KANTROWITZ, GOLDHAMER & GRAIFMAN GARY S. GRAIFMAN (GG-2276) 210 Summit Avenue Montvale, NJ 07645 Telephone: (201) 391-7000 Facsimile: (201) 307-1086
Liaison Counsel
[Additional counsel appear on signature page.]
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CONDITIONALLY CERTIFIED CLASS OF ) No. 2:08-cv-04947-GEB-MCA CERTAIN FORMER SUMMIT BANCORP ) SHAREHOLDERS, ) CLASS ACTION
) Plaintiffs, ) STIPULATION AND AGREEMENT OF
) SETTLEMENT vs. )
) FLEETBOSTON FINANCIAL ) CORPORATION, et al., )
Defendants. ) )
)
This Stipulation and Agreement of Settlement (the "Stipulation") is entered into between
(i) Plaintiffs l on behalf of themselves and the class and (ii) Settling Defendants FleetBoston
Financial ("FBF"), Terrence Murray, Charles K. Gifford, Robert J. Higgins, Henrique C.
Meirelles, Eugene M. McQuade, Ernest L. Puschaver, William C. Mutterperl, Joel B. Alvord,
William Barnet III, Daniel P. Burnham Jr., John T. Collins, William F. Connell, Gary L.
Countryman, Alice F. Emerson, James F. Hardymon, Marian L. Heard, Robert M. Kavner,
Thomas J. May, Donald F. McHenry, Michael B. Picotte, Thomas R. Piper, Thomas C. Quick,
Francene S. Rodgers, Thomas M. Ryan and Paul R. Tregurtha, all by and through the
undersigned attorneys.
This Stipulation states all of the terms of the Settlement and is intended by the Parties to
fully and finally compromise, resolve, discharge and settle the Released Claims subject to the
terms and conditions set forth below.
WHEREAS:
The Litigation
A. On September 19, 2002, Amsterdam, et al. v. FleetBoston Financial, et al., 02-cv-
04561 (WGB), a putative securities class action, was filed in this Court against Defendants. The
case was assigned to District Court Judge William G. Bassler and Magistrate Judge Madeline C.
Arleo. Two substantially similar class action complaints, Paul v. FleetBoston Financial, et al.,
02-cv-4724 (WGB), and Fink v. FleetBoston Financial, et al., 02-cv-5427 (WGB), were filed
soon thereafter.
Except where stated otherwise, all capitalized terms are defined in Section 1 of this Stipulation.
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B. On November 19, 2002, Plaintiffs filed a motion to consolidate the three class
action complaints and appoint lead plaintiffs and lead counsel for the consolidated action.
C. On January 9, 2003, Judge Bassler issued an order: (1) consolidating Amsterdam,
et al. v. FleetBoston Financial, et al., with the Paul and Fink actions, (2) appointing the Estate of
Harry Amsterdam (with Philip Amsterdam as representative of the Estate) and five other
plaintiffs as Lead Plaintiffs, 2 and (3) appointing Lead Plaintiffs' choice of Cauley Geller
Bowman & Coates, LLP, 3 Weiss & Yourman, 4 and Stull, Stull & Brody as co-lead counsel and
Kantrowitz, Goldhammer & Graifman, PC as Liaison Counsel (collectively, "Co-Lead
Counsel"). The consolidated case was captioned In re FleetBoston Financial Corporation
Securities Litigation, 02-cv-04561 (WGB) (the "Action").
D. On April 22, 2003, Plaintiffs filed a consolidated amended complaint (the
"Complaint"). The Complaint charged the Settling Defendants with violations of §§ 11, 12(a)(2)
and 15 of the Securities Act of 1933 (the "Securities Act").
E. On June 30, 2003, the Settling Defendants filed a motion to dismiss the
Complaint on numerous grounds. On August 11, 2003, Plaintiffs filed a memorandum in
opposition to Defendants' motion to dismiss and a cross-motion to strike exhibits submitted by
Defendants in support of their motion to dismiss. On August 29, 2003, Defendants filed a
memorandum in opposition to Plaintiffs' cross-motion to strike exhibits. On September 12,
2003, Defendants filed a reply in further support of their motion to dismiss the complaint.
2 The five other plaintiffs (Arthur L. Foster, Walter H. Foster, Jr., Arnold D. Mohel, John J. Kulik, and Judith T. Kulik) later withdrew as Lead Plaintiffs.
3
Later succeeded by Robbins Geller Rudman & Dowd LLP.
4 Currently Weiss & Lurie.
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F. On April 23, 2004, Judge Bassler issued an order granting in part and denying in
part Defendant's motion to dismiss, but sustaining certain of Plaintiffs' Securities Act claims.
G. On June 21, 2004, Defendants filed their answer to the Complaint.
H. On July 30, 2004, following a July 28, 2004 pretrial conference, Magistrate Judge
Arleo issued a pretrial schedule order concerning, inter alia, deadlines and other procedures for
fact and expert discovery.
I. Following the entry of the July 30, 2004 pretrial scheduling order, the parties
commenced fact discovery. Plaintiffs' Counsel conducted discovery and investigation during the
ensuing prosecution of the Action. This discovery and investigation has included, among other
things . (i) inspection and analysis of more than 180,000 pages of internal documents produced
by Defendants in response to requests served by Co-Lead Counsel; (ii) inspection of tens of
thousands documents produced by non-parties in response to subpoenas served by Co-Lead
Counsel, including audit documents and accounting papers produced by Defendants'
independent auditor PricewaterhouseCoopers; (iii) propounding of and response to numerous
written discovery requests, including interrogatories and requests for admissions; (iv) preparing
and/or responding to discovery motions brought by and against both parties and non-parties; (v)
retention of consultants and experts, including economics and damages experts, accounting
experts, investment banking experts and experts on Argentina and South America; (vi)
conducting depositions of nineteen witnesses, including current and former employees, officers
and directors and consultants of Fleet and its affiliates, as well as various non-party witnesses;
and (vii) review and analysis of Fleet's public filings, annual reports, and other public
statements. Defendants conducted discovery as well, including requesting, reviewing and
analyzing thousands of pages of documents produced by seven named plaintiffs/proposed
representatives; deposing all seven named plaintiffs/proposed representatives as part of its
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defense against class certification, re-certification and the merits, and propounding written
discovery requests, including interrogatories and requests for admission.
J. On October 18, 2004, Plaintiffs filed their amended motion for class certification
("Class Certification Motion"). 5 On January 21, 2005, following class discovery, which included
the deposition of proposed class representative Philip Amsterdam, Defendants filed their
opposition to Plaintiffs' Class Certification Motion. Plaintiffs filed their reply memorandum on
February 28, 2005, and Defendants filed a letter-brief in further opposition to the Motion on
April 1, 2005. Plaintiffs responded to Defendants' letter-brief on April 6, 2005.
K. On December 28, 2005, Judge Bassler issued a memorandum opinion and order
granting Plaintiffs' Class Certification Motion, appointing the Estate of Harry Amsterdam (by its
Executor Phillip Amsterdam) as class representative, and approving Co-Lead Counsel and
Liaison Counsel as counsel for the certified class ("Class Counsel").
