Anwar et al v. Fairfield Greenwich Limited et al

Filing 1398

SETTLEMENT AGREEMENT Citco Defendants. Document filed by Julia Anwar. (Attachments: #1 Exhibit A, #2 Exhibit A-1, #3 Exhibit A-2, #4 Exhibit A-3, #5 Exhibit B)(Finkel, Robert)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
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PASHA ANWAR, et al.,
Plaintiffs,
v.
FAIRFIELD GREENWICH LIMITED, et al.,
Defendants.

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:: MASTER FILE NO. 09-CV-0118 (VM)
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STIPULATION OF SETTLEMENT
This Stipulation of Settlement (the “Stipulation”), dated as of August 12, 2015, which is
entered into by and among the Representative Plaintiffs (as defined herein), on their own behalf
and on behalf of the Settlement Class (as defined herein), and the Citco Defendants (as defined
herein), by and through their undersigned attorneys, states all of the terms of the settlement and
resolution of this matter by the Settling Parties (as defined herein) and is intended by the Settling
Parties to fully and finally release, resolve, remise and discharge the Released Claims (as defined
herein) against the Released Parties (as defined herein), subject to the approval of the United
States District Court for the Southern District of New York (the “Court”). All undefined terms
below with initial capitalization shall have the meanings ascribed to them in Section A.1. below.
WHEREAS:
The Action
A.

On December 19, 2008, plaintiffs Pasha S. Anwar and Julia Anwar filed a

putative class action lawsuit on behalf of themselves and all others similarly situated in the

Supreme Court for the State of New York, entitled Anwar v. Fairfield Greenwich Group, et al.,
No. 603769/2008 (“Anwar”). On January 7, 2009, Anwar was removed to the Court.
B.

On and after January 8, 2009, putative class action lawsuits were filed by certain

plaintiffs on behalf of themselves and all others similarly situated in the Court, entitled Pacific
West Health Medical Center Inc. Employees Retirement Trust v. Fairfield Greenwich Group, et
al., No. 09 Civ. 00134; Inter-American Trust v. Fairfield Greenwich Group, et al., No. 09 Civ.
00301; Laor v. Fairfield Greenwich Group et al., No. 09 Civ. 2222; The Knight Services
Holdings Limited v. Fairfield Sentry Limited, et al., No. 09 Civ. 2269; and Zohar v. Fairfield
Greenwich Group, et al., No. 09 Civ. 4031 (collectively, and together with Anwar, the “Action”).
C.

By Orders dated on and after January 14, 2009, the Court consolidated the Action

under the Docket No. 09-cv-0118 (VM).
D.

By Orders dated January 30, 2009 and July 7, 2009, the Court appointed Boies,

Schiller & Flexner LLP, Wolf Popper LLP, and Lovell Stewart Halebian Jacobson LLP
(“Plaintiffs’ Lead Counsel”) as Interim Co-Lead Counsel to act on behalf of all Plaintiffs and
Lead Counsel for the Representative Plaintiffs in the Action. In the Action, through the filing of
the SCAC on September 29, 2009, the Representative Plaintiffs asserted claims on behalf of a
proposed class of similarly situated investors in the Funds against the Citco Defendants for
violations of federal securities law, specifically Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and New York and foreign law, under various common-law theories.
The SCAC also included over one hundred other Named Plaintiffs. The SCAC also asserted
claims against the FG Defendants, the PwC Defendants, and GlobeOp Financial Services LLC
(“GlobeOp”).

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E.

By Orders dated on and after April 27, 2010, over 200 additional Persons joined

the Action as Named Plaintiffs and were deemed parties to the same extent as if they had been
named as plaintiffs in the SCAC.
The Citco Defendants’ Motion to Dismiss the SCAC
F.

By Orders of the Court dated July 29, 2010 and August 18, 2010, the Court

granted in part and denied in part the Citco Defendants’ (and other Defendants’) motions to
dismiss the SCAC.
G.

By Order of the Court filed on November 3, 2011, the claims of ABN AMRO

Life S.A. in the Action were dismissed with prejudice.
H.

By Order of the Court filed on February 22, 2012, the claims of Jeffrey S.

Lieberman in the Action were dismissed with prejudice.
I.

On August 6, 2012, the Court granted the Citco Defendants’ (and other

Defendants’) renewed motion to dismiss all negligence-based claims asserted against them on
behalf of initial investors in the Funds. Subsequently, Plaintiffs amended the SCAC to add
allegations against the Citco Defendants, and on the basis of those amendments, the Court, on
May 13, 2014, reinstated Plaintiffs’ negligence-based claims related to initial investments
asserted against the Citco Defendants.
J.

In May 2015, in response to the recent Kingate decision by the Court of Appeals

for the Second Circuit concerning the Securities Litigation Uniform Standards Act (“SLUSA”),
the Plaintiffs withdrew Count 25 of the SCAC against the Citco Defendants. Thereafter, the
Citco Defendants filed a renewed motion to dismiss all of Plaintiffs’ remaining non-federal
claims pursuant to SLUSA. Plaintiffs opposed that motion, which was sub judice at the time the
Settling Parties signed a term sheet to settle Plaintiffs’ claims against the Citco Defendants.

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Merits Discovery
K.

Merits discovery commenced shortly after the Court’s August 18, 2010 Order on

Defendants’ motions to dismiss. Defendants produced, and Plaintiffs’ Counsel reviewed, more
than nine million pages of documents; and Plaintiffs’ Lead Counsel reviewed and produced to
defense counsel more than 75,000 pages of documents on behalf of the Representative Plaintiffs
and certain other Named Plaintiffs. Plaintiffs’ Lead Counsel conducted 30 merits depositions of
the Citco Defendants and approximately 48 merits depositions of former and current employees
of the other Defendants and non-parties in locations including New York, Miami, Toronto,
Amsterdam and Bermuda. Eighteen individuals who are associated with or who are the
Representative Plaintiffs or other Named Plaintiffs were deposed in Arizona, Cleveland, and
New York, some of whom traveled from international residences including Israel, Bahrain, and
Belgium for their depositions.
Class Certification
L.

On March 1, 2011, the Representative Plaintiffs served a motion for class

certification requesting the Court to certify the Action as a class action and to appoint them as
class representatives (the “Motion for Class Certification”). Following discovery on class
certification issues, all defendants in the Action, including the Citco Defendants, opposed the
Motion for Class Certification.
M.

On February 25, 2013, the Court granted Plaintiffs’ motion to certify a class

consisting of all investors in the Funds as of December 10, 2008, who suffered a net loss of
principal invested in the funds, except for investors in certain excluded countries. The Court also
appointed Plaintiffs’ Lead Counsel to serve in that capacity. On March 11, 2013, the FG
Defendants having settled in principle the claims asserted against them in the Action, the

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remaining Citco, PwC and GlobeOp Defendants filed motions pursuant to Fed. R. Civ. P. 23(f)
with the Second Circuit Court of Appeals seeking interlocutory review of the February 25, 2013
Order. GlobeOp subsequently withdrew its motion after entering into a settlement of the claims
asserted against it in the Action. The Second Circuit granted the Citco and PwC motions
pursuant to Rule 23(f).
N.

On June 19, 2014, the Second Circuit vacated the District Court’s class

certification order and remanded for additional factual findings by the District Court. Plaintiffs
thereafter renewed their class certification motion against the Citco and PwC Defendants. In an
order and opinion dated March 3, 2015, the District Court again certified the same class.
O.

The Citco and PwC Defendants thereafter filed motions pursuant to Fed. R. Civ.

