed immediately prior to the execution of the Settlement
Agreement.






	20.	 	THIS COURT ORDERS AND ADJUDGES that any appeal or challenge affecting the approval of the
Plan of Allocation or this Court’s approval of British Columbia Class Counsel fees shall in no
way disturb or affect the balance of this Order and shall be deemed to be separate and apart
from the balance of this Order.




10









 






	21.	 	THIS COURT ORDERS AND ADJUDGES that, upon the Effective Date, the British Columbia Action be
and is hereby dismissed against the Defendants with prejudice and without costs.





	 	 	 	 	 
	 	 BY THE COURT





DEPUTY DISTRICT REGISTRAR

 	 
	 	 	 
	 	 	 



Approved as to form:




	 	 	 
	 	 	 
	 	 	 
	 

Solicitor for the Plaintiffs

	 	 
	 
	 	 
	 

Solicitor for the Defendants

	 	 
	Nortel Networks Corporation,
	 	 
	John A. Roth, F. William Conner
	 	 
	and Chahram Bolouri
	 	 
	 
	 	 
	 

Solicitor for the Defendant, Frank Dunn

	 	 







11









 








No. S015159

Vancouver Registry




IN THE SUPREME COURT OF BRITISH COLUMBIA




BETWEEN:




JANIE JEFFERY and RONALD MENSING




Plaintiffs




     AND:



NORTEL NETWORKS CORPORATION, JOHN A ROTH,

FRANK A. DUNN, F. WILLIAM CONNOR and

CHAHRAM BOLOURI




Defendants




      




ORDER




      





 









 







EXHIBIT J




UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK




	 	 	 	 	 
	 


	 	x	 	 
	IN RE NORTEL NETWORKS CORP.

	 	:
	 	Consolidated Civil Action No.:
	SECURITIES LITIGATION,

	 	:

:
	 	2001-CV-1855 (RMB)
	 


	 	x	 	 
	THIS DOCUMENT RELATES TO ALL ACTIONS

	 	:	 	 
	 

	 	:	 	 
	 


	 	x	 	 






NOTICE OF PENDENCY OF CLASS ACTION





	TO:	 	THIS NOTICE IS SENT PURSUANT TO RULE 23 OF THE FEDERAL RULES OF CIVIL PROCEDURE AND AN ORDER
OF THE-UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE “COURT”), DATED
SEPTEMBER 5, 2003. THE PURPOSE OF THIS NOTICE ‘IS TO INFORM YOU OF (i). THE PENDENCY OF THE
ABOVE-CAPTIONED CLASS ACTION (THE “ACTION”); (ii) THE CERTIFICATION OF THE CLASS. DESCRIBED
HEREIN, OF. WHICH YOU MAY BE A MEMBER (“CLASS MEMBER”); AND (iii) YOUR RIGHT TO BE EXCLUDED
FROM THE CLASS.





DEFINITION OF THE CLASS




     1. On September 5, 2003, the Court entered an order certifying this case as a class action and
defining the class as follows:



     All persons or entities who, during the period October 24, 2000 and continuing through and
including February 15, 2001 (the “Class Period”), purchased Nortel Networks Corporation (“Nortel”
or the “Company”) common stock or call options or sold Nortel put options (collectively, “Nortel
Securities”), and who suffered damages thereby (the “Class”), including, but not limited to, those
persons who traded In Nortel Securities on the New York Stock Exchange and/or the. Toronto Stock
Exchange. Excluded from the Class are Defendants, members of any of the Individual Defendants’
immediate families, any entity in Which any Defendant has a controlling interest is a parent or
subsidiary of or is controlled by the Company, and the officers, directors, affiliates, legal
representatives, heirs, predecessors, successors or assigns of any of the Defendants.



     This Notice is given to you in the belief that you may be a member of the Class. To be a Class
Member, you must meet all of the criteria listed above. If you do not meet the Class definition,
the Notice does not apply to you. If you are uncertain whether you are a Class Member, contact
Counsel for the Class (who is listed in paragraph 8 below) or your own attorney. Class Members may
be entitled to recover damages on the claims asserted. This Notice, however, is not intended to
suggest any likelihood that Plaintiffs or members of the Class will be entitled to recover such
damages.



