Lax v. Palomar Medical Technologies, Inc. et al

Filing 14

Judge Mark L. Wolf: ORDER entered granting 11 Motion to Stay. "Allowed. This case is hereby STAYED. The parties shall, by December 2, 2013, report whether the settlement of the Delaware case has been approved and whether this case may be dismissed." (MacDonald, Gail)

Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13 Page 1 of 6

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

MELVIN LAX,

Plaintiff,
v.

PALOMAR MEDICAL TECHNOLOGIES,
INC., JOSEPH CARUSO, LOUIS P.
VALENTE, JEANNE COHANE, DAMIAN N.
DELL'ANNO, NICHOLAS P. ECONOMOU
PH.D., JAMES G. MARTIN, A. NEIL
PAPPALARDO, CYNOSURE, INC. and
COMMANDER ACQUISITION CORP.,
Defendants.

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Civil Action No. 13-11276

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STIPULATION AND JOINT MOTION TO STAY PROCEEDINGS
PENDING SETTLEMENT APPRO VAL
Plaintiff Melvin Lax (the "Plaintiff') and Defendants Palomar Medical Technologies,
Inc., Joseph Caruso, Louis P. Valente, Jeanne Cohane, Damian N. Dell 'Anno, Nicholas P.
Economou, James G. Martin, A. Neil Pappalardo, Cynosure, Inc., and Commander Acquisition
Corp.' (collectively, the "Defendants," and, together with Plaintiff, the "Parties") state as
follows:
WHEREAS, on May 28, 2013, Plaintiff in his individual capacity as a shareholder of
Palomar Medical Inc. ("Palomar") filed the complaint (the "Complaint") in the above-referenced
action (the "Lax Action") asserting claims under state and federal law challenging the acquisition
of Palomar by an affiliate of Cynosure, Inc. ("Cynosure");

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Commander Acquisition Corp. is now known as Commander Acquisition, LLC.

Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13 Page 2 of 6

WHEREAS, prior to the filing of the Complaint, beginning on March 21, 2013, five
plaintiffs had filed separate complaints on behalf of a putative class of Palomar shareholders that
contained substantially similar allegations, and sought similar relief, in the Delaware Court of
Chancery and Massachusetts Superior Court, which cases were thereafter consolidated in
separate actions captioned, respectively, In re Palomar Medical Technologies Shareholder

Litigation, CA. No. 8491-YCP (Del. Ch.) (the "Delaware Class Actions") and Calin, Gusinky
Living Trust, & Saffer v. Palomar Medical Technologies, Inc. et al., Nos. 13-1051-BLS 1, 13­
1328-BLSl, 13-1385-BLS1 (Mass. Super. Ct.) (the "Massachusetts Class Actions");
WHEREAS, on May 12, 2013, the parties to the Delaware Class Actions reached
agreement to pursue expedited discovery in anticipation of briefing a preliminary injunction
motion. Beginning on May 13, 2013, the parties exchanged documents and the plaintiffs in the
Delaware Class Actions deposed a representative of Palomar's financial advisor, the Chief
Executive Officer of Palomar, and a member of the Palomar Board of Directors who also served
as Chairman of the M&A Committee. On May 17, 2013, the Massachusetts Superior Court
ordered the Massachusetts Class Actions stayed in favor of the Delaware Class Actions;
WHEREAS, beginning on May 23, 2013, the parties to the Delaware Class Actions
engaged in extensive and arm's-length good faith negotiations regarding a potential settlement of
the Delaware Class Actions and the Delaware Plaintiffs' demands that Palomar stockholders be
provided with further disclosure prior to the stockholder vote on the Merger;
WHEREAS, on June 3, 2013, the Delaware Plaintiffs filed a brief and declaration in
support ofa motion for preliminary injunction. Also on June 3, 2013, the parties to the Delaware
Actions agreed to the principal terms ofa settlement of the Delaware Actions. On June 7,2013,
the parties to the Delaware Actions entered into a Memorandum of Understanding ("Delaware
Memorandum") memorializing their agreement-in-principle for the settlement of the Delaware

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Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13