P. 23(f) with the Second Circuit seeking interlocutory review of the March 3, 2015 class
certification order. The Citco Defendants’ motion was still pending when, on July 20, 2015, the
Settling Parties signed a term sheet agreeing to the settlement of the claims asserted by Plaintiffs
against the Citco Defendants in the Action. The Citco Defendants’ motion is now being held in
abeyance pending approval of this Settlement.
Expert Discovery
P.

In connection with expert discovery, Plaintiffs submitted expert reports from four

expert witnesses on issues relating to the Citco Defendants’ liability and an expert report on
damages. Citco submitted reports from seven experts on liability issues, one expert on damages
and one expert on foreign law. Plaintiffs, in response, submitted one rebuttal report from a new
liability expert and four rebuttal reports from their previously designated liability expert
witnesses. All six of Plaintiffs’ expert liability and damages experts and all eight of Citco’s
liability and damages experts (excluding the foreign law expert) were deposed as part of expert

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discovery. Plaintiffs and the PwC Defendants also exchanged expert reports on liability and
damages issues and conducted depositions of each other’s experts.
Summary Judgment and Trial
Q.

On April 22, 2015, the Court entered an Order, among other things, scheduling

September 1, 2015 as the deadline for the parties to file summary judgment motions and
scheduling commencement of trial of the Action for January 4, 2016. If not for the Settlement,
the Citco Defendants would have filed a summary judgment motion seeking dismissal of all
remaining Counts against them in the SCAC.
Prior Settlements
R.

On March 25, 2013, the Court entered an Order approving the settlement of

Plaintiffs’ claims against the FG Defendants. That order was affirmed on appeal. On November
22, 2013, the Court entered an Order approving the settlement of Plaintiffs’ claims against
GlobeOp; there was no appeal.
The Proposed Settlement of the Action Against the Citco Defendants
S.

Beginning in August 2013, at the suggestion of the Court and with the assistance

of retired U.S. District Judge Layn Phillips, a highly experienced mediator, Plaintiffs and the
Citco Defendants engaged in extensive, arm’s-length negotiations, including three separate fullday meetings conducted over a two year period. In this process, Judge Phillips made a
mediator’s proposal that was ultimately accepted by the parties.
T.

On July 20, 2015, the Settling Parties signed a term sheet agreeing to fully and

finally settle the Action as against the Citco Defendants in return for specified consideration and
to fully release all Released Claims asserted against the Citco Defendants and the Released
Parties, which agreement is memorialized in this Stipulation.

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U.

In return for the consideration described herein, this Stipulation is intended to

fully and finally release, resolve, remise and discharge the Released Claims against the Released
Parties with prejudice.
V.

By virtue of this Settlement, if approved by this Court, the PwC Defendants shall

remain the only defendants in this Action.
W.

The Settling Parties’ entry into this Stipulation is not, and shall not be construed

as or deemed to be evidence of, an admission as to the merit or lack of merit of any claims or
defenses asserted in the Action.
X.

Through the extensive discovery described above, Plaintiffs’ Lead Counsel have

conducted a comprehensive investigation relating to the claims and the underlying events alleged
in the Action, and have also investigated the financial status of the Citco Defendants. Plaintiffs’
Lead Counsel have analyzed the evidence and information adduced through discovery and
investigation, and have researched the applicable law with respect to the Representative
Plaintiffs and the Settlement Class. In negotiating and evaluating the terms of this Stipulation,
Plaintiffs’ Lead Counsel considered the significant legal and factual defenses to the
Representative Plaintiffs’ Claims; continuing developments on several key legal issues that may
adversely affect plaintiffs’ claims; the lengthy amount of time that would be entailed in
addressing contested class certification issues, as well as further motion practice, trial, and likely
appeals; and the Citco Defendants’ ability to satisfy a judgment in the Action if the
Representative Plaintiffs were to prevail at trial and on appeal, as well as the potential difficulty
in executing on any such judgment. In addition, Plaintiffs’ Lead Counsel considered the effect
that the Settlement would have in simplifying litigation of the remaining claims against the PwC
Defendants, who may through settlement or judgment provide significant additional

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compensation to the class. Plaintiffs’ Lead Counsel believe they have received sufficient
information to evaluate the merits of the proposed Settlement. Based upon their evaluation,
Plaintiffs’ Lead Counsel and the Representative Plaintiffs unanimously have determined that the
Settlement set forth in this Stipulation is fair, reasonable and adequate and in the best interests of
all Settlement Class Members, and that it confers substantial benefits upon the Settlement Class
Members.
Y.

The Released Parties deny any and all allegations of wrongdoing, fault, liability or

damage whatsoever; deny that they engaged in, committed or aided or abetted the commission of
any breach of duty, breach of contract, wrongdoing or violation of law; deny that they acted
improperly in any way; deny that they caused any damage whatsoever to the Representative
Plaintiffs or any of the other Settlement Class Members; believe that they acted properly at all
times; maintain that they complied with any fiduciary, contractual, or other duties to the extent
such duties existed; and maintain that they have complied with all laws at all times.
Z.

The Citco Defendants enter into this Stipulation solely to eliminate the

uncertainties, burden and expense of further litigation. Nothing in this Stipulation shall be
construed as any admission by any of the Released Parties of any wrongdoing, fault, liability, or
damages whatsoever.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by
and among the Representative Plaintiffs, for themselves and on behalf of the Settlement Class,
and the Citco Defendants, by and through their respective undersigned counsel that, subject to
the approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in
consideration of the benefits flowing to the Settling Parties from the Settlement set forth herein,
the Action and the Released Claims as against the Citco Defendants shall be finally and fully

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compromised, settled and released, the Action shall be dismissed with prejudice and the
Released Claims shall be finally and fully released as against the Citco Defendants and the
Released Claims shall be finally and fully released as against the Released Parties, upon and
subject to the terms and conditions of this Stipulation, as follows.
A. Definitions
1.

In addition to the terms defined above, the following capitalized terms, used in

this Stipulation, shall have the meanings specified below:
a. “Administrative Costs” means all costs and expenses associated with
providing notice of the Settlement to the Settlement Class or otherwise administering or carrying
out the terms of the Settlement, excluding legal fees.
b.

“Authorized Claimant” means any Settlement Class Member who is a

Claimant and whose claim for recovery has been allowed pursuant to the terms of this
Stipulation, the exhibits hereto, and any order of the Court.
c. “BLMIS” means Bernard L. Madoff Investment Securities LLC.
d.

“Beneficial Owner” means any one of, and “Beneficial Owners” means

all of, those Persons who were beneficial owners of shares or limited partnership interests in any
of the Funds as of December 10, 2008 (whether as holders of record or traceable to a shareholder
or limited partner account of record). For the avoidance of doubt, only Beneficial Owners may
file a Proof of Claim or request for exclusion with respect to each share or limited partnership
interest in any of the Funds. Where a fund, trust, or similar investment vehicle is an investor in
one or more of the Funds, the fund, trust, or similar investment vehicle is the Beneficial Owner
for purposes of this Stipulation, not the underlying investors in the fund or similar investment
vehicle. Where the record owner of shares or limited partnership interests is a nominee,

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custodian, or other Person acting in a materially similar fashion on behalf of one or more
Beneficial Owners, that nominee, custodian or other Person is not a Beneficial Owner and may
not execute a Proof of Claim or request for exclusion on behalf of any such Beneficial Owners.
e.

“Citco Defendants” means Citco Fund Services (Europe) B.V., Citco

(Canada) Inc., Citco Bank Nederland N.V. Dublin Branch, Citco Global Custody N.V., Citco
Fund Services (Bermuda Limited), The Citco Group Limited, Brian Francoeur, and Ian Pilgrim.
f. “Claimant” means any Settlement Class Member who files a Proof of
Claim in such form and manner, and within such time, as the Court shall prescribe.
g.

