UNITET? STATES DISTRICT COURT SOUTHERN DISTRICT OF...

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UNITET? STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YOR K In re REFCO, INC . SECURITIES LITIGATION MASTER FIILE NO . 05 Civ,. 8626 (GEL ) ,STrPIIY.ATION AND AGREEMENT OF SETTLEMEN T This stipulation and agreement of settlement is made and entered into by and between Lead Plaintiffs RH Capital Associates LLC and Pacific Investment Management Company LLC on behalf of themselves and the class of persons defined below (th e "Class") and Defendant BAWAG P .S .K . Bank. Mr Arbeit and Wirtschaft an d OsterreicldschePostsparkasse Aktiengesellschaft ("I33AWAGx") . W1WBA$ t A . All capitalized words or terms not otherwise defined herein shall have th e meaning for those words or terms as set forth itsi the section below entitled "Definitions " at ¶1 hereo f B. Commencing in October 2005 , multiple securities class action complaints were filed against Refco, certain of Refco's former officers an d directors, Refco's auditors , Refeo's underwriters, and others . C . By Order dated February 8, 2006, the Court consolidated the class actions and appointed RH Capital A ssociates LLC and Pacific Investment Management

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  • UNITET? STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

    In re REFCO, INC. SECURITIESLITIGATION

    MASTER FIILE NO.05 Civ,. 8626 (GEL)

    ,STrPIIY.ATION AND AGREEMENT OF SETTLEMENT

    This stipulation and agreement of settlement is made and entered into by and

    between Lead Plaintiffs RH Capital Associates LLC and Pacific Investment Management

    Company LLC on behalf of themselves and the class of persons defined below (the

    "Class") and Defendant BAWAG P.S.K. Bank. Mr Arbeit and Wirtschaft and

    OsterreicldschePostsparkasse Aktiengesellschaft ("I33AWAGx").

    W1WBA$t

    A. All capitalized words or terms not otherwise defined herein shall have the

    meaning for those words or terms as set forth itsi the section below entitled "Definitions"

    at ¶1 hereof

    B. Commencing in October 2005 , multiple securities class action complaints

    were filed against Refco, certain of Refco's former officers and directors, Refco's

    auditors , Refeo's underwriters, and others .

    C. By Order dated February 8, 2006, the Court consolidated the class actions

    and appointed RH Capital A ssociates LLC and Pacific Investment Management

  • Company LLC as Lead Plaintiffs, and appointed the law firms of Bern stein Litowitz and be

    Grant & Eisenhofer to serve as Co-Lead Counsel;

    D. On or about March 30, 2006, Co-Lead Counsel commenced settlement

    discussions with BAWAG' s Counsel ;

    E. On April 3, 2006, based in part on those settlement diacussion , when

    Lead Plaintiffs filed in the Action the Complaint, they did not name 1AWAG as a

    detendmt ;

    F. On May 5, 2006, Lead Plaintiffs filed in the Action the Amended

    Complaint, which, inter ahzu, named BAWAG as a defendant, and asserted claims against

    BAWAG pursuant to Section 15 of the Securities Act of 1933 and Sections 10(b) an d

    20(a) of the Securities Exchange Act of 1934 ;

    G. Co-Lead Counsel have conducted an investigation and analyzed the claims

    and researched the applicable law with respect to the claims against BAWAG and it s

    potential defenses thereto;

    H. Co-Lead Counsel and BAWAG's Counsel have continued to engage in

    arms ' length negotiations to resolve the claims by Lead Plaintiffs and the Class against

    BAW AG, and have now agreed to settle those claims on terms that include financial and

    nonfinancial benefits to the Class, including the payment of at least $108 million in cas h

    to the Class ;

    L In order to facilitate BAWAG's ability to achieve a global resolution of its

    potential liability relative to Refco in the Action and o ther cases and potential cases, Lead

    Plaintiffs have agreed that to the extent they may obtain funds from the Global

    Resolution Fund, which the UJSAO may establish to compensate, among others ,

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  • victimized Refee investors , those fads will be credited as partial payment of BAWAG's

    obligations under this agreement ;

    J . In the course of these settlement discussions , BAWAG has made available

    for review by Co-Lead Counsel certain documents pertinent to the Class's claims an d

    BAWAG's defenses to those claims , including all documents that 13AWAG had provided

    to the TJSAG and the Creditors Committee, and Co-Lead Counsel reviewed those

    documents before Lead Plaintiffs agreed to this Settlement;

    K. As pan of these settlement discussions, BAWAG has briefed counsel for

    Lead Plaintiffs and their consultants concerning the limited ability of BAWAG to pay

    any judgment or settlement;

    L. BAWAG acknowledges that the efforts of Lead Plaintiffs, including the

    .ling of the Amended Complaint and the presentation of certain facts and arguments

    during the settlement discussions, contributed materially to BAWAG's agreement to fimd

    the Global Resolution Fund and to pay the Settlement Amount set forth below in order to

    resolve the Action ;

    M_ Based upon their independent investigation and the BAWAG documents

    they have reviewed, Co-Lead Counsel and Lead Plaintiffs have concluded that the terms

    and conditions of this Stipulation are fir, reasonable and adequate to Lead Plain tiffs and

    the Class, and in the Class 's best interests, and have agreed to se tt le the claims raised in

    the Action with BAWAG pursuant to the terms and provisions of this Stipulation, after

    considering (a) the substantial benefits that the Class will receive from the Settlement,

    (b) the attendant risks of litigation, and (e) the desirability of permitting the Settlement to

    be consummated as provided by the te rms of this Stipulation ; and

    3

  • N. BAWAG continues to deny that it committed any acts or omissions giving

    use to any liability and/or violation of law, and is entering into this Settlement to avoi d

    the burden and expense of further litigation.

    NOW THEREFORE , without any concession by Lead. Plaintifs that the Action

    lacked remit, and without any concession by BAWAG of any liability or wrongdoing or

    lack of merit in its defenses, it is hereby STIPULATED AND AGREED, by and among

    the parties to this Stipulation, through their respective allomeys, subject to approval by

    the Court pursuant to We 23(e) of the Federal Rules of Civil procedure, in consideration

    of the benefits flowing to the parties hereto, that all Settled Claims as against BAWAG

    shall be compromised, settled, released and dismissed with prejudice, and without costs,

    upon and subject to the following terms and conditions :

    DEFE II` IONS

    1. As used hereinafter in this Stipulation, the following terms shall have th e

    following meanings ;

    a. "Action" means In re Refco. Inc. Securities Litigation, No. 05 Cis'.

    8626 (GEL) (S .D.N.Y.), pending in the United States District Court for the Southern

    District of New York .

    b. "Amended Complaint" stall mean the amended complaint filed by

    Lead Plaintiffs in this Action on May 5, 2 046.

    c. "Approval (hder" means any order of the United States

    Batdniptcy Court for the Southern District of New York approving the separat e

    settlement reached between BAWAG and the Creditors Committee;

    4

  • d. "Authorized Claimant" means a Class Member who submits a

    timely and valid Proof of Claim to the Claims Administrator and does not opt out.

    e. "BAWAG" means BAWAG P.S_K. Bank Air Albeit und

    Wirtschaft and Osterrciobischo Postspaxkasse Aktiengesellschaft .

    f. "BAWAG's Counsel" means the law firm of Dechert LLP,

    g. `~BAWAG Global Restitution Fund" means a fund to be created by

    the USAO using the proceeds of a separate settlement between the USAO and BAWAG,

    b„ 1IAWAG Settlement" or "Settlement" means the resolution of the

    Action as against BAWAG in accordance with the terms and provisions of thi s

    Stipulation .

    i . "Bernstein Litowitz" means the law fmn of Bernstein Litowitz

    Berger & Gmssmann LLP, Co-Lead Counsel for Lead Plaintiffs and the Class.

    j "Claims Administrator" means the firm to be retained by Lead

    Counsel, subject to Court app cwal, which shall process Proofs of Claim and administer

    the Settlement Amount to Authorized Claimants .

    k . "Class" means all persons and entities who purchased or otherwise

    acquired Refco Group Ltd ., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due

    2012 (CUSIP Nos. 758 (56HAA5 and/or 75866f1.C1) and/or common stack of Refco

    (CUSIP No. 758666109) during the Class Period and who were damaged thereby .

    Excluded from the Settlement Class are. (i.) Refco ; (ii) the Defendants; (iii) any person or

    entity who was a partner, executive officer, director, controlling person, subsidiary, or

    affiliate of Refco or any Defendant during the Class Period ; (iv) members of the

    Defendants' immediate families; (v) entities in which Refco or any Defendant has a

    5

  • controlling interest ; and (vi) the legal representatives, heirs, predecessors, successors or

    assigns of any of the foregoing excluded persons or entities_ Also excluded from the

    Class is any person or entity who or which properly excludes himself, herself or itself by

    filing a valid and timely request for exclusion in accordance with the requirements set

    forth in the Notice,

    1 . "Class Distribution Order" means an order of the Court approving

    the Claims Administrator 's administrative determinations concerning the acceptance an d

    rejection of the claims submitted herein, and approving any fees and expenses not

    previously applied for, including the fees and expenses of the Claims Administrator and,

    if the Effective Date has occurred, directing payment of the Net Settlement Fund t o

    Authorized Claimants .

    in. "Class Member" means any person or entity who or which is a

    member of the Class and not excluded therefirom _

    ri, "Class Period" means the period from August 5, 2004 through and

    including October 17, 2005 .

    o. "Co-Lead Counsel" means the law firms of Bernstein Litowitz and

    Giant & l3isenhofer ,

    p "Complaint" shall mean the consolidated class action complaint

    filed. by Lead Plaintiffs in this Action on April 3, 2006.

    q "Confidentiality Agreement" mew the confidentiality agreement

    entered into between BAWAG and Co-Lead Counsel for the Lead Plaintiffs, dated July 7 ,

    2006 .

    6

  • r "Contingent Payment" shall have the meaning set forth in ¶ 8

    below.

    s. "Court" means the United States District Court for the Southern

    District ofNew York.

    t, "Creditors Committee" means Refco's Official Committee of

    Unsecured Creditors in the Refco Bankruptcy Proceeding .

    u, "Defendants" means all defendants named in the Amended

    Complaint and any future named defendants .

    v. "Effective Date" means the date upon which the Judgment has

    become Final .

