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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION SECURITIES
LITIGATION
)
CIVIL ACTION
NO. 03- 12628-NG
STIPULATION AND AGREEMENT OF SETTLEMENT
This Stipulation and Agreement of Settlement (the "Stipulation ) is submitted pursuant to
Rule 23 of the Federal Rules of Civil Procedure.
Subject to the approval of the Court, this
Stipulation is entered into among : (i) Lead Plaintiff Ronald Erickson ("Erickson ) and Plaintiff
John G. Esposito ("Esposito ) (together the "Plaintiffs or the "Class Representatives ) on behalf
of themselves and all Class Members (as hereinafter defined), by and through their undersigned
attorneys ; and (ii) Biopure Corporation ("Biopure ), Thomas A. Moore, Carl W. Rausch, Ronald
F. Richards, Howard P. Richman, Charles A. Sanders and J. Richard Crout (collectively,
"Defendants ), by and through their undersigned attorneys (collectively, Class Representatives
and Defendants shall be referred to herein as the "Parties ).
I.
THE ACTION
A.
The Filed Actions
On or after December 30, 2003, fifteen securities class actions were filed in the United
States District Court for the District of Massachusetts against Biopure and certain of Biopure's
present or former officers:
Greene v. Biopure Corporation et al., Civ. No. 03-12628-NG;
Esposito v. Biopure Corporation et al., Civ. No. 04-10013-NG; King v. Biopure Corporation et
al., Civ. No. 04-10038-NG; Criden v. Biopure Corporation et al., Civ. No. 04-10046-NG;
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Shurkin et al. v. Biopure Corporation et al., Civ. No. 04-10055 -NG; Nizzo v. Biopure
Corporation et al., Civ. No. 04-10065-NG; Brooks v. Biopure Corporation et al., Civ. No. 0410077-NG; Perlegis v. Biopure Corporation et al., Civ. No. 04-10078-NG; Weber v. Biopure
Corporation et al., Civ. No. 04-10090-NG; Haims v. Biopure Corporation et al., Civ. No. 0410144-NG; Model Partners Limited v. Biopure Corporation et al., Civ. No. 04-10155-NG;
Patenaude v. Biopure Corporation et al., Civ. No. 04-10179-NG; Pinckney v. Biopure
Corporation et al., Civ. No. 04-10189-NG; Johnson v. Biopure Corporation et al., Civ. No. 0410190-NG; and Kruszka v. Biopure Corporation et al., Civ. No. 04-10202-NG.
On May 14, 2004, the Court ordered the complaints consolidated into a single action
under the caption In re Biopure Securities Litigation , Civ. No. 03-12628-NG (the "Action )
The Court also appointed Ronald Erickson as Lead Plaintiff and approved Stull, Stull & Brody
("Stull ) and Shapiro Haber & Urmy, LLP (" Shapiro ) as Co-Lead Counsel (together, Stull and
Shapiro shall be referred to as "Co-Lead Counsel ).
B.
Procedural History
On July 23, 2004, the Class Representatives and other named Plaintiffs filed a
Consolidated Amended Class Action Complaint ("CAC ) alleging claims under Section 10(b) of
the Securities Exchange Act of 1934 (the "Exchange Act ) and Rule lOb-5 promulgated
thereunder, Section 20(a) of the Exchange Act and Section 20A of the Exchange Act.
On October 6, 2004, all Defendants filed a motion to dismiss the CAC . On December 7,
2004, plaintiffs filed their opposition to the motion. On January 24, 2005, Defendants filed their
reply. On January 5, 2006 the Plaintiffs filed a motion for leave to file a Second Consolidated
Amended Complaint ("SCAC ). On January 23, 2006 the Defendants filed their opposition to
that motion.
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On February 2, 2006 the Court held a hearing on Defendants' motion to dismiss and the
plaintiffs ' motion for leave to file the SCAC.
The Court issued a Memorandum and Order
denying the Defendants ' motion to dismiss and granting the Plaintiffs leave to file the SCAC
("the Order ) on March 28 , 2006 . On the same date , the Plaintiffs filed the SCAC, which raised
the same legal claims as were set forth in the CAC, but supported them with additional factual
allegations.
On April 28, 2006 Defendants filed their Answer and Affirmative Defenses to the SCAC.
On May 5, 2006 the Class Representatives and named Plaintiff Stuart Gottlieb filed a motion to
certify: (i) a class of purchasers of Biopure common stock from April 9, 2003 through December
24, 2003, with Lead Plaintiff Erickson seeking to serve as Class representative; and (ii) a SubClass of purchasers of Biopure common stock who purchased contemporaneously with sales by
Biopure and Rausch, with named Plaintiffs Esposito and Gottlieb as Sub-Class representatives.
Defendants served Lead Plaintiff Erickson and Plaintiffs Gottlieb and Esposito with class
certification related discovery, including document requests, interrogatories and deposition
notices, and conducted third party class certification discovery with respect to Lead Plaintiff
Erickson, Plaintiff Gottlieb and Plaintiff Esposito. Lead Plaintiff Erickson and Plaintiff Esposito
sat for their depositions on May 30 and May 31, 2006, respectively.
On June 5, 2006, the Class Representatives filed an amended motion for class
certification, seeking to certify : (i) a class of purchasers of Biopure common stock from April 9,
2003 through December 24, 2003, with Lead Plaintiff Erickson and named Plaintiff Esposito
seeking to serve as class representatives; and (ii) a sub-class of purchasers of Biopure common
stock who purchased contemporaneously with sales by Biopure and Rausch with named Plaintiff
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Esposito seeking to serve as sub-class representative .
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The members of the above-referenced
class and sub-class are collectively referred to herein as the "Class Members.
Defendants filed a memorandum in opposition to the amended motion for class
certification on July 25, 2006. Plaintiffs replied on September 29, 2006 and Defendants surreplied on October 13, 2006. The amended motion to certify the Class was pending on February
6, 2007, when the Parties notified the court that they had reached a settlement.
II.
INVESTIGATION, DISCOVERY AND RESEARCH
A.
Investigation, Discovery and Research Conducted by Co-Lead Counsel
Co-Lead Counsel have conducted extensive discovery and factual investigation during
their prosecution of the Action. This discovery and investigation has included, inter alia, (a)
review and analysis of Biopure's public filings, annual reports, and other public statements; (b)
review of transcripts of testimony in a related proceeding by the SEC; (c) consultations with
experts; (d) research of the applicable law with respect to the claims asserted in the Action and
the potential defenses thereto; (e) detailed review and analysis of over 40,000 pages of
documents produced by Defendants in discovery.
Based upon their investigation to date , Co-Lead Counsel believe that the terms and
conditions of this Stipulation are fair, reasonable and adequate to the Class Representatives and
the Class Members, and in their best interests, and the Class Representatives have agreed to
settle the claims raised in the Action pursuant to the terms and provisions of this Stipulation,
after considering (a) the substantial benefits that Class Representatives and the Class Members
will receive from the Settlement; (b) the attendant risks of litigation; and (c) the desirability of
permitting the Settlement to be consummated as provided by the terms of this Stipulation.
B.
Settlement Negotiations and Mediation
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The Parties began to discuss a possible resolution of this action early in the proceedings.
Discussions between the Parties continued for many months, resulting in a mediation held in
September 2005 and conducted by the Honorable Layn Phillips (Ret.), United States District
Court Judge for the Western District of Oklahoma. Although the mediation with retired Judge
Phillips failed to result in a settlement, the Parties continued to discuss the possibility of
settlement and engaged in another mediation on October 11, 2006, conducted by Professor Eric
Green. Following the mediation with Professor Green, the Parties continued to negotiate the
terms of a potential settlement and ultimately, the Parties reached the settlement set forth herein.
III.
PLAINTIFFS' CLAIMS AND BENEFITS OF SETTLEMENT
The Class Representatives believe that the causes of action asserted in the SCAC have
merit and that the evidence developed to date supports their claims. The Class Representatives
have collected evidence through discovery and investigation that they strongly believe would
demonstrate at trial that Defendants knowingly and/or recklessly issued, or caused Biopure to
issue, materially false and/or misleading statements concerning the business, operations and
financial condition of Biopure, which caused the price of Biopure common stock to be
artificially inflated during the Class Period (as defined below) and resulted in injury to the Class
Representatives and the Class Members.
