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8-K - MAINE & MARITIMES CORPORATION 8-K - MAINE & MARITIMES CORP | maine8k.htm |
Exhibit
99.1
STATE OF MAINE | BUSINESS AND CONSUMER DOCKET |
SAGADAHOC, SS. | Location: West Bath |
Docket No. BCD-WB-CV-10-13 |
KEVIN
DUPLISEA, Individually and on Behalf of All Others Similarly
Situated,
Plaintiff,
v.
MAINE
& MARITIMES CORPORATION, ROBERT E. ANDERSON, BRENT M. BOYLES, MICHAEL
W. CARON, D. JAMES DAIGLE, RICHARD G. DAIGLE, DAVID N. FELCH, DEBORAH L.
GALLANT, NATHAN L. GRASS, BRIAN N. HAMEL, and LANCE A. SMITH,
Defendants.
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STIPULATION AND
AGREEMENT OF
SETTLEMENT
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Plaintiff Kevin Duplisea (“State
Plaintiff”) in the above-captioned action Duplisea v. Maine & Maritimes
Corporation, et al, (“the State Action”), and plaintiff Amy Johnson-Gee
(“Federal Plaintiff”, together with State Plaintiff, “Plaintiffs”) in an action
pending in the United States District Court for the District of Maine (“the
Federal Court”), captioned Johnson-Gee v. Brett Boyles et
al., Case No. 1:10-cv-00142-JAW, (the “Federal Action”, together with the
State Action, the “Actions”), individually and on behalf of the Settlement Class
(as defined herein), and defendants Maine & Maritimes Corporation (“MAM” or
the “Company”), BHE Holdings Inc. (”BHE”), BHE Holding Sub One Inc. (“Merger
Sub”), Robert Anderson, Brent Boyles, Michael Caron, D. James Daigle, Richard
Daigle, David Felch, Deborah Gallant, Nathan Grass, Brian Hamel, Lance Smith
(the “Individual Defendants”, together with MAM, BHE and Merger Sub, the
“Defendants”), by and through their undersigned attorneys, hereby submit this
Stipulation and Agreement of Settlement (the “Stipulation”) for the Court’s
approval pursuant to Rule 23 of the Maine Rules of Civil Procedure.
WHEREAS, on March 12, 2010, MAM
announced that it had entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with BHE and Merger Sub. Upon the terms of the Merger
Agreement and subject to the conditions set forth therein, Merger Sub will be
merged with and into MAM, and as a result MAM will continue as the surviving
corporation and a wholly owned subsidiary of BHE. Pursuant to the
Merger Agreement, each issued and outstanding share of common stock of MAM
(other than shares owned by MAM, BHE or Merger Sub, or by any stockholders who
are entitled to and who properly exercise appraisal rights under Maine law) will
be canceled and will be automatically converted into the right to receive $45.00
in cash, without interest and subject to any applicable withholding taxes at the
closing of the Merger Agreement (the “Merger”);
WHEREAS, on March 16, 2010, the State
Action challenging the Merger was filed in the Superior Court of the State of
Maine, Aroostook County, Case No. CARSC-cv-10-043, against MAM and the
Individual Defendants, seeking to enjoin the Merger. The complaint,
filed as a class action on behalf of MAM shareholders, alleged, among other
things, that the Individual Defendants breached their fiduciary duties to the
Company’s shareholders by agreeing to sell the Company for inadequate and unfair
consideration and pursuant to an inadequate and unfair process, and that MAM
aided and abetted such breaches;
WHEREAS,
the State Action seeks, among other things, equitable relief against MAM and
certain of its officers and directors with respect to the proposed
Merger;
WHEREAS, the State Action was
subsequently transferred to the Business and Consumer Docket of the Maine
Superior Court and assigned the docket number BCD-WB-CV-10-13;
2
WHEREAS,
on April 9, 2010, the Company submitted a Schedule 14A Preliminary Proxy
Statement (the “Preliminary Proxy”) to the Securities and Exchange Commission
(“SEC”) in connection with the Merger;
WHEREAS, on April 16, 2010, the Federal
Plaintiff filed the Federal Action in the Federal Court. The
complaint in the Federal Action asserts claims against the Individual Defendants
and MAM for alleged breach of fiduciary duty in connection with the Merger and
claims against MAM, BHE and Merger Sub for aiding and abetting such alleged
breach of fiduciary duty and seeks equitable relief;
WHEREAS, on April 22, 2010, the State
Plaintiff amended his complaint in the State Action asserting claims for
breaches of fiduciary duty, including disclosure violations, against MAM and the
Individual Defendants;
WHEREAS, on May 7, 2010, the Federal Plaintiff amended her complaint in the
Federal Action by adding a claim against MAM under Section 14(a) of the
Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder for
alleged misrepresentations and omissions made in the Preliminary
Proxy;
WHEREAS,
counsel for State Plaintiff made specific recommendations to counsel for
Defendants concerning additional disclosures that Plaintiffs considered
necessary so that the Definitive Proxy (as defined herein) did not omit to state
facts necessary to make the statements therein not misleading, and to ensure
that MAM’s public stockholders receive all material information concerning the
Merger necessary to enable them to make an informed decision as to whether they
should tender their shares;
3
WHEREAS,
counsel for Plaintiffs and counsel for Defendants have engaged in arm’s-length
negotiations concerning recommended additional disclosures (the “Recommended
Disclosures”) and a potential settlement of the Actions;
WHEREAS,
the Company filed with the SEC a Schedule 14A Definitive Proxy Statement (the
“Definitive Proxy”) containing additional disclosures relating to the Merger on
June 23, 2010 that substantially addressed the Recommended Disclosures and
formed the basis for a settlement of the Actions. A blackline