    W. "Escrow Account" means the interest beathig account maintaine d

    by the Escrow Agent into which the Settlement Amount shall be deposited . Until the

    Effective Date, the Escrow Account shall be controlled and maintained -jointly by

    Bernstein Litowitz and Grant & Eisenhofer , on behalf of Lead Plaintiffs and the Class.

    X . "Escrow Agent" means the financial institution selected by Co-

    Load Counsel to receive, hold, invest and disburse the Settlement Amount pursuant to the

    terms of this Stipulation and the Escrow Agreement ,

    Y- "Escrow Agreement" means the escrow agreement between

    Bernstein Litowitz, Grant & Eisenhofer and the Escrow Agent with respect to the Escro w

    Account.

    Z. "Final," with respect to the Judgment, means the later of (i) if

    there is an appeal from the Judgment (other than an appeal pertaining solely to the

    Court's approval of a Plan of Allocation and/or the Court's award of attorneys' fees ,

    7

  • costs or expenses), the date of final affixmance on appeal and the expiration of the time

    for any further•judicial review whether by appeal, reconsideration or a petition for a writ

    of certiorari and, if certiorari is granted, the date of final aflainnanco of the Judgment

    following review pursuant to the grant; or (ii) the expiration of the time for the filing or

    noticing of any appeal from the Judgment, which shall be thirty (30) days der the

    Judgment is entered in the Court's docket. Any appeal or proceeding seeking judicial

    review pertaining solely to (i) Court approval of the Plan of Allocation of the Net

    Settlement Fund ; and/or (ii) the Court's award of attoanneys' fees, costs or expenses, shall

    not affect the time set forth above for the Judgment to become Final .

    sa. "Grant & Eisenhofe?" means Grant & Eisertho fe r P.A., Co-Lead

    Counsel for Lead Plaintiffs and the Class .

    bb. ";udgment" means the proposed judgment to be entered approvin g

    the BAWAG Settlement substantially in the f©tm attached hereto as Exhibit B .

    cc. "Lead Plaintiffs" means RTC Capital Associates LLC and Pacifi c

    Investment Management Company LLC .

    dd. "Net Settlement Fund" means the Settlement Fund less (i) Court

    awarded attorneys' fees and expenses; (u) Notice and Administration Expenses ; (iii) any

    required Taxes ; and (iv) any other fees or expenses approved by the Court.

    ee. `Norm-Contingent Payment" has the meaning set forth in 18 below .

    if. "Notice" means the Notice of Pendency of Class Action, Hearing

    on Proposed Settlement and Attorneys' Fee Petition and Right to Share in Net Settlement

    Fund which is to be sent to members ofthe Class substantially in the form attached hereto

    as Exhibit 1 to Exhibit A hereto .

    8

  • gg. "Notice and Administration Expenses" means all expense s

    incurred in connection with the preparation and printing of the Notice ; providing notice

    to the Class by mail, publication and other means; receiving and reviewing claims ;

    applying the Plan of Allocation; corresponding with Class Members ; and the costs of the

    Claims Administrator.

    hh. 'Notice and Preliminary Approval Order" means the proposed

    order preliminarily approving the BAWAG Settlement, and directing notice to the Clas s

    of the pcndeney of the Action and of the BAWAG Settlement, which shall b e

    substantially in the form attached hereto as Exhibit A.

    ii . "Plan of Allocation" means the plan that Lead Plaintiffs wil l

    submit to the Court at a later date and upon further notice to the Class that shall b e

    atilized for distribution of the Net Settlement Fund to Authorized Clain tts in a manne r

    consistent with the terms of this Stipulation, and as approved by the Court.

    jj . "Proof of Claim" means the form substantially in the form to b e

    approved by the Court and disseminated to Class Members at a future date, which Clas s

    Members shall be required to complete and return to the Claims Administrator in order to

    substantiate their entitlement to a share of the Net Settlement Fund.

    kk. "Publication Notice" means the Summary Notice of Pendency o f

    Class Action, Hearing on Proposed Settlement and Attorneys' Fee Petition and Right to

    Shape in Net Settlement Fund for publication substantially in the form attached a s

    Exhibit 2 to Exhibit A hereto.

    9

  • 11. "R.efco" means Refco, Inc. and its predecessors and subsidiaries,

    including, but not limited to, ltefco Group Ltd ., LLC, New Refco Group Ltd., LLC,

    - Refco Finance Holdings LLC, Refco Finance Inc ., and Refco Capital Markets Ltd .

    mm. "Refco Ba iptcy 'roceeding" means the consolidated

    bankruptcy pxaeeedings relating to Refco, currently pending in the Bankruptcy Court for

    the Souther District of Now York .

    nn. "Released Parties" means the Settling Defendants and the Released

    Plaintiff Parties collectively .

    00. "Released Plaintiff Parties" means the Lead Plaintiffs and their

    attorneys, trustees, accountants, affiliates, subsidiaries, parents, predecessors, successors,

    or related companies and any of their respective present or former officers, directors and

    o nployees.

    pp. "Sale Puce" means the Transaction Value as defined in a separate

    Stipulation and Order of Settlement reached between BAWAG and the Creditors

    Committee and approved by the Approval Order.

    qq. "Salo Transaction" means the Sale Transaction as defined in a

    separate Stipration and Order of Settlement reached between BAWAG and the Creditor s

    Committee and approved by the Approval Order.

    rr. "Settled Claims" means any and all claims, rights, demands,

    obligations, controversies, debts, damages, losses, causes of action or liabilities of any

    kind or nature whatsoever in law or in equity, including both known and Unknown

    Claims, held by any Class Member at any point from the beginning of time to the date of

    the execution of this Stipulation, including but not limited to those which (1) were

    10

  • asserted in the Action by Class Members against any of the Settling Defendants ; or (ii)

    could have been asserted in any forum by any of the Class Members against any of the

    Settling Defendants , that arise out of or relate to the allegations of the Complaint and the

    acquisition or disposition of Refce Group Ltd„ LLC/Refco Finance Inc . 9% Senior

    Subordinated Notes due 2012 and/or common stock of Refeo during the Class Period,

    as . "Settling Defendants" means :SAWAG, its direct and indirect

    subsidiaries, parents, affiliate , predecessors, and successors, set forth in the attached

    Schedule A, and their respective agents and attorneys , set forth in the attached Schedule

    B, and all past, present, and future officers, directors and employees, except for the

    individuals set forth in the attached Schedule C or any individuals who at any time

    worked as an officer, director or employee of Refco, in their capacity as officer, director

    or employee of Refco , excluding any individual who served as an officer, director, or

    employee OfBAWAG Overseas, Inc, or DP Capital , Inc . prior to the merger with or sale

    of these entities to Refco and who was not otherwise employed by Refco .

    tt . "Settling Defendants' Claims" means any and all claims, rights ,

    demands, obligations, controversies, debts, damages, losses, causes of action and

    liabilities of any kind or nature whatsoever in law or in equity, including both known and

    Unknown Claims, held at any point from the beginning of time to the date of the

    execution of this Stipulation, which claims have been or could have been asserted by the

    Settling Defendants against any of the Released Plaintiff Parties and which arise out of or

    relate in anyway to the institution or maintenance of the Action .

    I I

  • au. "Settlement Amount" means the Non-Contingent Payment o f

    $108;000,000 and the Contingent Payment of up to $32,000,000, as described more fully

    in ¶ 8 -10 below.

    vv. "Settlement Fund" means (i) the Non-Contingent Payment of

    $108,000,000 in cash to be paid by or on behalf of BAWAG ; (ii) any amounts paid

    pursuant to the Contingent Payment; and (iii) any interest earned on any monies held in

    the Escrow Account.

    ww. "Settlement Hearing" means the hearing to be held by the Court to

    determine whether the proposed BAWAG Settlement is fair , reasonable and adequate and

    should be approved.

    xx. "Stipulation" means this Stipulation and Agreement of Settlement,

    yy. "Taxes" means all taxes on the income of the Settlement Fund and

    expenses costs incurred in connection with the taxation of the Settlement Fund

    (including, without limitation, expenses of tax attorneys and accountants) .

    zz. "Termination Notice" shall have the meaning set forth in 13 7

    below.

    aaa. "USAO" means the United States Attorney for the Southern

    District of New York.

    bbb. 'Vnknown Claims ' means any and all Settled Claims which Lead

    Plaintiffs in the Action or any Class Member does not know to exist in his, her or it s

    favor at the time of the release of the Settling Defendants, and any Settling Defendants'

    Claims which the Settling Defendants do not know to exist in its favor at the time of the

    release of the Released Plaintiff Parties, Which if known by them might have affecte d

    12

  • their decisions with respect to the Settlement . With respect to any and all Settled Claims

    and Settling Defendants' Claims, the parties stipulate and agree that upon the Effective

    Date, Lead Plaintiffs and the Settling Defendants shall expressly, and each Class Member

    shall be deemed to have, and by operation of the Judgment shall have, expressly waived

    any and all provisions, rights and benefits conferred by any law of any state or territory of

    the United States, any law applicable in Austria or principle of common law, which is

    similar, comparable, or equivalent to Cal . Civ. Code § 1542, which provides-

    A general release does not extend to claims which thecreditor does not know or suspect to exist in his or herfavor at the time of executing the release, which if knowuby him or her must have materially affected his or hersettlement with the debtor.

    Lead Plaintiffs and BAWAG acknowledge, and other Class Members by operation of law

    shall be deemed to have acknowledged, that the inclusion of -Unknown Claims" in the

    definition of Settled Claims and Settling Defendants' Claims was separately bargained

    for and was a key element of this Settlement .

    RELEASES

    2. The obligations incurred pursuant to this Stipulation are in full and final

    disposition of the Action with respect to the Settling Defendants and any and all Settled

    Claims .

    3. As of the Effective Date, Lead Plaintiffs and each Class Member on behalf

    of themselves, and each of their respective predecessors, successors, parents, subsidiaries,

    affiliates, heirs, executors, trustees, and administrators, by operation of the Judgment,

    will release and forever discharge each and every Settled Claim, as against each and

    every one of the Settling Defendants and shall forever be barred and enjoined from

    13

  • commencing, instituthg or maintaining any of the Settled Claims against any of the

    Settling Defendants .

    4, As of the Effective Date, the Settling Defendants, on behalf of themselve s

    and each and every of the Settling Defendants, by operation of the Judgment, will release

    and forever discharge each and every Settling Defendants' Claim, and shall forever be

    barred and enjoined from commencing, instituting or maintaining any of the Settling

    Defendants' Claims against any of the Released Plaintiff Parties .

