UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

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IN RE: SIERRA WIRELESS, INC. SECURITIES LITIGATION,

This Document Relates To:

ALL ACTIONS

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Civil Action No. 1:05-CV-01299-SHS (Consolidated)

ELECTRONICALLY FILED

CLASS ACTION

CONSOLIDATED AMENDED CLASS ACTION COMPLAINT

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Lead Plaintiffs National Elevator Industry Pension Plan, Cary Boyko, Andy Hua, John

Travan, Roger S. Curry, and James M. Dowd (collectively, the “Lead Plaintiffs” or the “Plaintiffs”),

by their attorneys, for their Consolidated Amended Class Action Complaint, allege the following

based upon knowledge with respect to their own acts and upon other facts obtained through an

investigation conducted by and under the supervision of Plaintiffs’ counsel, which included

reviewing and analyzing information and financial data obtained from numerous public and

proprietary sources including, but not limited to, LEXIS-NEXIS, the Bloomberg wire service, United

States Securities and Exchange Commission (“SEC”) and Canadian Securities Administrators

(“CSA”) filings by Sierra Wireless, Inc. (“Sierra Wireless” or the “Company”) and its officers and

directors, securities analysts’ reports and advisories about the Company, press releases and other

public statements issued by the Company and media reports about the Company. The investigation

conducted by Plaintiffs’ counsel included interviews of former employees of Sierra Wireless, and

employees and former employees of companies that conducted business with the Company who are

knowledgeable about the Company’s business practices and about the industry and markets in which

the Company operates. Based upon the substantial facts already uncovered, Plaintiffs believe that

substantial additional evidentiary support will exist for the allegations set forth herein after a

reasonable opportunity for discovery.

NATURE OF THE ACTION

1. This is a federal securities class action brought on behalf of a class consisting of all

persons and entities, other than Defendants, who purchased or otherwise acquired Sierra Wireless

securities between January 28, 2004 and January 26, 2005, inclusive (the “Class Period”), seeking to

pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

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JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the

Exchange Act [15 U.S.C. §§78j(b), 78n(a) and (e), and 78t(a)], and Rule 10b-5 promulgated

thereunder by the SEC [17 C.F.R. §240.10b-5].

3. This Court has jurisdiction over the subject matter of this action pursuant to Section

27 of the Exchange Act.

4. Venue is proper in this District pursuant to Section 27 of the Exchange Act. Many of

the acts charged herein, including the preparation and dissemination of materially false and

misleading information, occurred in substantial part in this District, and Sierra Wireless conducts

business in this District.

5. In connection with the acts alleged in this complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to,

the mails, interstate telephone communications and the facilities of the national securities markets.

PARTIES

6. Lead Plaintiffs National Elevator Industry Pension Plan, Cary Boyko, Andy Hua,

John Travan, Roger S. Curry, and James M. Dowd, as set forth in their certifications, which were

previously filed in this litigation and are incorporated by reference herein, purchased Sierra Wireless

securities during the Class Period and have been damaged thereby.

7. Defendant Sierra Wireless is a Canadian corporation with its principal place of

business located at 13811 Wireless Way, Richmond, British Columbia, Canada V6V 3A4. The

Company develops and markets products that include wireless data modems for portable computers,

embedded modules for original equipment manufacturers, rugged vehicle-mounted modems and

mobile phones.

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8. Defendant David B. Sutcliffe (“Sutcliffe”) was, at all relevant times, Sierra Wireless’

Chairman and Chief Executive Officer. During the Class Period, Sutcliffe, while in possession of

material non-public information, sold 80,194 shares of his personally-held Sierra Wireless stock for

$2.45 million in proceeds.1

9. Defendant David G. McLennan (“McLennan”) was hired as Sierra Wireless’ Chief

Financial Officer in March 2004 and served in that position at all relevant times thereafter.

10. Defendant Jason W. Cohenour (“Cohenour”) was Sierra Wireless’ Senior Vice

President, Worldwide Sales from the beginning of the Class Period until August 2004, and Chief

Operating Officer from August 2004 to October 2005. During the Class Period, Cohenour, while in

possession of material non-public information, sold 40,500 shares of his personally-held Sierra

Wireless stock for $1.2 million in proceeds.

11. Defendants Sutcliffe, McLennan, and Cohenour are referred to herein as the

“Individual Defendants,” and together with Sierra Wireless, as “Defendants.”

12. During the Class Period, the Individual Defendants, as senior executive officers

and/or directors of Sierra Wireless were privy to confidential and proprietary information concerning

Sierra Wireless, its operations, finances, financial condition, and present and future business

prospects. Because of their positions with Sierra Wireless, the Individual Defendants had access to

non-public information about its business, finances, products, markets and present and future

business prospects via access to internal corporate documents, conversations and connections with

other corporate officers and employees, attendance at management and board of directors meetings

and committees thereof and via reports and other information provided to them in connection

1 All Canadian dollar proceeds from the sale of insider shares were converted to U.S. dollars at the spot exchange rate at the close of trading on the date(s) of sale(s).

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therewith. Because of their possession of such information, the Individual Defendants knew or

recklessly disregarded the fact that adverse facts specified herein had not been disclosed to, and were

being concealed from, the investing public.

13. The Individual Defendants are liable as direct participants in, and as co-conspirators

with respect to, the wrongs complained of herein. In addition, the Individual Defendants, by reason

of their status as senior executive officers and/or directors were “controlling persons” within the

meaning of Section 20 of the Exchange Act and had the power and influence to cause the Company

to engage in the unlawful conduct complained of herein. Because of their positions of control, the

Individual Defendants were able to and did, directly or indirectly, control the conduct of Sierra

Wireless’ business.

14. The Individual Defendants, because of their positions with the Company, controlled

and/or possessed the authority to control the contents of its reports, press releases and presentations

to securities analysts and through them, to the investing public. The Individual Defendants were

provided with copies of the Company’s reports and press releases alleged herein to be misleading,

prior to or shortly after their issuance and had the ability and opportunity to prevent their issuance or

cause them to be corrected. Thus, the Individual Defendants had the opportunity to commit the

fraudulent acts alleged herein.

15. As senior executive officers and/or directors and as controlling persons of a publicly-

traded company whose common stock was, and is, registered with the SEC pursuant to the Securities

Act of 1933 and the Exchange Act, and was and is, traded on the NASDAQ National Market and

governed by the federal securities laws, the Individual Defendants had a duty to disseminate

promptly accurate and truthful information with respect to Sierra Wireless’ financial condition and

performance, growth, operations, financial statements, business, products, markets, management,

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earnings and present and future business prospects, to correct any previously issued statements that

had become materially misleading or untrue, so that the market price of Sierra Wireless’ securities

would be based upon truthful and accurate information. The Individual Defendants’

misrepresentations and omissions during the Class Period violated these specific requirements and

obligations.

16. It is appropriate to treat the Individual Defendants as a group for pleading purposes

and to presume that the false, misleading and incomplete information conveyed in the Company’s

public filings and corporate press releases as alleged herein were the collective actions of the

narrowly defined group of Individual Defendants identified above. Each of the Individual

Defendants, by virtue of his high-level position with the Company, directly participated in the

management of the Company and the dissemination of public statements regarding Sierra Wireless

during the Class Period, was directly involved in day-to-day operations of the Company at the

highest levels, and was privy to confidential, proprietary information concerning the Company and

its business and operations, as alleged herein. The Individual Defendants were directly involved in

making, drafting, producing, reviewing and/or disseminating the false and misleading statements and

information alleged herein, and/or were aware or recklessly disregarded, that the false and

misleading statements were being issued regarding the Company.

CLASS ACTION ALLEGATIONS

17. Lead Plaintiffs bring this action as a class action pursuant to Federal Rules of Civil

Procedure 23(a) and (b)(3) on behalf of a Class consisting of all persons and entities who purchased

or otherwise acquired Sierra Wireless securities between January 28, 2004 and January 26, 2005,

inclusive.

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18. Excluded from the Class are Defendants, the officers and/or directors of the

Company, at all relevant times, members of their immediate families and their legal representatives,

heirs, successors or assigns and any entity in which Defendants have or had a controlling interest.

19. The members of the Class are so numerous that joinder of all members is

impracticable. During the Class Period, Sierra Wireless had more than 24 million shares of common

stock outstanding that were actively traded on the NASDAQ National Market and the Toronto Stock

Exchange. While the exact number of Class members is unknown to Plaintiffs at this time and can

only be ascertained through appropriate discovery, Plaintiffs believe that there are hundreds or

thousands of members in the proposed Class. Record owners and other members of the Class may

be identified from records maintained by Sierra Wireless or its transfer agent and may be notified of

the pendency of this action by mail, using the form of notice similar to that customarily used in

securities class actions.

20. Plaintiffs’ claims are typical of the claims of the members of the Class as all members

of the Class are similarly affected by Defendants’ wrongful conduct in violation of the federal

securities laws that are complained of herein.

21. Plaintiffs will fairly and adequately protect the interests of the members of the Class

and have retained counsel both competent and experienced in class and securities litigation.

22. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants’ acts as

alleged herein;

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(b) whether statements made by Defendants to the investing public during the

Class Period misrepresented material facts about the business, operations and financial statements of

Sierra Wireless; and

(c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

23. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation make it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

SUBSTANTIVE ALLEGATIONS

Background Facts

24. Defendant Sierra Wireless describes itself as a leading provider of wireless

communications hardware and software products that enable consumers to access wireless data and

voice networks using notebook computers, personal digital assistants (or PDAs), vehicle-based

systems, and mobile phones. According to the Company, it has “built a reputation in the wireless

data industry for creating state-of-the-art, high-quality products within aggressive time-frames.”

25. During the Class Period, Sierra Wireless’ key products were: 1) the “AirCard” line of

PC cards that enabled internet connectivity from lap top computers; 2) embedded modules that were

built into original equipment manufacturers’ (“OEMs”) handheld computers and other devices; 3)

vehicle-mounted modems (or “Rugged Modems”) and software that permitted wireless access to

remote databases; and 4) the Voq Professional Phone, a multi-functional cellular phone that was

designed to compete with devices such as the Blackberry and palmOne Treo. A significant number

of Sierra Wireless products were designed for cellular networks using the standard “2.5 generation,”

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or “2.5 G,” technology at the time, such as Cellular Digital Packet Data (“CDPD”), Code Division

Multiple Access (“CDMA”), Global System for Mobile (“GSM”) and Generalized Packet Radio

Service (“GPRS”). Certain other products Sierra Wireless developed and/or marketed during the

Class Period were intended for faster and higher capacity networks using next generation “3G”

technology such as Enhanced Data over GPRS Evolution (“EDGE”), Universal Mobile

Telecommunications System (“UMTS”), and CDMA 1x Evolution Data Optimized (“EV-DO”).

Unbeknownst to Investors, Sierra Wireless Is Not Selected by

PalmOne to Supply Embedded Modules for Its Next Generation of Treo Phones

26. During the Class Period, Sierra Wireless represented that it was a “market leader” in

the development and sales of embedded modules to hardware manufacturers that integrated the

modules into laptops and handheld devices for wireless data and voice connectivity. For 2004, the

Company reported that revenues from the sales of embedded modules accounted for between 30%

and 43% of its total revenues.

27. During 2004, palmOne was the Company’s largest OEM customer. Sierra Wireless

was the exclusive supplier of modules using CDMA technology for palmOne’s Treo 600

smartphones, mobile phones that featured, among other things, organizer, email, web browsing, and

camera functions. For each quarter of 2004, palmOne accounted for approximately 20% of Sierra

Wireless’ total revenues.

28. In or around late 2003, palmOne began the process of determining which supplier it

would use for its next generation of Treo phones that would replace the Treo 600.

29. Prior to the start of the Class Period, unbeknownst to investors, Defendants learned

that Sierra Wireless was not selected by palmOne to supply embedded modules for its next

generation of Treo phones. Accordingly, Sierra Wireless would continue to sell palmOne embedded

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modules for the Treo 600 but would, in effect, lose palmOne as a customer after palmOne phased out

sales of that phone to make room for its next generation of phones.

30. According to a former palmOne new products material manager with personal

knowledge of palmOne’s embedded modules business with Sierra Wireless, palmOne communicated

to Sierra Wireless executives in late 2003 that Sierra Wireless did not win the bid to design and

supply embedded modules for palmOne’s newest version of the Treo phone.

31. In order to make up for the anticipated significant revenue shortfall from the loss of

business from palmOne, Sierra Wireless ramped up its efforts to increase distribution of its

smartphone, the Voq Professional Phone, during the Class Period. Sierra Wireless first announced

the introduction of the Voq phone in October 2003 and launched the product in the second quarter of

2004. Defendants claimed at all relevant times that “the product category [for Voq] could be as

much as 20% of total revenues, and that Voq would “drive future growth.” Unbeknownst to

investors, however, Defendants knew from the outset, but failed to disclose, that Sierra Wireless

could not successfully break into the smartphone market with the Voq Professional Phone because

major manufacturers with recognized brand names such as palmOne, Research In Motion, Nokia,

and SonyEricsson, among others, dominated the market and had already established significant

distribution channels for their smartphone products. Moreover, Defendants failed to disclose that the

Voq phone was poorly designed and exhibited mechanical failures. After reporting dismal sales

revenue that accounted for less than 2% of the Company’s total revenues each quarter in 2004, the

Company discontinued its development of the Voq product line in June 2005.

32. During the Class Period, Sierra Wireless maintained an acrimonious relationship with

palmOne. According to a former Sierra Wireless marketing director who worked in the Company’s

embedded modules segment during the Class Period, Sierra Wireless’ relationship with palmOne

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took a turn for the worse when palmOne learned that Sierra Wireless was developing the Voq

Professional Phone that would compete with the Treo phones. According to the former Sierra

Wireless marketing director and one of the founders of AirPrime, Inc. (“AirPrime”),2 who

maintained close ties with former Sierra Wireless employees, including those who went to work for

palmOne, the competitive threat posed by the Voq phone was a contributing factor to palmOne’s

decision to seek an alternate embedded modules supplier for its new Treo phones.

33. Another reason why Sierra Wireless failed to win the palmOne supply contract was

the price of the Company’s embedded modules, which was relatively high compared to modules

manufactured by competitors. According to one of the founders of AirPrime, palmOne sought a less

expensive module for its new Treo phones, however, “Sierra Wireless had provided information to

Palm that they were not willing to go below a certain price or costs on the modules.” As a result,

according to the AirPrime founder, palmOne turned to other suppliers and Sierra Wireless was “not

even in consideration as one of the potential new vendors. Palm told Sierra that they would carry

them through the year, 2004, but after that they said that they would be sourcing product from

another vendor.”

34. According to the AirPrime founder, after Defendants learned that the Company’s

business with palmOne would come to an end, they did not seek new business from other hardware

manufacturers for sales of the Company’s embedded modules, but rather, relied on sales of Voq to

make up for the anticipated revenue shortfall. Sierra Wireless, however, was only able to sign up

one carrier, KPN in the Netherlands, to carry the Voq phone. According to the Vice President of an

authorized dealer of Voq phones during the Class Period, Sierra Wireless’ failure to get “carrier

2 AirPrime was acquired by Sierra Wireless in August 2003.

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recognition” was due, in part, to the fact that Voq was built on an operating system designed by

Microsoft. “Microsoft is trying to make headway and trying to find partners all the time . . . none of

the big cell phone makers will partner with Microsoft . . . . Microsoft is a competitive threat,”

according to the Vice President of the authorized Voq dealer. In addition, Sierra Wireless was

unable to generate meaningful revenues from the sale of its Voq phones at the retail level.

Unbeknownst to Investors, Sierra Wireless’

Core PC Cards Business Was Subject to Adverse Business Developments

35. At the same time that the Company was struggling with the loss of its palmOne

business, Sierra Wireless was faced with another significant crisis – its core PC Cards business was

in dire jeopardy. First, the Company was slow to develop next generation UMTS technology,

thereby placing it far behind its competitors. Second, Verizon Wireless, a major customer for its

core PC Card products, was in the process of selecting its supplier for its next generation of cards –

CDMA EV-DO – and, given the Company’s unwillingness to lower its prices, it was not likely to be

selected as a supplier (and ultimately was not selected).

36. During the Class Period, the Company’s best-selling products were its AirCards,

which the Company sold indirectly to consumers through mobile wireless providers. According to

Sierra Wireless, its AirCards offered computer users wide-area wireless internet connectivity to

networks using various technologies, including CDMA and GSM/GPRS. For 2004, the Company

reported quarterly revenues from the sale of AirCards as high as $40 million. Throughout the Class

Period, the Company reported record end-user sell-through levels of its PC Cards and forecasted

continuing robust revenue and earnings growth in that business segment.

37. During the Class Period, Sierra Wireless’ dominant share of the CDMA PC Cards

market eroded with the entry of other PC Card manufacturers such as Novatel and Kyocera whose

products were comparatively less expensive and based on newer technology. According to a former

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Sierra Wireless director of supply chain, “We had older technology and they had new technology

and their cost point was lower. The number one reason why [Novatel and Kyocera] could go lower

was because they made a decision to design the product to a new technology and basically

leapfrogged our technology and went to the next level, which was more cost effective.”

38. During the Class Period, wireless carriers worldwide began to deploy next-generation

3G wireless networks using the latest technology, such as EV-DO and/or UMTS, that offered higher

internet speeds and greater network capacity. As companies such as AT&T and Verizon Wireless

increased spending on their 3G networks, the demand for compatible next generation devices

increased. At all relevant times, Sierra Wireless represented to the investing public that it was able

to stay ahead of the curve by, among other things, developing a family of 3G products that utilized

UMTS technology that would be ready to come to market by the first quarter of 2005. These

statements, however, were materially false and misleading because defendants knew or recklessly

disregarded that other manufacturers of UMTS products, such as SonyEricsson, Novatel, and Option

Wireless Technology, had begun to rollout their UMTS products beginning in early 2004 and had

already established significant shares of the UMTS market. Defendants knew or recklessly

disregarded that, in these circumstances, it was unfeasible for Sierra Wireless to launch a

competitive line of UMTS products by its projected deadline. According to a former Sierra Wireless

product manager, Sierra Wireless decided as early as the beginning of 2004 against developing a

UMTS PC Card.