L. On December 2, 2005, while Plaintiffs' class certification motion was sub judice,
Defendants filed a motion for partial judgment on the pleadings pursuant to Rule 12(c) of the
Federal Rules of Civil Procedure. Amongst other relief, Defendants' motion sought a ruling
from the Court that limited Plaintiffs' claims to only those concerning Fleet's Argentine loan loss
reserves. Plaintiffs opposed Defendants' 12(c) motion on January 31, 2006, requesting leave to
amend should Defendants' Motion be granted in whole or in part. On March 17, 2006,
Defendants filed a reply memorandum in further support of the 12(c) motion.
M. On April 28, 2006, following the parties' appearance at a February 8, 2006 status
conference, Magistrate Judge Arleo issued a pretrial order closing fact discovery, with the
exception of a number of outstanding non-party depositions and document requests, both within
5 Plaintiffs' original motion for class certification was filed on September 28, 2004.
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the United States and abroad, and outstanding disputes concerning Plaintiffs' responses to
interrogatories.
N. On July 10, 2006, the Action was reassigned to District Court Judge Susan D.
Wigenton. Magistrate Judge Arleo remained assigned to the case.
0. On March 5, 2007, Judge Wigenton issued an order denying Defendants' motion
for partial judgment on the pleadings.
P. On April 16, 2007, Plaintiffs filed a motion to expand the class definition ordered
by Judge Bassler in his December 28, 2005 memorandum opinion and order certifying the class
("Motion to Expand the Class Definition"). 6 Defendants filed a memorandum in opposition on
June 1, 2007, and Plaintiffs filed a reply memorandum on June 22, 2007.
Q. On June 27, 2007, the Action was reassigned to Chief District Court Judge Garrett
E. Brown, Jr. Magistrate Judge Arleo remained assigned to the case.
6 In pertinent part, Judge Bassler certified the following class on December 28, 2005 as follows:
All persons or entities who exchanged shares of Summit Bancorp ("Summit") common stock for shares of FBF common stock in connection with the merger between FBF and Summit (the "Merger"), and pursuant to the registration statement and prospectus filed by FBF on or about January 25, 2001 (the "Merger Registration Statement" or "Registration Statement") for the shares it would be issuing in connection with the Merger (the "Class") and sold such shares of FBF common stock between December 21, 2001 and November 7, 2003.
Plaintiffs' motion to expand the class definition sought to eliminate the portion of Judge Bassler's class definition that required the sale of Fleet shares following the Merger, the so- called "sold-by" period.
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R. On November 28, 2007, Chief Judge Brown issued an opinion and order: (1)
granting in part Plaintiffs' Motion to Expand the Class Definition; ? (2) granting in part
Defendants' 12(c) motion clarifying which claims were plead in the Complaint, which Judge
Wigenton had not addressed in her March 5, 2007 Order; and (3) denying Plaintiffs' application
to amend the complaint.
S. On March 7, 2008, Defendants were granted leave to file a motion for summary
judgment.
T. Class representative Philip Amsterdam (as representative of the Estate of Harry
Amsterdam) passed away on March 22, 2008. On June 4, 2008, Class Counsel filed a motion to
appoint Andrew Amsterdam (son of Philip, grandson of Harry and succeeding executor of the
Estate of Harry Amsterdam) as substitute class representative. Defendants filed a memorandum
in opposition to the appointment of Andrew Amsterdam on July 3, 2008. In their opposition,
Defendants not only contested the appointment of Andrew Amsterdam as class representative but
7 In granting Plaintiffs' motion, Judge Brown amended the class definition by slightly expanding the "sold-by" period rather than eliminating it entirely. As such, Judge Brown ordered the class definition, in pertinent part, as follows:
All persons or entities who: (1) exchanged shares of Summit Bancorp common stock for shares of FBF common stock in connection with the merger between FBF and Summit ("FBF-Summit Merger"), and pursuant to the registration statement and prospectus filed by FBF on or about January 25, 2001 for the shares it would be issuing in connection with the FBF-Summit Merger, and (2) sold such shares of FBF common stock during the period which (a) began when the investing public could have reasonably learned about the content of FBF's disclosure that was made on or after December 19, 2001, but (b) ended on the date which was the first day following November 6, 2003, and during which the FBF shares traded at the price equal to — or higher than — the price paid at the open market for FBF's shares on the date of the FBF-Summit Merger, and (3) sustained damages as a result of such transactions.
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renewed their challenge to the numerosity requirement of Rule 23 previously raised in opposition
to Plaintiffs' Class Certification Motion. Plaintiffs filed a reply memorandum on July 23, 2003.
U. On October 3, 2008, Chief Judge Brown issued an opinion denying Andrew
Amsterdam's application for appointment as class representative (leaving the class
"conditionally certified"), but granting Class Counsel the opportunity to locate and propose
additional qualified Class Members to serve as substitute class representatives. The Court also
requested that Class Counsel provide evidence of the existence of at least 40 bona fide Class
Members. Thereafter, Class Counsel sent a letter and questionnaire to potential class members
advising them of the existence of this case and inquiring as to whether they would be interested
in serving as a class representative. Counsel also sought to use the letter and questionnaire as a
"survey" of potential class membership to rebut Defendant's renewed "numerosity" challenge by
establishing that at least 40 investors who exchanged their Summit Bancorp ("Summit") shares
for FBF shares in the Merger sold at least one of those shares during the Class Period and was
damaged thereby, in accordance with the class definition.
V. Accordingly, in addition to inquiring as to their interest in serving as a class
representative, Class Counsel requested that potential class members submit specific information
regarding their transactions and holdings in Summit and FBF prior to, at the time of and
subsequent to the Merger.8
W. On October 7, 2008, pursuant to Chief Judge Brown's order entered that day
reflecting the substance of his October 3, 2008 opinion, In re FleetBoston Financial Corporation
8 In particular, recipients of the questionnaire were asked to provide: (1) the number of FBF shares (if any) that they held at the time of the Merger; (2) the number of Summit shares exchanged, and FBF shares received, pursuant to the Merger; and (3) the purchases and sales of FBF shares made during the December 19, 2001 through November 7, 2003 Class Period.
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Securities Litigation, 02-cv-04561(GEB) was "re-qualified" into an individual action with the
Estate of Harry Amsterdam as the sole plaintiff, and this action, bearing the caption
Conditionally Certified Class of Certain Former Summit Bancorp Shareholders v. FleetBoston
Financial Corporation, et al., 08-cv-04947 (GEB), was opened.
X. On January 7, 2009, following a process that included creating a survey
questionnaire, identifying shareholder records and coordinating logistics with Berdon & Co.
Claims Administrators, LP, over 25,000 survey questionnaires were mailed to persons or entities
that had exchanged Summit shares for Fleet shares in the Merger. Additionally, over 500
separate notices and questionnaires were sent to nominee broker-dealers on behalf of their
clients. Approximately 5,000 follow-up mailings were subsequently made in the ensuing weeks.
Y. Class Counsel compiled, reviewed, organized, analyzed and responded to survey
questionnaire responses for both numerosity and substitute class representative purposes in an
effort to comply with Chief Judge Brown's October 3, 2008 opinion and October 7, 2008 order.
Class Counsel also interviewed class representative candidates.
Z. On June 19, 2009, Class Counsel filed a motion for approval of Class
representatives and ruling verifying numerosity of the conditionally certified class ("Numerosity
and Class Representative Motion"). In the Motion, Class Counsel proposed five class members
as substitute class representatives: Marjorie J. Maucher; Adam E. Loory; Frank W Deardorf;
Gerritt S. Swart; and Douglas G. Lamb. Class Counsel also presented documentation purporting
to establish the existence of 157 class members, gleaned from both individual and nominee
broker-dealer responses.
