Attached files
| file | filename |
|---|---|
| 10-K - ADAMS GOLF INC | v176553_10k.htm |
| EX-21.1 - ADAMS GOLF INC | v176553_ex21-1.htm |
| EX-31.2 - ADAMS GOLF INC | v176553_ex31-2.htm |
| EX-23.1 - ADAMS GOLF INC | v176553_ex23-1.htm |
| EX-31.1 - ADAMS GOLF INC | v176553_ex31-1.htm |
| EX-23.2 - ADAMS GOLF INC | v176553_ex23-2.htm |
| EX-32.1 - ADAMS GOLF INC | v176553_ex32-1.htm |
IN
THE UNITED STATES DISTRICT COURT
FOR
THE DISTRICT OF DELAWARE
STIPULATION OF
SETTLEMENT
THIS
STIPULATION OF SETTLEMENT (“Stipulation”) is entered into this 9th day of
December, 2009 (the “Execution Date”) by and among Plaintiffs Todd Tonore, F.
Kenneth Shockley, John Morrash and Patricia Craus (“Plaintiffs”) on behalf of a
class as defined herein of persons who made purchases in or traceable
to Adams Golf Inc.’s (“Adams Golf”) initial public offering (“IPO”), and
Defendants, Adams Golf, B. H. Adams, Darl P. Hatfield, Richard Murtland, Paul F.
Brown, Roland E. Casati, Finis F. Conner and Stephen R. Patchin (collectively,
“Adams Golf Defendants”), Lehman Brothers Holdings, Inc. (“LBHI”), Lehman
Brothers Inc. (“LBI”) (an unnamed party to the Action), Nationsbanc Montgomery
Securities, LLC (now Banc of America Securities, LLC) and Ferris, Baker Watts,
Inc. (now RBC Capital Markets Corporation) (collectively, “Underwriter
Defendants”) (collectively, with the Adams Golf Defendants,
“Defendants”).
I. THE
LITIGATION
On June
11, 1999, persons who had bought Adams Golf shares in or traceable to the July
9, 1998 IPO filed a class action complaint pursuant to Sections 11, 12 and 15 of
the Securities Act of 1933, 15 U.S.C.A. §§77k, 77l and 77o, against Defendants
in the United States District Court for the District of Delaware (the
“Action”).
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The
complaint alleged, in pertinent part, that the Registration Statement for the
IPO omitted disclosure of both the existence and the risk of gray marketing, and
that the Registration Statement materially misrepresented how Adams Golf’s clubs
were sold to the public. The complaint also alleged that the
Registration Statement materially misrepresented or omitted the impact of an
industry-wide oversupply of golf clubs. The complaint alleged that
the value of Adams Golf stock declined precipitously after the IPO.
On August
13, 1999, Plaintiffs moved to consolidate the case with related cases, and they
moved to be appointed Lead Plaintiffs and for their counsel to be appointed lead
and liaison counsel. On April 17 and 25, 2000, Judge Roderick R.
McKelvie granted the motion to consolidate and appointed Plaintiffs as lead
plaintiffs, Berger & Montague, P.C. as Plaintiffs’ Lead Counsel, and
Rosenthal, Monhait, Gross & Goddess, P.A. (now Rosenthal, Monhait &
Goddess, P.A.) as Liaison Counsel. Thereafter, Plaintiffs filed a
Consolidated and Amended Class Action Complaint on May 17, 2000.
On July
6, 2000, the Adams Golf Defendants and the Underwriter Defendants filed motions
to dismiss. Judge McKelvie granted the motions to dismiss on December
10, 2001. Plaintiffs filed a motion to alter or amend the judgment,
but Judge McKelvie left the bench before ruling on the motion. On
January 6, 2003, the case was reassigned to Judge Kent A. Jordan, who denied
Plaintiffs’ motion to alter or amend the judgment on August 27,
2003.
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Plaintiffs
appealed Judge Jordan’s decision to the Court of Appeals for the Third
Circuit. The Third Circuit reversed as to the gray marketing
allegations, affirming as to the allegations concerning industry-wide
oversupply, and remanded to the District Court on September 17,
2004.
On June
27, 2005, Judge Jordan certified a class (the “Class”) consisting of “all
persons who purchased shares of Adams Golf in, or traceable to Adams Golf’s IPO
between July 10, 1998 and October 22, 1998” (the “Class Period”). The
Class excludes Defendants and their affiliates. The Court appointed
Todd Tonore, F. Kenneth Shockley, John Morrash and Patricia Craus as Class
Representatives. Judge Jordan affirmed this Class definition in
signing the Class Certification Order on August 3, 2005. On September
1, 2005, Plaintiffs filed their Second Consolidated and Amended Class Action
Complaint (“Complaint”). The Court denied the ensuing motion to
dismiss. On November 4, 2005, Plaintiffs sent a Notice of Pendency of
the Class Action to all Class Members. Five Class Members requested
exclusion.
Thereafter,
Plaintiffs took extensive discovery, including productions of documents from
Defendants, requests for admissions, document subpoenas on third parties and
twenty-five depositions. Plaintiffs named two experts who produced
reports, and Defendants named six experts who produced reports. The
parties deposed almost all of the experts, and Plaintiffs named a rebuttal
expert. On September 11, 2006, the Underwriter Defendants and the
Adams Golf Defendants each filed motions for summary judgment against Plaintiffs
and Daubert motions
against Plaintiffs’ experts. Plaintiffs filed Daubert motions against most
of Defendants’ expert witnesses on the same date. Soon after all the
motions were briefed, in November 2006, Judge Jordan was elevated to the Third
Circuit. The case was assigned to Magistrate Judge Mary Pat Thynge,
who, on March 5, 2007, terminated all pre-trial and trial dates previously set
by Judge Jordan.
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The case
was reassigned to Chief Judge Gregory M. Sleet on February 7,
2008. Commencing on September 15, 2008, and periodically thereafter,
LBHI and certain of its subsidiaries (collectively, the “Debtors”) commenced
with the United States Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”) voluntary cases under Chapter 11 of title 11 of the
United States Code (the “Chapter 11 Cases”), and this Action was stayed as to
LBHI. On September 19, 2008, a proceeding was commenced under the
Securities Investor Protection Act of 1970 (“SIPA”) with respect to LBI (the
“SIPA Proceeding”), which proceeding is now pending before the Bankruptcy Court.
James W. Giddens (the “LBI Trustee”) was appointed trustee for LBI pursuant to
SIPA.
The Court
reinstated the case against all other defendants and Judge Sleet held a status
conference on January 16, 2009. Thereafter, Judge Sleet heard argument on the
motions for summary judgment and the Daubert motions, and set
September 11, 2009 for the pretrial conference, and October 13, 2009 for the
trial. Subsequently, Judge Sleet denied most of the relief sought in
the motions.
The
parties mediated before retired Judge Nicholas H. Politan on September 9, 2009,
two days before the scheduled pretrial conference. As a result of
that mediation, the parties, after arms-length bargaining, reached a settlement
that also includes LBI and LBHI. Defendants and their insurers,
except LBI and LBHI, agreed to pay or cause to be paid to Plaintiffs and the
Class $16.5 million in cash plus up to an additional $1.25 million if the Adams
Golf Defendants are successful in litigation (“the Insurance Litigation”)
against their former insurance broker, Thilman & Filipini, LLC, or its
successor entities (“Thilman”), and/or Zurich American Insurance Company
(“Zurich”). Thilman is alleged to have failed to give notice of the
Action to Zurich, one of Adams Golf’s insurers, which denied
coverage. The $1.25 million, or as much as is recovered up to $1.25
million, will be paid from any settlement or judgment in the Insurance
Litigation after Adams Golf’s attorney’s fees and costs have been
paid.