“Claims” means any and all manner of claims, demands, rights, actions,

potential actions, causes of action, liabilities, duties, damages, losses, diminutions in value,
obligations, agreements, suits, fees, attorneys’ fees, expert or consulting fees, debts, expenses,
costs, sanctions, judgments, decrees, matters, issues and controversies of any kind or nature
whatsoever, whether known or unknown, contingent or absolute, liquidated or not liquidated,
accrued or unaccrued, suspected or unsuspected, disclosed or undisclosed, apparent or not
apparent, foreseen or unforeseen, matured or not matured, which now exist, or heretofore or
previously existed, or may hereafter exist (including, but not limited to, any claims arising under
federal, state or foreign law, common law, bankruptcy law, statute, rule, or regulation relating to
alleged fraud, breach of any duty, breach of any contract, negligence, fraudulent conveyance,
avoidance, violations of the federal securities laws, or otherwise), whether individual, class,
direct, derivative, representative, on behalf of others, legal, equitable, regulatory, governmental
or of any other type or in any other capacity.
h. “Claims Administrator” means Rust Consulting, which shall administer
the Settlement.

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i. “Defendants” means PricewaterhouseCoopers LLP,
PricewaterhouseCoopers Accountants Netherlands N.V., PricewaterhouseCoopers International
Limited, Citco Fund Services (Europe) B.V., Citco (Canada) Inc., Citco Bank Nederland N.V.
Dublin Branch, Citco Global Custody N.V., Citco Fund Services (Bermuda) Ltd., The Citco
Group Limited, Brian Francoeur, Ian Pilgrim, the FG Defendants, and GlobeOp Financial
Services LLC (“GlobeOp”).
j. “Escrow Agent” means Citibank, N.A., which shall be subject to the joint
control of Boies Schiller & Flexner LLP and Paul, Weiss, Rifkind, Wharton, & Garrison LLP
(“Paul Weiss”), except after the occurrence of the Effective Date as provided in ¶ 33.
k. “Effective Date” means the first date by which all of the events and
conditions specified in ¶ 32 of this Stipulation have been met and have occurred.
l. “FG Defendants” means Fairfield Greenwich Limited, Fairfield
Greenwich Bermuda Limited, Fairfield Greenwich Group, Fairfield Greenwich Advisors LLC,
Fairfield Risk Services Ltd., Fairfield Heathcliff Capital LLC, and Fairfield Greenwich (UK)
Limited, Walter M. Noel, Jr., Jeffrey H. Tucker, Andrés Piedrahita, Lourdes Barreneche, Robert
Blum, Cornelis Boele, Gregory Bowes, Vianney d’Hendecourt, Yanko Della Schiava, Harold
Greisman, Jacqueline Harary, David Horn, Richard Landsberger, Daniel E. Lipton, Julia Luongo,
Mark McKeefry, Charles Murphy, Corina Noel Piedrahita, Maria Teresa Pulido Mendoza,
Santiago Reyes, Andrew Smith, Philip Toub, and Amit Vijayvergiya.
m. “Final” when referring to the Final Judgment means exhaustion of all
possible appeals, meaning (i) if no objections are filed pursuant to ¶ 12 of this Stipulation, the
day after entry of the Final Judgment, or (ii) if any objections are filed pursuant to ¶ 12 of this
Stipulation, (a) if no appeal or request for review of the Final Judgment is filed, the day after the

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date of expiration of any time for appeal or review of the Final Judgment under the Federal
Rules of Civil Procedure, i.e., thirty (30) days after the Judgment or order is entered on the
Court’s docket or (b) if an appeal or request for review of the Final Judgment is filed, the day
after the date the appeal or request for review is dismissed, or the Final Judgment is upheld on
appeal or review in all material respects, and is not subject to further review on appeal or by
certiorari or otherwise; provided, however, that any dispute or appeals relating solely to the
amount, payment or allocation of attorneys’ fees and expenses, the Plan of Allocation, or the
provisions of ¶¶ 18-19 of this Stipulation shall have no effect on finality for purposes of
determining the date on which the Final Judgment becomes Final.
n. “Final Judgment” means the final order and judgment to be entered by the
Court approving the Settlement, materially in the form attached hereto as Exhibit B, or an
alternative judgment finally approving the Settlement which is materially different from Exhibit
B and which does not result in any Settling Party terminating the Settlement and Stipulation
pursuant to ¶ 31 of this Stipulation.
o.

“Fund” means any one of, and “Funds” means all of, Fairfield Sentry

Limited, Fairfield Sigma Limited, Fairfield Lambda Limited, Greenwich Sentry, L.P. and
Greenwich Sentry Partners, L.P.
p. “Named Plaintiffs” and “Plaintiffs” means the Persons identified as
plaintiffs in paragraphs 1 through 116 of the SCAC, together with all other Persons who, by
order of the Court, were subsequently joined as plaintiffs in the Action and deemed plaintiffs
with respect to the SCAC to the same extent as if they had been named as plaintiffs in the SCAC,
except any plaintiffs whose claims have been dismissed with prejudice.

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q. “Net Loss” means the total cash investment made by a Beneficial Owner
in a Fund, directly or indirectly through one or more intermediaries, less the total amount of any
redemptions or withdrawals or recoveries by that Beneficial Owner from or with respect to such
investment in that Fund.
r.

“Notice” means the “Notice of Proposed Partial Settlement of Class

Action and Settlement Fairness Hearing, and Motion for Attorneys’ Fees and Reimbursement of
Expenses,” which is to be sent to Settlement Class Members substantially in the form attached
hereto as Exhibit A-1.
s. “Opt-Out” means any one of, and “Opt-Outs” means all of, any Persons
who otherwise would be Settlement Class Members and have timely and validly requested
exclusion from this Settlement Class in accordance with the provisions of the Preliminary
Approval Order and the Notice given pursuant thereto.
t.

“Person” means any individual, corporation, fund, limited liability

corporation, professional corporation, limited liability partnership, partnership, limited
partnership association, joint stock company, estate, legal representative, trust, unincorporated
association, government or any political subdivision or agency thereof, and any business or legal
entity and their spouses, heirs, predecessors, successors, representatives, or assigns.
u. “Plaintiffs’ Counsel” means Plaintiffs’ Lead Counsel and such other
plaintiffs’ counsel who have filed actions consolidated into the SCAC.
v. “Plaintiffs’ Lead Counsel” means Boies, Schiller & Flexner LLP, Wolf
Popper LLP, and Lovell Stewart Halebian Jacobson LLP.
w. “Plan of Allocation” means a plan or formula for allocating the Settlement
Fund to Authorized Claimants after payment of Administrative Expenses, Taxes and Tax

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Expenses, and such attorneys’ fees, costs and expenses as may be awarded by the Court. Any
Plan of Allocation is not a condition to the effectiveness of this Stipulation, and the Released
Parties shall have no responsibility or liability with respect thereto.
x. “Preliminary Approval Order” means the proposed order preliminarily
approving the Settlement and directing notice thereof to the Settlement Class substantially in the
form attached hereto as Exhibit A.
y. “Proof of Claim” means the Proof of Claim to be submitted by Claimants,
substantially in the form attached as Exhibit A-3.
z. The “PwC Defendants” means PricewaterhouseCoopers LLP, and
PricewaterhouseCoopers Accountants Netherlands N.V.
aa. “Released Claims” means any and all Claims, including Unknown Claims,
that have been, could have been, or in the future can or might be asserted in any federal, state or
foreign court, tribunal, forum or proceeding by on or behalf of any of the Releasing Parties
against any one or more of the Released Parties, whether any such Released Parties were named,
served with process, or appeared in the Action, which have arisen, could have arisen, arise now,
or hereafter arise out of or relate in any manner to the allegations, facts, events, matters, acts,
occurrences, statements, representations, misrepresentations, omissions, or any other matter,
thing or cause whatsoever, or any series thereof, embraced, involved, at issue, or set forth in, or
referred to or otherwise related in any way, directly or indirectly, to: (i) the Action, and the
allegations, claims, defenses, and counterclaims asserted in the Action, (ii) marketing and/or
selling of the Funds by one or more of the Citco Defendants and/or the Released Parties, (iii) any
disclosures or failures to disclose, by one or more of the Citco Defendants and/or the Released
Parties, with respect to one or more of the Funds and/or the Citco Defendants and/or BLMIS, (iv)

