EXHIBIT 1
Stipulation and Agreement of Settlement
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
XXXX XXXXXXX, )
)
Plaintiff, )
)
v. ) C.A. Nos. 14807 & 15416
)
XXXXXXX X. XXXXXX, XXXXXX X. XXXXXX, )
XXXX XXXXXX, XXXXXX XXXXXXXX, )
XXXXXXX XXXXXXX, XXXXXXXX X. XXXXXXXX, )
MILESTONE PROPERTIES, INC. and )
CONCORD ASSETS GROUP, INC., )
)
Defendants. )
)
)
)
STIPULATION AND AGREEMENT OF SETTLEMENT
THIS STIPULATION AND AGREEMENT OF SETTLEMENT (together with all exhibits,
the "Stipulation") is entered into this 5th day of August, 1998 by and among (i)
XXXX XXXXXXX (the "Plaintiff"), suing on his own behalf, purportedly on behalf
of all holders of the $.78 Convertible Series A preferred stock, par value $.01
per share (the "MPI Preferred Stock") of MILESTONE PROPERTIES, INC. ("MPI"), a
Delaware corporation, and derivatively on behalf of MPI, and (ii) XXXXXXX X.
XXXXXX, XXXXXX X. XXXXXX, XXXX XXXXXX, XXXXXX XXXXXXXX, XXXXXXX XXXXXXX,
XXXXXXXX X. XXXXXXXX, MPI and CONCORD ASSETS GROUP, INC., a New York corporation
("Concord") (collectively, the "Defendants") through their undersigned counsel.
WHEREAS:
A. MPI, through its own operations and those of its subsidiaries, is
engaged in the business of acquiring, owning, managing and developing real
estate, and other real estate related businesses.
B. Defendants Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxxxx,
Xxxxxx Xxxxxxxx and Xxxxxxx XxXxxxx are directors and/or executive officers of
MPI, and at the time of the Transactions (as defined herein) were, along with
Defendant Xxxx XxXxxx, directors and/or executive officers of MPI.
C. Defendants Xxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx and Xxxxxxx XxXxxxx were,
at the time of the Transactions, the only members of the Related Party
Transaction Committee of MPI's Board of Directors, which committee was appointed
by the Board to evaluate the fairness of possible transactions with parties
related to MPI, including the Acquisition (as defined herein) challenged by the
Plaintiff.
D. In September 1995, MPI distributed to each holder of MPI common stock,
par value $.01 per share (the "MPI Common Stock"), and to each holder of MPI
Preferred Stock, a Proxy Statement - Information Statement dated September 12,
1995 (the "Proxy Statement") describing certain transactions to be considered
and approved at a Special Meeting of MPI's stockholders held on October 23,
1995, whereby: (i) MPI would acquire certain wraparound notes, wraparound
mortgages and fee interests from subsidiaries and affiliates of Concord in
exchange for $500,005 in cash and the
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issuance to such subsidiaries and affiliates of Concord of 2,544,654 shares of
MPI Common Stock (the "Acquisition"); (ii) 16 properties owned by MPI would be
transferred (the "Transfer") to Union Property Investors, Inc. ("UPI"), a
Delaware corporation and a then wholly-owned subsidiary of MPI; and (iii) UPI
would be recapitalized (the "Recapitalization") and thereafter, all of the
outstanding shares of UPI's Common Stock would be distributed to the holders of
MPI Common Stock (the "MPI Common Stockholders") on a share-for-share basis and
for no consideration (the "Spin-Off") (the Acquisition, the Transfer, the
Recapitalization, the Spin-Off, and the transactions contemplated thereby,
including, without limitation, the actions undertaken at and in connection with
the Special Meeting of MPI's stockholders held on October 23, 1995, and the
documents prepared in connection therewith, including, without limitation, the
Proxy Statement, are collectively referred to herein as the "Transactions"). The
Acquisition required the approval of a majority of the shares of MPI Common
Stock, and the Transfer and Spin-Off were contingent on the approval of the
Acquisition. On October 23, 1995, the MPI Common Stockholders approved the
Acquisition. The Transfer and the Spin-Off were completed in October 1995 and
November 1995, respectively.
E. On January 30, 1996, the Plaintiff, a holder of MPI Preferred Stock,
filed a class action complaint (the "Complaint") on behalf of all holders of
shares of MPI Preferred Stock (the "MPI Preferred Stockholders") in the Delaware
Court of Chancery (the "Court"), Civil Action No. 14807, claiming that the
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Transactions breached the Defendants' fiduciary duty and an implied obligation
of good faith owed to the holders of the MPI Preferred Stock (the "First
Action"). On February 12, 1996, the Defendants moved to dismiss the Complaint
pursuant to Chancery Court Rule 12(b)(6) for failure to state a claim.
F. The Plaintiff filed an Amended Class Action Complaint on June 5, 1996
(the "Amended Complaint") that included additional counts challenging the
Transactions as violating Section 271 of the Delaware General Corporation Law
("Section 271") and several provisions of the Certificate of Designations
governing the MPI Preferred Stock (the "Certificate of Designations"). On June
19, 1996, the Defendants moved to dismiss the Amended Complaint. On October 25,
1996, the Court ruled that the remedy of rescission would not be available in
the action. See Xxxxxxx x. Xxxxxx, Del. Ch., C.A. Xx. 00000, Xxxxxx, X.X.
G. While the remainder of the Defendants' motion to dismiss was before the
Court, the Plaintiff, on December 9, 1996, filed a second action against the
same defendants, Civil Action No. 15416 (the "Second Action"), and sought
dismissal, without prejudice, of the First Action (collectively, the "Actions").
The Second Action contained a single claim alleging that the Transactions
constituted a breach of fiduciary duty to the MPI Preferred Stockholders. The
Defendants moved to dismiss, or in the alternative, to stay the Second Action.
H. By Memorandum Opinion and Order dated May 12, 1997, the Court granted in
part and denied in part the Defendants' motions to
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dismiss. The Court dismissed the Second Action in its entirety, dismissed the
breach of fiduciary duty claim in the First Action for failure to state a claim,
and dismissed the Section 271 claim on the ground that the Plaintiff had no
standing to xxx under such section. The Court also denied the motion to dismiss
the Plaintiff's contractual claims in the First Action against MPI alleging
breaches of the Certificate of Designations, and granted leave to further amend
the Amended Complaint to assert a derivative claim challenging the fairness of
the Acquisition. The Plaintiff subsequently filed an amended complaint asserting
a breach of fiduciary duty claim.
