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"161/NAL1 MILBERG WEISS BERSHAD
HYNES & LERACH LLP
2 WILLIAM S. LERACH 69581)KEITH F. PARK 54275) e?4 6-0
3 600 West Broadway, Suite 1800an Diego, CA 92101 tes)4 Telephone: 619/231-1058 .=619/231-7423 (fax, <26
Lead Counsel for Plaintiffs6
7
8
9
10UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA12
WESTERN DIVISION
14 In re THE DIANA CORPORATION ) Master File No.SECURITIES LITIGATION ) CV-97-3186-R(AJWx)
15This Document Relates To: ) CLASS ACTION
ALL ACTIONS.17
18STIPULATION OF SETTLEMENT
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26 *itAFtwVt .,"k4"
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1 This Stipulation of Settlement (the "Stipuiation u ), dated as
2 of October 5, 1998, is made and entered by and among the following
3 parties (as defined further in Section IV herein) to the above-
4 entitled Litigation: (i) the Representative Plaintiffs (as defined
5 1 below), on behalf of themselves and each of the Settlement Class
r a Members (as defined below), by and through their counsel of record
7 in the Litigation; and (ii) the Defendants (as defined below), by
8 and through their counsel of record in the Litigation (collectively
the Settling Partics n ). The Stipulation is intended by the
10 , Settling Parties to fully, finally and forever resolve, discharge
11 and settle the Released Claims (as defined herein), upon and
12 subject to the terms and conditions hereof.
13 1
14 1. THE LITIGATION
The following actions were commenced in the United States
16 1 District Court for the Central Distri= of California, Western •
17 Division, on and after April 30, 1997:
18 1. Binder, et al. v. Communications Corporation, et al.,Civ. 97-3186-R(AJWx);
192. Tramontano, et al. v. The Diana Corporation, et al.,
20 1 Civ. 97-3503-GHK(VAPx);
21 3. Barcelo v. Diana Corporation, et al.,Civ. 97-3507-WDK(AJWx);
224. Vislockv v. Diana Cornoration, et al.,
23 j Civ. 97-3658-AC(JGx);
24 5. Lowincler v. The Diana Corporation, et al.,Civ. 97-3797-R8WL(SHx);
25 i6. Janowski, et al. v. The Diana Corporation, et al.,
26 1 Civ. 97-3930-RAP(VAPx);1
27 7. :Klein v. The Diana Corporation, et al.,Civ. 97-4282-WDK(RCx);
28
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,, • . . . -
1 8. Valente v. The Diana Corporation, et al.,Civ. 97-4711-RAP(VAPx); and
.z.
9. Zavas, et al. v. The Diana Corporation, et al.,
3 Civ. 978-4813-GHK(CWx).1!
4 1 These actions were consolidated by Order, dated July 23, 1997i
5 1 as ln re Diana Corporation Securities Litigation, Master File No.1
6 ' 97-3186-R(AJWx). These consolidated actions are referred to hereinI
7 as the "Litigation."
8 This is a securities class action on behalf of all Persons,
9 other than Defendants, who purchased or otherwise acquired the
10 common stock of Diana Corporation ("Diana Corp." or the "Company"),
11 between December 6, 1994 and May 2, 1997, inclusive (the
12 "Settlement Class Period". The Litigation is brought under4
13 1 510(b) and 20(a) of the Securities Exchange Act of 1934, and Rule
14 10b-5 promulgated thereunder.
15
16 II. DEFENDANTS' STATEMENT AND DENIALS OF WRONGDOING ANDLIABILITY
17The Defendants have denied and continue to deny each and all
18of the claims and contentions alleged by the Representative
19 IPlaintiffs on behalf of the Settlement Class. Nonetheless, the
20Defendants have concluded that further conduct of the Litigation
21would be protracted and expensive, and that it is desirable that
22the Litigation with respect to the Defendants be fully and finally
23
settled in the manner and upon the terms and conditions set forth24 ,
1 in this Stipulation in order to limit further expense,25
1 inconvenience and distraction, to dispose of the burden of25 111 protracted litigation, and to permit the operation of the27
Defendants' business without further expensive litigation and the28
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1 distraction and diversion of the Defendants' executive personnel
2 with respect to matters at issue in tie Litigation. The Defendants
3 also have taken into account the uncertainty and risks inherent in
4 any litigation, especially in complex cases like this Litigation.
The Defendants have, therefore, determined that entering into this
6 Stipulation is a reasonable business iudgment.
7
III. CLAIMS OF THE REPRESENTATIVE PLAINTIFFS AND EINTEPITS OFSETTLEMENT
9The Representative Plaintiffs believe that the claims asserted
J0in the Liti gation have merit and that the evidence developed to
11date in the Litigation supports the claims asserted. The
12Representative Plaintiffs assert, and believe they would present
i3supporting evidence at trial, that Defendants caused the price of
L4Diana Corp.'s stock to be artificially inflated during the
15Settlement Class Period by the issuance of materially false
16statements and by omitting to state material information concerning
17Diana Corp.'s sales, revenues, profits, products and business, and
18that as a result Representative Plaintiffs and Settlement Class
19Members were injured.
20However, counsel for the Representative Plaintiffs recognize
2122 arid acknowledge the expense and length of continued proceedings
necessary to prosecute the Litigation against the Defendants23
through trial and through. appeals. Counsel for the Representative24
Plaintiffs believe that the settlement set forth in the Stipulation25
confers substantial benefits upon the Settlement Class and20
Settlement Class Members. Based on their evaluation, counsel for27
the Representative Plaintiffs have determined that the settlement28
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set forth in the Stipulation is in the best interest of the
2 Representative Plaintiffs and the Settlement Class.
3
4 IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and
6 among the Representative Plaintiffs (for themselves and the
7 Settlement- Class Members), and the Defendants, by and through their
9 respective counsel or attorneys of record, that, subject to the
9 aPproval of the Court, the Litigation and the Released Claims shall
10 be finally and fully compromised, settled and released, and the
11 Litigation shall be dismissed with prejudice, as to the Settling
Parties, upon and suhject to the terms and conditions of the
Stipulation, as follows:
14 1. Definitions
15 As used in the Stipulation the following terms have the
16 meanings specified below:
17 1.1 'Authorized Claimant" means any Settlement Class Member
18 whose claim for recovery has been allowed pursuant to the terms of
19 ( the Stipulation.
20 1.2 'Claimant means any Settlement Class Member who tiles a
21 Proof of Claim in such form and manner, and within such time, as
22 the Court shall prescribe.
23 1.3 °Claims Administrator" means Gilardi & Co., P.O. Box
24 5109, Larkspur, California 94377-5100.
25 1.4 "Defendants" means Coyote Network Systems, Inc., formerly
26 known as The Diana. Corporation; Coyote Technologies Corporation,
27tormerly known as Sattel Communications Corporation; Coyote
28 Technologies, LLC, formerly known as Sattel Communications L.IC;
-- 4 -
1 Sattel Technologies, Inc.; Richard Y. Fisher; Donald E. Runge;
2 " James J. Fiedler; Daniel Latham; Sydney B. Lilly; R. Scott Miswald;
3 George Weischadle; and Concentric Network. Corporation.
4 1.5 "Effective Date means the first business day following
5 the first date on which all of the events and conditions specified
6 in $8.1. of ....he Stipulation have been met and have occurred.
