UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
IN RE PINNACLE HOLDINGS CORP. No. 8:01-CV-624-T-27-MSS
SECURITIES LITIGATION
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STIPULATION AND AGREEMENT OF SETTLEMENT
This Stipulation and Agreement of Settlement (the "Stipulation") is
submitted pursuant to Rule 23 of the Federal Rules of Civil Procedure. Subject
to the approval of the Court, this Stipulation is entered into among Lead
Plaintiffs Xxxx Xxxxxxx, Xxxxxx and Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxxx,
and Xxxxx Xxxxx, on behalf of themselves and the Class (as hereinafter defined),
Louisiana School Employees' Retirement System, on behalf of itself and the
Section 11 Sub-Class (as hereinafter defined), Defendants Pinnacle Holdings Inc.
("Pinnacle"), Xxxxxx Xxxxxx ("Xxxxxx"), Xxxxxx Xxx ("Day"), Xxxxxxx Xxxx
("Card"), Xxxxx X'Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx, and Xxxxx
Xxxxxxx (collectively, the "Officer and Director Defendants"), Deutsche Bank
Securities, Inc. (originally sued as "Deutsche Bank Xxxx Xxxxx"), Xxxxxxx Xxxxx
& Co., Xxxxxxx Xxxxx & Company, Xxxxxxx Xxxxx & Associates, Inc., Xxxxxxx Xxxxx
Xxxxxx, and Banc of America Securities LLC (collectively, the "Underwriter
Defendants") and PricewaterbouseCoopers LLP ("PwC") (Pinnacle, the Officer and
Director Defendants, the Underwriter Defendants, and PwC are collectively
referred to hereinafter as the "Defendants"), by and through their respective
counsel.
WHEREAS:
A. Beginning on March 23, 2001, six class actions alleging violations
of federal securities xxxx - Xxxxxx v. Pinnacle Holdings Inc., et al., Case No.
8:01-CV-624-T-27MSS; Worrall v. Pinnacle Holdings Inc., et al., Case No.
8:01-CV-698-T-27TGW; Troncatty v.
Pinnacle Holdings Inc., et al., Case No. 8:01-CV-749-T-27TBM; Xxxxxxxx x.
Pinnacle Holdings Inc., et al., Case No. 8:01-CV-839-T-27TGW; Xxxxxx v. Pinnacle
Holdings Inc., et al., Case No. 8:01-CV-902-T-27TGW; and Derogatis v. Pinnacle
Holdings Inc., et al., Case No. 8:01-CV-956T-27TBM - were filed in this Court
and were subsequently consolidated under the caption above, and are hereinafter
referred to as the "Action";
B. Plaintiffs have moved for leave to file a Second Consolidated
Amended Complaint (the "Complaint"). The Complaint alleges, among other things,
that Xxxxxxxx, the Officer and Director Defendants (other than Card) and the
Underwriter Defendants violated Sections 11 and 15 of the Securities Act of 1933
by disseminating to the public a false and misleading Registration Statement and
Prospectus (collectively the "Prospectus") relating to the January 18, 2000
Offering. The Complaint also alleges that the false and misleading information
in the Prospectus caused the price of the stock issued under the Prospectus to
be artificially inflated. The Section 11 claims are brought on behalf of a
putative Sub-Class consisting of all persons who bought Xxxxxxxx shares on, or
traceable to, the January 18, 2000 Offering, and were damaged thereby;
C. The Complaint also alleges that Pinnacle, Day, Wolsey, Card and PWC
(the "Section 10(b) Defendants") violated Section 10(b) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by disseminating
false and misleading statements and/or concealing material adverse facts
regarding Pinnacle's business operations and financial condition between June
29, 1999 and August 14, 2001, inclusive (the "Class Period"). The Complaint
alleges that the false and misleading information caused the price of Pinnacle's
common stock to be artificially inflated during the Class Period. The Section
10(b) claims are brought on behalf of a putative Class consisting of all persons
who
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purchased or otherwise acquired Pinnacle's common stock during the Class Period
and were damaged thereby. The Complaint also alleges that Day, Xxxxxx and Card
are liable as control persons under Section 20(a) of the Securities Exchange Act
of 1934.
X. Xxxxxxxxxx have denied, and continue to deny, each and every claim
and contention alleged by plaintiffs in this Action. Defendants have expressly
denied, and continue to deny, all charges of wrongdoing or liability against
them arising out of any of the conduct, statements, acts or omissions alleged,
or that could have been alleged, in this Action. Defendants also have denied,
and continue to deny, inter alia, the allegations that plaintiffs or the Class
have suffered damage, that the price of Pinnacle common stock was artificially
inflated by reasons of alleged misrepresentations, non-disclosures or otherwise,
or that plaintiffs or the Class were harmed by the conduct alleged in this
Action. This Stipulation shall in no event be construed or deemed to be evidence
of or an admission or concession on the part of any Defendant with respect to
any claim or of any fault or liability or wrongdoing or damage whatsoever, or
any infirmity in the defenses that the Defendants have asserted. Nonetheless,
Defendants have concluded that further conduct of this Action would be
protracted and expensive, and that it is desirable that this Action be fully and
finally settled in the manner and upon the terms and conditions set forth in
this Stipulation. Defendants also have taken into account the uncertainty and
risks inherent in any litigation, especially in complex cases like this Action.
Defendants have therefore determined that it is desirable and beneficial to them
that this Action be settled in the manner and upon the terms and conditions set
forth in this Stipulation.
E. Plaintiffs' Counsel represent that they have conducted an
investigation relating to the claims and the underlying events and transactions
alleged in the Complaint. Plaintiffs'
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Counsel represent that they have performed a pre-filing investigation, reviewed
and analyzed confirmatory discovery and have researched the applicable law with
respect to the claims of Plaintiffs and the Class against the Defendants and the
potential defenses thereto. This Stipulation shall not be construed or deemed to
be a concession by any Plaintiff of any infirmity in the claims asserted in the
Action;
X. Xxxxxxxxxx, by their counsel, have conducted discussions and arm's
length negotiations with counsel for Defendants with respect to a compromise and
settlement of the Action with a view to settling the issues in dispute and
achieving the best relief possible consistent with the interests of the Class. A
mediation was conducted at which the parties reached the outlines of a
settlement.
G. Plaintiffs' Counsel represent that, based upon their pre-filing
investigation, a review and analysis of confirmatory discovery and information
learned at the mediation, Plaintiffs' Counsel have concluded that the terms and
conditions of this Stipulation are fair, reasonable and adequate to Plaintiffs
and the Class, and in their best interests, and have recommended to lead
plaintiffs, and lead plaintiffs have agreed to, settle the claims raised in the
Action pursuant to the terms and provisions of this Stipulation, after
considering (a) the substantial benefits that Plaintiffs and the members of the
Class will receive from settlement of the Action, (b) the attendant risks of
litigation, and (c) the desirability of permitting the Settlement to be
consummated as provided by the terms of this Stipulation; and
X. Xxxxxxxx has filed a petition under Chapter 11 of Title 11 of the
United States Code, 11 U.S.C. ss. 101, et seq. (the "Bankruptcy Code"). On July
30, 2002, the United States Bankruptcy Court for the Southern District of New
York (the "Bankruptcy Court") entered an order (the "Confirmation Order")
confirming the First Amended Plan of Reorganization of
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Pinnacle Towers III Inc., Pinnacle Holdings Inc., Pinnacle Towers Inc. and
Pinnacle San Antonio LLC, debtors and debtors-in-possession (collectively
"Debtors"), dated June 27, 2002 (the "Plan"). In the Confirmation Order, the
Bankruptcy Court approved the payment by Xxxxxxxx's Directors and Officers'
insurer, Genesis Insurance Company ("Genesis") of $8,200,000 on behalf of
Xxxxxxxx and the Officer and Director Defendants to the plaintiff Class.
Pursuant to the confirmed Plan, effective as of the Confirmation Date, but
subject to the occurrence of the Effective Date of the Plan, certain creditors
and equity holders of Pinnacle are deemed to have given releases to Pinnacle,
the Officer and Director Defendants and PwC of all claims which any of such
parties may be entitled to assert based in whole or in part upon any act or
omission, transaction or other occurrence taking place on or before the
Confirmation Date in any way relating to the Debtors, their business, their
governance, their securities disclosure practices, or the purchase or sale of
any of Debtors' debt securities or equity securities. The releases of non-debtor
Defendants under the Plan are contingent on this Settlement becoming effective.
NOW THEREFORE, 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 of any liability or wrongdoing or lack of merit in the
defenses whatsoever by Defendants, it is hereby STIPULATED AND AGREED, by and
among the parties to this Stipulation, through their respective attorneys,
subject to approval of the Court pursuant to Rule 23(e) of the Federal Rules of
Civil Procedure, in consideration of the benefits flowing to the parties hereto
from the Settlement, that all Settled Claims (as defined below) as against the
Released Parties (as defined below) and all Inter-Defendant Claims (as defined
below) as against any
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Inter-Defendant Released Parties (as defined below) shall be compromised,
settled, released and dismissed with prejudice, upon and subject to the
following terms and conditions:
CERTAIN DEFINITIONS
1. As used in this Stipulation, the following terms shall have the
following meanings:
(a) "Authorized Claimant" means a Class Member who submits a timely
and valid Proof of Claim and Release form to the Claims Administrator.
(b) "Bankruptcy Court" means the United States Bankruptcy Court for
the Southern District of New York.