I. On June 4, 1997, the Plaintiff appealed the May 12, 1997 Order of the
Court (the "Appeal") dismissing the Second Action. On June 11, 1997, the
Defendants moved to dismiss the Plaintiff's appeal and cross-appealed from the
portion of the Order which denied the motion to dismiss certain causes of action
in the First Action (the "Cross Appeal").
J. On October 30, 1997, the parties hereto entered into a certain
Stipulation and Agreement of Settlement (the "Prior Stipulation") in connection
with a previous proposed settlement (the "Prior Settlement") of the Actions.
Pursuant to the terms of the Prior Settlement, if approved and consummated, MPI
and its stockholders would have released all derivative claims arising in
connection with the Transactions and the holders of the MPI Preferred Stock
between October 23, 1995 and the date on which the Prior Settlement was
consummated would have released any claims
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they may have had against MPI and the other named Defendants arising out of the
Transactions. Each MPI Preferred Stockholder who did not opt out of the Prior
Settlement and who owned shares of the MPI Preferred Stock on the date that the
Prior Settlement was consummated would surrender their shares of MPI Preferred
Stock to a wholly-owned subsidiary of Concord, and receive in exchange for each
share of MPI Preferred Stock surrendered, $0.75 in cash payable by MPI plus one
share of Preferred Stock of such Concord subsidiary. The Preferred Stock of the
Concord subsidiary would have had a liquidation preference of $2.25 per share,
would have been required to be redeemed by the Concord subsidiary at $2.25 per
share after five years, and would have had no voting or dividend rights. In
addition, any holder of the Concord subsidiary's preferred stock who did not
want to wait the full five years for such shares to be redeemed could have had
shares redeemed by the Concord subsidiary at the following prices prior to the
fifth year: within 2 years after the Prior Settlement - $1.00 per share; 2-3
years after the Prior Settlement - $1.40 per share; 3-4 years after the Prior
Settlement - $1.60 per share; 4 - 5 years after the Prior Settlement - $1.90 per
share. The Concord subsidiary's redemption obligations would have been secured
by a Letter of Credit.
K. Upon executing the Prior Stipulation, the parties asked the Supreme
Court of the State of Delaware (the "Supreme Court") to remand the matter to the
Court for consideration of the terms of the Prior Stipulation and the actions to
be undertaken thereby as required by Chancery Court Rules 23(e) and 23.1.
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L. By correspondence of April 22, 1998, Defendants' counsel informed the
Supreme Court and the Court that the Plaintiff had withdrawn from the Prior
Settlement. By order of June 11, 1998, the Supreme Court dismissed the Appeal
and the Cross Appeal as interlocutory appeals not taken in compliance with
Delaware Supreme Court Rule 42, but said that the dismissal ruling did not
preclude the Court from determining, upon appropriate application, whether a
final judgment should be entered pursuant to Rule 54(b) of the Court.
M. The Plaintiff enters into this Stipulation after taking into account (i)
the benefits to the MPI Preferred Stockholders and MPI from the Settlement, (ii)
the risks of continued litigation, (iii) the desirability of permitting the
Settlement to be consummated as provided by the terms of this Stipulation, and
(iv) the conclusion by the Plaintiff and his counsel that the terms and
conditions of the Settlement are fair, reasonable, adequate, and in the best
interests of MPI and the MPI Preferred Stockholders.
N. The Defendants enter into this Stipulation after taking into account (i)
MPI's indemnification obligations to the individual Defendants under its
Certificate of Incorporation, as amended, and its By-laws, (ii) the Settlement's
resolution of all claims or potential claims by the MPI Preferred Stockholders
and derivative claims by the stockholders of MPI relating to, or arising from,
the Transactions (iii) the Settlement's beneficial impact on the MPI Common
Stockholders by settling claims of MPI Preferred
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Stockholders relating to the right of MPI Preferred Stockholders to convert
their shares into MPI Common Stock at a higher ratio as part of the
Transactions, and (iv) avoiding delay and significant expenses associated with
continued litigation.
O. The Defendants have denied and continue to deny that any of them has
committed or has threatened to commit any violations of law or breaches of duty
to MPI, the Plaintiff or the MPI Preferred Stockholders, but because of the
expense, inconvenience and uncertainty of continued litigation, consider it
desirable that the Actions be settled and dismissed.