7 1.5 "FscroT Agent" means Milberg Weiss Bersha• Hynes 6, Lerach
3 LLP.
9 1 1.7 "Final" means: (1) The date of final affirmance on an
10 , aiopeal. from the Judgment, the expiration of the time for a petition
11 .For a writ of certiorari to review the Judgment and, if certiorari
12 be granted, the date of final affirmance of the Judgment following
13 1 review pursuant to that grant; or (ii) the date of final dismissal
of any appeal from the Judgment or the final dismissal of any
15 proceeding on certiorari to review the Judgment; or (iii) it no
16 appeal is filed, the expiration date of the time for the filing or1-? ,o-ci-ng of any appeal from the Court's judgment approving the_
18 Stipulation substantially in the form and content of Exhibit "B"1
19 1 hereto, i.e., thirty 00) days atter entry oL the Judgment or such
20 longer time as may be allowed by Court order extending the time for1
21 appeal. Any proceeding or order, or any appeal or petition for a
22 writ of certiorari pertaining solely . to any plan of allocation
23 h and/or application for attorneys' fees, costs or expenses, shall
24 nut in any way delay or preclude the Judgment from becoming Final.
25 ] 1.8 "Individual Defendants" means Richard Y. Fisher, Donald
26 E. Runge, James J. Fiealer, Daniel Latham, Sydney B. Lilly, R.1
27 1 Scott Miswald, and George Weischadie,
28
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1.9 "Judgment" means the judgment to be rendered by the
2 Court, substantially in the form and content attached hereto as
Exhibit B.
4 1.10 "Parties" means, collectively, each of the Defendants and
5 tbe Representative Plaintiffs on behalf of themselves and the
0 members of the Settlement Class.
7 1.21 "Person" means any natural person, business or legal
8 entity of any form.
9 1.12 "Plaintiffs' Settlement Counsel" means the following
10 counsel for the Representative Plaintiffs in the Litigation:
Milberg Weiss Bershad Hynes & Lerach LLP, William S. Lerach and
12 Keith F. Park, 600 W. Broadway, Suite 1800, San Diego, California
13 92101, Telephone; 619/231-1059.
1.13 "Plan of Allocation" means a plan or formula of
15 allocation of the Settlement Fund which shall be described in the
16 . "Notice of Pendency and Proposed Partial Settlement of Class
17 1 Action" to be sent to Settlement Class Members in connection with
16 the settlement whereby the Settlement Fund shall be distributed to
19 Authorized Claimants after payment of expenses of notice and
20 administration of the settlement, any taxes, penalties or interest
21 or tax preparaLlon fees owed by the Settlement Fund, and such
22 attorneys' fees, costs, expenses and interest as may be awarded by
23 the Court. Any Plan of Allocation is not part of the Stipulation.
24 Responsibility for administration of any Plan of Allocation shall
23 rest solely with Plaintiffs' Settlement Counsel under the
26 supervision of the Court, The Defendants and their counsel shall
have no responsibility or liability tor the structure or
28 administration of any such Plan.
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1 1,14 "Related Parties" means each of a Defendant's past or
present directors, officers, employees, partners, principals,
3 agents, underwriters, controlling shareholders, any entity in which
the Defendant and/or any member(s) of any Defendant's immediate
5 family has or have a controlling interest, attorneys, accountants,
6 banks, investment banks or investment bankers, advisors, personal
7 or legal representatives, insurers, reinsurers, predecessors,
• 8 successors, parents, subsidiaries, divisions, loint ventures,
9 assigns, spouses, heirs, associates, related or affiliated
10 entities, any members of Lheir immediate families, or an y trust of
1 1 which any Defendant is the trustee or settior or which is for the
12 i bene.fit of any Defendant and/or membersY of his family.
13 1.15 "Released Claims" shall collectively mean all claims
14 ir.c:ud*ng "Unknown Claims" as defined in 4!1.24 hereofl, demands,
15 rights, liabilities, damages, expenses, costs, attorneys' fees,
16 actions and causes of action of every nature and description
17 whatsoever, known or unknown, whether in contract, tort, equity or
18 otherwise, whether or not concealed or hidden, asserted or that
19 might have been asserted, including, without limitation, claims for
20 negligence, gross negligence, indemnification, breach of duty of
21 care and/or breach of duty of loyalty, fraud, breach of fiduciary
9 2 duty, or violations of any state or federal statutes, rules or
23 regulations, by any Settlement Class Member against any of :he
24 Released Persons (as defined below) which are based upon, relate to
25 or arise from the purchase or other acquisition of Diana Corp.
common stock hy any Settlement Class Member during the Settlement
27 Class Period, including but not. limited to, the facts,
28 transactions, events, occurrehces, acts, di, sue, staLewents,
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1 omissions or failures to act which were or could have been alleged
2 in the LitiQation or any other forum, based upon, relating to or13 1 arising from the facts which were alleged.f1
4 1 1.16 "Released Persons" means each and all of the Defendantsi5 i and their respective Related Parties.
6 1 1.17 "Representative Plaintiffs" means Frank Tramontano,
7 1 Jeffrey Camobell, Marvin A. Cooper, Lee Kimmel, Grace Mokrzyc)(i and
8 1 Allan Shantz.
'9 1.18 "Representative Plaintiffs' Counsel" means each counseli10 1 who has appeared as counsel for any of the Representativeii
1 .
11 P1 aintiffs in the Litigation.
12 1,19 "Settlement Class" means all persons (except Defendants,
13 members of the immediate family of any Individual Defendant, any
14 entity in which any Defendant has a controlling interest, and the
15 1 legal representatives, heirs, successors or assigns of any such
16 i excluded party) who purchased or otherwise acquired the common
117 i stock of Diana Corp. during the period from December 6, 1994
18 through May 2, 1991, excluding those persons who timely and validlyi19 I request exclusion from the Settlement Class.0
20 1.20 "Settlement Class Member ° or "Member of the Settlement
21 Class" means a Person who falls within the definition of the
22 Settlement Class as set forth in 111.19 of the Stipulation.
23 1.21 "Settlement Class Period" means the period from December1
24 1 6, 1994 through May 2, 1997, inclusive.
25 1 1.22 "Settlement Fund" means:!
26 I (a) The principal amount of Seven. million Twe Hundred
27 and Fifty Thousand Dollars ($7,250,000) in cash, which has been
28 I paid by or on behalf of all of the Defendants except Concentrici1 -8-
1 1 Network Corporation and the princi pal amount. of Seven Hundred Fifty
2 Thousand Dollars (:;.-750,000) which has been paid by or on bellalf of
CcucenLric Network Cororation to the EscTow Agent, plus interest
4 earned or accrued thereon; and
5 1 (b) Two Million Two Hundred and Twenty-Five Thousand
6 1 warrants (the Settlement Warrants") to purchase one share each cf
7 1 the common stock of Coyote Network Systems, Inc. "Coyote")
18 f (formerly known as The Diana Corporation). The Settlement Warrants
9 Phaii bear the following characteristics and shall be issued
10 P pursuant to an agreement substantially in the form set forth in
11 Exhibit "C” hereto:
12 (i) The Warrants shall be valid for a period of
13 three 0) years from the date of their issuance by Coyote;
14 I (ii) Each Warrant shall be exercisable for one share
15 of Coyote stock ac a pri_ce the "Exercise Price") of nine dollars
16 1 in the first year, ten dollars in the second year and eleven
17 1 dollars in the third year;
18 • ( iii) The total number of warrants to he contributed
19 to the Settlement Fund will be adjusted to reflect any comMon stock
20 spiits, common stock dividends, reverse common stock splits,
21 1 recapitalizations, or other similar transactions that occur from
22 1 1 the date of this Stipulation until the time of the distribution of
23 1 the warrants or nine months from the Effective Date whichever is
24 1 earlier such that the percentage of ownership of the equity of
25 j Coyote represented by the warrants, if exercised, and after, giving.