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any fiduciary, contractual, or other obligations of one or more of the Citco Defendants and/or the
Released Parties (to the extent such duties existed) related to the Funds and/or the Settlement
Class Members, (v) any administrative, custodial, or other services provided to any of the Funds
and/or BLMIS by one or more of the Citco Defendants and/or the Released Parties, (vi) due
diligence by one or more of the Citco Defendants and/or the Released Parties related to the
Funds and/or BLMIS, (vii) purchases of, sales of (or decisions not to sell), or fees paid in relation
to, direct or indirect investments in one or more of the Funds, (viii) any direct or indirect
investment in BLMIS, or (ix) any claims in connection with, based upon, arising out of, or
relating to the Settlement (but excluding any claims to enforce the terms of the Settlement).
bb.

“Released Parties” means (i) each of the Citco Defendants, their

respective past, present and future, direct or indirect, parent entities, subsidiaries, and other
affiliates, predecessors and successors of each and all such entities, and each and all of the
foregoing entities’ respective past, present, and future directors, officers, employees, partners,
alleged partners, stockholders, members and owners, attorneys, advisors, consultants, trustees,
insurers, co-insurers, reinsurers, representatives, and assigns, including but not limited to Brian
Francoeur and Ian Pilgrim; (ii) to the extent not included in (i) above, any and all persons, firms,
trusts, corporations, and other entities in which any of the Citco Defendants has a financial
interest or was a founder, settler or creator of the entity, and, in their capacity as such, any and all
officers, directors, employees, trustees, beneficiaries, settlers, creators, attorneys, consultants,
agents, or representatives of any such person, firm, trust, corporation or other entity; and (iii) in
their capacity as such, the legal representatives, heirs, executors, and administrators, of any of
the foregoing. For avoidance of doubt, “Released Parties” does not include the PwC Defendants.

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cc.

“Releasing Parties” means the Representative Plaintiffs, each and every

member of the Settlement Class and each of their respective predecessors, successors, assigns,
parents, subsidiaries and other affiliates, officers, directors, employees, partners, members,
managers, owners, trustees, beneficiaries, advisors, consultants, insurers, reinsurers,
stockholders, investors, nominees, custodians, attorneys, heirs, representatives, administrators,
executors, devisees, legatees, and estates.
dd. “Representative Plaintiffs” means the representative plaintiffs in the
Action, specifically, Pacific West Health Medical Center Employees Retirement Trust, Harel
Insurance Company Ltd., Martin and Shirley Bach Family Trust, Natalia Hatgis, Securities &
Investment Company Bahrain, Dawson Bypass Trust, and St. Stephen’s School.
ee. “SCAC” means the Second Consolidated Amended Complaint filed by
the Representative Plaintiffs in the Action on September 29, 2009, and the additional amended
allegations to the Second Consolidated Amended Complaint filed by the Representative
Plaintiffs in this Action on April 17, 2014.
ff. “Settlement” means the settlement contemplated by this Stipulation.
gg. “Settlement Amount” means the cash sum of $125,000,000 (one hundred
twenty-five million dollars).
hh. “Settlement Class” means all Persons who were Beneficial Owners of
shares or limited partnership interests in the Funds as of December 10, 2008 (whether as holders
of record or traceable to a shareholder or limited partner account of record) and who suffered a
Net Loss of principal invested in the Funds, excluding (i) Opt-Outs; (ii) any Persons who have
been dismissed from this Action with prejudice or who are barred by prior judgment or
settlement from asserting any of the claims against the Citco Defendants set forth in the SCAC;

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(iii) Fairfield Sigma Limited; (iv) Fairfield Lambda Limited; and (v) the Defendants and any
entity in which the Defendants have a controlling interest, and the officers, directors, affiliates,
legal representatives, attorneys, immediate family members (as defined in 17 C.F.R. 240.16a1(e)), heirs, successors, subsidiaries and/or assigns of any such individual or entity in their
capacity as such (except for any of the Citco Defendants in their role as nominee or record
shareholder for any investor). For the avoidance of doubt, Fairfield Sigma Limited and Fairfield
Lambda Limited are excluded from the Settlement Class because shareholders of those funds are
included as Settlement Class Members to the extent they have suffered a Net Loss of principal in
those funds.
ii. “Settlement Class Member” means any one of, and “Settlement Class
Members” means all of, the members of the Settlement Class.
jj. “Settlement Hearing” means the hearing at or after which the Court will
make a final decision pursuant to Rule 23 of the Federal Rules of Civil Procedure as to whether
the Settlement contained in the Stipulation is fair, reasonable and adequate, and therefore, should
receive final approval from the Court.
kk. “Settling Party” means any one of, and “Settling Parties” means all of,
the parties to the Stipulation, namely the Citco Defendants and the Representative Plaintiffs on
behalf of themselves and the Settlement Class.
ll. “Unknown Claims” shall mean all claims, demands, rights, liabilities, and
causes of action of every nature and description which any Settlement Class Member does not
know or suspect to exist in his, her or its favor at the time of the release of the Released Parties
which, if known by him, her or it, might have affected his, her or its settlement with and release
of the Released Parties, or might have affected his, her or its decision not to opt-out or object to

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this Settlement. With respect to any and all Released Claims, the Settling Parties stipulate and
agree that, upon the Effective Date, the Representative Plaintiffs shall expressly waive, and each
of the Settlement Class Members shall be deemed to have waived, and by operation of the Final
Judgment shall have waived, the provisions, rights and benefits of California Civil Code § 1542,
which provides:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the
debtor.
The Representative Plaintiffs shall expressly waive and each of the Settlement Class Members
shall be deemed to have, and by operation of the Final Judgment shall have, expressly waived
any and all provisions, rights and benefits conferred by any law of any state, territory, country or
principle of common law, which is similar, comparable or equivalent to California Civil Code §
1542. Settlement Class Members may hereafter discover facts in addition to or different from
those which he, she or it now knows or believes to be true with respect to the subject matter of
the Released Claims, but the Representative Plaintiffs shall expressly fully, finally and forever
settle and release, and each Settlement Class Member, upon the Effective Date, shall be deemed
to have, and by operation of the Final Judgment shall have, fully, finally and forever settled and
released, any and all Released Claims, known or unknown, suspected or unsuspected, contingent
or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have
existed, upon any theory of law or equity now existing or coming into existence in the future,
including, but not limited to, conduct which is negligent, intentional, with or without malice, or a
breach of any fiduciary, contractual, or other duty, law or rule, without regard to the subsequent
discovery or existence of such different or additional facts. The Representative Plaintiffs
acknowledge, and the Settlement Class Members shall be deemed by operation of the Final

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Judgment to have acknowledged, that the foregoing waiver was separately bargained for and a
key element of the Settlement of which this release is a part.
B. The Settlement Consideration
2.

In consideration for the promises and obligations contained herein and the full

and final release, settlement and discharge of all Released Claims against the Released Parties,
the Settling Parties have agreed to payments, and waivers as set forth in ¶¶ 3-5 of this
Stipulation, subject to the conditions set forth in this Stipulation.
3.