detailing, among other things, the additional disclosures resulting from the
parties’ arm’s length negotiations is attached hereto as Exhibit A;
WHEREAS,
after extensive arm’s length negotiations between counsel for the parties, on
June 29, 2010, the parties executed a Memorandum of Understanding (“MOU”), which
established the settlement terms set forth herein that are subject to final
approval of the Court (the “Settlement”);
WHEREAS,
the Plaintiffs, through counsel, have investigated the claims and allegations
asserted in the Actions, as well as the underlying events and transactions
relevant to those claims and allegations. In connection with this
investigation, Plaintiffs’ counsel conducted confirmatory discovery, prior to
execution of this Stipulation, including the review of non-public documents from
MAM and conducting interviews of defendant and MAM director, Brent Boyles on
July 20, 2010, and Tom Stafford of KeyBanc Capital Markets, Inc. (“KeyBanc”), on
July 21, 2010;
WHEREAS,
on July 22, 2010, MAM disclosed that the shareholder vote regarding the Merger
was complete and 99% of shares outstanding had been voted in favor of the
Merger;
WHEREAS,
counsel for all parties have concluded that the terms contained in this
Stipulation are fair and adequate to MAM, its stockholders, and members of the
Settlement Class (as defined herein), that it is reasonable to pursue the
settlement of the Actions based upon the procedures and terms outlined herein
and the benefits and protections offered hereby, and the parties wish to
document their agreement in this Stipulation;
4
WHEREAS,
Defendants have denied, and continue to deny, that they have committed or aided
and abetted the commission of any violation of law of any kind or engaged in any
of the wrongful acts alleged in the Actions, and expressly maintain that they
have diligently and scrupulously complied with their fiduciary and other legal
duties, including disclosing material information about the Merger, and are
entering into this Stipulation solely to eliminate the burden and expense of
further litigation;
WHEREAS,
all parties recognize the time and expense that would be incurred by further
litigation of the Actions and the uncertainties inherent in such litigation;
and
WHEREAS,
the parties represent and agree that the 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 adequate information and sufficient discovery
and after consultation with experienced legal counsel. The parties
believe that settlement is in the best interests of the parties and therefore
wish to settle and resolve the claims asserted in the Actions;
NOW,
THEREFORE, the parties stipulate and agree, through their respective counsel,
subject to the approval of the Court, as follows:
Settlement
Consideration
1. Counsel
for Plaintiffs and counsel for Defendants conferred on certain disclosures
supplemental to those contained in the Preliminary Proxy. On June 23,
2010, as a result of these arms-length negotiations, MAM made further public
disclosures in its Definitive Proxy some of which were requested by Plaintiffs
and agreed upon by Defendants and Plaintiffs (“Supplemental
Disclosures”). The Supplemental Disclosures are summarized as
follows1:
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MAM
disclosed additional information pertaining to the outcome or status of
various wind farm projects;
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MAM
disclosed additional information pertaining to discussions regarding
continuing employment for certain MAM employees
post-Merger;
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MAM
disclosed additional information pertaining to the retention of KeyBanc
for services related to the Merger;
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MAM
disclosed additional information pertaining to KeyBanc’s advice on or
about August 14, 2009 that MAM should explore the market for potential
bidders and obtain information that would allow MAM to determine whether
it should pursue a sale or similar
transaction;
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MAM
disclosed additional information pertaining to confidentiality and
standstill agreements entered into with potential
bidders;
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MAM
disclosed additional information pertaining to its decision regarding a
potential attempt to reengage Company A and Company B in an attempt to
secure a bid in excess of $45 per share on account of the express
reservations communicated by Company A and Company B regarding their
willingness to make firm offers;
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MAM
disclosed additional information pertaining to concerns that Company A and
other bidders expressed regarding a lack of certainty around MAM’s future
transmission opportunities, given that MAM had been unable to provide
historical or projected financial information for the MPC Project, secure
regulatory approval for the MPC Project, and that it could not be assumed
with sufficient certainty that a potential scaled-down transmission line
project would come to fruition;
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MAM
disclosed additional information pertaining to the MAM Board’s decision to
discontinue the “market check” process in October
2009;
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MAM
disclosed additional information pertaining to the MAM Board’s decision
not to reengage in the sales process and instead focus solely on
negotiations with BHE given that the market check process had been lengthy
and thorough;
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1 Capitalized terms used but not defined
in this paragraph have the meanings ascribed to them in the Definitive
Proxy.