26 effect to such transactions but without giving effect to any other
27 issuance, will remain the same as it is on the date of the
28 St ipulat ion ;
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1 (iv) If Coyote's common stock is listed for trading
2 on the Regular NASDAQ System, Coyote will use its reasonable, best
3 efforts to list the Settlement Warrants on NASDAQ;
4 If (v) Coyote shall ±ssue the Warrants pursuant to an
exemption from the registration requirements of 55 of the
6 Securities Act or' 1933 and shall comply with any applicable blue
7 sky u securities laws, and shall assure that upon issuance, the,
3 , Warrants will be freely tradable without any restriction, other
9 0 than restrictions applicable to persons who may be deemedfl
10 affiliates of Coyote, and will be otherwise fully paid, non-
11 assessable and free from all liens and encumbrances. All costs
12 associated with the issuance, qualification, and registration of
13 the Warrants shall be borne by Coyote;,
, 4 (vi) Five (5) days prior to the scheduled date of
the hearing for final approval of the Settlement_ Coyote shall
15 1 provide Plaintiffs' Settlement Counsel with the written opinion of
17 I outside counsel substantially to the effect that the Warrants have118 been duly authorized by the Company and, when issued and delivered
19 in the manner and on the terms described in the agreement nursuant
20 to which the Warrants will be issued t.,:ne "Warrant Agreement"),
21 d will be valid and binding obligations of Coyote, enforceable in
22 1 accordance with their terms. The opinion to be delivered shall be
23 for the sole use of Plaintiffs' Settlement Counsel in consummating
24 the Settlement and no Person shall have any claim against counsel
25 h based upon such opinion;H
26 (ill) To the extent it has not already occurred as of1
27 the EffeoLive Date, Coyote undertakes to register the shares of
28 1
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. .
common stock issuable upon exercise of the Warrants with the
2 Securities and Exchange Common;
(viii) Upon completion of the claims administration
4 process, Plaintiffs' Settlement Counsel shall promptly provide
Coyote, or its transfer agent with a pa yment list identifying each
6 Warrant recipient and the number of Warrants approved for issuance
to each such person. Coyote shall direct its stock transfer agent
8 to issue and distribute the Warrants within thirty (30) days of
9 receipt of the list to the persons and in the amounts shown on said
10 lict; provided, however, that there shall be no issuance of
11 fractional interests in warrants.
12 1.23 "Diana Corp." or the "Company" means Coyote Network
13 S-y.stems, Inc., formerly known as The Diana Corporation.
1.24 T.Jnknown Claims" means any Released Claims which the
15 Representative Plaintiffs or any Settlement Class Member does not
16 know or suspect to exist in his her or its favor at the time of
17 the release of the Released Persons which, if known by him, her or
13 it, might nave affected his, her or its settlement with and release
19 of the Released Persons, or might have affected his, her or its
20 decision not to object to, or opt out of, this settlement. With
21 respect to any and ail Released Claims, the Parties stipulate and
22 agree that, upon the Effective Date, the Representative Plaintiffs
23 expressly waive and relinquish, and the Settlement Class Members
24 shall be deemed to have, and by operation of the Judgment shall
25 have expressly waived and relinquished, to the fullest extent
26 permitted by law, the provisions, rights, and benefits of 1542 of
the California Civil Code, which provides:
28
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A general release does not extend to claims which_L
2 1 the creditor does not know or suspect to exist in hisf
3 I favor at the time of executing the release, which if
4 known by him must have materially affected his settlement
5 [ with the debtor.
6 The Representative Plaintiffs expressly waive and the Settlement
7 Class Members shall he deemed to waive, and unon the Effective Date
e and by operation of the Judgment shall have waived, any and all
9 , brovisions, rights and benefits conferred by any law of the United
10 States or of any state or territory or the United States, or
i lprinciple of common law, which is similar, comparable or equivalent
12 1 to 51542 of the California Civil Code. The Representative
1-
__D. Plaintiffs or other Settlement Class Members may hereafter discoveri
14 I facts in addition to or different from those which he, she or it1
15 , now knows or believes to be true with resoect to the subject matteri
16 of the Released Claims, but each of them hereby stipulate and agree
17 1 that the Representative Plaintiffs do settle and release, and each1
18 1
S•ttlement Class Member shall be deemed to, upon the Effective Date
19 1 and by operation of the judgment shall have, fully, finall y , and
20 i forever settled and released any and all Released Claims, known or
21 , un i:tnown, suspected or unsuspected, contingent or non-contingent,
22 , whether or not concealed or hidden, which now exist, or heretofore1
23 have existed upon any theory of law or equity now existing or
24 1 coming into existence in the future, including, but not limited to,
_ I2':. , j conduct which is negligent, intentional, with or without malice, or1 126 a breach of any duty, law or rule, without regard to the subsequent
27 discovery or existence of such different or additional facts. The
28 11
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q _1
1 Parties acknowledge that the foregoing waiver was bargained for and
2 i a key element of the settlement of which this release is a part.13
11
1 1.25 "D&O Carriers" means Old Republic Insurance Company and
4 il American Dynasty Surplus Line Insurance Company.
5 1 2. Administration Of The Settlement Fund!i
- [ a. The Escrow Agent
7 2.1 The cash portion of the Settlement Fund has already been
9 transferred to the Escrow Agent.
9 i 7.2 The Escrow Agent shall invest the Settlement Fund in
10 11 . nr struments backed by the full faith and credit of the United
11 f States Government or fully insured by :he United States Government.
12 j or an agency thcreof and shall reinvest the proceeds of theser
13 / instruments as they mature in similar instruments at the current
14 11 market rates.
15 1
1 2.3 The Escrow Agent shall not disburse the Settlement Fund
15 except as provided in this Stipulation, or by an order of the1117 I Court, or with the written agreement of counsel for Defendants and
i18 1 Plaintiffs Settlement Counsel.i1
9.1 2.4 The Escrow Agent may not execute any other transactions
20not expressly authorized by the Stipulation absent further Order of1 121 / the Court.
22 1 2.5 All funds held by the Escrow Agent shall be deemed and
23 I considered to be in custodia legis of the Court, and shall remainl'
24 i subject to the jurisdiction of the Court, until such time as such1
25 1 ffuncs shall be distributed pursuant to the Stipulation and/or
1.1-
26 further order(s) of the Court.1
2/ 1 2.6 Within ten (10) days after the execution of this
28 Stipulation by all Parties, the Escrow Agent may establish a
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v Notice and Administration.7und 1 " and $50,000 may be transferred
2 i from the Settlement Fund to it. The Notice and Administration Fund
3 may be used by Plaintiffs' Settlement Counsel to pay one half the
4 out-of-pocket costs and expenses reasonably and actually incurred
5 in connection with providing notice to the Settlement Class,
6 1 locating Settlement Class Members, soliciting Settlement Class
7 claims, assisting with the filing of claims, administering and
8 distributing the Settlement Fund to the Members of the Settlement
9 Class, processing Proofs of Claim and Releases and paying escrow
10 ' fees and costs, it any, but not including any payments to employees
or agents at Plaintiffs' Settlement Counsel. The Notice
12 1 Administration Fund shall also be invested and. earn interest as
13 I -o,--v'ded for in I12.2 of this Stipulation. The Escrow Agent shall
14 I be obligated to provide such accountings of transactions involving
15 the Settlement Fund and the Notice and Administration Fund as the
16 1 Co=t may require.
17 2.7 On the 8ffective Date, any balance (including interest)
18 then remaining in the Notice and Administration Fund, less expenses
19 I incurred but not yet paid, shall be transferred by the Escrow Agent1
20 1 to be deposited and credited as part of the Settlement Fund, to he
21 applied as set forth in T;5.2 below. Thereafter, Plaintiffs'r
22 Setr:lement Counsel s -nall have the right to use such portions of the
23 Settlement Fund as are, in their exercise of reasonable judgment,
24 necessary to carry out :.he purPoses set forth in (i2.6.