39. The lack of a UMTS product line in Sierra Wireless’ portfolio was detrimental to the

Company’s financial performance and growth. During the Class Period, Sierra Wireless held a

commanding share of the CDMA market with its embedded modules and PC Cards. In 2004, the

Company reported revenues in its CDMA segment that accounted for between 77% and 91% of its

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total quarterly revenues. Sierra Wireless’ financial health was, therefore, heavily dependent upon

the success of its CDMA product line. The Company’s share of the CDMA market, however, began

to erode during the Class Period as competing wireless solutions companies introduced lower cost

PC Cards and products utilizing next generation 3G technology, including UMTS. Without its own

line of UMTS products, Sierra Wireless was in a precarious position because it would not be able to

make up its lost CDMA revenues thereby. In a report published by Orion Securities on September

30, 2004, analysts John Grandy and Darren Robinson stated as follows:

Currently, Sierra Wireless is showing phenomenal success in the CDMA technology but limited success in the GSM/EDGE/UMTS product line. This is evidenced by the fact that 90% of the company’s Q2/04 revenue came from the CDMA 1x segment while only 9% came from the GSM/GPRS segment. Given the competitive nature of the wireless data business, we expect Sierra to lose some market share in the CDMA segment. If the company is not able to make up this forecasted loss with improvement in the GSM/EDGE/UMTS segment it could have a negative effect on overall financial performance.

40. At the end of the Class Period, Sierra Wireless shocked investors by announcing that

it was abandoning its plans to develop UMTS products.

41. During the Class Period, Sierra Wireless’ largest PC Cards customer was Verizon

Wireless. For the first three quarters of 2004, Sierra Wireless supplied its AirCards to Verizon

Wireless on an exclusive basis. In January 2004, in response to Verizon Wireless’ announcement

that it planned a $1 billion, 2-year rollout of its next generation CDMA EV-DO internet service

nationwide, Defendants represented that Sierra Wireless stood to benefit therefrom because it was

“already providing EV-DO PC Cards to Verizon in support of their 2-city trial.” Defendants further

maintained that even as the Company faced competition from other PC Cards manufacturers, such as

Novatel Wireless and Kyocera, Sierra Wireless would be able to hold onto its lion’s share of the

market and continue to generate positive revenues and earnings growth for the foreseeable future.

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42. Unbeknownst to investors, however, Verizon Wireless had decided not to use Sierra

Wireless AirCards for its nationwide rollout of the EV-DO network but instead opted to use lower

cost PC Cards manufactured by Sierra Wireless’ competitors, Novatel and Kyocera. According to a

former Novatel manager who handled Novatel’s business relations with Verizon Wireless and an

Audiovox Communications employee whose company purchased PC Cards from suppliers and

resold them to Verizon Wireless, Sierra Wireless’s AirCards were relatively expensive compared to

its competitors’ products, and Sierra Wireless resisted lowering the price of its PC Cards.

43. Defendants, realizing that the Company’s PC Cards revenues would decline

dramatically with the anticipated loss of business from Verizon Wireless, engaged in an undisclosed

and unlawful scheme to stuff the Company’s distribution channels with PC Cards that was far in

excess of end user demand in order to meet quarterly earnings guidance. According to a former

Sierra Wireless marketing director for the Company’s embedded modules business, Defendants

knew by the beginning of the fourth quarter of 2004 that Verizon Wireless had rejected Sierra

Wireless as a PC Cards supplier for its nationwide EV-DO rollout. Verizon Wireless’ practice,

according to a former director of operations at Novatel and the former Novatel manager, was to

provide its suppliers with a forecast of its demand for PC Cards at least three months in advance of

placing orders and to advise the suppliers of the target bid price they would have to beat. Therefore,

according to the former Novatel director and manager, Sierra Wireless’ management would have

known in the beginning of the fourth quarter of 2004 that Verizon Wireless’ estimated demand for

Sierra Wireless PC Cards in the following quarter had dramatically declined and that Sierra Wireless

had priced its AirCards out of the competition for the contract with Verizon Wireless. With respect

to Sierra Wireless’ scheme to stuff its distribution channels, the former Sierra Wireless marketing

director confirmed that “there was a pretty solid amount in the inventory as far as product sitting out

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there, meanwhile, the next competitors came in.” As a result of defendants’ fraudulent and illegal

scheme, the Company’s fourth quarter guidance and reported results in that quarter were materially

false and misleading.

44. According to a former Sierra Wireless product manager who is currently a senior

product manager at Novatel, Sierra Wireless’ refusal to lower the price of its AirCards was the

primary reason why Verizon Wireless rejected Sierra Wireless as the supplier for the nationwide

rollout of its EV-DO network.

While in the Possession of the True Facts About Sierra Wireless,

Defendants Sutcliffe and Cohenour and Other Sierra Wireless Insiders Sell

Millions of Dollars of Their Personally-Held Sierra Wireless Stock

45. Defendants were motivated to engage in the fraudulent and illicit conduct detailed

herein, resulting in the artificial inflation of the Company’s securities, so that insiders, including

defendants David Sutcliffe and Jason Cohenour, could sell 481,283 shares of their personally-held

Sierra Wireless stock during the Class Period, while in possession of material non-public

information, for proceeds in excess of $13.05 million.

46. The Individual Defendants, as officers and directors of the Company, were privy to

confidential financial information concerning the Company’s business, financial condition and future

business prospects and outlook. In this capacity, the Individual Defendants had access to material,

nonpublic information concerning the Company’s true financial condition. Notwithstanding the duty

not to sell Sierra Wireless common stock under these circumstances, or to disclose insider

information prior to selling their stock, two of the Individual Defendants, and several other directors

of the Company, sold Sierra Wireless stock at prices that were artificially inflated by Defendants’

materially false and misleading statements and omissions.

47. In total, Sierra Wireless insiders sold 481,283 shares of Sierra Wireless stock for

proceeds of $13,053,574.07 during the Class Period. Notably, since May 2003 (the date on which

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insider reports for Sierra Wireless were first filed in the System for Electronic Disclosure by

Insiders), the same Company insiders who sold their Sierra Wireless shares during the Class Period

sold only 124,760 shares prior thereto for proceeds of $1.6 million (with defendant Sutcliffe

reporting no other sales prior to the Class Period and defendant Cohenour reporting sales of only

19,000 shares prior to the start of the Class Period). The following chart sets forth sales of Sierra

Wireless stock by Company insiders during the Class Period:

Insider Date of Sale No. of Shares

Price/Share

Proceeds ($USD)

Gregory D. Aasen Director 2/20/2004 16,000 $35.6300 $427,122.20

Total Aasen 16,000 $427,122.20

Stephen Warren BlaineVice President, Engineering 2/3/2004 3,000 $37.5000 $84,143.61

5/19/2004 1,500 $32.2880 $35,210.47

8/27/2004 4,544 $30.3100 $104,904.14

Total Blaine: 9,044 $224,258.21

Paul G. Cataford Director 2/11/2004 7,800 $36.3300 $215,772.48

2/12/2004 1,500 $35.6300 $40,522.41

2/12/2004 1,500 $34.1300 $38,816.44

2/13/2004 500 $34.5600 $13,120.73

5/25/2004 1,500 $37.9200 $41,466.79

Total Cataford: 12,800 $349,698.85

Jason W. Cohenour Senior Vice President, Worldwide Sales and Chief Operating Officer 2/11/2004 20,500 $27.1700 $556,985.00

4/22/2004 10,000 $33.4900 $334,900.00

7/30/2004 10,000 $31.4500 $314,500.00

Total Cohenour: 40,500 $1,206,385.00

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Insider Date of Sale No. of Shares

Price/Share

Proceeds ($USD)

Bill Gary Dodson Senior VP, Operations 5/28/2004 5,000 $27.6600 $138,300.00

Total Dodson: 5,000 $138,300.00

Derek Evans 2/6/2004 6,063 $26.9300 $163,276.59

Total Evans: 6,063 $163,276.59

Andrew S.G. Harries Senior Vice President 2/25/2005 10,000 $34.0000 $247,867.61

2/26/2004 28,972 $35.0900 $741,684.89

4/23/2004 6,400 $40.0000 $188,041.72

4/26/2004 4,500 $40.0000 $133,541.06

5/26/2004 14,000 $37.8900 $386,999.34

7/29/2004 18,541 $40.0000 $559,897.33

Total Harries: 82,413 $2,258,031.96

Evan Jones Vice President, Engineering 2/17/2004 5,118 $27.4600 $140,540.28

7/28/2004 2,600 $29.3130 $76,213.80

11/1/2004 6,400 $16.8700 $107,968.00

11/17/2004 4,000 $19.2900 $77,160.00

Total Jones: 18,118 $401,882.08

James Kirkpatrick via The Kirkpatrick Family Trust Chief Technology Officer 2/17/2004 28,119 $27.4400 $771,585.36

5/27/2004 5,000 $27.5900 $137,950.00

8/20/2004 7,896 $23.9600 $189,188.16

8/23/2004 76,000 $24.6700 $1,874,920.00

Total Kirkpatrick 117,015 $2,973,643.52

Charles E. Levine Director 8/23/2004 500 $25.0000 $12,500.00

Total Levine: 500 $12,500.00

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Insider Date of Sale No. of Shares

Price/Share

Proceeds ($USD)

Jin Ho Pak Vice President Sales, Asia Pacific, Central and Latin America 4/22/2004 1,479 $47.3500 $51,656.45