    5. Notwithstanding any release or other language that may be contained i n

    the Stipulation and Order of Settlement that may be entered by the Bankruptcy Court or

    in any other documcnt (including, but not limited to, any order issued by the Bankruptcy

    Court for the Southern District of New York in connection with the separate settlement

    reached between BAWAG and the Creditors Committee) which purports to release or

    otherwise extinguish or limit any claims that Lead Plaintiffs and/or members of the Class

    have asserted or could assert against BAWAG (collectively, the "Bankruptcy Releases"),

    the Parties agree that as long as the Settlement between Lead Plaintiffs and BAWAG is

    approved by the Cowl, the Bankruptcy Releases shall be fully effective on their terms,

    provided, however, the Bankruptcy Releases shall not release the claims of Lead

    Plaintiffs and/or members of the Class in this Action, which claims will be released only

    through this Settlement between Lead Plaintiffs and BAWAG . Further, notwithstanding

    any language that may be contained in the Bankruptcy Releases or other documents

    referenced above, if this Settlement or any future settlement between the Parties is

    approved by the Court, nothing shall preclude members of the Class from receiving

    distributions from such Settlement or future settlement in this Action receivin g

    14

  • distributions from settlements reached between BAWAG and others in the Bankruptcy

    Court, to the extent that those Class members have allowed claims as creditors or interest

    holders in the Refco Bankruptcy Proceeding. The Parties fu Zer agree that, in the event

    that this Settlement is not approved by the Court, and the Parties subsequently enter into a

    future settlement, any future settlement will include the terms of this paragraph .

    CLASS CERTIFICATION

    6. Solely for proses of this Settlement, BAWAG stipulates to (i )

    certification of the Action as a class action, pursuant to Rules 23(a) and 23(b)(3) of the

    Federal Rules of Civil procedure; (ii) the appointment of Load Plaintiffs as

    representatives of the Class; and (iii) the appointment of Co-Lead Counsel as Class

    Counsel pursuant to Rule 23(g) of the Federal Rules of Civil Procedure. Lead Plaintiffs

    will move for, and BAWAG shall not oppose, entry of the Notice and Preliminary

    Approval Order, which will certify the Action to proceed as a class action solely for

    purposes of the Settlement .

    THE SETTLEMENT CONSIDERATIO N

    7. In fall settlement of the claim s asserted in the Action against the Settlin g

    Defendant and in consideration of the rcleascs specified in 'J 3-5, above, BAWAG shall

    provide Lead Plaintiffs with the monetary and non-monetaz y consideration described

    below.

    Ma et Consideration

    8, BAWAG shall pay or cause to be paid to the members of the Class the

    sum of$108,00 0,000 in cash (the "Non-Contingent Payment"), and in the event BAWAG

    15

  • is sold for a Sale Price exceeding €L8 billion (curos) within two years after the Approva l

    Order is entered, BAWAG will pay to the members of the Class an additional cash sum ,

    calculated as follows: 5% of the Sale Price of BAWAG above £1 .8 billion (euros), up to

    a maximum additional payment to the Class not to exceed $32,000,000 (dollars) (the

    "Contingent Payment"). For currency conversion puposes, all amounts paid shall be

    converted into U.S. dollars on the date such Contingent Payment is made .

    9. The Settlement Amount shall be paid in accordance with the followin g

    schedule:

    a. BAWAG shall pay $25,000,000 of the Non-Contingcut Payment

    into the Escrow Account within thirty days after the Approval Order becomes a final

    order that has not been stayed, vacated, reversed, or materially modified or amended, and

    as to which: (i) the time to seek review, reargument, or rehearing has expired, and as to

    which no appeal or motion or petition for certiorari, review, or rehearing is pending, or

    (ii) if a stay, appeal, review, reargur ent, rehearing, or certiorari has been sought, the

    order or judgment has been afl rmed, or the request for stay, review, reargument,

    rehearing, or certiorari has been denied and the time to seek fur her stay, appeal, review,

    reargument, rehearing, or certiorari has expired, as a result of which such order or

    judgment has become final and non-appealable in accordance with applicable law;

    provided, however, that the possibility that a motion under Rule 60 of the Federal Rules

    of Civil ocedure, or Rule 9024 of the Federal Rules of Bankruptcy Procedure, may be

    but has not then been Mod with respect to such order, shall not cause such order not to be

    a final order.

    16

  • b. Within thirty days of the earlier of (a) the closing of the Sal e

    Transaction of BAWAG or (b) one year after the date the Approval Order is entered,

    BAWAG shall pay $75,000,000 of the Non-Contingent Payment into the Escrow

    Account ;

    o. Should BAWAG be sold for a Sale Price exceeding £L8 billion

    (euros) within two years after the Approval Order is entered, BAWAG shall, within thirt y

    days after the closing of the Sale Transaction of BAWAG, pay the Contingent Payment

    into the Escrow Account ;

    d. Within ten days after entry of the, Notice and i liminary Approval

    Order by the Court, $AWAG shall pay $8,000,000 of the Non-Contingent Payment into

    the Escrow Account.

    10. Lead Plaints agree that, in connection with each of the payments due

    from BAWAG in accordance with. ¶¶ 9(a)-(c) above, before demanding payment from

    BAWAG they will use their reasonable best efforts both to (a) apply to the USAO, on

    bebaif ofthe Class, to receive that payment from the BAWAG Global Resolution Fund,

    and (b) pursue receipt of such payment, and further, that they will credit the receipt of

    any monies received from the BAWAG Global Resolution Fund to reduce, dollar for

    dollar, the payment obligations of BAWAG pursuant to ¶¶ 9(a)-(c) in that order (Le,

    ¶3(a) first, then ¶9(b), then ¶9(c)) . BAWAG agrees that it remains unconditionally

    obligated to pay directly to the Class whatever amount is necessary to ensure that each of

    the payments set forth in ¶¶ 9(a)-(c) above is fully paid should the USAO, for any reason

    whatsoever, fail to pay, in whole or in part, the amounts required to be paid pursuant to

    IM 9(a)-(c). BAWAG's obligation to pay the amounts set forth in ¶¶ 9(a)-(c) shall b e

    17

  • suspended while the USAO processes the aforementioned request(s), pravk ed however,

    that if the USAO fails to make full payment within 180 days of a scheduled payment

    date, interest shall accrue on such amounts that remain unpaid at the then-applicable 3-

    month LIBOR rate without compounding . If the USAO fails to make frill payment of any

    amount of the Non -Contingent Payment within 365 days of the scheduled payment dat e

    in 19(b) or full payment of the Contingent Payment within 365 days of the scheduled

    payment date in 19(c), BAWAG shall, on or before the 366th day after the respective

    scheduled payment dates, make such payments to the Escrow Account as are necessary

    such that the Class receives fall payment of the scheduled payment, plus interest as set

    forth herein . Nonetheless, if the USAO inalces a payment to the Class out of th e

    BAWAG Global Resolution fund after BAWAG has made a direct payruent to the Class

    pursuant In 9(a), (b) or (c) above, the Class will transfer an amount equivalent to the

    pay xeent received fCoxn the USAO pr ant to that same subparagraph ie . ' 1 9(a), (b) or

    (c)) to BAWAG within twenty days of receipt of such payment from the USAQ . In-no

    event shall the funds received through the BAWAG Global Resolution Fund reduce the

    payment obligation ofBAWAG set forth in 19(d) above, even if that payment results in

    total payments to the Class exceeding $108 million .

    Non-Monetary Consideration

    11. Subject to Austrian bank secrecy laws and pursuant to the Co dentialit y

    Agrcement, BAWAG shall provide Co-Lead Counsel with access to such documents and

    financial information that Lead Plaintiffs believe arereasonably necessary to confir the

    information provided during the course of settlement negotiations. Subject to the

    provisions of the Austrian bank secrecy laws and pursuant to the Confidentiality

    is

  • Agreement, BAWAG agrees, that it shall, upon reasonable request, be under a continuing

    obligation to provide Lead Plaintiffs with copies of all Refco-related documents provided

    in the future to the USAO and/or the Creditors Committee.

    12. BAWAG shall in good faith and subject to Austrian bank secrecy laws

    provide reasonable cooperation to assist Lead Plaintiffs in their prosecution of claims

    against other defendants and/or prospective defendants in the Action. BAWAG's

    cooperation shall include making reasonably available to Lead Plaintiffs for interviews

    and depositions (without the need for subpoenas) in Austria then current BAWAG

    employees familiar with the aforementioned documents and the matters alleged in the

    Amended Complaint, provided, however, that Lead Plaintiffs agree that the timing of

    such interviews and/or depositions will be subject to coordination with the USAO and

    Securities and Exchange Commission.

    USE AM A ) % NISTlt4UON OF SETTLEMENT FUND

    13. The Settlement Fund may be used. (i) to pay any Taxes; (ii) to pay Notic e

    and Administration Expenses ; (iii) to pay any attorneys' fees and expenses awarded by

    the Court ; (iv) to pay any other fees and expenses approved by the court ; and (v) to pay

    Claims of Authorized Claimants determined valid for payment; provided, however, that

    Co-Lead Counsel agree that finds used to pay any attorney's fee award shall not be

    drawn from funds that are paid to the Settlement Fund through the BAWAG Global

    Resolution Fund .

    14, The Net Settlement Fund shall remain in the Escrow Account until th e

    Effective Date, whereafter the Net Settlement Fund shall be distributed to Authorize d

    Claimants as provided in ¶j 22-25 hereof. All funds held by the Escrow Agent shall b e

    19

  • deemed to be in the custody of the Court, and shall remain subject to the jurisdiction of

    the Court -until such tine as the funds shall be distributed or returned Pursuant to this

    Stipulation and/or further order of the Court . The Escrow Agent shall invest arty funds in

    the Escrow Account in United States Treasury Bills or, if approved by each of the Co-

    Lead Counsel and Lead Plaintiffs, in money market funds with one or more of the fifty

    (50) largest banking institutions in the United States, and shall collect and reinvest all

    interest accrued thereon. The Lead Plaintiffs have structured the Escrow Account so that

    will qualify as a "qualified settlement hind," as that term is defined in Treas . Reg.