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MAM
disclosed additional information pertaining to the projected cash flows
used by KeyBanc in its Discounted Cash Flow
analysis;
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MAM
disclosed additional information pertaining to MAM management’s future
employment prospects with Emera;
and
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MAM
disclosed additional information pertaining to the number of Phantom Stock
Units held by each director as of March 31,
2010.
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2. Plaintiffs
have reviewed the aforementioned Supplemental Disclosures contained in the
Definitive Proxy and have determined that the additional disclosures form a
fair, reasonable and adequate basis for settling the Actions. The
parties agree that, other than the filing of the Definitive Proxy and any
required disclosure to the Court, the SEC or shareholders, no public statement
or press release shall be issued concerning the Settlement.
3. Defendants
have vigorously denied, and continue to vigorously deny, any wrongdoing or
liability with respect to all claims asserted in the Actions, including that
they have committed any violations of law, that they have acted improperly in
any way, that they have any liability or owe any damages of any kind to
Plaintiffs and/or the Settlement Class (as defined herein) and that any
additional disclosures (including the Supplemental Disclosure) are or were
required under any applicable rule, regulation, statute or law, but are entering
into this Stipulation solely because they consider it desirable that the Actions
be settled and dismissed on the merits and with prejudice in order to (i)
eliminate the burden, inconvenience, expense, risk and distraction of further
litigation, (ii) finally put to rest and terminate all the claims which were or
could have been asserted against Defendants in the Actions and (iii) thereby
permit the Merger to proceed without the risk of injunctive or other
relief.
4. Plaintiffs’
counsel conducted an investigation in order to confirm the fairness of the
Settlement, which included, inter alia, reviewing
non-public MAM documents pertaining to the Merger, including Board and Strategic
Planning Committee minutes, presentations by MAM’s financial advisor, KeyBanc,
considered by MAM’s Board, as well as conducting interviews of Mr. Boyles, a MAM
director and officer, and Tom Stafford, a director of mergers and acquisitions
at KeyBanc, who are familiar with the facts and circumstances of the Merger and
the documents produced.
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Release
5. Upon
Final Court Approval (as defined in Paragraph 18), Plaintiffs and all members of
the Settlement Class (as defined in Paragraph 10) will be deemed to and shall
have fully, finally and forever released, discharged, caused to be dismissed
with prejudice on the merits and settled any and all manner of claims, demands,
rights, liabilities, losses, obligations, duties, damages, costs, debts,
expenses, interest, penalties, sanctions, fees, attorneys’ fees, actions,
potential actions, causes of action, suits, agreements, judgments, decrees,
matters, issues and controversies of any kind, nature or description whatsoever,
whether known or unknown, disclosed or undisclosed, accrued or unaccrued,
apparent or not apparent, foreseen or unforeseen, matured or not matured,
suspected or unsuspected, liquidated or not liquidated, fixed or contingent,
including Unknown Claims (as defined below), that Plaintiffs (in the State
Action or the Federal Action) or any or all members of the Settlement Class (as
defined below) ever had, now have, may have or otherwise could, can or might
assert, whether direct, derivative, individual, class, representative, legal,
equitable or of any other type, or in any other capacity, against any of the
Released Parties (as defined below), whether based on state, local, foreign,
federal, statutory, regulatory, common or other law or rule (including, but not
limited to, any claims arising under the federal securities laws, including
Section 14(a) of the Securities Exchange Act of 1934, or any claims that could
be asserted derivatively on behalf of MAM), which, now or hereafter, are based
upon, arise out of, relate in any way to or involve, directly or
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indirectly,
any of the actions, transactions, occurrences, statements, representations,
misrepresentations, omissions, allegations, facts, practices, events, claims or
any other matters, things or causes whatsoever, or any series thereof, that
were, could have been or in the future can or might be alleged, asserted, set
forth, claimed, embraced, involved or referred to in or related to, directly or
indirectly, any of the Actions or the subject matter of any of the Actions in
any court, tribunal, forum or proceeding, including, without limitation, any and
all claims that are based upon, arise out of, relate in any way to or involve,
directly or indirectly, (i) the Merger or the issuance of any securities in
connection therewith, (ii) any actions, deliberations or negotiations in
connection with the Merger, including the process of deliberation or negotiation
by each of MAM, BHE, Merger Sub and any of their respective officers, directors
or advisors or parent entities (including Emera, Inc.) and their respective
officers, directors or advisors, (iii) the consideration received by Settlement
Class (as defined below) members in connection with the Merger, (iv) the
Preliminary Proxy, Definitive Proxy or any other disclosures, public filings,
periodic reports, press releases, proxy statements or other statements issued,
made available or filed relating, directly or indirectly, to the Merger, (v) the
fiduciary obligations of the Released Parties (as defined below) in connection
with the Merger, (vi) the fees, expenses or costs incurred in prosecuting,
defending or settling the Actions, or (vii) any of the allegations in any
complaint or amendment(s) thereto filed in the Actions (collectively, the
“Released Claims”); provided, however, that the Released Claims shall not
include the right to enforce the Settlement or any properly perfected claims by
MAM stockholders for statutory appraisal in connection with the
Merger.