25 b. Taxes
26 2.8 (a) The Parties and the Escrow Agent agree to treat the
27 Settlement Fund as being at all times a n qualified settlement fund"
28 within the meaning of Treas. Reg. 1.468B-1. In addition, the
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,,
i Escrow Agent and, as required, the Defendants contributing any1
2 1 settlement consideration shall jointly and timely make the1
3 1 "relation-back. election" (as defined in :reas. Reg. V1.4.688-1) back114 1 to the earliest permitted date. Such election shall be made in1
5 / compliance with the procedures and requirements contained in such;
6 regulations. It shall be the responsibility of the Escrow Agent to
7 1 timely and properly prepare, and deliver the necessary1a i documentation for signature by all necessary parties, and1
h
9 thereafter to cause the appropriate filing to occur.ii
10 (b) For the purposes of §468 of the Internal Revenue1 1
11 Code of 1986, and Treas. Reg. §1.468B, the "administrator" shall be11
12 1 the Escrow Agent. The Escrow Agent shall timely and properly file113 1 all informational and other tax returns necessary or advisable with
f
14 , respect to the Settlement Fund (including, without limitation, the
15 returns described in Treas. Rea. §1.468B-2(1)). Such returns (as
16 well as the election described in ¶2.8(a)) shall be consistent with1
17 1 this 112.9 and in all events shall reflect that all taxes (including
18 any estimated taxes, interest or penalties) on the income earned by[i19 1 the Settlement Fund shall be paid out of the Settlement Fund as
20 1 provided in 12.8(c) hereof.i
21 (c) Ali (i) taxes (including any estimated taxes.i
22 interest or penalties) arising with respect to the income earned by
23 the Settlement Fund ("Taxes"), and (ii) expenses and costsi
24 reasonably incurred in connection with. the operation and1
25 1 i-lelementation of this . 2,8 (including, without limitation,1
._
26 1 expenses of tax attorneys and/or accountants and mailing and
27 dLstribution costs and expenses relating to filing (or failing to
28 i file) t.be reiurns descrj_bed in this I T. 2,$) ("Tax Expenses"), shall
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I be paid out of the Settlement Fund; in all events the Released
2 Persons shall not have any liability or responsibility for the
i
3 Taxes, the Tax Expenses, or the filing of any tax returns or other
4 . documents with the Internal Revenue Service or any other state or15 . local taxing authority. The Escrow Agent shall indemnify and hold
6 the Released Persons harmless for Taxes and Tax Expenses
7 (including, without limitation, Taxes payable by reason of any such
3 i-demnification). Further, Taxes and Tax Expenses shall be treated
9 as, and considered to be, a cost of administration of the
10 settlement and shall be timely paid by the Escrow Agent out cf the
11 1 Settlement Fund witn•ut prior order from the Court, and the Escrow(k
12 Ac..ent shall bc obligated (notwithstanding anything herein to the
113 1 contrary) to withhold from distribution to Authorized Claimants any1
1 4 tunds necessary to pay such amounts as well as any amounts that
13 ' may be re quired to be withheld under Treas. Reg. §1.4683-2(1) (2));
16 the Released Persons are not responsible and shall have no
1i liabilitv therefor, or for any reporting requirements that mayi
18 i relate thereto. The Parties hereto agree to cooperate with thei15 1 Escrow Agent, each other, and their tax attorneys and accountants
II20 1 to the extent reasonably necessary to carry out the provisions of
21 this 1j2.8.
22 i (-. TerminationI
. 1
23 1 2.9 in the event that this Stipulation is not approved, or is
24 i
termLi nated, canceled, or fails to become effective for any reason,
25 1 the .7.25 million portion of the Settlement Fund contributed by the
26 D&O Carriers (including accrued interest) and the funds deposited
27 in the Notice and Administration Fund (described in ¶2.6 above),
28 1 together with interest and any investment returns, less one half of1
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P
1 the costs actually paid or incurred pursuant to q'2.6 above, but
2 1irrtd to $50,000, and less any Taxes or Tax Expenses paid o-
3 incurred pursuant to ¶2.8 herein, shall be refunded to the D&O
4 Carriers f 11 - • ' 114 68.89% of any amounts inmi ion p as
5 excess of $7.25 million to Old Republic Insurance Company and the
6 remainder tc American Dynasty Surplus Lines Insurance Company. In
no event shall the amount to be refunded to the D&O Carriers be
6 less than S7.2 million. The $750,000 portion of the Settlement,
9 together with interest and any investment return, less any Taxes or
10 1 Tax Expenses shall be refunded to Concentric Network Corporation_
11 3. Notice Order And Settlement Hearing 1
12 t 3.1 Promptly after execution of the Stipulation, the Parties
12 shall submit the Stipulation together with i.ts Exhibits to the
14 n-I -ha l jointly apply for entry of an order (the 'Notice
/ .
a -;
Or6er'), substanLialiy in the form and content of Exhibit 'A"
16 hereto, requestinq certification of the Settlement Class pursuant
17 to Rule 23(b) (3) of the Federal Rules of Civil Procedure,
18 preliminary ap-.-proval of the settiement set forth in the
19 Stipulation, and alDproval for the mailing and publication of a
20 Notice of Pendency and Proposed Settlement of Class Action in1
22 1 substantially the form of Exhibit A-1 hereto.
22 3.2 The Parties shall request that, after notice is given, the
Court hold a hearing (the "Settlement Hearing) and finally approve
24 1 this settlemenL as set forth herein_ At or after the Settlement
25 1 Hearing, Plaintiffs Settlement Counsel also will request :that. the
26 Conrt approve the proposed Plan of Allocation and the Fee ami
27 Exnense Application.
2.6
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4. Releases
2 4.1 Effective upon the Effective Date, the Representative
3 Plaintifts hereby fully, finally and forever release, relinquish
4 . and discharge, and each of the Settlement Class Members shall be
5 . deemed to have, and by operation of the Judgment shall have, fully,
6 finally, and forever released, relinquished and discharged all
7 Released Claims against each and ail of the Released Persons,
8 whether or not such Settlement Class Member executes and delivers
9 the Proof of Claim and Release.
0 4.2 Upon the Effective Date, each of the Defendants shall be
11 deemed to have and by operaLion of the Judgmenr shall have, fully,
12 finally, and forever released, relinquished and discharged the
Representative PlainLiLfs, Lhe Sei:tlement Class Members, and
1 4counsel to the Representative Plaintiffs from all claims (including
13 1rkraowrl Cla:.ms), arising out of, relating to, or in connectIon
16 wit. the institution, prosecution, assertion or resolution of the
17 LitioatHon or the Released Claims.
18 4.3 Upon the Effective Date, the Defendants and the DLO
19 Carriers release, relinquish and discharge, and by operation of the
20 Judgment shall be deemed to have fully and finally released,
21 -,felinquished and discharged, each other from any and all of the
22 , following claims (including Unknown Claims), demands, rights,
liabilities, damages, expenses, costs, attorneys' fees, actions and
24 causes of aczion of every nature and description whatsoever, known
25 or unknown, whether . in contract, tort, equity or otherwise, whether
26 or not concealed or hdden, asserted or t -hat might have been
27 asserted collectively "Claims°):
28
- 18
1 (a) Each Defendant releases, relinquishes and discharges
• each other Defendant and the D&O Carriers, and each DELO Carrier
• releases, relinquishes and discharges each Defendant from any and
4 all Claims arising out of, relating to, or in connection with the
5 J.-Istitution, prosecution, defense or resolution of the Litigation
O or the Released Claims, including but not limited to claims for
7 indemnification and contribution, except that this release does no't
A include a Release of any Claims (i) for any future liability or
9 exbenses arising out of or relating to claims by Persons who
10 exclude themselves from the Settlement Class that would have been
Released Claims but for such exclusion, or (ii) arising under or
12 relating to the November 2 Letter and the january Letter (both
13 defined in 118.6 below).