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II.
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DEFENDANTS’
DENIALS OF WRONGDOING AND LIABILITY
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Defendants
have expressly denied and continue to deny all allegations of any wrongdoing or
liability against them arising out of any of the conduct, statements, acts or
omissions alleged, or that could have been alleged, in the
Action. Defendants have also denied and continue to deny, inter alia, any allegations
of material misrepresentations, non-disclosures or lack of due diligence in
connection with the Registration Statement. They deny that Plaintiffs
or the Class have suffered any damages, or that Plaintiffs or the Class were
harmed by any conduct alleged in the Action or that could have been alleged
therein. Defendants state that any harm to the Class was caused by
factors other than those alleged in the Complaint, and maintain that Defendants
can prove the affirmative defenses of loss causation and due
diligence.
Nonetheless,
Defendants have concluded that further conduct of the Action would be
protracted, expensive and distracting, and that it is desirable that the Action
be fully and finally settled.
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III.
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PLAINTIFFS’
CLAIMS AND BENEFITS OF SETTLEMENT
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Plaintiffs
allege that the Registration Statement, pursuant to which they and the Class
bought their stock, contained material misstatements and omissions about, inter alia, the existence and
risk of the unauthorized distribution of Adams Golf Tight Lies golf clubs to
discount outlets, known as gray marketing. Plaintiffs allege that
they and the Class members were damaged because of the fall in the price of
Adams Golf stock after the IPO, which Plaintiffs allege was caused by growing
public awareness of the sale of Adams Golf clubs, through the gray market, at
discount prices.
Although
Plaintiffs believe their allegations are sound, and believe they could have
prevailed at trial, they have concluded that it is in the best interest of the
Class to settle. Plaintiffs considered the risks of trial and the
time and expense of protracted litigation, including appeals, especially since
this litigation is more than 10 years old. The Parties have,
therefore, determined that it is desirable and beneficial that the Action be
settled in the manner and upon the terms and conditions set forth
herein.
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IV. TERMS
OF SETTLEMENT
NOW
THEREFORE, IT IS HEREBY AGREED, by and among Plaintiffs (on behalf of themselves
and the Class Members) and Defendants, by and through their respective
undersigned counsel of record, without any admission or concession on the part
of Plaintiffs of any lack of merit of the Action whatsoever, and without any
admission or concession by Defendants of any liability or wrongdoing or lack of
merit in the defenses to the Action whatsoever, subject to the approval of the
Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, and
subject to approval of the Bankruptcy Court, with respect to LBHI, LBI, and the
LBI Trustee, and in consideration of the benefits flowing to the Settling
Parties from the Settlement, that the Action and all Released Claims as against
the Released Parties shall be finally and fully compromised, settled, released
and dismissed with prejudice as to all Released Parties, upon and subject to the
following terms and conditions.
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1.
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Certain
Definitions
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The following terms, as used in this
Stipulation, have the following meanings:
1.1 “Attorney’s
Fees and Costs” means the amount awarded by the Court for Plaintiffs’ counsel’s
attorney’s fees and costs.
1.2 “Authorized
Claimant” means any Class Member who submits a timely and valid Proof of Claim
to the Claims Administrator.
1.3
“Claimant” means any Class Member who submits a Proof of Claim to the Claims
Administrator.
1.4 “Claims
Administrator” means Heffler Radetich & Saitta, LLP.
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1.5 “Claims
Released by Plaintiffs” means and includes all claims, causes of action,
demands, rights, liabilities, whether class or individual in nature, known or
unknown, suspected or unsuspected, contingent or non-contingent, collateral or
direct, at law, equity, or otherwise, that have been or could have been asserted
by any Plaintiff or Class Member or any person claiming rights derivatively of a
member of the Class, which arise out of, are based upon or relate to, or are in
connection with: the claims asserted in the Action including the facts alleged
in the Complaint; the purchase of Adams Golf stock during the Class Period; or
any of the facts, claims, or matters of any kind, related directly or indirectly
to the subject matters set forth in, or the facts, causes of action, counts or
claims for relief which were, might have been, or could have been asserted,
alleged or litigated in the Action; against Defendants (including any other
former director or officer of Adams Golf), or any of Defendants’ current or
former parents, subsidiaries, affiliates, predecessors-in-interest,
successors-in-interest, officers, directors, employees, attorneys, insurers
(except with respect to the Insurance Litigation), agents, representatives,
principals, assigns, subrogees, stockholders, partners, trustees, heirs,
beneficiaries, servants, all persons claiming rights derivatively of them, and
all other persons, trusts, partners, entities or corporations in privity with
any of them or otherwise affiliated or related to any of them, and/or any
subsidiary thereof or any of them. Released Claims also include
Unknown Claims.
1.6 “Claims
Released by Defendants” means all Defendants’ claims or causes of action which
could have been asserted relating to the defense, institution or prosecution of
the Action, or arising out of or related to facts alleged in the Complaint,
released by Defendants, their counsel, and/or any entity basing a claim on
rights of Defendants and/or their counsel, but not including claims made by
Defendants in the Insurance Litigation.
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1.7 “Claims
Released by Underwriter Defendants” mean all Underwriter Defendants’ claims for
indemnification related to the Action released by LBHI, LBI, and the LBI
Trustee, RBC Capital Markets Corporation, and Banc of America Securities,
LLC.
1.8 “Class”
means all persons who purchased shares of Adams Golf in, or traceable to, Adams
Golf’s July 9, 1998 IPO or between July 10, 1998 and October 22, 1998, excluding
Defendants and members of their immediate families, any entity in which a
Defendant has a controlling interest, and the heirs, successors and assigns of
any excluded individual or entity.
1.9 “Class
Member” means each member of the Class who has not timely and validly excluded
himself, herself or itself from the Settlement, but including those who have
opted back into the Settlement.
1.10 “Effective
Date” means the day when the Final Order becomes Final.
1.11 “Escrow
Agents” means Todd S. Collins, Esq. of Berger & Montague, P.C., Paul R.
Bessette, Esq. of Greenberg Traurig, LLP, and their designees, who shall serve
until the Effective Date, after which Todd S. Collins shall be the Escrow
Agent.
1.12 “Final,”
in reference to a judgment or order means a judgment or order as to which the
time for appeal or to seek permission to appeal therefrom has expired without an
appeal or, if appealed, such order or judgment has been affirmed in its
entirety, or satisfactorily to the Parties, by the court of last resort to which
such appeal has been taken and such affirmance has become no longer subject to
further appeal or review.
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1.13 “Final
Order” means the Order and Final Judgment of the Court approving the Stipulation
of Settlement and dismissing the Action with prejudice and without costs,
substantially in the form of Exhibit E attached hereto.
1.14 “Memorandum
of Understanding” means the Memorandum of Understanding signed October 29, 2009
(“MOU”).