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6. Whether
or not each or all of the following persons or entities were named, served with
process or appeared in the Actions, that “Released Parties” means (i) Robert
Anderson, Brent Boyles, Michael Caron, D. James Daigle, Richard Daigle, David
Felch, Deborah Gallant, Nathan Grass, Brian Hamel, Lance Smith, BHE, Emera,
Inc., MAM and Merger Sub; (ii) any person or entity which is, was or will be
related to or affiliated with any or all of them or in which any or all of them
has, had or will have a controlling interest, including parent entities; and
(iii) the respective past, present or future family members, spouses and heirs,
as well as their respective past or present trusts, trustees, executors,
estates, administrators, beneficiaries, distributees, foundations, agents,
employees, fiduciaries, partners, partnerships, general or limited partners or
partnerships, joint ventures, member firms, limited liability companies,
corporations, parents, subsidiaries, divisions, affiliates, associated entities,
shareholders, principals, officers, directors, managing directors, members,
managing members, managing agents, predecessors, predecessors-in-interest,
successors, successors-in-interest, assigns, financial or investment advisors,
advisors, consultants, investment bankers, entities providing any fairness
opinions, underwriters, brokers, dealers, lenders, commercial bankers,
attorneys, personal or legal representatives, accountants and associates of each
and all of the foregoing.
7. “Unknown
Claims” means any claim that the State Plaintiff, Federal Plaintiff or any
member of the Settlement Class does not know or suspect exists in his, her or
its favor at the time of the release of the Released Claims as against the
Released Parties, including, without limitation, those that, if known, might
have affected the decision to enter into the Settlement. With respect
to any of the Released Claims, the parties to this Stipulation stipulate and
agree that upon Final Court Approval (as defined in Paragraph 18), Plaintiffs
shall expressly, and each member of the Settlement Class shall be deemed to
have, and by operation of the final order and judgment by the State Court shall
have, expressly waived, relinquished and released any and all provisions, rights
and benefits conferred by or under Cal. Civ. Code § 1542 or any law of the
United States or any state of the United States or territory of the United
States or principle of common law, which is similar, comparable or equivalent to
Cal. Civ. Code § 1542, which provides: “A general release does not extend to
claims which the creditor does not know or suspect 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.” The
Plaintiffs acknowledge, and the members of the Settlement Class by operation of
law shall be deemed to have acknowledged, that they may discover facts in
addition to or different from those now known or believed to be true with
respect to the Released Claims, but that it is the intention of the Plaintiffs,
and by operation of law the members of the Settlement Class, to completely,
fully, finally and forever extinguish any and all Released Claims, known or
unknown, suspected or unsuspected, that now exist, heretofore existed or that
may hereafter exist, and without regard to the subsequent discovery of
additional or different facts. Plaintiffs acknowledge, and the
members of the Settlement Class by operation of law shall be deemed to have
acknowledged, that the inclusion of “Unknown Claims” in the definition of
“Released Claims” was separately bargained for and was a key element of the
Settlement and was relied upon by each and all of the Defendants in entering
into this Stipulation;
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8. Defendants
and the Released Parties release Plaintiffs, members of the Settlement Class and
their counsel from all claims arising out of the instituting, prosecution,
settlement or resolution of the Actions, provided however, that the Defendants
and Released Parties shall retain the right to enforce in the State Court the
terms of the Settlement;
9. Pending
Final Court Approval (as defined in Paragraph 18), Plaintiffs and all members of
the Settlement Class, or any of them, are barred and enjoined from commencing,
prosecuting, instigating or in any way participating in the commencement or
prosecution of any action asserting any Released Claims against any of
Defendants or Released Parties.
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Class
Certification
10. For
purposes of settlement only, the parties agree to certification by the Court,
pursuant to Rule 23 of the Maine Rules of Civil Procedure, of a non-opt-out
settlement class consisting of all common stockholders of MAM from October 1,
2009 through and including the date of the closing of the Merger (the
“Settlement Class Period”), including any and all of their respective successors
in interest, predecessors, representatives, trustees, executors, administrators,
heirs, assigns, transferees or affiliates, immediate and remote, and any person
or entity acting for or on behalf of, or claiming under, any of them and each of
them (the “Settlement Class”). Defendants will separately file an
unopposed motion in the State Action asserting that, for purposes of this
Settlement only, the Court should certify the Settlement Class as a mandatory
non-opt-out class under Maine Rule of Civil Procedure 23 (the “Mandatory
Non-Opt-Out Class Motion”). Plaintiffs and Plaintiffs’ counsel shall
not oppose the Mandatory Non-Opt-Out Class Motion.