BACKGROUND OF THE LITIGATION




          2.a. Commencing in February of 2001, numerous securities class actions were instituted on
behalf of purchasers of common stock or call options and sellers of Nortel put options during the
period from October 24, 2000 and continuing through and including February 15, 2001, alleging
violations of U.S. federal securities laws. These lawsuits were consolidated for all purposes by
Court Order filed October 16, 2001.




     b. Plaintiff, Trustees of the Ontario Public Service Employees’ Union Pension Plan Trust Fund
(the “Lead Plaintiff” or “OPTrust”), was designated Lead Plaintiff by Memorandum and Order of the
Court dated January 10, 2002.



     c. By order of the Court dated February 1, 2002, Milberg Weiss Bershad Hynes and Lerach LLP,
was appointed as sole Lead Counsel for the Class.



     d. On January 18, 2002, the Lead Plaintiff filed a Second Consolidated Amended Class Action
Complaint, the operative complaint herein (the “Complaint”), against Nortel as well as against John
Andrew Roth, Clarence Chandran and Frank A. Dunn (collectively, the “Individual Defendants”)
(together with Nortel, the “Defendants”). The Complaint was



1









 







filed by the Lead Plaintiff on behalf of a proposed Class consisting of all persons or
entities who, during the Class Period, purchased Nortel common stock or call options or sold Nortel
put options, and who suffered damages thereby, including, but not limited to, those persons who
traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock Exchange. The
Complaint alleges, inter alia, that the Company and the Individual Defendants, who were officers
and/or directors of Nortel, made materially false and misleading statements and omissions in
Nortel’s financial reports, in violation of United States Generally Accepted Accounting Principles
(“GAAP”), and in other public documents disseminated to the investing public, thereby artificially
inflating the price of the securities of Nortel and damaging members of the Class.



     e. The Complaint alleges that, during the Class Period, Defendants materially misrepresented
the Company’s revenues and earnings and the value of the Company’s receivables in public reports
and statements disseminated to the investing public. It is further alleged that these
misrepresentations resulted in the Company’s issuance of financial statements, and other public
statements regarding Nortel’s future business prospects, in violation of Section 10(b) of the
Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), Rule 10b-5 promulgated
thereunder, 17 C.F.R. § 240.10b-5, and Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a). The
Complaint further alleges that, as a result of Defendants’ materially false and misleading
statements, Nortel’s common shares were artificially inflated during the Class Period, thereby
causing damage to members of the Class who purchased Nortel common stock or call options or sold
Nortel put options during that period.



     f. Defendants filed a motion to dismiss the Complaint on August 15, 2002. By Memorandum and
Order dated January 3, 2003, the Court denied Defendants’ motion to dismiss the Complaint.



     g. On January 1, 2002, Defendants answered the Complaint. Defendants deny that they violated
any laws or did anything wrong. They believe that their actions were proper under the federal
securities laws and they assert several affirmative defenses.



     h. On March 21, 2003, the Lead Plaintiff made a motion to certify the Class as described
above. By Order dated September 5, 2003, the Court certified the Class as described above and
OPTrust as Class Representative.



     i. Lead Counsel is engaged in extensive document and deposition discovery with Defendants and
third parties. Under the current Court-ordered schedule, merits discovery (including depositions)
will be completed by May 28, 2004.



     j. This Notice is given to you in the belief that you may be a member of the Class whose
rights may be affected by this Action. This Notice is an admission by Defendants or an expression
of any opinion by the Court concerning the merits of the Action or a finding by the Court that the
claims asserted by Plaintiffs in this case are valid; or that there has been any wrongdoing or
violation of law by Defendants. There is no assurance that a judgment in favor of the Class will be
granted. This Notice is intended merely to advise you of the pendency of this Action and of your
rights with respect to the Action, including the right to remain a Class Member or to exclude
yourself from the Class. YOU NEED NOT TAKE ANY ACTION TO BE OR REMAIN A MEMBER OF THE
CLASS.



RIGHTS IF YOU REMAIN A CLASS MEMBER




     3. IF YOU WISH TO REMAIN A CLASS MEMBER, YOU ARE NOT REQUIRED TO DO ANYTHING AT THIS
TIME. If you remain a Class Member, you will be bound by any judgment in this Action, whether
it is favorable or unfavorable. If there is a recovery, you may be entitled to share in the
proceeds, less such costs, expenses and attorney’s fees as the Court may allow outs of any such
recovery. If the Defendants prevail, you may not pursue a lawsuit on your own with regard to any of
the issues decided in this Action.



     4. In the event of a recovery, you will be required to prove your membership in the Class,
your purchase of Nortel common stock or call options, or your sale of Nortel put options, and your
damages, if any.



TO BE EXCLUDED FROM THE CLASS




     5. If you wish to exclude yourself from the Class and not be a part of this class action
litigation, you must make a request in writing. In order to be valid, each such request for
exclusion must set forth the name and address of the person or entity requesting exclusion, must
state that such person or entity requests exclusion from the Class in In re Nortel Networks
Corp. Securities Litigation, Case No. 01-CV-1855 (RMB), and must be signed by such person or
entity. Requests for Exclusion must be mailed to the address provided in paragraph 10 below. For it
to be effective, your Request for Exclusion must be postmarked no later than June 14, 2004. Do
not request exclusion if you wish to participate in this Action against the Defendants as a
Class Member.