1.15 “Net
Settlement Fund” shall mean the Settlement Fund, plus interest, less Notice and
Administration Costs, Attorney’s Fees and Costs, amounts payable to any
Plaintiff pursuant to 15 U.S.CA 77 z-1(a)(4) (“PSLRA”) as awarded by the Court
(“Plaintiff Expense Awards”), and taxes on interest earned by the Settlement
Fund, and tax expenses.
1.16 “Notice”
means the notice of the class settlement to be mailed to Class Members in
substantially the form of Exhibit B attached hereto.
1.17 “Plaintiffs’
Lead Counsel” means Berger & Montague, P.C.
1.18 “Plaintiffs’
Counsel” means Plaintiffs’ Lead Counsel, Liaison Counsel and Plaintiffs’ counsel
who have worked under the direction of Plaintiffs’ Lead Counsel, including the
Law Office of Donald B. Lewis, Keller Rohrback, L.L.P., Klafter, Olsen &
Lesser, L.L.P., and Abrahams, Lowenstein & Bushman, P.C.
1.19 “Plan
of Allocation” means the plan by which the Net Settlement Fund is distributed to
the Authorized Claimants.
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1.20 “Preliminary
Approval Order” means the proposed Order to be entered by the Court,
preliminarily approving the Settlement and directing notice thereof to the
Class, substantially in the form of Exhibit A attached hereto.
1.21
“Proof of Claim” shall mean the document sent to Class Members,
along with the Notice, entitled “Proof of Claim and Release Form and
Substitute Form W-9” substantially in the form of Exhibit C attached
hereto.
1.22 “Registration
Statement” means the Registration Statement for the Adams Golf IPO, including
the prospectus, filed with the SEC that became effective on July 9,
1998.
1.23 “Released
Claims” includes claims released by Plaintiffs, claims released by Defendants
and indemnity claims released by Underwriter Defendants, including the Trustee
of LBI.
1.24 “Released
Parties” means each of the Adams Golf Defendants, Underwriter Defendants
(including LBHI, LBI, and the LBI Trustee), Plaintiffs, and Class Members, and
their past or present parents, subsidiaries, affiliates,
predecessors-in-interest, successors-in-interest, officers, directors, advisors,
agents, assigns, administrators, attorneys, banks or investment banks,
co-insurers, consultants, employees, estates, executors, heirs, insurers,
limited partners or partners, reinsurers, representatives, spouses (present and
former), any entity in which any Party has a controlling interest, any member of
any individual Party’s immediate family, or any trust of which any Party is the
settlor or which is for the benefit of any individual Party and/or member(s) of
his or her family, but not Thilman, or its successor entities, Zurich or any
other present or future defendant in the Insurance Litigation.
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1.25 “Settlement”
means the settlement embodied by this Stipulation.
1.26 “Settlement
Amount” or “Settlement Fund” means the principal amount of $16,500,000.00, plus
the first $1,250,000, after attorney’s fees and costs, actually
received by Adams Golf (if any) in connection with the Insurance
Litigation, plus interest, deposited in Huntington National Bank.
1.27 “Settling
Parties” or “Parties” means the Plaintiffs, Class Members, and Defendants
(including LBI and LBHI).
1.28 “Summary
Notice” means the summary notice of class settlement in substantially the form
of Exhibit D attached hereto.
1.29 “Unknown
Claims” means any Released Claim that any Plaintiff or Class Member does not
know or suspect to exist in his, her or its favor at the time of the release of
the Released Parties, that if known by him, her or it, might have affected his,
her or its decision to settle and release Released Parties, or might have
affected any Class Member’s decision not to object to this Settlement or not to
exclude himself, herself or itself from the Settlement.
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2.
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Terms
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2.1 The
Adams Golf Defendants and their insurers and the Underwriter Defendants, other
than LBI and LBHI, shall pay or cause to be paid to Plaintiffs $16,500,000 in
cash. The $16,500,000, less the amount payable from Federal Insurance
Company (“Federal”), shall be paid into an interest-bearing escrow account
maintained by the Escrow Agents at Huntington National Bank (the “Escrow
Account”) within ten (10) business days of the Court’s preliminary approval of
the Settlement.
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2.2.
Federal shall pay its contribution to the Settlement Amount to the Escrow Agent
for deposit into the Escrow Account within ten (10) business days after the
Effective Date.
2.3 Within
ten (10) business days of any payment to Adams Golf in settlement or as a result
of a judgment in the Insurance Litigation, Adams Golf shall pay to the Escrow
Agent(s), for deposit into the Escrow Account, the amount of the payment, less
reasonable attorney’s fees and expenses incurred by Adams Golf in the Insurance
Litigation, up to and including, but not in excess of, $1,250,000.
2.4 The
control of the Insurance Litigation and any decision to settle, dismiss, or
otherwise dispose of the litigation remains at the sole discretion of Adams
Golf. Adams Golf agrees to keep Plaintiffs’ Lead Counsel informed
with respect to all material developments in the Insurance Litigation, including
with respect to settlement, and will provide periodic reports and respond to
questions from Plaintiffs’ Counsel.
2.5 The
Settlement shall be without costs to either side.
2.6 The
obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Action and any and all Released Claims as against all
Released Parties.
2.7 Upon
the Effective Date of this Settlement, Plaintiffs, Class Members and Defendants,
on behalf of themselves and each of their heirs, executors, administrators,
successors and assigns, and any persons they represent, shall, with respect to
each Released Claim, release and forever discharge, and shall forever be
enjoined from prosecuting, any Released Claims against any of the Released
Parties.
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3.
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Notice and
Administration Fund
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3.1 Ten
(10) business days after the entry of the Preliminary Approval Order,
Plaintiffs’ Lead Counsel may establish a “Notice and Administration Fund” of
$50,000 from the Settlement Amount deposited at Huntington National
Bank. This Fund may be used by Plaintiffs’ Counsel to pay costs and
expenses reasonably and actually incurred in connection with providing the
Notice to the Class, publishing the Summary Notice, locating Class Members, and
assisting with the filing of Claim Forms, administering and distributing the Net
Settlement Fund to Authorized Claimants, processing Claim Forms and paying
escrow fees and costs, taxes on interest earned by the Settlement Amount, tax
expenses and any related or incidental costs and charges (“Notice and
Administration Costs”). The Notice and Administration Fund may also
be invested and earn interest. If the $50,000 in the Notice and
Administration Fund is used up before the Net Settlement Fund has been
distributed to Authorized Claimants, any further Notice and Administration Costs
may be paid from the Settlement Fund.
3.2 Under
no circumstances will Defendants be required to pay more than the Settlement
Amount pursuant to this Stipulation and the Settlement set forth
herein. However, any interest on the Settlement Amount accrues to the
benefit of the Class, provided the Final Order dismissing the Action becomes
Final.
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4.
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The Escrow
Agents
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4.1 The
Escrow Agents shall invest the funds in the Settlement Fund in excess of One
Hundred Thousand Dollars ($100,000) in instruments backed by the full faith and
credit of the United States Government or fully insured by the United States
Government, or any agency thereof, and shall reinvest the proceeds of those
instruments as they mature in similar instruments at their then-current market
rates. Any funds held by the Escrow Agents in escrow hereunder in an
amount of less than One Hundred Thousand Dollars ($100,000) shall be held in an
interest-bearing bank account insured by the FDIC.