14 (b) Each Defendant releases and discharges Old Republic.
15 Insurance Comp any from any further Claims under directors &
16 officers insurance policy No. C1JG24530, effective September 20,
1995 to SepterrLer 20, 1997.
18 4.4 Only those Settlement Class Members filing valid and
19 timely Proofs of Claim and Release shall be entitled to receive any
20 distributions from the Settlement Fund, including any warrants.
21 The Proofs of Claim and Release to be executed by the Settlement
22 Class Members shall release all Released Claims against the
23 Released. Persons, and shall be substantially in the form and
24 content of Exhibit "A-2 n hereto. All Settlement Class Members
25 shall be hound by the releases set forth therein, and in this
25 Stipulation, whether or not they submit a valid and timely Proof of
Claim and Release.
28
- 19 -
Administration And Calculation Of Claims,Final Awards And Supervision And Distribution
2 Ot Settlement Fund
5.i Plaintiffs' Settlement Counsel, or their authorized
A agents, acting on behalf of the Settlement Class, and subject to
5 such supervision, direction or approval of the Court as may be
6 required, shall administer and calculate the claims submitted by
7 Settlement Class Members and shall oversee distribution of that
8 portion of the Settlement Fund that is finally awarded by the Court
9 to the Settlement Class Members.
10 5.2 If the Effective Date occurs, the Settlement Fund shall
11 he applied as follows:
12 (a) To pay all unpaid costs and expenses reasonably and
actually incurred in connection with providing Notice to the
14 Settlement Class Members, including locating Settlement Class
15 Members, soliciting Settlement Class claims, assisting with the
16 filing of claims, administering and distributing the Settlement
17 . Fund to the Settlement Class, processing Proofs of Claim and
18 Release and paying escrow fees and costs, if any;
19 (b) to pay Taxes and Tax Expenses;
20 (c) To pay Representative Plaintiffs' Counsel attorneys'
21 fees, expenses and costs, with interest (if awarded) (the "Fee and
22 Expense Award"), it and to the extent allowed by the Court; and
23 To distribute the balance of the Settlement Fund
24 (the Net Settlement Fund") to Authorized Claimants as allowed by
the Stipulation, the Plan of Allocation or the Court.
25 5.3 After the Effective Date and subject to such further
27 iprcvai and further order(s) of the Court as may be required, the
28 Net Settlement Fund shall he distributed to Settlement Class
- 20 -
1 Members who submit valid, timely filed Proofs of Claim and Release
2 ("Authorized Claimants"), subject to and in accordance with the
3 following:
4 (aj Within ninety (90) days after the mailing of the
5 T Notice or such other time as may be set by the Court, each Person
6 claiming to be an Authorized Claimant shall be required to submit
7 to the Claims Administrator a separate completed Proof of Claim and
8 Release as attached to the Notice and substantially in the form and
9 content of Exhibit n A-2" hereto, signed under penalty of perjury
10 and su,oported by such documents as specified in the Proof of Claim
11 and Release and as are reasonably available to the Authorized
12 Claimant.
13 (b) Except as otherwise ordered by the Court, all
14 ; Settlement Class Members who fail to timely submit a valid Proof of
Claim and Release within such period, or such other period as may
1:5 be ordered by the Court, or who have not already done so, shall be
17 , forever barred from receiving any distributions from the Settlement
Fund, bt will in all other respects be subject to and bound by the
provisions of Lhis Stipulation, the Settlement and releases
20 contained herein, and the Judgment.
21 (c) The Net Settlement Fund shall he distributed to the
22 Authorized Claimants in accordance with and subject to the Plan of
23 Allocation to be described in the Notice mailed to Settlement Class
24 Members, The nroposed Plan of Allocation shall not be a part of
25 the Stipulation.
26 5_4 Neither the Defendants, ncr their counsel, nor any of
27 their Related Parties shall have any res ponsibility for or
28 liability whatsoever with respect to: (a) the investment or
- 21 -
1 distribution cf the Settlement Fund; (b) the Plan of Allocation;
2 .o_) the determination or administration of taxes; or (d) any losses
3 incurred in connection with (a), (b) or (c). No Person shall have
4 any claim of any kind against Defendants, or their respective
5 counsel, or Related Parties, with respect to the matters set forth
6 in this paragraph.
1 5.5 No Person shall have any claim against the Representative
8 Plaintiffs or their counsel (including Plaintiffs Settlement
9 Consel), or any claims administrator, or other agent designated by
10 Plaintiffs' Settlement Counsel, based on the distributions
1 1 substantially made in accordance with this Stipulation and the
12 settlement contained herein, the Plan of Allocation or further
13 orders of the Court.
1 4 5.6 :t is understood and agreed by the Parties that any
15 proposed Plan of Allocation of the Net Settlement Fund, including,
16 without limitation, any adjustments to an Authorized Claimant's
17 claim set forth therein, is not a part of this Stipulation and is
to be considered by the Court separately from the Court's
19 consideration of the fairness, reasonableness and adecuacy of the
20 settlement set forth in this Stipulation, and any order or
21 proceedings relating solely to the Plan of Allocation shall not
22 operate to terminate or cancel this Stipulation or affect the
23 finality of the Court's Judgment approving this Stipulation and the
21 settlement set forth herein, including, but not limited to, the
25 release, discharge, and relinquishment of the Released Claims
26 , against the Released Persons, or any other orders entered pursuant
27 to the Stipulation.
28 i
1
- 22 -
1 6. Representative Plaintiffs Counsel'sAttorneys' Fees And Reimbursement Of Expenses
2
6.1 The Representative Plaintiffs or their counsel may submit3
an application or applications (the "Fee and Expense Application")4
for distributions to them from the Settlement Fund for: 'W an5
award of attorneys' fees to 30% of the Settlement Fund plus (ii)
reiffddursement of all reasonable expenses and costs, including the7
reasonable fees of any experts or consultants, incurred in8
connection with prosecliting the Litigation, plus interest (if5
awarded by the Court) on such attorneys' fees, costs and expenses10
at the same rate and for the same periods as earned by the11
Settlement Fund (until paid), as may be awarded by the Court.12
6.2 The cash portion of the attorneys' tees, expenses and13
costs, including the fees of ex p erts and consultants, as awarded by14
the Court (the CO"F and Expense Award";, may be transferred to15
Plaintiffs' Settlement Counsel from the Settlement Fund, within16
five (5) business days after the Court both (i) executes an order17
awarding such fees and expenses and (ii) enters a judgment in18
substantially the form attached as Exhibit B hereto approving the19
settlement. Plaintiffs' Settlement Counsel shall thereafter20
allocate the 7, ee and Ex-oense Award among RepresenLative Plaintiffs'21
Counsel in a manner which Plaintiffs' Settlement Counsel in qood22
faith believe reflects the contributions of such counsel to the23
prosecution and settlement of the Litigation; provided, however,24
that in the event that this Stipulation and the settlement set25
for th herein does not become effective for any reason, or the26
Judgment or the order making the Fee and Expense Award is reversed27
or modified on appeal, and in the event that the Fee and Expense28
- 23 -
1 Award has been paid to any extent, then Representative Plaintiffs'
2 Counsel shall within five (5) business days from the event which
3 precludes the Effective Date from occurring or such reversal or
4 modification, refund to the Settlement Fund the fees, expenses,
5 costs and interest (if any) previouSly paid to them from the
6 Settlement Fund, including accrued interest on any such amount at
7 the average rate earned on the Settlement Fund from the time of
8 withdrawal until the date of refund. Each such Representative
9 Plaintiffs' Counsel's law firm, as a condition of receiving such
10 fees and expenses, on behalf of itself and each partner and/or
11 shareholder of it, agrees that the law firm and its partners and/or
12 shareholders are subject to the j urisdiction of the Court for the
purpose of enforcing this 116.2 of the Stipulation. Without
14 limitation, each such law firm and its partners and/or shareholders
15 agree that the Court may, upon application of Defendants or
16 Plaintiffs' Settlement Counsel, on notice to counsel to the
Representative Plaintiffs, summarily issue orders, including, but
18 not limited to, judgments and attachment orders, and may make
19 appropriate findings of or sanctions for contempt, against them or
20 any of them should such law firm fail timely to repay fees and
21 expenses, plus interest, pursuant to this IN.2, and subject to the
22 further undertakings imposed on Plaintiffs' Settlement Counsel
23 contained in the letter dated February 23, 1999 from Plaintiffs'