    §1 .46881, which has been promulgated under Section 468E of the Internal Revenue

    Code of 1986, as amended) and the parties hereto accordingly agree to treat the

    Settlement Fund as a Qualified Settlement Fund within the meaning of Treasury

    Regulation §1,468B-l., and that Bernstein Litowitz and Grant & Eiseuhofer, as

    administrators of the Settlement Fund within the meaning of Treasury Regulation

    §1 .468B-2(k)(3), shall be responsible for timely filing tax returns and any relevant tax

    filings and documentation relating thereto for the Settlement Fund and timely paying

    from the Settlement Fund any Taxes owed with respect to the Settlement Fund,

    BAWAGs Counsel as transferor agrees to provide promptly to Bernstein Litowitz the

    required statement described in Trceaury Regulation §1 .468B-3(o); ovide thA since

    the Settling Defendants are not US persons and are not US taxpayers, the Settling

    Defendants do not file US federal income tax returns and thus, the Settling Defendants

    cannot file the required statement with their US tax retort-, as this regulation appears t o

    require-

    20

  • 15. All Taxes shall be paid out of the Settlement Fund, and shall be timely

    paid by the Escrow Agent without prior Order of the Court . Any Tax returns prepared

    for the Settlement Fund (as well as the election set forth therein) shall be consistent with

    the previous paragraph, and in all events shall reflect that all Taxes (including any

    interest or penalties) on the income earned by the Settlement Fund shall be paid out of the

    Settle ,ent Fund as provided herein. The Settlement Fund shall indemnify and hold the

    Settling Defendants harmless for Taxes and related expenses (including without

    limitation, taxes payable by reason of any such inde nihcation), if any, payable by the

    Settling Defendants by reason of the income earned on the Settlement Fund . The Set g

    Defendants shall notify the Escrow Agent promptly if they receive any notice of any

    claim for Taxes relating to the Settlement Fund .

    16. Co-Lead Counsel may pay from the Settlement Amount al l reasonable

    costs and expenses associated with the administration of the settlement, including,

    without limitation, the actual costs of identifying and notifying Class Members and

    printing and mailing the Notice and Proof of Claim, publication of the Publication

    Notice, reimbursement to nominee owners for forwarding the Notice and Proof of Claim

    to their beneficial owners, the administrative expenses incurred and fees charged by the

    Claims Administrator in connection with mailing notices and processing the submitted

    claims, and any other Notice and Administration Expenses. In the event that the

    Settlement is terminated, as provided for hereon, Notice and Administration Expenses

    paid or accrued in connection with this paragraph shall not be returned to the persons

    who paid the Settlement A oubt up to a maximum amount of $300,000.04.

    21

  • 17. Co-Lead Counsel will apply to the Court for a Class Distribution Order ,

    on notice to BAWAG's Counsel, approving the, Claims Administrator 's administrative

    determinations concerning the acceptance and rejection of the claims submitted herein

    and approving any fees and expenses not previously applied for, including the fees and

    expenses of the Claims Administrator, and, if the Effective Date has occurred, directing

    the payment of the Net Settlement Fund to Authorized Claimants.

    18. This is not a claims-made settlement . As of the Effective Date, with the

    exception of the Class's obligation to return payments to BAWAG if payments arc later

    obtained from the BAWAG Global Resolution Fund (as set forth in paragraph 10 above),

    and the terms of paragraph 40 below, neither the Settling Defendants nor any person

    paying the Settlement Amount or any portion of the Settlement Amount on behalf of the

    Settling Defendants shall have any right to the return of the Settlement Fund or any

    portion thereof irrespective of the number of Proofs of Claim filed, the collective amount

    of losses of Authorized Claimants, the percentage of recovery of losses, or the amounts to

    be paid to Authorized Claimants from the Not Settlement Fad . In the event that the

    Settlement is ter ated or fails to become effective for any reason prior to the Effective

    Date, the Class shall return to BAWAG the $8 million Non-Contingent Payment paid in

    accordance with paragraph 9(d) above, subject to the provisions of paragraph 40.

    19. The Claims Administrator will administer the Settlement under Co-Lead

    Counsel's supervision and subject to the jurisdiction of the Court. The Settling

    Defendants will have no responsibility for the administration of the Settlement, and shall

    have no liability to the Class in connection with such adrninistratiom Co-Lead Counsel

    will cause the Claims Administrator to mail the Notice (and, at a later date, the Proof of

    22

  • Claim) to those members of the Class whose addresses may be identi fied through

    reasonable effort. Co-Lead Counsel will publish the Publication Notice of the proposed

    Settlement in the national edition of The Wall Street Journal within ten (10) days of the

    mailing of the Notice, or in such other form or manner as may be ordered by the Court .

    ATTORNEYS' FEI AND EXPENSE S

    20. At any time prior to distribution to the Class, upon reasonable notice to

    Class Members, Co-Lead Counsel, on behalf of all plaintiffs' counsel in the Action, may

    apply to the Court for an award from the Settlement Fund of attorneys' fees not to exceed

    7% of the Non-Contingent Payment; provided, however, that funds used to pay any

    attorneys' fee award shall not be drawn from funds that BAWAG may pay to the

    Settlement Fund through the BAWAG Global Resolution Fund . BAWAG will take no

    position on any request for attorney's fees by Co-Lead Counsel other than to

    affirmatively acknowledge that the efforts of Lead Plaintiffs and Co-Lead Counsel,

    including the filing of the Amended Complaint and the presentation of certain facts and

    arguments during the, settlement discussions, contributed materially to BAWAG's

    agreement to fond the BAWAG Global Resolution Fund and to pay the Settlement

    Amount to the Class. Any attorneys' fees as axe awarded by the Court shall be paid from

    the Settlement Fund to Co-Lead Counsel within five (5) business days of the entry of the

    Order awarding such attorneys' fees, notwithstanding the existence of any timely filed

    objections thereto, or potential for appeal therefrom, or collateral attack on the Settlemeiit

    or any part thereof, subject to the obligation of Co--Lead Counsel and each such plaintiffs'

    counsel to refund to the Settlement Fund, within ten (10) days, the amount received by

    each plus accrued interest at the rate paid on the Escrow Account by the financial

    23

  • institution holding it, if and when, as a result of any appeal and/or further proceeding on

    remand, or successful collateral attack, the fee or cost award is reduced or reversed, if the

    award order does not become final, if the Settlement itself is voided by any party as

    provided herein, or if the Settlement is later reversed or modified by any court. Co-Lead

    Counsel shall allocate tbo attorneys' fees among plaintiffs' counsel in a manner in which

    they in good faith believe reflects the contributions of such counsel to the prosecution and

    settlement of the Action with the Settling Defendants . Co-Lead Counsel will indemnify

    and hold the Settling Defendants harmless for any claims by any Class member regarding

    attorneys' fees.

    21 . Lead Plaintiffs and Co-Lead Counsel may not cancel or terminate th e

    Stipulation or the Settlement in accordance with' 37 or otherwise based on this Court's

    or any appellate court's ruling solely with respect to any application for attorneys' fees

    and expenses or other fee and expense award in the Action . The Settling Defendants

    have no responsibility or liability for the allocation of attorneys" fees .

    nix sUTION TO AUThORJZ1p CLA1MANrT S

    22. The Claims Administrator shall determine each Authorized Claimant's pr o

    rata share of the Net Settlement Fund based upon each Authorized Claimant' s

    Recognized Loss as set forth in 123 below.

    23. The distribution of the Net Settlement Fund to Class Members shall be

    subject to the Plan of Allocation, which Lead Plaintiffs shall propose in their discretion,

    at a later point and subject to farther notice to Class Members . The Settling Dcf ndants

    will take no position with respect to such Plan of Allocation; such Plan of Allocation is a

    matter separate and apart from the proposed Settlement between Lead plaintiffs and th e

    24

  • Settling Defendants, and any decision by the Court concerning the Plan of Allocation

    shall not affect the validity or finality of the proposed Settlemcnt .

    24. The Plan of Allocation is not a necessary term of this Stipulation and it is

    not a condition of this Stipulation that any particular plan of allocation be approved by

    the Court . Lead Plaintiffs and Co-Lead Counsel may not cancel or terminate the

    Stipulation or the Settlement in accordance with ¶ 37 or otherwise based on this Coma's

    or any appellate court's ruling solely with respect to the flan of Allocation or any plan of

    allocation in the Action . The Settling Defendants have no responsibility or liability for

    allocation of the Net Settlement Fund .

    25. Each Authorized Claimant shall be allocated a pro rata share of the Net

    Settlement Fund based on the Flan of Allocation. The Settling Defendants will have no

    involvement or responsibility in reviewing or challenging claims.

    ADMJ 1ST.' 4TION Or~ SETTLEMENT

    26. Any member of the Class who fails to timely submit a valid Proof o f

    Claim will not be entitled to receive any of the proceeds from the Net Settlement Fund

    but will otherwise be bound by all of the terms of this Stipulation and the Settlement,

    including the terns of the Judgment to be entered in the Action and the, releases provided

    for herein, and will be barred from bringing any action against the Settling Defendants

    concerning the Settled Claims .

    27. Co-Lead Counsel shall be responsible for supervising the admini stration

    of the Settlement and disbursement of the Net Settlement Fund. The Settling Defendants

    shall have no liability, obligation or responsibility for the administration of the

    25

  • Settlement, the allocation of the Settlement proceeds or the reviewing or challenging o f

    claims of members of the Class .