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          If you exclude yourself from the Class, you will not be bound by any judgment in this Action
against the Defendants, nor will you be entitled to share, in any recovery in this Action against
the Defendants, should any recovery be obtained, but you may individually pursue any legal rights
you may have against the Defendants.




          If you do not exclude yourself from the Class, you. will be bound by any judgment in this
Action and you will not be entitled to share in the recoveries of any other class action involving
similar factual allegations that has been filed against Nortel or any of the Individual Defendants
and you may not individually pursue such an action against any of the Defendants.




SPECIAL NOTICE TO CANADIAN RESIDENTS




     6. Nortel is currently a defendant/respondent. in separate proposed class .proceedings in
three different .provinces In Canada, each governed by Canadian law. Nortel is a defendant in two
actions commenced in Ontario and British Columbia, respectively, which propose certification of the
actions as class proceedings, and is also a respondent to a motion for authorization to institute a
class action in Quebec.                   0   .



          The Ontario action (Law et al. v. Nortel Networks Corp. et al., Ontario Superior Court of
Justice Commercial List, Court File No. 02.Cl-4605 (the “Ontario Action”)) was commenced on July
17; 2002 against Nortel, John Andrew Roth, Frank Dunn, F. William Conner, Chahram Bolouri and
William Howe (collectively, the “Nortel Ontario Defendants”), as well as Deloitte & Touche LLP. The
plaintiffs seek to have the Ontario Action certified as a class action on behalf of (subject to
certain exclusions) all persons resident in Canada who purchased Nortel securities (including
certain options on Nortel securities) during the period of October 24, 2000 through February 15,
2001 and who suffered a realized or unrealized capital loss as of February 15, 2001 as a
consequence. The Statement of Claim alleges negligence, negligent and reckless misrepresentation,
oppression, selective disclosure and breaches of the Securities Act (Ontario) and the Competition
Act (Canada). The plaintiffs further allege insider trading as against certain of the individual
Nortel Ontario Defendants. In general, the Ontario Action alleges that in various public statements
made prior to February 15, 2001, the Nortel Ontario Defendants misrepresented sales revenue, net
income and cash flow for the 2000 fiscal year and that Nortel would meet its revenue and earnings
projections for 2000, the first quarter of 2001 and for 2001. The Ontario Action further alleges
that Nortel engaged in a number of improper accounting practices in violation of GAAP to increase
revenues and earnings artificially in 2000 and 2001.




          The British Columbia action was commenced on September 17, 2001 (Jeffery et al. v. Nortel
Networks Corp. et al., Supreme Court of British Columbia, No. S015159 Vancouver Registry) (the
“British Columbia Action”)) against Nortel, John A. Roth, Frank A. Dunn, F. William Conner and
Chahram Bolouri (the “Nortel B.C. Defendants”). The plaintiffs, seek to have the British Columbia
Action certified as a class action on behalf of (subject to certain exclusions) all persons who
acquired Nortel shares during the period of November 1, 2000 through February 15, 2001. The
plaintiffs allege negligent misrepresentation against the Nortel B.C. Defendants and generally
allege that Nortel’s guidance regarding revenue and earnings for Nortel’s fourth quarter and fiscal
2000, and for the first quarter and fiscal year 2001, was materially false and misleading.




          The motion filed in Quebec on February 22, 2001 (Association de Protection des Épargnants et
Investisseurs du Québec v. Nortel Networks, Corp., Superior Court, District of Montreal No.:
500-06-000126-017) (the “Québec Proceeding”)) seeks leave to commence a class action on behalf of
(subject to certain exclusions) every person who purchased or otherwise acquired shares Nortel
during the period of January 19, 2001 through February 15, 2001, and who were still holding those
shares as of February 15, 2001 and who suffered a loss or damage as a result thereof. The
petitioner alleges that Nortel’s guidance regarding its first quarter of fiscal year 2001 was
misleading, that it should have informed the public and its shareholders that it was unable to meet
its financial projections, and that by not doing so, Nortel breached its legal obligations as set
out in the Securities Acts of Québec and Ontario as well as in the Québec Civil Code.




          Hearings have not yet taken place to determine whether the Ontario Action and British Columbia
Action will be certified as class actions or whether leave will be granted in the Québec Proceeding
to institute a class action. Nortel and the Individual Defendants intend to oppose certification of
each of these proceedings. Discovery has not yet proceeded in any of these three Canadian
proceedings.