Submission and Application
to the Court
11. In
conjunction with the execution of this Stipulation, the parties have applied
jointly for entry of a scheduling order substantially in the form attached
hereto as Exhibit B (the “Scheduling Order”) establishing the procedure for: (i)
the approval of notice to the Settlement Class substantially in the form
attached hereto as Exhibit C (the “Notice”) and (ii) the Court’s final
consideration of this Stipulation, Certification of the Settlement Class and
Plaintiffs’ application for an award of Counsel’s attorneys’ fees and
expenses.
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12. Plaintiffs
shall be responsible for providing notice of the Settlement to the members of
the Settlement Class under terms approved by Defendants and the
Court. MAM shall pay all reasonable costs and expenses incurred in
providing notice of the Settlement to the members of the Settlement Class, with
the understanding that notice shall be effected by mail unless otherwise
provided by law.
Order and Final
Judgment
13. If,
following a hearing (the “Settlement Hearing”), the Court approves this
Settlement (including any modification thereto made with the consent of the
parties as provided for herein) as fair, reasonable, adequate and in the best
interest of the Settlement Class, the parties shall jointly request that the
Court enter an Order and Final Judgment substantially in the form attached
hereto as Exhibit D.
Conditions of
Settlement
14. The terms
of this Stipulation, including the entry of an Order and Final Judgment, the
release of all claims, and the payment of any award of attorneys’ fees or other
consideration, are expressly conditioned upon the Merger becoming effective
under Maine law.
15. The terms
of this Stipulation are expressly conditioned on
the Federal Plaintiff seeking and obtaining the voluntary dismissal with
prejudice of the Federal Action;
16. In the
event that this Settlement does not obtain Final Court Approval, then this
Stipulation shall be null and void and of no force and effect, unless otherwise
agreed to in writing by the parties to this Stipulation; provided, however, that
the Court’s award of attorneys’ fees and expenses (of whatever amount), or any
modification, alteration or reversal on appeal of such award shall not void this
Stipulation. In the event this Stipulation is rendered null and void
for any reason, each party shall be restored to his, her or its respective
position as it existed prior to the execution of this Stipulation, this
Stipulation shall not be deemed to prejudice in any way the respective positions
of the parties with respect to the Action, and neither the existence of this
Stipulation or the MOU (or the contents of these documents) shall be
discoverable or admissible in evidence or shall be referred to for any purpose
in the Actions or in any other litigation or
proceeding. Notwithstanding the foregoing, neither Plaintiffs nor any
member of the Settlement Class shall have any right to terminate or withdraw
from this Stipulation by reason of any order relating to fees and
expenses.
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17. Neither
the existence of this Stipulation or the MOU, nor the contents of those
documents or any negotiations, discussions, statements or proceedings in
connection therewith shall be deemed to constitute a presumption, concession, or
admission by any Plaintiff or any Defendant of any fault, liability,
misrepresentation, omission or wrongdoing or lack of any fault, liability,
misrepresentation, omission or wrongdoing as to any facts or claims alleged or
asserted in the Actions or in any other action or proceeding (whether civil,
criminal or administrative). Neither the existence of this
Stipulation or the MOU (or the contents of these documents) nor any
negotiations, statements or proceedings in connection therewith, shall be
offered or admitted into evidence or referred to, interpreted, construed,
invoked or otherwise used by any person for any purpose in the Actions or in any
other action, litigation or proceeding (whether civil, criminal, or
administrative), except as may be necessary to enforce or obtain Court approval
of the Settlement, or as may be necessary to explain to the Court or any member
of the Settlement Class why the Settlement was not consummated in the event that
this Stipulation is terminated, or to move to dismiss or stay an action relating
to the released claims brought by a member of the Settlement
Class. This provision shall remain in force in the event this
Stipulation is terminated.
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Final Court
Approval
18. Final
court approval of the Settlement (“Final Court Approval”) shall have been
obtained once all of the following have occurred: (a) entry by the
Court of an Order and Final Judgment in all material respects in the form set
forth in Exhibit C attached hereto; and (b) either (i) the expiration of the
time for the filing or noticing of an appeal or motion for reargument or
rehearing from the Court’s entry of such Order and Final Judgment without such
appeal or motion having been made; (ii) the final affirmance of such Order and
Final Judgment on any appeal or reargument or rehearing or (iii) the final
dismissal of any appeal; provided, however, and notwithstanding any provision to
the contrary in this Stipulation, Final Court Approval shall not include (and
this Stipulation is expressly not conditioned on) the approval of attorneys’
fees, costs and expenses of Plaintiffs’ counsel as provided in paragraph 19 and
any appeal related thereto. Final Court Approval
shall: (i) resolve and provide for the dismissal with prejudice and
without costs to any party, except as set forth in paragraph 19 herein, of all
claims asserted or that could have been asserted in the Actions and all other
claims (as described hereinafter), if any, arising out of or relating, in whole
or in part, to the Merger; and (ii) provide for the preparation and filing of
such other documentation as may be necessary to obtain approval of the
settlement of the Actions upon and consistent with the terms set forth in this
Stipulation. The entry of a final and binding judgment shall dismiss
with prejudice (whether voluntary or involuntary) the State Action upon the
Final Court Approval.