Even though the Class Representatives have survived Defendants ' motion to dismiss,
have briefed the issue of class certification, and believe their claims are strong, they recognize
and acknowledge the expense and length of time which would be consumed by continued
proceedings necessary to prosecute the Action against the Defendants through trial and appeals.
Co-Lead Counsel have also taken into account the uncertain outcome and the risk of any
litigation, especially in complex actions such as this Action, as well as the difficulties and delays
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inherent in such litigation. Co-Lead Counsel are also mindful of the inherent problems of proof
under, and possible defenses to, the securities law violations asserted in the Action. Further, CoLead Counsel also considered the ability to pay issues arising from the financial circumstances of
Biopure and the ability to fund a settlement or satisfy a verdict from insurance proceeds, which
have been used in part to defend this Action and a related action prosecuted by the SEC.
In light of the foregoing, the Class Representatives and Co-Lead Counsel believe that the
Settlement confers substantial benefits upon the Class and they have determined that the
Settlement set forth in the Stipulation is in the best interests of the Class Representatives and the
Class Members.
IV.
DEFENDANTS' DENIAL OF WRONGDOING AND LIABILITY
Defendants have denied and continue to deny each and all of the claims and contentions
alleged by the Class Representatives in the Action.
Defendants expressly have denied and
continue to deny all charges of wrongdoing or liability against them arising out of any conduct,
statements , acts or omissions alleged, or that could have been alleged, in the Action. Defendants
have also denied and continue to deny, inter alia, the allegations that Class Representatives or
the Class have suffered damages, that the price of Biopure common stock was artificially inflated
by reasons of alleged misrepresentations, non-disclosures or otherwise, and that the Class
Representatives or the Class were harmed by the conduct alleged in the SCAC.
Nonetheless, Defendants have concluded that further conduct of the Action would be
protracted and expensive, and that it is desirable that the Action and any Settled Claims,
including Unknown Claims (as defined below), be fully and finally settled in the manner and
upon the terms and conditions set forth in this Stipulation.
Defendants have also taken into
account the uncertainty and risks inherent in any litigation, especially in complex securities cases
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like this Action. Defendants, therefore, have determined that it is desirable and beneficial to
them that the Action be settled in the manner and upon the terms and conditions set forth in this
Stipulation.
V.
TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW THEREFORE, without any admission or concession on the part of Class
Representatives of any lack of merit of the Action whatsoever, and without any admission or
concession of any fault, liability, wrongdoing or damage whatsoever, or lack of merit in the
defenses whatsoever, by the Defendants , it is hereby STIPULATED AND AGREED, by and
among the Parties to this Stipulation, through their respective attorneys, subject to approval of
the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the
benefits flowing to the Parties hereto, that all Settled Claims (as hereinafter defined) as against
the Released Parties (as hereinafter defined) and all Settled Defendants' Claims (as hereinafter
defined) shall be compromised, settled, released and dismissed with prejudice, upon and subject
to the following terms and conditions (the "Settlement )
DEFINITIONS
1.
As used in this Stipulation, the following terms shall have the following
meanings:
(a)
"Authorized Claimant means any Class Member who submits a timely
and valid Proof of Claim and Release form ("Proof of Claim ) that is accepted by the Claims
Administrator.
(b)
"Claimant means any Class Member who files a Proof of Claim.
(c)
"Claims Administrator
which shall administer the Settlement.
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means Berdon Claims Administration LLC,
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(d)
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"Class and "Class Members mean all persons or entities who purchased
or otherwise acquired Biopure common stock from April 9, 2003 through December 24, 2003,
inclusive. Excluded from the Class are Defendants, the former and current officers and directors
of Biopure, members of their immediate families and their legal representatives, heirs, successors
or assigns and any entity in which Defendants have or had a controlling interest.
(e)
"Class Period
means the period of time from April 9, 2003 through
December 24, 2003, inclusive.
(f)
"Court
means the United States District Court for the District of
Massachusetts, the Honorable Nancy Gertner presiding.
(g)
"Defendants
means Biopure Corporation, Thomas A. Moore, Carl W.
Rausch, Ronald F. Richards, Howard P. Richman, Charles A. Sanders and J. Richard Crout.
(h)
"Defendants' Counsel means the law firm of Bingham McCutchen, LLP.
(i)
"Effective Date of Settlement or "Effective Date means the date upon
which the Settlement contemplated by this Stipulation shall become effective, as set forth in ¶27
below.
0)
"Escrow Agents means Co-Lead Counsel, Edward F. Haber and Howard
(k)
"Final means : (i) if an appeal is filed, the date of final affirmance on an
Longman.
appeal from the Order and Final Judgment, the expiration of the time for a petition for a writ of
certiorari to review the Order and Final Judgment or, if certiorari is granted, the date of final
affirmance of the Order and Final Judgment following review pursuant to that grant; or (ii) the
date of final dismissal of any appeal from the Order and Final Judgment and the final dismissal
of any proceeding on certiorari to review the Order and Final Judgment; or (iii) if no appeal is
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filed, the expiration date of the time for the filing or noticing of any appeal from the Order and
Final Judgment, i.e., thirty (30) calendar days after entry of the Order and Final Judgment (or, if
the date for taking an appeal or seeking review shall be extended beyond this time by order of the
Court, by operation of law or otherwise, or if such extension is requested, the date of expiration
of any extension if any appeal or review is not sought); or (iv) if the Court enters an Order and
Final Judgment in a form other than that provided above ("Alternative Judgment ) and none of
the Parties hereto elect to terminate the Settlement, the date that such Alternative Judgment
becomes final as defined in parts (i) to (iii) above and no longer subject to appeal or review. Any
proceeding or order, or any appeal or petition for a writ of certiorari pertaining solely to any plan
of allocation and/or application for attorneys' fees, costs or expenses, or compensatory award for
Class Representatives shall not in any way delay or preclude the Order and Final Judgment from
becoming final.
(1)
"Gross Settlement Fund means the Settlement Amount, plus any interest
earned thereon.
(m)
"Insurers
means the Underwriters of Lloyd's, London; Old Republic
Insurance Company; and Carolina Casualty Insurance Company (the "Insurers ).
(n)
"Class Representatives
means Lead Plaintiff Ronald Erickson and
Plaintiff John G. Esposito.
(o)
"Co-Lead Counsel
means Stull , Stull & Brody and Shapiro Haber &
(p)
"Net Settlement Fund
Urmy, LLP.
means the Gross Settlement Fund, as defined
herein, net of any taxes, as referred to in ¶7, on the income thereof, and net of any funds to pay
(i) the notice and administrative costs referred to in ¶11, (ii) taxes and escrow fees; (iii) the
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attorneys' fees and expense award referred to in ¶12; and (iv) any award to Class Representatives
granted by the Court referred to in ¶12.
(q)
"Notice
means the Notice of Proposed Settlement of Class Action,
Motion for Attorneys' Fees and Settlement Fairness Hearing, which is to be sent to members of
the Class substantially in the form attached hereto as Exhibit 1 to Exhibit A.
(r)
"Order and Final Judgment
means the proposed order to be entered
approving the Settlement substantially in the form attached hereto as Exhibit B.
(s)
"Person
means an individual, corporation (including all divisions and
subsidiaries), 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.
(t)
"Plan of Allocation means a plan or formula for the allocation of the Net
Settlement Fund whereby the Net Settlement Fund shall be distributed to Authorized Claimants.
(u)
"Preliminary Approval Order
means the proposed order preliminarily
approving the Settlement and directing notice thereof to the Class substantially in the form
attached hereto as Exhibit A.
(v)
"Released Parties
means any and all of the Defendants, their past or
present subsidiaries, parents, successors and predecessors, officers, directors, agents, employees,
Insurers, co-insurers, reinsurers, controlling shareholders, attorneys, divisions, joint ventures,
accountants, spouses, personal or legal representatives, assigns, heirs, any members of an
Individual Defendant's immediate family and any trust of which any Individual Defendant is the
settlor or which is for the benefit of an Individual Defendant's family, and any person, firm,
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trust, corporation, officer, director or other individual or entity in which any Defendant has a
controlling interest or which is related to or affiliated with any of the Defendants , and the legal
representatives , heirs, successors in interest or assigns of any such party.