    28. For purposes of determining the extent, if any, to which a Class Membe r

    shall be entitled to be treated as an "Authorized Claimant," the following conditions shal l

    apply :

    a. Each Class Member shall be required to submit a Proof of Claim

    signed under penalty of perjury, and supported by such documents as are designated

    therein, including proof of the claimant's loss, or such other documents or proof as Lead

    Counsel, in its discretion, may deem acceptable and subject to the approval of the Court;

    b. All Proofs of Claim must be submitted by the date specifie d

    thereon unless such period is extended by Order of the Court. Any Class Member who

    fails to submit a Proof of Claim by such date shall be forever ban cd from receiving anY

    payment pursuant to this Stipulation (unless, by Order of the Court, a later submitted

    Proof of Claim by such Class Member is approved), but shall in all other respects be

    bound by all of the terms of this Stipulation and the Settlement, including the terms of the

    Judgment to be entered in the Action and the releases provided for herein, and will be

    barred from bringing any action against the Settling Aofcndants concerning the Settled

    Claims . A Proof of Claim shall be deemed to have been submitted when posted, if

    received with a postmark indicated on the envelope and if mailed first-class postage

    prepaid and addressed in accordance with the instructions thereon, provided that it is

    received before the motion for the Class Distribution Order is filed. In all other cases, the

    Proof of Claim shall be deemed to have been submitted when actually received by the

    Claims Administrator ;

    26

  • e. Each Proof of Claim shall be submitted to and reviewed by the

    Claims Administrator, who shall determine in accordance with this Stipulation and unde r

    the supervision of Co-Lead Counsel, the extent, if any, to which each claim shall b e

    allowed, subject to review by the Court pursuant to subparagraph (e) below;

    d. Proofs of Claim that do not meet the submission requirements may

    be rejected. Prior to rejection of a Proof of Claim, the Claims Administrator shall

    communicate with the claimant in order to afford the claimant the opportunity to remedy

    curable deficiencies in the Proof of Claim submitted . The Claims Administrator, under

    supervision of Co-Lead Counsel, shall -notify, in a timely fashion and in writing, all

    claimants whose Proofs of Claim they propose to reject in whole or in part, setting forth

    the reasons therefore, and shall indicate in such notice that the claimant whose claim is to

    be rejected in whole or in part bas the right to a review by the Court if such claimant so

    desires and if such claimant complies with the requirements of subparagraph (e) below;

    e. If any claimant who is notified by the Claims Administrator tha t

    the Claims Administrator intends to reject his, her or its claim in whole or in part desires

    to contest such rejection, such claimant must, within twenty (20) days after the date of

    mailing of the notice required in subparagraph (d) above, serve upon the Claims

    Administrator a notice and statement of reasons indicating the claimant's grounds for

    contesting the rejection along with any supporting documentation, and specifically

    requesting a review thereof by the Court. If the dispute concerning the claim cannot be

    otherwise, resolved, Co-Lead Counsel shall thereafter present the request for review to the

    Court; and

    27

  • f The administrative determinations of the Claims Administrato r

    accepting and rejecting claims shall be presented to the Court, on notice to f3AWAG's

    Counsel, for approval by the Court in the Class Distribution Order.

    29. Each claimant shall be deemed to have submitted to the jurisdiction of the

    Court with respect to the claimant's claim, and the claim will be subject to investigation

    and discovery under the Federal Rules of Civil Procedure, provided that such

    investigation and discovery shall be limited to that claimant's status as a Class Membe r

    and the validity and amount of the claimant 's claim. Iu connection with the processing of

    the Proofs of Claim, no discovery shall be allowed on the merits of the Action or of the

    settlement,

    30. Payment pursuant to this Stipulation shall be deemed final and conclusive

    against all Class Members . All Class Members whose claims are not approved by the

    Court shall be barred from participating in distributions from the Net Settlement Fund,

    but otherwise shall be bound by all of the terms of this Stipulation and the Settlement,

    including the terms of the Judgment to be entered in the Action and the releases provided

    for herein, and will be barred from bringing any action against the Settling Defendant s

    concerning the Settled Claims.

    31. All proceedings with respect to the administration, processing and

    determination of claims described in this Stipulation and the determination of al l

    controversies relating thereto, including disputed questions of law and fact with respect to

    the validity of claims, shall be subject to the jurisdiction of the Court .

    32. The Net Settlement Fund shall be distributed to Authorized Claimants b y

    the Claims Administrator only after the Effective Date and after all claims have bee n

    28

  • processed and all claimants whose claims have been rejected or disallowed, iti whole or

    in part, have been notified and provided the opportunity to communicate with the Claims

    Administrator concerning such rejection or disallowance; provided, however, that a

    distribution may occur pending any appellate court's ruling solely with respect to the

    scope of the bar order provision of the Judgment, as set forth in 135 herein .

    TERMS OF THE PRELIMINARY APPROVAL ORDER

    33 . Concurrently with their application for preliminary Court approval of the,

    Settlement contemplated by this Stipulation, and promptly after execution of this

    Stipulation, Co-Lead Counsel shall apply to the Court for entry of an Order Preliminarily

    Approving Settlement of the Action, substantially in the forth of the Preliminary

    Approval Order annexed hereto as Exhibit A.

    34. The Settlement is conditioned upon the Approval Order by the Bankruptcy

    Court becoming a final order that has not been stayed, vacated, reversed, or materially

    modified or amended, and as to which: (i) the time to seek review, reargument, or

    rehearing has expired, and as to which no appeal or motion or petition for certiorari,

    review, or rehearing is pending, or (ii .) if a stay, appeal, review, reargument, rehearing, or

    certiorari has been sought, the order or judgment has been affirmed, or the request for

    stay, review, rear ,rtent, rehearing, or certiorari has been denied and the time to seek

    further stay, appeal, review, rear ent, rehearing, or certiorari has expired, as a result of

    which such order or judgment has become final and non-appealable in accordance with

    applicable law; provided, however, that the possibility that a motion under Rule 60 of the

    Federal Rules of Civil Procedure, or Rule 9024 of the Federal Rules of l ankruptey

    Procedure, may be but has not then been filed with respect to such order, shall not cause

    29

  • such order not to be a final order. Should this condition not be met, the Settlement shal l

    be null and void.

    TERMS QF THE U 3GW+ NT

    35. If the Settlement contemplated by this Stipulation is approved by the

    Court, Co-Lead Counsel and BAWAG's Counsel shall jointly request that the Court enter

    a Judgment substantially in the form annexed hereto as Exhibit B . The Judgment shall

    contain a provision barring claims for contribution, as provided for in 15 U.S.C. §78u-

    4(1)(7), by or against the Settling Defendants . Nothing herein is intended to broaden the

    language of the Private Securities Litigation Reform Act of 1995 .

    36, The Settlement is conditioned upon final court approval, dismissal of the

    Action as to BAWAG with -prejudice, and the Judgment becoming Final . Should those

    conditions not be met, the Settlement shall be null and void .

    TERMINATIO N

    37. BAWAG and Lead plaintiffs shall have the right to terminate th e

    Settlement and this Stipulation by providing written notice of their election to do so

    (`Termination Notice") to all other parties hereto within thirty (30) days of (a) the

    Court's declining to enter the Preliminary Approval Ow" in any material respect ; (b) the

    Court's refusal to approve this Stipulation or any material part of it, (c) the Court's

    declining to enter the Judgment in any material -respect ; (d) the date upon which the

    Judgment is modified or reversed in any material respect by the United States Court of

    Appeals or the Supreme Court of the United States; or (e) in the event that the Court

    enters a judgment in a form other than the Judgment {`Alternative Judgment') and none

    of the parties hereto elects to terminate this Settlement, the date upon which suc h

    30

  • Alternative Judgment is modified or reversed in any material respect by the United States

    Court of Appeals or the Supreme Court of the United States . The award of attorneys'

    fees, if any, to Co-Lead Counsel is not a basis for termination of this Settlement

    Agreement.

    38. BAWAG, at its discretion, has the option to withdraw from the Settlement

    if (i) holders of 5% (five percent) of the shares eligible to participate in the Settlement opt

    out, and/or (ii) holders of 5% (five percent) of the notes eligible to participate in the

    Settlement opt out. Co-Lead Counsel shall have the right to communicate with the

    holders of such shares and/or notes and, if a sufficient number of them withdraw their

    requests for exclusion such that the total number of shares and/or notes eligible to

    participate in the Settlement represented by the remaining "opt outs" represents less than

    5% of the total number of shares and/or notes eligible to participate in the Settlement,

    BAWAG's notice of termination shall be deemed withdrawn . 13AWAG must exercise its

    option to terminate in writing to Co-Lead Counsel within ten business days after

    receiving notice that the last opt out is filed that would exceed the 5% threshold for eithe r

    stock or notes, or the option is waived .

    39. Except as otherwise provided herein, in the event the Settlement is

    terminated or fails to become effective for any reason, then the Settlement shall b e

    without prejudice and none of its terms shall be effective or enforceable except as

    specifically provided herein, the parties to this Stipulation shall be deemed to have

    reverted to their respective status in the Action as of May 31, 2006 and, except as

    otherwise expressly provided, the parties in the Action shall proceed in all respects as i f

    31

  • this Stipulation and any related orders had not been entered . In such event, the fact and

    terms of this Stipulation shall not be adm issible in any trial of this Action.

    40_ If the Settlement Amount, or any portion thereof, is to be returne d

    pursuant to the provisions of this Stipulation, any portion of the Settlement Amount

    previously paid by or on behalf of the Settling Defendants, plus interest earned less any

    Taxes paid or due (in which case the deducted funds will be used to pay such Taxes) with

    respect to such interest income , and less any Notice and Administration Costs actually

    paid or incurred up to $300,000, shall be returned to the source of such payments i.e.

    BAWAQ or the BAWAG Global Resolution Fund) .

    NO" MISSION OF WRONGDOIN G

    41 . This Stipulation, whether or not consummated, and any negotiations ,

    proceedings or agreements relating to the Stipulation, the Settlement, and any matter s

    arising in connection with settlement negotiations, proceedings, or agreements :

    a. shall not be admissible in any action or proceeding for any reason,

    other than an action to enforce the terms hereof;

    b. shall not be described as, co=trued as, offered or received agains t

    the Settling Defendants as evidence of and/or deemed to be evidence of any presumption,

    concession, or admission by the Settling Defendants of: the truth of any fact alleged by

    Lead Plaintiffs ; the validity of any claim that has been or could have been asserted in the

    Action or in any litigation; the deficiency of any defense that has been or could have been

    asserted in the Action or in any litigation ; or any liability, negligence, fault, or

    wrongdoing of the Settling Defendants ;

    32

  • C . shall not be described as, construed as, offered or received agains t

    Lead Plaintiffs or any Class Members as evidence of any infirmity in the claims of said

    Lead plaintiffs and the Class or that damages recoverable under the Amended Complaint

    would not have exceeded the Settlement Amount ;

    d. shall, not be described as, construed as, offered or received against

    any of the parties to this Stipulation, in any other civil, criminal or administrative action

    or proceeding, provided, however, that (i} if it is necessary to refer to this Stipulation to

    effectuate the provisions of this Stipulation, it may be refer'ed to in such proceedings,

    and (ii) if this Stipulation is approved by the Court, the Settling Defendants may refer to

    it to effectuate the liability protection granted them hereunder ; and

    e. shall not be described as or construed against the Settlin g

    Defendants or the Toad Plaintiffs and any Class Members as an admission or concession

    that the consideration to be given hereunder represents the amount which could be or

    would have been awarded to said Lead Plaintiffs or Class Members after trial .