AA. Following the filing of Plaintiffs' Numerosity and Class Representative Motion,
the parties engaged in class discovery, including requests for and production of documents, and
interrogatory requests and responses. Defendants also conducted, and Class Counsel defended,
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the depositions of each of the five proposed substitute class representatives. On September 17,
2009, Defendants filed an opposition to Plaintiffs' Numerosity and Class Representative Motion.
On October 20, 2009, Plaintiffs filed their reply memorandum, and Defendants sought and were
granted leave to file a sur-reply in opposition, which was filed on December 2, 2009.
BB. The parties had, from time to time, discussed settlement of the Action, and those
discussions became more intense in December of 2010 while the Numerosity and Class
Representative Motion was still pending. Following negotiations, the parties agreed that a
mediation might help resolve the Action ("Mediation"). Retired Federal District Court Judge
Nicholas H. Politan was retained by mutual consent of the parties, and the parties prepared
submissions to Judge Politan describing the legal and evidentiary basis of their respective
positions, including analysis of damages A full-day mediation took place on March 3, 2011,
and the parties reached an agreement in principle to resolve the Action on that day.
CC. Class Counsel have conducted an investigation relating to the allegations
pertaining to each Defendant in the Action, the alleged damages suffered by the class and the
defenses asserted by Defendants. In connection therewith, inter cilia, Class Counsel (i) reviewed
and analyzed publicly-available documents published or disseminated by, on behalf of, or
concerning Defendants, including SEC filings, wire and press releases and other announcements,
transcripts or wire broadcasts of conference calls, securities analysts' reports and advisories and
information readily available on the internet; (ii) reviewed and analyzed discovery produced by
Defendants and third parties; and (iii) consulted extensively with experts retained to review and
advise on the issues pertinent to Plaintiffs' claims in the Action, including the alleged damages
that Plaintiffs would seek to prove at a trial.
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DD. Plaintiffs and Class Counsel believe that the proceedings, investigation and
discovery described above provide an adequate and satisfactory basis for the Settlement
described herein.
Benefits of the Settlement to the Class
EE. Plaintiffs and Class Counsel believe that the Settlement provides a substantial
recovery for the Class Members based on Class Counsel's investigation into the claims asserted,
the discovery conducted and the possible damages that might be proven against Defendants in
the Action.
FF. Plaintiffs and Class Counsel further recognize and acknowledge the expense and
length of continued proceedings necessary to prosecute the Action against Defendants through
trial and appeals. They have also considered the uncertain outcome and the risk of any litigation,
especially in complex litigation such as this Action, as well as the difficulties and delays inherent
in any such litigation. They are further mindful of the inherent problems of proof and possible
defenses to the federal securities law violations and therefore believe that it is desirable that the
Released Claims be fully and finally compromised, settled and resolved with prejudice and
enjoined as set forth herein. Based upon their evaluation, Plaintiffs and Class Counsel have
determined that the Settlement set forth in this Stipulation is fair, reasonable and adequate and in
the best interests of the Lead Plaintiffs and the Class Members, and that it confers substantial
benefits upon the Class Members.
GG. Defendants deny that they have committed any act or omission giving rise to any
liability and/or violation of the federal securities laws, and state that they are entering into this
Settlement solely to eliminate the uncertainties, burden and expense of further protracted
litigation. The Parties further agree that neither the Stipulation, nor the Settlement, nor any of
their terms, nor any press release or other statement or report by the Parties or by others
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concerning this Stipulation or the Settlement or their terms, shall constitute an admission or
finding of wrongful conduct, acts or omissions on the part of any Defendant or an admission or
concession on the part of Plaintiffs of any lack of merit of the Action whatsoever, or be
admissible as evidence of any such admission, concession, wrongful act or omission in any
proceeding, including but not limited to arbitrations, other than a proceeding to enforce the terms
of the Stipulation, for any purpose whatsoever.
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND
AGREED, by (i) Plaintiffs, for themselves and on behalf of the Class Members and (ii) the
Settling Defendants, that subject to the approval of the Court pursuant to Rule 23 of the Federal
Rules of Civil Procedure, the Action shall be settled, compromised and dismissed as to the
Parties, on the merits and with prejudice and the Released Claims shall be finally and fully
compromised, settled and dismissed as to the Released Parties, in the manner and upon the terms
and conditions hereafter set forth:
Definitions
1. The following capitalized terms, used in this Stipulation, shall have the meanings
specified below:
(a) "Administrator" means the notice and claims administrator selected by
Class Counsel and appointed by the Court.
(b) "Authorized Claimant" means any Class Member who submits a Proof of
Claim that is allowed pursuant to the terms of this Stipulation.
(c) "Class" means all persons or entities who (1) exchanged shares of Summit
Bancorp common stock for shares of FBF common stock in connection with the merger between
FBF and Summit ("FBF-Summit Merger"), and pursuant to the registration statement and
prospectus filed by FBF on or about January 25, 2001 for the shares it would be issuing in
connection with the FBF-Summit Merger; and (2) sold such shares of FBF common stock during
the period which (a) began when the investing public could have reasonably learned about the
content of FBF's disclosure that was made on or after December 19, 2001, but (b) ended on the
date which was the first day following November 6, 2003, and during which the FBF shares
traded at the price equal to — or higher than — the price paid at the open market for FBF's shares
on the date of the FBF-Summit Merger; and (3) sustained damages as a result of such
transactions. Excluded from the Class are Defendants; members of the Individual Defendants'
immediate families; and directors, officers, subsidiaries, or affiliates of FBF; any entity in which
any excluded person has a controlling interest; and their legal representatives, heirs, successors
and assigns.
(d) "Class Counsel" means the law firms of Robbins Geller Rudman & Dowd
LLP, Weiss & Lurie and Stull, Stull & Brody or their respective successor(s).
(e) "Class Member" means a member of the Class who does not submit a
timely, completed and executed request for exclusion, substantially in the form required by the
Notices attached hereto as Exhibits A-1 and A-3 or as otherwise approved by the Court, thereby
opting out of the Class.
(f) "Class Representatives" means Marjorie J. Maucher, Adam E. Loory,
Frank W Deardorf, Gerritt S. Swart, and Douglas G. Lamb.
(g) "Class Settlement Account" means the bank account established and
maintained by the Class Counsel (or their successor(s)), into which the Settlement Amount shall
be deposited.
(h) "Complaint" means the Consolidated Amended Complaint dated April 21,
2003.
"Counsel for Defendants" means Cleary Gottlieb Steen & Hamilton LLP.
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(j) "Court" means the United States District Court for the District of New
Jersey.
(k) "Defendant Released Parties" is as defined in paragraph 1(cc)(i).
(1) "Defendant Releasees" is as defined in paragraph I (cc)(i).
(m) "Defendants" means FleetBoston Financial ("FBF"), Terrence Murray,
Charles K. Gifford, Robert J. Higgins, Henrique C. Meirelles, Eugene M. McQuade, Ernest L.
Puschaver, William C. Mutterperl, Joel B. Alvord, William Barnet III, Daniel P. Burnham Jr.,
John T. Collins, William F. Connell, Gary L. Countryman, Alice F. Emerson, James F.