(w)
"Settled Claim(s) means any and all claims, including both known claims
and Unknown Claims (as defined below), debts, demands, rights or causes of action or liabilities
of every nature and description whatsoever (including, but not limited to, any claims for
damages, interest, attorneys' fees, expert or consulting fees, equitable or injunctive relief and any
other costs, expenses or liability whatsoever), whether based on federal, state, local, statutory or
common law or any other law, rule or regulation, whether fixed or contingent, accrued or
unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured, whether class
or individual in nature, known or unknown, whether concealed or hidden, asserted or that could
have been asserted, including, without limitation , claims for negligence, gross negligence , breach
of duty of care and/or breach of duty of loyalty, fraud, breach of fiduciary duty, or violations of
any state or federal statutes, rules or regulations , (i) that have been asserted in this Action by the
Class Members or their attorneys or any of them against any of the Released Parties, or (ii) that
could have been asserted in any forum by the Class Members or their attorney or any of them or
their successors and assigns or any of them against any of the Released Parties which arise out of
or are based upon or relate in any way to the allegations, transactions, facts, matters or
occurrences, representations or omissions involved, set forth, or referred to in the SCAC or relate
in any way to the purchase, sale or acquisition of Biopure common stock during the Class Period
except for claims to enforce the Settlement.
(x)
"Defendants' Settled Claims means any and all claims, debts, demands,
rights or causes of action or liabilities whatsoever (including, but not limited to, any claims for
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damages, interest, attorneys' fees, expert or consulting fees, equitable or injunctive relief and any
other costs, expenses or liability whatsoever), whether based on federal, state, local, statutory or
common law or any other law, rule or regulation, whether fixed or contingent, accrued or
unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured, whether class
or individual in nature, including both known claims and Unknown Claims (as defined below),
that have been or could have been asserted in the Action or any forum by the Defendants or any
of them or the successors and assigns of any of them against any of the Class Representatives,
Class Members or their attorneys, which arise out of or relate in any way to the institution,
prosecution, or settlement of the Action (except for claims to enforce the Settlement).
(y)
"Settlement Amount means the consideration to be paid by the Insurers
on behalf of the Defendants pursuant to the Settlement set forth herein, which consideration shall
be TEN MILLION DOLLARS ($ 10,000 ,000.00) total, consisting of the First Deposit (as defined
below), the Second Deposit (as defined below), and the Third Deposit (as defined below).
(z)
"Summary Notice
means the Summary Notice of Settlement for
publication substantially in the form attached as Exhibit 3 to Exhibit A.
(aa)
"Unknown Claims means any and all claims , rights or causes of action or
liabilities whatsoever, whether based on federal, state, local, statutory or common law or any
other law, rule or regulation which any Lead Plaintiff or 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, and any
Defendants' Settled Claims which any Defendant does not know or suspect to exist in his, her or
its favor at the time of the release of the Defendants' Settled Claims, which, if known by him,
her or it, could have been asserted in any forum by the Class Members or any of them against
any of the Released Parties which relate to the purchase, sale or acquisition of common stock of
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Biopure during the Class Period, even if unknown at the time of execution of this Stipulation, or
could have been asserted by the Defendants against the Lead Plaintiff or Class Members relating
to the Action, even if unknown at the time of the execution of this Stipulation. With respect to
any and all Settled Claims and Defendants' Settled Claims, the Parties stipulate and agree that
upon the Effective Date, the Class Representatives and the Defendants shall expressly, and each
Class Member shall be deemed to have, and by operation of the Order and Final Judgment shall
have, expressly waived any and all provisions , rights and benefits conferred by any law of any
state or territory of the United States, or principle of common law, which is similar, comparable,
or equivalent to Cal. Civ. 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 Class Representatives and 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 Settled Claims, but the Class Representatives shall expressly fully, finally
and forever settle and release, and each Class Member, upon the Effective Date, shall be deemed
to have, and by operation of the Judgment shall have, fully, finally and forever settled and
released any and all Settled Claims, known or unknown, suspected or unsuspected , contingent or
non-contingent, whether 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
duty, law or rule, without regard to the subsequent discovery or existence of such different or
additional facts.
Class Representatives and Defendants acknowledge, and Class Members by
operation of law shall be deemed to have acknowledged, that the inclusion of "Unknown
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in the definition of Settled Claims and Settled Defendants' Claims was separately
bargained for and was a key element of the Settlement.
The Settlement Consideration
2.
The Settlement Amount consists of the total consideration to be paid by the
Insurers on behalf of Defendants and equals TEN MILLION DOLLARS ($ 10,000,000.00).
Under no circumstances will the Defendants be obligated to pay any portion of the Settlement
Amount. Within (1) the later of thirty calendar days of execution of the Stipulation or ten days
of the Court' s preliminary approval of the Settlement and (2) no sooner than thirty days after
receipt of wire transfer instructions, including account name, account number, tax identification
number for the putative class entity, executed W-9 Form on behalf of the putative class, bank
name, ABA routing number, and SWIFT number, the Defendants shall cause the Underwriters of
Lloyd' s, London ("Lloyds ) to deposit its contribution toward the Settlement Amount (the "First
Deposit ) into an interest-bearing escrow account in the name "In re: Biopure Corporation
Securities Litigation Settlement Fund,
with a tax identification number to be provided by
Plaintiffs, with Robert A. Buhlman, Esq., Counsel to the Defendants, and Edward F. Haber, Esq.
and Howard T. Longman, Esq., Counsel to the Class Representatives, serving as joint account
holders, all of whose express authority is required for any account activity (the "Initial Escrow
Account ). The amount of the First Deposit shall be the remaining limits of the Lloyds policy
covering the Defendants for the Action.
3.
Within (1) the later of thirty calendar days of the execution of the Stipulation or
ten days of the Court's preliminary approval of the Settlement and (2) no sooner than thirty days
after receipt of wire transfer instructions, including account name, account number, tax
identification number for the putative class entity, executed W-9 Form on behalf of the putative
class, bank name, ABA routing number, and SWIFT number, the Defendants shall cause Old
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Republic Insurance Company ("Old Republic ) to deposit its contribution toward the Settlement
Amount (the "Second Deposit ) into the Initial Escrow Account.
The amount of the Second
Deposit shall be FIVE MILLION DOLLARS ($ 5,000 , 000.).
4.
Within (1) the later of thirty calendar days of the execution of the Stipulation or
ten days of the Court's preliminary approval of the settlement and (2) no sooner than thirty days
after receipt of wire transfer instructions, including account name, account number, tax
identification number for the putative class entity, executed W-9 Form on behalf of the putative
class, bank name, ABA routing number, and SWIFT number, the Defendants shall cause
Carolina Casualty Insurance Company ("Carolina Casualty ) to deposit its contribution toward
the Settlement Amount (the "Third Deposit ) into the Initial Escrow Account. The amount of
the Third Deposit shall be the total required which when added to the First Deposit and the
Second Deposit equals exactly TEN MILLION DOLLARS ($ 10,000 , 000.).
5.
If the Effective Date as defined in ¶27 does not occur because Defendants do not
cause the First Deposit, Second Deposit and Third Deposit to be deposited in conformity with
¶12-4, the Class Representatives through Co-Lead Counsel shall have the right, but not the
obligation, to terminate this Stipulation pursuant to ¶28. The Initial Escrow Account will require
signatures of Co-Lead Counsel Edward F. Haber and Howard T. Longman and Defendants'
Counsel Robert A. Buhlman to release deposited funds prior to the Effective Date. In the event
final approval of the Settlement is not obtained from or granted by the Court for any reason or in
the event an appeal of final judgment is filed and the final judgment is vacated or remanded, or
in the event the Settlement is terminated, then all monies in the Initial Escrow Account shall be
wire-transferred or otherwise delivered back to Lloyds, Old Republic and Carolina Casualty to
include (i) the full amount of their respective Deposits; (ii) less any amounts paid or owed as
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reasonable costs and expenses associated with the Settlement as of that time; (iii) plus their pro
rata portion of interest accrued, if any, and any portion of the Settlement Amount previously
caused to be paid by Defendants, together with any interest earned thereon, within ten (10)
business days of said termination. Otherwise, all interest accruing on the Initial Escrow Account
shall accrue to the benefit of the Class.
Within three business days after the Effective Date , all monies in the Initial
6.