    MISCELLANEOUS PROVISIONS

    42. All of the exhibits attached hereto are hereby incorporated by reference as

    though fully set forth herein,

    43 . BAWAG warrants as to itself that, as to the payments made by or on

    behalf of it, at the time of such payment that BAWAG made or caused to be made

    pursuant to 118.10 above, it was not insolvent nor did nor will the payment required to

    be made by or on behalf of it render BAWAG insolvent within the meaning of and/or f'or

    the purposes of the United States Bankruptcy Code, including §§ 101 and 547 thereof

    This warranty is made by BAWAG and not by BAWAGr's Counsel .

    33

  • 44, If a case is commenced in respect of BAWAG (or any insurer contributin g

    funds to the Settlement Amount on behalf of )3AWAG) under Title 11 of the United

    States Code (Bankruptcy), or a trustee, receiver or conservator is appointed under any

    similar law, and in the event of the entry of a final order of a court of competent

    jurisdiction determining the transfer of money to the Settlement Fund or any portion

    thereof by or on behalf of BAWAG to be a preference, voidable transfer, fraudulent

    transfer or similar transaction, and any portion thereof is required to be returned, and such

    amount is not promptly deposited to the Settlement Fund by others, then, at the election

    of Lead Plaintiffs, the parties shall jointly move the Court to vacate and set aside the

    releases given and the Judgment entered in favor of the Settling Defendants pursuant to

    this Stipulation, which releases and Judgment shall be null and void, and the parties shall

    be restored to their respective positions in the litigation as of May 31, 2006, and any cash

    amounts in the Settlement Fund shall be returned as provided above .

    45 . The parties to this Stipulation and Agreement of Settlement intend th e

    Settlement of the Action to be a final and complete resolution of all disputes asserted or

    which could be asserted by Lead Plaintiffs and Class Members against the Settling

    Defendants with respect to the Settled Claims . Accordingly, Lead Plaintiffs and the

    Settling Defendants agree not to assert in any form that the Action was brought or

    defended in bad faith or without a reasonable basis. The parties hereto shall assert no

    claims of any violation of Rule 11 of the Federal Rules of Civil Procedure relating to the

    maintenance, defense or settlement of the, Action. The parties agree that the amount paid

    and the other tennis of the Settlement were negotiated at arm's length in good faith by th e

    34

  • parties, and reflect a settlement that was reached voluntarily after consultation with

    experienced legal counsel .

    46. This Stipulation may not be modified or amended, Por may any of its

    provisions be waived, except by a writing signed by all parties hereto or their successors-

    in interest .

    47. The headings herein are used for the purpose of convenience only and are

    not meant to have legal effect.

    48. The administration and consummation of the Settlement as embodied in

    this Stipulation shall be under the authority of the Court, and the Court shall retain

    jurisdiction for the purpose of entering orders providing for awards of attorneys' fees and

    expenses to Co-Lead Counsel and enforcing the terms of this Stipulation .

    49. The waiver by one patty of any breach of this Stipulation by any other

    party shalt not be deemed a waiver of any other prior or subsequent breach of this

    Stipulation.

    50. This Stipulation and its exhibits constitute the entire agreement among the

    parties hereto concerning the Settlement of the Action as against the, Settling Defendants ,

    and no representations, warranties, or inducements have been made by any party hereto

    concerning this Stipulation and its exhibits other than those contained and memorialize d

    in such documents.

    51. This Stipulation may be executed in one or more counterparts . All

    executed counterparts and each of them shall be deemed to be one and the same

    instrument provided that counsel for the parties to this Stipulation shall exchange among

    themselves original signed counterparts .

    35

  • 52. This Stipulation slain be binding when signed, but the Settlement shall be

    effective only on the condition that the Effective Date occurs.

    53 . This Stipulation shall be binding upon, and inure to the benefit of, the

    successors and assigns of the parties hereto .

    54. The construction, interpretation, operation, effect and validity of thi s

    Stipulation, and all documents necessary to effectuate it, shall be governed by the internal

    laws of the State of New York without regard to conflicts of laws, except to the exten t

    that tzder'al law requires that federral law govern .

    55. This Stipulation shall not be construed more strictly against one party than

    another merely by virtue of the fact that it, or any part of it, may have been prepared by

    counsel for one of the parties, it being recognized that it is the result of arm's length

    negotiations among the parties, and all parties have contributed substantially and

    materially to the preparation of this Stipulation.

    $S. All counsel and any other person executing this Stipulation and any of the

    exhibits hereto, or any related settlement documents , warrant and represent that they have

    the fall authority to do so , and that they have the authority to take appropriate action

    required or permitted to be taken pursuant to the Stipulation to effectuate its terms .

    57. Co-Lead Counsel and BAWAG's Counsel agree to cooperate fully with

    one another in seeking Court approval of the Preliminary Approval Order, the Stipulatio n

    and the Settlement, and to promptly agree upon and execute all such other documentation

    as reasonably may be required to obtain final approval by the Court of-the Settlement .

    36

  • IN WITNESS WHEREOF, Lead Plain tiffs and BAWAG have caused this

    Stipulation to be executed,by their duly authorized attorneys, as of September ,2 2006.

    GRANT & ETSENHOPER P.A. DECHBRT LLP

    By BY ~. . ..

    -and- Cournseifor BAWAG P.S.K Bankfir.rhea and Wirischaft andOsterreichi the Pos twpurkusseAktiengaellkhaft

    BERNSTE!N LUOWI.TZ IMRGPR& GROSSMANN LL 1 1

    f

    'By

    Ca-Lead Counsel for Load Plaintiffs and the Class

    37

  • $cbe trade A

    AVB Affiliates„Ingebe" Ind strie - u . GewerbeBeteiligangsgesellsehaft m b.H.Austinvest AnstaltAl-ALTERNATIVE INVESTMENTS LTD .Alinea Pri tstifhmgAlinea Holding GmbHALPHARENT sx.o .Athena Wien Beteiligungen AGAUST-INGEBE Beteiligangsverwaltung GmbH.AUSTFINANZVERWALTUNO S .A.AUSTOST ANSTALTAUSTOST HANDELS UN]) TREUHAND LIMITEDAUSTOST HANDELS- UN) TREUHANDGESELLSCHAI T M.B.H .B.I.S. BAWAG Internet Services CrmhHB.L.H. BAWAG Leasing Holding GmbHBAWAG Allianz Mitarbeitervorsorgekasse AGBAWAG Bank CZ as.BAWAG banka d4 .BAWAG Bet eiligungsmanagement CrrnbHBAWAG CAPITAL FINAN CE (JERSEY) II LIMITEDBAWAG CAPITAL FINANCE (JERSEY) III LIMITEDBAWAG CAPITAL FINANCE (JERSEY) LIMITEDBAWAG FINANCE HOLDING LIMITEDI3AWAG Finance Malta Ltd .BAWAG Fin analyse GZnbHBAWAG INTERNATIONAL FINANCE LIMITEDBAWAG Invest Consult GnxbHBAWAG Leasing & Fleet KftBAWAG Leasing & fleet s-T.o .BAWAG Leasing & Fleet Sp. z o .o .BAWAG Leasing Rt .BAWAG Malta Banc Limited.BAWAG F.S.K. Datendienst Gesellsoha-ft m.bH.BAWAG P.S.K. Fubrparkleasing GmbHBAWAG P .S.K. IMMOBILIEN AGBAWAG P .S.K. IMMOBILIENLEASING GmbHBAWAG P.S.K. Kommerzieasing GmbHBAWAG P .S.K. LEASING GmbHBAWAG P .S.K. LEASING (bnbH & Co. Hacl holzerhof Endchtungs- and Vermietungs-KO.BAWAG I .S .K . LEASING GmbH & Co. MOBILIENLEASING KG.BAWAG P.S.K. MOBI'LIENLEAEING QnbTlBAWAG P.S.K. Vennietungs unid Leasing GmbHBAWAG Wohnbaubank AktiengesellschaftBAWAG Wahnbauholding GmbB

  • BETARENT s.r .o_bezahlen .at Internet Service GinbHBodensee LimitedBFI Holding GmbH13FI Holding GmbH & Co KEG .BPI Holding GrmbH & Co . Bstriebsanlagenverwaltangs KG.BPI Holding GmbH & Co . Immobilien and Anlagen KG.BSH BAWAG Strategic Holding Gmb HCeIestcTrust reg .C. & P. Leasing Gescllsehaft m.b.H .Cafe Bawag Betriebagesellschaft xn .b .H.CARNI Industrie-I mobiliengesellschat zn .b .H.Cromer Capital Management Ltd .CROMER FINANCE LTD .Cromer International LimitedE-C-B Beteiligungsgeselischaft m.b.H .easybank AGEinlagensicherang der Banken and Bankiers Gesellschaft m .b .H .EURO RAIL INVEST LIMITEDFC Leasing GmbHFCH alpha Fiinanzierongsvermittlung CmbHFCH beta Finanzierungsvern itthmg Gmb HF FE Finai1zierungsvermittlungsgesellschaft m .b .H. in Liqu .FinHaus s.r .o.Gara Fcucrwehrzentralen Leasing Gesellschaft m.b.H.Gara Holding GmbHGara RPK Grandstizcksverwaltungsgesellschaft m .b.H.Genossanschaftskiiche der bei der Osterreichischen Postsparltasse tatigen Bediensteten,rogistrierte Genosse ehaft mit beschrankter Haftung in Liqu.Haffner See-Liegenschaftsverwaltungsgesellschaft m .b.H.HBV Holding d Eeteiligurngsvetwaltung GmbHHFE alpha Handels'GmbH[DG Immobilien Development Gesellscbaft rn .b .H.[DO Imrnobilien Development Geseilsehaft tn .b .H. & Co KGIngcbe beta Immobilienholding GmbHIngebe CGR Finar .erungsberatung GmbH in Liqu .Ingebe Im nobilienhandels- mid Vermittlungs-GmbH.Ingebe Modica Holding GmbHISTRO - RECOVERY, s.r.o ,IS'1RO ASSET MANAGEMENT, sprav, spol ., a.s .Istrobanka a.s .ISTROFINANCE, s,r.o .ISTROLEASING, s,r.o.ISTRORENT, sx.o.Kinomax spolka z. ograniczona odpawiedzialnosciaKLB B aulandentwicklung GmbH

  • Kommun easing GmbNKongrel3hotel Linz Betriebsgesellschaft m b .FLKongref3hotel Linz richhingsgesellscb ift m .b.H.L. B6sendorfer Klavierfabrik GmbHM. Sittikus Sir. 10 Errichtonl s GmbH.