Page 3 of 6

Actions, subject to approval by the Delaware Chancery Court. Thereafter, on June 10, 2013,
Palomar filed with the SEC a Form 8-K containing certain supplemental disclosures to the final
shareholder proxy materials previously filed with the SEC on May 23, 2013 (the "Proxy
Materials");
WHEREAS, beginning on June 7, 2013, the parties to the Massachusetts Class Actions
and the Lax Action (together, the "Massachusetts Actions") engaged in arm's-length good faith
negotiations regarding a potential settlement of the Massachusetts Actions and the Massachusetts
Plaintiffs' demands that Palomar stockholders be provided with further disclosure prior to the
stockholder vote on the Merger. On June 14, 2013, the parties to the Massachusetts Actions
entered into a Memorandum of Understanding ("Massachusetts Memorandum" and, together
with the Delaware Memorandum, the "Settlement") memorializing their agreement-in-principle
for the settlement of the Massachusetts Actions, subject to approval by the Delaware Chancery
Court. Subsequently, on June 14, 2013, Palomar filed with the SEC a Form 8-K containing
additional supplemental disclosures to the Proxy Materials;
WHEREAS, Plaintiffs' counsel expects to file the documents in support of the Settlement
for the Delaware Chancery Court's review and preliminary and final approval within the next
thirty days.

Plaintiffs will petition the Delaware Chancery Court for a fee award, which

Defendants have reserved their right to oppose.
WHEREAS, in view of the Settlement, the Parties agree that a stay of these proceedings
IS

appropriate and would avoid the potentially wasteful expenditure of party and judicial

resources, pending court approval of the Settlement;
NOW THEREFORE, the Parties, through their respective undersigned counsel, hereby
stipulate, pursuant to the terms of the Settlement, and subject to the Court's approval, as follows:
I.

Plaintiff shall voluntarily stay all claims asserted in his Complaint;
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Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13 Page 4 of 6

II.

Defendants need not answer or otherwise respond to the Complaint; and

III.

Plaintiff shall voluntarily dismiss the Complaint on or before final approval of the
Settlement by the Delaware Court of Chancery.

The Parties further agree that this Joint Stipulation shall be without prejudice to Plaintiffs right
to seek to pursue his claims in the event that the motion for final approval of the Settlement is
denied by the Delaware Court of Chancery. The Parties further agree that this Joint Stipulation
shall be without prejudice to Defendants' right to move to stay or dismiss the claims asserted in
the Complaint in the event the stay is lifted for any reason.
Dated: August 5, 2013
FOR PLAINTIFF MELVIN LAX

IslThomas G. Shapiro
Thomas G. Shapiro
[e-mail]
Shapiro Haber & Urmy LLP
53 State Street
Boston, MA 02108
617-439-3939

lsi Benjamin Kaufman
Gregory Mark Nespole
[e-mail]
Benjamin Y. Kaufman
[e-mail]
Martin E. Restituyo
[e-mail]
Wolf Haldenstein Adlaer Freeman
& Herz LLP
270 Madison Avenue
New York, NY 10016
[phone]

FOR DEFENDANTS PALOMAR
MEDICAL TECHNOLOGIES, INC.,
JOSEPH CARUSO, LOUIS P. VALENTE,
JEANNE COHANE, DAMIAN N.
DELL' ANNO, NICHOLAS P.
ECONOMOU, JAMES G. MARTIN, AND
A. NEIL PAPP ALARDO

lsi Daniel W. Halston
Daniel W. Halston (BBO# 548692)
[e-mail]
Nolan J. Mitchell (BBO# 668145)
[e-mail]
Andrew S. Dulberg (BBO# 675405)
[e-mail]
Wilmer Cutler Pickering Hale and Dorr
LLP
60 State Street
Boston, MA 02109
[phone]

FOR DEFENDANTS CYNOSURE, INC. AND
COMMANDER ACQUISITION LLC FIK/A
COMMANDER ACQUISITION CORP.

lsi Richard J. Rosensweig
Richard J. Rosensweig (BBO# 639547)
[e-mail]
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Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13 Page 5 of 6

David M. Zucker (BBO# 684800)
[e-mail]
Goulston & Storrs, P .C.
400 Atlantic Avenue
Boston, MA 02110
[phone]
IT IS SO ORDERED.

Dated:

,2013
Honorable Mark L. Wolf, U.S.DJ.

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Case 1:13-cv-11276-MLW Document 11 Filed 08/05/13

Page 6 of 6

CERTIFICATE OF SERVICE
I, Daniel W. Ralston, certify that on August 5, 2013, I caused a copy of this Stipulation
and Joint Motion to be served on all counsel electronically via the Court's ECF system.

lsi Daniel W. Ralston
Daniel W. Ralston