(c) "Bankruptcy Order" shall have the meaning given that term in
paragraph 23(a) hereof.
(d) "Barred Claims" means any and all claims, demands, rights, causes
of action or liabilities, of every nature and description whatsoever, whether
based in law or equity, on federal, state, local, statutory or common law, or
any other law, rule or regulation, including both known claims and Unknown
Claims, that have been or could have been asserted in any forum by the Class
Members, or any of them, or the successors or assigns of any of them, whether
directly, indirectly, representative or in any other capacity, against any of
the Released Parties, which arise out of, or relate in any way, directly or
indirectly, to, or could have been asserted based upon, the allegations,
transactions, facts, events, matters, occurrences, acts, representations or
omissions involved in, set forth in, referred to, or which relate directly or
indirectly to this Securities Action, including, without limitation, claims for
negligence, gross negligence, breach of duty of care, breach of duty of loyalty,
breach of duty of candor, fraud, negligent misrepresentation, and breach of
fiduciary duty.
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(e) "Claims Administrator" means the firm of Xxxxxxx & Co. LLC which
shall administer the Settlement.
(f) "Class" and "Class Members" means, for the purposes of this
Settlement only, all persons who purchased or otherwise acquired the common
stock of Pinnacle Holdings Inc. ("Pinnacle") during the period from June 29,
1999 through and including August 14, 2001, including persons who acquired
Pinnacle common stock pursuant to or traceable to the January 18, 2000 Offering.
Excluded from the Class are Defendants in this Action, members of the immediate
families (parents, spouses, siblings, and children) of each of the Officer and
Director Defendants, any subsidiary or affiliate of Pinnacle, PwC, or the
Underwriter Defendants and the directors and officers of Pinnacle, PwC, the
Underwriter Defendants or their subsidiaries or affiliates, or any entity in
which any excluded person has a controlling interest, and the legal
representatives, heirs, successors in interest or assigns of any excluded
person. Also excluded from the Class are any putative Class Members who exclude
themselves by filing a request for exclusion in accordance with the requirements
set forth in the Notice. All persons excluded from the Class pursuant to this
paragraph are referred to as "Excluded Persons."
(g) "Class Period" means, for the purposes of the Settlement only, the
period of time from June 29, 1999 through and including August 14, 2001.
(h) "Confirmation Order" has the meaning given that term in paragraph
H of the recitals hereof.
(i) "Confirmatory Discovery" means any and all documents, transcripts,
or other information provided by any Defendant to Plaintiffs' Co-Lead Counsel
pursuant to the terms of the parties' Memorandum of Understanding dated as of
May 16, 2002.
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(j) "Defendants" means Pinnacle, the Officer and Director Defendants,
the Underwriter Defendants, and PwC.
(k) "Defendants' Counsel" means the law firm of Holland & Knight, LLP
("Holland & Knight"), for Defendant Pinnacle, the law firm of Akerman Senterfitt
& Xxxxxx, P.A., for Officer and Director Defendants Xxxxxx Xxxxxx, Xxxxxx Xxx,
Xxxxx X'Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx, and Xxxxx Xxxxxxx, the
law firm of Xxxxx & Xxxxxxx for Officer and Director Defendant Xxxxxxx Xxxx, the
law firm of Xxxxx Xxxxxxx LLP for the Underwriter Defendants, and the law firm
of Xxxxxx, Xxxxxx & Xxxxxxxxx for Defendant PwC.
(l) "Escrow Agent" shall have the definition given that term in
paragraph 4(a) hereof.
(m) "Effective Date" means the date upon which the Settlement
contemplated by this Stipulation shall become effective, as set forth in
paragraph 23 below.
(n) "Excluded Persons" shall have the definition given that term in
paragraph 1(f) hereof.
(o) "Genesis" shall have the definition given that term in paragraph
1(r) hereof.
(p) "Gross Settlement Fund" shall have the definition given that term
in paragraph 4(d) hereof.
(q) "Individual Defendants" means Xxxxxx Xxxxxx, Xxxxxx Xxx, and
Xxxxxxx Xxxx.
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(r) "Insurer" means Genesis Insurance Company ("Genesis"), the
directors and officers liability insurance carrier for Pinnacle and the Officer
and Director Defendants.
(s) "Inter-Defendant Claims" means any and all claims, demands,
rights, causes of action or liabilities, of every nature and description
whatsoever, whether based in law or equity, on federal, state, local, statutory
or common law, or any other law, rule or regulation, including both known claims
and Unknown Claims, that have been or could have been asserted, directly,
indirectly, representatively or in any other capacity, in any forum by any
Inter-Defendant Released Party against any other Inter-Defendant Released Party,
which arise out of, or relate in any way, directly or indirectly, to, the
allegations, transactions, facts, events, matters, occurrences, acts,
representations or omissions involved in, set forth in, referred to, or that
relate to Pinnacle and that could have been asserted in this Securities Action,
including without limitation, claims for negligence, gross negligence, breach of
duty of care, breach of duty of loyalty, breach of duty of candor, fraud,
negligent misrepresentation, and breach of fiduciary duty. "Inter-Defendant
Claims" does not mean and shall not include claims (1) by and between the
Officer and Director Defendants and Pinnacle concerning any SEC investigation,
claims unrelated to this Securities Action, and defense costs relating to this
Securities Action; and (2) by Pinnacle or the Officer and Director Defendants
against Genesis.
(t) "Inter-Defendant Released Parties" means Defendants, their
affiliates, representatives, shareholders, creditors, partners, principals,
officers, directors, employees, professional advisors, attorneys, agents,
successors in interest, including but not limited to a trustee appointed in a
chapter 7 or 11 proceeding.
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(u) "January 18, 2000 Offering" means the offer and sale by Pinnacle
of shares of Pinnacle Common Stock pursuant to a registration statement, number
333-94049, filed under the Securities Act of 1933 and declared effective on
January 18, 2000, as amended by a registration statement, number 333-94931,
filed under the Securities Act of 1933 and pursuant to Rule 462(b) thereunder.
(v) "Notice" means the Notice of Pendency of Class Action, Hearing On
Proposed Settlement and Attorneys' Fee Petition and Right to Share in Settlement
Fund, which is to be sent to members of the Class substantially in the form
attached hereto as Exhibit 2 to Exhibit A.
(w) "Notice and Administration Account" has the meaning given that
term in paragraph 4(e) hereof.
(x) "Officer and Director Defendants" means defendants Xxxxxx Xxxxxx,
Xxxxxx Xxx, Xxxxxxx Xxxx, Xxxxx X'Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxx, and Xxxxx Xxxxxxx.
(y) "Order and Final Judgment" means the proposed order to be entered
approving the Settlement substantially in the form attached hereto as Exhibit B.
(z) "Plaintiffs' Counsel" means Plaintiffs' Co-Lead Counsel and all
plaintiffs' counsel listed at the end of this Stipulation.
(aa) "Plaintiffs' Co-Lead Counsel" means the law firms of Xxxxxxx
Xxxxx Xxxxxxx Xxxxx & Xxxxxx LLP ("Xxxxxxx Xxxxx"), and Schiffrin & Barroway,
LLP.
(bb) "Plan" shall have the definition given that term in paragraph H
of the recitals hereof.
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(cc) "Preliminary Approval Order" means the proposed order
preliminarily approving the Settlement and directing notice thereof to the Class
substantially in the form attached hereto as Exhibit A.
(dd) "Proof of Claim and Release" means the proposed proof of claim
and release to be executed by Class Members substantially in the form attached
hereto as Exhibit 1 to Exhibit A.
(ee) "Publication Notice" means the summary notice of proposed
Settlement and hearing for publication substantially in the form attached hereto
as Exhibit 3 to Exhibit A.
(ff) "PwC" means defendant PricewaterhouseCoopers LLP.
(gg) "Released Parties" means Defendants, their past or present
affiliates, subsidiaries, parents, successors and predecessors, shareholders,
creditors, partners, principals, officers, directors, agents, employees,
insurers, reinsurers, professional advisors, attorneys, auditors, accountants
and any person, firm, trust, corporation, officer, director or other individual
or entity in which any Defendant has a controlling interest or which is related
to or affiliated with any of the Defendants, and the legal representatives,
heirs, successors in interest or assigns of the Defendants.
(hh) "Section 11 Sub-Class" means, for the purposes of this Settlement
only, all persons who acquired Pinnacle common stock pursuant to or traceable to
the January 18, 2000 Offering. Excluded from the Section 11 Sub-Class are all
persons excluded from the Class, as set forth in paragraph 1(e) hereof.
(ii) "Settled Claims" means any and all claims, demands, rights,
causes of action or liabilities, of every nature and description whatsoever,
whether based in law or
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equity, on federal, state, local, statutory or common law, or any other law,
rule or regulation, including both known claims and Unknown Claims, that have
been or could have been asserted in any forum by Class Members, or any of them,
or the successors or assigns of any of them, whether directly, indirectly,
representatively or in any other capacity, against any of the Released Parties,
which arise out of, or relate in any way, directly or indirectly, to the
allegations, transactions, facts, events, matters, occurrences, acts,
representations or omissions involved in, set forth in, referred to, or that
could have been asserted in this Securities Action, including without
limitation, claims for negligence, gross negligence, breach of duty of care,
breach of duty of loyalty, breach of duty of candor, fraud, negligent
misrepresentation, and breach of fiduciary duty, arising out of, based upon or
related in any way to the purchase or acquisition of Pinnacle securities by any
Class Member during the Class Period or in the January 18, 2000 Offering.