Hardymon, Marian L. Heard, Robert M. Kavner, Thomas J. May, Donald F. McHenry, Michael
B. Picotte, Thomas R. Piper, Thomas C. Quick, Francene S. Rodgers, Thomas M. Ryan and Paul
R. Tregurtha.
(n) "Effective Date" means the first date on which all of the following have
occurred: (i) all conditions to the Settlement have been satisfied; (ii) the Court has granted final
approval to the Settlement; and (iii) the time allowed for appeal, motion or petition for
reconsideration or review has expired, or all such appeals, motions or petitions have been
exhausted and the Settlement has been affirmed.
(o) "Fairness Hearing" is as defined in paragraph 4(b).
(p) "Individual Defendants" means Terrence Murray, Charles K. Gifford,
Robert J. Higgins, Henrique C. Meirelles, Eugene M. McQuade, Ernest L. Puschaver, William C.
Mutterperl, Joel B. Alvord, William Barnet III, Daniel P. Burnham Jr., John T. Collins, William
F. Connell, Gary L. Countryman, Alice F. Emerson, James F. Hardymon, Marian L. Heard,
Robert M. Kavner, Thomas J May, Donald F. McHenry, Michael B. Picotte, Thomas R. Piper,
Thomas C. Quick, Francene S. Rodgers, Thomas M Ryan and Paul R. Tregurtha.
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(q) "Judgment" means the judgment, substantially in the form attached hereto
as Exhibit B, to be entered in the Action pursuant to paragraph 5, below, of this Stipulation.
(r) "Plaintiffs" are, collectively, individuals that have served as a named
plaintiff, lead plaintiff, class representative or have been proposed as a class representative,
including Arthur L. Foster, Walter H. Foster, Jr., Arnold D. Mohel, John J. Kulik, and Judith T.
Kulik, Marjorie Mancher, Adam E. Loory, Frank W. Deardorff, Gerritt S. Swart and Douglas
Lamb, but excluding Philip Amsterdam (as representative of the Estate of Harry Amsterdam) and
Andrew Amsterdam
(s) "Net Settlement Fund" means the Settlement Fund less any applicable
taxes, attorneys' fees, expert fees, costs and expenses, including those associated with notice to
the Class and administration of the Settlement, as approved by the Court.
(t) "Parties" means Plaintiffs and Defendants.
(u) "Person" means any individual, corporation, partnership, limited
partnership, association, affiliate, joint stock company, joint venture, estate, custodian, legal
representative, trust, unincorporated association, entity, government and any political subdivision
or agency thereof or any other type of business or legal entity and his, her or its heirs, executors,
administrators, predecessors, successors, representatives or assigns.
(v) "Plaintiff Releasees" is as defined in paragraph 1(cc)(ii).
(w) "Plaintiffs' Counsel" means any counsel who have appeared in the Action
on behalf of Plaintiffs.
(x) "Plan of Allocation" means any plan or formula of allocation of the Net
Settlement Fund, which plan or formula shall be proposed by Plaintiffs to be approved by the
Court upon notice to the Class, or such other plan or formula of allocation as the Court shall
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approve, whereby the Net Settlement Fund shall in the future be distributed to Authorized
Claimants.
(y) "Preliminary Approval Order" means the Order that Plaintiffs and
Defendants will seek from the Court, as described in paragraph 4, below, and substantially in the
form attached hereto as Exhibit A. Entry of a "Preliminary Approval Order" shall constitute
preliminary approval of the Settlement.
(z) "Proof of Claim" means the submission to be made by Class Members, on
the Proof of Claim and Release form, which shall be approved by the Court.
(aa) "Recognized Claim" is as defined in the Plan of Allocation, as set forth in
Exhibit A-1.
(bb) "Released Claims" means:
(i) Any and all claims, demands, rights, liabilities and causes of action
(including "Unknown Claims" as defined herein) of any nature whatsoever, asserted under
federal, state, common, local or foreign law (including, without limitation, claims under the
Securities Exchange Act of 1934 and the Securities Act of 1933, any analogous state securities
act, and common law) that Plaintiffs and/or any Class Members (a) asserted in the Complaint, or
(b) could have asserted in any forum, that arise out of or are based upon the allegations,
transactions, facts, matters or occurrences, representations or omissions involved, set forth, or
referred to in the Complaint and that relate to the exchange of shares of Summit for FBF
common stock in connection with the FBF-Summit Merger, except for claims relating to
enforcement of the Settlement.
(ii) Any and all claims, demands, rights, liabilities and causes of action
(including "Unknown Claims" as defined herein) of any nature whatsoever, asserted under
federal, state, common, local or foreign law that Defendants could have asserted in any forum
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that arise out of or are based upon the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Complaint and that relate to
the exchange of shares of Summit for FBF common stock in connection with the FBF- Summit
Merger, except for claims relating to the enforcement of the Settlement.
(cc) "Released Parties" means:
with respect to Defendants: Defendants, their respective present
and former parents, subsidiaries, divisions and affiliates, the present and former employees,
officers and directors of each of them, the present and former attorneys, accountants, auditors,
advisors, trustees, administrators, fiduciaries, consultants, representatives, insurers, and agents of
each of them, and the predecessors, heirs, successors and assigns of each of them (together,
"Defendant Releasees"), and any Person or entity which is or was related to or affiliated with any
Defendant Releasee or in which any Defendant Releasee has or had a controlling interest and the
present and former employees, officers and directors, attorneys, accountants, auditors, advisors,
trustees, administrators, fiduciaries, consultants, representatives, insurers, and agents of each of
them (all, with Defendant Releasees, "Defendant Released Parties").
(ii) with respect to Plaintiffs: Plaintiffs and all other Class Members,
their respective present and former parents, subsidiaries, divisions, affiliates, transferees and
assigns, the present and former legal representatives, employees, officers and directors of each of
them, the present and former attorneys, accountants, auditors, advisors, trustees, administrators,
executors, fiduciaries, consultants, representatives, insurers, and agents of each of them, and the
predecessors, heirs, successors and assigns of each, and Plaintiffs' Counsel (together, the
"Plaintiff Releasees"), any Person or entity in which any Plaintiff Releasee has or had a
controlling interest or which is or was related to or affiliated with any Plaintiff Releasee, and any
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OD
(ick)
Person or entity making claims (now or in the future) through or on behalf of any Plaintiff
Releasee.
(dd) "Settlement" means the settlement of the Action between and among
Plaintiffs, on behalf of themselves and Class Members, and Defendants, as set forth in this
Stipulation.
(ee) "Settlement Amount" means Five Million Five Hundred Thousand Dollars
($5,500,000.00) in cash.
(ff) "Settlement Fund" means the Settlement Amount once deposited by
Defendants into the interest-bearing Class Settlement Account designated by Plaintiffs.
"Settlement Mediator" means Hon. Nicholas H. Politan (ret.).
"Supplemental Agreement" is as defined in paragraph 13.
"Tax Expense" is as defined in paragraph 10.
"Taxes" is as defined in paragraph 9.