Attorneys’
Fees
19. Robbins
Geller Rudman & Dowd, LLP, as Lead Counsel for State Plaintiff and the
Settlement Class (“Lead Counsel”) shall apply to the Court for an award to
Plaintiffs’ counsel of attorneys’ fees, costs and expenses not to exceed
$400,000.00
(the “Attorneys’ Fee
15
Application”),
to be paid by MAM or its successors subject to Court
approval. Counsel for Defendants will not oppose Plaintiffs’
Attorneys’ Fee Application and will cause MAM (or any successor thereto) to pay
the awarded of attorneys’ fees, costs and expenses (the “Attorneys’ Fee Award”),
as directed by the Court, if and solely to the extent that such Attorneys’ Fee
Award does not exceed $400,000.00
and subject to the express condition that the Merger shall become effective
under Maine law. All parties agree that, notwithstanding anything in
this Stipulation to the contrary, or any order of the Court making or approving
an Attorneys’ Fee Award, in no event shall MAM or its successors be obliged to
pay to Plaintiffs, the Settlement Class or Plaintiffs’ counsel any amount in
excess of $400,000.00
for attorneys’ fees, costs and expenses in connection with the Actions (other
than those expenses incurred in disseminating the Notice in accordance with
paragraph 10), and in no event shall any Defendant other than MAM or its
successors be obliged to pay any part of the Attorneys’ Fee Award or any of
Plaintiffs’ attorneys’ fees, costs and expenses. Subject to the
approval of the Court, Lead Counsel shall allocate any Attorneys’ Fee Award
among counsel for Plaintiffs in the Actions. Subject to the
foregoing, MAM agrees to pay the Attorneys’ Fee Award within ten (10) business
days of the latest date on which: (a) a final order has been entered (i)
approving the Settlement (including the Releases as provided in paragraphs 5-9
above); (ii) awarding attorneys’ fees and expenses; (iii) dismissing with
prejudice the State Action; (iv) dismissing with prejudice the Federal Action;
and (b) upon the fulfillment of each of the following: (i) the consummation of
the Merger substantially in accordance with the terms and conditions set out in
the Merger Agreement; (ii) the Court’s certification of the Settlement Class
pursuant to Maine Rule of Civil Procedure 23; (iii) the dismissal with prejudice
of the Actions without the award of any damages, costs, fees or the grant of any
further relief except for an award of fees and expenses the State Court may make
in
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accordance
with this paragraph; (iv) the entry of a final judgment in the State Action
approving this Settlement and providing for the dismissal with prejudice of the
State Action and approving the grant of a release by the Settlement Class to the
Released Parties of the Released Claims; (v) the inclusion in the final judgment
of a provision enjoining all members of the Settlement Class from asserting any
of the Released Claims; and (vi) Federal Plaintiff seeking voluntary dismissal
with prejudice, without right of appeal, of the Federal Action, without any
request for attorneys’ fees or costs in that action, within five (5) business
days of Final Court Approval of the Settlement, and the dismissal of the Federal
Action with prejudice. Plaintiffs’ counsel shall be obliged to return
to MAM or its successors any portion of the Attorneys’ Fee Award that is
affected by any decision by any court, or by any appellate court, to reduce,
vacate, dismiss, modify or otherwise change or nullify any court order making or
approving an Attorneys’ Fee Award. Plaintiffs’ counsel will not seek
attorneys’ fees and expenses other than as provided for in this paragraph and
will not make any application for an award of fees or expenses in the Federal
Action. The Released Parties shall bear no other expenses, costs,
damages, or fees alleged or incurred by the Plaintiffs, by any member of the
Settlement Class or by any of their attorneys, experts, advisors, agents,
representatives or affiliates.
Effect of
Release
20. The
release contemplated by this Stipulation extends to claims that the releasing
parties do not know or suspect to exist at the time of the release, which, if
known, might have affected the releasing party’s decision to enter into the
release; the releasing parties shall be deemed to relinquish, to the extent
applicable, and to the full extent permitted by law, the provisions, right and
benefits of Section 1542 of the California Civil Code, which provides as
follows:
17
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;
and the
releasing parties shall be deemed to waive any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or
principle of common law, which is similar, comparable or equivalent to
California Civil Code Section 1542. The parties to this Stipulation
acknowledge that the foregoing waiver was separately bargained for and is a
material term of this Stipulation.
Cooperation
21. The
parties to this Stipulation (a) acknowledge that it is their intent to
consummate this Stipulation, and (b) 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. In addition to the actions
specifically provided for in this Stipulation, the parties and their attorneys
agree to cooperate fully with one another in seeking Final Court Approval and to
agree promptly upon and execute all such other documentation as may be
reasonably required to obtain Final Court Approval.