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4.2 All
funds held by the Escrow Agents shall be deemed and considered to be in custodia legis of the Court,
and shall remain subject to the jurisdiction of the Court until such time as
such funds shall be distributed to Class Members or for Notice and
Administration Costs, Taxes and Tax Expenses, Attorney’s Fees and Costs, or
Plaintiff Expense Awards pursuant to this Stipulation and/or further order(s) of
the Court.
4.3 The
Escrow Agents shall not disburse the Settlement Fund except as provided in this
Stipulation, or by an order of the Court.
4.4 Subject
to further order and/or directions as may be made by the Court, the Escrow
Agents are authorized to execute such transactions on behalf of the Class
Members as are consistent with the terms of this Stipulation.
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5.
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Taxes
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5.1 The
Settling Parties and the Escrow Agents agree to treat the Settlement Fund as
being at all times a “qualified settlement fund” within the meaning of Treas.
Reg. § 1.468B-1. The Escrow Agents shall timely make such elections
as necessary or advisable to carry out the provisions of this ¶ 5.1, including
the “relation-back election” (as defined in Treas. Reg. ¶ 1.468B-1) back to the
earlier permitted date. Such elections shall be made in compliance
with the procedures and requirements contained in such
regulations. The Escrow Agents are responsible for timely and
properly preparing and delivering the necessary documentation for signature by
all necessary parties, and thereafter for making the appropriate
filing.
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5.2 For
the purpose of § 468B of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, the “administrator” shall be the Escrow
Agents. The Escrow Agents shall timely and properly file all
informational and other tax returns necessary or advisable with respect to the
Settlement Amount (including, without limitation, the returns described in
Treas. Reg. § 1.468B-2(k)). Such returns as well as the election
described in this paragraph shall be consistent with this paragraph and in all
events shall reflect that all taxes as defined in subsection 5.3 below
(including any estimated taxes, interest or penalties) on the income earned by
the Settlement Fund shall be paid out of the Settlement Fund.
5.3 All
(i) taxes (including any estimated taxes, interest or penalties) arising with
respect to the income earned by the Settlement Fund, including without
limitation, any taxes or tax detriments that may be imposed upon Defendants or
their counsel with respect to any income earned by the Settlement Fund for any
period during which the Settlement Fund does not qualify as a “qualified
settlement fund” for federal or state income tax purposes (collectively,
“Taxes”); and (ii) expenses and costs incurred in connection with the operation
and implementation of the terms of paragraphs 5.1 to 5.4, including
without limitation, expenses of tax attorneys and/or accountants and mailing and
distribution costs and expenses relating to filing (or failing to file) the
returns described in this paragraph (collectively, “Tax Expenses”), shall be
paid out of the Notice and Administration Fund. In all events,
neither Defendants nor any of them, nor their counsel, shall have any liability
or responsibility for the Taxes or the Tax Expenses. Taxes and Tax
Expenses shall be treated as, and considered to be, a cost of administration of
the Settlement Fund and shall timely be paid by the Escrow Agent(s) out of the
Notice and Administrative Fund without prior order from the
Court. The Escrow Agent(s) shall be obligated (notwithstanding
anything herein to the contrary) to withhold from distribution to Authorized
Claimants any funds necessary to pay such amounts, including the establishment
of adequate reserves for any Taxes and Tax Expenses (as well as any amounts that
may be required to be withheld under Treas. Reg. § 1.468B-2 (1)(2)); neither any
of the Defendants, nor their insurers, nor their counsel is responsible for
taxes or Tax Expenses, nor shall they have any liability
therefore. Defendants and their insurers will be indemnified through
the Settlement Fund for any tax liabilities relating to the Settlement Fund. The
Settling Parties agree to cooperate with the Escrow Agents, each other and their
tax attorneys and accountants to the extent reasonably necessary to carry out
the provisions of this paragraph.
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6.
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Preliminary Approval,
Notice, Settlement Hearing and Final
Approval
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6.1 Within five
(5) business days after the Execution Date of this Stipulation, Plaintiffs shall
submit the Stipulation together with its exhibits to the Court and shall submit
to the Court a motion for entry of the Preliminary Approval Order, requesting,
inter alia, the
preliminary approval of the Settlement set forth in the Stipulation, and final
approval of the Notice, Proof of Claim and Release Form to be mailed to all
persons in the Class who can be identified with reasonable effort and of the
Summary Notice to be published, substantially in the forms attached hereto as
Exhibits B, C and D. The Notice shall include the general terms of
the Settlement set forth in this Stipulation and shall set forth the procedure
by which Class Members may request to be excluded from the Settlement or may
object to the Settlement, the Plan of Allocation, the request for Attorney’s
Fees and Costs, and/or the Plaintiff Expense Award. The date and time
of the hearing for final approval of the Settlement (“Final Hearing”) shall be
included in the Notice.
6.2 The
Parties shall request that the Court hold a hearing and finally approve the
Settlement and the Final Order contemplated by this Stipulation, after the
Notice and Summary Notice have been mailed and published, respectively, and
after the Class Members have been given an opportunity to exclude themselves or
to object to the Settlement, the Plan of Allocation, the Request for Attorney’s
Fees and Costs and the request for Plaintiff Expense Awards.
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6.3 If
the Settlement contemplated by this Stipulation is approved by the Court,
counsel for the Parties shall request that the Court enter the Final Order
approving the Settlement and enter Final Judgment dismissing the Action with
prejudice and without costs, substantially in the form to be attached hereto as
Exhibit E. In the event of an appeal of the Final Order, Plaintiffs,
with the cooperation of Defendants, shall use their best efforts to seek a
dismissal of the appeal or an affirmance of the Final Order. The
Final Order shall contain a statement that the parties agree that, during the
course of the Action, the parties and their respective counsel at all times
complied with the requirements of Fed. R. Civ. P. 11, and the parties agree not
to make any public statements that contradict such a finding. The
Parties agree that the Action was resolved in good faith following arm’s length
bargaining and with the assistance of Judge Nicholas Politan serving as
mediator.
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7.
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Releases
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7.1 On
the Effective Date, the Plaintiffs and each Class Member, 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, in addition, Defendants, on
behalf of themselves, their successors and assigns, and any other person
claiming (now or in the future) through or on behalf of Defendants: (i) fully,
finally and forever release, relinquish, remise and discharge the Released
Parties from all claims, including, without limitation, Released Claims, arising
out of or in connection with the institution, prosecution, or assertion of the
Action and covenant not to threaten, demand, or sue the Released Parties or any
of them regarding any action or proceeding of any nature with respect
to the Released Claims, and (ii) are forever enjoined and barred from asserting
the Released Claims against the Released Parties or any of them in any action or
proceeding of any nature. With respect to Plaintiffs and Class
members, the foregoing applies regardless of whether any such Plaintiffs and/or
Class Members ever seek or obtain any distribution from the Net Settlement Fund;
whether such Plaintiffs and/or Class Members executed and delivered a Proof of
Claim; whether such Plaintiffs and/or Class Members filed an objection to the
Settlement or to their claim being rejected as provided in this Stipulation, the
proposed Plan of Allocation, any application by Plaintiffs’ Counsel for an award
of Attorney’s Fees and Costs, and any Plaintiff Expense Request; and whether the
claims of such Plaintiffs or Class Members have been approved or allowed or such
objection has been overruled by the Court.
18
7.2 In
accordance with the Private Securities Litigation Reform Act of 1995, 15 U.S.C.