          Contact information for the plaintiffs’ legal counsel in each of the three Canadian
proceedings can be obtained through Lead Counsel in this Action listed in paragraph 8 below.




     7. IF YOU DO NOT REQUEST EXCLUSION FROM THE CLASS IN THIS ACTION BY JUNE 14, 2004, YOU WILL BE
CONSIDERED A CLASS MEMBER OF THE ACTION AND COURT WILL CONSIDER YOU BOUND BY ANY FINAL JUDGMENT IN
THE ACTION, WHICH WILL BE DECIDED ON THE BASIS OF U.S. LAW RATHER THAN CANADIAN LAW. FURTHERMORE,
IF YOU DO NOT EXCLUDE YOURSELF FROM THE CLASS IN THIS ACTION,



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NORTEL WILL TAKE THE POSITION IN ANY EXISTING OR FUTURE CANADIAN PROCEEDINGS THAT YOU ARE
EXCLUDED FROM PARTICIPATING IN ANY CANADIAN CLASS PROCEEDINGS.



     8. If you do not request exclusion from the Class in the manner set forth above, you will be
represented by the Court-appointed Lead Plaintiff and Lead Counsel for the Class. Lead Counsel for
the Class is:




	 	 	 	MILBERG WEISS BERSHAD HYNES

   & LERACH LLP

Steven G. Schulman, Esq.

Daniel B. Scotts, Esq.

One Pennsylvania Plaza

New York New York 10119-0165

(800) 320-5081




Please do not contact the Lead Plaintiff directly; questions should be addressed to Lead Counsel.




     9. If you remain a Class Member, you will not be personally responsible for Plaintiffs’
attorneys’ fees or costs. Any fees or expenses ultimately allowed by the Court to Plaintiffs’
counsel will be payable out of the recovery in the Action, if any.



SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES,




     10. If you purchased common stock of Nortel, or purchased Nortel call options, or sold Nortel
put options, during the period from October 24, 2000 through and Including February 15, 2001 for
the beneficial interest of a person or entity other than yourself, the Court has requested that,
within fourteen (14) days of your receipt of this Notice, you either (a) provide to the Notice
Administrator identified below the name and last known address of each person or entity for whom or
which you purchased such stock during such time period or (b) request additional copies of this
Notice, which will be provided to you free of charge, and within ten (10) days mail the Notice
directly to the beneficial owners of the securities referred to herein. If you choose to follow
alternative procedure (b), the Court has requested that, upon such mailing, you send a statement to
the Notice Administrator confirming that the mailing was made as directed. You are entitled to
reimbursement of your reasonable expenses actually incurred in connection with the foregoing,
including reimbursement of reasonable postage expenses and the reasonable costs of ascertaining the
names and addresses of beneficial. owners, Those reasonable expenses and costs will be paid upon
request and submission of appropriate supporting documentation. All communications concerning the
foregoing should be addressed to the Notice Administrator:




	 	 	 	Nortel Securities Litigation

c/o The Garden City Group, Inc.

Notice Administrator

P.O. Box 9000 #6169

Merrick, NY 11566-9000

1-866-808-3538





          If this Notice was sent to you at your current address, you do not have to do anything further
to receive further notices concerning this Action. If it was forwarded by the postal service, or if
it was otherwise sent to you at an address that is not current, you should immediately contact the
Notice Administrator referred to above in this paragraph.




AVAILABILITY OF FILED PAPERS




     11. This Notice does not fully describe all of the claims and contentions of the parties. The
pleadings and other papers filed in this Action are available for inspection, during business
hours, at the Office of the Clerk of the Court, United States District Court for the Southern
District of New York. In addition, you may obtain a copy of the Complaint by contacting the above
listed Plaintiffs’ counsel.



     12. If you have any questions about this Notice, you may consult an attorney of your own
choosing, or plaintiffs’ counsel whose name, address and telephone number are listed in paragraph 8
above. DO NOT ADDRESS ANY QUESTIONS ABOUT THE CASE TO THE CLERK OF THE COURT OR TO THE JUDGE. They
are not permitted to answer your questions.



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     13. This notice does not indicate any expression of opinion by the Court concerning the merits
of any of the claims or defenses asserted by or against the parties in this Action or in any other
action discussed herein. This notice is merely to advise you of the pendency of this Action.



	 	 	 
	Dated; March 10, 2004

	 	BY ORDER OF THE UNITED STATES DISTRICT COURT
	 

	 	FOR THE SOUTHERN DISTRICT OF
	 

	 	NEW YORK







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