    M.AP Xandels GmbHMARVE lmmobiliencntwicklungsgesellschaft m .b.H.MffT + RA, s .r.o.Monte Brook Corporate Assets Ltd .Obesnosterer - Beteiligungsgesellschaft rn.b.H.OMNIJ C Infonnationstecbnolagie-Systemservice GrnbHP.S.K. Beteiligungsverwalf g G ibHP.S.K. Handel and Vermietang GmbH.P.S.K. IMMOBILIENLEASING GmbHP. S .K. Liegenschai n VermieWngs- and Verwalttmgsgeselllschaft m .b .11,P.S.K. Versivherongs` and Pinamasexviee Gmb HP.S.K. Zahlungsve&ehxsabwick1ungs G nbHP. S .K.VicherangAGPLATO Gmndstiicksverwertung GSnbHPluto Beteiligungsverwaltung GmbHPOLESTAR LIMITEDPT limnobilieffleasing GmbHPULAWSKA Planungs . und Errichtungsges.m b.H.R & B Leasinggesellschaf imb .H.RAIL TRANS INVEST LIMITEDReslplan Beta Liegenschaflsverwaltung Gesellschaft m .b.H.RP 17 BAWAG hnmobilienleasing GntbHRF 2 BPI Holding GmbH & Co . KG .RF 4 BAWAG P .S .K LEASING GmbH & Co. OHO.RF BAWAG Leasing Gesellschaft m.b.H.RP elf Realitatenverwertungsgesellscliatl m.b.H,RP fiinfztie1m BAWAG Mobilien-Leasing Geaeflschait ra .b.H,RF near BAWAG P.S.K. LEASING GmbH & Co. KG.RF sechs BAWAG P .S.I . LEASING GmbH & Co. KG.RF zehn BPI Holding GmbH & Co KG.RF zwolf BAWAG Leasing Gesellachaf t m .b .H.Rhein LimitedRVG Immobilienholding GmbHRVG, Renalitatenverwcrtungsgesellschaft mi .b .H,SPARI)A Bank AktiengesellschaftSTART Immobilienloasing GmbHStiefelkonig d .o .o .Stiefelkonig Schuhhandels Gesellschaft m.b .H .Stiefelkonig spol. s.r.o .Stiefclkonig trgovinas ceviji d .o.o.STK Be ligang GmnbH

  • TADEMA Leasing and Boteiligwng Gcsellsoha±t in .b.H .UHW Finanzierungsdienstl eistungenbeta Gmb Hiini venture Beteffigangs AG6KK Holding Gesellsohafl m.t .H.Osteneichische VoTkehrskrcdifbmk AGBond Classic Ltd.CAP Holding AGCDC City Investments Ltd.Conservative Properties Ltd .First Investors Assets Ltd.Moore Classic Ltd . 'ts'ar Portfolio Ltd.

  • KGB entitiesO ceichiseher GewcTkschaftsburdQGB Vermoge verwaltungsgeseltschaft m.h.H.0GB Beteiligungsgeseilschaft m.b.HAnteilsverwaitung BAWAG P .S .T .. AGasterreichische Gewerkscha #ilithe SolidarAat Pfivatstit g

  • Current Supervisory Boardfamily name first nameMulnu Wcmcr

    Selhtseh SiegfriedStein Dwors1-Ioehieituer AlbertKothbauer MaxK.ovarik GeorgSehe Richard

    Zraimig Gabriela

    Rai Mon a

    Mstel MaetuelaJa ubovits BrigitteLeeb Rudol fPrali BeatrixStreibel-Zarf Tngtid

  • Schedule B

    SchedWe 13 includes the following, their predecessors, successors, and all a .rioyees, partners,members, shareholders, agents, and representatives thereof:

    KPMG Wirtschafrufangs- d St erberatungs bHDeloitte WirtsehaRspriiihngs GrmbHExinger GmbHDeloitte F8I Consulting GrmbH

    Schedule B also includes the following, their predecessors, successors, affiliates, parents, andsubsidiaries, and all employees, partners, members, shareholders, agents, and representativesthereof

    Feltner Wratzfeld. & Partner Recbtsanwalte GmbH.Dr. Harry Neubauer and Dr. Christa Springer, RechtsanwaltcMcDermott will & EmeryDechert LLPJaksch, Schoeller & RielSchoenherr Rechtsanwl lte GmbHMien & Overt' LLP

  • Schedule C

    Helmut ElsnerJohann ZwettlexHubert KreuchJosef Schwa eskerChristian Buttnerpater Nakowitz

  • CERTIFICATE OF SERVIC E

    I hereby certify that on September 8, 2006, the attached document was fi led with theClerk of Court using CM/ECF which will send noti fication of such fi lings to the fo llowingparties :

    Bradley E . Lerman, EsquireBruce Roger Braun , EsquireLinda T. Coberly, EsquireWINSTON & STRAWN3 5 West Wacker DriveChicago, IL 6060 1Emails : [email protected],[email protected], [email protected] .comCounsel to Defendant Grant Thornton LLP

    David Emilio Mollon , EsquireJames David Reich, Jr., EsquireBeth A. Tchlinguirian , EsquireWINSTON & STRAWN LLP200 Park AvenueNew York, NY 10166

    Isl Megan D. McIntyreMegan D. McIntyre

    Stuart 1. Friedman , EsquireIvan O . Kline , EsquireElizabeth D . Meacham, EsquireFRIEDMAN & WITTENSTEIN P .C .600 Lexington AvenueNew York, NY 10022Emails : [email protected] .com,emeacham [email protected] .com,[email protected] .comCounsel to William Sexton

    Richard E . Nathan, EsquireNATHAN LAW FIRM123 South June Stree tLos Angeles , CA 90004Email : [email protected] .netCounsel to Dennis Klejna

    Emails : [email protected],[email protected] to Defendant Grant Thornton LLP

    Helen B . Kim, EsquireBAKER HOSTETLER333 South Grand Avenue, Suite 1800Los Angeles , CA 9007 1Email : hkim i bakerlaw.comLead Counsel to Dennis Klejna

    Mark D. Powers, EsquireBAKER HOSTETLER666 Fifth AvenueNew York, NY 10103Email : [email protected] .comCounsel to Dennis Klejna

    Holly K. Kulka, Esq .HELLER EHRMAN WHITE &MCAULIFFE, LLPTimes Square Tower7 Times SquareNew York, NY 10036Email : [email protected] .comCounsel to Phillip Silverman

    Melissa Sarafa, EsquireNorman L . Eisen, EsquireZUCKERMAN SPAEDER LLP1540 Broadway , Suite 1604New York, NY 1003 6Email : msarafa zuckerman .comCounsel to Tone Grant

  • John V.H. Pierce, EsquireRobert Bruce McCaw, EsquireDawn M. Wilson, EsquireLori A. Martin, EsquireMichael L. Feinberg, EsquireMichael H . Park, EsquireWILMER, CUTLER & PICKERING399 Park AvenueNew York, NY 10022Emails : [email protected] .com,j ohn.pierce(awilmerhale. com,lori [email protected] .com,[email protected] .com,michael . [email protected] . eomMichael. [email protected] . comCounsel to Defendants Credit Suisse First Boston LLC,Goldman Sachs & Co., Bank ofAmerica Securities LL C,Merrill Lynch Pierce Fenner & Smith Inc., DeutscheBank Securities Inc ., JP Morgan Securities Inc., SandlerO'Neil Partners LP, HSBC Securities (USA) Inc.,William Blair & Company LLC, Harris Nesbitt Corp.,Samuel A . Ramirez & Company, Muriel Siebert & Co .,Inc ., The Williams Capital Group, Utendahl CapitalPartners and CMG Institutional Trading LLC

    Greg A. Danilow, EsquireRobert Francis Carangelo, EsquireWEIL, GOTSHAL & MANGES LLP767 Fifth AvenueNew York, NY 10153Counsel to Defendants Thomas H. Lee, David V.Harkins, Scott L. Jaeckel, Scott A. Schoen, NathanGanicher, Leo R. Breitman, Ronald L. O'Kelley, ThomasH. Lee Partners, L .P., Thomas HLee Equity Fund V.,L.P ., Thomas H. Lee Parallel Fund V., L.P., Thomas H.

    Lee Equity (Cayman) Fund V., L.P., THL EquityAdvisors V., LLC, Thomas H. Lee Investors LimitedPartnership, The 1997 Thomas H. Lee Nominee Trust

    Email : greg.danilowgweil .com

    robert [email protected] .com

    Barbara Moses, EsquireRachel Marissa Korenblat, EsquireMORVILLO, ABRAMOWITZ, GRAND,IASON ANELLO &BOHRER, P .C .565 Fi fth Ave.New York, NY 1001 7Counsel to Robert TrostenEmails : bmoses . maglaw.comrkorenblat(,maglaw . corn

    I hereby certify that on September 8, 2006, the attached document was sent via OvernightMail to the following parties :

    Matthew Sava , EsquireYoram Jacob Miller , EsquireSHAPIRO FORMAN ALLEN SAVA &MCPHERSON LLP380 Madison AvenueNew York, New York 1001 7Counsel to Defendant Gerald Sherer andJoseph J. Murphy

    Michael T . Hannafan, EsquireBlake T. Hannafan, EsquireNicholas A. Pavich, EsquireMICHAEL T . HANNAFAN & ASSOCIATESOne East Wacker Drive, Suite 1208Chicago, IL 60601Counsel to Defendant Tone N. Grant

    Jeffrey T. Golenbock, EsquireAdam C. Silverstein, EsquireGOLENBOCK EISEMAN ASSOR BELL &PESKOE LLP437 Madison AvenueNew York, NY 10022-7302Counsel to Defendants Refco Group Holdings, Inc .,Phillip Bennett and The Phillip R. Bennett Three YearAnnuity Trust

    Richard Soto, EsquireHunton & Williams LLP200 Park Avenue, 53rd FloorNew York, New York 10166Counsel to Santo Maggio

  • Westminster-Refco Management LLC Andrew Levander, EsquireOne World Financial Center DECHERT LLP200 Liberty Street, Tower A 30 Rockefeller PlazaNew York, New York 10281 New York, NY 10112-2200

    Email : [email protected] .comCounsel to BAWAG P.,S K Bank fur Arbeit andWirtschaft and Osterreichische PostsparkasseAktiengesellschaft.