Subject to the terms of the Stipulation, and on the latter of ten (10) days after the

date on which the Court grants preliminary approval of the Settlement or September 18, 2015
(the “Settlement Funding Date”), the Citco Defendants shall cause $125,000,000 to be deposited
into the Account, under the control of the Escrow Agent. The Settlement Amount, and interest
earned thereon, is referred to as the “Settlement Fund.”
4.

Subject to the conditions set forth herein, the Citco Defendants agree to waive,

and by operation of the Final Judgment shall have waived all rights to seek recovery on claims
for contribution or indemnity that they hold or may hold against the Funds or any party
indemnified by the Funds, the FG Defendants, GlobeOp, and the PwC Defendants for any
expenses incurred or amounts paid in connection with the Action. Nothing in this provision
precludes the Citco Defendants from arguing that the settlement proceeds in this case are an
offset against claims that may be made against them in other proceedings.
5.

Apart from the payments identified in ¶¶ 3 and 10 of this Stipulation, the Citco

Defendants shall have no further monetary obligation to Plaintiffs’ Counsel, the Representative
Plaintiffs, or the Settlement Class under this Settlement.

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C. Representations and Warranties Regarding the Settlement Consideration
6.

The Citco Defendants warrant as to themselves that they are not insolvent nor

will the payments contemplated herein render them insolvent within the meaning and/or for the
purposes of the United States Bankruptcy Code, including §101 and §547 thereof, or any similar
provisions of foreign law.
D. Handling and Disbursement of Funds by the Escrow Agent
7.

No monies will be disbursed from the Settlement Fund until after the Effective

Date except:
i.

As provided in ¶ 10 below;

ii.

As provided in ¶ 38 below, if applicable; and

iii.

To pay Taxes and Tax Expenses (as defined in ¶ 11 below) on the

income earned by the Settlement Fund. Taxes and Tax Expenses shall be paid out of the
Settlement Fund and shall be considered to be a cost of administration of the Settlement and shall
be timely paid by the Escrow Agent (pursuant to written instructions from counsel pursuant to
this Stipulation) without prior Order of the Court.
8.

The Escrow Agent (pursuant to written instructions from counsel pursuant to this

Stipulation) shall invest any funds deposited into the Settlement Fund in short term instruments
backed by the full faith and credit of the United States Government or fully insured by the
United States Government or an agency thereof (or funds that invest solely in such instruments),
and shall reinvest the proceeds of these instruments as they mature in similar instruments at their
then-current market rates.

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9.

The Escrow Agent shall not disburse the Settlement Fund, except as provided in

this Stipulation, by an order of the Court, or with the written agreement of counsel for all of the
Settling Parties pursuant to this Stipulation.
10.

The Escrow Agent may, without further approval from the Citco Defendants or

the Court, disburse at the direction of Plaintiffs’ Lead Counsel up to $300,000 (three hundred
thousand dollars) from the Settlement Fund prior to the Effective Date to pay Administrative
Costs, including, without limitation: escrow agent costs, the costs of publishing summary notice,
and printing and mailing the full Notice and Proof of Claim, as directed by the Court. In the
event that such costs are incurred prior to payment of the Settlement Amount by the Citco
Defendants and the Settlement is not consummated for any reason, the Citco defendants shall
promptly reimburse such costs up to a maximum of $150,000 (one hundred fifty thousand
dollars). This sentence shall survive termination of the Settlement.
E. Taxes
11.

The Settling Parties agree to treat the Settlement Fund as being at all times a

“qualified settlement fund” within the meaning of Treasury Regulation § 1.468B-1. In addition,
Plaintiffs’ Lead Counsel or its designee shall timely make such elections as necessary or
advisable to carry out the provisions of this ¶ 11, including the “relation-back election” (as
defined in Treasury Regulation § 1.468B-1) back to the earliest permitted date. Such elections
shall be made in compliance with the procedures and requirements contained in such regulations.
It shall be the responsibility of Plaintiffs’ Lead Counsel or its designee to timely and properly
prepare and deliver the necessary documentation for signature by all necessary parties, and
thereafter to cause the appropriate filing to occur.

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i.

For purposes of § 468B of the Internal Revenue Code of 1986, as

amended, and Treasury Regulation § 1.468B-2(k)(3) promulgated thereunder, the
“administrator” shall be the Plaintiffs’ Lead Counsel or its designee. Plaintiffs’ Lead Counsel or
its designee shall timely and properly file all informational and other tax returns necessary or
advisable with respect to the Settlement Fund (including without limitation the returns described
in Treasury Regulation § 1.468B-2(k)). Such returns (as well as the election described in this ¶
11) shall be consistent with this ¶ 11 and in all events shall reflect that all Taxes (including any
estimated Taxes, interest or penalties) on the income earned by the Settlement Fund shall be paid
out of the Settlement Fund as provided in ¶ 11(ii) hereof.
ii.

All Taxes (including any estimated Taxes, interest or penalties) arising

with respect to the income earned by the Settlement Fund, including any Taxes or tax detriments
that may be imposed upon the Citco Defendants or their counsel with respect to any income
earned by the Settlement Fund for any period during which the Settlement Fund does not qualify
as a “qualified settlement fund” for federal or state income tax purposes (“Taxes”), and expenses
and costs incurred in connection with the operation and implementation of this ¶ 11 (including,
without limitation, expenses of tax attorneys and/or accountants and mailing and distribution
costs and expenses or penalties relating to filing (or failing to file) the returns described in this ¶
11) (“Tax Expenses”), shall be paid out of the Settlement Fund, as appropriate. The Citco
Defendants and their counsel shall have no liability or responsibility for the Taxes or the Tax
Expenses. Taxes and Tax Expenses shall be treated as, and considered to be, a cost of
administration of the Settlement and shall be timely paid out of the Settlement Fund without
prior order from the Court. The Escrow Agent (pursuant to written instructions from counsel
pursuant to this Stipulation) shall be obligated (notwithstanding anything herein to the contrary)

22

to withhold from distribution to Authorized Claimants any funds necessary to pay such amounts,
including the establishment of adequate reserves for any Taxes and Tax Expenses (as well as any
amounts that may be withheld under Treasury Regulation § 1.468B-2(l)(2)). Neither the Citco
Defendants nor their counsel is responsible therefore nor shall they have any liability with
respect thereto. The Settling Parties agree to cooperate with each other, and their tax attorneys
and accountants, to the extent reasonably necessary to carry out the provisions of this ¶ 11.
F. Preliminary Approval Order, Notice Order, and Settlement Hearing
12.

Promptly after the execution of this Stipulation, Plaintiffs’ Lead Counsel shall

submit this Stipulation and its exhibits to the Court and shall apply for preliminary approval of
the Settlement set forth in this Stipulation, entry of a preliminary approval order, and approval
for the mailing and dissemination of notice, substantially in the form of Exhibits A, A-1, A-2,
and A-3. The mailed Notice (Exhibit A-1) shall include the general terms of the Settlement and
the provisions of the Plan of Allocation, and shall set forth the procedure by which recipients of
the Notice may object to the Settlement or the Plan of Allocation or request to be excluded from
the Settlement Class. The date and time of the Settlement Hearing shall be added to the Notice
before it is mailed or otherwise provided to Settlement Class Members.
13.

To assist in dissemination of notice, the Citco Defendants, at their own expense,

will cooperate in providing names and contact information of the Settlement Class Members and
their nominees or custodians in their possession and will use best reasonable efforts to assist
Plaintiffs’ Lead Counsel in obtaining such information from other sources (to the extent not
already done so).
14.