(jj) "Settled Defendants' Claims" means any and all claims, rights or
causes of action or liabilities whatsoever, whether based on federal, state,
local, statutory or common law or any other law, rule or regulation, including
both known claims and Unknown Claims, that have been or could have been asserted
in the Action or any forum by the Defendants or any of them or the successors or
assigns of any of them against any of the Plaintiffs, Class Members or their
attorneys, which arise out of or relate in any way to the institution,
prosecution, or settlement of the Action except claims relating to the
enforcement of the settlement of the Action.
(kk) "Settlement" means the settlement contemplated by this
Stipulation.
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(ll) "Settlement Fairness Hearing" means the hearing contemplated by
paragraph 4 of the Preliminary Order in Connection with Settlement Proceedings,
attached hereto as Exhibit A.
(mm) "Taxes" shall have the definition given that term in paragraph
5(b) hereof.
(nn) "Termination Notice" shall have the definition given that term in
paragraph 24 hereof.
(oo) "Underwriter Defendants" means Deutsche Bank Securities, Inc.
(originally sued as "Deutsche Bank Xxxx Xxxxx"), Xxxxxxx Xxxxx & Co., Xxxxxxx
Xxxxx & Company, Xxxxxxx Xxxxx & Associates, Inc., Xxxxxxx Xxxxx Xxxxxx, and
Banc of America Securities LLC.
(pp) "Unknown Claims" means any and all Settled Claims, Settled
Defendants' Claims, and Inter-Defendant Claims released pursuant to this
Stipulation that any releasing party does not know or suspect to exist in his,
her, or its favor at the time of the release, which, if known by him, her, or it
might have affected his, her or its decision(s) with respect to the Stipulation.
With respect to any and all claims released pursuant to this Stipulation, the
parties hereto stipulate and agree that upon the Effective Date, the releasing
party(ies) shall expressly, and each Class Member shall be deemed to have, and
by operation of the Order and Final Judgment shall have, expressly waived any
and all provisions, rights, and benefits conferred by any law of any state or
territory of the United States, or principle of common law, which is similar,
comparable, or equivalent to Cal. Civ. Code Section 1542, which provides:
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A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
Plaintiffs and Defendants acknowledge, and Class Members by operation of law
shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in
the definition of claims released pursuant to this Stipulation was separately
bargained for and was a material element of this Settlement.
SCOPE AND EFFECT OF SETTLEMENT
2. As set forth in the Order and Final Judgment, the obligations incurred
pursuant to this Stipulation shall be in full and final disposition of the
Action and any and all Settled Claims as against all Released Parties, any and
all Inter-Defendant Claims as against all Inter-Defendant Released Parties, and
any and all Settled Defendants' Claims.
3. (a) The parties agree to entry of an Order and Final Judgment providing
that Plaintiffs and members of the Class on behalf of themselves, their heirs,
executors, administrators, successors and assigns shall, with respect to each
and every Settled Claim, release and forever discharge, and shall forever be
enjoined from prosecuting all Settled Claims, and shall covenant to refrain from
instituting, commencing or prosecuting either directly, indirectly,
representatively, or in any other capacity, all Barred Claims against any of the
Released Parties, whether or not such Class Member executes and delivers the
Proof of Claim and Release, or otherwise shares in the Gross Settlement Fund.
(b) The parties agree to entry of an Order and Final Judgment providing
that each of the Defendants, on behalf of themselves and the Released Parties,
shall release and forever discharge each and every of the Settled Defendants'
Claims, and shall forever be enjoined from prosecuting the Settled Defendants'
Claims.
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(c) The parties agree to entry of an Order and Final Judgment providing
that each of the Inter-Defendant Released Parties shall release and forever
discharge each and every of the Inter-Defendant Claims, and shall forever be
enjoined from prosecuting the Inter-Defendant Claims as against any of the other
Inter-Defendant Released Parties.
(d) The parties agree to entry of an Order and Final Judgment providing
that to the full extent provided by Section 21D(f)(7) of the Securities Exchange
Act of 1934, 15 U.S.C. 78u-4(f)(7), and the common law of the U.S. Court of
Appeals for the Eleventh Circuit, all claims, including, but not limited to,
claims for contribution, or equitable indemnification against any party or third
person, including but not limited to, any trustee appointed in a Chapter 7 or 11
bankruptcy proceeding, related, directly or indirectly, to the facts of this
action shall be barred; provided, however, that the claims excluded from the
definition of Inter-Defendant Claims in the last sentence of paragraph 1(s)
hereof shall not be barred.
(e) The parties shall move the Court to enter an agreed protective
order governing the confidentiality of all Confirmatory Discovery.
(f) The parties shall move the Court to convene the Settlement Fairness
Hearing not sooner than 70 days after entry of the Preliminary Approval Order.
(g) Pinnacle shall use its best efforts to obtain releases by certain
creditor and equity holders of Pinnacle, the Officer and Director Defendants,
and PwC, in substantially similar form as that proposed in Pinnacle's Plan of
Reorganization at Article XVI(I), a copy of which is attached to the parties'
Memorandum of Understanding dated as of May 16, 2002. The Confirmation Order
specifically approves the releases contained in Article XVI(I) of the Plan.
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THE SETTLEMENT CONSIDERATION
4. (a) Defendant Pinnacle, and the Officer and Director Defendants have
caused Xxxxxxxx's directors and officers liability insurance carrier, Genesis
Insurance Company, to pay, to Plaintiffs and the Class, $8,200,000 (the "Genesis
Cash Settlement Amount") into a joint interest-bearing escrow account (the
"Joint Escrow Account") under the control of Xxxxxxx Xxxxx and Xxxxxxx & Xxxxxx
as escrow agents (each referred to as "Escrow Agent," and collectively, "Escrow
Agents"). It is understood that, of such $8.2 million payment, $4.1 million
shall be deemed to have been made on behalf of Pinnacle, and $4.1 million shall
be deemed to have been made on behalf of the Officer and Director Defendants.
(b) PwC has paid $2,600,000 (the "PwC Cash Settlement Amount") into the
Joint Escrow Account on behalf of Plaintiffs and the Class.
(c) The Underwriter Defendants have paid $200,000 (the "Underwriter Cash
Settlement Amount") into the Joint Escrow Account on behalf of Plaintiffs and
the Class.
(d) The Genesis Cash Settlement Amount, the PwC Cash Settlement Amount, the
Underwriter Cash Settlement Amount, and any interest earned thereon shall be the
"Gross Settlement Fund."
(e) Upon satisfaction of the conditions set forth in paragraphs 23(a) and
23(b) hereof, $100,000 of the Gross Settlement Fund shall be transferred from
the Joint Escrow Account into a separate money market account with a U.S. bank
under the control of Plaintiffs' Co-Lead Counsel (the "Notice and Administration
Account") to be used solely for paying the cost of notice to the Class and the
administration of the claims submitted pursuant to the Order and Final Judgment
Approving Settlement to be entered by the District Court.
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Only the unused portion, if any, of the foregoing administration and costs fund
shall be refundable to the Joint Escrow Account. In the event that the costs of
notice to the Class and the administration of claims exceed $100,000, Plaintiffs
and the Class shall be solely responsible for such excess costs.
5. The Gross Settlement Fund, net of any Taxes (as defined below) on the
income thereof, shall be used to pay (i) the attorneys' fee and expense award
referred to in paragraph 8 hereof, and (ii) any remaining administration
expenses referred to in paragraph 9 hereof. The balance of the Gross Settlement
Fund after the above payments shall be the Net Settlement Fund which shall be
distributed to the Authorized Claimants as provided in paragraphs 10 to 12
hereof. All funds held by the Escrow Agent(s) shall be deemed to be in the
custody of the Court and shall remain subject to the jurisdiction of the Court
until such time as the funds shall be distributed or returned to the persons
paying the same pursuant to this Stipulation and/or further order of the Court.
The Escrow Agent(s) shall invest any funds in excess of $100,000 in short term
United States Treasury Securities or securities backed by the full faith and
credit of the United States government or fully insured by the U.S. government
or an agency thereof, and shall collect and reinvest all interest accrued
thereon. Any funds held in escrow in an amount of less than $100,000 may be held
in an interest bearing bank account insured by the FDIC. The parties hereto
agree that the Gross Settlement Fund is intended to be a Qualified Settlement
Fund within the meaning of Treasury Regulation ss. 1.468B-1 and that Xxxxxxx
Xxxxx, as administrator of the Gross Settlement Fund within the meaning of
Treasury Regulation ss. 1.468B-2(k)(3), shall be responsible for filing tax
returns for the Gross Settlement Fund and paying from the Gross Settlement Fund
any Taxes owed with respect to the Gross Settlement Fund. Counsel for
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Defendants agree to provide promptly to the Escrow Agent(s) the statement
described in Treasury Regulation ss. 1.468B-3(e). After the Effective Date,
Xxxxxxx & Knight shall resign as Escrow Agent and administrator and Xxxxxxx
Xxxxx shall act as sole Escrow Agent and administrator, and Holland & Knight
shall have no further responsibility for any of the matters discussed in this
paragraph 5.
(b) All (i) taxes on the income of the Gross Settlement Fund and (ii)
expenses and costs incurred in connection with the taxation of the Gross
Settlement Fund (including, without limitation, expenses of tax attorneys and
accountants) (collectively "Taxes") shall be paid out of the Gross Settlement
Fund, shall be considered to be a cost of administration of the settlement and
shall be timely paid by the Escrow Agent(s) without prior Order of the Court. In
all events Defendants and their counsel shall have no liability or
responsibility for the Taxes. The Gross Settlement Fund shall indemnify and hold
each of the Defendants and Defendants' counsel harmless for Taxes (including,
without limitation, Taxes payable by reason of any such indemnification).