Escrow Account shall be wire transferred to an escrow account designated by Co-Lead Counsel
(the "Escrow Account ), with Co-Lead Counsel serving as sole escrow agents (the "Escrow
Agents ).
All interest accruing on both Escrow Accounts shall accrue to the benefit of the
Class.
(a)
The Settlement Amount and any interest earned thereon shall be the Gross
Settlement Fund.
The Gross Settlement Fund, net of any Taxes (as defined below) on the
7.
income thereof, shall be used to pay (i) the notice and administration costs referred to in ¶11
hereof, (ii) escrow fees; (iii) the attorneys' fee and expense award referred to in ¶12 hereof; and
(iv) any award to Class Representatives granted by the Court referred to in ¶12 hereof.
The
balance of the Gross Settlement Fund after the above payments shall be the Net Settlement Fund,
which shall be distributed to the Authorized Claimants as provided in this Stipulation and the
Plan of Allocation.
(b)
Any sums required to be held in the Initial Escrow Account and Escrow
Account shall be deemed to be in the custody of the Court and shall remain subject to the
jurisdiction of the Court until such time as the funds shall be distributed or returned to the
persons paying the same pursuant to this Stipulation and/or further order of the Court.
Any
funds in excess of one-hundred thousand dollars ($100,000) shall be invested in short term
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United States Agency or Treasury Securities (or a mutual fund invested solely in such
instruments), and shall collect and reinvest all interest accrued thereon.
Any funds held in
escrow in an amount of less than $100,000 may be held in an interest-bearing bank account
insured by the FDIC. The parties hereto agree that the Gross Settlement Fund is intended to be a
Qualified Settlement Fund within the meaning of Treasury Regulation § 1.468B-1 and elect to
have such Qualified Settlement Fund treatment apply as of the earliest possible date.
The
Escrow Agents, as administrator of the Gross Settlement Fund held in the Escrow Account
within the meaning of Treasury Regulation § 1.468B-2(k)(3), shall be responsible for filing tax
returns for the Gross Settlement Fund and paying from the Gross Settlement Fund any Taxes
owed with respect to the Gross Settlement Fund.
Biopure agrees to provide to the Escrow
Agents the statement described in Treasury Regulation § 1.468B- 3(e) no later than February 15
of the year following the calendar year in which the Insurers make a transfer of the Settlement
Amount.
(c)
All (i) taxes on the income of the Gross Settlement Fund and (ii) expenses
and costs incurred in connection with the taxation of the Gross Settlement Fund (including,
without limitation, expenses of tax attorneys and accountants) (collectively "Taxes ) shall be
paid out of the Gross Settlement Fund, shall be considered to be a cost of administration of the
Settlement and shall be timely paid by Escrow Agents without prior order of the Court. In no
event shall the Defendants or the Released Parties have any responsibility for or liability with
respect to the Taxes.
Scope and Effect of Settlement; Releases
8.
(a)
The obligations incurred pursuant to this Stipulation shall be in full and
final disposition of the Action as against the Defendants and any and all Settled Claims as
against all Released Parties and any and all Defendants' Settled Claims.
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(b)
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For purposes of this Settlement, the Parties stipulate to the certification of
the Class as defined in ¶1(d) above.
9.
(a)
Upon the Effective Date of this Settlement, Class Representatives and
members of the Class (other than Class Members who have timely requested to be excluded from
the Class) on behalf of themselves, their heirs, executors, administrators, successors and assigns,
shall be deemed to have, and by operation of the Judgment shall have, with respect to each and
every Settled Claim, fully, finally and forever released, relinquished, and discharged, and shall
forever be enjoined from prosecuting, either directly or in any other capacity, any Settled Claims
against any of the Released Parties and their attorneys, whether or not such Class member
executes and delivers a Proof of Claim and Release form. By entering this Stipulation, Class
Representatives represent and warrant that they have not assigned, hypothecated, transferred, or
otherwise granted any interest in the Settled Claims, or any of them, to any other party or entity.
(b)
Upon the Effective Date of this Settlement, each of the Defendants, on
behalf of themselves and the Released Parties, shall release and forever discharge the Class
Members, the Class Representatives and their attorneys from each and every of the Settled
Defendants' Claims, and shall forever be enjoined from prosecuting the Defendants' Settled
Claims against the Class Members , the Class Representatives and their attorneys.
Administration
10.
Co-Lead Counsel may designate the settlement Claims Administrator, subject to
Court approval. Defendants' Counsel shall cooperate in the administration of the Settlement to
the extent reasonably necessary to effectuate its terms, including directing its transfer agent or
agents to provide all available information from Biopure's transfer records concerning the
identity of Class Members and their transactions during the Class Period. Biopure shall direct its
transfer agent or agents to provide the shareholder lists for the Class Period to Co-Lead Counsel
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within fourteen (14) calendar days of the Courts' execution of the Preliminary Approval Order.
Biopure or its transfer agent or agents shall also provide a list of Persons who are excluded from
the Class pursuant to the definition set forth in ¶1(d).
11.
Co-Lead Counsel may pay from the Gross Settlement Fund up to one-hundred
thousand dollars ($100,000) without further approval from the Defendants or the Court except
for Mr. Robert A. Buhlman's signature pursuant to Paragraph 5, for the reasonable costs and
expenses associated with identifying members of the Class and effecting mailed Notice and
Summary Notice to the Class, and the administration of the Settlement, including without
limitation, the actual costs of publishing the Summary Notice, printing and mailing the Notice,
engaging third party services to identify or update the mailing addresses of Class members,
reimbursements to nominee owners for forwarding notice to their beneficial owners, and the
administrative expenses incurred and fees charged by the Claims Administrator in connection
with providing notice and processing the submitted claims, when these costs are incurred. In the
event final approval is not obtained or granted for any reason, any and all funds so expended
shall not be owed to or recoverable by the Defendants, Lloyds, Old Republic or Carolina
Casualty.
Attorneys' Fees and Expenses
12.
Co-Lead Counsel will apply to the court for: (a) an award on behalf of Co-Lead
Counsel from the Gross Settlement Fund of attorneys' fees and reimbursement of expenses, plus
interest on such amounts; and (b) a compensatory award on behalf of Class Representatives,
which if awarded, will be paid from the Gross Settlement Fund when the Order and Final
Judgment becomes Final. Such amounts of attorneys' fees and reimbursement of expenses, plus
interest on such amounts, as are awarded by the Court shall be payable from the Gross
Settlement Fund when the Order and Final Judgment becomes Final. The award of attorneys'
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fees shall be allocated among Co-Lead Counsel in a fashion which, in the opinion of Co-Lead
Counsel, fairly compensates Co-Lead Counsel for their respective contributions in the
prosecution of the Action. Any order or proceedings related to the fees or expenses or interest
thereon, application, or any appeal from any order relating thereto or reversal or modification
thereof, shall not modify, terminate, or cancel this Stipulation, or affect or delay the finality of
the Order and Final Judgment approving the Stipulation and the Settlement of the Action.
Defendants and the Released Parties shall have no responsibility for or liability with respect to
any payment of attorneys' fees and expenses to Co-Lead Counsel separate and apart from the
Gross Settlement Fund.
Distribution to Authorized Claimants
13.
Any member of the Class who does not submit a valid Proof of Claim will not be
entitled to receive any of the proceeds from the Net Settlement Fund, but will otherwise be
bound by all of the terms of this Stipulation and the Settlement, including the terms of the Order
and Final Judgment to be entered in the Action and the releases provided for herein, and will be
barred from asserting any Settled Claim against any of the Released Parties, as provided herein.
14.
The Claims Administrator shall process the Proofs of Claim and, after entry of an
order for class distribution (the "Class Distribution Order ), distribute the Net Settlement Fund to
the Authorized Claimants. Co-Lead Counsel shall have the right, but not the obligation, to direct
the Claims Administrator to waive what they deem to be formal or technical defects in any
Proofs of Claim submitted in the interests of achieving substantial justice.
15.