§ 77k(f)(2)(A) and 15 U.S.C. §77z-1 (“PSLRA”), and other statutory or common law
rights, the Released Parties, and each of them, will, on the Effective Date, be
fully, finally and forever released and discharged from all claims for
contribution, indemnity or other federal or state law causes of action that have
been brought or may be brought by any person based upon, relating to, arising
out of, or in connection with the matters alleged in the Action. The
Final Judgment shall contain a provision that bars and enjoins Lead Plaintiffs
and the Class Members from prosecuting claims released by the Final
Judgment.
7.3 The
Underwriter Defendants including LBHI, LBI and the LBI Trustee and their counsel
shall release any claim for indemnification against Adams Golf relating to the
Action, on the Effective Date.
19
7.4 With
respect to any and all Released Claims, the Settling Parties stipulate and agree
that, upon the Effective Date, they shall be deemed to have, and by operation of
the Final Order shall have, expressly waived the provisions, rights
and benefits of any statute, rule or provision which prohibits the release of
Unknown Claims, including 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.
7.5 A
Settling Party may hereafter discover facts in addition to or different from
those which he, she, it or they now know or believe to be true with respect to
the subject matter of the Released Claims, but the Settling Parties, upon the
Effective Date, shall be deemed to have, and by operation of the Final Order
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
alleged to be negligent, 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. The Settling Parties shall be deemed by
operation of the Final Order to have acknowledged that the foregoing waiver was
separately bargained for and a key element of the Settlement of which this
release is a part.
20
|
8.
|
Provisions Relating to
LBI and LBHI
|
8.1 Notwithstanding
anything herein, neither LBHI nor LBI will be responsible for or have any
obligation to make any payments provided for or contemplated
herein.
8.2 Upon
final approval of the Settlement, any bankruptcy proofs of claims identified by
LBHI, the LBI Trustee, on behalf of LBI, or any other applicable Debtor,
including, but not limited to those listed on Schedule 1 annexed hereto, that
have been filed in the Chapter 11 Cases and/or in the SIPA Proceeding by a
member of the Class seeking damages arising from or relating to the claims
resolved by this Settlement will be deemed disallowed and expunged from the
applicable claims register to the extent the holder of such claim has not opted
out of the Class (the “Claim Disallowance”). Such Claim
Disallowance shall occur upon notice by LBHI, the LBI Trustee on behalf of LBI,
or any other applicable Debtor to their respective claims agent.
8.3 LBHI
and the LBI Trustee agree to seek an order of the Bankruptcy Court in the
respective Chapter 11 Cases and/or SIPA Proceeding that (1) approves LBHI’s and
LBI’s entry into the Settlement and the release of any indemnification claims
they may have with respect to the Action and (2) approves the Claim
Disallowance.
21
8.4 LBHI’s
and LBI’s entry into the Settlement and the MOU is subject to the entry of a
final non-appealable order of the Bankruptcy Court consistent with the
foregoing.
|
9.
|
Administration and
Calculation of Claims, Final Awards and Supervision and Distribution of
Settlement Amount
|
9.1 On
notice to the Class and appropriate orders of the Court, the Claims
Administrator, subject to such supervision and direction of the Court and/or
Plaintiffs’ Lead Counsel, as may be necessary or as circumstances may require,
shall administer and calculate the Proofs of Claim submitted by Class Members
and, upon the Effective Date and thereafter, shall oversee distribution of the
Net Settlement Fund to Authorized Claimants. Subject to the terms of
this Stipulation and any order(s) of the Court, the Settlement Amount shall be
applied as follows:
9.1.1 to
pay Notice and Administration Costs;
9.1.2 to
pay the Taxes and tax expenses;
9.1.3 to
pay the Attorney’s Fees and Costs;
9.1.4 to
pay Plaintiff Expense Awards;
9.1.5 to
distribute the Net Settlement Fund pro rata to Authorized Claimants as allowed
by the Plan of Allocation, this Stipulation, or the Court, in amounts not to
exceed the damages any Authorized Claimant could have received under 15 U.S.C.
§77k(e), plus interest.
9.1.6 it
being understood that this is not a claims made settlement, the funds in the
Settlement Account will not necessarily be returned to defendants; if any funds
remain from the Settlement Amount, after the above payments, the Court shall
determine the disposition of such remaining funds.
22
9.2 After
the Effective Date, and after Federal has deposited its share of the Settlement
Amount in the Escrow Account and in accordance with the terms of the
Stipulation, the Plan of Allocation, or such further approval and further
order(s) of the Court as may be necessary or as circumstances may require, the
Net Settlement Fund shall be distributed to Authorized Claimants, subject to and
in accordance with the following:
9.2.1 Each
Claimant shall be required to submit to the Claims Administrator a completed
valid Proof of Claim signed under penalty of perjury and supported by such
documents as specified in the Proof of Claim, post- marked on or before the date
set by the Court and stated in the Notice.
9.2.2 Except
as otherwise ordered by the Court, all Class Members who fail to submit a valid
Proof of Claim within such period as may be ordered by the Court, or otherwise
allowed, shall be forever barred from receiving any payments pursuant to the
Settlement or this Stipulation, but shall in all other respects be subject to
and bound by the provisions of the Stipulation, the releases contained herein,
and the Final Order with respect to all Released Claims, regardless of whether
such Class Members seek or obtain by any means, including without limitation, by
submitting a Proof of Claim or any similar document, any distribution from the
Net Settlement Fund.
23
9.2.3 The Net
Settlement Fund shall be distributed to Authorized Claimants in accordance with
a Plan of Allocation as set forth in the Notice. Any such Plan of
Allocation is not a part of this Stipulation.
9.3 Neither
Defendants nor their counsel shall have any responsibility for, interest in, or
liability whatsoever to any person, including, without limitation, to any Class
Members, Claimants, or Plaintiffs and Plaintiffs’ Counsel with respect to the
investment or distribution of the Settlement Amount, the Plan of Allocation, the
determination, administration, or calculation of claims, the payment or
withholding of Taxes or tax expenses, or any losses incurred in connection with
any such matters.
9.4 No
person shall have any claim against the Plaintiffs, Plaintiffs’ Counsel, or the
Claims Administrator based on distributions made substantially in accordance
with the Settlement and this Stipulation, any Plan of Allocation, or orders of
the Court.
9.5 It
is understood and agreed by the Settling Parties that any Plan of Allocation of
the Net Settlement Fund including, but not limited to, any adjustments to any
Authorized Claimant’s claim, 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 set forth in the
Stipulation, and any order or proceeding relating to the Plan of Allocation
shall not operate to terminate or cancel the Stipulation or affect the finality
of the Court’s Final Order approving the Stipulation and the Settlement herein,
or any other orders entered pursuant to the Stipulation.
9.6 Each
Proof of Claim shall be submitted to the Claims Administrator who shall
determine, in accordance with this Stipulation and order of the Court, the
extent, if any, to which each claim shall be allowed, subject to appeal to the
Court.
24
9.7 Proofs
of Claim that do not meet the filing requirements may be
rejected. Before rejection of a Proof of Claim, the Claims
Administrator shall communicate with the Claimant submitting such claim in order
to attempt to remedy curable deficiencies in the Proof of Claim
submitted. The Claims Administrator shall notify in a timely fashion,
and in writing, all Claimants whose Proofs of Claim the Administrator proposes
to reject in whole or in part, setting forth the reasons thereof, and shall
indicate in such notice that the Claimant whose claims are to be rejected has
the right to review by the Court if such Claimant so desires and complies with
the requirement of 9.8 below.