Total Pak: 1,479 $51,656.45

S. Jane Rowe Director 2/11/2004 4,000 $36.5000 $111,170.33

2/13/2004 5,000 $34.3700 $130,485.95

2/16/2004 5,000 $35.0000 $133,049.49

2/26/2004 5,000 $35.8400 $133,651.55

7/30/2004 4,000 $41.3150 $124,124.98

Total Rowe: 23,000 $632,482.31

August Daniel SchielerSenior Vice President, Worldwide Sales 2/13/2004 7,082 $25.4400 $180,166.08

5/19/2004 3,000 $25.0000 $75,000.00

5/27/2004 2,000 $27.5500 $55,100.00

7/28/2004 2,083 $28.0000 $58,324.00

8/13/2004 15,309 $23.6667 $362,313.51

8/26/2004 5,500 $24.0849 $132,466.95

11/5/2004 917 $18.9900 $17,413.83

Total Schieler 35,891 $880,784.37

David B. Sutcliffe President and Chief Executive Officer 2/17/2004 41,000 $36.9700 $1,156,899.71

4/22/2004 39,194 $44.9400 $1,299,239.04

Total Sutcliffe: 80,194 $2,456,138.75

Norman Toms Chief Technical Officer 2/16/2004 31,700 $34.6700 $835,580.48

2/17/2004 1,566 $35.0000 $41,833.31

Total Toms: 33,266 $877,413.78

Total Insider Sales 481,283 $13,053,574.07

- 19 -

Materially False and Misleading

Statements Made During the Class Period

48. The Class Period begins on January 28, 2004. On that date, Sierra Wireless issued a

press release announcing its financial results for the fourth quarter and year-ended December 31,

2003. In the release, Defendant Sutcliffe made very positive remarks regarding the Company’s

growth potential, stating, in relevant part, as follows:

Looking ahead, we have good visibility on near term demand and we are investing

in new products to drive future growth. These include our Voq professional

phone, expected to ship commercially during the second quarter, and products for the new and expanding EV-DO and EDGE networks. With positive cash flow and the proceeds from the recent financing, the company is well-positioned to capitalize on

opportunities for further growth. [Emphasis added.]

49. On the same day, January 28, 2004, Defendants hosted a conference during which

they reiterated the Company’s previously announced results and guidance. During the call, Sutcliffe

stated that the Company was “very well positioned to capitalize on opportunities for future growth.”

In addition, with respect to the launch of Sierra Wireless’ Voq product line, Defendants stated, in

relevant part, as follows:

“. . . I’ll put my head a little bit of the ways into the news and tell you that for the year we think the product category [for Voq] could be as much as 20% of total

revenues . . .” [Emphasis added.]

“We think we can get a greater payback out of working on EV-DO, on EDGE, and on Voq.”

50. The statements in ¶¶48 and 49 were materially false and misleading, and defendants

knew or recklessly disregarded the statements as such, for the reasons set forth infra at ¶¶31-34. In

addition, the statements were materially false and misleading and known or recklessly disregarded

by defendants as such because there was no reasonable basis to claim that the Voq Professional

Phone would be a product that would drive future growth or that its product category would achieve

revenues that account for 20% of Sierra Wireless’ total revenues. On the contrary, the Voq phone

- 20 -

was poorly designed, exhibited mechanical failures, and only one carrier had agreed to sell it during

the Class Period. According to a former Sierra Wireless staff engineer who had personal knowledge

of Sierra Wireless’ development of the Voq Professional Phone, the Company was “a year late” to

the smartphone market, and “there were a lot of mechanical problems with it because their design

team had never designed a phone before.” Moreover, Defendants knew that they could not secure a

meaningful share of the smartphone market with Voq because the market was already dominated by

major manufacturers with recognized brands who had already established significant distribution

channels.

51. During the January 28, 2004 conference call, Defendants also reported that Sierra

Wireless’ AirCards were experiencing “strong” and “accelerating” sell-through at the retail level,

and indicated that the sales trends would continue for the foreseeable future. In particular, defendant

Jason Cohenour, the Company’s Senior Vice President of Worldwide Sales and, subsequently, Chief

Operating Officer, stated that given Verizon Wireless’ recently announced national rollout of its next

generation 3G network, Sierra Wireless was in a position to benefit from the expected increase in

end-user demand:

Also in January --January of ‘04, Verizon announced a $1b 2-year national rollout of their of [sic] CDMA EV-DO service, expanding the service from the 2 trial seats of San Diego and Washington, DC. And this news is significant to us as we are

already providing EV-DO PC Cards to Verizon in support of their 2-city trial.

[Emphasis added.]

52. During the call, Michael Walkley, an analyst from RBC Capital Markets, asked

Defendants whether competition from other PC Card manufacturers would impact Sierra Wireless’

supply agreements with Verizon Wireless. In response, Defendants stated that the Company will

“survive” despite new market entrants, especially because the launch of Verizon Wireless’ 3G

services was expected to increase end user demand for PC Cards:

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Michael Walkley, RBC Capital Markets: “In terms of EV-DO has -- in your discussions with Verizon, are they giving any kind of visibility on the products that they would expect from you and potential competition for your AirCards?”

Unidentified Corporate Participant: “Well we always -- only the paranoids survive.

So we always anticipate that there will be competition; we can’t have an exclusive spot in the Verizon channel forever -- we understand that. And I think both we and Verizon anticipate that demand for EV-DO will represent a substantial increase over the demand for 1x. If 1x demonstrated anything that speed matters to end users. So

we fully expect that will have a positive impact on end user adoption and sell

through.” [Emphasis added.]

53. The statements in ¶¶51-52 were materially false and misleading, and known or

recklessly disregarded as such by Defendants, because the Company could not “survive” in the PC

Cards market with competitors such as Novatel and Kyocera who sold their PC Card products at a

substantial discount to Sierra Wireless’ AirCard.

54. During the same conference call, Cohenour stated that, with respect to the Company’s

development of next generation UMTS products, “we do indeed have a plan to bring a UMTS

product to market. But I wouldn’t expect to see that until early 2005 . . . .”

55. The statements in ¶54 were materially false and misleading, and Defendants knew or

recklessly disregarded the statements as such, because Defendants knew that the market for UMTS

products, such as PC Cards, was already dominated by other wireless solutions companies, as

described further in ¶¶35 and 37-39, and therefore, it was not feasible for Sierra Wireless, which was

late to the UMTS market, to introduce a competitive and profitable UMTS product in early 2005.

Moreover, according to a former Sierra Wireless product manager, Defendants decided as early as

the beginning of 2004 that, in light of the Company’s lateness to the UMTS market, it would not

develop a UMTS PC Card.

56. In reaction to the statements made in the Company’s January 28, 2004 press release

and conference call, the price of Sierra Wireless stock rose $3.07 per share, or 13.65%, from its

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closing price on January 28, 2004, to close at $25.55 on January 29, 2004. Over the next two trading

days, the price of Sierra Wireless stock rose an additional $2.59 per share.

57. On April 19, 2004, the Company hosted a conference call to discuss its results for the

first quarter, the period ended March 31, 2004. During the conference call, defendant Sutcliffe

projected positive results for the second quarter and beyond, stating, “Looking at Q2 and the future,

our demand is presently very strong . . . . With positive cash flow and a strong balance sheet, we

feel we’re well positioned to capitalize on those opportunities for future growth.”

58. With respect to the Company’s OEM segment, defendant Sutcliffe stated, “I do

expect OEM to continue to be a strong segment. We spent years investing in building up our

portfolio of OEM clients and our portfolio of OEM products, and are doing quite well in that area

right now.” Similarly, defendant Cohenour stated that, in light of the number of OEM opportunities

recently won by the Company, “[w]e expect that to continue to be a healthy business for the

foreseeable future.”

59. The statements in ¶¶57-58 were materially false and misleading, and Defendants

knew or recklessly disregarded the statements as such, because: (a) the Company was not “well-

positioned to capitalize on those opportunities for future growth” because Defendants knew prior to

the Class Period that the Company had failed to win new business from palmOne to supply

embedded modules for palmOne’s new Treo phone; and (b) Defendants knew prior to the Class

Period that the Company’s sales of embedded modules to palmOne for the Treo 600 phone would be

completed by the fourth quarter of 2004 and therefore, the Company’s OEM revenues would decline

precipitously thereafter because the Company had not secured business to replace the loss of

revenues from palmOne. Moreover, Defendants knew that they were not realistically a contender to

win the contract to supply palmOne’s new Treo phone because they refused to lower the price of the

- 23 -

Company’s embedded modules, as described further in ¶33. According to a former palmOne new

products material manager with personal knowledge of palmOne’s business with Sierra Wireless,

palmOne communicated to Sierra Wireless executives in or about early 2004 that Sierra Wireless did

not win the contract to design and supply embedded modules to palmOne for its new Treo 650

phone. According to a former Sierra Wireless marketing director of embedded modules and one of

the founders of AirPrime, palmOne’s decision to terminate Sierra Wireless as a supplier was the

result of, in material part, Sierra Wireless’ decision to develop the Voq Professional Phone that

would compete with the Treo phones, as discussed in ¶32. Sierra Wireless first announced the

introduction of the Voq phones in October 2003 and launched the product line in the second quarter

of 2004.