For purposes of determining the extent, if any, to which a Class Member shall be
entitled to be treated as an "Authorized Claimant, the following conditions shall apply:
(a)
Each Class Member shall be required to submit a Proof of Claim (see
attached Exhibit 2 to Exhibit A), supported by such documents as are designated therein,
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including proof of the transactions claimed and the losses incurred thereon, or such other
documents or proof as the Claims Administrator, in its discretion, under the direction of Co-Lead
Counsel, may deem acceptable;
(b)
All Proofs of Claim must be submitted by the date specified in the Notice
unless such period is extended by order of the Court. Any Class Member who fails to submit a
Proof of Claim by such date shall be forever barred from receiving any payment pursuant to this
Stipulation (unless, by order of the Court, a later submitted Proof of Claim by such Class
Member is approved), but shall in all other respects be bound by all of the terms of this
Stipulation and the Settlement, including the terms of the Order and Final Judgment to be entered
in the Action and the releases provided for herein, and will be barred from bringing any action
against the Released Parties asserting the Settled Claims. Provided that it is received before the
motion for the Class Distribution Order is filed, a Proof of Claim shall be deemed to have been
submitted when posted, if received with a postmark indicated on the envelope and if mailed by
first-class mail and addressed in accordance with the instructions thereon. In all other cases, the
Proof of Claim shall be deemed to have been submitted when actually received by the Claims
Administrator;
(c)
Each Proof of Claim shall be submitted to and reviewed by the Claims
Administrator, who shall determine in accordance with this Stipulation and the direction given
by Co-Lead Counsel the extent, if any, to which each claim shall be allowed, subject to review
by the Court pursuant to subparagraph (e) below;
(d)
Proofs of Claim that do not meet the submission requirements may be
rejected. Prior to rejection of a Proof of Claim, the Claims Administrator shall communicate
with the Claimant in order to remedy the curable deficiencies in the Proof of Claim submitted.
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The Claims Administrator shall notify, in a timely fashion and in writing, all Claimants whose
Proofs of Claim they propose to reject in whole or in part, setting forth the reasons therefor, and
shall indicate in such notice that the Claimant whose claim is to be rejected has the right to a
review by the Court if the Claimant so desires and complies with the requirements of
subparagraph (e) below;
(e)
If any Claimant whose claim has been rejected in whole or in part desires
to contest such rejection, the Claimant must, within twenty (20) days after the date of mailing of
the notice required in subparagraph (d) above, serve upon the Claims Administrator a notice and
statement of reasons indicating the Claimant's grounds for contesting the rejection along with
any supporting documentation , and requesting a review thereof by the Court.
If a dispute
concerning a claim cannot be otherwise resolved by the Claims Administrator, Co-Lead Counsel
and the Claimant, Co-Lead Counsel shall thereafter present the request for review to the Court;
and
(f)
The administrative determinations of the Claims Administrator accepting
and rejecting claims, after review by Co-Lead Counsel, shall be presented to the Court, on notice
to Defendants ' Counsel , for approval by the Court in the Class Distribution Order.
(g)
All proceedings with respect to the administration, processing and
determination of claims described by ¶ 15(a) - 15(f) of this Stipulation and the determination of
all controversies relating thereto, including disputed questions of law and fact with respect to the
validity of claims , shall be subject to the jurisdiction of the Court.
16.
Each Claimant shall be deemed to have submitted to the jurisdiction of the Court
with respect to the Claimant' s claim.
All proceedings with respect to the administration,
processing and determination of claims described in ¶15 of this Stipulation and the determination
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of all controversies relating thereto, including disputed questions of law and fact with respect to
the validity of claims, shall be subject to the jurisdiction of the Court. No discovery shall be
allowed on the merits of the Action or Settlement in connection with the processing of Proofs of
Claim.
17.
Payment pursuant to this Stipulation shall be deemed final and conclusive against
all Class Members. All Class Members whose claims are not approved by the Court shall be
barred from participating in distributions from the Net Settlement Fund, but otherwise shall be
bound by all the terms of this Stipulation and the Settlement, including the terms of the Order
and Final Judgment to be entered in the Action and the releases provided for herein, and will be
barred from bringing any action against the Released Parties concerning the Settled Claims.
18.
The Net Settlement Fund shall be distributed to Authorized Claimants by the
Claims Administrator only after the Effective Date and after: (i) all claims have been processed,
and all Claimants whose claims have been rejected or disallowed, in whole or in part, have been
notified and provided the opportunity to be heard concerning such rejection or disallowance; (ii)
all objections with respect to all rejected or disallowed claims have been resolved by the Court,
and all appeals therefrom have been resolved or the time therefor has expired; (iii) all matters
with respect to attorneys' fees , costs , compensatory awards, and disbursements have been
resolved by the Court, all appeals therefrom have been resolved or the time therefor has expired;
(iv) all costs of administration, including those set forth in ¶11, have been paid, and (v) all
attorneys' fees and expenses, as described in ¶12, have been paid.
19.
Co-Lead Counsel will apply to the Court, on notice to Defendants' Counsel, for
the Class Distribution Order approving the Claims Administrator's administrative determinations
concerning the acceptance and rejection of the claims submitted herein and approving any fees
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and expenses not previously applied for, including any fees and expenses of the Claims
Administrator that require such application, and, if the Effective Date has occurred, directing
payment of the Net Settlement Fund to Authorized Claimants.
20.
By the determination of the Claims Administrator, each Authorized Claimant
shall be allocated a pro rata share of the Net Settlement Fund based on his or her accepted claim
compared to the total accepted claims of all accepted Claimants, as defined in the Plan of
Allocation described in the Notice annexed hereto as Exhibit 1 to Exhibit A, or in such other
Plan of Allocation as the Court approves. Defendants shall have no involvement in reviewing or
challenging claims.
21.
The Plan of Allocation proposed in the Notice is not a necessary term of this
Stipulation, and it is not a condition of this Stipulation that any particular Plan of Allocation be
approved. It is understood and agreed by the Parties hereto that the proposed Plan of Allocation
is not part of the 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 the
Stipulation, and any order or proceeding relating to the Plan of Allocation shall not operate to
terminate or cancel the Stipulation or affect the finality of the Court's Order and Final Judgment
approving the Stipulation and the Settlement set forth herein, or any other orders entered
pursuant to the Stipulation.
22.
No person shall have any claim against any of the Class Representatives, Class
Members, Co-Lead Counsel, the Claims Administrator, the Defendants or their counsel based on
the Claims Administrator' s decisions as to acceptance or rejection of Proofs of Claims or based
on investments or distributions made substantially in accordance with this Stipulation and the
Settlement contained herein, the Plan of Allocation or further orders of the Court.
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23.
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The Defendants and Defendants' Counsel shall have no responsibility for, interest
in, or liability whatsoever with respect to:
(a)
any act, omission or determination of the Escrow Agent, Claims
Administrator, Co-Lead Counsel or any designees or agents of Co-Lead Counsel, Escrow Agent
or Claims Administrator;
(b)
any act, omission or determination of Co-Lead Counsel or their designees
or agents in connection with the administration of the Settlement;
(c)
the management, investment or distribution of the Gross Settlement Fund
after it is transferred to the Escrow Account;
(d)
the determination, administration , calculation or payment of any claims
asserted against the Gross Settlement Fund; or
(e)
the Plan of Allocation.
Terms of the Preliminary Approval Order
24.
Promptly after execution of this Stipulation and concurrently with their
application for preliminary court approval of the Settlement contemplated by this Stipulation,
Co-Lead Counsel and Defendants' Counsel shall jointly move the Court for entry of a
Preliminary Approval Order, substantially in the form annexed hereto as Exhibit A.
Terms of Order and Final Judgment
25.
If the Settlement contemplated by this Stipulation is approved by the Court,
counsel for the Parties shall request that the Court enter an Order and Final Judgment
substantially in the form annexed hereto as Exhibit B.
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Supplemental Agreement
26.
Simultaneously herewith, Co-Lead Counsel and Defendants' Counsel are
executing a "Supplemental Agreement
setting forth certain conditions under which this
Stipulation may be terminated by Defendants, if potential Class Members purchased or acquired
above a certain threshold number of the outstanding shares of Biopure common stock during the
Class Period opt out of the Class. The Supplemental Agreement shall not be filed with the Court
unless a dispute arises as to its terms. In the event Defendants terminate this Stipulation pursuant
to the Supplemental Agreement, this Stipulation shall become null and void and of no further
force and effect and the provisions of ¶28 shall apply.
Notwithstanding the foregoing, the
Stipulation shall not become null and void as a result of the election by Defendants to exercise
their option to terminate the Stipulation pursuant to the Supplemental Agreement until the
conditions set forth in the Supplemental Agreement have been satisfied.
