In re AudioEye, Inc. Sec. Litig.

Filing 100

ORDER AND FINAL JUDGMENT: Lead Plaintiffs' Counsel are HEREBY AWARDED 33 1/3% (thirty-three and one-third percent) of the Gross Settlement Fund for their attorneys' fees, plus accrued interest, which sum the Court finds to be fair and reasonable. Lead Plaintiffs' Counsel are hereby AWARDED $507,825.00, plus accrued interest, in reimbursement of litigation expenses of $26,250.47, which expenses the Courts finds to be have been reasonably incurred. The foregoing amounts shall be paid to Lead Plaintiffs' Counsel from the Gross Settlement Fund, $1,525,000.00 in cash, subject to the terms, conditions, and obligations of the Stipulation, which terms, conditions, and obligations are incorporated herein. It is further Ordered that the Motion for an Award of Attorneys' Fees and Reimbursement of Expenses (Doc. #95 ) and the Motion for Final Approval of the Settlement, Class Certification and Plan of Allocation (Doc. #94 ) are GRANTED. This is the Final Judgment of the Court. This action is closed. Signed by Senior Judge David C Bury on 5/8/2017. (MFR)

WO

UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
---------------------------------------------------CV-15-00163-TUC-DCB

IN RE AUDIOEYE, INC., SECURITIES
LITIGATION

ORDER AND FINAL
JUDGMENT

---------------------------------------------------On the 8th day of May, 2017, a hearing having been held before this Court
to determine: (1) whether the terms and conditions of the Stipulation of Settlement
dated December 13, 2016 (the “Stipulation”) are fair, reasonable and adequate for
the settlement of all claims asserted by (i) Plaintiffs against (ii) Defendants
AudioEye, Inc. (“AudioEye”), Nathaniel Bradley and Edward O’Donnell
(collectively, “Defendants”), and (2) whether to approve the proposed Plan of
Allocation as a fair and reasonable method to allocate the Net Settlement Fund
among Settlement Class Members; and,
The Court having considered all matters submitted to it at the hearing and
otherwise; and,
It appearing that the Notice substantially in the form approved by the Court
in the Court’s Order Preliminarily Approving Settlement and Providing For Notice

(“Preliminary Approval Order”) was mailed to all reasonably identifiable
Settlement Class Members and otherwise made available on the Claims
Administrator’s website; and,
It appearing that the Summary Notice substantially in the form approved by
the Court in the Preliminary Approval Order was published in accordance with that
Order and the specifications of the Court;
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED
THAT:

1.

Capitalized terms used herein have the meanings defined in the

Stipulation.
2.

The Court has jurisdiction over the subject matter of the Litigation,

Lead Plaintiffs, all Settlement Class Members and the Settling Defendants.
3.

For purposes of this Settlement, this is a class action on behalf of all

persons who purchased or otherwise acquired any common stock of AudioEye
during the period from May 14, 2014 through and including April 1, 2015, and
who were allegedly damaged thereby (the “Settlement Class”). Excluded from the
Settlement Class are Defendants, the officers and directors of AudioEye during the
Class Period, members of their immediate families and their legal representatives,
heirs, successors, or assigns, any entity in which Defendants have or had a
controlling interest, and any persons who separately file an action against one or
more of Defendants, based in whole or in part on any claim arising out of or
relating to any of the alleged acts, omissions, misrepresentations, facts, events,
matters, transactions, or occurrences referred to in the Litigation or otherwise
alleged, asserted, or contended in the Litigation. Also excluded from the
Settlement Class are those persons who filed valid and timely requests for
exclusion in accordance with the Preliminary Approval Order.

4.

With respect to the Class, and for purposes of this Settlement only, the

Court finds and concludes that the requirements of Federal Rules of Civil
Procedure 23(a) and 23(b)(3) are satisfied as: (a) the Members of the Class are so
numerous that joinder of all Class Members in the Litigation is impracticable; (b)
there are questions of law and fact common to the Class that predominate over any
individual questions; (c) the claims of the Lead Plaintiffs are typical of the claims
of the Class; (d) the Lead Plaintiffs and Lead Plaintiffs’ Counsel have fairly and
adequately represented and protected the interests of all the Class Members; and
(e) a class action is superior to other available methods for the fair and efficient
adjudication of the controversy, considering: (i) the interests of the Members of the
Class in individually controlling the prosecution of the separate actions, (ii) the
extent and nature of any litigation concerning the controversy already commenced
by Members of the Class, (iii) the desirability or undesirability of continuing the
litigation of these claims in this particular forum, and (iv) the difficulties likely to
be encountered in the management of the Litigation. Accordingly, for settlement
purposes only, the Class is certified, Lead Plaintiffs are appointed Class
Representatives, and Lead Plaintiffs’ Counsel are appointed Class Counsel
5.