"Unknown Claims" means any Released Claims that any Plaintiff or Class
Member does not know of or suspect to exist in his, her or its favor at the time of the release of
Defendant Released Parties and any Released Claim that any Released Party does not know or
suspect to exist in his, her or its favor at the time of the release of the Plaintiff Releasees which,
if known by him, her or it might have affected his, her or its decisions with respect to the
Settlement including, with respect to Plaintiffs, his, her or its decision not to object to this
Settlement or not to exclude himself, herself or itself from the Class. With respect to any and all
Released Claims, the Parties stipulate and agree that, upon the Effective Date, Plaintiffs shall
expressly waive, and each of the Class Members shall be deemed to have and by operation of the
Judgment shall have expressly waived, the provisions, rights and benefits of California Civil
Code § 1542 and any provisions, rights and benefits conferred by any law of any state or territory
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of the United States or principle of common law which is similar, comparable or equivalent to
California Civil Code § 1542, which provides:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
Plaintiffs and Class Members may hereafter discover facts in addition to or different from those
that any of them now knows or believes to be true with respect to the subject matter of the
Released Claims, but each Plaintiff shall expressly, and each Class Member, upon the Effective
Date, shall be deemed to have, and by operation of the Judgment shall have fully, finally and
forever settled and released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist,
or heretofore have existed upon any theory of law or equity now existing or coming into
existence in the future, including, but not limited to, conduct which is negligent, reckless,
intentional, with or without malice, or a breach of any duty, law or rule, without regard to the
subsequent discovery or existence of such different or additional facts. Plaintiffs and Defendants
acknowledge, and the Class Members shall be deemed to have acknowledged, and by operation
of the Judgment shall have acknowledged, that the foregoing waiver was separately bargained
for and a key element of the settlement of which this release is a part.
Submission of the Settlement to Court for Approval
2. As soon as practicable, but in no event later than ten (10) business days after
execution of the Stipulation, Plaintiffs and Defendants shall apply to the Court for preliminary
approval of the Settlement and for the scheduling of a hearing for consideration of final approval
of the Settlement, approval of the Plan of Allocation and approval of Class Counsel's application
for an award of attorneys' fees and expenses, including awards to each Plaintiff as provided for
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under the Private Securities Litigation Reform Act. The Parties and their counsel shall use their
best efforts to obtain final Court approval of the Settlement.
3. The Parties have agreed upon the following documents to be submitted to the
Court for its consideration along with this Stipulation: Proposed Preliminary Approval Order
(Exhibit A); Notice of Pendency and Proposed Settlement of Class Action (Exhibit A-1); Proof
of Claim and Release (Exhibit A-2); Summary Notice of Proposed Settlement of Class Action
(Exhibit A-3); Proposed Judgment and Order of Dismissal with Prejudice (Exhibit B).
4. The Parties shall jointly apply to the Court for entry of the Preliminary Approval
Order, substantially in the form attached hereto as Exhibit A:
(a) preliminarily approving the Settlement;
(b) setting a hearing (the "Fairness Hearing"), upon notice to the Class, to: (i)
consider whether the Settlement should be approved as fair, reasonable and adequate to the Class
Members, (ii) consider whether the Class Representatives should be approved for purposes of the
Settlement; (iii) consider whether the Class should be certified for purposes of the Settlement;
(iv) consider whether to dismiss the claims of Plaintiffs and all Class Members against
Defendants, as set forth in this Stipulation, on the merits and with prejudice; (v) consider
whether the Plan of Allocation is fair and reasonable and should be approved; and (vi) consider
whether Class Counsel's application for an award of attorneys' fees and payment of costs and
expenses, including the expenses of Plaintiffs, should be approved;
(c) approving the method of giving notice of the Settlement to the Class;
(d) approving the form of notice attached hereto as Exhibit A-1;
(e) approving the summary form of notice attached hereto as Exhibit A-3;
(0
approving the Proof of Claim and Release form attached hereto as Exhibit
A-2;
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(g) setting a period of time during which members of the Class may submit
written objections to the Settlement, the proposed Plan of Allocation or to the application for
attorneys' fees and expenses or to request exclusion from the Class;
(h) pending the Effective Date, enjoining the prosecution of any action or
claims that are subject to the release and dismissal contemplated by this Settlement by any Class
Member;
(i) setting a period of time during which Class Members must submit Proof of
Claim forms in order to participate in the distribution of the Net Settlement Fund, unless
extended by Order of the Court.
5. At the Fairness Hearing, the Parties shall jointly request entry of a Judgment,
substantially in the form attached hereto as Exhibit B, the entry of which is a condition of this
Stipulation and Settlement:
(a) approving finally the Settlement as fair, reasonable and adequate, within
the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its consummation
pursuant to its terms,
(b) approving the appointment of Class Representatives for purposes of the
Settlement;
(c) approving certification of the Class for purposes of the Settlement;
(d) dismissing the Action and all of the claims asserted by the Class Members
in the Complaint without costs (except as set forth in this Stipulation) and with prejudice, and
releasing the Released Claims as against each of the Released Parties;
(e) finding that the Complaint, and the complaints filed by any Plaintiff in the
Action, were filed on a good faith basis in accordance with the Private Securities Litigation
Reform Act of 1995 and Rule 11 of the Federal Rules of Civil Procedure;
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(f) to the extent permitted by applicable law, upon the Effective Date,
permanently barring and enjoining the institution and prosecution, by Plaintiffs and other Class
Members, of any action, including through an arbitration, against Defendant Released Parties in
any federal or state court, or in any other court, arbitration proceeding, administrative agency, or
other forum in the United States or elsewhere asserting any Released Claim, and permanently
barring and enjoining the institution and prosecution, by Defendants, of any action, including
through an arbitration, against the Plaintiff Releasees in any federal or state court, or in any other
court, arbitration proceeding, administrative agency, or other forum in the United States or
elsewhere asserting any Released Claim;
(g) reserving jurisdiction over this Action, including all further proceedings
concerning the administration, consummation and enforcement of this Settlement;
(h) containing such other and further provisions consistent with the terms of
this Settlement to which the Parties hereto expressly consent in writing.
6. At the Fairness Hearing, Plaintiffs shall also request entry of an Order approving
the Plan of Allocation, consistent with prior notice sent to the Class. The Plan of Allocation
proposed by Plaintiffs is not a part of the Stipulation and is to be considered by the Court
separately from the Court's consideration of the fairness, reasonableness and adequacy of the
Settlement. The Plan of Allocation is not a necessary teiui of this Stipulation and it is not a
condition of this Stipulation that any particular Plan of Allocation be approved. Defendants will
take no position on any Plan of Allocation imposed by Plaintiffs. Any decision by the Court
concerning the Plan of Allocation shall not affect the validity, enforceability or finality of this
Stipulation and Settlement, and any modification of the Plan of Allocation by the Court shall not
provide any of the Parties with the right to terminate the Settlement or impose an obligation on
Defendants to modify or increase the consideration paid in connection with the Settlement. Any
-21-
order or proceedings relating to a request for approval of the Plan of Allocation, or any appeal
from any order relating thereto or reversal or modification thereof, shall not operate to terminate
the Settlement or affect or delay the effectiveness or finality of the Judgment and the release of
the Released Claims.
7. At the Fairness Hearing, Class Counsel shall also request entry of an Order
approving Class Counsel's application for an award of attorneys' fees and expenses, and for
awards to the Class Representatives pursuant to 15 U.S.C. § 78u-4(a)(4), consistent with the
notice sent to members of the Class in connection with this Settlement. Any award of attorneys'
fees and expenses to Class Counsel or to the Class Representatives shall be paid exclusively
from the Settlement Fund. In no event shall Defendants otherwise be obligated to pay for such
attorneys' fees and expenses other than via their contribution of the Settlement Amount. The
attorneys' fees, expenses and costs, including the fees of experts and consultants, as awarded by
the Court, shall be payable to Class Counsel from the Settlement Fund immediately after the
Court executes an order awarding such fees and expenses, even if there is an objection thereto or
potential for an appeal thereof, subject to the joint and several obligation of Class Counsel to
make appropriate refund repayments to the Settlement Fund as more particularly set forth below.