Effective Date of Settlement, Waiver or Termination
27.
The Effective Date of Settlement shall be the date when all the following shall
have occurred:
(a)
entry of the Preliminary Approval Order in all material respects in the
form annexed hereto as Exhibit A;
(b)
Defendants have caused the Settlement Amount to be deposited pursuant
(c)
approval by the Court of the Settlement, following notice to the Class, as
to ¶¶2-4;
prescribed by Rule 23 of the Federal Rules of Civil Procedure; and
(d)
entry by the Court of an Order and Final Judgment, substantially in the
form attached hereto as Exhibit B, and the expiration of any time for appeal or review of such
Order and Final Judgment, or, if any appeal is filed and not dismissed, after such Order and Final
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Judgment is upheld on appeal in all material respects and is no longer subject to review upon
appeal or review by writ of certiorari, or, in the event that the court enters an Alternative
Judgment and none of the Parties hereto elects to terminate this Settlement, the date that such
Alternative Judgment becomes final and no longer subject to appeal or review.
28.
(a) Defendants or Class Representatives through Co-Lead Counsel shall have the
right, but not the obligation, to terminate the Settlement and this Stipulation by providing written
notice of their election to do so ("Termination Notice ) to all other Parties hereto within thirty
(30) business days of: (a) the Court 's declining to enter the Preliminary Approval Order in any
material respect; (b) the Court's refusal to approve this Stipulation or any material part of it; (c)
the Court's declining to enter the Order and Final Judgment in any material respect; (d) the date
upon which an order of the Court of Appeals, modifying the Order and Final Judgment in any
material respect, becomes final; (e) the date upon which an order of the Supreme Court;
modifying the Order and Final Judgment in any material respect, becomes final; (f) the date
upon which an order of the Court of Appeals, modifying in any material respect, an Alternative
Judgment (in the event that none of the Parties had elected to terminate the Settlement because of
the Alternative Judgment), becomes final ; (g) the date upon which an order of the Supreme
Court, modifying the Alternative Judgment (in the event that none of the Parties had elected to
terminate the Settlement because of the Alternative Judgment) in any material respect, becomes
final.
(b) The Class Representatives, through Co-Lead Counsel, shall have the right,
but not the obligation, to terminate the Settlement and this Stipulation by providing written
notice of their election to do so ("Termination Notice ) to all other Parties hereto within thirty
(30) business days of.-the Settlement Amount not having been paid pursuant to ¶12-4;
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Except as otherwise provided herein, in the event the Settlement is terminated or
fails to become effective for any reason, then the Parties to this Stipulation shall be deemed to
have reverted to their respective status in the Action as of the date and time immediately prior to
the execution of this Stipulation. If the Settlement is terminated or fails to become effective,
except as otherwise expressly provided, the Parties shall proceed in all respects as if this
Stipulation and any related orders had not been entered and within ten (10) days thereafter shall
file with the Court a status report.
No Admission of Wron2doin2
30.
The Parties agree that the Settlement Amount, as well as the other terms of the
Settlement, were negotiated in good faith by the Parties and reflect a settlement that was reached
voluntarily after consultation with experienced legal counsel. Neither the Stipulation nor the
Settlement contained therein, nor any act performed or document executed pursuant to or in
furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be or may be used as
an admission of, or evidence of, any fault or omission of any of the Released Parties or Class
Representatives; (b) is or may be deemed to be or may be used as an admission of, or evidence
of, any fault or omission of any of the Released Parties or Class Representatives in any civil,
criminal or administrative proceeding in any court, administrative agency or other tribunal; (c) is
or may be deemed as an admission or concession that the consideration to be given hereunder
represents the amount which could be or would have been recovered after trial; or (d) is or may
be construed as or received as evidence as an admission, concession or presumption against Lead
Plaintiff or any of the Class Members that any of their claims are without merit, or that any
defenses by the Defendants have merit, or that damages recoverable under the SCAC would not
have exceeded the Gross Settlement Fund. The Released Parties may file the Stipulation and/or
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the Final Order and Judgment of this Action in any other action that may be brought against
them in order to support a defense or counterclaim based on principles of res judicata, collateral
estoppel , release , good faith settlement , judgment bar or reduction or any theory of claim
preclusion or issue preclusion or similar defense or counterclaim. The Defendants have denied
and continue to deny each and every claim alleged against them in the Action and any
wrongdoing whatsoever and this Stipulation shall in no event be construed or deemed to be
evidence of or an admission or concession on the part of any Defendant with respect to any claim
of any fault, liability, wrongdoing or damage whatsoever, or any infirmity in the defenses that
the Defendants have asserted.
Miscellaneous Provisions
31.
All of the exhibits attached hereto are hereby incorporated by reference as though
fully set forth herein.
32.
If a case is commenced with respect to any of the Defendants or the Insurers
under Title 11 of the Bankruptcy Code, or a trustee, receiver or conservator is appointed under
any similar law, and in the event of the entry of a final order of a court of competent jurisdiction
determining the transfer of money to the Gross Settlement Fund or any portion thereof to be a
preference, voidable transfer, fraudulent transfer or similar transaction and any portion thereof is
required to be returned, and such amount is not promptly deposited to the Gross Settlement Fund
by others, then, at the election of Co-Lead Counsel, the Parties shall jointly move the Court to
vacate and set aside the releases given and Order and Final Judgment entered in favor of the
Defendants pursuant to this Stipulation, which releases and Order and Final Judgment shall be
null and void, and the Parties shall be restored to their respective positions in the Action as of the
date a day prior to the date of this Stipulation and any cash amounts in the Gross Settlement
Fund shall be returned as provided in ¶29 above.
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The Parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could have been asserted by the Class
Representatives, the Class or their attorneys against the Released Parties with respect to the
Settled Claims.
Defendants will not deny that the litigation is being settled voluntarily after
consultation with competent legal counsel. Class Representatives, Defendants, and their counsel
shall not make any applications for fees, costs or sanctions, pursuant to Rule 11, Rule 37, Rule
45, or any other court rule or statute, with respect to any claims or defenses in this Action or to
any aspect of the institution, prosecution or defense of this Action. The Parties are aware of no
facts or circumstances that would give rise to any violations of Rule 11 of the Federal Rules of
Civil Procedure relating to this Action. The final judgment will contain a statement that each
side shall bear its own costs unless otherwise specified herein. The Parties agree that the amount
paid and the other terms of the Settlement were negotiated at arm's-length in good faith by the
Parties, and reflect a settlement that was reached voluntarily after consultation with experienced
legal counsel.
34.
This Stipulation may not be modified or amended, nor may any of its provisions
be waived except by a writing signed by all Parties hereto or their successors-in-interest.
35.
The headings herein are used for the purpose of convenience only and are not
meant to have legal effect.
36.
The administration and consummation of the Settlement as embodied in this
Stipulation shall be under the authority of the Court, and the Court shall retain jurisdiction for the
purpose of entering orders providing for awards of attorneys' fees and expenses to Co-Lead
Counsel, compensatory awards to Class Representatives, and enforcing the terms of this
Stipulation.
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The waiver by one Party of any breach of this Stipulation by any other Party shall
not be deemed a waiver of any other prior or subsequent breach of this Stipulation.
38.
This Stipulation, its exhibits, and the Supplemental Agreement constitute the
entire agreement among the Parties hereto concerning the Settlement of the Action, and no
representations , warranties or inducements have been made by any Party hereto concerning this
Stipulation and its exhibits other than those contained and memorialized in such documents.
39.
This Stipulation may be executed in one or more counterparts.
All executed
counterparts and each of them shall be deemed to be one and the same instrument provided that
counsel for the Parties to this Stipulation shall exchange among themselves original signed
counterparts.
40.
This Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the Parties hereto.
41.
The construction, interpretation, operation, effect and validity of this Stipulation,
and all documents necessary to effectuate it, shall be governed by the internal laws of the
Commonwealth of Massachusetts without regard to conflicts of laws, except to the extent that
federal law requires that federal law governs.
42.
This 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 Parties, it being recognized that it is the result of arm's-length negotiations
between the Parties and all Parties have contributed substantially and materially to the
preparation of this Stipulation.
43.