18
Stay of
Proceedings
22. Pending
Final Court Approval, the parties agree to stay any further discovery or other
proceedings in the Actions, other than those concerning this
Settlement. Defendants’ time to answer or otherwise respond to the
Complaint is extended indefinitely. Plaintiffs will stay, and will
not initiate, any other proceedings other than those concerning the
Settlement. The parties also agree to use their best efforts to
prevent, stay or seek dismissal of or oppose entry of any interim or final
relief in favor of any member of the Settlement Class in any other litigation
against any of the parties to this Stipulation, or which challenges this
Settlement, the Merger Agreement, any of the transactions contemplated by the
Merger Agreement, including, without limitation, the Merger, or otherwise
involves a Released Claim.
Return of
Documents
23. Plaintiffs’
counsel agrees that within ten (10) days of receipt of a written request by any
producing party following Final Court Approval, they will return to the
producing party all discovery material obtained from, including all documents
produced by and/or deposition testimony given by, any of Defendants or
Defendants’ affiliates in the Actions (herein “Discovery Material”), or certify
in writing that such Discovery Material has been destroyed. The
parties agree to submit to the Court any dispute concerning the return or
destruction of Discovery Material.
Right of
Withdrawal
24. All
Defendants shall have the right to withdraw from this Stipulation in the event
that any court enjoins or otherwise precludes the Merger or any of the
transactions contemplated by the Merger Agreement, or in the event that any
claim related to the subject matter of the Action, the Merger Agreement, the
transactions contemplated by the Merger Agreement, including, without
limitation, the Merger or the Released Claims, is commenced or prosecuted
against any of Defendants in any court prior to Final Court Approval, and
(following a motion by Defendants) any such claim is not dismissed with
prejudice or stayed in contemplation of dismissal with prejudice. In
the event that any such claim is commenced or prosecuted, the parties shall
cooperate and use their best efforts to secure the dismissal with prejudice (or
a stay in contemplation of dismissal with prejudice, following Final Court
Approval) thereof.
19
No
Waiver
25. If any
provision or term of this Stipulation is held to be illegal, invalid or
unenforceable, such provision or term shall be fully severable; this Stipulation
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised part of this Stipulation and the remaining
provisions shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provisions or by its
severance. Furthermore, in lieu of each such illegal, invalid or
unenforceable provision or term, there shall be added automatically as part of
this Stipulation another provision or term as similar to the illegal, invalid or
unenforceable provisions as may be possible and that is legal, valid and
enforceable.
26. Any
failure by any party to insist upon the strict performance by any other party of
any of the provisions of this Stipulation shall not be deemed a waiver of any of
the provisions hereof, and such party, notwithstanding such failure, shall have
the right thereafter to insist upon the strict performance of any and all of the
provisions of this Stipulation to be performed by such other party.
27. No
waiver, express or implied, by any party of any breach or default by any other
party in the performance by the other party of its obligations under this
Stipulation shall be deemed or construed to be a waiver of any other breach,
whether prior, subsequent or contemporaneous, under this
Stipulation.
20
Successors, Assigns and
Third Party Beneficiaries
28. This
Stipulation shall be binding upon and inure to the benefit of the parties
(including members of the Settlement Class) and their respective agents,
executors, heirs, successors and assigns; provided, that no party shall
assign or delegate its rights or responsibilities under this Stipulation without
the prior written consent of the other parties hereto. Released
Parties are intended third party beneficiaries under this Stipulation entitled
to enforce this Stipulation in accordance with its terms.
Governing
Law
29. This
Stipulation shall be governed by, and construed in accordance with, the laws of
the State of Maine, without regard to Maine’s principles governing choice of
law. The Court shall have exclusive jurisdiction over any dispute
arising out of this Stipulation.
Non-Assignment of
Claims
30. Plaintiffs
represent and warrant that (i) Plaintiffs are members of the Settlement Class,
and (ii) none of Plaintiffs’ claims or causes of action in the Actions has been
assigned, encumbered, or in any manner transferred, in whole or in
part. The parties to this Stipulation agree that any dispute arising
out of or relating in any way to the enforcement or interpretation of this
Stipulation or the Settlement shall not be litigated or otherwise pursued in any
forum or venue other than the Court, and the parties to this Stipulation
expressly waive any right to demand a jury trial as to any such
dispute.
21
Entire
Agreement
31. This
Stipulation and its exhibits constitute the entire agreement among the parties
with respect to the subject matter hereof, and may be modified or amended only
by a writing signed by the signatories hereto. No representations,
warranties or inducements other than those contained and memorialized in this
Stipulation and its exhibits have been made by any party hereto concerning this
Stipulation and its exhibits.
Counterparts
32. This
Stipulation may be executed in two or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when such
counterparts have been signed by each of the parties and delivered to the other
parties.
33. Signed
signature pages of this Stipulation may be delivered by telecopier or e-mail,
which will constitute complete delivery without any necessity for delivery of
originally signed signature pages in order for this Stipulation to constitute a
binding agreement.