9.8 If
any Claimant whose claim has been rejected in whole or in part desires to
contest such rejection, the Claimant must, within twenty (20) days after the
date of mailing of the notice required by 9.7 above, serve upon the Claims
Administrator a notice and statement of reasons indicating the Claimant’s ground
for contesting the rejection along with any supporting documentation, and
requesting a review thereof by the Court. If a dispute concerning a
claim cannot be otherwise resolved, the Claimant shall thereafter present the
request for review to the Court. Class Members involved in such a
dispute whose rejection is ultimately upheld by the Court shall (i) be forever
barred from receiving any payments pursuant to this Stipulation and the
Settlement set forth herein, but shall in all respects be subject to and bound
by this Stipulation and the Settlement, including the releases provided for in
this Stipulation, the Proof of Claim, and the Final Order; (ii) be conclusively
deemed to have fully, finally and forever released, relinquished, and discharged
all Released Claims against the Released Parties; (iii) be conclusively deemed
to have and by operation of the Final Order shall have fully, finally, and
forever released, relinquished, and discharged the Released Parties from all
claims, including without limitation, Released Claims arising out of or in
connection with the institution, prosecution, or assertion of the Action or the
Released Claims; (iv) be conclusively deemed to have covenanted not to sue any
Released Parties in any action or proceeding of any nature with respect to the
Released Claims; and (v) forever be enjoined and barred from asserting the
Released Claims against any of the Released Parties in any action or proceeding
of any nature, whether or not such Class Members have filed an objection to the
Settlement, the proposed Plan of Allocation, or any application by Plaintiffs’
Counsel for an award of Attorney’s Fees and Costs or for Plaintiff Expense
Awards, and whether or not the claims of such Class Members have been approved
or allowed, or such objections have been overruled by the Court.
25
9.9 Payment
to Authorized Claimants 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 shall in all respects be subject
to and bound by this Stipulation and the Settlement, including the releases
provided for in this Stipulation, the Proof of Claim, and the Final Order and
shall (i) be conclusively deemed to have fully, finally and forever released,
relinquished, and discharged all Released Claims against the Defendants (ii) be
conclusively deemed to have and by operation of the Final Order shall have
fully, finally, and forever released, relinquished, and discharged the
Defendants from all claims (including, without limitation, the Released Claims)
arising out of or in connection with the institution, prosecution, or assertion
of the Action or the Released Claims; (iii) be conclusively deemed to have
covenanted not to sue the Defendants in any action or proceeding of any nature
with respect to the Released Claims; and (iv) forever be enjoined and barred
from asserting the Released Claims against the Defendants or any of them in any
action or proceeding of any nature, whether or not such Class Members have
executed and delivered a Proof of Claim, whether or not such Class Members
participated in the Net Settlement Fund, and whether or not such Class Members
have filed an objection to the Settlement or to their claims being rejected as
provided therein, the proposed Plan of Allocation, or any application by
Plaintiffs’ Counsel for an award of Attorney’s Fees and Costs and whether or not
the claims of such Class Members have been approved or allowed or such objection
has been overruled by the Court.
9.10 The
Plaintiffs, through Plaintiffs’ Counsel, hereby agree not to opt out or object
to this Stipulation or entry of the Preliminary Approval Order or Final
Order.
26
|
10.
|
Plaintiffs’ Attorney’s
Fees and Costs and Plaintiff Expense
Awards
|
10.1 Plaintiffs’
Counsel may, upon such notice to the Class as may be required, submit an
application or applications (the “Fees and Costs Application”) for distributions
from the Settlement Amount for: (i) an award of Attorney’s Fees; plus (ii)
reimbursement of Costs incurred in connection with prosecuting the Action,
including any Notice and Administration Costs; plus (iii) any interest on such
Attorney’s Fees and Costs (until paid) at the same rate and for the same periods
as earned by the Settlement Amount, as appropriate, as may be awarded by the
Court; plus (iv) any Plaintiff Expense Awards.
10.2 Plaintiffs’
Counsel reserve the right to seek additional compensation for their services in
administering the Settlement or in the event of exceptional recoveries on a per
claim basis.
10.3 Defendants
shall not take any position concerning the Fees and Costs
Application. Any decision by the Court concerning any such awards
shall not affect the validity or finality of the Settlement. Any
award of Attorney’s Fees and Costs shall be paid solely from the Settlement
Amount, which is in the Escrow Account, to Plaintiffs’ Counsel at such time as
the Court has granted final approval of the Settlement, and ordered an award of
Attorney’s Fees and Costs, and those orders have become
Final. Likewise, any amounts granted by the Court for Plaintiff
Expense Awards will be paid to Plaintiffs from the Settlement Amount in the
Escrow Account after the Final Order and the order granting Plaintiff Expense
Awards have become Final.
27
10.4 The
procedure for, and the allowance or disallowance by the Court of, the Fees and
Costs Application are not part of the Settlement set forth in this Stipulation,
and are to be considered by the Court separately from the Court’s consideration
of the fairness, reasonableness and adequacy of this Stipulation of
Settlement. Any order or proceedings relating to the Fees and Costs
Application or any appeal from any Attorney’s Fees and Costs award or Plaintiff
Expense Award or any other order relating thereto or reversal or modification
thereof, shall not operate to terminate or cancel the Stipulation, or affect or
delay the finality of the Final Order and the Settlement of the Action as set
forth herein.
10.5 Defendants
and their counsel, or any of them, shall have no responsibility for, and no
liability whatsoever with respect to, any payment(s) pursuant to the Fees and
Costs Application.
10.6 Defendants
and their counsel, or any of them, shall have no responsibility for, and no
liability whatsoever with respect to, the allocation of the Attorney’s Fees and
Costs among Plaintiffs’ Counsel, and/or any other person who may assert some
claim thereto, or any Fees and Costs Award, that the Court may make in the
Action.
28
|
11.
|
Termination of
Settlement
|
11.1 At
least ten (10) days before the date set for the Final Hearing, Plaintiffs’
Counsel shall provide to the Defendants’ Counsel a list of those who have timely
opted-out or excluded themselves from the Settlement, showing the number of
shares bought in the Class Period by each person who has opted out and has not
withdrawn the exclusion (the “Opt-Out List”). As soon as practicable,
but at least five (5) days before the Final Hearing, the Parties’
counsel shall confer for the purpose of calculating the number of shares bought
by persons in the Class who have timely excluded themselves from the
Settlement. Defendants shall have the option to terminate the
Settlement if they reasonably determine that requests for exclusion from the
Settlement have been made by persons in the Class representing more than a
certain number of the total of 6.9 million shares purchased pursuant to the
Registration Statement. The number of opt-out shares triggering
Defendants’ right to terminate the Settlement is set forth in a separate
stipulation signed by the Parties, and filed under seal.
11.2 If
the Defendants elect to exercise the option set forth in ¶ 11.1 hereof, written
notice of such election must be provided to Plaintiffs’ Counsel and filed with
the Court at least three (3) days before to the Final
Hearing. Such notice must be served by hand delivery, e-mail or fax,
with confirmation by telephone to Plaintiffs’ Counsel. The Defendants
may withdraw their election by providing written notice of such withdrawal, by
hand delivery, e-mail or fax with telephone confirmation to Plaintiffs’ Counsel
no later than 5:00 p.m. Eastern Time on the day before the Final Hearing, or by
such later date as the Parties agree in writing.