At the time of the submission described in ¶ 12 hereof, the Settling Parties,

through their counsel, shall jointly request that, after the Notice is provided, the Court hold the

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Settlement Hearing and approve the Settlement as set forth herein as promptly after the
Settlement Hearing as possible, except to the extent a Settling Party has exercised the right to
terminate the Settlement pursuant to ¶ 31 or ¶ 34.
15.

The Court, in its discretion, may order that the notice of the Settlement be

combined with the required notice of any class certified by the Court with respect to claims
against other Defendants.
G. Releases
16.

Upon the Effective Date, as defined in ¶ 1(k) hereof, the Releasing Parties, on

behalf of themselves, their successors and assigns, and any other Person claiming (now or in the
future) through or on behalf of them, regardless of whether any such Releasing Party ever seeks
or obtains by any means, including without limitation by submitting a Proof of Claim, any
disbursement from the Settlement Fund, shall be deemed to have, and by operation of the Final
Judgment shall have, fully, finally, and forever released, relinquished, and discharged all
Released Claims against the Released Parties and shall have covenanted not to sue the Released
Parties with respect to all such Released Claims, and shall be permanently barred and enjoined
from asserting, commencing, prosecuting, instituting, assisting, instigating, or in any way
participating in the commencement or prosecution of any action or other proceeding, in any
forum, asserting any Released Claim, either directly, representatively, derivatively, or in any
other capacity, against any of the Released Parties. Nothing contained herein shall, however,
bar the Releasing Parties from bringing any action or claim to enforce the terms of this
Stipulation or the Final Judgment. This release does not include any claims asserted or which
may be asserted by the Funds, or the pending (though dismissed) derivative litigation brought in
connection with the Funds; provided, however, that to the extent that any such claims have been

24

or may be asserted, nothing in this paragraph or any provision herein shall prevent the Released
Parties from asserting any defenses or raising any argument as to liability or damages with
respect to such claims or, with the exception of the provisions of paragraph 4, prevent the
Released Parties from asserting any rights, remedies or claims against the Funds or in the
pending (though dismissed) derivative litigation.
17.

Upon the Effective Date, as defined in ¶ 1(k) hereof, the Released Parties, on

behalf of themselves, their heirs, executors, predecessors, successors and assigns, shall be
deemed to have, and by operation of the Final Judgment shall have, fully, finally, and forever
released, relinquished, and discharged each and all of the Representative Plaintiffs, Settlement
Class Members and Plaintiffs’ Counsel from all Claims which arise out of, concern or relate to
the institution, prosecution, settlement or dismissal of the Action (the “Defendant Released
Claims”), and shall be permanently enjoined from prosecuting the Defendant Released Claims
against the Representative Plaintiffs, Settlement Class Members and Plaintiffs’ Counsel. The
Citco Defendants hereby represent and warrant that they are not aware of any claims that they
have or may have against the Representative Plaintiffs, the Named Plaintiffs, Plaintiffs’ Counsel
or a Settlement Class Member (or nominee) that are not released by virtue of this ¶ 17. Nothing
contained herein shall, however, bar the Citco Defendants from bringing any action or claim to
enforce the terms of this Stipulation or the Final Judgment.
18.

To the fullest extent permitted by law, all Persons, including without limitation

the PwC Defendants, shall be permanently enjoined, barred and restrained from bringing,
commencing, prosecuting or asserting any claims, actions, or causes of action for contribution,
indemnity or otherwise against any of the Released Parties seeking as damages or otherwise the
recovery of all or any part of any liability, judgment or settlement which they pay or are

25

obligated to pay or agree to pay to the Settlement Class or any Settlement Class Member arising
out of, relating to or concerning any acts, facts, statements or omissions that were or could have
been alleged in the Action, whether arising under state, federal or foreign law as claims, crossclaims, counterclaims, third-party claims or otherwise, in the Court or any other federal, state, or
foreign court, or in any arbitration proceeding, administrative agency proceeding, tribunal, or any
other proceeding or forum. The proposed Final Judgment will include a reciprocal order equal in
scope to that contemplated in this ¶ 18 enjoining the Released Parties from bringing claims
against the PwC Defendants.
19.

Any final verdict or judgment that may be obtained by one or more of the

Representative Plaintiffs or one or more of the other Settlement Class Members, whether
individually or on behalf of a class, against one or more of the PwC Defendants or other Person
barred from seeking contribution pursuant to this Stipulation (a “Non-Dismissed Defendant
Judgment”) shall be reduced, to the extent permitted by applicable law, by the greater of (i) the
amount that corresponds to the percentage of responsibility attributed to the Released Parties
under the Non-Dismissed Defendant Judgment; and (ii) the gross monetary consideration
provided to such Representative Plaintiff or other Settlement Class Member or Members
pursuant to this Stipulation.
H. Administration and Calculation of Claims, Final Awards and Supervision and
Distribution of the Settlement Fund
20.

Under the supervision of Plaintiffs’ Lead Counsel, acting on behalf of the

Settlement Class, and subject to such supervision and direction of the Court as may be necessary
or as circumstances may require, the Claims Administrator shall administer and calculate the
claims submitted by Settlement Class Members and shall oversee distribution of the Net
Settlement Fund (as defined below), to Authorized Claimants. Citco, as nominee or record

26

shareholder for certain investors’ accounts, will follow instructions of Settlement Class members
with respect to the submission and processing of Proofs of Claim.
21.

The Settlement Fund shall be applied as follows:
i.

To pay the Taxes and Tax Expenses described in ¶ 11 above;

ii.

To pay Administrative Costs;

iii.

To pay Plaintiffs’ Counsel’s attorneys' fees and expenses and the

Representative Plaintiffs’ actual out of pocket expenses relating to the representation of the
putative class (including lost wages) and, if appropriate, an incentive award as provided in ¶¶ 25
and 26 hereof (the “Fee and Expense Award”), to the extent allowed by the Court; and
iv.

To distribute the balance of the Settlement Fund, that is, the Settlement

Fund less the items set forth in ¶¶ 21(i), (ii), and (iii) hereof (the “Net Settlement Fund”), to the
Authorized Claimants as allowed by this Stipulation, the Plan of Allocation, or the Court.
22.

Upon and after the Effective Date with respect to the Net Settlement Fund, and

in accordance with the terms of the Plan of Allocation or such further approval and further
order(s) of the Court as may be necessary or as circumstances may require, the Net Settlement
Fund shall be distributed to Authorized Claimants subject to and in accordance with the Plan of
Allocation set forth in the Notice.
23.

This is not a claims-made settlement, and if all conditions of the Stipulation are

satisfied and the Final Judgment becomes Final, no portion of the Settlement Fund will be
returned to the Citco Defendants. Neither the Citco Defendants nor their counsel shall have any
responsibility for, interest in, or liability whatsoever with respect to the investment or
distribution of the Net Settlement Fund, the Plan of Allocation, the determination,
administration, or calculation of claims, the payment or withholding of Taxes or Tax Expenses,

27

or any losses incurred in connection therewith. No Person shall have any claims against
Plaintiffs’ Counsel, the Claims Administrator or any other agent designated by Plaintiffs’
Counsel based on distribution determinations or claim rejections made substantially in
accordance with this Stipulation and the Settlement contained herein, the Plan of Allocation, or
orders of the Court.
24.

It is understood and agreed by the Settling Parties that any proposed Plan of

Allocation of the Net Settlement Fund including, but not limited to, any adjustments to an
Authorized Claimant’s claim set forth therein, is not a condition of this Stipulation and is to be
considered by the Court separately from the Court’s consideration of the fairness,
reasonableness, and adequacy of the Settlement set forth in this Stipulation. Any order or
proceedings relating to the Plan of Allocation, or any appeal from any order relating thereto or
reversal or modification thereof, shall not operate to modify, terminate or cancel this Stipulation,
or affect or delay the finality of the Final Judgment, or any other orders entered pursuant to this
Stipulation.
I. Plaintiffs’ Counsel’s Attorneys’ Fees and Reimbursement of Expenses
25.