24 Settlement Counsel to counsel tor the Diana Corporation (the
25 "February 23, 1999 letter"). The warrant portion of the fees, if
26 any, shall be distributed to Representative Plaintiffs' Counsel at
27 the same time the Settlement Warrants are distributed to Authorized
28 Claimants.
- 24 -
1 6.3 Defendants and their Related Parties shall have no
2 responsibility for, and no liability whatsoever with respect to,
3 any payment to Plaintiffs' Settlement Counsel or any Representative
4 Plaintiffs Counsel from the Settlement Fund.
5 6.4 Neither the Defendants and their Related Parties, nor the
6 D&O Carriers, shall have any responsibility for, or any liability
7 whatsoever with respect to, the allocation of the Fee and Expense
8 , Award among Representative Plaintiffs' Counsel, or any other Person
9 who may assert some claim thereto, or any Fee and Expense Awards
10 1 that the Court may make in Lhis Litigation.
11 6.5 The procedure for and the allowance or disallowance by
12 1 the Court of the Fee and Expense Application are not part of the1
13 1 settlement set forth in thLs Stipulation, and are to be considered
14 by the Court separately from the Court's consideration of the
15 . fairness, reasonableness and adequacy of the settlement set forth
16 ' in this Stpulation. Any order or proceedings relating to the Fee
17 and Expense A ppl .ication, or any appeal from any order relating
thereto, shall not operate to terminate or cancel this Stipulation,
19 or affect or delay the finality of the Judgment approving this
20 Stipulation and the settlement of the Litigation set forth herein.
21 7. Conditions Of Settlement, Effect OfDisapproval, Cancellation Or Termination
22
7.1 The Effective Date of this Stipulation shall be23
conditioned on the occurrence of all of the following events:24
(a) Defendants shall have timely transferred or caused25
to he timely transferred the Settlement Fund to the Escrow. Agent as26
reqlAred in 111.22 above, which the parties acknowledge has already27
oc=rred;28
- 25 -
• 4 (b) The Court shall have entered the Notice Order and
2 certified the Settlement Class, as required by ¶4 above;
(c) The Court shall have entered the Judgment, or a
• j udgment substantially in the form and content of Exhibit °E11;
5 (d) The Judgment shall have become Final, as defined in
3 7 above;
0 .
7 1 ;e) Defendants shall not have exercised the option to
8 terminate the Stipulation and settlement in accordance with the1
9 terms of the Supplemental Agreement described in ¶7.A.
10 7,2 Upon the Effective Date any and all remaining interest or
11 righL of the Defendants to the Settlement Fund shall be absolutely
22 and forever extinguished.
13 7.3 Neither a modification nor a reversal on appeal of any
14 Plan of Allocation or of any amount of attorneys' fees, costs,
expenses and interest awarded by the Court to any ot the
16 Representative Plaintiffs' Counsel shall constitute a condition to
17 tile Effective Date or grounds for cancellation and termination of
18 the Stipulation.
19 7.4 If all of the conditions specified in ¶7.1 are not met
20 , prior to July 1, 2000, then this Stipulation shall be canceled and
21 terminated unless Plaintiffs' Settlement Counsel and counsel for
22 Defendants mutually agree in writing to proceed with this
Stipulation.
24 ' 7.5 Unless otherwise ordered by the Court, in the event this
25 Ztipulation snail terminate, or be canceled, or shall not become
26 effective for any reason, within five (5) business days after
27 written notification of such event is sent by counsel for Coyote or
28 1 PlaThtiffs' Settlement Counsel to the Escrow Agent, the $7.25
-26 -
million Dollar portion of the Settlement Fund (including accrued
2 interest), plus the greater of (i) any amount then remaining in the
3 Notice and Administration Fund and (ii) $25,300 (in either event,
4 including accrued interest), neL of Taxes and Tax Expenses paid or
5 incurred pursuant to 112.7 herein, shall be refunded by the Escrow
6 Agent as follows: $5 million plus 68.89% of any amounts in excess
7 of $7.25 million shall be refunded to Old Republic Insurance
3 Company and the balance shall be returned to American Dynasty
9 Surplus Lines Insurance Company. In such event the D&O Carriers
10 shall be entitled to any tax refund owing to the Settlement Fund.
11 At the request of Detendants or the D&O Carriers' counsel, the
12 Escrow Agent or its designee shall apply for such refund and pay to
13 the D&O Carriers and Concentric their pro rata portion of the
14 proceeds, less the cost of obtaining the tax refund. The $750,000
15 portion of the Settlement, together with interest and any
16 investment return, less any Taxes or Tax Expenses shall be refunded
17 to Concentric Network Corporation.
