By the Order signed by U.S. District Judge Freda L. Wolfson on September 11, 2006, the Court grants the motion for attorney fees, certifies the case as a class action and approves the settlement. The case is now closed.

According to a press release dated May 20, 2006, Tellium, an Oceanport maker of optical switches before it was bought out in 2003, will pay $5.5 million to settle a class-action securities fraud case. The proposed settlement was filed in federal court yesterday and a hearing is set for June 16 in Camden. Shareholders sued Tellium, now part of California-based Zhone Technologies, alleging the company and executives lied about its financial condition during the time of its 2001 initial public offering.

As summarized by Zhone Technologies, Inc.’s FORM 10-Q for the quarterly period ended March 31, 2006 , on various dates between approximately December 10, 2002 and February 27, 2003, numerous class action securities complaints were filed against Tellium in the United States District Court for the District of New Jersey. On May 19, 2003, a consolidated amended complaint representing all of the actions was filed. The complaint alleges, among other things, that Tellium and its then-current directors and executive officers, and its underwriters, violated the Securities Act of 1933 by making false and misleading statements or omissions in its registration statement prospectus relating to the securities offered in the initial public offering. The complaint further alleges that these parties violated the Securities Exchange Act of 1934 by acting recklessly or intentionally in making the alleged misstatements and/or omissions in connection with the sale of Tellium stock. The complaint seeks damages in an unspecified amount, including compensatory damages, costs and expenses incurred in connection with the actions and equitable relief as may be permitted by law or equity. On March 31, 2004, the court granted Tellium’s and the underwriters’ motions to dismiss the complaint and allowed the plaintiffs to file a further amended complaint. On May 14, 2004, the plaintiffs filed a second consolidated and amended complaint. On June 25, 2004, Zhone, as Tellium’s successor-in-interest, and the underwriters again moved to dismiss the complaint. On June 30, 2005, the court dismissed with prejudice the plaintiffs’ claims under the Securities Exchange Act of 1934, but denied the motions to dismiss with respect to the plaintiffs’ claims under the Securities Act of 1933. The plaintiffs moved for reconsideration of that portion of the court’s June 30, 2005 decision dismissing their claims under the Securities Exchange Act of 1934. On August 26, 2005, the court denied the plaintiffs’ motion for reconsideration.

The original complaint charges Tellium, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants failed to disclose that: (i) Qwest agreed to purchase Tellium products, in return, Qwest executives received lucrative shares of Tellium in conjunction with its IPO, a fact that was not disclosed to the public; (ii) Qwest did not need the large number of switches they had ordered from Tellium and, in fact, had no strong obligation to purchase more switches in the future and could avoid their contractual obligations with relative ease; (iii) after issuing positive statements about the Company's financial standing, defendants Bunting and Glassmeyer unloaded large amount of their shares (iv) and because the Company issued false and misleading statements about Tellium's business and the Qwest contract, the Company's shares have been traded at artificially inflated prices, as high as $29 per share.