60. During the conference call, Defendants reiterated their earlier estimates regarding the

rollout of Sierra Wireless’ UMTS product line. According to Cohenour, the Company “will develop

a line of UMTS product variance and bring these products to market in Europe and North America in

the first half of ‘05.” Sutcliffe affirmed this guidance, stating, “the UMTS product family, which as

Jason indicated, we’re going to start introducing in the first half of ‘05. And I don’t think we want to

suggest that we’re going to change those time frames at this point.”

61. The statements in ¶60 were materially false and misleading, and defendants knew or

recklessly disregarded them as such, because of the reasons set forth in ¶55, above.

62. On April 24, 2004, an analyst at Detwiler Mitchell & Co. published a research note

speculating that palmOne was about to launch a new version of the Treo 600 phone, the Treo 610, on

the Verizon Wireless network and that “PalmOne has plans to move away from Sierra Wireless for

models following the Treo 600 and 610.” [Emphasis added.] The research note was summarized in

a report published by Dow Jones Newswire on April 26, 2004. In reaction to this news, the price of

- 24 -

Sierra Wireless stock fell $4.71 per share, or 16%, from its closing price of $29.02 per share on April

24, 2004, to close at $24.31 per share on April 26, 2004. Defendants did not immediately comment

on this news or the decline in the Company’s stock price. Instead, Defendants continued to assure

the investing public that demand for Sierra Wireless’ embedded modules continued to be strong and

did not disclose that they had, in fact, lost the contract to supply palmOne with embedded modules

for its next generation of Treo phones. For example, on May 4, 2004, in a press release announcing

that VeriFone, Inc., a provider of secure electronic payment technologies, selected Sierra Wireless

embedded modules for its family of mobile and countertop IP-enabled, wireless point of sale

payment terminals, Cohenour stated that “We are very pleased that a global leader like VeriFone has

joined our growing roster of embedded module customers.” [Emphasis added.] In addition, on July

21, 2004, the Company issued a press release announcing positive results for the second quarter of

2004 which, according to Sutcliffe, was because “[d]emand for our PC Card, embedded module and

mobile product lines are fueling these results, particularly in North America.”

63. On July 21, 2004, Sierra Wireless hosted a conference call to discuss its financial

results for the quarter ended June 30, 2004. During the call, Defendants maintained a positive

outlook across all of the Company’s business segments. In particular, Defendants stated, “Now

looking at Q3 and future beyond Q3, at this point in time our demand is very strong . . . . We’re

guiding for strong sequential quarterly revenue growth.” Cohenour remarked that, although “going

forward, [we expect] PC cards and Voq as a percentage of our revenue mix to trend up . . . OEM as a

percentage of revenue mix to trend down.”

64. During the conference call, Glen Tracey, an analyst from Pacific International

Securities, asked why Defendants estimated that Sierra Wireless’ embedded modules sales revenues,

as a percentage of total revenues, would decline given palmOne’s announcement that it intended to

- 25 -

increase shipments of the Treo 600. Cohenour, rather than disclose Sierra Wireless’ failure to gain

new design wins from palmOne and that its shipments for the palmOne Treo 600 were near

completion, responded as follows:

I think first time, specifically we just announced earlier this week on the heels of Palm and Verizon announcement the previous week that we are the supplier of the CDMA modules for the Treo 600 which is just launching in Verizon’s channels. And so I guess you could say that our business results in Q2 and our guidance for Q3 incorporate our understanding of the demand for our products within Palm’s overall mix. Keep in mind the Treo 600 has more than one flavor of product, and we’re only the wireless solution provider for this CDMA 1X flavor . . . . And so our guidance does reflect our view of opportunities with customers like Palm and networks like Sprint and Verizon who carry that product. . . . But our guidance reflects our

knowledge of the business opportunity today. [Emphasis added.]

65. In addition, Sutcliffe revealed the Company’s standard practice for forecasting and

meeting customer demand:

Our normal business practice which has not changed at all with our larger customers, is they give us rolling monthly forecasts ranging from 6 to 12 months in advance of their demand. And they give us orders typically 30-90 days in advance of the actual shipment. And we haven’t changed those practices at all.

With respect to meeting the demands of OEM customers, Cohenour stated, “It depends on the OEM

customer and also on where they’re at in their process of ramping specific channels . . . they have a

need that’s some weeks in advance of the actual end customer sell through.”

66. The statements in ¶¶62-65 were materially false and misleading and Defendants knew

or recklessly disregarded the statements as such because of the reasons set forth in ¶¶29-34.

67. Cohenour continued to fuel investors’ expectations that the launch of Sierra Wireless’

UMTS product line was imminent, stating, “we do anticipate that our first UMTS product will hit the

market in the first half of ‘05.”

68. The statement in ¶67 was materially false and misleading, and Defendants knew or

recklessly disregarded as such, because of the reasons set forth in ¶55.

- 26 -

69. On August 31, 2004, the truth about the status of Sierra Wireless’ relationship with

palmOne began to emerge. On that day, the Company issued a press release to reiterate its

previously issued guidance and to finally address shareholder inquiries regarding the Company’s

embedded modules business. In the release, the Company revealed that it had “failed to gain any

new design wins with palmOne” and that its shipments relating to the Treo 600 are expected to

decline. Specifically, the Company stated in relevant part, as follows:

Sierra Wireless is currently the supplier of CDMA modules for the palmOne Treo 600. We have orders on hand and we expect to continue shipments through the remaining life cycle of that product. We note that Verizon Wireless recently announced the launch of the Treo 600. With respect to future embedded module business opportunities, Sierra Wireless does not comment on the confidential product roadmaps and plans of any of our customers prior to those customers making their own plans public. We do not expect to gain new design wins with palmOne for new

products in the near to medium term and we consider it probable that our business

volume with palmOne will decline when shipments related to the Treo 600 decline.

We believe that we may gain new design wins with palmOne over the longer term

and we do expect to gain new design wins with other embedded module customers

on an ongoing basis. [Emphasis added.]

70. The statements in ¶69 were materially false and misleading, and Defendants knew or

recklessly disregarded the statements as such, because Defendants knew, but failed to disclose, that

Sierra Wireless’ embedded modules shipments to palmOne would end in the fourth quarter of 2004

and that the Company would not be able to make up for the resulting shortfall in revenues because it

had not been engaged by other large OEM customers.

71. On October 27, 2004, Sierra Wireless issued a press release announcing its financial

results for the third quarter of 2004, the period ended September 30, 2004. In the release, the

Company also provided the following guidance for the fourth quarter of 2004:

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Q4 2004 Guidance

----------------

Revenue $63.0 million Gross margin 39% - 40% Operating expenses $16.0 - 16.9 million Net earnings $7.7 million Diluted earnings per share $0.29

Cash flow from operations Positive

Sutcliffe remarked that “We expect further strong operating results in the fourth quarter.”

72. In addition, the Company finally disclosed in the release that its shipments to

palmOne would end in the fourth quarter of 2004, stating, as follows: “We expect to make

significant CDMA module shipments to palmOne for the Treo 600 during the fourth quarter. By

year-end, we expect to have completed the shipment of orders on hand and currently do not have

visibility on further shipments for this product with palmOne.” (Emphasis added.) In reaction to

this news, the price of Sierra Wireless stock fell another $0.77 per share.

73. The statements in ¶71 were materially false and misleading and Defendants knew or

recklessly disregarded the statements as such because of the reasons set forth in ¶¶29-31.

74. On the same day, October 27, 2004, the Company conducted a conference call during

which Defendants repeated the previously announced results and guidance. During the call, Sutcliffe

reiterated his positive sentiment, stating the following, in relevant part:

Turning to Q4 and beyond, our demand is currently very strong, our bookings are up and our visibility for the fourth quarter is very good . . . . With the positive cash flow we’ve got and a very strong balance sheet, we’re well positioned to capitalize on those opportunities, and they’ll continue to be our focus.

75. The statements in ¶74 were materially false and misleading and Defendants knew or

recklessly disregarded the statements as such because of the reasons set forth in ¶¶29-31, 35-39 and

41-42.

- 28 -

76. Cohenour also participated in the conference call and echoed Sutcliffe’s positive

guidance by reiterating his expectations that the Company would benefit from the nationwide rollout

of Verizon Wireless’ CDMA EV-DO network. In that respect, Cohenour stated, in relevant part, as

follows:

[w]e expect revenue growth in all three geographical regions in Q4. This growth will be driven by demand for currently shipping products, as well as new products, including the AirCard 775 for EDGE and Voq. Demand for our PC card and

embedded modules continues to be strong . . . . Demand in Q3 for our EV-DO PC Cards remained strong . . . and we’re expecting this trend to continue in Q4. We also note that Verizon is continuing to expand its network aggressively, and that Sprint is also now planning to deploy. As an early innovator in the EV-DO space,

we believe we are well positioned to benefit from this network expansion.

[Emphasis added.]

77. Moreover, Cohenour clarified that the Company “has been the major [supplier] of

EV-DO PC Cards to Verizon Wireless” and that defendants expect to continue to perform well in the

PC Cards market despite the entry of competing PC Cards manufacturers, stating, in relevant part, as

follows:

[W]e’ve expected since we did that acquisition [of Airprime] that-that there would be new competitive entrance into the space and eventually they’ll get product calls from Verizon’s network. Frankly we are amazed at how long it’s taking . . . . So, our business outlook for our business on EV-DO, and including with carriers like Verizon, is that new competitors will enter the space. We will compete with them as we have in many cases directly in the past, and we expect, and our guidance reflects, our expectation of the share of the market that we should be able to win in the space

of that expected competition. [Emphasis added.]