P. The parties hereto desire to settle and dismiss with prejudice the
Actions and any and all claims that have been or could have been asserted
therein directly or indirectly by any and all members of the Settlement Class
(as defined herein) and any derivative claims arising out of or relating to the
Transactions (the "Settlement Claims") on the terms and subject to the
conditions set forth in this Stipulation.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows, subject to court approval
as set forth below:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Stipulation, except as otherwise
expressly provided or unless the context otherwise requires:
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(a) the words "herein," "hereof," and "hereunder" and other words of
similar import refer to this Stipulation as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including," "include," and "includes" followed by one or
more examples are intended to be illustrative and shall not be deemed to limit
the scope of the classification or category to the examples listed, and shall be
read to mean "including, without limiting the scope or generality of the
foregoing;" and
(c) the following capitalized terms shall have the meanings respectively
assigned to them below, and include the plural as well as the singular:
"Acquisition" shall have the meaning set forth in the Recitals;
"Actions" shall have the meaning set forth in the Recitals;
"Amended Complaint" shall have the meaning set forth in the Recitals;
"Appeal" shall have the meaning set forth in the Recitals;
"Business Day" is a day on which the New York Stock Exchange is open for
trading;
"Cash Payment" shall have the meaning set forth in Section 2.1;
"Certificate of Designations" shall have the meaning set forth in the
Recitals;
"Class Claims" shall have the meaning set forth in Section 3.1(a);
"Complaint" shall have the meaning set forth in the Recitals;
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"Concord" shall have the meaning set forth in the Introduction;
"Court" shall have the meaning set forth in the Recitals;
"Cross-Appeal" shall have the meaning set forth in the Recitals;
"Defendants" shall have the meaning set forth in the Introduction;
"Defendants' Affiliates" shall have the meaning set forth in Section
3.1(a);
"Derivative Claims" shall have the meaning set forth in Section 3.1(b);
"Exchange Act" means the Securities Exchange Act of 1934, as amended;
"Exchange Agent" shall have the meaning set forth in Section 4.6;
"Final Opt-Out Date" shall have the meaning set forth in Section 4.3;
"Final Order" shall have the meaning set forth in Section 4.5;
"First Action" shall have the meaning set forth in the Recitals;
"Letter of Transmittal" shall have the meaning set forth in Section 4.6;
"MPI" shall have the meaning set forth in the Introduction;
"MPI Certificate" shall have the meaning set forth in Section 4.6;
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"MPI Common Stock" shall have the meaning set forth in the Recitals;
"MPI Common Stockholders" shall have the meaning set forth in the Recitals;
"MPI Preferred Stock" shall have the meaning set forth in the Introduction;
"MPI Preferred Stockholders" shall have the meaning set forth in the
Recitals;
"Opt-Out Shares" are shares of MPI Preferred Stock held by Record MPI
Preferred Stockholders who (i) formally file a notice in the manner set forth in
Section 4.3 herein informing the Court of their desire to opt out of the
Settlement and not be considered members of the Settlement Class and (ii) do not
sell, transfer, assign or otherwise convey such shares of MPI Preferred Stock
prior to the Settlement Effective Date;
"Plaintiff" shall have the meaning set forth in the Introduction;
"Potential Settlement Class Members" means all holders of shares of MPI
Preferred Stock as of October 23, 1995 and their successors in interest through
the Settlement Effective Date, including the Record MPI Preferred Stockholders
but excluding Defendants and Defendants' Affiliates;
"Prior Settlement" shall have the meaning set forth in the Recitals;
"Prior Stipulation" shall have the meaning set forth in the Recitals;
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"Proxy Statement" shall have the meaning set forth in the Recitals;
"Recapitalization" shall have the meaning set forth in the Recitals;
"Record Date" shall have the meaning set forth in Section 4.2;
"Record MPI Preferred Stockholders" means all holders of shares of MPI
Preferred Stock as of the Record Date, excluding Defendants and Defendants'
Affiliates;
"Released Persons" shall have the meaning set forth in Section 3.1(a);
"Scheduling Order" shall have the meaning set forth in Section 4.1;
"SEC" shall mean the Securities and Exchange Commission;
"Second Action" shall have the meaning set forth in the Recitals;
"Section 271" shall have the meaning set forth in the Recitals;
"Securities Act" means the Securities Act of 1933, as amended;
"Settled Claims" shall have the meaning set forth in Section 3.1(c);
"Settlement" shall have the meaning set forth in the Recitals;
"Settlement Claims" shall have the meaning set forth in the Recitals;
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"Settlement Class" means all Potential Settlement Class Members who do not
opt out of the Settlement, temporarily certified by the Court solely for
purposes of the Settlement;
"Settlement Consideration" means the Cash to be paid to the Settlement
Consideration Recipients;
"Settlement Consideration Recipients" means Settlement Class members who
own shares of MPI Preferred Stock as of the Settlement Effective Date;
"Settlement Effective Date" means the date on which the Final Order
approving the Settlement becomes final and is no longer subject to appeal,
whether by the passage of time, affirmance on appeal or otherwise;
"Settlement Hearing" shall have the meaning set forth in Section 4.4;
"Settlement Notice" shall have the meaning set forth in Section 4.1;
"Spin-Off" shall have the meaning set forth in the Recitals;
"Stipulation" shall have the meanings set forth in the Introduction;
"Supreme Court" shall have the meaning set forth in the Recitals;
"Transactions" shall have the meaning set forth in the Recitals;
"Transfer" shall have the meaning set forth in the Recitals; and
"UPI" shall have the meaning set forth in the Recitals.
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ARTICLE II
THE EXCHANGE OF MPI PREFERRED STOCK AND RELEASES
FOR THE CASH PAYMENT
Section 2.1 Settlement Consideration. As of the Settlement Effective Date,
each Settlement Consideration Recipient shall, in consideration of the releases
and discharge of the Settled Claims provided for in this Stipulation and the
transfer to MPI of each share of MPI Preferred Stock held by such Settlement
Consideration Recipient as of the Settlement Effective Date, be entitled to
receive $3.00 in cash (the "Cash Payment" or the "Settlement Consideration")
from MPI on behalf of the Defendants.
ARTICLE III
DISCHARGE OF CLAIMS
Section 3.1. Release of Claims. In consideration of the benefits to MPI and
the Settlement Class described in the Recitals and Section 2.1 hereof, and
subject to the approval of the Court as provided for herein, the Class Claims
and the Derivative Claims, as described below, shall be released as follows:
(a) Release of Class Claims. MPI, the Plaintiff and each Settlement Class
member shall fully, finally and forever compromise, settle, release and dismiss
with prejudice pursuant to the terms and conditions as set forth herein, any and
all claims, rights, demands, liabilities, actions, causes of action, suits,
damages, losses, obligations, matters and issues, whether asserted or
unasserted, contingent or absolute, known or unknown, suspected or unsuspected,
disclosed or undisclosed, matured or
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unmatured, material or immaterial, legal or equitable, (i) which have been,
could have been, or in the future can or might be, asserted in the Actions or
otherwise by the Plaintiff or any member of the Settlement Class, whether
individual or class, (including, without limitation, claims arising under the
federal securities laws), against any of the Defendants in the Actions or any of
their families, affiliates, associates and subsidiaries, and each of their
respective present or former officers, directors, stockholders, agents,
employees, attorneys, representatives, financial and other advisors, investment
or commercial bankers, trustees, general and limited partners and partnerships,
heirs, executors, personal representatives, estates, administrators,
predecessors, successors and assigns (collectively, the "Defendants'
Affiliates") and any other person or entity acting for or on behalf of any
Defendant (collectively, the "Released Persons"), and (ii) which arise out of or
relate in any manner whatsoever, directly or indirectly, to any of the
allegations, facts, events, transactions, occurrences, acts, representations,
statements, misrepresentations or omissions, or any other matter, thing or cause
whatsoever, or any series thereof, involved, embraced, set forth or otherwise
referred or related directly or indirectly to the Transactions, the Actions, the
adjustment made to the conversion ratio for the MPI Preferred Stock in
connection with the Transactions, or any public filings or other statements that
were issued in connection with the Transactions by any Released Person in the
Actions (the "Class Claims").