    Refco Managed Futures LLCOne World Financial Center200 Liberty Street, Tower ANew York, New York 10281

  • Exhibit A

    to Stipulation and Agreement of Settlement

  • IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK----------------------------------------------------------- . x

    05 Civ. 8626 (GEL)In re REFCO, INC. SECURITIES LITIGATION

    --- ---------------------------------------- --------------- x

    ORDER PRELIMINARILY APPROVINGPROPOSED SETTLEMENT WITH DEFENDANT BAWAG

    WHEREAS, by Order dated February 8, 2006, Pacific Investment Management

    Company LLC and RH Capital Associates LLC were appointed by this Court to serve as Lea d

    Plaintiffs on behalf of the Class in In re Refco, Inc. Securities Litigation , No. 05 Civ. 8626

    (GEL) (S.D.N.Y.) (the "Action") ;

    WHEREAS, the parties have made an application, pursuant to Rule 23 of the Federa l

    Rules of Civil Procedure, for an order preliminarily approving the partial settlement

    ("Settlement") of the Action in accordance with the Stipulation and Agreement of Settlement

    dated September 7, 2006 ("Stipulation") as between Lead Plaintiffs and defendant BAWAG

    P.S.K. Bank R k Arbeit and Wirtschaft and Osterreichische Postsparkasse Aktiengesellschaft

    (BAWAG"), which sets forth the terms and conditions for a proposed Settlement and for the

    release of certain claims and the dismissal of the Action against BAWAG with prejudice upon

    the terms and conditions set forth therein ;

    WHEREAS, the Court has not ce rtified the Action as a class action, but is being asked to

    preliminarily certify a Settlement Class , for purposes of this Settlement only, consisting of al l

    persons and entities that purchased or otherwise . acquired Refco Group Ltd ., LLC/ Refco Finance

    Inc . 9% Senior Subordinated Notes, due 2012 (CUSIP Nos, 75866HAA5 and/or 75866HAC1)

  • and/or common stock of Refao (CUSIP No. 75866GI09) during the period August 5, 200 4

    through and including October 17, 2005 (ft "Class Period") and who were damaged thereby;

    i1REAS, Lead Plaintiffs' proposed definition of the Settlement Class excludes (i)

    Refca; (ii) the Defendants; (iii) any person or entity who was a partner, executive officer,

    director, controlling person, subsidiary, or affiliate of Refeo or any Defendant during the Class

    Period; (iv) members of the Defendants' immediate families ; (v) entities in which Refers or any

    Defendant has a controlling interest ; and (vi) the legal representatives, heirs, predecessors,

    successors or assigns of any of the foregoing excluded persons or entities . Also excluded from

    the Class is any person or entity who or which properly excludes himself, herself or itself by

    Ming a valid and timely request for exclusion in accordance with the requirements set forth in

    the Notice.

    Wh EREAS, the Court having (1) read and considered the First Amended Consolidated

    Class Action Complaint filed in this Action on May 5, 2006 ; (2) read and considered Lead.

    Plaintiffs' Notice of Motion for (1) Preliminary Approval of Partial Settlement With Defendant

    BAWAO, (I1) Preliminary Certification of Class for Purposes of Settlement (III) Preliminary

    Approval of Form and Manner of Notice, and (.lV) Scheduling of a Final Approval Hearing,

    together with the aceonmpanying Memorandum of Law; (3) read and considered the Stipulation ;

    and (4) heard and considered arguments by counsel for Lead. Plaintiffs and 13AWAG in favor of

    preliminary approval of the Settlement and preliminary certification of the Settlement Class for

    purposes of the Settlement;

    WHEREAS, the Court finds, upon a prelimina ry evaluation, that the proposed Settlement

    fails within the range of possible approval criteria, as it provides a beneficial result for the

    2

  • A6

    Settlement Class and appears to be the product of good faith, informed and non-collusiv e

    negotiations between experienced and able counsel for the settling parties;

    WI ERAS, the Court also finds, upon a preliminary evaluation, that the Settlement

    Class should be apprised of the Settlement, allowed to file objections thereto and to appear at th e

    Settlement Hearing, or alternatively, be afforded a reasonable opportunity to opt out of the

    Action ;

    WHEREAS, the Court finds, upon a preliminary evaluation , that the Notice and the

    Publication Notice attached hereto as Exhibits I and 2, respectively, and the mt4hodoiogy

    described in Paragcapb 6 of this Order for the publication and dissemination of such Notice and

    Publication Notice : (i) are the best practicable -notice ; (ii) are reasonably calculated, under the

    c umstances, to apprise Class Members of the pendency of the Action and of their right to

    object or exclude themselves from the proposed Settlement and to object to Co-Lead Counsel's

    application for attorneys' fees; (iii) are reasonable and constitute due, adequate and sufficient

    notice to all persons and entities entitled to receive notice; and (iv) meet all applicable

    requirements of the Federal Rules of Civil Procedures, the United States Constitution (including

    the Due Process Clause), the Private Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4,

    et seq_), the Rules of the Court and any other applicable law; and

    WHEREAS, unless otherwise. stated herein, all defined terms contained herein shall have

    the same meanings set forth the Stipulation.

    NOW THEREFORE, IT 1S HEREBY ORDERED :

    1 . Class Findings - For purposes of the Settlement of this Action as against BAWAG (and

    only for such purposes, and without an adjudication of the merits), the Court preliminarily finds that the

    requirements of the Federal Rules of Civil Proaedm, the United States Constitution, the Rules of the

    3

  • Court and any other applicable law have been met as to the Settlement Class described in the paragraphs

    above in that :

    a. The identities of the Settlement Class members are likely to beascertainable from records kept by Refeo and/or its agents, and from otherobjective criteria, and the Settlement Class members are so numerous thatthou' joindeer before the Court would be impracticable .

    b . Lead Plaintiffs have alleged numerous questions of fact and law commonto the Settlement Class.

    c. Based on allegations in the Action that BAWAG engaged in misconductuniformly affecting members of the proposed Settlement Class, the Courtpreliminarily finds that the claims of the Lead Plaintiffs in the Action aretypical of the claims of the proposed Settlement Class .

    d. The Court finds that Lead Plaintiffs will fairly and adequately protect theinterest of the proposed Class in that (1) the interests of Lead Plaintiffs andthe nature of their alleged claims are consistent with those of the membersof the Settlement Class, (ii) there appear to be no conflicts between oranoag the Lead Plaintiffs and the Settlement Class, (in) Lead Plaintiffshave been and appear to be capable of coutin .zing to be active participantsin both the prosecution and the settlement of the Action, and (iv) LeadPla ffs and the Settlement Class mmernbers are represented by qualified,reputable counsel who are experienced in preparing and prosecuting largo,complex securities fraud class actions .

    e. The Court preliminarily finds that, for settlement purposes in the Action asagainst BAWAG, questions of law or fact common to members of theSettlement Class predominate over any questions affecting only individualmembers of the Settlement Class and that a class-action resolution in themanner proposed by the Stipulation would be superior to other availablemethods for a fair and efficient adjudication of the Action. In makingthese preliminary findings, the Court has considered, among other factors,(i') the interest of the Settlement Class members in individually controllingthe prosecution or defense of separate actions, (ii) the impracticability orinefficiency of prosecuting or defending separate actions, (iii) the extentand nature of any litigation concerning these claims already couuuenced,and (iv) the desirability of concentrating the litigation of the claims in aparticular forum.

    2. Prel mhi Class Ce eation for Settl+s ent Pn o es With BAWAG --- Based on

    the findings set out in paragraph I above, the Court preliminarily certifies the following Settlement

  • Class for settlement purposes only under Fed . R. Civ. P, 23(a) and (b)(3) in the Action: all persons and

    entities that purchased or otherwise acquired Refco Group Ltd ., LLC! Refco Finance Inc. 9% Senior

    Subordinated Notes due 2012 (CUSIP Nos. 758661AA5 and/or 75S6 6HACX) and/or common stock of

    Refco (CUSIP No. 75866(109) during the Class Period and were datuaged thereby. The Settlement

    Class excludes (i) Refco; (ii) the Defendants ; (iii) any person or entity who was a partner, executive

    officer, director, controlling person, subsidiary, or affiliate of Refco or any Defendant during the Class

    Period; (iv) members of the Defendants' immediate families ; (v') entities in which Refco or any

    Defendant has a controlling interest; and (vi) the legal representatives, heirs, predecessors, successors or

    assigns of any of the foregoing excluded persons or entities . Also excluded from the Class is any person

    or entity who or which properly excludes himself, herself or itself by filing a valid and timely request for

    exclusion in accordance with the requirements set forth in the Notice .

    3. Preliminary Approval of Settlement - The Court hereby preliminarily approve s

    the Settlement, as embodied in the Stipulation, as being fair, reasonable and adequate as to th e

    Settlement Class members, subject to further consideration at the Settlement Hearing described

    below.

    4. Settlement Hearing - A hearing (the "Settlement Hearing") shall be hold on

    2006 at before the Honorable Gerard E. Lynch in the United

    States District Court for the Southern District of New York, United States Courthouse, 500 Pearl

    Street, New York, NY, 10007, The purpose of the Settlement Hearing will be to determine

    whether the proposed Settlement on the terms and conditions provided for in the Stipulation is

    fair, reasonable and adequate to the Class and should be approved by the Court; whether the

    Judgment as provided in the Stipulation should be entered herein and whether Co-Lead

    Counsel's application for attorneys' fees should be granted.

    5

  • 5 . Approval of Form► and Content of Notice -- The Court approves, as to form and

    content, the Notice and the Publication Notice, attached hereto as l ibits I and 2, respectively,

    and finds that the mailing and distribution of the Notice and the publication of the Publication

    Notice in the manner and form set forth in Paragraph 6 of this Order meet the requirements of

    Rule 23 of the Federal Rules of Civil Procedure, the Securities Exchange Act of 1934, a s

    amended by Section 21D(a)(7) of the Private Securities Litigation Reform Act of 1995, 15

    U.S,C. § 78u-4(a)(7), and due pro