78. The statements in ¶¶76 and 77 were materially false and misleading and Defendants

knew or recklessly disregarded the statements as such because of the reasons set forth in ¶¶35-39 and

41-42. In addition, the statements were materially false and misleading because: (a) the purported

“strong” demand for the Company’s PC Cards was the result of, in material part, Defendants’

fraudulent scheme to stuff Sierra Wireless’ distribution channels with PC Cards that were far in

excess of consumer demand in order to meet the Company’s and analyst’s guidance. According to a

- 29 -

former Sierra Wireless marketing director of the Company’s embedded modules business, “there

was pretty solid amount in the inventory [of PC Cards] as far as product sitting out there, meanwhile,

the next competitors came in.” In addition, according to one of the founders of AirPrime, “Sierra

was stuffing the distributor network in an effort to make its earnings numbers that they had forecast

to Wall Street. The two specific accounts were Sprint and Verizon”; and (b) the Company was not

in a position to benefit from Verizon Wireless’ nationwide rollout of their CDMA EV-DO services

because Defendants knew that Verizon Wireless had rejected Sierra Wireless for the rollout and

selected, instead, a lower cost PC Cards supplier. According to a former Sierra Wireless product

manager, the “writing was on the wall” by the beginning of the fourth quarter of 2004 that Verizon

Wireless was dissatisfied with Sierra Wireless’ PC Cards and had decided to replace Sierra Wireless

with lower cost suppliers such as Novatel or Kyocera. Moreover, the product manager stated that

Sierra Wireless attempted to salvage its business with Verizon Wireless by offering to sell its

AirCards at deep discounts of approximately $179.00 each, at a profit margin of only approximately

6%.

79. With respect to Sierra Wireless’ UMTS product line, defendants Cohenour and

Sutcliffe affirmed their prior guidance of the introduction of the Company’s UMTS products:

Cohenour: “[W]e have UMTS on our product roadmap [and] already being very actively developed [in] other product form factors . . . .

Sutcliffe: “[W]e’re expecting to bring our first of a family of UMTS products to market during 2004 . . . . I’m sorry, 2005 . . . there’s no change in our outlook on UMTS.”

80. The statements in ¶79 were materially false and misleading and Defendants knew or

recklessly disregarded the statements as such because of the reasons set forth in ¶55.

- 30 -

81. Moreover, although revenues from the sales of Voq had only attributed between 1%

to 2% of the Company’s total revenues each quarter in 2004, Cohenour stated during the conference

call that “Voq will be a significant positive contributor to our financial results.” (Emphasis added.)

82. The statements in ¶81 were materially false and misleading, and defendants knew or

recklessly disregarded the statements as such, because of the reasons set forth in ¶34.

THE TRUTH EMERGES

83. The truth finally emerged on January 26, 2005. On that date, after the close of

ordinary trading, the Company issued a press release announcing fourth quarter 2004 results that

were well below its previous guidance. In the release, the Company reported revenues of $58.8

million, far short of its previous guidance of $63 million, and net earnings and earnings per share of

$7.3 million and $0.28, respectively, compared to its earlier estimates of $7.7 million and $0.29.

While the Company’s disappointing fourth quarter results were surprising, its projected first-quarter

revenue and earnings were even more shocking. Specifically, the Company announced that first-

quarter revenues would fall sequentially by at least 65% to between $18 million and $20 million

from $58.8 million in the fourth-quarter of 2004, and that the Company would suffer a first-quarter

loss of between $9.2 million and $9.9 million, or between $0.35 to $0.38 per share. Analysts had

forecast a profit of $0.20 per share before exceptional items on revenue of $53.9 million. The news

sparked a major sell-off and caused the price of Sierra Wireless shares to fall $5.53, or 38%, in a

single day, wiping out a third of the Company’s market capitalization.

84. Defendants attributed the projected first quarter 2005 shortfall to the loss of revenues

from embedded modules sales to palmOne, excess inventory of PC Cards at Sierra Wireless’ channel

partners and the loss of its dominant market share due to increased competition. Specifically, the

Company stated, in relevant part, as follows:

- 31 -

Following our considerable revenue and earnings growth in 2004, we expect a significant reduction in our business in early 2005. We expect revenue in the first quarter of 2005 to be approximately $40 million less than in Q4 2004. This is partially a result of lower sales from embedded modules that will not include further shipments to palmOne for the Treo600. We also expect that Q1 demand for PC

cards will be lower as a result of channel inventory levels at some of our channel

partners that is already sufficient to meet their short term customer demand and

the near term impact of increased competition, and resulting loss of market share,

in the EV-DO PC card market. [Emphasis added.]

85. In a conference call conducted on the same day, Sutcliffe stated that the “primary

cause of the lower guidance is specifically in the PC Cards area” and “a secondary cause is the effect

of – the anticipated effect of a new competitive entrant in EV-DO, where until now, we’ve enjoyed

very close to a 100-percent market share.” When an analyst from TD Waterhouse asked what

caused the channel buildup of PC Cards, Sutcliffe revealed that the channel partner in question was

Verizon Wireless, stating, in relevant part, as follows:

“. . . we are comfortable with the end market demand . . . . And I would point out to you that Verizon, we have been working with them now on EV-DO for approximately 18 months. They’ve been rolling out markets in stages over that period of time . . . . And like most channels, you would expect that as the channel prepares to launch a new product or to expand its distribution footprint -- that you would expect that channel to build inventory before it turns on those new markets . . . [W]e certainly would not attribute the sequential decline in our revenues to any forecast issue --in terms of future demands from any of our partners.”

86. During the conference call, Defendants also finally revealed that they had abandoned

plans to bring to market the Company’s UMTS product line in favor of developing products that

employed high-speed downlink packet access (or “HSDPA”) technology, which, according to

Defendants offered “compelling advantages.” Some analysts, surprised by the Company’s decision

to “leapfrog” UMTS technology, noted that there is little, if any, current demand for HSDPA

technology because it appears that no wireless networks have considered utilizing such technology in

the near term.

- 32 -

87. On January 27, 2005, in reaction to Defendants’ announcement, Orion Securities, Inc.

published a morning note downgrading its rating of Sierra Wireless stock to “Equal Weight” from

“Overweight,” and slashing its target price to $15 per share from $23. The morning note stated, in

relevant part, as follows:

What was not anticipated – by us or, we believe, most other observers – was the apparent collapse of Sierra’s business with its single most important customer, Verizon Wireless. Verizon had announced that it had agreed to add Novatel Wireless as an alternative supplier of EV-DO cards; however, it now appears that following this decision, Verizon cut Sierra off entirely, saying that it already had adequate inventories of Sierra’s cards. It remains unclear whether Verizon is not satisfied with the capabilities of Sierra’s product (as has been rumoured), or whether Sierra has lost out to Novatel because of price. In any case, the prospects for recovery of Sierra’s business with this key customer are murky.

* * *

It is astonishing news that Sierra does not plan to produce a UMTS product. In

contrast to its two major competitors, Sierra Wireless advised analysts on

Wednesday night that it did not intend to develop a product for UMTS wireless

networks. Instead, the company will focus its efforts on developing a product for

HSDPA (high-speed downlink packet access), the future evolution of GSM.

HSDPA will offer theoretical speeds of 8-10 Megabits per second, and will

therefore be more competitive with CDMA than the most recent evolution of GSM,

UMTS. The problem is that we are not aware of any wireless networks that are

considering implementing HSDPA in the near term, and Qualcomm apparently

has not yet developed a chipset for HSDPA. On Wednesday’s conference call, Sierra was unable to provide a time-line for an HSDPA product, and was also unable to say whether its HSDPA modules would be backward compatible with its GPRS modules. All in all, it is a rather confusing situation. However, what is clear is that Sierra will be ceding all the spending on UMTS hardware to its competitors. This means that the prospects for significant revenue in the GSM universe over the next (say) 18 months are quite limited. [Emphasis added.]

88. On the same day, January 27, 2005, SG Cowen & Co analysts Christin Armacost,

Chris Guidi, and Lucas Bianchi authored a report entitled, “Did They Really Say $18-20 Million?”

In the report, the analysts commented on the Company’s financial condition and prospects in light of

Defendants’ astonishing disclosures that day:

Conclusion: Sierra Wireless Q1 guidance demonstrates the significant issues the Company faces resulting from increased competition and customer concentration.

- 33 -

We believe Q1 guidance confirms our belief that it will lose share in the PC card market and will need to increase investment to remain competitive. The company plans to enhance its product roadmap, which could provide some benefits in 2006. However, we would continue to avoid the shares given the near-term risks and the uncertainty inherent in a product transition that is at least a year away.

Results Disappointing And Guidance Even Worse. Revenues of $58MM fell short of consensus estimates of $63MM. Even more disappointing was Q1 guidance of $18-20MM in revenues vs. consensus of $54MM. We believe most Street models were expecting the discontinuation of the PalmOne module business but not a severe decline in the PC card business. Management claimed that customers need to adjust their inventories of Sierra EV-DO and also EDGE cards, but end demand remains robust and the inventory correction should not last very long. Management also admitted that they are being impacted by new entrants (i.e. Novatel at Verizon).