In the event that the Effective Date does not occur, or the Judgment or the order making the fee
and expense award is reversed or modified, or the Stipulation is terminated, and in the event that
any fee and expense award has been paid to any extent, then Class Counsel shall, within ten (10)
business days from receiving notice from the Counsel for Defendants or from a court of
appropriate jurisdiction, refund to the Settlement Fund, any fees, expenses and costs previously
paid or otherwise transferred to them from the Settlement Fund plus interest thereon at the same
rate as earned on the Settlement Fund, (a) in the full amount if the Effective Date does not occur
or the Stipulation is terminated, or (b) in such other amount corresponding to that portion of any
- 22 -
fee and expense award that is reversed or modified. Class Counsel, as a condition of receiving
such fees and expenses, on behalf of themselves and each of their partners and/or shareholders,
agree that Plaintiffs' Counsel and their partners and/or shareholders are subject to the jurisdiction
of the Court for the purpose of enforcing the provisions of this paragraph. Without limitation,
each of Plaintiffs' Counsel and its partners and/or shareholders agree that the Court may, upon
application of Defendants on notice to Class Counsel, summarily issue orders, including but not
limited to judgments and attachment orders, and may make appropriate findings of or sanctions
for contempt, against them or any of them should there be a failure to timely repay such fees and
expenses. Any disapproval or modification of the application for an award of attorneys' fees and
reimbursement of expenses by the Court shall not affect the enforceability of the Stipulation,
provide any of the Parties with the right to terminate the Settlement, or impose an obligation on
Defendants to modify or increase the Settlement Amount. Defendants take no position as to the
reasonableness of any application for attorneys' fees and expenses made by Class Counsel.
Class Counsel shall have sole discretion in the allocation of attorneys' fees among Plaintiffs'
Counsel.
Settlement Consideration
8. In full and complete settlement of the Action and the Released Claims,
Defendants shall pay to Plaintiffs, for the benefit of the Class, the Settlement Amount as follows:
(a) Within fifteen (15) business days after the entry of the Preliminary
Approval Order, and the identification, in writing, of the Class Settlement Account, Defendants
shall pay into the Class Settlement Account the Settlement Amount.
9. The Settlement Amount shall be deposited into an interest-earning Class
Settlement Account designated by Lead Plaintiffs. Any sums required to be held in escrow
hereunder shall be held by Class Counsel as the "Escrow Agents." All funds held by the Escrow
-23-
Agents shall be deemed to be in the custody of the Court and will remain subject to the
jurisdiction of the Court until such time as it is distributed to Authorized Claimants. The Escrow
Agents shall invest any funds in excess of $100,000 in short-term United States Agency or
Treasury Securities (or in money market funds whose portfolio is composed of United States
Agency or Treasury Securities which are backed by the full faith and credit of the United States
Government), and shall collect and reinvest all interest accrued thereon. Any funds held in
escrow in an amount of less than $100,000 may be held in a bank account insured by the Federal
Deposit Insurance Corporation. The Parties agree to treat the Settlement Fund as a Qualified
Settlement Fund within the meaning of Treasury Regulation § 1.468B-1 and the Administrator,
or other agent designated by Class Counsel, shall be responsible for filing tax returns for the
Class Settlement Account and paying from the Class Settlement Account any taxes, including
any interest or penalties thereon (the "Taxes"), owed with respect to such Class Settlement
Account. In addition, the Administrator, or other agent designated by Class Counsel, as
required, shall do all things that are necessary or advisable to carry out the provisions of this
paragraph.
10. All Taxes arising with respect to the income earned by the Settlement Fund,
including any expenses and costs incurred in connection with the payment of Taxes pursuant to
this paragraph (including without limitation, expenses of tax attorneys and/or accountants (the
"Tax Expenses")), shall be paid out of the Settlement Fund. Defendants shall not have any
liability or responsibility for the Taxes or the Tax Expenses. The Administrator, or other agent
designated by Class Counsel, shall timely and properly file all informational and other tax
returns necessary or advisable with respect to the Settlement Fund and the distributions and
payments therefrom, including, without limitation, the tax returns described in Treas. Reg.
§ 1.468B-2(k), and to the extent applicable, Treas. Reg. § 1.468B-2(1). Such tax returns shall be
-24-
consistent with the terms herein and in all events shall reflect that all Taxes on the income earned
by the Settlement Fund shall be paid out of the Settlement Fund. The Escrow Agents shall
timely pay Taxes and Tax Expenses out of the Settlement Fund, and are authorized to withdraw,
without prior order of the Court, from the Class Settlement Account amounts necessary to pay
Taxes and Tax Expenses. Defendants shall not have any responsibility or liability for the acts or
omissions of Class Counsel or their agents, as described herein.
11. This is not a claims-made settlement. As of the Effective Date, Defendants shall
not 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
Settlement Fund. Pursuant to the Plan of Allocation approved by the Court, each Authorized
Claimant shall be allocated a portion of the Net Settlement Fund based on his, her or its
Recognized Claim. Defendants shall have no involvement in reviewing or challenging claims.
If any funds remain in the Net Settlement Fund by reason of uncashed checks or otherwise, then,
after the Administrator has made reasonable and diligent efforts to have Class Members who are
entitled to participate in the distribution of the Net Settlement Fund cash their distribution
checks, any balance remaining in the Net Settlement Fund six (6) months after the initial
distribution of such funds shall be re-distributed, after payment of any unpaid costs or fees
incurred in administering the Net Settlement Fund for such re-distribution, to Class Members
who have cashed their checks and who would receive at least $10.00 from such re-distribution, if
such re-distribution is determined to be economically feasible. If, six months after such re-
distribution, if taken, any funds remain in the Net Settlement Fund, then such balance shall be
contributed to non-sectarian, not-for-profit, 501(c)(3) organization(s) designated by Class
Counsel.
- 25 -
12. In order to effectuate the provisions of paragraph 11, the schedule reflected in the
Preliminary Approval Order submitted to the Court pursuant to paragraph 4 shall provide that
any requests for exclusion must be postmarked (or hand delivered) at least fourteen (14) days
prior to the Fairness Hearing and that within three (3) business days of receipt by the
Administrator of any requests for exclusion, copies of all such forms shall be provided to
Counsel for Defendants. The Parties acknowledge that paragraph 11 constitutes a material term
of this Stipulation and Settlement. The Supplemental Agreement shall not be filed with the
Court unless and until a dispute among the Parties concerning its interpretation or application
arises and in that event it shall be filed and maintained in the Court under seal. The terms and
conditions of the Supplemental Agreement may be disclosed to the Court but shall otherwise be
kept confidential and shall not be disclosed unless otherwise ordered by the Court to any other
person.
13. The Defendants shall have the option (which option must be unanimously
exercised) to terminate the Settlement in its entirety in the event that, as set forth in the
supplemental agreement, dated July 12, 2011 (the "Supplemental Agreement"), members of the
Class in the amount set forth in the Supplemental Agreement choose to opt out of the Class.