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(b) Release of Derivative Claims. MPI, the Plaintiff, each Settlement Class
member, each MPI Common Stockholder and each MPI Preferred Stockholder shall
fully, finally and forever compromise, settle, release and dismiss with
prejudice pursuant to the terms and conditions as set forth herein, any and all
claims, rights, demands, liabilities, actions, causes of action, suits, damages,
losses, obligations, matters and issues, whether asserted or unasserted,
contingent or absolute, known or knowable, matured or unmatured, material or
immaterial, legal or equitable (i) which have been, could have been, or in the
future can or might be, asserted in the Actions (including, without limitation,
claims arising under the federal securities laws) or otherwise by or on behalf
of MPI against any of the Defendants in the Actions or against any Released
Person, and (ii) which arise out of or relate in any manner whatsoever, directly
or indirectly, to any of the allegations, facts, events, transactions,
occurrences, acts, representations, statements, misrepresentations or omissions,
or any other matter, thing or cause whatsoever, or any series thereof, involved,
embraced, set forth or otherwise referred or related directly or indirectly to
the Transactions, the Actions, the adjustment made to the conversion ratio for
the MPI Preferred Stock in connection with the Transactions, or any public
filings or other statements that were issued in connection with the Transactions
by any Released Person in the Actions (the "Derivative Claims").
(c) The Class Claims and the Derivative Claims will be referred to
collectively herein as the "Settled Claims". The
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term "Settled Claims" does not include claims arising pursuant to this
Stipulation.
ARTICLE IV
IMPLEMENTATION
Section 4.1 The Scheduling Order just one. Forthwith after this Stipulation
has been signed with due authorization by all counsel for the parties, counsel
for the parties shall jointly submit this Stipulation to the Court and shall
jointly apply for a scheduling order substantially in the form annexed hereto as
Exhibit A (the "Scheduling Order") establishing a date for a hearing to
determine the fairness and adequacy of the Settlement, granting conditional
class certification, and approving the proposed Notice of Pendency of Class and
Derivative Action, Proposed Settlement, Settlement Hearing and Right to Appear
to the Settlement Class (the "Settlement Notice") in substantially the form
annexed hereto as Exhibit B. The parties hereto hereby consent to the
conditional certification of the Settlement Class solely for the purposes of
this Stipulation as set forth herein. In the event that this Stipulation shall
terminate or be cancelled, or the Settlement shall not become effective for any
reason, the conditional class certification and notice order described in this
Section 4.1 shall be vacated and Defendants shall be free to assert any claims
or defenses with respect to any subsequent action or proceeding involving or
relating to class certification.
Section 4.2 Notice of Proposed Settlement. MPI shall set a record date (the
"Record Date"), which shall be no later than the
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15th day following entry of the Scheduling Order, to determine the MPI Common
Stockholders who shall be entitled to receive the Settlement Notice and to
determine the Potential Settlement Class Members who shall be afforded an
opportunity to opt out of the Settlement. Promptly after the Record Date, MPI
shall cause the Settlement Notice to be sent to the Plaintiff, each Potential
Settlement Class Member, and each MPI Common Stockholder as of the Record Date
in the manner directed and approved by the Court. Costs of printing, mailing and
publication of the Settlement Notice shall be paid by MPI. MPI will instruct its
transfer agent to distribute a copy of the Settlement Notice together with any
certificates of shares of MPI Preferred Stock that may be issued after the
Record Date. The Settlement Notice shall direct brokers, nominees and others who
hold of record for the account of another to provide copies of the Settlement
Notice to any persons for whose account they purchase MPI Preferred Stock after
the Record Date.
Section 4.3 Settlement Opt-Out. The Potential Settlement Class Members
(other than those who acquire shares of MPI Preferred Stock after the Record
Date) shall have 45 days from the date of the mailing of the Settlement Notice
in which to opt out of the Settlement Class and the Settlement (the 45th day
shall be referred to herein as the "Final Opt-Out Date") by mailing a letter to
the Register in Chancery and to each counsel of record prior to the Final
Opt-Out Date setting forth (i) his, her or its name, address, social security
number or employer identification number, as applicable, and telephone number,
(ii) the number of shares of MPI
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Preferred Stock owned and, if available, the certificate number(s) of the stock
certificate(s) representing such shares of Stock, (iii) if the shares of MPI
Preferred Stock are not or were not held of record or registered in such
member's name on the books and records of MPI, the letter shall indicate the
name or brokerage firm and account in which such shares of MPI Preferred Stock
were registered and shall include evidence of such member's ownership thereof,
and (iv) that he, she or it elects to opt out of the Settlement. Any Potential
Settlement Class Member who does not return an opt-out election meeting the
requirements of this Section 4.3 on or prior to the Final Opt-Out Date shall be
deemed a member of the Settlement Class and shall be bound by, and subject to,
the terms and conditions of this Stipulation, the Settlement and all court
orders affecting the Settlement Class. Any Potential Settlement Class Member who
elects to opt out of the Settlement and, prior to the Settlement Effective Date,
sells, transfers, assigns or otherwise conveys his, hers or its shares of MPI
Preferred Stock, shall not be entitled to receive the Settlement Consideration
and his, hers or its shares of MPI Preferred Stock shall not be deemed to be
Opt-Out Shares. MPI Preferred Stockholders who acquire their shares of MPI
Preferred Stock after the Record Date shall not be entitled to opt out of the
Settlement.
Section 4.4 Settlement Hearing. A settlement hearing (the "Settlement
Hearing") shall be held at such time after the Final Opt-Out Date and at such
place as shall be designated by the Court. In connection with the Settlement
Hearing, the parties hereto shall
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file such papers as their counsel believe to be necessary. At the Settlement
Hearing, the Court shall consider the fairness of the terms and conditions of
the Settlement and all of the transactions contemplated by this Stipulation and
whether the Settled Claims should be dismissed with prejudice.