We Believe SWIR’s Problems Extend Past One Quarter. We believe that SWIR faces more problems than a near term inventory correction. We have stated and continue to believe that SWIR’s share at Verizon will be secondary to NVTL ($13). We also have concerns regarding SWIR’s position vs. SonyEricsson for share at Cingular and SWIR’s relationship with Audiovox (which has been its primary channel into Verizon’s 3G network). Increased investment in new products such as HSDPA and EV-DO rev-A could yield benefits in 2006, but will lead to increased investment and operating losses through our forecast horizon, however with $131MM ($5 per share) in net cash, SWIR has adequate resources for the next several years. SWIR has missed the current market opportunity due to its mis-steps in WCDMA and is attempting to position itself for the next product transition that is at least a year away.

SWIR’s Pain Is NVTL’s Gain, But Will SWIR Resort To Irrational Pricing? We believe that SWIR’s guidance validates our position that NVTL and not SWIR will be the dominant supplier to Verizon’s EV-DO network. We believe that NVTL’s shipments to Verizon, unlike SWIR, will actually increase sequentially in the March quarter and NVTL does not face VZ specific inventory issues. Also, SWIR’s announcement that it will skip a WCDMA product (originally planned for 1H:05) and go right to the next-gen HSDPA (planned for 2H:05) relieves some competitive pressure this year in Novatel’s core WCDMA market. The excess inventory from SWIR does create the risk of additional pricing pressure in the EV-DO market, which we will continue to monitor closely, however Novatel’s more diverse end-market exposure helps to insulate them from EV-DO pricing - we estimate that EV-DO will account for only 30% of NVTL’s shipments in 2005. We continue to believe that end demand in the PC card market will accelerate throughout the year and NVTL should see increasing momentum in the back half as we believe they will gain share in this growing market.

89. On June 7, 2005, Sierra Wireless announced that it would abandon its Voq product

line, claiming that the Company would be better off focusing on core areas of its business. Sutcliffe

- 34 -

conceded that the Company had only enjoyed “limited success” on the Voq phone and that

“continuing to proceed with Voq is no longer the best use of our resources.”

ADDITIONAL SCIENTER ALLEGATIONS

90. As alleged herein, Defendants acted with scienter in that Defendants knew that the

public documents and statements issued or disseminated in the name of the Company were

materially false and misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced in

the issuance or dissemination of such statements or documents as primary violations of the federal

securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their receipt of

information reflecting the true facts regarding Sierra Wireless, their control over, and/or receipt

and/or modification of Sierra Wireless’ allegedly materially misleading misstatements and/or their

associations with the Company which made them privy to confidential proprietary information

concerning Sierra Wireless, participated in the fraudulent scheme alleged herein. In addition,

Defendants knew that they had stuffed the channels with excess inventory of PC Cards because they

had in place a system for tracking end user demand six to twelve months in advance.

91. At all relevant times, the Company represented that it could track the end-user, retail

demand for its products via “rolling monthly forecasts,” provided by Sierra Wireless’ customers, that

“rang[ed] from 6 to 12 months in advance of their demand,” followed by “orders, typically 30-90

days in advance of the actual shipment.” According to the Company’s Chairman and Chief

Executive Officer, defendant David Sutcliffe, the rolling monthly forecasts were the Company’s

“first leading indicator on demand in future quarters.” The Company stated that it was able to

successfully satisfy customer demand because it had “built a distributor channel that responds to the

unique purchasing and usage requirements of our customer base.”

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UNDISCLOSED ADVERSE INFORMATION

92. The market for Sierra Wireless’ securities was open, well-developed and efficient at

all relevant times. As a result of these materially false and misleading statements and failures to

disclose, Sierra Wireless’ securities traded at artificially inflated prices during the Class Period. The

artificial inflation continued until at least January 26, 2005. Plaintiffs and other members of the

Class purchased or otherwise acquired Sierra Wireless securities relying upon the integrity of the

market price of Sierra Wireless’ securities and market information relating to Sierra Wireless, and

have been damaged thereby.

93. During the Class Period, Defendants materially misled the investing public, thereby

inflating the price of Sierra Wireless’ securities, by publicly issuing false and misleading statements

and omitting to disclose material facts necessary to make Defendant’s statements, as set forth herein,

not false and misleading. Said statements and omissions were materially false and misleading in that

they failed to disclose material adverse information and misrepresented the truth about the Company,

its business and operations.

94. At all relevant times, the material misrepresentations and omissions particularized in

this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Plaintiffs and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false or misleading

statements about Sierra Wireless’ business, prospects and operations. These material misstatements

and omissions had the cause and effect of creating in the market an unrealistically positive

assessment of Sierra Wireless and its business, prospects and operations, thus causing the

Company’s securities to be overvalued and artificially inflated at all relevant times. Defendants’

materially false and misleading statements during the Class Period resulted in the members of the

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Class purchasing the Company’s securities at artificially inflated prices, thus causing the damages

complained of herein.

LOSS CAUSATION

95. During the Class Period, as detailed herein, Defendants engaged in a scheme to

deceive the market and a course of conduct that artificially inflated Sierra Wireless’ securities and

operated as a fraud or deceit on Class Period purchasers of Sierra Wireless securities by issuing false

and misleading statements. Moreover, when Defendants’ omission of material information in

connection with its investment strategy and loan portfolio became apparent to the market, Sierra

Wireless securities fell precipitously as the prior artificial inflation came out of Sierra Wireless’

stock price. As a result of their purchases of Sierra Wireless securities during the Class Period,

Plaintiffs and the Class have suffered economic loss, i.e., damages under the securities laws.

96. By failing to make adequate disclosures regarding: (i) the Company’s failure to win

new business from palmOne; (ii) the end of the Company’s existing business with palmOne; (iii) the

excess PC Cards inventory at the Company’s distribution channels; (iv) the loss of one of the

Company’s largest customers, Verizon Wireless; (v) the Company’s inability to compete in a

crowded smartphone market; and (vi) the failure to develop a competitive UMTS product,

Defendants presented a misleading picture of Sierra Wireless’ business and prospects. Thus, instead

of truthfully disclosing during the Class Period the true risks that Sierra Wireless was exposed to,

Defendants caused the Company to conceal the existence of these risks.

97. Defendants’ false and misleading statements and reckless behavior had the intended

effect and caused Sierra Wireless stock to trade at artificially inflated levels throughout the Class

Period, reaching as high as $45.03 per share on April 12, 2004.

98. As a direct result of the public revelations that Sierra Wireless failed to win the bid to

design and supply embedded modules for palmOne’s new Treo phone, the price of Sierra Wireless’

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common stock plummeted $4.71, or 16%, to close at $24.31 on April 27, 2004. Further, as a result

of the Company’s announcement that it failed to win new business from palmOne and that its

shipments to palmOne for the Treo 600 would be completed at the end of the Treo 600’s lifecycle,

the price of Sierra Wireless stock fell another $1.68 over the course of four days to close at $15.97

on September 7, 2004. On October 27, 2004, the Company’s announcement that its shipments to

palmOne for the Treo 600 phone were due to be completed in the fourth quarter of 2004 caused the

price of Sierra Wireless stock to decline another $0.77 per share. Finally, on January 26, 2005,

Sierra Wireless stock fell $5.53 per share, or 38%, after the Company revealed that it had missed its

fourth quarter guidance, and that first quarter results would be dramatically lower than prior quarters

as a result of excess PC Cards inventory at Verizon Wireless, and that the Company would abandon

its plans to bring to market UMTS products. These declines removed some of the inflation from the

prices of Sierra Wireless’ securities causing real economic loss to investors who had purchased the

Company’s securities during the Class Period.

99. The declines in Sierra Wireless’ common stock price during the Class Period, as set

forth in ¶98 above and herein were a direct result of the nature and extent of Defendants’ fraud

finally being revealed to investors and the market. The timing and magnitude of Sierra Wireless’

common stock price declines negate any inference that the loss suffered by Plaintiffs and the Class

was caused by changed market conditions, macroeconomic or industry facts or Company-specific

facts unrelated to Defendants’ fraudulent conduct. The economic loss, i.e., damages, suffered by

Plaintiffs and the Class was a direct result of Defendants’ fraudulent actions to artificially inflate the

prices of Sierra Wireless’ securities which led to a significant decline in the values of Sierra

Wireless’ securities when Defendants’ prior misrepresentations and other fraudulent conduct were

revealed.

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APPLICABILITY OF PRESUMPTION OF RELIANCE:

FRAUD ON THE MARKET DOCTRINE

100. At all relevant times, the markets for Sierra Wireless securities were an efficient

market for the following reasons, among others:

(a) Sierra Wireless securities met the requirements for listing, and were listed and

actively traded on the Toronto Stock Exchange and the NASDAQ National Market, highly efficient

markets;

(b) As a regulated issuer, Sierra Wireless filed periodic public reports with the

SEC, CSA, the NASDAQ National Market, and the Toronto Stock Exchange;

(c) Sierra Wireless regularly communicated with public investors via established

market communication mechanisms, including through regular disseminations of press releases on

the national circuits of major newswire services and through other wide-ranging public disclosures,

such as communications with the financial press and other similar reporting services; and

(d) Sierra Wireless was followed by several securities analysts employed by

major brokerage firms who wrote reports which were distributed to the sales force and certain

customers of their respective brokerage firms. Each of these reports was publicly available and

entered the public marketplace.