18 7.6 In the event that this Stipulation is not approved by the
19 Court or the settlement set forth in this Stipulation is terminated
or fails to become effective in accordance with its terms, the
21 Parties shall he restored to their respective positions in the
22 Litigation as of October 6, 1998. In such event, the terms and
provisions of this Stipulation, with the exception of 111,1-1.25,
24 2,3, 2.5, 2.6, 2.8, 2.3, 5.4, 5.5, 6.2, 6,3, 6.4, 7.1-7.8 herein,
25 shall have no further force and effect with respect to the Parties
26 and shall not be used in this Liti gation or in any other proceeding
27 for any purpose, except as provided tor in 111i1.1-1.25, 2.3, 2.5,
28 2.6, 2.9, 2.9, 5.4, 5.5, 6.2, 6.3, 6.4, 7.1-7.8; and any Judgment
- 27 -
1 or order entered by the Court in accordance with the terms of this
2 Stipulation shall be treated as vacated, nunc pro tunc. No order
3 of the Court or modification or reversal on appeal of any order of
4 the Court concerning the Plan of Allocation or the amount of any
5 attorneys' fees, costs, expenses and interest awarded by the Court
6 1
to the Representative Plaintiffs or any of their counsel shall
constitute grounds for cancellation or termination of this
8 Stipulation.
0 7,7 If a case is commenced in respect to any Defendant under
10 Title 11 of the United States Code (Dankruptcy), or a trustee,1
11 receiver or conservator is appointed under any similar law, and in
12 the event of the entry of a finaI order of a court of competent
13 1 jurisdiction determining the transfer of the Settlement Fund, or
14 1 any portion thereof, by or on behalf of such Defendant to be a
15 1 preference, voidable transfer, fraudulent conveyance or similar
16 transaction, then, as to such Defendant only, the releases given
17 and Judgment entered in favor of such Defendant pursuant to this
18 Stipulation shall be null and void if such transfer is returned.
19 7.6 If prior to the Settlement Hearing, Persons who otherwise
20 would be Members of the Settlement Class have filed with the Court
21 valid and timely requests for exclusion ("Requests for Exclusion)
. 22 from the Settlement Class in accordance with the provisions of the
23 Notice Order and the Notice given pursuant thereto or it the Court
)4 permits any Persons who have filed untimely requests for exclusion
25 to exclude themselves from the Settlement Class, and such Persons
26 in the aggregate purchased a number of shares during the Settlement
27 Class Period in an amount greater than the amount specified in a
28 separate Supplemental Agreement between the Parties (the
- 28 -
"Supplemental Agreement n ), Defendants, in accordance with the terms
2 of the Supplemental Agreement, in their sole and absolute
3 discretion, shall have the option to terminate this Stipulation by
4 providing notice to Plaintiffs' Set:Element Counsel at or prior to
5 the hearing at which the Out will consider final approval .of the
6 Settlement or within five business days after the allowance of an
7 121.1Limely request for exclusion, whichever is later. Copies of all
2 Requests for 2xclusion received, together with copies of all
9 written revocations of Requests for Exclusion, shall be delivered
10 to counsel for Defendants within two (2) days of receipt thereof by
11 Plaintiffs' Settlement Counsel.
12 8_ Miscellaneous Provisions
13 8.1 The Parties (a) acknowledge that it is their intent to
14 consummate this agreement; and (b) agree to cooperate to the extent
15 necessary to effectuate and implement all terms and conditions of
16 this Stipulation and to exercise their best efforts to accomplish
17 the foregoing terms and conditions of the Stioulation. •
18 8.2 Each D&O Carrier and Defendant warrants as to himself or
19 itself that, at the time any of the payments provided for herein
20 were made, on behalf cf himself or itself, he or it was not
21 insolvent and the payment did not render him or it insolvent. This
22 representation is made by each D&O Carrier and Defendant as to
23 himself or itself and only as to payments (if an y) that he or it
24 made and is not made by counsel for the D&O Carriers and
25 Defendants.
26 3.3 Defendanzs agree that the amount of the Settlement Fund
27 reflects a good faith settlement of Representative PlainLiffs and
28 the Settlement Class' claims, reached voluntarily after
- 29 -
consultation with experienced legal counsel. Neither this
2 Stipulation nor the settlement contained therein, nor any act
performed or document executed pursuant to or in furtherance of
4 this Stipulation or the settlement: (i) is or may be deemed to he
5 or may be used as an admission of, or evidence of, the validity of
6 any Released Claim, or of any wrongdoing or liability of the
7 Released Persons; or (ii) is or may he deemed to he or may be used
8 as an admission of, or evidence of, any fault or omission of any of
9 the Released Persons in any civil, criminal or administrative
10 proceeding in any court, administrative agency or other tribunal.
11 Released Persons may file this Stipulation and/or the Judgment from
12 this action in any other action that may be brought against them in
13 1 order to support a defense or counterclaim based on principles of
1/i res Hudicata, collateral estoppel, release, good faith settlement,
15 judgment bar or reduction cr any theory of claim preclusion or
16 issue preclusion or similar defense or counterclaim. The Judgment
.17 shal- contain a statement that the Settling Parties agree that,
18 during the course of this Litigation, all Settling Parties and
19 their respective counsel complied with the requirements of Rule 11
20 of the 7ederel Rules of Civil Procedure.
21 8.4 Al] of the Exhhits to this Stipulation are material and
22 integral parts hereof and are fully incorporated herein by this
23 reference.
24 8.5 This Stipulation may he amended or modified only by a
25 written instrument signed by or on behalf of all Parties or their
26 successors—in-interest.
27 8.6 This Sti pulation, the exhibits attached hereto and the
28 Supplemental Agreement constitute the entire agreement among the
- 30 -
Parties hereto and no representations, warranties or inducements
2 have been made to any party concerning this Stipulation, its
3 exhibits or the Supplemental Agreement other than the
4 representations, warranties and covenants contained and
memorialized in such doouments, except for the agreements and
6 promises contained in a letter agreement dated November 2, 1998,
7 executed by counsel for the Defendants except Sattel Technologies,
8 Inc., and counsel for the D&O Carriers (the "November 2 Letter"),
9 a letter aqreement dated January 31, 1999 executed by counsel for
10 Defendants Fisher, Runge and Coyote and the D&O Carriers (the
11 "January 31, 1999 letter") and the February 23, 1999 letter.
12 Except as otherwise provided herein., or in the November 2 Letter,
13 each. loarty shall bear its own costs.
14 8.7 Plaintiffs' Settlement Counsel, on behalf of the
15 Settlement Class, are expressly authorized by the Representative
16 PlaintLffs to take all appropriate action required or permitted to
17 be taken by the Settlement Class pursuant to this Stipulation to
18 effectuate its terms and also are expressly authorized to enter
19 into any modifications or amendments to this Stipulation on behalf
20 of the Settlement Class which they deem appropriate.
21 8.8 Each counsel or other Person executing this Stipulation
22 or any of its exhibits on behalf of any party hereto hereby
23 warrants that such person has the full authority to do so. Ali
24 orders and agreements entered durina the course of the Litigation
25 relative to the confidentiality of information shall survive this
26 Sti:culation.
27 8.9 This Stipulation may be executed by facsimile and in one
28 or more counterparts. All executed counterparts and each of them
- 31 -
shall be deemed to be one and the same instrument. Counsel for the
Parties to this Stibulation shall exchange among themselves
3 original signed counterparts and a complete set of original
4 executed counterparts shall he filed with the Court.
5 8.10 This Stipulation shall be binding upon, and inure to the
6 benefit of, the successors and assigns of the Parties hereto.
7 8.11 The Court shall retain jurisdiction with respect to
8 imniementati•n and enforcement of the terms of this Stipulation,
9 ancl all Parties hereto and their counsel submit to the jurisdicticn
10 of the Court for purposes of implementing and enforcing the
11 settlement embodied in this Stipulation.
22 , 8.12 This Stipulation and the Exhibits hereto shall be
13 considered to have been negotiated, executed and delivered, and to
14 he wholly performed, in the State of California, and the righta and
15 ' obligations of the Parties to this Stipulation shall he construed
16 and enforced in accordance with the laws of the State of
17 California, without giving effect to that state's choice of law
18 1 principles, together with any . applicable provisions of federal law.
19 8.13 Under no circumstances shall the Defendants or the D&O
20 Carriers have any liability whatsoever under this settlement for
21 any amount other than their contribution to the Settlement Fund as
22 set forth in 1)1.22 hereof.
24
25
26
27
28
- 32 -
• "
1 IN WITNESS WHEREOF. the Parties hereto have caused this
2 Stipulation to be executed, by their duly authorized attorneys, as
3 ot October 6, 1998.MILBERG WEISS BERSHAD
4 HYNES & LERACH LLPWILLIAM S. LERACH
5 KEITH F.
6(7) t n:.)c
7 „owllilryr: KEITH F. PARK
8600 West Broadway, Suite 1800
9 San Diego, CA 92101Telephone: 619/231-1058
10 1
MILBERG WEISS BERSHAD
11 1 HYNES & LERACH LLPJEFF S. WESTERMAN
12 KATHLEEN A. HERKENHOFF355 South Grand Avenue
13 Suite 4170Los Ange_es, CA 90071
14 Telephone: 213/617-9007
15 MILBERG WEISS -.8ERSHADHYNES & LERACH LLP
16 KEITH M. FLEISCHMANARIANA J. TADLER
17 One Pennsylvania PlazaNew York, NY 10119-0165
L8 Telephone: 212/594-5300
19 Lead Counsel for Plaintiffs
20 SULLIVAN & CROMWELL
21
222y: ROBERT A. SACKS
231888 Cenury Park East
24 Los Angeles, CA 90067Telephone: 310/712-6600
25Attorneys for Defendants The
26 Diana Corporation, SattelCommunications Corporation,
27 Sattel Communications LLC,James Fiedler, Daniel Latham
28 and R. Scott Miswald
- 33 -
FE1 21 M g 6:48P4 S LA OFFICE ND, 2188 P. 4/5
. . . .
