Document:

exv10w13

 

EXHIBIT 10.13

	 	 	 
	CANADA

	 	(CLASS ACTION)
	 
	 	 
	PROVINCE OF QUEBEC

	 	SUPERIOR COURT
	DISTRICT OF MONTREAL
	 	 
	 

	 	PRESIDING: THE HONOURABLE MADAM
	 

	 	JUSTICE MICHELE MONAST, JSC
	 
	 	 
	 

	 	 
	 
	 	 
	NO.: 500-06-000126-017

	 	ASSOCIATION DE PROTECTION DES
	 

	 	EPARGNANTS ET INVESTISSEURS DU
	 

	 	QUEBEC (A.P.E.I.Q.)
	 
	 	 
	 

	 	Petitioner
	 

	 	and
	 
	 	 
	 

	 	ANDRE 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.

 

 

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     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.
50151590, 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;
	 
	 	(n)	 	“Nortel” means the Respondent, Corporation Nortel Networks;

 

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	 	(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 (or a French version thereof in the case of
the French magazines and newspapers contemplated by the Notice Plan), 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;

 

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	 	(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 Iead
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 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

 

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Indiana Electrical Workers Pension Trust Fund MEW 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
20, 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

 

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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 epargnants et investisseurs du Quebec
(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 a date to be set by this
Court, approximately 90 days from the date set herein for the mailing of the Notice, 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

 

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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 from the date set herein for the mailing of the Notice, 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 1 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.

 

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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 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, no later than 14 days
after entry of the last order by any order 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
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.

 

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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.

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 120 clays 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 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

 

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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.

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 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
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

 

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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 an exemption, pursuant to
Section 3(a)(10) of the United States Securities Act of 1933, as amended, 15 U.S.C. § 77c(a)(l ),
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.

	 	 	 	 	 	 	 
	27 Juin 2006

	 	 	 	/s/ Michèle Monast	 	 
	 

Date

	 	 
	 	 

J.S.C.exv10w14

 

EXHIBIT 10.14

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
	 	 	)	 	 	TUESDAY THE 27TH DAY
	BEFORE

	 	 	)	 	 	 	 	 	)	 	 	 
	 

	 	 	)	 	 	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 27th day of June 2006, AND ON HEARING
David A. Klein, counsel for the Plaintiff, AND ON HEARING Gregory J. Nash, counsel for the
Defendants Nortel Networks Corporation, John A. Roth, F. William Conner and Chahram Bolouri, 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.

 

 

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	 	(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 and Frank A. Dunn, William R. Hawe,
Clarence Chandran, and Deloitte & Touche LLP;

 

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	 	(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

 

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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 20, 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;

 

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	 	(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.

 

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	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 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 a date to be set by this Court, approximately 90 days from the date set herein for the
mailing of the Notice, 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

 

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sending it by first class mail post marked no later than 60 days after the date set herein
for the mailing of the Notice 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 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.

 

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	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 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, no later than 14 days after entry of the last order by any order of the Courts in the
Nortel I Actions and the Nortell II Actions (as defined in the Stipulation) approving the
Notice applicable to that proceeding, 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,

 

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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 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 120 days after the date set herein
for the mailing of the Notice. Such deadline may be further extended by order of this
Court.

 

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	 	(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
	 
	 	(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

 

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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 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 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 he distributed to Class Members,
and to counsel for the Representative Plaintiffs as may be

 

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awarded by the respective Courts, without registration and compliance with the prospectus
delivery requirements of U.S. securities laws.

	 	 	 	 	 
	 

	 	 	 	BY THE COURT
	 
	 	 	 	 
	 

	 	/s/
	 	/s/
	 

	 	 	 	DEPUTY DISTRICT REGISTRAR
	 
	 	 	 	 
	 

	 	 	 	CHECKED/FORM
	 

	 	 	 	/s/                      
	 
	 	 	 	 
	Approved as to form and consented to:
	 	 	 	 
	 
	 	 	 	 
	/s/
 

	 	 	 	 
	Solicitor for the Plaintiffs
	 	 	 	 
	 
	 	 	 	 
	/s/
 

	 	 
	 	[stamp
	Solicitor for the Defendants

	 	 	 	ENTERED
	Nortel Networks Corporation,

	 	 	 	JUN 27 2006
	John A. Roth, F. William Conner

	 	 	 	VANCOUVER REGISTRY
	and Chahram Bolouri

	 	 	 	VOL S1389 FOL 98 ]

 

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

 

Klein Lyons

Barristers & Solicitors

Suite 1100 – 1333 West Broadway

Vancouver, BC V6H 4C1

Tel: 604-874-7171

Attention: David A. Klein

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