Further, Taxes shall be treated as, and considered to be, a cost of
administration of the Gross Settlement Fund and shall be timely paid by the
Escrow Agent(s) out of the Gross Settlement Fund without prior order from the
Court and 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 (as well as any amounts that may be required to be
withheld under Treas. Reg. Sec. 1.468B-2(1)(2)); neither Defendants nor their
counsel are responsible nor shall they have any liability therefor.
ADMINISTRATION
6. The Claims Administrator shall administer the Settlement under
Plaintiffs' Co-Lead Counsel's supervision and subject to the jurisdiction of the
Court. Except as stated
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in paragraph 14 hereof, Defendants shall have no responsibility for the
administration of the Settlement and shall have no liability to the Class in
connection with such administration. Defendants' Counsel shall cooperate in the
administration of the Settlement to the extent reasonably necessary to
effectuate its terms. Pinnacle shall provide without charge all information from
Xxxxxxxx's transfer records concerning the identity of Class Members and their
transactions.
7. Without further approval from the Defendants or the Court, Plaintiffs'
Co-Lead Counsel may pay from the Notice and Administration Account the
reasonable costs and expenses associated with the administration of the
Settlement, including without limitation, the costs of identifying members of
the Class and effecting mail notice and Publication Notice. Such amounts shall
include, without limitation, the actual costs of publication, printing and
mailing the Notice, reimbursements to nominee owners for forwarding notice to
their beneficial owners, and the administrative expenses incurred and fees
charged by the Claims Administrator in connection with providing notice and
processing the submitted claims.
ATTORNEYS' FEES AND EXPENSES
8. Plaintiffs' Counsel will apply to the Court for an award from the Gross
Settlement Fund of attorneys' fees not to exceed one-third (33?%) of the Gross
Settlement Fund and reimbursement of expenses, plus interest on such expenses at
the same net rate as is earned by the Gross Settlement Fund from the date of
funding to the date of payment. Such attorneys' fees, expenses, and interest as
are awarded by the Court shall be payable from the Gross Settlement Fund to
Plaintiffs' Counsel upon the Effective Date, subject to Plaintiffs' Counsel's
obligation to make appropriate refunds or repayments to the Gross Settlement
Fund plus accrued interest at the same net rate as is earned by the Gross
Settlement Fund, if
19
and when, as a result of any appeal and/or further proceedings on remand, or
successful collateral attack, the fee or cost award is reduced or reversed. The
procedure for and the allowance or disallowance by the Court of any application
by Plaintiffs' Co-Lead Counsel for attorneys' fees and expenses, including the
fees and expenses of experts and consultants, to be paid from the Gross
Settlement Fund, 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 the Settlement, and any order
proceedings relating to any fee and expense application, or any appeal from any
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
Order and Final Judgment. The Released Parties shall have no involvement in, nor
responsibility for, and no liability whatsoever with respect to, the allocation
among Plaintiffs' Counsel, or any other counsel, expert or consultant and/or any
other person who may assert some claim thereto, of any fee and expense award
that the Court may make in this Action.
ADMINISTRATION EXPENSES
9. Plaintiffs' Counsel will apply to the Court, on notice to Defendants'
Counsel, for an order (the "Class Distribution Order") approving the Claims
Administrator's administrative determinations concerning the acceptance and
rejection of the claims submitted herein and approving any fees and expenses not
previously applied for, including the fees and expenses of the Claims
Administrator, and, if the Effective Date has occurred, directing payment of the
Net Settlement Fund to Authorized Claimants.
DISTRIBUTION TO AUTHORIZED CLAIMANTS
10. The Claims Administrator shall determine each Authorized Claimant's pro
rata share of the "Net Settlement Fund" based upon each Authorized Claimant's
Recognized
20
Claim (as defined in the Plan of Allocation described in the Notice annexed
hereto as Exhibit 2 to Exhibit A, or in such other Plan of Allocation as the
Court approves).
11. The Plan of Allocation proposed in the Notice is not a necessary term
of this Stipulation and it is not a condition of this Stipulation that that Plan
of Allocation be approved.
12. Each Authorized Claimant shall be allocated a pro rata share of the Net
Settlement Fund based on his or her Recognized Claim compared to the total
Recognized Claims of all accepted claimants. This is not a claims-made
settlement. The Defendants shall not be entitled to get back any of the
settlement monies once the Settlement becomes final. The Defendants shall have
no involvement in reviewing or challenging claims.
ADMINISTRATION OF THE SETTLEMENT
13. Any member of the Class who does not submit a valid Proof of Claim and
Release will not be entitled to receive any of the proceeds from the Net
Settlement Fund but will otherwise be bound by all of the terms of this
Stipulation and the Settlement, including the terms of the Judgment to be
entered in the Action and the releases provided for herein, and will be barred
from bringing any action against the Released Parties concerning the Settled
Claims as provided herein..
14. Plaintiffs' Co-Lead Counsel shall be responsible for supervising the
administration of the Settlement and disbursement of the Net Settlement Fund by
the Claims Administrator. Except for their obligation to pay the Cash Settlement
Amount, and Xxxxxxxx's obligation to cooperate in the production of information,
without charge to any party, with respect to the identification of Class Members
from Pinnacle's shareholder transfer records, as provided herein, Defendants
shall have no liability, obligation or responsibility for the administration of
the Settlement or disbursement of the Net Settlement
21
Fund. Plaintiffs' Co-Lead Counsel shall have the right, but not the obligation,
to waive what they deem to be formal or technical defects in any Proofs of Claim
submitted in the interests of achieving substantial justice.
15. For purposes of determining the extent, if any, to which a Class Member
shall be entitled to be treated as an "Authorized Claimant", the following
conditions shall apply:
(a) Each Class Member shall be required to submit a Proof of Claim and
Release (see attached Exhibit 1 to Exhibit A), supported by such documents as
are designated therein, including proof of the Claimant's loss, or such other
documents or proof as Plaintiffs' Co-Lead Counsel, in their discretion, may deem
acceptable;
(b) All Proofs of Claim must be submitted by the date specified in the
Notice unless such period is extended by Order of the Court. Any Class Member
who fails to submit a Proof of Claim and Release by such date shall be forever
barred from receiving any payment pursuant to this Stipulation (unless, by Order
of the Court, a later submitted Proof of Claim and Release by such Class Member
is approved), but shall in all other respects be bound by all of the terms of
this Stipulation and the Settlement including the terms of the Judgment to be
entered in the Action and the releases provided for herein, and will be barred
from bringing any action against the Released Parties concerning the Settled
Claims as provided herein. Provided that it is received before the motion for
the Class Distribution Order is filed, a Proof of Claim and Release shall be
deemed to have been submitted when posted, if received with a postmark indicated
on the envelope and if mailed by first-class mail and addressed in accordance
with the instructions thereon. In all other cases, the Proof of Claim and
Release shall be deemed to have been submitted when actually received by the
Claims Administrator;
22
(c) Each Proof of Claim and Release shall be submitted to and reviewed
by the Claims Administrator, under the supervision of Plaintiffs' Co-Lead
Counsel, who shall determine in accordance with this Stipulation the extent, if
any, to which each claim shall be allowed, subject to review by the Court
pursuant to subparagraph (e) below;
(d) Proofs of Claim that do not meet the submission requirements may
be rejected. Prior to rejection of a Proof of Claim and Release, the Claims
Administrator shall communicate with the Claimant in order to remedy the curable
deficiencies in the Proofs of Claim and Releases submitted. The Claims
Administrator, under supervision of Plaintiffs' Co-Lead Counsel, shall notify,
in a timely fashion and in writing, all Claimants whose Proofs of Claim they
propose to reject in whole or in part, setting forth the reasons therefor, and
shall indicate in such notice that the Claimant whose claim is to be rejected
has the right to a review by the Court if the Claimant so desires and complies
with the requirements of subparagraph (e) below;
(e) 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 in subparagraph (d) above,
serve upon the Claims Administrator a notice and statement of reasons indicating
the Claimant's grounds for contesting the rejection along with any supporting
documentation, and requesting a review thereof by the Court. If a dispute
concerning a claim cannot be otherwise resolved, Plaintiffs' Co-Lead Counsel
shall thereafter present the request for review to the Court; and
(f) The administrative determinations of the Claims Administrator
accepting and rejecting claims shall be presented to the Court, on notice to
Defendants' Counsel, for approval by the Court in the Class Distribution Order.
23
16. Each Claimant shall be deemed to have submitted to the jurisdiction of
the Court with respect to the Claimant's claim, and the claim will be subject to
investigation and discovery under the Federal Rules of Civil Procedure, provided
that such investigation and discovery shall be limited to that Xxxxxxxx's status
as a Class Member and the validity and amount of the Claimant's claim. No
discovery shall be allowed on the merits of the Action or Settlement in
connection with processing of the Proofs of Claim.
17. Payment pursuant to this Stipulation shall be deemed final and
conclusive against all Class Members. All Class Members whose claims are not
approved by the Court shall be barred from participating in distributions from
the Net Settlement Fund, but otherwise shall be bound by all of the terms of
this Stipulation and the Settlement, including the terms of the Order and Final
Judgment to be entered in the Action and the releases provided for herein, and
will be barred from bringing any action against the Released Parties concerning
the Settled Claims as provided herein.