14. Other than their obligation to provide the materials listed in paragraph 18(f) to the
Administrator, under no circumstances will Defendants be required to pay more than the
Settlement Amount pursuant to this Stipulation and Settlement.
Releases
15. Upon the Effective Date, Plaintiffs and the Class, on behalf of themselves, their
successors and assigns, and any other Person claiming (now or in the future) through or on
behalf of them, and regardless of whether any such Plaintiff or Class Member ever seeks or
obtains by any means, including, without limitation, by submitting a Proof of Claim, any
-26-
distribution from the Settlement Fund, shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished, and discharged all
Released Claims against the Defendant Released Parties and shall have covenanted not to sue the
Defendant Released Parties with respect to all such Released Claims, and shall be permanently
barred and enjoined from instituting, commencing, or prosecuting any such Released Claim
against any Defendant Released Party.
16. Upon the Effective Date, Defendants shall be deemed to have, and by operation of
the Judgment shall have, fully, finally, and forever released, relinquished and discharged the
Class and counsel to Plaintiffs from all claims arising out of, in any way relating to, or in
connection with the institution, prosecution, assertion, settlement or resolution of the Action or
the Released Claims except to enforce the releases and other terms and conditions contained in
this Stipulation.
Administration and Distribution of the Settlement Fund
17. The Administrator, subject to the supervision, direction and approval of the Court,
shall administer and calculate the Proofs of Claim submitted by Class Members and shall oversee
distribution of the Settlement Fund. As part of the Preliminary Approval Order, Lead Plaintiffs
shall seek appointment of the Administrator.
18. The Settlement Fund shall be applied as follows:
(a) To pay the costs of notifying the Class, assisting Class Members in
completing their Proofs of Claim, and otherwise administering the Settlement on behalf of the
Class, including processing of Proofs of Claim and distributing the Net Settlement Fund and to
pay Class Settlement Account fees and costs, if any (collectively, the "Administrative
Expenses"). All reasonable costs and expenses of notice to the Class, up to a maximum of
- 27 -
$250,000 prior to the Effective Date, shall be paid from the Class Settlement Amount without
further approval by the Court or Defendants.
(b) Subject to the approval and further order(s) of the Court, to pay to Class
Counsel the amount awarded by the Court as attorneys' fees and expenses, including the
expenses of the Class Representatives.
(c) To pay Taxes and Tax Expenses owed by the Settlement Fund.
(d) Subject to the approval and further order(s) of the Court, to distribute the
balance of the Net Settlement Fund to Authorized Claimants as provided in the Plan of
Allocation, to be submitted by Lead Plaintiffs to the Court for approval and upon notice to the
Class, or as otherwise ordered by the Court.
(e) In order for a member of the Class to participate in such distribution of the
Net Settlement Fund:
That member of the Class must be an Authorized Claimant.
(ii) To qualify as an Authorized Claimant a member of the Class must
timely submit a separate Proof of Claim and Release, signed, subject to penalties of perjury,
substantially in the form attached as Exhibit A-2 hereto, and supported by proof of Class
membership.
(iii) Unless otherwise ordered by this Court, any Class Member who
fails to submit a Proof of Claim and Release within such period as may be established by this
Court shall be forever barred from receiving any payments pursuant to this Stipulation, but in all
other respects will be subject to and bound by the provisions of this Stipulation and the
Judgment.
-28-
(iv) Class Counsel have the right, but not the obligation, to waive what
they deem to be formal or technical defects in any Proof of Claim and Release submitted, in the
interest of achieving substantial justice.
Defendants shall bear no responsibility for the costs, fees or expenses
described in this paragraph 18. Neither Defendants nor their counsel shall have any
responsibility for, interest in, or liability whatsoever with respect to the Settlement Fund, any
Plan of Allocation, the determination, administration, or calculation of claims, the payment or
withholding of taxes, the distribution of the Net Settlement Fund, or any losses incurred in
connection with any such matters.
19. Payment from the Net Settlement Fund made pursuant to and in the manner set
forth above shall be deemed conclusive of compliance with this Stipulation as to all Authorized
Claimants.
20. No Authorized Claimant shall have any claim against Plaintiffs, Defendants, the
Administrator or any other agent designated by Class Counsel, or any of their counsel, based on
the distributions made substantially in accordance with this Stipulation and/or order(s) of the
Court.
Effect of Disapproval, Cancellation or Termination of Agreement
21. If the Court does not enter the Judgment substantially in the form provided for in
paragraph 5 or if the Court enters the Judgment and appellate review is sought and on such
review, the entry of Judgment is vacated, modified or reversed, then this Stipulation shall be
cancelled and terminated, unless all parties who are adversely affected thereby, in their sole
discretion within thirty (30) days from the date of the mailing of such ruling to such parties,
provide written notice to all other parties hereto of their intent to proceed with the Settlement
under the terms of the Judgment as it may be modified by the Court. Such notice may be
-29-
provided on behalf of Plaintiffs and the Class Members by Class Counsel. No party shall have
any obligation whatsoever to proceed under any terms other than substantially in the form
provided and agreed to herein, except to the extent provided for in paragraphs 6 and 7, relating to
the Plan of Allocation, and award of attorneys' fees and expenses to Class Counsel or to the
Class Representatives. If any party hereto engages in a material breach of the terms hereof, any
other party, provided that it is in substantial compliance with the terms of this Stipulation, may
terminate this agreement on notice to the breaching party or sue for enforcement.
22. Unless otherwise ordered by the Court, in the event this Stipulation should
terminate, be cancelled, or otherwise fails to become effective for any reason, including, without
limitation, in the event that the Settlement as described herein is not approved by the Court, then
within ten (10) business days after Class Counsel gives written notice of such event to Counsel
for Defendants, or Counsel for Defendants gives written notice to Class Counsel, any cash
deposited by Defendants, or any of them, into the Class Settlement Account pursuant to
paragraph 9 hereof, and any funds received by Class Counsel or the Class Representatives
pursuant to paragraph 7 hereof, shall be refunded, reimbursed, or repaid as directed by Counsel
for Defendants, including interest accrued (less any amounts paid or payable for costs and
expenses of notice, administration and/or taxes). Such amount due to Defendants shall not be
reduced by any investment losses on the funds in escrow; such losses shall be an obligation of
the Escrow Agent. In such event, the Parties shall be deemed to have reverted nunc pro tunc to
their respective status as of the date and time immediately before the execution of this
Stipulation and they shall proceed in all respects as if this Stipulation and related orders had not
been executed and without prejudice in any way from the negotiation, fact or terms of this
Settlement. No order of the Court concerning any fee and expense award shall constitute
grounds for cancellation or termination of the Stipulation.
-30-
Miscellaneous Provisions
23. All of the exhibits to be attached hereto are incorporated by reference as though
fully set forth herein.
24. Plaintiffs acknowledge that, given the amount of discovery of Defendants and
others that they have reviewed to date, Plaintiffs are satisfied that an adequate factual record has
been established that supports the Settlement and hereby waive any right to conduct further
discovery to assess or confirm the Settlement.
25. This Stipulation may be amended or modified only by a written instrument signed
by the signatories below.