The Court hereby finds that the forms and methods of notifying the

Settlement Class of the Settlement and its terms and conditions met the
requirements of due process and Rule 23 of the Federal Rules of Civil Procedure,
Section 21D(a)(7) of the Exchange Act, 15 U.S.C. § 78u-4(a)(7), as amended by
the Private Securities Litigation Reform Act of 1995; the Constitution of the
United States (including the Due Process Clause); and any other applicable law,
constituted the best notice practicable under the circumstances; and constituted due
and sufficient notice to all persons and entities entitled thereto of these proceedings
and the matters set forth herein, including the Settlement and Plan of Allocation, to
all persons entitled to such notice. No Settlement Class Member is relieved from

the terms of the Settlement, including the releases provided for therein, based upon
the contention or proof that such Settlement Class Member failed to receive actual
or adequate notice. A full opportunity has been offered to the Settlement Class
Members to object to the proposed Settlement and to participate in the hearing
thereon. The Court further finds that the notice provisions of the Class Action
Fairness Act, 28 U.S.C. § 1715, were fully discharged. Thus, it is hereby
determined that all members of the Settlement Class are bound by this Order and
Final Judgment [except those persons listed on Exhibit A to this Order and Final
Judgment].
6.

The Settlement is approved as fair, reasonable and adequate, and in

the best interests of the Plaintiffs. Lead Plaintiffs and Settling Defendants are
directed to consummate the Settlement in accordance with the terms and provisions
of the Stipulation.
7.

The Litigation and the operative Consolidated Amended Complaint

are hereby dismissed in their entirety, with prejudice, and without costs.
8.

Upon the Effective Date, and as provided in the Stipulation, Lead

Plaintiffs and each of the Settlement Class Members, on behalf of themselves, and
each of their current, past and future trusts, estates, beneficiaries, heirs, joint
tenants, tenants in common, executors, administrators, trustees, predecessors,
successors,

partners,

spouses,

parents,

subsidiaries,

affiliates,

attorneys,

consultants, experts, brokers, creditors, insurers, agents, representatives, and
assigns, and any Person that any of them represents, shall and by operation of this
Order and Final Judgment are hereby deemed to have fully, finally, and forever
released, relinquished and discharged, and are forever enjoined from prosecuting,
any and all of the Settled Claims and all claims arising out of, relating to, or in
connection with the Settlement, the Litigation, and/or the resolution of the
Litigation against the Released Parties, whether or not such Settlement Class

Member executes and delivers the Proof of Claim and Release form or shares in
the Net Settlement Fund.
9.

Upon the Effective Date, Defendants shall release and forever

discharge each and every one of the Defendants’ Claims, and by operation of this
Order and Final Judgment shall be forever enjoined from prosecuting Defendants’
Claims as against any of the Lead Plaintiffs, Settlement Class Members, or their
attorneys, including but not limited to claims for malicious prosecution or
sanctions.
10.

The Plan of Allocation is approved as fair and reasonable, and Lead

Plaintiffs’ Counsel and the Claims Administrator are directed to administer the
Stipulation and Plan of Allocation in accordance with its terms and provisions.
Any modification or change in the Plan of Allocation that may hereafter be
approved shall in no way disturb, affect or delay the finality of this Order and Final
Judgment or the Releases provided thereunder, shall not disturb, affect or delay the
Effective Date of the Settlement, and shall be considered separate from this Order
and Final Judgment.
11.

In accordance with 15 U.S.C. § 78u-4(f)(7) and all other applicable

laws and regulations, any and all claims by any Person against any of the Settling
Defendants and/or other Released Persons for contribution or indemnification
arising out of or relating in any way to any Settled Claim, or where the alleged
damage to the claimant is measured by reference to the claimant’s liability to any
of the Lead Plaintiffs and/or Settlement Class Members, are hereby permanently
barred and discharged. Further:
a. All

claims

for

contribution

and

indemnification,

however

denominated, based upon or arising under the federal securities laws,
state law, foreign law or common law, in favor of any Person(s),
against any of the Defendants and/or other Released Parties, with

respect to, arising out of, or relating in any way to the claims,
allegations, transactions, and/or events that are the subject of the
Litigation, and/or based upon liability for, or arising out of or relating
in any way to the Settled Claims, are extinguished, discharged, barred,
satisfied and/or otherwise unenforceable.
b. All Persons are hereby barred and permanently enjoined, to the fullest
extent allowed by law, from asserting, instituting or prosecuting in
any capacity, any claim, action or proceeding against any of the
Defendants and/or other Released Parties for equitable, partial,
comparative, or complete contribution, subrogation or indemnity,
however denominated, based upon liability for, and/or arising out of
or relating in any way to the Settled Claims, and the Court finds that
all such claims are extinguished, discharged, satisfied and made
unenforceable.
c. Notwithstanding the foregoing, nothing in the Stipulation or this
Order and Final Judgment shall apply to, bar, release or otherwise
affect any claim or right to indemnification by any present or former
employee, officer or director of AudioEye, based on contractual
indemnity,

corporate

by-laws,

or

Arizona

law

governing

indemnification of employees, directors and officers (including a
claimed right for advancement of fees and costs), or any claim by any
present or former employee, officer or director of AudioEye for
indemnity or contribution arising in or from any proceeding other than
this Litigation, that the Person asserting such claim would otherwise
be entitled to assert in the absence of the Stipulation and Settlement
and the Court’s Order and Final Judgment. Nor shall any of the
foregoing apply to, bar, release or otherwise affect any rights or

claims by any of the Released Parties under any relevant insurance
policies.
12.