18. All proceedings with respect to the administration, processing and
determination of claims described by paragraph 15 of this Stipulation and the
determination of all controversies relating thereto, including disputed
questions of law and fact with respect to the validity of claims, shall be
subject to the jurisdiction of the Court.
19. The Net Settlement Fund shall be distributed to Authorized Claimants by
the Claims Administrator only after the Effective Date and after: (i) all Claims
have been processed, and all Claimants whose Claims have been rejected or
disallowed, in whole or in part, have been notified and provided the opportunity
to be heard concerning such rejection or disallowance; (ii) all objections with
respect to all rejected or disallowed claims have been resolved by the Court,
and all appeals therefrom have been resolved or the time therefor has
24
expired; (iii) all matters with respect to attorneys' fees, costs, and
disbursements have been resolved by the Court, all appeals therefrom have been
resolved or the time therefor has expired; and (iv) all costs of administration
have been paid.
TERMS OF PRELIMINARY APPROVAL ORDER
20. Promptly after this Stipulation has been fully executed, Plaintiffs'
Co-Lead Counsel and Defendants' Counsel jointly shall apply to the Court for
entry of a Preliminary Approval Order, substantially in the form annexed hereto
as Exhibit A. After entry of such order, Plaintiffs' Co-Lead Counsel shall
promptly cause to be published and mailed the Publication Notice and Notice
annexed hereto as Exhibits 3 and 2 to Exhibit A, respectively.
TERMS OF ORDER AND FINAL JUDGMENT
21. If the Settlement contemplated by this Stipulation is approved by the
Court, Plaintiffs' Co-Lead Counsel and Defendants' Counsel jointly shall
promptly request that the Court enter an Order and Final Judgment substantially
in the form annexed hereto as Exhibit B.
SUPPLEMENTAL AGREEMENT
22. Simultaneously herewith, Plaintiffs' Co-Lead Counsel and Defendants'
Counsel are executing a "Supplemental Agreement" setting forth certain
conditions under which this Stipulation may be withdrawn or terminated by
Defendants if potential Class Members who purchased in excess of a certain
number of shares of Pinnacle common stock traded during the Class Period exclude
themselves from the Class. The Supplemental Agreement shall not be filed prior
to the Settlement Fairness Hearing unless a dispute arises as to its terms. In
the event of a withdrawal by any Defendant(s) from this Stipulation pursuant to
the Supplemental Agreement, all other parties shall have the right to withdraw
from this Stipulation during the period beginning five (5) calendar days after
the first such
25
withdrawal and ending twenty (20) calendar days after the first such withdrawal,
in accordance with the terms of the Supplemental Agreement. In the event that
either (a) Plaintiffs' Co-Lead Counsel or (b) all Defendants withdraw from the
Stipulation pursuant to the Supplemental Agreement, and such withdrawals are not
nullified pursuant to the Supplemental Agreement, this Stipulation shall become
null and void and of no further force and effect, except that the provisions of
paragraphs 25 and 26 hereof shall apply. Notwithstanding the foregoing, the
Stipulation shall not become null and void as a result of the election by any
Defendant(s) to exercise his, her, its, or their option to withdraw from the
Stipulation pursuant to the Supplemental Agreement until all conditions set
forth in the Supplemental Agreement have been satisfied. Copies of all requests
for exclusion received, together with copies of all written revocations of
requests for exclusion, shall be delivered to all Defendants' counsel within
three (3) business days of receipt by Plaintiffs' Co-Lead Counsel and in no
event later than twenty-seven (27) business days before the Court conducts a
hearing to approve the Settlement.
EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION
23. The Effective Date of Settlement shall be the date when all the
following shall have occurred:
(a) entry by the United States Bankruptcy Court having jurisdiction over the
bankruptcy of Pinnacle (the "Bankruptcy Court") of a final order approving the
payment by Genesis of the $8.2 million payment referenced in paragraph 4(a)
hereof (the "Bankruptcy Order"), and the expiration of any time for appeal or
review of the Bankruptcy Order, or, if any appeal is filed and not dismissed,
after the Bankruptcy Order is upheld on appeal in all material respects and is
no longer subject to review upon appeal or review by writ of certiorari;
26
(b) entry of the Preliminary Approval Order in all material respects
in the form annexed hereto as Exhibit A;
(c) approval by the Court of the Settlement, following notice to the
Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil
Procedure;
(d) entry by the Court of an Order and Final Judgment, in all material
respects in the form set forth in Exhibit B annexed hereto, and the expiration
of any time for appeal or review of such Order and Final Judgment, or, if any
appeal is filed and not dismissed, after such Order and Final Judgment is upheld
on appeal in all material respects and is no longer subject to review upon
appeal or review by writ of certiorari, or, in the event that the Court enters
an order and final judgment in form other than that provided above ("Alternative
Judgment") and none of the parties hereto elect to terminate this Settlement,
the date that such Alternative Judgment becomes final and no longer subject to
appeal or review.
24. Either (a) Plaintiffs' Co-Lead Counsel, (b) Pinnacle and the Officer
and Director Defendants acting as a group, (c) PwC, or (d) the Underwriter
Defendants acting as a group, shall have the right to terminate the Settlement
and this Stipulation by providing written notice of its or their election to do
so ("Termination Notice") to all other parties hereto within thirty (30) days
after: 1) the refusal by the Bankruptcy Court to enter the Bankruptcy Order in
any material respect; 2) the Court's refusal to enter the Preliminary Approval
Order in any material respect; 3) the Court's refusal to approve this
Stipulation in any material respect; 4) the Court's refusal to enter the Order
and Final Judgment in any material respect; 5) the date upon which the Order and
Final Judgment is modified or reversed in any material respect by the Court of
Appeals or the Supreme Court; or 6) the date upon which an Alternative Judgment
is modified or reversed in any material respect by the
27
Court of Appeals or the Supreme Court. In the event that any party provides a
Termination Notice pursuant to this paragraph, all other parties shall have the
right to withdraw from this Stipulation within 30 calendar days of the first
Termination Notice. In the event that either (x) Plaintiffs' Co-Lead Counsel or
(y) all Defendants withdraw from the Stipulation pursuant to this paragraph,
this Stipulation shall become null and void and of no further force and effect,
except that the provisions of paragraphs 25 and 26 hereof shall apply.
25. Except as otherwise provided herein, in the event the Settlement is
terminated pursuant to paragraphs 22 or 24 hereof, then the parties to this
Stipulation shall be deemed to have reverted to their respective status in the
Action immediately prior to execution of the parties' Memorandum of
Understanding as of May 16, 2002 and, except as otherwise expressly provided,
the parties shall proceed in all respects as if this Stipulation and any related
orders had not been entered, and any portion of the Gross Settlement Fund
previously paid by Defendants, together with any interest earned thereon, less
any Taxes due with respect to such income, and less costs of administration and
notice actually incurred and paid or payable from the Notice and Administration
Account pursuant to paragraph 4(e) hereof, shall be returned directly to the
persons paying the same in proportion to the amounts paid within 15 business
days of termination of the settlement.
NO ADMISSION OF WRONGDOING
26. This Stipulation, whether or not consummated, and any proceedings taken
pursuant to it:
(a) shall not be offered or received against the Defendants as
evidence of or construed as or deemed to be evidence of any presumption,
concession, or admission by any of the Defendants with respect to the truth of
any fact alleged by Plaintiffs or the validity of any claim that has been or
could have been asserted in the Action or in any litigation, or
28
the deficiency of any defense that has been or could have been asserted in the
Action or in any litigation, or of any liability, negligence, fault, or
wrongdoing of the Defendants;
(b) shall not be offered or received against the Defendants as
evidence of a presumption, concession or admission of any fault,
misrepresentation or omission with respect to any statement or written document
approved or made by any Defendant, or against the Plaintiffs and the Class as
evidence of any infirmity in the claims of Plaintiffs and the Class;
(c) shall not be offered or received against the Defendants as
evidence of a presumption, concession or admission that the Class may be
certified;
(d) shall not be offered or received against the Defendants or against
the Plaintiffs or the Class as evidence of a presumption, concession or
admission with respect to any liability, negligence, fault or wrongdoing, or in
any way referred to for any other reason as against any of the parties to this
Stipulation, in any other civil, criminal or administrative action or
proceeding, other than such proceedings as may be necessary to effectuate the
provisions of this Stipulation;
(e) shall not be construed against the Defendants or the Plaintiffs
and the Class as an admission, evidence, or concession that the consideration to
be given hereunder represents the amount which could be or would have been
recovered after trial;
(f) shall not be construed as or received in evidence as an admission,
concession or presumption against Plaintiffs or the Class or any of them that
any of their claims are without merit or that damages recoverable under the
Complaint would not have exceeded the Gross Settlement Fund; and
29
(g) Any Defendant(s) may file the Stipulation and/or the Order and
Final Judgment in any action that may be brought against them in order to
support a defense or counterclaim based on principles of res judicata,
collateral estoppel, release, good faith settlement, judgment bar or reduction
or any other theory of claim preclusion or issue preclusion or similar defense
or counterclaim.
MISCELLANEOUS PROVISIONS
27. All of the exhibits attached hereto are hereby incorporated by
reference as though fully set forth herein.