Authority
34. All
counsel and any other person or entity executing this Stipulation, or any
related Settlement documents, warrant and represent that they have the full
authority to do so and that they have the authority to take appropriate action
required or permitted to be taken pursuant to the Stipulation to effectuate its
terms.
Miscellaneous
35. The
headings herein are used for the purpose of convenience only and are not meant
to have legal effect.
22
36. This
Stipulation shall not be construed more strictly against one party than another
merely by virtue of the fact that this Stipulation, or any part of it, may have
been prepared by counsel for one of the parties, it being recognized that this
Stipulation is the result of arm’s-length negotiations between the parties and
all parties have contributed substantially and materially to the preparation of
this Stipulation.
[SIGNATURES
ON THE NEXT PAGE]
23
STIPULATED
AND AGREED TO BY:
ROBBINS
GELLER RUDMAN
& DOWD LLP
RANDALL
J. BARON
A.
RICK ATWOOD, JR.
ELLEN
GUSIKOFF STEWART
DAVID
T. WISSBROECKER
EUN
JIN LEE
|
|
655
West Broadway, Suite 1900
San
Diego, CA 92101
Telephone: 619/231-1058
619/231-7423
(fax)
Lead
Counsel for State Plaintiff Kevin Duplisea
|
|
LANHAM
BLACKWELL, P.A.
SAMUEL
W. LANHAM, JR.
|
|
470
Evergreen Woods
Bangor,
Maine 04401
Telephone: 207/942-2898
207/941-8818
(fax)
|
|
Co-Lead
Counsel for State Plaintiff Kevin
Duplisea
|
24
GOODWIN
PROCTER LLP
JOHN
O. FARLEY
MICHAEL
T. JONES
|
|
|
|
Exchange
Place
53
State Street
Boston,
MA 02109
Telephone: 617/570.1000
617/523-1231
(fax)
|
|
Counsel
for Defendants Maine & Maritimes Corporation, Robert Anderson, Brent
Boyles, Michael Caron, D. James Daigle, Richard Daigle, David Felch,
Deborah Gallant, Nathan Grass, Brian Hamel, Lance
Smith
|
CURTIS,
THAXTER, STEVENS, BRODER
& MICOLEAU,
LLC
CHRISTIAN
CHANDLER
|
|
|
|
One
Canal Plaza, Ste. 1000
Portland,
ME 04101
Telephone: 207/774-9000
207/775-0612
(fax)
|
|
Co-Counsel
for Defendants Maine & Maritimes Corporation, Robert Anderson, Brent
Boyles, Michael Caron, D. James Daigle, Richard Daigle, David Felch,
Deborah Gallant, Nathan Grass, Brian Hamel, Lance
Smith
|
25
WEIL,
GOTSHAL & MANGES LLC
JOSEPH
S. ALLERHAND
STACY
NETTLETON
|
|
767
Fifth Avenue
New
York, New York
(212)
310-8000
(212)
310-8007 (f)
|
|
Co-Counsel
for BHE Holdings Inc. and BHE Holding Sub One
Inc.
|
VERRILL
DANA LLP
JAMES
T. KILBRETH
|
|
One
Portland Square
P.O.
Box 586
Portland,
ME 04112-0586
(207)
774-4000
(207)
774-7499 (f)
|
|
Co-Counsel
for BHE Holdings Inc. and BHE Holding Sub One
Inc.
|
LEVI
& KORSINSKY, LLP
EDUARD
KORSINSKY, ESQ.
|
|
|
|
EDUARD
KORSINSKY
|
|
30
Broad Street, 15th Floor
New
York, New York 10004
(212)
363-7500
(212)
363-7171 (f)
|
|
Counsel
for Federal Plaintiff Amy
Johnson-Gee
|
26
WEIL,
GOTSHAL & MANGES LLC
JOSEPH
S. ALLERHAND
STACY
NETTLETON
|
|
|
|
JOSEPH
S. ALLERHAND
|
|
767
Fifth Avenue
New
York, New York
(212)
310-8000
(212)
310-8007 (f)
|
|
Co-Counsel
for BHE Holdings Inc. and BHE Holding Sub One
Inc.
|
VERRILL
DANA LLP
JAMES
T. KILBRETH
|
|
|
|
JAMES
T. KILBRETH
|
|
One
Portland Square
P.O.
Box 586
Portland,
ME 04112-0586
(207)
774-4000
(207)
774-7499 (f)
|
|
Co-Counsel
for BHE Holdings Inc. and BHE Holding Sub One
Inc.
|
LEVI
& KORSINSKY, LLP
EDUARD
KORSINSKY, ESQ.
|
|
EDUARD
KORSINSKY
|
|
30
Broad Street, 15th Floor
New
York, New York 10004
(212)
363-7500
(212)
363-7171 (f)
|
|
Counsel
for Federal Plaintiff Amy
Johnson-Gee
|
27