Section 4.5 Entry of Order. At the Settlement Hearing, counsel for the
parties shall submit for entry by the Court an agreed upon proposed Final Order
(the "Final Order") in substantially the form annexed hereto as Exhibit C,
providing as follows:
(a) Approving the Stipulation, the Settlement and the transactions
contemplated thereby as fair, just, reasonable, adequate and in the best
interest of the Settlement Class and the members thereof, and directing the
performance of the acts set forth in, and reserving jurisdiction to supervise
the administration and consummation of, this Stipulation and the Settlement;
(b) Determining that the requirements of Rules 23.1 and 23(e) of the
Chancery Court Rules and due process have been satisfied, including inter alia,
certification of a Settlement Class and that the class and derivative interests
have been adequately represented;
(c) Dismissing the Actions with prejudice on the merits, extinguishing,
discharging and releasing any and all Settled Claims as against any and all
Released Persons, and permanently barring the parties, including Plaintiff and
all members of the Settlement
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Class, from asserting, commencing, prosecuting or continuing, either directly,
individually, representatively, derivatively or in any other capacity any of the
Settled Claims as against any and all Released Persons; and
(d) Containing provision for the Final Order to be vacated upon notice to
the Court of the nonfulfillment or impossibility of fulfillment of any of the
conditions set forth in Article V hereof.
Section 4.6 Cash Distribution. (a) The Defendants shall designate an
exchange agent reasonably acceptable to the Plaintiff (the "Exchange Agent") to
act as such in connection with effecting the settlement distribution
contemplated by Section 2.1.
(b) Within ten days after the Settlement Effective Date, MPI, on behalf of
the Defendants, shall deliver to the Exchange Agent an amount equal to the
aggregate Cash Payment to be paid to the Settlement Consideration Recipients
pursuant to Section 2.1. In no event shall interest be paid or accrue on any
Cash Payment.
(c) As soon as practicable after the Settlement Effective Date, the
Defendants shall cause the Exchange Agent to distribute to each Settlement
Consideration Recipient a letter of transmittal (the "Letter of Transmittal") in
a form reasonably acceptable to Plaintiff's counsel which shall specify (i) the
manner by which to effect the surrender of the certificate(s) representing such
Settlement Consideration Recipient's shares of MPI Preferred Stock (the "MPI
Certificates") in exchange for the Cash Payment due to such Settlement
Consideration Recipient, and (ii) that delivery shall be effected, and risk of
loss and title to MPI Certificates
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shall pass, upon proper delivery thereof to the Exchange Agent. Upon surrender
of an MPI Certificate together with a Letter of Transmittal, duly executed, and
in the form and having such other provisions as MPI shall reasonably request,
the holder of such MPI Certificate shall be entitled to receive the Cash Payment
provided for in Section 2.1 hereof in exchange therefor from the Exchange Agent,
and such MPI Certificate shall thereafter be cancelled. The Exchange Agent shall
be directed by MPI to take reasonable steps to contact all Settlement
Consideration Recipients and to assist such Settlement Consideration Recipients
in surrendering their MPI Certificates in exchange for the Settlement
Consideration.
(d) From and after the Settlement Effective Date, each MPI Certificate
shall be deemed to be conveyed, assigned and transferred to and for the benefit
of MPI, shall be cancelled and retired, and shall not evidence as to any holder
or former holder thereof any interest in MPI other than the right of the
Settlement Consideration Recipients to receive the Settlement Consideration for
each share of MPI Preferred Stock formerly represented by such MPI Certificate.
If a Cash Payment is to be made to a person other than the one in whose name the
MPI Certificate surrendered in exchange therefor is registered, it shall be a
condition to such issuance and payment that such MPI Certificate be properly
endorsed (or accompanied by an appropriate instrument of transfer), with
signatures guaranteed by a bank, broker, dealer, credit union, savings
association, clearing agency or other institution that is a member of a
recognized signature guarantee medallion program within the meaning of Rule
17Ad-15 under the Securities Exchange
22
Act of 1934, as amended, and accompanied by evidence that any applicable stock
transfer taxes have been paid or provided for.
(e) Any Cash Payments made available to the Exchange Agent pursuant to
Section 4.6(b) and not paid out in exchange for MPI Certificates within one year
after the Settlement Effective Date shall be repaid to MPI by the Exchange
Agent. MPI shall deposit all such Cash Payments repaid to it pursuant to the
previous sentence in trust, in either an interest or a non-interest bearing
account, as determined by MPI in its sole discretion, for such Settlement
Consideration Recipients who have not exchanged their MPI Certificates for a
Cash Payment within one year after the Settlement Effective Date. Any interest
accrued on any such funds so deposited shall belong to MPI and be paid to it
from time to time. Any funds so deposited and not exchanged for MPI Certificates
within seven years after the Settlement Effective Date need not be maintained in
trust for such Settlement Consideration Recipients who have not, at such time,
exchanged their MPI Certificates for a Cash Payment. After the first anniversary
of the Settlement Effective Date, any Settlement Consideration Recipient who has
not theretofore delivered or surrendered his or her MPI Certificate to the
Exchange Agent shall, subject to applicable law, look to MPI for the Cash
Payment to be paid pursuant to Section 2.1. Notwithstanding the foregoing, none
of the Exchange Agent, MPI or any other party hereto shall be liable to a
Settlement Consideration Recipient for any Cash Payment delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
23
(f) The Exchange Agent and MPI shall be entitled to deduct and withhold
from the payment of any Settlement Consideration payable to any Settlement
Consideration Recipient, such amounts as the Exchange Agent or MPI may be
required to deduct and withhold under the Internal Revenue Code of 1986, as
amended from time to time, or any provision of any state, local or foreign law.
To the extent that any amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Stipulation as having been paid to such
Settlement Consideration Recipient.
(g) In the event that any MPI Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such MPI Certificate to be lost, stolen or destroyed, and, if required by MPI,
in its sole discretion, the posting by such person of a bond in such reasonable
amount as MPI may direct as indemnity against any claim that may be made against
it with respect to such MPI Certificate, the Exchange Agent or MPI shall
exchange for such lost, stolen or destroyed MPI Certificate such Cash Payment to
which such person would otherwise have been entitled had such MPI Certificate
been surrendered in accordance with Section 4.6(c).