29
11.3 If
the Defendants elect to terminate the Stipulation pursuant to ¶ 11.1 hereof,
Plaintiffs’ Counsel may review the validity of any request for exclusion from
the Settlement and may attempt to cause retraction or withdrawal of any request
for exclusion. No Defendant or Released Party shall in any way
interfere with, obstruct or seek to enjoin efforts by Plaintiffs’ Counsel to
seek to have those persons who requested exclusion to withdraw their requests
for exclusion. If, by the day before the Final Hearing (or a later
date agreed upon in writing), Plaintiffs’ Counsel are successful in reducing the
number of shares held by persons who requested exclusion from the Class to a
number which is within the limit permitting the Defendants to terminate the
Stipulation, then any termination of the Stipulation by the Defendants shall
automatically be deemed null and void. In that event, Plaintiffs’
Counsel shall serve on counsel for the Defendants, by hand delivery, e-mail or
fax, a statement identifying the persons in the Class who have withdrawn their
requests for exclusion and the number of shares they bought, or persons who
requested exclusion but were not in the Class, and the number of shares they
bought.
11.4 If
the Defendants elect to terminate the Stipulation in accordance with ¶11.1 and
such termination is not nullified in accordance with ¶11.3, the Stipulation
shall be terminated and deemed null and void, and the provisions of ¶12.4 shall
apply.
|
12.
|
Conditions of
Settlement, Effective Date, Effect of Disapproval, Cancellation or
Termination
|
12.1 The
Effective Date, at which time this Stipulation shall become Final, shall be
conditioned on the occurrence of all of the following events:
12.1.1 The
Defendants have not exercised any right under Section 11.1 to terminate the
Stipulation;
30
12.1.2 The
Final Order has been entered by the Court without any changes not acceptable to
the Parties;
12.1.3 The
Bankruptcy Court both in the Chapter 11 Cases and the SIPA Proceeding has
approved LBHI’s and LBI’s entry into the Settlement and release of
indemnification claims they may have with respect to the Action and has approved
the Claim Disallowance, and such order has become Final; and
12.1.4 The
Final Order has become Final.
12.2 Upon
occurrence of all of the events referenced in ¶ 12.1 (and its subparts), above,
any and all remaining interest or right of the Defendants in or to the
Settlement Amount shall be absolutely and forever extinguished, and Paul
Bessette, Esq. will no longer be Escrow Agent.
12.3 If
all of the conditions specified in ¶ 12.1 (and its subparts) are not met, then
the Stipulation shall be cancelled and terminated, subject to and in accordance
with ¶¶ 12.4 below, unless Plaintiffs’ Counsel and Defendants’ counsel mutually
agree in writing to proceed with the Stipulation.
12.4 Unless
otherwise ordered by the Court, in the event that the Stipulation should
terminate, or be cancelled, or otherwise fail to become effective for any
reason, including without limitation, in the event that the Final Order
approving the Settlement and dismissing the Action does not become Final, then
within five (5) business days after written notification of such event is sent
by counsel for Defendants or by Plaintiffs’ Counsel to the Escrow Agents, the
amount in the Escrow Account, including accrued interest, except for amounts
already incurred or paid for Notice and Administration Costs, and Taxes, and Tax
Expenses, shall be refunded to Defendants and their Insurers in proportion to
their contributions to the Settlement Amount. At the request of
counsel for Defendants, the Escrow Agent or its designee shall apply for any tax
refund owed on the Settlement Funds and pay the proceeds, after deduction for
any fees or expenses incurred in connection with such application(s)for refund,
to the Persons contributing to the Settlement Fund. In addition, (i)
the Settling Parties shall be restored to their respective positions in the
Action as of September 9, 2009, with all of their respective claims and defenses
preserved as they existed on that date; (ii) the terms and provisions of the
Stipulation shall be null and void and shall have no further force or effect
with respect to the Settling Parties, and neither the existence nor the terms of
this Stipulation or MOU (nor any negotiations preceding this Stipulation nor any
acts performed pursuant to, or in furtherance of, this Stipulation) shall be
used in the Action or in any other action or proceeding for any purpose except
in litigation or other proceedings concerning the Settlement; and (iii) any
judgment or order entered by any court in accordance with the terms of the
Stipulation shall be treated as vacated, nunc pro tunc.
31
|
13.
|
Miscellaneous
Provisions
|
13.1 Plaintiffs
and their counsel represent and warrant that none of Plaintiffs’ claims or
causes of action alleged in the Complaint or that could have been alleged in the
Action have been assigned, encumbered or in any manner transferred in whole or
in part.
13.2 Upon
final approval of the Settlement, all parties to the Stipulation of Settlement
agree to abide by the provisions in ¶18 of the Protective Order filed on
December 14, 2004 regarding the return or destruction of Confidential
Information.
13.3 The
Settling Parties: (i) acknowledge that it is their intent to
consummate this Stipulation; and (ii) agree to cooperate to the extent
reasonably necessary to effectuate and implement all terms and conditions of the
Stipulation and to exercise their best efforts to accomplish the foregoing terms
and conditions of the Stipulation.
13.4 The
Settling Parties intend this Settlement to be a final and complete resolution of
all Released Claims between them with respect to the
Action. Defendants do not admit any liability to any person, nor do
Defendants admit any wrongdoing or liability, however described, including
without limitation, any violations of federal or state securities laws, gross
negligence or negligence and Defendants expressly deny any such wrongdoing or
liability. Nothing herein contained shall constitute an adjudication
or finding on the merits as to the claims of any party hereto, and shall not be
deemed to be, intended to be or construed as an admission of liability, in any
way on the part of any Party hereto, or any evidence of the truth of any fact
alleged or the validity of any claims that have been or could be asserted in the
Action. All Parties expressly deny any liability for any and
all claims of any nature whatsoever; nor shall anything herein contained
constitute an acknowledgment of fact, allegation or claim that has been or could
have been made, nor shall any third party derive any benefit whatsoever from the
statements made within this Stipulation. Nor shall this Stipulation,
nor any negotiations or proceedings connected with it be construed, offered or
received in evidence in any action or proceeding of any kind whether as an
admission or concession of any liability or wrongdoing or otherwise by any party
hereto except as may be necessary to consummate, defend or enforce this
Stipulation.
32
13.5 Neither
the MOU, the Stipulation nor the Settlement, nor any act performed or document
executed pursuant to or in furtherance of the MOU, the Stipulation or the
Settlement: (i) is or may be deemed to be or may be used as an admission of, or
evidence of, the validity of any Released Claim, or of any wrongdoing or
liability of the Parties; (ii) is or may be deemed to be or may be used as an
admission of, or evidence of, any fault or omission of the Parties in any civil,
criminal or administrative proceeding in any court, administrative agency or
other tribunal; (iii) shall constitute an adjudication or finding on the merits
as to the claims of any Party and shall not be deemed to be, intended to be or
construed as an admission of liability, in any way on the part of any Party or
any evidence of the truth of any fact alleged or the validity of any claims that
have been or could be asserted in the Action. All Parties expressly
deny any liability for any and all claims of any nature whatsoever; nor shall
anything herein contained constitute an acknowledgment of fact, allegation or
claim that has been or could have been made, nor shall any third party derive
any benefit whatsoever from the statements made within this Stipulation; nor
(iv) shall be construed against Defendants as an admission or concession that
the consideration to be given hereunder represents the amount which could be or
would have been recovered after trial. Any Party may file the
Stipulation and/or the Final Order in any action that may be brought against
them in order to support a defense or counter claim based on principles of res
judicata, collateral estoppel, release, good faith settlement, judgment bar or
reduction or any other theory of claim preclusion or issue preclusion or similar
defense or counterclaim.