28. Each Defendant (other than Pinnacle) warrants as to himself, herself or
itself that, as to the payments made by or on behalf of him, her or it, at the
time of such payment that the Defendant made or caused to be made pursuant to
paragraph 4 above, he, she or it was not insolvent nor did nor will the payment
required to be made by or on behalf of him, her or it render such Defendant
insolvent within the meaning of and/or for the purposes of the United States
Bankruptcy Code, including xx.xx. 101 and 547 thereof. This warranty is made by
each such Defendant and not by such Defendant's Counsel.
29. Neither lead plaintiffs nor Plaintiffs' Counsel shall issue any press
release or make, directly or indirectly, any statement to the public at large
that disparages Pinnacle, the Officer and Director Defendants, PwC, or the
Underwriter Defendants. This provision shall not apply to lead plaintiffs' court
filings in support of the proposed Settlement, and shall be of no further force
or effect if the Settlement is terminated pursuant to paragraphs 22 or 24
hereof.
30. If a case is commenced in respect of any Defendant, including Pinnacle
(or any insurer contributing funds to the Cash Settlement Amount on behalf of
any Defendant) under Title 11 of the United States Code (Bankruptcy), or a
trustee, receiver or conservator is
30
appointed under any similar law, and in the event of the entry of a final order
of a court of competent jurisdiction determining the transfer of money to the
Gross Settlement Fund or any portion thereof by or on behalf of such Defendant
to be a preference, voidable transfer, fraudulent transfer or similar
transaction, and any portion thereof is so returned prior to the Effective Date,
and such amount is not promptly deposited to the Gross Settlement Fund by
others, then, at the election of Plaintiffs' Co-Lead Counsel, the parties shall
jointly move the Court to vacate and set aside the releases given and the Order
and Final Judgment entered pursuant to this Stipulation, and the parties shall
be restored to their respective positions in the litigation prior to execution
of the parties' Memorandum of Understanding as of May 16, 2002, and any cash
amounts in the Gross Settlement Fund shall be returned as provided in paragraph
25 above.
31. The parties to this Stipulation intend the Settlement to be a final and
complete resolution of all disputes asserted or which could be asserted by the
Class Members against the Released Parties with respect to the Settled Claims.
Accordingly, Plaintiffs and Defendants agree not to assert in any forum that the
litigation was brought by Plaintiffs or defended by Defendants in bad faith or
without a reasonable basis. The parties hereto shall assert no claims of any
violation of Rule 11 of the Federal Rules of Civil Procedure relating to the
prosecution, defense, or settlement of the Action. The parties agree that the
amount paid and the other terms of the Settlement were negotiated at arm's
length in good faith by the parties, and reflect a settlement that was reached
voluntarily after consultation with experienced legal counsel.
31
32. This Stipulation may not be modified or amended, nor may any of its
provisions be waived except by a writing signed by all parties hereto or their
successors-in-interest.
33. The headings herein are used for the purpose of convenience only and
are not meant to have legal effect.
34. The administration and consummation of the Settlement as embodied in
this Stipulation shall be under the authority of the Court and the Court shall
retain jurisdiction for the purpose of entering orders providing for awards of
attorneys' fees and expenses to Plaintiffs' Counsel and enforcing the terms of
this Stipulation.
35. The waiver by one party of any breach of this Stipulation by any other
party shall not be deemed a waiver of any other prior or subsequent breach of
this Stipulation.
36. This Stipulation and its exhibits, the Supplemental Agreement, the
Escrow Agreement between Xxxxxxx Xxxxx Xxxxxxx Xxxxx & Xxxxxx LLP and Holland &
Knight, LLP, and the Settlement Agreement and Release dated as of June 6, 2002
between Genesis, Pinnacle, and the Officer and Director Defendants constitute
the entire agreement among the parties hereto concerning the Settlement of the
Action, and no representations, warranties, or inducements have been made by any
party hereto concerning this Stipulation and its exhibits and the Supplemental
Agreement other than those contained and memorialized in such documents.
37. This Stipulation may be executed in one or more counterparts. All
executed counterparts and each of them shall be deemed to be one and the same
instrument.
38. This Stipulation shall be binding upon, and inure to the benefit of,
the successors and assigns of the parties hereto.
32
39. The construction, interpretation, operation, effect and validity of
this Stipulation, and all documents necessary to effectuate it, shall be
governed by the internal laws of the State of Florida without regard to
conflicts of laws, except to the extent that federal law requires that federal
law governs.
40. This Stipulation shall not be construed more strictly against one party
than another merely by virtue of the fact that it, or any part of it, may have
been prepared by counsel for one of the parties, it being recognized that it is
the result of arm's-length negotiations between the parties and all parties have
contributed substantially and materially to the preparation of this Stipulation.
41. All counsel and any other person executing this Stipulation and any of
the exhibits hereto, or any related settlement documents, warrant and represent
that they have the 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.
42. Plaintiffs' Co-Lead Counsel and Defendants' Counsel agree to cooperate
fully with one another in seeking Court approval of the Preliminary Approval
Order, the Stipulation and the Settlement, and to promptly agree upon and
execute all such other documentation as may be reasonably required to obtain
final approval by the District Court of the Settlement.
33
DATED: September 19, 2002
XXXXXXX XXXXX XXXXXXX
XXXXX & XXXXXX LLP
By:/s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
R. Xxxxxxx Xxxxxxxx
The Plaza
0000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CO-LEAD COUNSEL FOR PLAINTIFFS
SCHIFFRIN & XXXXXXXX, LLP
By:/s/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
Xxxx X. Xxxxxxx
Three Bala Plaza East, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CO-LEAD COUNSEL FOR PLAINTIFFS
HOLLAND & KNIGHT, LLP
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR DEFENDANT PINNACLE HOLDINGS,
CORP.
By:/s/ Xxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx
Xxxxx X. Xxxxxx
Xxx Xxxxxxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR THE DEFENDANTS XXXXXX XXXXXX,
XXXXXX XXX, XXXXX X'XXXXX, XXXXXX XXXXX,
XXXX XXXXXX, XXXXX XXXXXX, XXXXX XXXXXXX
XXXXX & XXXXXXX
By:/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxxx Point West Tower
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR XXXXXXX X. XXXX
XXXXXX, XXXXXX & XXXXXXXXX
By:/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
0000 X Xxxxxx, X.X.
Washington, D.C. 20037-1420
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR PRICEWATERHOUSECOOPERS LLP
AKERMAN SENTERFITT & XXXXXX, P.A.
By:/s/ Xxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx
Xxxxx X. Xxxxxx
Xxx Xxxxxxxxx Xxxxx Xxxxxx
00xx Xxxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR THE DEFENDANTS XXXXXX XXXXXX,
XXXXXX XXX, XXXXX X'XXXXX, XXXXXX XXXXX,
XXXX XXXXXX, XXXXX XXXXXX, XXXXX
XXXXXXX
XXXXX & XXXXXXX
By:/s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxxx Point West Tower
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR XXXXXXX X. XXXX
XXXXXX, XXXXXX & XXXXXXXXX
By:/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
0000 X Xxxxxx, X.X.
Washington, D.C. 20037-1420
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR PRICEWATERHOUSECOOPERS LLP
XXXXX XXXXXXX LLP
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COUNSEL FOR THE UNDERWRITER DEFENDANTS
- and -
XXXXXXXXX XXXXXXXX XXXXXX &
XXXXXXXXX LLP
Xxxxxxx X. XxXxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
COUNSEL FOR PLAINTIFF LOUISIANA SCHOOL
EMPLOYEES' RETIREMENT SYSTEM
XXXXXX XXXXXX XXXXXX
& XXXXXX, LLP
Xxxxxx X. Xxxxxx, Xx.
Xxxx Xxxxx
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXX HALDENSTEIN XXXXX
XXXXXXX & XXXX LLP
Xxxx Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
LAW OFFICES OF XXXXXXX X. XXXXX,
P.A.
Xxxxxxx X. Xxxxx
The World Trade Center - Baltimore
Suite 0000
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Tel: (000) 000-0000
LAW OFFICES OF XXXX X. XXXXXX
Xxxx X. Xxxxxx
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Tel: (000)000-0000
Fax: (000)000-0000
LAW OFFICES OF XXXXXXX X. XXXXX,
P.C.
Xxxxxxx X. Xxxxx
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
LAW OFFICES OF XXX X. XXXXXXX
Xxx X. Xxxxxxx
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
ADDITIONAL PLAINTIFFS' COUNSEL
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was
furnished by Federal Express Mail this 23rd day of September, 2002, to the
following:
HOLLAND & KNIGHT LLP XXXXX XXXXXXX XXXXXXX
Xxxxx Xxxxxxx & WOLF, LLP
Xxxxxx Xxxxxxxx Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxx X. Xxxxxx
Xxxxx, Xxxxxxx 00000 000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
ATTORNEYS FOR DEFENDANT XXXXXXXX Xxxxx, Xxxxxxx 00000
HOLDINGS, INC.
XXXXX XXXXXXX XXXXXXX
XXXXXXX, XXXXXXXXXX & WOLF, LLP
& XXXXXX, P.A. Xxxxx Xxxxxx, Xx.