ARTICLE V
CONDITIONS
Section 5.1 The Defendants' agreement to settle the Actions on the terms
stated herein is contingent upon, and subject to the fulfillment of, each of the
following conditions, any or all of which may be waived in writing by the
Defendants:
24
(a) The Scheduling Order and the Final Order shall have been approved and
entered by the Court in substantially the forms annexed hereto as Exhibit A and
Exhibit C, respectively;
(b) The number of Opt-Out Shares shall not at any time exceed 10% of the
shares of MPI Preferred Stock outstanding on the Record Date;
(c) The Settlement Class shall not be modified by the Court in any manner
adverse to the Defendants;
(d) MPI shall have complied with all applicable requirements of Rule 13(e)
of the Exchange Act or received a "no-action letter" from the SEC or separate
opinions of counsel from counsel for the Plaintiff and counsel for the
Defendants reasonably satisfactory to MPI that the transactions contemplated by
the Settlement need not comply with and/or are exempt from, the requirements set
forth in Rule 13(e) of the Exchange Act;
(e) All necessary state securities or "blue sky" filings, permits or
approvals required to consummate the Settlement and the other transactions
contemplated hereby shall have been made or obtained, the cost of making such
filings and obtaining such permits and approvals shall not be greater than
$50,000, and no stop order or proceedings seeking a stop order with respect to
any such filings, permits or approvals shall be in effect;
(f) The Defendants shall have made all filings and registrations and shall
have received (in form and substance reasonably satisfactory to the Defendants)
all consents, authorizations, declarations and approvals necessary to consummate
the Settlement and the other transactions contemplated hereby;
25
(g) No court, agency or other authority shall have issued any order, decree
or judgment to set aside, restrain, enjoin or prevent, and no statute, rule,
regulation, executive order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any United States court or governmental
entity of competent jurisdiction which prohibits, restrains, enjoins, sets aside
or prevents, the consummation of the Settlement or the transactions contemplated
hereby and no action, suit, investigation or proceeding shall be pending, or
threatened in writing, seeking such relief or damages from any or all of the
Defendants related to the Transactions or the Settled Claims which the
Defendants reasonably believe would not or might not be barred by the releases
given in connection with this Settlement or by the res judicata effect of entry
of the Final Order dismissing the Actions with prejudice; and
(h) The Settlement Effective Date shall not be after June 30, 1999.
Section 5.2 Termination. In the event that at any time after the date
hereof, any of the conditions set forth in Section 5.1 fail to be fulfilled or
become impossible of fulfillment, or either party terminates this Stipulation
without prejudice, upon notice to the Court and the other parties hereto of the
non-fulfillment of any of said conditions, or the impossibility of the
fulfillment of any of said conditions, the Court shall vacate the Final Order
(if it has been entered) which shall thereafter be of no further force and
effect.
26
ARTICLE VI
COVENANTS
Section 6.1 Cooperation. The parties hereto and their attorneys agree to
cooperate fully with one another in seeking the Court's approval of this
Stipulation and the Settlement, obtaining the entry of the Final Order,
effectuating the Settlement and the transactions contemplated hereby, and
fulfilling the conditions set forth in Article V hereof.
27
ARTICLE VII
MISCELLANEOUS
Section 7.1 Purpose of Agreement. Counsel for Plaintiff have represented
that they have sufficiently investigated the facts and researched the applicable
law regarding the claims advanced by the Plaintiff in the Actions and the
potential defenses which have been or may be asserted thereto by the Released
Persons. However, by entering into this Stipulation, none of the parties hereto
agrees or concedes that the claims or defenses heretofore asserted by any of the
other parties hereto, whether in the Actions or otherwise, have merit or do not
have merit. The parties acknowledge that this Stipulation is being entered into
for the purposes of the Settlement only, there having been no finding of
liability of any kind, and to avoid the expense and length of continued
proceedings, taking into account the uncertainty and risk inherent in any
litigation, especially in complex matters such as the Actions. The parties
further acknowledge that this Stipulation will not be disclosed, referred to or
offered in evidence in the Actions or in any other proceeding if this
Stipulation is terminated for any reason.
Section 7.2 Stipulation Not Admission. Neither this Stipulation or any
exhibit or document referenced herein, nor any action taken to effectuate or
further this Stipulation or the Settlement set forth herein is, may be construed
as, or may be used as an admission by or against any other parties of any fault,
wrongdoing or liability whatsoever, or as a waiver or limitation of
28
any defenses otherwise available to any of the parties. Entering into or
carrying out of this Stipulation, the exhibits hereto, and any negotiations or
proceedings related thereto shall not in any event be construed as, or deemed to
be evidence of, an admission or concession by any of the parties, or to be a
waiver of any applicable defense, and shall not be offered or received in
evidence in any action or proceeding against any party hereto in any court,
administrative agency or other tribunal for any purpose whatsoever other than to
enforce or effectuate the provisions of this Stipulation or the provision of any
of the exhibits to this Stipulation. No one other than MPI, the Plaintiff, the
Defendants and the other parties hereto, the members of the Settlement Class and
MPI Common Stockholders is entitled to rely upon this Stipulation. The parties
hereto each specifically reserve all rights, claims, demands, defenses, actions
or causes of action which each party presently has, or claims to have, against
any of the others and nothing contained herein will be deemed to affect the
same, until the Settlement Effective Date.
Section 7.3 Attorneys' Fees. Plaintiff will apply to the Court, at the
Settlement Hearing, for an award of legal fees and expenses reasonably incurred
by Plaintiff's counsel in connection with the Actions, this Stipulation and the
Settlement, in an aggregate amount not to exceed $750,000, which application and
amount shall not be challenged by the Defendants. The amounts awarded by the
Court shall be paid by MPI, without interest, on the later to occur of the
Settlement Effective Date or November 1,
29
1999. No other legal fees and expenses will be sought by Plaintiff's counsel
from the Defendants nor from the Settlement Consideration to be paid under this
Settlement.
Section 7.4 Notices. Any and all notices, requests, consents, directives or
communications by any party intended for any other party shall be in writing,
shall be given personally, by telecopy (with confirmation acknowledged), or by
postage prepaid certified or registered mail, return receipt requested, and
shall be deemed delivered on the earlier of (a) the date received and (b) the
date four Business Days after the date of a deposit in a United States Postal
Depository, and shall be addressed as follows:
If to Plaintiff:
Xxxxxxxxx, Monhait Gross & Goddess
Suite 1401
Mellon Bank Center
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Defendants:
Milestone Properties, Inc.
000 X. Xxxxxxxx Xxxx Xxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Prickett, Jones, Xxxxxxx, Xxxxxxx & Xxxxxx
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
30
and
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any party may, from time to time, change the address to which such written
notice, requests, consents, directive or communications are to be mailed, by
giving the other parties ten days' prior written notice of the changed address
in the manner herein above provided.