26. Neither the Stipulation nor the Settlement, nor any act performed or document
executed pursuant to or in furtherance of the Stipulation or the Settlement: (i) is or may be
deemed to be or may be used as an admission or evidence of the validity of any Released Claim
or of any wrongdoing or liability of Defendants; (ii) is or may be deemed to be or may be used as
an admission or evidence of any liability, fault or omission of Defendants in any civil, criminal
or administrative proceeding in any court, arbitration proceeding, administrative agency or other
forum or tribunal in which Defendants are or become parties, other than in such proceedings as
may be necessary to consummate or enforce the Stipulation, the Settlement or the Judgment; or
(iii) is or may be deemed to be or may be used as an admission, concession or presumption
against Plaintiffs or the Class that any of their claims are without merit or that damages
recoverable under the Complaint would not have exceeded the Settlement Fund.
Notwithstanding the foregoing, Defendants and/or the Defendant Released Parties may file the
Stipulation and/or the Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of res judicata, collateral estoppel, release,
-31-
good faith settlement, judgment bar or reduction, or any theory of claim preclusion, issue
preclusion or similar defense or counterclaim.
27. The Parties intend the Settlement to be a final and complete resolution of all
disputes asserted or which could be asserted by the Class Members against the Released Parties
with respect to the Released Claims. Accordingly, the Parties agree not to assert any claim under
Rule 11 of the Federal Rules of Civil Procedure or any similar law, rule or regulation, that the
Action was brought or defended in bad faith or without a reasonable basis. The Parties to the
Stipulation agree that the amount paid and the other terms of the Settlement were negotiated at
arm's length and in good faith by the Parties, and reflect a settlement that was reached
voluntarily based upon extensive investigation and sufficient discovery and after consultation
with experienced legal counsel, and under the supervision of the Settlement Mediator.
28. Plaintiffs state that the Settlement set forth herein constitutes a fair, reasonable
and adequate resolution of the claims that Plaintiffs asserted against Defendants in the Action,
and the Released Claims. The Parties agree that, except if otherwise required by law or unless
ordered by the Court, they will not publicize, disseminate, refer to, or otherwise distribute to any
third party any information regarding the negotiations between the Parties, or any information or
documents they have obtained from the other side in connection with the Action, whether the
information was obtained through document or other written discovery, or through depositions,
or otherwise.
29. Except as Class Counsel and Counsel for Defendants may otherwise agree, in
writing, to the extent permitted by law all agreements made and orders entered during the course
of the Action relating to the confidentiality of information shall survive this Stipulation.
30. If a case is commenced with respect to any Person or entity contributing to the
Settlement Fund under Title 11 of the United States Code (Bankruptcy), or a trustee, receiver or
- 32 -
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 benefit of the Settlement Fund, or any portion
thereof, by or on behalf of any Defendant to be a preference, voidable transfer, fraudulent
conveyance, or similar transaction and any portion thereof is required to be returned, and such
amount is not promptly deposited to the Settlement Fund by or on behalf of Defendants then, at
the election of Class Counsel, the Parties shall jointly move the Court to vacate and set aside the
releases given and Judgment entered in favor of the Defendant Released Parties pursuant to this
Stipulation, which releases and Judgment shall be null and void, and the Parties shall be restored
to their respective litigation positions in the Action immediately prior to the execution of this
Stipulation and any cash proceeds in the Settlement Fund shall be returned as provided in
paragraph 22 above.
31. The waiver by one party of any breach of this Stipulation by any other party shall
not be deemed a waiver of any other prior or subsequent breach of this Stipulation.
32. This Stipulation, its exhibits and the Supplemental Agreement constitute the
entire agreement among these Parties, and no representations, warranties or inducements have
been made to the Parties concerning this Stipulation, its exhibits or the Supplemental Agreement,
other than the representations, warranties and covenants contained and memorialized in such
documents.
33. In the event that there exists a conflict or inconsistency between the terms of this
Stipulation and the terms of any exhibit to be attached hereto, the terms of this Stipulation shall
prevail.
34. 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 shall exchange among themselves original signed counterparts.
- 33 -
35. The Parties hereto and their respective counsel of record agree that they will use
their best efforts to obtain all necessary approvals of the Court required by this Stipulation.
36. Each counsel signing this Stipulation represents that such counsel has authority to
sign this Stipulation on behalf of his or her identified clients.
37. This Stipulation shall be binding upon and shall inure to the benefit of the
successors and assigns of the Parties hereto, including any and all Released Parties and any
corporation, partnership, or other entity into or with which any party hereto may merge,
consolidate or reorganize.
38. Notices required by this Stipulation shall be submitted either by any form of
overnight mail or in person to:
WEISS & LURIE Joseph H. Weiss Richard A. Acocelli Julia J. Sun 1500 Broadway, Suite 1600 New York, NY 10036 Telephone: (212) 682-3025 Facsimile: (212) 682-3010
ROBBINS GELLER RUDMAN & DOWD LLP
Samuel H. Rudman Robert M. Rothman Evan J. Kaufman 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: (631) 367-7100 Facsimile: (631) 367-1173
STULL, STULL & BRODY Jules Brody Howard T. Longman 6 East 45th Street, 4th Floor New York, NY 10017 Telephone: (212) 687-7230 Facsimile: (212) 490-2022
CO-LEAD COUNSEL FOR PLAINTIFFS AND THE CLASS
CLEARY GOTTLIEB STEEN & HAMILTON LLP Mitchell A. Lowenthal Jeffrey A. Rosenthal One Liberty Plaza New York, NY 10006 Telephone: (212) 225-2000 Facsimile: (212) 225-3999
COUNSEL FOR DEFENDANTS -34-
39. Except for attorney notes, pleadings and other Court submissions, Plaintiffs agree
to return to Defendants all discovery obtained from Defendants, including all copies thereof and
information extracted from such discovery, or certify the destruction thereof, within thirty (30)
days after the Effective Date or the termination of this agreement.
40. This Stipulation shall be governed by and construed in accordance with the laws
of the State of New York, without regard to choice of law principles, to the extent that federal
law does not apply. The Court shall retain jurisdiction over actions or proceedings based upon,
including the enforcement of, this Stipulation or any of its terms.
DATED: July 12, 2011 KANTROWITZ, GOLDHAMER & GRAIFMAN
By:
GARY S. GRAIFMAN 210 Summit Avenue Montvale, NJ 07645 Telephone: (201) 391-7000 Facsimile: (201) 307-1086
Liaison Counsel for Plaintiffs
ROBBINS GELLER RUDMAN & DOWD LLP Samuel H. Rudman Robert M. Rothman Evan J. Kaufman 58 South Service Road, Suite 200 Melville, NY 11747 Telephone: (631) 367-7100 Facsimile: (631) 367-1173
STULL, STULL & BRODY Jules Brody Howard T. Longman 6 East 45th Street, 4th Floor New York, NY 10017 Telephone: (212) 687-7230 Facsimile: (212) 490-2022
- 35 -
WEISS & LURIE Joseph H. Weiss Richard A. Acocelli Julia J. Sun 1500 Broadway, Suite 1600 New York, NY 10036 Telephone: (212) 682-3025 Facsimile: (212) 682-3010
Class Counsel for Plaintiffs
CLEARY GOTTLIEB STEEN & HAMILTON LLP
By: Mitchell A. Lowenthal Jeffrey A. Rosenthal Members of the Firm
One Liberty Plaza New York, New York 10006 Telephone: (212) 225-2000 Facsimile: (212) 225-3999
Counsel for Defendants
-36-
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