Xxxxxxx X. Xxxxxxxx 0000 Xxxxxxxxxx Xxxxxx, X.X
Xxxxx Xxxxxx Xxxxxxxxxx, D.C. 20036-2412
SunTrust International Center
Xxx Xxxxxxxxx 0xx Xxxxxx, 00xx Xxxxx XXXXX XXXXXXX XXXXXXX
Xxxxx, Xxxxxxx 00000-1704 & WOLF, LLP
Xxxxx X. Xxxxxxx
ATTORNEYS FOR DEFENDANTS XXXXXX X. XXX 0000 Xxxxx Xxxxxx
AND XXXXXX XXXXXX, XXXXX X'XXXXX, Baltimore, Maryland 21209-3600
XXXXXX XXXXX, XXXX XXXXXX, XXXXX
XXXXXX AND XXXXX XXXXXXX XXXXX XXXXXXX XXXXXXX
& WOLF, LLP
XXXXX & XXXXXXX Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx 0000 Xxxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxxx Xxxxx 000
Xxxxx 000 - Xxxx Xxxxx Xxxxxx, Xxxxxxxx 00000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
and ATTORNEYS FOR UNDERWRITER DEFENDANTS
XXXXX & XXXXXXX
Xxxxxxx B. Xxxxx XXXXXX, XXXXXX & XXXXXXXXX
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxxx
0000 X Xxxxxx, X.X. 0000 X. Xxxxxx, X.X.
Suite 500 Washington, D.C. 20037-1420
Washington, D.C. 20007
COUNSEL FOR PRICEWATERHOUSECOOPERS
ATTORNEYS FOR DEFENDANT XXXXXXX X. XXXX
--------------------------
X. Xxxxxxx Xxxxxxxx
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
IN RE PINNACLE HOLDINGS CORP. No. 8:01-CV-624-T-27-MSS
SECURITIES LITIGATION
/
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ORDER AND FINAL JUDGMENT
On the 17th day of January, 2003, a hearing having been held before
this Court to determine: (1) whether the terms and conditions of the Stipulation
and Agreement of Settlement filed September 24, 2002, (the "Stipulation") are
fair, reasonable and adequate for the settlement of all claims asserted by the
Class against the Defendants in this Action, including the release of the
Defendants and the Released Parties, and should be approved; (2) whether
judgment should be entered dismissing this Action on the merits and with
prejudice in favor of the Defendants and as against all persons or entities who
are members of the Class herein who have not requested exclusion therefrom; (3)
whether to approve the Plan of Allocation as a fair and reasonable method to
allocate the settlement proceeds among the members of the Class; and (4) whether
and in what amount to award Plaintiffs' Counsel fees and reimbursement of
expenses. The Court having considered all matters submitted to it at the hearing
and otherwise; and it appearing that a notice of the hearing substantially in
the form approved by the Court was mailed to all persons or entities reasonably
identifiable, who purchased or otherwise acquired the common stock of Pinnacle
Holdings Inc. ("Pinnacle") during the period from June 29, 1999 through and
including August 14, 2001 (the "Class Period"), including persons who acquired
Pinnacle common stock pursuant to or traceable to the January 18, 2000 Offering,
except those persons or entities excluded from the definition of the Class, as
shown by the records of Xxxxxxxx's transfer agent, at the respective addresses
set forth in such records, and that a summary notice of the hearing
substantially in the form
34
approved by the Court was published in the October 24, 2002 national edition of
The Wall Street Journal pursuant to the specifications of the Court; and the
Court having considered and determined the fairness and reasonableness of the
award of attorneys' fees and expenses requested; and all capitalized terms used
herein having the meanings as set forth and defined in the Stipulation.
NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
1. The Court has jurisdiction over the subject matter of the Action, the
Plaintiffs, all Class Members, and the Defendants.
2. The Court finds that, for the purposes of the Settlement, the
prerequisites for a class action under Fed. R. Civ. P. 23(a) and (b)(3) have
been satisfied in that: (1) the number of members of both the Class and the
Section 11 Sub-Class are so numerous that joinder of all members thereof is
impracticable; (2) there are questions of law and fact common to the Class, and
there are questions of law and fact common to the Section 11 Sub-Class; (3) the
claims of the named representatives are typical of the claims of the Class they
seek to represent and the claims of the named representative of the Section 11
Sub-Class are typical of the claims of the Class it seeks to represent; (4) the
Plaintiffs will fairly and adequately represent the interests of the Class and
the Section 11 Sub-Class; (5) the questions of law and fact common to the
members of the Class predominate over any questions affecting only individual
members of the Class, and the questions of law and fact common to the members of
the Section 11 Sub-Class predominate over any questions affecting only
individual members of the Section 11 Sub-Class; and (6) a class action is
superior to other available methods for the fair and efficient adjudication of
the controversy, considering (i) the interest of the members of the Class in
individually controlling the prosecution of the separate actions,
2
(ii) the extent and nature of any litigation concerning the controversy already
commenced by members of the Class, (iii) the desirability or undesirability of
continuing the litigation of these claims, and (iv) the difficulties likely to
be encountered in the management of the action.
3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure and for the
purposes of the Settlement, this Court hereby certifies this action as a class
action on behalf of all persons who purchased or otherwise acquired the common
stock of Pinnacle during the Class Period, including persons who acquired
Pinnacle common stock pursuant to or traceable to the January 18, 2000 Offering.
Excluded from the Class are Defendants in this Action, members of the immediate
families (parents, spouses, siblings, and children) of Xxxxxx Xxxxxx ("Xxxxxx"),
Xxxxxx Xxx ("Day"), Xxxxxxx Xxxx ("Card") (together the "Individual Defendants")
or Xxxxx X'Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx, and Xxxxx Xxxxxxx
(collectively with the Individual Defendants, the "Officer and Director
Defendants"), any subsidiary or affiliate of Pinnacle, Deutsche Bank Securities,
Inc. (originally sued as "Deutsche Bank Xxxx Xxxxx"), Xxxxxxx Xxxxx & Co.,
Xxxxxxx Xxxxx & Company, Xxxxxxx Xxxxx & Associates, Inc., Xxxxxxx Xxxxx Xxxxxx,
and Banc of America Securities LLC (collectively, the "Underwriter Defendants")
and PricewaterhouseCoopers LLP ("PwC") and the directors and officers of
Pinnacle, PwC, the Underwriter Defendants or their subsidiaries or affiliates,
or any entity in which any excluded person has a controlling interest, and the
legal representatives, heirs, successors in interest or assigns of any excluded
person. Also excluded from the Class are the persons and/or entities who
requested exclusion from the Class as listed on Exhibit A annexed hereto. For
the purposes of the settlement only, a Sub-Class (the "Section 11 Sub-Class")
is also certified consisting of all
3
persons who acquired Pinnacle common stock pursuant to or traceable to the
January 18, 2000 Offering. Excluded from the Section 11 Sub-Class are all
persons excluded from the Class.
4. Notice of the pendency of this Action as a class action and of the
proposed Settlement was given to all Class Members who could be identified with
reasonable effort. The form and method of notifying the Class of the pendency of
the action as a class action and of the terms and conditions of the proposed
Settlement met the requirements of Rule 23 of the Federal Rules of Civil
Procedure, Section 21D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C.
78u-4(a)(7) as amended by the Private Securities Litigation Reform Act of 1995
(the "PSLRA"), due process, and any other applicable law, constituted the best
notice practicable under the circumstances, and constituted due and sufficient
notice to all persons and entities entitled thereto.(1)
5. The Settlement is approved as fair, reasonable and adequate, and the
parties are directed to consummate the Settlement in accordance with the terms
and provisions of the Stipulation. The Court finds that the Stipulation is fair,
reasonable and adequate as to each of the settling parties, and that the
Stipulation is hereby approved in all respects, and the settling parties are
hereby directed to perform its terms.
6. This Action, which the Court finds was filed by plaintiffs on a good
faith basis in accordance with the PSLRA and Rule 11 of the Federal Rules of
Civil Procedure based
--------
1 Should Xxxxxx X. Xxx, residing at Creek House, Old Fort Bay, P.O. Box
N-7776, Nassau, NP, The Bahamas, ultimately file a proof of claim form
in response to the Deficiency of Claim Form to be sent to him by the
Claims Administrator, it shall be deemed timely by this Court. Only if
the claim is otherwise insufficient, will the claim be denied.
4
upon all publicly available information, is hereby dismissed with prejudice and
without costs, except as provided in the Stipulation, as against the Defendants.
7. Members of the Class and their heirs, executors, administrators,
successors and assigns, are hereby permanently barred and enjoined from
instituting, commencing or prosecuting, either directly or in any other
capacity, any and all claims, demands, rights, causes of action or liabilities,
of every nature and description whatsoever, whether based in law or equity, on
federal, state, local, statutory or common law, or any other law, rule or
regulation, including both known claims and Unknown Claims, that have been or
could have been asserted in any forum by Class Members, or any of them, or the
successors or assigns of any of them, whether directly, indirectly,
representatively or in any other capacity, against any of the Released Parties,
which arise out of, or relate in any way, directly or indirectly, to the
allegations, transactions, facts, events, matters, occurrences, acts,
representations or omissions involved in, set forth in, referred to, or that
could have been asserted in this Action, including without limitation, claims
for negligence, gross negligence, breach of duty of care, breach of duty of
loyalty, breach of duty of candor, fraud, negligent misrepresentation, and
breach of fiduciary duty, arising out of, based upon or related in any way to
the purchase or acquisition of Pinnacle securities by any Class Member during
the Class Period or in the Pinnacle January 18, 2000 Offering (the "Settled
Claims") against Defendants, their past or present affiliates, subsidiaries,
parents, successors and predecessors, shareholders, creditors, partners,
principals, officers, directors, agents, employees, insurers, reinsurers,
professional advisors, attorneys, auditors, accountants and any person, firm,
trust, corporation, officer, director or other individual or entity in which any
Defendant has a controlling interest or which is related to or affiliated with
any of the Defendants, and the legal representatives,
5
heirs, successors in interest or assigns of the Defendants (the "Released
Parties"). The Settled Claims are hereby compromised, settled, released,
discharged and dismissed as against the Released Parties on the merits and with
prejudice by virtue of the proceedings herein and this Order and Final Judgment.
