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EXHIBIT 10.16
 CANADA
    
    (CLASS ACTION)PROVINCE OF QUEBEC
    
    SUPERIOR COURTDISTRICT OF MONTREALPRESIDING: THE HONOURABLE
MADAM JUSTICE MICHELE MONAST, JSCNO : 500-06-000277-059
    
    CLIFFORD W. SKARSTEDTPetitioner- v. -CORPORATION NORTEL NETWORKSRespondentandFONDS DAIDE AUX RECOURS COLLECTIFSMis en cause
 ORDER
 THIS MOTION Stipulation
 ON READING
 1. THIS COURT ORDERS AND DECLARES
 (a)
    
    Claims Administrator means the entity approved by this Court pursuant to
paragraph 10 to administer the Settlement;




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(b)
    
    Class Members means members of the Ontario National Class, the Quebec Class
and the U.S. Global Class;(c)
    
    Class Period means the period of time between April 24, 2003 through April
27, 2004, inclusive;(d)
    
    Courts means the Ontario Court, the Quebec Court and the U.S. Court;(e)
    
    Defendant means the Respondent, Corporation Nortel Networks;(f)
    
    Escrow Agent has the meaning set forth in the Stipulation;(g)
    
    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;(h)
    
    Gross Cash Settlement Fund has the meaning set forth in the Stipulation;(i)
    
    Gross Settlement Fund has the meaning set forth in the Stipulation;(j)
    
    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;(k)
    
    Individuals means Frank A. Dunn, Douglas Beatty, Michael Gollogly, John
Edward Cleghorn, Robert Ellis Brown, Robert Alexander Ingram, Guylaine Saucier,
Sherwood Hubbard Smith, Jr., 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);(l)
    
    Nortel means the Respondent, Corporation Nortel Networks;(m)
    
    Nortel II Actions means the Ontario National Action, the Quebec Actionand
the U.S. Action;(n)
    
    Nortel II Defendants means Nortel, Frank A. Dunn, Douglas Beatty, Michael
Gollogly, John Edward Cleghorn, Robert Ellis Brown, Robert Alexander Ingram, Guylaine
Saucier, Sherwood Hubbard Smith, Jr. and Deloitte & Touche LLP;
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(o)
    
    Notice means the global notice to the classes in the Nortel II Actions
substantially in the form attached as Schedule B to this Order, as approved in
paragraph 12 of this Order;(p)
    
    Notice Plan means the plan for the publication and dissemination of the
Notice, Publication Noticeand Proof of Claimby the Claims Administrator, attached as
Schedule D to this Order;(q)
    
    Ontario Court means the Ontario Superior Court of Justice;(r)
    
    Ontario National Action means the proceeding in the Ontario Superior Court of
Justice, Gallardiv. Nortel Networks Corporation et al., Court File No. 05-CV-285606CP;(s)
    
    Ontario National Class means all persons, except Excluded Personsand except
members of 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;(t)
    
    Proof of Claim means the form substantially in the form attached as Schedule
C to this Order, as approved in paragraph 13 of this Order;(u)
    
    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 (or a French version thereof in the case of
the French magazines and newspapers contemplated by the Notice Plan), as approved in
paragraph 18 of this Order;(v)
    
    Quebec Action means this proceeding;(w)
    
    Quebec Class means all persons and entities, except Excluded Personswho,
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. For purposes of the definition of Quebec Class, an entity means a
legal person established for a private interest, a partnership or an association if at
all times during the 12-month period preceding February 18, 2005, not more than 50
persons bound to it by contract of employment were under its direction or control and
if it is dealing at arms length with the representative of the Quebec Class;(x)
    
    Quebec Class Counsel means Trudel & Johnston;(y)
    
    Quebec Class Counsel Fees means the fees, disbursements, costs, GST, and
other applicable taxes or charges of Quebec Class Counsel;(z)
    
    Quebec Class Member means a member of the Quebec Classwho does not opt out
of, or request exclusion from, the Quebec Classin the manner set forth in this Order;
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(aa)
    
    Quebec Court means the Superior Court of Quebec;(bb)
    
    Released Parties means any and all of the Nortel II 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 II Defendanthas a controlling interest or
which is related to or affiliated with any of the Nortel II Defendants, and the legal
representatives, heirs, executors, administrators, trustees, successors in interest or
assigns of the Nortel II Defendants;(cc)
    
    Representative Plaintiffs means, collectively, the representative or lead
plaintiffs in each of the Nortel II Actions;(dd)
    
    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 II Actionsagainst any of the Released Parties, or
(ii) that could have been asserted in any forum by the Class Membersin the Nortel II
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 II
Actionsand that relate to the purchase of Nortel common stock or call options or the
sale of Nortel put options during the Class Periodor (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 II
Actions. Settled Claimsdoes 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 Fundv. Nortel
Networks Corporation, Ontario Superior Court of Justice, Court File No. 49059, for
leave pursuant to the Canada Business
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Corporations Actto commence a representative action in the name of and on behalf of
Nortel against certain of the Released Parties;(ee)
    
    Settlement Agreement means the Settlement Agreement and Confirmation of
Stipulation and Agreement of Settlement, including the Stipulationattached 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;(ff)
    
    Settlement means the proposed settlement of the Nortel II Actionspursuant to
the terms set forth in the Settlement Agreementadopting and ratifying the Stipulation
;(gg)
    
    Settlement Approval Motion means the motion for final approval of the
Settlementby this Court to be heard at the date, time and location described in
paragraph 6 of this Order;(hh)
    
    Stipulation means the Stipulation and Agreement of Settlement attached to the
Settlement Agreement as Schedule A;(ii)
    
    Supplemental Agreement means the agreement referred to in paragraph 23 of the
Stipulationsetting forth certain conditions under which the Settlementmay be
terminated by Nortel if potential Class Memberswho 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;(jj)
    
    Unknown Claims means any and all Settled Claimswhich any of the
Representative Plaintiffs, or Class Membersdoes not know or suspect to exist in his,
her or its favour at the time of the release of the Released Partieswhich if known by
him, her or it might have affected his, her or its decision(s) with respect to the
Settlement;(kk)
    
    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, Master File No. 05-MD-1659 (LAP);(ll)
    
    U.S. Court means the U.S. Federal District Court for the Southern District of
New York; and(mm)
    
    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.
 2. THIS COURT ORDERS
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3. THIS COURT ORDERS
  4. THIS COURT ORDERS
 5. THIS COURT ORDERS
  6. THIS COURT ORDERS
 7. THIS COURT ORDERS
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8. THIS COURT ORDERS
 9. THIS COURT ORDERS
 10. THIS COURT ORDERS
 11. THIS COURT ORDERS
 12. THIS COURT ORDERS
 13. THIS COURT ORDERS
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14. THIS COURT ORDERS
 15. THIS COURT ORDERS
 16. THIS COURT ORDERS
 17. THIS COURT ORDERS
 18. THIS COURT ORDERS
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19. THIS COURT ORDERS
 (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.
 20. THIS COURT ORDERS
 (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(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.
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21. THIS COURT ORDERS
 22. THIS COURT ORDERS
 23. THIS COURT ORDERS
 24. THIS COURT ACKNOWLEDGES
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27 Juin 2006
    
    
    
    /s/ Michèle MonastDate
    
    
    
    J.S.C.
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