33
13.6 All
Stipulations made and orders entered during the course of the Action relating to
the confidentiality of information shall survive this Stipulation.
13.7 All
of the Exhibits to the Stipulation are material and integral parts hereof and
are fully incorporated herein by this reference.
13.8 The
Stipulation may be amended or modified only by a written instrument signed by or
on behalf of all Settling Parties or their respective
successors-in-interest.
13.9 The
Stipulation and the Exhibits attached hereto and the stipulation referred to in
Section 11.1 above constitute the entire Stipulation between the Settling
Parties and no representations, warranties or inducements have been made to any
party concerning the Stipulation or its Exhibits other than the representations,
warranties and covenants contained and memorialized in such
documents. Except as otherwise provided herein, each party shall bear
its own costs.
13.10 Plaintiffs’
Counsel, on behalf of the Class, are expressly authorized by Plaintiffs to take
all appropriate action required or permitted to be taken by or on behalf of the
Class pursuant to the Stipulation to effectuate its terms and also are expressly
authorized to enter into any modifications or amendments to the Stipulation on
behalf of the Class that they deem appropriate.
34
13.11 Each
counsel or other Person executing the Stipulation or any of its Exhibits on
behalf of any party hereto hereby warrants that such Person has the full
authority to do so.
13.12 The
Stipulation may be executed by facsimile or PDF and in one or more
counterparts. All executed counterparts and each of them shall be
deemed to be one and the same instrument. Counsel for the parties to
the Stipulation shall exchange among themselves original signed counterparts and
a complete set of executed counterparts shall be filed with the
Court.
13.13 The
Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the Parties hereto.
13.14 The
Court shall retain jurisdiction with respect to implementation and enforcement
of the terms of the Stipulation.
13.15 The
Stipulation and the Exhibits attached hereto shall be considered to have been
negotiated, executed and delivered, and to be wholly performed, in the State of
Delaware, and the rights and obligations of the Parties to this Stipulation
shall be construed and enforced in accordance with, and governed by, the
internal, substantive laws of the State of Delaware without giving effect to
that State’s choice of law principles.
35
13.16 All
notices, requests, claims, demands, and other communications under this
Stipulation shall be in writing, and shall be given or made (and shall be deemed
to have been duly given or made upon receipt) by delivery in person, by
registered or certified mail (postage prepaid, return receipt requested), by
facsimile, by e-mail followed by first-class mail, or by Federal Express or
similar overnight courier to the respective parties at the following addresses
(or at such address for a party as shall be specified in a notice given in
accordance with this paragraph).
|
(a)
|
If
to Plaintiffs:
|
BERGER & MONTAGUE,
P.C.
Todd S. Collins
Elizabeth W. Fox
Neil F. Mara
1622 Locust Street
Philadelphia, PA 19103
|
|
Tel:
|
(215)
875-3000
|
|
|
Fax:
|
(215)
875-4604
|
|
|
(b)
|
If
to Banc of America Securities, LLC, RBC Capital Markets Corporation,
and/or Lehman Brothers Holdings,
Inc.
|
SIMPSON
THACHER & BARTLETT LLP
Michael
J. Chepiga
Paul C.
Gluckow
425
Lexington Avenue
New York,
NY 10017
|
Tel:
|
(212)
455-2000
|
|
|
Fax:
|
(212 455-2502 |
|
|
(c)
|
If
to James W. Giddens, Trustee for the SIPA Liquidation of Lehman Brothers
Inc.
|
HUGHES
HUBBARD & REED LLP
James B.
Kobak, Jr.
Sarah L.
Cave
One
Battery Park Plaza
New York,
New York 10004
Telephone: (212)
837-6000
|
|
(d)
|
If
to Adams Golf Defendants:
|
GREENBERG
TRAURIG LLP
Paul R.
Bessette
300 West
Sixth Street, Suite 2050
Austin,
TX 78701
|
Tel:
|
(512) 320-7200 | |
|
Fax:
|
(215) 864-0065 |
36
IN WITNESS WHEREOF, the
Parties hereto have caused the Stipulation to be executed, by themselves or
their duty authorized attorneys, dated as of the Execution Date referred to
above.
|
Carmella
P. Keener, Del. Bar No. 2810
ROSENTHAL,
MONHAIT GROSS & GODDESS
Suite
1401, Citizens Bank Center
Wilmington,
DE 19899
Tel: (302)
656-4433
Liaison Counsel
for Plaintiffs
|
Jeffrey
L. Moyer, Del. Bar No. 3309
RICHARDS,
LAYTON & FINGER, P.A.
One
Rodney Square
920
North King Street
Wilmington,
DE 19899
Tel: (302)
651-7700
Local
Counsel for Adams Golf Defendants
|
|
|
Todd
S. Collins
BERGER
& MONTAGUE, P.C.
1622
Locust Street
Philadelphia,
PA. 19103
Tel: (215)
875-3000
Lead
Counsel for Plaintiffs and the Class
|
Paul
R. Bessette
GREENBERG
TRAURIG, LLP
300
West Sixth Street, Suite 2050
Austin,
Texas 78701
Tel: (512)
320-7200
Counsel
for Adams Golf Defendants
|
|
|
John
E. James, Del. Bar No. 996
POTTER
ANDERSON & CORROON, LLP
Hercules
Plaza – Sixth Floor
1313
N. Market Street
Wilmington,
DE 19801
Tel: (302)
984-6000
Local
Counsel for Underwriter Defendants
|
||
|
Michael
J. Chepiga
Paul
C. Gluckow
SIMPSON
THACHER & BARTLETT LLP
425
Lexington Avenue
New
York, NY 10017-3954
Tel:
(212) 455-2000
Counsel
for Banc of America Securities, LLC, RBC Capital Markets Corporation, and
Lehman Brothers Holdings, Inc.
|
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|
James
B. Kobak, Jr.
Sarah
L. Cave
HUGHES
HUBBARD & REED LLP
One
Battery Park Plaza
New
York, New York 10004
Telephone: (212)
837-6000
Counsel
for James W. Giddens,
Trustee
for the SIPA Liquidation of Lehman Brothers
Inc.
|
37
Schedule 11
|
1.
|
Proof of Claim No. 30699
– individual claim for damages in excess of $30,041.00 based on violations
of the Securities Act of 1933.
|
|
2.
|
Proof of Claim No. 30700
– individual claim for damages in excess of $123,660.00 based on
violations of the Securities Act of
1933.
|
|
3.
|
Proof of Claim No. 31115
– individual claim for damages in excess of $46,850.00 based on violations
of the Securities Act of 1933.
|
|
4.
|
Proof of Claim No. 31116
– individual claim for damages in excess of $45,370.00 based on
violations of the Securities Act of
1933.
|
|
5.
|
Proof of Claim No. 32494
– class claim for damages in excess of $200,000.00 based on
violations of the Securities Act of
1933.
|