101. As a result of the foregoing, the market for Sierra Wireless securities promptly

digested current information regarding Sierra Wireless from all publicly available sources and

reflected such information in the prices of Sierra Wireless’ securities. Under these circumstances, all

purchasers of Sierra Wireless securities during the Class Period suffered similar injury through their

purchase of Sierra Wireless securities at artificially inflated prices and a presumption of reliance

applies.

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NO SAFE HARBOR

102. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint.

Many of the specific statements pleaded herein were not identified as “forward-looking statements”

when made. To the extent there were any forward-looking statements, there were no meaningful

cautionary statements identifying important factors that could cause actual results to differ materially

from those in the purportedly forward-looking statements. Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, Defendants are

liable for those false forward-looking statements because at the time each of those forward-looking

statements was made, the particular speaker knew that the particular forward-looking statement was

false, and/or the forward-looking statement was authorized and/or approved by an executive officer

of Sierra Wireless who knew that those statements were false when made.

COUNT I

Violation of Section 10(b) of

the Exchange Act and Rule 10b-5

Promulgated Thereunder Against All Defendants

103. Plaintiffs repeat and reallege each and every allegation contained above as if fully set

forth herein.

104. During the Class Period, Sierra Wireless and the Individual Defendants, and each of

them, carried out a plan, scheme and course of conduct which was intended to and, throughout the

Class Period, did: (i) deceive the investing public, including Plaintiffs and other Class members, as

alleged herein; (ii) artificially inflate and maintain the market price of Sierra Wireless’ securities;

and (iii) cause Plaintiffs and other members of the Class to purchase Sierra Wireless’ securities at

artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct,

Defendants, and each of them, took the actions set forth herein.

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105. Defendants: (i) employed devices, schemes, and artifices to defraud; (ii) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements not

misleading; and (iii) engaged in acts, practices, and a course of business which operated as a fraud

and deceit upon the purchasers of the Company’s securities in an effort to maintain artificially high

market prices for Sierra Wireless’ securities in violation of Section 10(b) of the Exchange Act and

Rule 10b-5. All Defendants are sued either as primary participants in the wrongful and illegal

conduct charged herein or as controlling persons as alleged below.

106. Sierra Wireless and the Individual Defendants, individually and in concert, directly

and indirectly, by the use, means or instrumentalities of interstate commerce and/or of the mails,

engaged and participated in a continuous course of conduct to conceal adverse material information

about the business, operations and future prospects of Sierra Wireless as specified herein.

107. Defendants employed devices, schemes and artifices to defraud, while in possession

of material adverse non-public information, and engaged in acts, practices, and a course of conduct

as alleged herein, in an effort to assure investors of Sierra Wireless’ value and performance and

continued substantial growth, which included the making of, or the participation in the making of,

untrue statements of material facts and omitting to state material facts necessary in order to make the

statements made about Sierra Wireless and its business operations and future prospects in the light of

the circumstances under which they were made, not misleading, as set forth more particularly herein,

and engaged in transactions, practices and a course of business which operated as a fraud and deceit

upon the purchasers of Sierra Wireless’ securities during the Class Period.

108. Each of the Individual Defendants’ primary liability, and controlling person liability,

arises from the following facts: (i) the Individual Defendants were high-level executives and/or

directors at the Company during the Class Period and members of the Company’s management team

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or had control thereof; (ii) each of these defendants, by virtue of his responsibilities and activities as

a senior officer and/or director of the Company was privy to and participated in the creation,

development and reporting of the Company’s internal budgets, plans, projections and/or reports; (iii)

each of these defendants enjoyed significant personal contact and familiarity with the other

defendants and was advised of and had access to other members of the Company’s management

team, internal reports and other data and information about the Company’s finances, operations, and

sales at all relevant times; and (iv) each of these defendants was aware of the Company’s

dissemination of information to the investing public, which they knew or recklessly disregarded was

materially false and misleading.

109. Defendants had actual knowledge of the misrepresentations and omissions of material

facts set forth herein, or acted with reckless disregard for the truth in that they failed to ascertain and

to disclose such facts, even though such facts were available to them. Such defendants’ material

misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and

effect of concealing Sierra Wireless’ operating condition and future business prospects from the

investing public and supporting the artificially inflated prices of its securities. As demonstrated by

Defendants’ overstatements and misstatements of the Company’s business and earnings throughout

the Class Period, Defendants, if they did not have actual knowledge of the misrepresentations and

omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining from

taking those steps necessary to discover whether those statements were false or misleading.

110. As a result of the dissemination of the materially false and misleading information

and failure to disclose material facts, as set forth above, the market prices of Sierra Wireless’

securities were artificially inflated during the Class Period. In ignorance of the fact that market

prices of Sierra Wireless’ publicly-traded securities were artificially inflated, and relying directly or

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indirectly on the false and misleading statements made by Defendants, or upon the integrity of the

market in which the securities trade, and/or on the absence of material adverse information that was

known to or recklessly disregarded by Defendants but not disclosed in public statements by

Defendants during the Class Period, Plaintiffs and the other members of the Class acquired Sierra

Wireless securities during the Class Period at artificially high prices and were damaged thereby.

111. At the time of said misrepresentations and omissions, Plaintiffs and other members of

the Class were ignorant of their falsity, and believed them to be true. Had Plaintiffs, the other

members of the Class and the marketplace known of the true financial condition and business

prospects of Sierra Wireless, which were not disclosed by Defendants, Plaintiffs and other members

of the Class would not have purchased their Sierra Wireless securities, or, if they had acquired such

securities during the Class Period, they would not have done so at the artificially inflated prices

which they paid.

112. By virtue of the foregoing, Defendants have violated Section 10(b) of the Exchange

Act, and Rule 10b-5 promulgated thereunder.

113. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiffs and the

other members of the Class suffered damages in connection with their respective purchases and sales

of the Company’s securities during the Class Period.

COUNT II

Violation of Section 20(a) of

the Exchange Act Against the Individual Defendants

114. Plaintiffs repeat and reallege each and every allegation contained above as if fully set

forth herein.

115. The Individual Defendants acted as controlling persons of Sierra Wireless within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

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positions, and their ownership and contractual rights, participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had the

power to influence and control and did influence and control, directly or indirectly, the decision-

making of the Company, including the content and dissemination of the various statements which

Plaintiffs contend are false and misleading. The Individual Defendants were provided with or had

unlimited access to copies of the Company’s reports, press releases, public filings and other

statements alleged by Plaintiffs to be misleading prior to and/or shortly after these statements were

issued and had the ability to prevent the issuance of the statements or cause the statements to be

corrected.

116. In particular, each of these defendants had direct and supervisory involvement in the

day-to-day operations of the Company and, therefore, is presumed to have had the power to control

or influence the particular transactions giving rise to the securities violations as alleged herein, and

exercised the same.

117. As set forth above, Sierra Wireless and the Individual Defendants each violated

Section 10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of

their positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a)

of the Exchange Act. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiffs

and other members of the Class suffered damages in connection with their purchases of the

Company’s securities during the Class Period.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for relief and

judgment, as follows:

(a) Determining that this action is a proper class action and appointing Plaintiffs '

Co-Lead Counsel as Lead Counsel for the Class and certifying Plaintiffs as class representatives

under Rule 23 of the Federal Rules of Civil Procedure ;

(b) Awarding compensatory damages in favor of Plaintiffs and the other Clas s

members against all Defendants, jointly and severally, for all damages sustained as a result of

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon ;

(c) Awarding Plaintiffs and the Class their reasonable costs and expenses incurre d

in this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper .

JURY DEMANDED

Plaintiffs hereby demand a trial by jury .

DATED: February 21, 2006 LERACH COUGHLIN STOIA GELLERRUDMAN & ROBBINS LLP

SAMUEL H. RUDMAN (SR-7957)DAVID A. ROSENFELD (DR-7564 )

DAVID A. R O SENFELD

58 South Service Road , Suite 200Melville , NY 11747Telephone : 631/367-7100631/367 -1173 (fax)

MILBERG WEISS BERSHAD& SCHULMAN LL P

LEE A. WEISS (LW-1130)SHARON M. LEE (SL-5612)One Pennsylvania PlazaNew York, NY 10119Telephone : 212/594-5300212/868 -1229 (fax)

Co-Lead Counsel for Plaintiffs

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CERTIFICATE OF SERVICE

I, David A. Rosenfeld, hereby certify that on February 21, 2006, I caused a tru e

and correct copy of the attached :

Consolidated and Amended Complaint

to be served by first-class mail to all additional counsel on the attached service list .

David A. Rosen Id

SIERRA WIRELESS (NY)(LEAD)Service List - 2/21/2006 (05-0032N)

Pane 1 of 1

Counsel For Defendant(s )

Stuart J . BaskinJaculin Aaron

Shearman & Sterling LLP599 Lexington AvenueNew York, NY 10022-4676

212/848-4000212/848-7179(Fax )

Counsel For Plaintiff(s )

Samuel H. Rudman Lee A . WeissDavid A. Rosenfeld Sharon M . LeeMario Alba, Jr . Milberg Weiss Bershad & Schulman LL PLerach Coughlin Stoia Geller Rudman & One Pennsylvania Plaz aRobbins LLP New York, NY 1011 958 South Service Road, Suite 200 212/594-5300Melville, NY 11747 212/868-1229 (Fax )

631/367-7100631/367-1173(Fax)