Plaintiffs’ Lead Counsel may submit an application or applications (the “Fee and

Expense Application”) for distributions from the Settlement Fund to Plaintiffs’ Lead Counsel
and other firms that have participated in the Action on behalf of the Settlement Class Members
for (i) an award of attorneys’ fees; (ii) reimbursement of actual costs and expenses, including the
fees and expenses of experts and/or consultants, incurred in connection with prosecuting the
Action as against the Citco Defendants; and (iii) reimbursement to the Representative Plaintiffs
of their actual out of pocket expenses (including lost wages) and, if appropriate, an incentive
award.

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26.

The attorneys’ fees and expenses, including the fees and expenses of experts,

consultants and/or the Representative Plaintiffs, as awarded by the Court, shall be paid to
Plaintiffs’ Lead Counsel (on behalf of all Plaintiffs’ Counsel and the Representative Plaintiffs)
from the Settlement Fund, as ordered, on or after the Effective Date, together with interest
accrued on such amount from the date of such order to the date of payment at the same rate as
earned on the Settlement Fund.
27.

The procedure for, and allowance or disallowance by the Court of, any

application by Plaintiffs’ Lead Counsel or the Representative Plaintiffs for attorneys’ fees and
expenses, including the fees and expenses of experts and/or consultants, are not a condition of
the Settlement set forth in this Stipulation and are to be considered by the Court separately from
the Court’s consideration of the fairness, reasonableness, and adequacy of the Settlement set
forth in this Stipulation. Any order of or proceedings relating to the Fee and Expense
Application, or any appeal from any order relating thereto or reversal or modification thereof,
shall not operate to modify, terminate or cancel this Stipulation, or affect or delay the finality of
the Final Judgment or any other orders entered pursuant to this Stipulation.
28.

Any award of attorneys’ fees and/or expenses shall be paid solely from the

Settlement Fund and shall reduce the settlement consideration paid to the Settlement Class
accordingly. The Released Parties shall have no responsibility for, and no liability whatsoever
with respect to, any payments to Plaintiffs’ Lead Counsel or any other plaintiffs’ counsel or the
Representative Plaintiffs and/or any other Person who receives payment from the Settlement
Fund.

29

J. Class Certification
29.

In the Final Judgment, the Settlement Class shall be certified for purposes of this

Settlement, but in the event that the Final Judgment does not become Final or the Settlement fails
to become effective for any reason, all Settling Parties reserve all their rights on all issues,
including whether a class should be certified in the Action. For settlement purposes only, in
connection with the Final Judgment, the Citco Defendants shall consent to (i) the appointment of
Representative Plaintiffs as the class representatives, (ii) the appointment of Plaintiffs’ Lead
Counsel as class counsel, and (iii) the certification of the Settlement Class pursuant to Rules
23(a) and (b)(3) of the Federal Rules of Civil Procedure.
K. Stay of Litigation
30.

The Settling Parties agree to stay the litigation of claims in the Action as against

the Citco Defendants pending the occurrence of the Effective Date.
L. Conditions Of Settlement, Effect of Disapproval, Cancellation or Termination
31.

The Representative Plaintiffs, on behalf of the Settlement Class, or the Citco

Defendants shall have the right to terminate the Settlement and Stipulation by providing written
notice of their election to do so (“Termination Notice”) to all other Settling Parties within thirty
(30) days of: (i) entry of a Court order declining to enter the Preliminary Approval Order in any
material respect; (ii) entry of a Court order refusing to approve this Stipulation in any material
respect; (iii) entry of a Court order declining to enter the Final Judgment in any material respect;
or (iv) entry of an order by which the Final Judgment is modified or reversed in any material
respect by the Court, the Court of Appeals or the United States Supreme Court.

30

32.

The Effective Date of this Stipulation shall not occur unless and until each of the

following events occurs and shall be the date upon which the last (in time) of the following
events occurs:
i.

The Settling Parties have not exercised their respective rights to

terminate the Settlement as provided in ¶¶ 31 or 34 hereof, and the time to exercise those rights
has expired;
ii.

The Court has entered the Preliminary Approval Order attached hereto

as Exhibit A or an order containing materially the same terms;
iii.

The Court has approved the Settlement, following notice to the

Settlement Class and the Settlement Hearing, and has entered the Final Judgment; and
iv.
33.

The Final Judgment has become Final as defined in ¶ A.1(m).

Upon the occurrence of the Effective Date, any and all interest or right of the

Citco Defendants in or to the Settlement Fund, if any, shall be absolutely and forever
extinguished, except as set forth in this Stipulation. At the occurrence of the Effective Date, Paul
Weiss shall no longer have joint control of the Escrow Agent with respect to the Settlement
Fund.
34.

If the aggregate Net Loss of Opt-Outs exceeds the threshold specified in a

separate “Supplemental Agreement” between the Settling Parties, then the Citco Defendants
shall have, in their sole and absolute discretion, the option to terminate this Stipulation and to
render the Settlement null and void in accordance with the procedures set forth in the
Supplemental Agreement. The Supplemental Agreement will not be filed with any court unless
and until a dispute among the Settling Parties concerning its interpretation and application arises,
or unless the Court requires, and in either event any Settling Party may seek to have the

31

Supplemental Agreement filed under seal, which application shall not be opposed by any other
Settling Party.
35.

If some or all of the conditions specified in ¶ 32 above are not met, or in the

event that this Stipulation is not approved by the Court, or the Settlement set forth in this
Stipulation is terminated or fails to become effective in accordance with its terms, then this
Stipulation shall be canceled and terminated, unless all of the Settling Parties agree in writing to
proceed with this Stipulation. None of the Settling Parties, or any of them, shall have any
obligation whatsoever to proceed under any terms other than those provided for and agreed
herein. If any Settling Party engages in a material breach of the terms hereof, any other Settling
Party, provided that it is in substantial compliance with the terms of this Stipulation, may
terminate this Stipulation on notice to all the Settling Parties.
36.

In the event the Stipulation shall terminate, or be canceled, or shall not become

effective for any reason, the Settling Parties shall be restored to their respective positions in the
Action immediately prior to July 20, 2015, and they shall proceed in all respects as if the
Stipulation had not been executed and the related orders had not been entered, and in that event
all of their respective claims and defenses as to any issue in the Action shall be preserved
without prejudice.
37.

In the event that the Stipulation is not approved by the Court or the Settlement

set forth in this Stipulation is terminated or fails to become effective in accordance with its
terms, the terms and provisions of this Stipulation, except as otherwise provided herein, shall
have no further force and effect with respect to the Settling Parties and shall not be used in this
Action or in any other proceeding for any purpose, and any judgment or order entered by the
Court in accordance with the terms of this Stipulation shall be treated as vacated, nunc pro tunc.

32

38.

In the event the Stipulation shall be terminated, or be canceled, or shall not

become effective for any reason, within seven (7) business days (except as otherwise provided in
the Supplemental Agreement) after the occurrence of such event, the Settlement Fund, less taxes,
any Administrative Costs which have either been disbursed or are determined to be chargeable,
shall be refunded by the Escrow Agent to the Citco Defendants (pursuant to written instructions
from counsel pursuant to this Stipulation). At the request of counsel for the Citco Defendants,
Plaintiffs’ Lead Counsel or its designee shall apply for any tax refund owed on the Settlement
Fund and pay the proceeds, after deduction of any fees or expenses incurred in connection with
such application(s) for refund, pursuant to written direction from the Citco Defendants.
39.