1 IN WITNESS WHEREOF, the Parties hereto have caused this
2 Stipulation tra he executed, by their duly authorized attorneys, as
3 of October 6, 1998.MTLBERG WEISS =SHAD
4 Irmns LEACH LLPWILLIAM S. LERACH
5 KEITH F. PARK
6
7By KEITH P. PARK
8600 West_ Broadway, Suite 1600
9 San Diego, CA 92101Telephone: 619/231-1058
10MILBERG wniss BERSHAD
11 HYN•S & LERACH LLID
JErr S. WESTERMAN
12 KATHLEEN A. HERKENHOPF255 South Grand Avenue
13 Suite 4170Los Angeles, CA 90071
14 Telephone: 213/617-9007
15 MILBERG WEISS RSHADHYNES & LERACH LLP
16 KEITH M. FLEISCHMANARIANA J. TAMER
17 One Pennsylvania PlazaNew York, NY 10119-0165
18 Telephone: 212/594-5300
19 Lead Col=e1 for Plaintiffs
20 SULLIVAN & CROM.ELL
21$ '
222y: ROBERT A. S.-.S
231888 Century Park East
24 Los Angeles, CA 90067Telephone: 310/712-6600
25Attorneys for Defendants The
26 Diana Corporation, SatteiCommunications Coxporation,
27 Sattel Communications LLC,James Fiedler, Daniel Latham
28 and R. Scott Miswald
- 33 -
1 DEBEVOISE & PLIMPTON
2Age<
3 7,7. . KUBEK
875 Third Avenue
5 New York, NY 10022Telephone: 212/909-6000
6Attorneys for Defendants
7 Richard Y. Fisher and DonaldE. Runge
8McCUTCHEN, DOYLE, BROWN &
9 ENERSEN LLP
10
11By: JOHN C. MORRISSEY
12355 South Grand AvenueSuite 4400Los Angeles, CA 90071
14 Telephone: 213/580-6400
15 Attorneys for DefendantsSydney B. Lilly and George
116 Weischadle
17 FULBRIGHT & JAWORSKI, L.L.P.
18
19 1By: ROBERT E. DARBY
20865 S. Figueroa Street
21 29th Floorlos Angeles, CA 90017-2571
22 Telephone: 213/892-9200
23 Attorneys for Defendant Sat.:.elTechnologies, Inc.
24WILSON, SONSINI, GOODRICH &
25 ROSATI
26
27By: TIMOTHY T SCOTT
28
- 34 -
1 DEBEVOISE & PLIMPTON
2
3By GARY W. KUBEK
4875 Third Avenue
5 New York, NY 10022Telephone: 212/909-6000
Attorneys for Defendants
7 Richard Y. Fisher and DonaldE. Rune
8McCUTCHEN, DOYLE, BROWN &
ENERSEN LLP
10
11 bAA45:By- JOHN C. MOR1 S Y
12355 South Grand Avenue
13 Suite 4400Los Angeles, CA 90071
1
14 Telephone: 213/680-6400
15 Attorneys for DetendantsSydney B. Lilly and George
16 Weischadle
17 FULBRIGHT JAWORSKI, L.L.P.
18
19By: ROBERT E. DARBY
20865 S. Figueroa Street
21 29th FloorLos Angeles, CA 90017-2571
22 Telephone: 213/892-9200
23 ! Attorneys for Defendant SattelTechnoloaies, Inc.
24WILSON, SONSINI, GOODRICH
25 ROSATI
26 1
27By: TIMOTHY T. SCOTT
28
- 4 -
DEBEVOISE & PLIMPTON
2
3By: GARY W. KUBEK
4875 Third Avenue
5 New York, NY 10022Telephone: 212/909-6000
6Attorneys for Defendants
7 Richard Y. Fisher and DonaldE. Runge
8McCUTCHEN, DOYLE, BROWN &
9 1 ENERSEN LLP
10
11By: JOHN C. MORRISSEY
12355 South Grand Avenue
13 Suite 4400Los Angeles, CA 90071
14 Telephone: 213/680-6400
15 Attorneys for DefendantsSydney B. Lilly and George
16 Weischadle
17 FULBRIGHT & JAWORSKI, L.L.P.
18
19,72y. ROBT E. DARE
20865 S. Figueroa .2treet
21 29th FloorLos Angeles, CA 90017-2571
22 Telephone: 213/892-9200
23 Attorneys for Defendant SattelTechnologies, Inc.
24WILSON, SONSINI, GOODRICH &
25 ROSATI
26 11
27 1
1 2y: TIMOTHY T. SCOTT28
1
- 34 -
DEBEVOISE sr PLIMPTON
2
3By:- GARY W. 11BEK
46753 Third Avenue
5 New York, NY 10022Telephone; 212/909-6000
6Attorneys for Defendants
7 Richard Y. Fisher and DonaldE. Runge
8MoCUTCHEN, DOYLE, BROWN Se
9 ENERSEM LLP
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11By; JOHN C. MORRISSEY
12355 South Grand Avenue
13 Suite 4400Los Angeles, CA 90071
14 Telephone: 213/690-6400
15 Attorneys for DetendantsSydney B. Lilly and George
16 Weischadle
FULBRIGHT JAWORSKI, L.L.P.
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19By: ROBERT E. DARBY
20065 S. Figuero trnet
21 29th FloorLos Angeles, CA 90017 - 2571
22 Telephone: 213/892-9200
23 Attorneys for Defendant SattelTechnologies, Tho.
24WILSON, SONSINI, GOODRICH &
25 ROSATI AO
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27 torBy; T 0 Y SC+TT
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1 650 Page Mill RoadPalo Alto, CA 94304-1050
2 Telephone: 650/493-9300
3 Attorneys for DefendantConcentric Network Corporation
4ARTER HADDEN
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7 D : KATHERINE BOWMAN
8 Ten West Broad StreetColumbus, OH 43215
9 Telephone: 614/221-3155
10 Attorneys for Old Rev.iblicInsurance Company
11KRAMER, LEVIN, NAFTALIS
12 & FRANKEL LLP
13
14 -By PHILIP KAUFMAN
15919 Third Avenue
16 New York, NY 10022Telephone: 212/715-9100
17Attorneys for American Dynasty
18 Surplus Lines InsuranceCompany
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1 650 Page Mill RoadPalo Alto, CA 94304-1050
2 Telephone: 650/493-9300
3 Attorneys for DefendantConcentric Network Corporation
4ARTER HADDEN
5
6
7 By: KATHERINE BOWMAN
Ten West Broad StreetColumbus, CH 43215
9 Telephone; 614/221-3155
10 Attorneys for Old RepublicInsurance Company
11KRAMER, LEVIN, NAFTALIS
12 .RANKEL LLP
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By: PhILIP KAUFMAN15
919 Third Avenue
16 New York, NY 10022TeleDhonc: 212/715-9100
17
Attorneys for American Dynasty
18 Surplus Lines insuranceCompany
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