The Court finds that all parties and their counsel have complied with

each requirement of Rule 11 of the Federal Rules of Civil Procedure as to all
proceedings herein.
13.

Neither this Order and Final Judgment, the Stipulation, nor any of the

negotiations, documents or proceedings connected with them shall be:
a. described as, construed as, offered or received against any Defendant
or any of the Released Parties as evidence of and/or construed as or
deemed to be evidence of any presumption, concession or admission
by any of them of the truth of any fact alleged by Plaintiffs in the
Litigation, of the validity of any claim that was or could have been
asserted in the Litigation, or of the deficiency of any defense that was
or could have been asserted in the Litigation or in any other litigation,
or of any liability, loss, damage, negligence, fault or wrongdoing
whatsoever;
b. described as, construed as, offered or received against any Defendant
or any of the Released Parties as evidence of and/or construed as or
deemed to be evidence of any presumption, concession or admission
by any of them that the consideration to be provided hereunder, or the
proposed Plan of Allocation, represents the amount that could be or
would have been awarded to Lead Plaintiffs or the Settlement Class
Members after trial.
14.

Exclusive and specific jurisdiction is hereby retained over

Defendants, the Lead Plaintiffs, and the Settlement Class Members for all matters
relating to the Settlement, including the administration, interpretation, effectuation
or enforcement of the Stipulation or Settlement and this Order and Final Judgment,

and including any application for fees and expenses incurred in connection with
administering and distributing the settlement proceeds to the Settlement Class
Members.
15.

Without further order of the Court, Settling Defendants and Lead

Plaintiffs may agree to reasonable extensions of time to carry out any of the
provisions of the Stipulation.
16.

There is no just reason for delay in the entry of this Order and Final

Judgment and immediate entry by the Clerk of the Court is directed pursuant to
Rule 54(b) of the Federal Rules of Civil Procedure.
17.

Lead Plaintiffs’ Counsel are HEREBY AWARDED 33 1/3%

(thirty-three and one-third percent) of the Gross Settlement Fund for their
attorneys’ fees, plus accrued interest, which sum the Court finds to be fair and
reasonable. Lead Plaintiffs’ Counsel are hereby AWARDED $507, 825.00, plus
accrued interest, in reimbursement of litigation expenses of $26,250.47, which
expenses the Courts finds to be have been reasonably incurred. The foregoing
amounts shall be paid to Lead Plaintiffs’ Counsel from the Gross Settlement Fund,
$1,525,000.00 in cash, subject to the terms, conditions, and obligations of the
Stipulation, which terms, conditions, and obligations are incorporated herein. Lead
Plaintiffs’ Counsel may make payments of fees and expenses to counsel for other
plaintiffs as Lead Plaintiffs’ Counsel deems appropriate based on their relative
contribution to the prosecution and resolution of the Action. Neither the Plan of
Allocation submitted by Lead Plaintiffs’ Counsel nor the portion of this Order and
Final Judgment regarding the attorneys’ fee and litigation expenses application
including any modification or change in the award of attorneys’ fees and litigation
expenses that may hereafter be approved, shall in any way disturb or affect this
Order and Final Judgment or the Releases provided hereunder and shall be
considered separate from this Order and Final Judgment.

18.

In the event that the Settlement does not become final and effective in

accordance with the terms and conditions set forth in the Stipulation, then this
Order and Final Judgment shall be rendered null and void and be vacated and the
Settlement and all orders entered in connection therewith shall be rendered null
and void (except as provided in paragraphs E.1-3., G, L.4-7., and M.14. in the
Stipulation), and the parties shall be deemed to have reverted to their respective
status prior to the execution of the Stipulation, and they shall proceed in all
respects as if the Stipulation had not been executed and the related orders had not
been entered, preserving in that event all of their respective claims and defenses in
the Litigation, and shall revert to their respective positions in the Litigation.
19.

The Escrow Agent shall maintain the Net Settlement Fund in

accordance with the requirements set forth in the Stipulation. No Defendant, or
any other Released Party, shall have any liability, obligation, or responsibility
whatsoever for the administration of the Settlement or disbursement of the Net
Settlement Fund. Lead Plaintiffs’ Counsel, Lead Plaintiffs, the Escrow Agent, and
the Claims Administrator shall have no liability to any Class Member with respect
to any aspect of the administration of the Settlement Fund, including, but not
limited to, the processing of Claim Forms and the distribution of the Net
Settlement Fund to Class Members.
IT IS FURTHER ORDERED that the Motion for an Award of Attorneys’
Fees and Reimbursement of Expenses (Doc. 95) and the Motion for Final Approval
of the Settlement, Class Certification and Plan of Allocation (Doc. 94) are
GRANTED. This is the Final Judgment of the Court. This action is closed.
Dated this 8th day of May, 2017.

Honorable David C. Bury
United States District Judge