All counsel and any other person executing this Stipulation and any of the
exhibits hereto, or any related settlement documents, warrant and represent that they have the full
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authority to do so and that they have the authority to take appropriate action required or
permitted to be taken pursuant to the Stipulation to effectuate its terms.
44.
Co-Lead Counsel and Defendants' Counsel agree to cooperate fully with one
another in seeking this Court's approval of the Preliminary Approval Order, the Stipulation and
the Settlement and entry of the Order and Final Judgment and to promptly agree upon and
execute all such other documentation as may be reasonably required to obtain final approval by
the Court of the Settlement.
Dated : May 17, 2007
Dated: May 17, 2007
/s/ Edward F. Haber
Edward F. Haber, Esq.
Matthew L. Tuccillo, Esq.
Shapiro Haber & Urmy LLP
53 State Street
Boston, MA 02109
Tel: (617) 439-3939
Fax: (617) 439-0134
Counsel for Plaintiffs
/s/ Howard T. Longman
Howard T. Longman, Esq.
Stull, Stull & Brody
6 East 45th Street
New York, NY 10017
Tel: (212) 687-7230
Fax: (212) 490-2202
Counsel for Plaintiffs
Dated : May 17, 2007
/s/ Robert A. Buhlman
Robert A. Buhlman, Esq.
Michael D. Blanchard, Esq.
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
Tel: (617) 951-8000
Fax: (617) 951-8736
Counsel for Defendants
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Certificate of Service
I hereby certify that this document, filed through the ECF system, will be sent
electronically to the registered participants as identified on the Notice of Electronic Filing
("NEF ) and paper copies will be sent to those indicated as non-registered participants on the
17th day of May, 2007.
/s/ Edward F. Haber
Edward F. Haber
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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION
SECURITIES LITIGATION
Civ. No. 03-12628-NG
PROPOSED ORDER OF PRELIMINARY APPROVAL
WHEREAS, the parties to the above-described class action ("Action") have applied for
an order, pursuant to Rule 23(e) of the Federal Rules of Civil Procedure , fixing certain matters in
connection with a proposed settlement of the Action (the "Proposed Settlement "), in accordance
with a Stipulation And Agreement of Settlement ("Settlement Agreement") entered into by the
parties as of May 17, 2007 together with the exhibits annexed thereto , which are incorporated
herein by reference;
NOW, THEREFORE , pursuant to Rule 23(e) of the Federal Rules of Civil Procedure,
upon the agreement of the parties, and after consideration of the Settlement Agreement and the
exhibits annexed thereto,
IT IS HEREBY ORDERED that:
1.
The provisions of the Settlement Agreement, including definitions of the terms
used therein, are hereby incorporated by reference as though fully set forth herein.
2.
The parties' Proposed Settlement, as embodied in the Settlement Agreement and
the exhibits attached thereto, is preliminarily approved as fair, reasonable, adequate and in the
best interests of the Class, pending a final hearing on the Proposed Settlement as provided
herein.
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3.
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This Proposed Settlement shall apply to the Class, preliminarily certified by the
Court for purposes of effectuating the Proposed Settlement, as defined in the Settlement
Agreement and consisting of all persons or entities who purchased or otherwise acquired of
Biopure Corporation ("Biopure") common stock from April 9, 2003 through December 24, 2003,
inclusive ("Class Period"). Excluded from the Class are Defendants in this action, the former
and current officers and directors of Biopure, members of their immediate families and their
legal representatives, heirs, successors or assigns and any entity in which Defendants have or had
a controlling interest.
4.
The Court approves, as to form and content, the proposed form of Notice of
Proposed Settlement of Class Action, Motion for Attorneys' Fees and Settlement Fairness
Hearing submitted by the parties as Exhibit A-I to the Settlement Agreement ("Notice"), and the
Proof of Claim Form submitted by the parties as Exhibit A-2 to the Settlement Agreement
("Proof of Claim"), and directs that Co-Lead Counsel for the Class shall mail, or cause to be
mailed, such Notice and Proof of Claim to all members of the Class who can be identified
through reasonable effort. The mailing is to be made by first-class United States mail, postage
prepaid, at least 60 days prior to the date of the Settlement Hearing.
Within fourteen (14)
business days from the date of entry of this order, Biopure shall direct its transfer agent(s) to
provide to the Claims Administrator a list containing the identity of all record holders of Biopure
common stock who purchased their common stock during the Class Period.
5.
Nominees who purchased or otherwise acquired Biopure common stock during
the Class Period are directed to: (a) send the Notice and the Proof of Claim Form to all beneficial
owners of Biopure common stock purchased or otherwise acquired during the Class Period,
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within ten (10) days after receipt of the Notice; or (b) send a list of the names and addresses of
such beneficial owners to the Claims Administrator within ten (10) days after receipt of the
Notice.
6.
The Court hereby approves , as to form and content , the proposed form of
Summary Notice of Settlement submitted by the parties as Exhibit A-3 to the Settlement
Agreement ("Summary Notice"), and directs that Co-Lead Counsel for the Class shall cause such
Summary Notice to be published once in the national edition of The Wall Street Journal no more
than 10 days after the mailing of the Notice and at least 50 days prior to the Settlement Hearing.
7.
The Court finds and determines that mailing of the Notice and Proof of Claim and
the publication of the Summary Notice as set forth above constitute the best notice to the Class
practicable under the circumstances, constitute due and sufficient notice of the matters set forth
in said Notice and Summary Notice to all persons entitled to receive such notice, and fully
satisfy the requirements of due process, of 15 U.S.C. § 78u-4(a)(7), and of Rule 23 of the Federal
Rules of Civil Procedure.
8.
Any Class Member who desires to request exclusion from the Class must submit a
written request for exclusion in the form and manner required by the Notice. Such request for
exclusion must be mailed with a postmark no later than
, 2007 (fourteen (14)
calendar days prior to the Settlement Fairness Hearing date); must refer to the action In re:
Biopure Corporation Securities Litigation, No. 03-12628-NG; must include a statement that the
Class Member wishes to be excluded from the Class; must provide the number of shares of
Biopure common stock that Class Member owned as of April 8, 2003 and the number of shares
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of Biopure common stock that Class Member purchased and sold during the Class Period, and
the dates of such purchases and sales. Such requests for exclusion must be mailed to:
In re Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
9.
Any Class Member who does not properly and timely request exclusion shall be
included in the Class and shall be bound by any deter ination, order or judgment entered in the
Action in connection with the Settlement, whether favorable or unfavorable, even if such Class
Member does not submit a timely Proof of Claim.
10.
A hearing will be held by this Court in the courtroom of the Honorable Nancy
Gertner, United States District Court, One Courthouse Way, Boston, Massachusetts 02210 at
_.m. on
, 2007 ("Settlement Fairness Hearing"), to determine:
(a)
whether the Proposed Settlement should be approved as fair, reasonable, adequate, and in the
best interests of the Class; (b) whether an Order and Final Judgment should be entered
substantially in the form of Exhibit B to the Settlement Agreement; (c) whether the Class should
be finally certified; (d) whether the Class Representatives' proposed plan of allocation of the
Settlement proceeds that is described in the Notice ("Plan of Allocation ") should be approved as
fair and reasonable to the Class; and (e) whether the application of Co-Lead Counsel for the
Class for an award of attorneys' fees, costs, and expenses, including an award of reasonable costs
and expenses to the Class Representatives, ("Fee and Expense Petition") should be approved.
The Settlement Hearing is subject to continuation or adjournment by the Court without further
notice.
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11.
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Prior to the Settlement Hearing, Co-Lead Counsel for the Class shall cause an
affidavit to be filed with the Court certifying that the Notice has been provided and the Summary
Notice has been published as directed in Paragraphs 3, 4 and 5 of this Order.
12.
Attendance at the Settlement Hearing is not mandatory.
Notwithstanding, any
Class Member who does not timely and properly exclude him/her/itself from the Class may
appear and show cause at the Settlement Hearing in person or by counsel and be heard in support
of, or in opposition to, the fairness, reasonableness and adequacy of the Proposed Settlement, the
Plan of Allocation and/or the Fee and Expense Petition submitted by Co-Lead Counsel for the
Class. However, no Class Member shall be heard in opposition. to the Proposed Settlement and
no paper or brief submitted by any such person shall be received or considered by the Court
unless fourteen (14) calendar days before the Settlement Hearing, that person shall file with the
Clerk of this Court and serve copies on counsel at the following addresses a written statement of
the position he, she or it will assert , and the reasons for his, her or its position, and proof of
membership in the Class:
Clerk
United States District Court
District of Massachusetts
One Courthouse Way
Boston, MA 02110
Howard T. Longman, Esq.