Section 7.5 Costs and Expenses. All reasonable costs and expenses related
to the Settlement shall, except as otherwise provided herein, be paid by MPI.
Section 7.6 Release and Discharge. When the Final Order approving the
Settlement becomes final and is no longer subject to appeal, whether by the
passage of time, affirmance on appeal or otherwise, and subject to the
contingencies contained herein, MPI and its stockholders and each member of the
Settlement Class shall be deemed to release and forever discharge each of the
Released Persons from the Settled Claims.
Section 7.7 Settlement Not Enforceable. In the event (a) the Settlement
proposed herein is not approved by the Court, (b) the Court approves the
Stipulation, but such approval is reversed or vacated on appeal and such order
reversing or vacating the Settlement becomes final by lapse of time or
otherwise, or (c) if any of the other conditions to such Settlement are not
fulfilled on
31
or prior to June 30, 1999, then the Settlement proposed herein shall be of no
further force or effect and the Stipulation and any amendment thereof shall be
null and void and without prejudice to any party hereto, and each party shall be
restored to his or its respective position as it existed prior to the execution
of the Stipulation.
Section 7.8 Authority to Execute. Each of the attorneys executing the
Stipulation on behalf of one or more parties hereto warrants and represents that
he or she has been duly authorized and empowered to execute the Stipulation on
behalf of his or her respective clients.
Section 7.9 Extensions of Time. Without further order of this Court, the
parties hereto may agree to reasonable extensions of time to carry out any of
the provisions of the Stipulation beyond June 30, 1999.
Section 7.10 Entire Agreement/Modifications. This Stipulation and the
exhibits hereto constitute the entire agreement among these parties and no
representations, warranties or inducements have been made to the Plaintiff or
its counsel concerning this Stipulation or its exhibits other than those
representations, warranties and covenants contained herein and in the exhibits
hereto. No waiver, modification or amendment of the terms of this Stipulation
shall be valid unless in writing signed by the party to be charged and only to
the extent therein set forth. Any failure by any party to insist upon the strict
performance by any other party of any of the provisions of this Stipulation
32
shall not be deemed a waiver of any of the provisions hereof, and such party,
notwithstanding such failure, shall have the right thereafter to insist upon the
strict performance of any and all of the provisions of this Stipulation to be
performed by such other party.
Section 7.11 Binding Agreement. This Stipulation, upon execution and
subject only to subsequent approval by the Court and satisfaction of the
conditions stated herein, shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, heirs, transferees,
successors in interest and assigns and upon any corporation, partnership or
other entity into or with which any party may merge or consolidate; provided,
however, that no assignment by any party hereto shall operate to relieve such
party hereto of its obligations hereunder.
Section 7.12 Third Parties. Nothing in this Stipulation, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Stipulation on any persons other than the members of Settlement Class, MPI
Common Stockholders, MPI, the Defendants and the Defendants' Affiliates, and the
other parties hereto, and their respective successors and assigns, nor is
anything in this Stipulation intended to relieve or discharge the obligations or
liabilities of any third parties to any party to this Stipulation, nor shall any
provision give any third parties any right of subrogation or action over or
against any party to this Stipulation.
33
Section 7.13 Exhibits. All of the exhibits hereto are incorporated by
reference as if set forth herein verbatim, and the terms of all exhibits are
expressly made part of this Stipulation.
Section 7.14 Counterparts. This Stipulation may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
Section 7.15 Captions. Captions contained in this Stipulation are inserted
only as a matter of convenience and in no way define, limit, extend or describe
the scope of this Stipulation or the intent of any provision hereof.
Section 7.16 Arm's-Length Negotiations. This Stipulation and the exhibits
hereto were executed after significant arm's-length negotiations among the
parties and reflect the conclusion of counsel for all of the parties to this
Stipulation that this Stipulation and the Settlement contemplated hereby are in
the best interests of all the parties hereto.
Section 7.17 Choice of Law. This Stipulation shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to conflict of law principles.
Section 7.18 Waiver. The waiver by any party of any breach of this
Stipulation shall not be deemed or construed as a waiver of any other breach,
whether prior, subsequent, or contemporaneous, of this Stipulation.
34
IN WITNESS WHEREOF, the undersigned, thereunto duly authorized, have
executed this Stipulation as of August 5, 1998.
ROSENTHAL, MONHAIT, GROSS
& GODDESS
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxx
Suite 1401, Mellon Bank Center
Xxxxxxxxxx, XX 00000
000-000-0000
Attorneys for Plaintiff
PRICKETT, JONES, XXXXXXX
XXXXXXX & XXXXXX
By: /s/ April Xxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxxxxx
April Xxxx Xxxxx
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
000-000-0000
Attorneys for Defendants
35
EXHIBIT A
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
XXXX XXXXXXX, )
)
Plaintiff, )
)
v. ) C.A. Nos. 14807 & 15416
)
XXXXXXX X. XXXXXX, XXXXXX X. )
MANDOR, XXXX XXXXXX, XXXXXX )
XXXXXXXX, XXXXXXX XXXXXXX, )
XXXXXXXX X. XXXXXXXX, )
MILESTONE PROPERTIES, INC. and )
CONCORD ASSETS GROUP, INC., )
)
Defendants.
ORDER SCHEDULING FAIRNESS HEARING AND APPROVING NOTICE
WHEREAS, the parties to the above-captioned actions (the "Actions") have
applied pursuant to Chancery Court Rules 23(a) and 23.1 for an Order to approve
the proposed settlement of the Actions in accordance with the Stipulation and
Agreement of Settlement entered into by the parties (the "Stipulation");
NOW, this ____ day of ____________ 1998, upon application of Plaintiffs and
Defendants, IT IS HEREBY ORDERED as follows:
1. A hearing (the "Settlement Hearing") pursuant to Chancery Court Rules
23(e) and 23.1 shall be held on _______, 199_, at __.m. in the Court of
Chancery, _____________ County Courthouse, ______________________, Delaware to
determine the fairness, reasonableness and adequacy of the Stipulation and the
Settlement (as defined in the Stipulation) and whether the Stipulation and the
Settlement should be finally approved by the Court and judgment entered thereon,
to consider the adequacy of the class and
derivative representative, to conditionally certify the Settlement Class (as
defined in the Stipulation) in accordance with Chancery Court Rule 23, to hear
and determine any objection to the Settlement, and to consider Plaintiff's
application for an award of attorney's fees and expenses.