No order of the Court or modification or reversal on appeal of any order of the

Court concerning the Plan of Allocation, ¶¶ 18-19 hereof, or the amount of any attorneys’ fees,
costs, expenses, and interest awarded by the Court to Plaintiffs’ Counsel shall constitute grounds
for cancellation or termination of the Stipulation.
M. Miscellaneous Provisions
40.

The headings herein are used for the purpose of convenience only and are not

meant to have legal effect.
41.

Each of the attorneys executing this Stipulation, any of its exhibits, or any

related settlement documents on behalf of any Settling Party hereto hereby warrants and
represents that he or she has been duly empowered and authorized to do so by the Settling Parties
he or she represents.
42.

This Stipulation, together with the Supplemental Agreement, constitute the

entire agreement between the Settling Parties and supersede any prior agreements. No
representations, warranties or inducements have been made to or relied upon by any Settling

33

Party concerning this Stipulation, other than the representations, warranties and covenants
expressly set forth herein and in the Supplemental Agreement. Except as otherwise provided
herein, each Settling Party shall bear its own costs.
43.

This Stipulation shall be binding upon, and shall inure to the benefit of, the

Settling Parties and their respective agents, successors, executors, heirs, and assigns.
44.

This Stipulation may be executed in any number of counterparts by any of the

signatories hereto and the transmission of an original signature page electronically (including by
facsimile or portable document format) shall constitute valid execution of the Stipulation as if all
signatories hereto had executed the same document. Copies of this Stipulation executed in
counterpart shall constitute one agreement.
45.

This Stipulation, the Settlement, and any all disputes arising out of or relating in

any way to this Stipulation, whether in contract, tort or otherwise, shall be governed by and
construed in accordance with the laws of the State of New York without regard to conflict of
laws principles.
46.

The Court shall retain jurisdiction with respect to the implementation and

enforcement of the terms of this Stipulation, and all parties hereto submit to the jurisdiction of
the Court for purposes of implementing and enforcing the Settlement embodied in this
Stipulation.
47.

This Stipulation may not be modified or amended, nor may any of its provisions

be waived, except by a writing signed by all Settling Parties or their counsel or their respective
successors in interest.

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48.

The Settling Parties and their counsel represent that they will not encourage or

otherwise influence any Settlement Class Members to request exclusion from, or object to, the
Settlement.
49.

The Settling Parties covenant and agree that neither this Stipulation, nor the fact

nor any terms of the Settlement, nor any communication relating thereto, is evidence, or an
admission or concession by any Settling Party or their counsel, any Settlement Class Member, or
any of the Citco Defendants or Released Parties, of any fault, liability or wrongdoing
whatsoever, as to any facts or claims alleged or asserted in the Action, or any other actions or
proceedings, or as to the validity or merit of any of the claims or defenses alleged or asserted in
any such action or proceeding. This Stipulation is not a finding or evidence of the validity or
invalidity of any claims or defenses in the Action, any wrongdoing by any Settling Party,
Settlement Class Member, or any of the Citco Defendants or Released Parties, or any damages or
injury to any Settling Party, Settlement Class Member, or any of the Citco Defendants or
Released Parties. Neither this Stipulation nor the Supplemental Agreement, nor any of the terms
and provisions of this Stipulation or Supplemental Agreement, nor any of the negotiations or
proceedings in connection therewith, nor any of the documents or statements referred to herein
or therein, nor the Settlement, nor the fact of the Settlement, nor the Settlement proceedings, nor
any statement in connection therewith, (a) shall (i) be argued to be, used or construed as, offered
or received in evidence as, or otherwise constitute an admission, concession, presumption, proof,
evidence, or a finding of any, liability, fault, wrongdoing, injury or damages, or of any wrongful
conduct, acts or omissions on the part of any of the Citco Defendants or Released Parties, or of
any infirmity of any defense, or of any damages to the Representative Plaintiffs or any other
Settlement Class Member, or (ii) otherwise be used to create or give rise to any inference or

35

presumption against any of the Released Parties concerning any fact or any purported liability,
fault, or wrongdoing of the Released Parties or any injury or damages to any person or entity, or
(b) shall otherwise be admissible, referred to or used in any proceeding of any nature, for any
purpose whatsoever; provided, however, that the Stipulation or the Supplemental Agreement or
the Final Judgment may be introduced in any proceeding, whether in the Court or otherwise, as
may be necessary to argue and establish that the Stipulation or Supplemental Agreement or Final
Judgment has res judicata, collateral estoppel, or other issue or claim preclusion effect or to
otherwise consummate or enforce the Settlement or Final Judgment, or as otherwise required by
law.
50.

The Stipulation shall not be construed more strictly against one Party than

another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel
for one of the Settling Parties, it being recognized that it is the result of arm’s-length negotiations
between the Settling Parties, and all Settling Parties have contributed substantially and materially
to the preparation of this Stipulation.
51.

All agreements by, between or among the Settling Parties, their counsel and their

other advisors as to the confidentiality of information exchanged between or among them shall
remain in full force and effect, and shall survive the execution and any termination of this
Stipulation and the final consummation of the Settlement, if finally consummated, without regard
to any of the conditions of the Settlement.
52.

Representative Plaintiffs and Plaintiffs’ Lead Counsel represent and warrant that

the Representative Plaintiffs are Settlement Class Members and none of the Representative
Plaintiffs’ claims or causes of action against one or more Citco Defendant in the Action, or

36

referred to in this Stipulation, or that could have been alleged against one or more FG Defendant
in the Action, have been assigned, encumbered or in any manner transferred in whole or in part.
53.

The Settling Parties shall not assert or pursue any action, claim or rights that any

party violated any provision of Rule 11 of the Federal Rules of Civil Procedure in connection
with the Action, the Settlement or the Stipulation. The Settling Parties agree that the Action was
resolved in good faith following arm’s-length bargaining.
54.

Any failure by any of the Settling Parties to insist upon the strict performance by

any other Settling Party of any of the provisions of the Stipulation shall not be deemed a waiver
of any of the provisions hereof, and such Settling 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 the other Settling Parties to this Stipulation.
55.

The waiver, express or implied, by any Settling Party of any breach or default by

any other Settling Party in the performance of such Settling Party of its obligations under the
Stipulation shall not be deemed or construed to be a waiver of any other breach, whether prior,
subsequent, or contemporaneous, under this Stipulation.
IN WITNESS WHEREOF, the Settling Parties have executed this Stipulation by
their undersigned counsel effective as of the date set forth below.
Dated: New York, New York
August 12, 2015

37

W O L F POPPER L L P

BOIES. S C H I L L E R & F L E X N E R L L P

By:.
David A. Barrett
Howard L, Vickery, II
575 Lexington Avenue
New Y o r k ^ N Y 10022
[phone]

C. Finkel
S45 Third Avenue
New York. N Y 10022
[phone]
L O V E L L S T E W A R T H A L B B I A N JACOB SON

— and —
Stuan H . Singer
Carlos Sires
Sash! Bach Somehow
Eii j . Glasser
401 East Las Olas Blvd., #1200
Ft. Lauderdale, Florida 33301
[phone]

;hristopher Lovell
Victor E. Stewart
61 Broadway. Suite 501
New York, N Y 10006
[phone]

Co-Lead Counsel for Pla'mlifjs
P A U L , WEISS, RIFKIND, W H A R T O N &
GARRISON L L P

BradS. Karp
Leslie Gordon Fagen
Allan I. Arffa
Walter Rseman
Andrew G. Gordon
1285 Avenue ofthe Americas
New York, N Y 10019
[phone]
Attorneys for Citco

38

Defendants