8. The Defendants and the successors and assigns of any of them, are hereby
permanently barred and enjoined from instituting, commencing or prosecuting,
either directly or in any other capacity, any and all claims, rights or causes
of action or liabilities whatsoever, whether based on federal, state, local,
statutory or common law or any other law, rule or regulation, including both
known claims and Unknown Claims, that have been or could have been asserted in
the Action or any forum by the Defendants or any of them or the successors and
assigns of any of them against any of the Plaintiffs, Class Members or their
attorneys, which arise out of or relate in any way to the institution,
prosecution, or settlement of the Action except claims relating to the
enforcement of the settlement of the Action (the "Settled Defendants' Claims")
against any of the Plaintiffs, Class Members or their attorneys. The Settled
Defendants' Claims are hereby compromised, settled, released, discharged and
dismissed on the merits and with prejudice by virtue of the proceedings herein
and this Order and Final Judgment.
9. The Inter-Defendant Released Parties (as defined below) are hereby
permanently barred and enjoined from instituting, commencing or prosecuting,
either directly or in any other capacity, any and all claims, demands, rights,
causes of action or liabilities, of every nature and description whatsoever,
whether based in law or equity, on federal, state, local, statutory or common
law, or any other law, rule or regulation, including both known claims and
Unknown Claims, that have been or could have been asserted, directly,
indirectly,
6
representatively, or in any other capacity, in any forum by any other
Inter-Defendant Released Party against any other Inter-Defendant Released Party,
which arise out of, or relate in any way, directly or indirectly, to, the
allegations, transactions, facts, events, matters, occurrences, acts,
representations or omissions involved in, set forth in, referred to, or that
could have been asserted in this Securities Action, including without
limitation, claims for negligence, gross negligence, breach of duty of care,
breach of duty of loyalty, breach of duty of candor, fraud, negligent
misrepresentation, and breach of fiduciary duty (the "Inter-Defendant Claims").
"Inter-Defendant Released Parties" means any of the Defendants, their
affiliates, representatives, shareholders, creditors, partners, principals,
officers, directors, employees, professional advisors, attorneys, agents,
successors in interest, including but not limited to a trustee appointed in a
chapter 7 or 11 proceeding. "Inter-Defendant Claims" does not include and shall
not include claims (1) by and between the Officer and Director Defendants and
Pinnacle concerning any SEC investigation, claims unrelated to this Securities
Action, and defense costs relating to this Securities Action; and (2) by
Pinnacle or the Officer and Director Defendants against Genesis. The
Inter-Defendant Claims are hereby compromised, settled, released, discharged and
dismissed on the merits and with prejudice by virtue of the proceedings herein
and this Order and Final Judgment.
10. To the full extent provided by Section 21D(f)(7) of the Securities
Exchange Act of 1934, 15 U.S.C. 78u-4(f)(7), and the common law of the U.S.
Court of Appeals for the Eleventh Circuit, the Court hereby bars all claims
including, but not limited to, claims for contribution, or equitable
indemnification against any party or third person, including but not limited to,
any trustee subsequently appointed in a Chapter 7 or 11 bankruptcy proceeding,
related, directly or indirectly, to the facts of this Action. However, this bar
shall not include
7
claims (1) by and between the Officer and Director Defendants and Pinnacle
concerning any SEC investigation, claims unrelated to this Securities Action,
and defense costs relating to this Securities Action; and (2) by Pinnacle or the
Officer and Director Defendants against Genesis.
11. Neither this Order and Final Judgment, the Stipulation, nor any of its
terms and provisions, nor any of the negotiations or proceedings connected with
it, nor any of the documents or statements referred to therein shall be:
(a) offered or received against the Defendants as evidence of or
construed as or deemed to be evidence of any presumption, concession, or
admission by any of the Defendants with respect to the truth of any fact alleged
by Plaintiffs or the validity of any claim that has been or could have been
asserted in the Action or in any litigation, or the deficiency of any defense
that has been or could have been asserted in the Action or in any litigation, or
of any liability, negligence, fault, or wrongdoing of the Defendants;
(b) offered or received against the Defendants as evidence of a
presumption, concession or admission of any fault, misrepresentation or omission
with respect to any statement or written document approved or made by any
Defendant, or against the Plaintiffs and the Class as evidence of any infirmity
in the claims of Plaintiffs and the Class;
(c) offered or received against the Defendants as evidence of a
presumption, concession or admission that the Class may be certified;
(d) offered or received against the Defendants or against the
Plaintiffs or the Class as evidence of a presumption, concession or admission
with respect to any liability, negligence, fault or wrongdoing, or in any way
referred to for any other reason as against any
8
of the parties to the Stipulation, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be
necessary to effectuate the provisions of the Stipulation;
(e) construed against the Defendants or the Plaintiffs and the Class
as an admission, evidence, or concession that the consideration to be given
hereunder represents the amount which could be or would have been recovered
after trial; or
(f) construed as or received in evidence as an admission, concession
or presumption against Plaintiffs or the Class or any of them that any of their
claims are without merit or that damages recoverable under the Complaint would
not have exceeded the Gross Settlement Fund.
12. Any Defendant(s) may file the Stipulation and/or the Order and Final
Judgment in any action that may be brought against them in order to support a
defense or counterclaim based on principles of res judicata, collateral
estoppel, release, good faith settlement, judgment bar or reduction or any other
theory of claim preclusion or issue preclusion or similar defense or
counterclaim.
13. The Plan of Allocation is approved as fair and reasonable, and
Plaintiffs' Counsel and the Claims Administrator are directed to administer the
Stipulation in accordance with its terms and provisions.
14. The Court finds that all parties and their counsel have complied with
each requirement of Rule 11 of the Federal Rules of Civil Procedure as to all
proceedings herein.
15. All funds held by the Escrow Agent(s) shall be deemed and considered to
be in the custody of the Court, and shall remain subject to the jurisdiction of
the Court, until
9
such time as such funds shall be distributed or returned pursuant to the
Stipulation and/or further order of the Court.
16. Exclusive jurisdiction is hereby retained over the parties and the
Class Members for all matters relating to this Action, including the
administration, interpretation, effectuation or enforcement of the Stipulation
and this Order and Final Judgment, and including any application for fees and
expenses incurred in connection with administering and distributing the
settlement proceeds to the members of the Class.
17. Plaintiffs' counsel are hereby awarded $2,750,000, in fees, plus
interest accruing at the same rate as that earned by the Class on the Gross
Settlement Fund from the date of funding through the date of payment. The Court
finds the $2,750,000 fee to be fair and reasonable pursuant to this Court's
review and application of the factors enumerated by the Eleventh Circuit Court
of Appeals in Camden I Condominium Association Inc. x. Xxxxxx, 946 F.2d 768
(11th Cir. 1991). The award of attorneys' fees shall be paid out of the Gross
Settlement Fund in accordance with the Stipulation. The award of attorneys' fees
shall be allocated among Plaintiffs' Counsel in a fashion which, in the opinion
of Plaintiffs' Co-Lead Counsel, fairly compensates each Plaintiffs' counsel for
their respective contributions to the prosecution of this action. Defendants
shall have no responsibility for such allocation, and shall have no liability to
any Plaintiffs' counsel or any other person in connection with the allocation of
attorneys' fees or costs.
18. The Court finds that the retention of Xxxxxxxxxx Xxxxxxx, PC was
warranted and necessary to ensure that the $4.1 million payments from Pinnacle
and the Director Defendants, respectively, would be approved by the United
States Bankruptcy Court for the Southern District of New York, In re Pinnacle
Towers III Inc., et al., Case Nos. 02-12477 and
10
02-12482 through 02-12484 Jointly Administered (the "Bankruptcy Court"), and
that the Co-Lead Counsel is authorized in their discretion to pay this firm out
of the award of Attorneys' fees.
19. The Court finds that the expenses for which Plaintiffs' counsel seeks
reimbursement were reasonable and necessary to the prosecution of this action,
and thus, Plaintiffs' counsel is awarded $271,542.68 in reimbursement of
expenses plus interest on such expenses at the same net rate as is earned by the
Gross Settlement Fund from the date of funding through the date of payment.
20. The Claims Administrator is directed to finalize the administration of
the claims and prepare for distribution of the net settlement funds on or before
March 31, 2003.
21. Without further order of the Court, the parties may agree to reasonable
extensions of time to carry out any of the provisions of the Stipulation.
22. In the event that the Settlement does not become effective or is
terminated in accordance with the terms of the Stipulation, this Judgment shall
be rendered null and void to the extent provided by and in accordance with the
Stipulation and shall be vacated, and in such event, all orders entered and
releases delivered in connection herewith shall be null and void to the extent
provided by and in accordance with the Stipulation.
11
23. There is no just reason for delay in the entry of this Order and Final
Judgment and immediate entry by the Clerk of the Court is expressly directed
pursuant to Rule 54 (b) of the Federal Rules of Civil Procedure.
Dated: Tampa, Florida
February 4, 2003
/s/ XXXXX X. XXXXXXXXXX
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XXXXXXXXX XXXXX X. XXXXXXXXXX
UNITED STATES DISTRICT JUDGE
12