2. The Court reserves the right to adjourn the Settlement Hearing without
further notice other than by announcement at the Settlement Hearing or any
adjournment thereof.
3. The Court reserves the right to approve the Settlement at or after the
Settlement Hearing with such modifications as may be consented to by the parties
to the Stipulation and without further notice to the members of the Settlement
Class or to MPI Common Stockholders (as defined in the Stipulation).
4. No later than 60 days prior to the date of the Settlement Hearing,
counsel for the Defendants shall cause to be mailed to members of the Settlement
Class and to MPI Common Stockholders, by first-class mail, postage prepaid, a
Notice of Pendency of Class and Derivative Action, Proposed Settlement and
Settlement Hearing (the "Settlement Notice") substantially in the form attached
hereto as Exhibit 1. Upon request, MPI shall make available additional copies of
the Settlement Notice to enable record holders to provide copies thereof to
beneficial owners. Milestone Properties, Inc. ("MPI") will instruct its transfer
agent to send a copy of the Settlement Notice together with any certificates of
shares of MPI Preferred Stock (as defined in the Stipulation) issued after the
Record Date (as defined in the Stipulation). The Settlement Notice
2
shall direct brokers, nominees and others who hold of record for the account of
another to provide copies of the Settlement Notice to any persons for whose
account they purchase MPI Preferred Stock after the Record Date.
5. The form and method of notice specified herein is the best notice
practicable and shall constitute due and sufficient notice of the Settlement
Hearing to all persons entitled to receive such notice. Milestone Properties,
Inc. shall, on or before the date of the Settlement Hearing directed herein,
file proofs of mailing of the Settlement Notice as directed herein.
6. Any Settlement Class member and any MPI Common Stockholder who objects
to the Settlement may appear in person or by his, her or its attorney at the
Settlement Hearing and present any evidence or argument that may be proper and
relevant; provided, however, that no person other than the Plaintiff and
Defendants and their counsel in the Actions shall be heard, and no papers,
briefs, pleadings or other documents submitted by any such person shall be
received and considered by the Court (unless the Court in its discretion shall
thereafter otherwise direct, upon application of such person and for good cause
shown), unless no later than ten days prior to the Settlement Hearing (i) a
written notice of the intention to appear, (ii) a detailed statement of such
person's objections to any matter before the Court, and (iii) the grounds
therefor or the reasons why such person desires to appear and to be heard, as
well as all documents and writings which such person desires the Court to
consider, shall be served by hand or first
3
class mail, postage prepaid, with the Register in Chancery and the following
counsel of record at the respective addresses listed below:
REGISTER IN CHANCERY
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
PRICKETT, JONES, XXXXXXX, XXXXXXX & XXXXXX
Xxxxxxx Xxxxxxxx
April Xxxx Xxxxx
0000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Attorneys for Defendants
ROSENTHAL, MONHAIT, GROSS & GODDESS
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxx
Suite 1401, Mellon Bank Center
Xxxxxxxxxx, XX 00000
Attorneys for Plaintiff and the Class
7. For Settlement purposes only, these actions are provisionally certified
as class actions on behalf of the Settlement Class.
8. Any person who fails to object in the manner prescribed above shall be
deemed to have waived such objection and shall be forever barred from raising
such objection or otherwise contesting the Settlement in this or any other
action or proceeding.
9. The Potential Settlement Class Members (as defined in the Stipulation,
other than those who acquire their shares of MPI Preferred Stock after the
Record Date) shall have 45 days from the
4
date of the mailing of the Settlement Notice in which to opt out of the
Settlement Class and the Settlement (the 45th day shall be referred to herein as
the "Final Opt-Out Date") by mailing a letter to the Register in Chancery and to
each counsel of record prior to the Final Opt-Out Date setting forth (i) his,
her or its name, address, telephone number and social security number or
employer identification number, as applicable, (ii) the number of shares of MPI
Preferred Stock owned and, if available, the certificate number(s) of the stock
certificate(s) representing such shares, (iii) if the shares of MPI Preferred
Stock are not or were not held of record or registered in such member's name on
the books and records of MPI, the letter shall indicate the name or brokerage
firm and account in which such shares of MPI Preferred Stock were registered and
shall include evidence of such member's ownership thereof, and (iv) that he, she
or it elects to opt out of the Settlement. Any Potential Settlement Class Member
who does not return an opt-out election in accordance with the provisions of
this Paragraph 9 shall be deemed a member of the Settlement Class.
10. Pending final determination of whether the Stipulation should be
approved, Plaintiff and all members of the Settlement Class and, as to the
derivative claim, MPI and its stockholders, or any of them, are barred and
enjoined from commencing or prosecuting any action in any forum asserting any
claims, either directly, representatively, derivatively or in any other
capacity, against any of the Defendants or any other persons or entities which
5
have been or could have been asserted, or which arise out of, or relate in any
way to the Settled Claims (as defined in the Stipulation).
11. If the Settlement provided for in the Stipulation shall be approved by
the Court following the Settlement Hearing, a Final Order and Judgment shall be
entered in substantially the form of Exhibit 1 to the Settlement Notice attached
as Exhibit 1 hereto.
12. If the parties withdraw from the Stipulation or if the Stipulation,
including any amendment made in accordance with its terms, is not approved by
the Court or is terminated or shall not become effective for any reason
whatever, this action shall proceed, completely without prejudice to any party
as to any matter of law or fact, as if the Stipulation had not been made and had
not been submitted to the Court, and neither the Stipulation nor any provision
contained in the Stipulation nor any action undertaken pursuant thereto nor the
negotiation thereof by any party shall be deemed an admission or offered or
received in evidence at any proceeding in this action or any other action or
proceeding.
----------------------------
Vice Chancellor
6
EXHIBIT B
NOTICE OF PENDENCY OF CLASS AND DERIVATIVE ACTION, PROPOSED
SETTLEMENT, SETTLEMENT HEARING AND RIGHT TO APPEAR
The Form of Notice of Pendency of Class and Derivative Action, Proposed
Settlement, Settlement Hearing and Right to Appear is attached as Exhibit 2 to
the Schedule 13E-3.
EXHIBIT C
FINAL ORDER AND JUDGEMENT
The Proposed Form of Final Order and Judgement is attached as Exhibit 3
to the Schedule 13E-3.