Stull, Stull & Brody
6 East 45th Street
New York, NY 10017
Edward F. Haber, Esq.
Shapiro Haber & Urmy LLP
Exchange Place
53 State Street
Boston, MA 02109
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Plaintiffs' Co-Lead Counsel
Robert A. Buhlman, Esq.
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
Counsel for Defendants
Any person who fails to object in the manner and by the date required shall be deemed to have
waived any objections, and shall be forever barred from raising any objection to the terms and
conditions of, or to the fairness, reasonableness or adequacy of the Proposed Settlement or to the
Judgment to be entered thereon in this or any other action or proceeding.
13.
In order to share in any proceeds resulting from the settlement of this Action,
Class Members must submit the Proof of Claim in the manner provided in Exhibit A-2 of the
Settlement Agreement by no later than October 31, 2007. Provided they are received before the
motion for Class Distribution Order is filed, all Proofs of Claim received by the Claims
Administrator shall be deemed to have been submitted when posted, if received with a postmark
indicated on the envelope and if mailed by first-class mail and addressed in accordance with the
instructions in the Notice.
Late claims shall be denied as untimely except as the Court may
otherwise order.
14.
Any Class Member may enter an appearance in the Action, at his, her or its own
expense, individually or through counsel of his, her or its choice. If any Class Member does not
enter an appearance, he, she or it will be represented by Co-Lead Counsel for the Class.
15.
Subject to the terms of the Stipulation, Co-Lead Counsel may use up to
$100,000.00 (One Hundred Thousand Dollars) of the Gross Settlement Fund to pay costs and
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expenses reasonably and actually incurred in connection with the administration of the
Settlement, including without limitation identifying and providing notice to the Class, locating
Class Members, processing Proofs of Claim, assisting with the filing of claims, administering
and distributing the Gross Settlement Fund to the Members of the Class, and paying escrow fees
and costs, if any.
Pursuant to 1J5 of the Stipulation and Agreement of Settlement, Co-Lead
Counsel must obtain Mr. Robert A. Buhhnan's signature to release deposited funds from the
Initial Escrow Account prior to the Effective Date of Settlement. No such amounts shall be used
to pay the attorneys' fees of Co-Lead Counsel. In the event final approval is not attained or
granted for any reason, any and all funds so expended shall not be owed to or recoverable by the
Defendants or the Defendants' insurers, as provided by the terms of Paragraph 5 of the
Stipulation.
16.
All discovery and pretrial proceedings in this Action are stayed and suspended
until further order of this Court. Pending the final determination of the fairness, reasonableness
and adequacy of the Proposed Settlement, no member of the Class, either directly,
representatively, or in any other capacity, shall institute, commence or prosecute against the
Defendants any of the Settled Claims in any action or proceeding in any court or tribunal.
17.
All funds held by the Escrow Agent shall be deemed and considered to be in the
custody of the Court, and shall remain subject to the jurisdiction of the Court, until such time as
such funds shall be distributed pursuant to the Settlement Agreement and/or further order(s) of
the Court.
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18.
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All papers in support of the Proposed Settlement, including any application by
Co-Lead Counsel for the Class for attorneys' fees and expenses shall be filed and served at least
five (5) business days before the Settlement Hearing.
19.
Neither the Settlement Agreement, nor any act performed or document executed
pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be
or may be used as an admission of, or evidence of, any fault or omission of any of the Released
Parties or Class Representatives; (b) is or may be deemed to be or may be used as an admission
of, or evidence of, any fault or omission of any of the Released Parties or Class Representatives
in any civil, criminal or administrative proceeding in any court, administrative agency or other
tribunal; (c) is or may be deemed as an admission or concession that the consideration to be
given hereunder represents the amount which could be or would have been recovered after trial;
or (d) is or may be construed as or received as evidence as an admission, concession or
presumption against Lead Plaintiff or any of the Class Members that any of their claims are
without merit, or that any defenses by the Defendants have merit, or that damages recoverable
under the SCAC would not have exceeded the Gross Settlement Fund. The Released Parties may
file the Stipulation and/or the Final Order and Judgment of this Action in any other action that
may be brought against them in order to support a defense or counterclaim based on principles of
resjudicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any
theory of claim preclusion or issue preclusion or similar defense or counterclaim.
The
Defendants have denied and continue to deny each and every claim alleged against them. in the
Action and any wrongdoing whatsoever and the Settlement Agreement shall in no event be
construed or deemed to be evidence of or an admission or concession on the part of any
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Defendant with respect to any claim of any fault, liability, wrongdoing or damage whatsoever, or
any infirmity in the defenses that the Defendants have asserted.
20.
The Court reserves the right to adjourn or continue the Settlement Hearing, and
any adjournment or continuance may be without further notice of any kind other than oral
announcement at the Settlement Hearing or at any later hearing.
Date:
.2007.
The Honorable Nancy Gertner
United States District Judge
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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION SECURITIES
LITIGATION
)
CIVIL ACTION
NO. 03- 12628-NG
NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION, MOTION FOR
ATTORNEYS' FEES AND SETTLEMENT FAIRNESS HEARING
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TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED
COMMON STOCK OF BIOPURE CORPORATION (" BIOPURE "), DURING THE
PERIOD FROM APRIL 9, 2003 THROUGH DECEMBER 24, 2003, INCLUSIVE.
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.
YOUR RIGHTS WILL BE AFFECTED BY PROCEEDINGS IN THIS
ACTION. IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED
TO RECEIVE BENEFITS BY FILING A PROOF OF CLAIM FORM.
PLEASE NOTE THAT IF YOU HAVE ANY OTHER CLAIMS AGAINST
DEFENDANTS OR BIOPURE, YOU MAY BE DEEMED TO RELEASE
SUCH CLAIMS IF YOU REMAIN A MEMBER OF THE CLASS, EVEN
IF YOU DO NOT FILE A PROOF OF CLAIM FORM. PLEASE SEE
SECTION VII BELOW FOR DETAILS.
DEADLINE FOR FILING CLAIMS : If you are a member of the Class as
defined below and wish to participate in the settlement, you must submit to the Claims
Administrator a Proof of Claim and Release Form ("Proof of Claim ), on the form
accompanying this notice, postmarked no later than October 31, 2007.
DEADLINE FOR REQUESTING EXCLUSION FROM THE CLASS : Requests for
exclusion from the Class must be sent to the Claims Administrator, as described below,
postmarked no later than
BANKS, SECURITIES BROKERS, AND OTHER NOMINEES : Please see Instructions
in Section IX below.
YOU ARE HEREBY NOTIFIED, as a member of a proposed Class, that the parties have
agreed that this lawsuit should proceed as a class action for purposes of settlement only. The
"Class consists of all persons or entities who purchased or otherwise acquired common stock of
Biopure Corporation ("Biopure ), during the period from April 9, 2003 through December 24,
2003, inclusive (the "Class Period ). Excluded from the Class are Defendants, present or former
Officers and Directors of Biopure, members of their immediate families and their legal
representatives , heirs, successors , or assigns , and any entity in which Defendants have, or had, a
controlling interest.
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil
Procedure, and a
2007 Order of the United States District Court for the District of
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Massachusetts (the "Court ), that pursuant to the Stipulation and Agreement of Settlement (the
"Stipulation ) dated as of May 17, 2007 and filed with the Court, a settlement (the "Settlement )
of the above-captioned action (the "Action ) in the amount of $10 million (Ten Million Dollars)
in cash has been reached with all Defendants in the Action, including Biopure, Thomas A.
Moore, Carl W. Rausch, Ronald F. Richards, Howard P. Richman, Charles A. Sanders and J.
Richard Crout (collectively "Defendants ). The Settlement is subject to approval by the Court.
If approved, the Settlement will result in, among other things: (1) the payment of the Settlement
Amount, as defined below and after certain deductions described below, to eligible members of
the Class who file timely and valid Proof of Claim forms and evidence a recognized loss; and
(2) the dismissal of the above-referenced Action and the release of the Released Claims, as
described in the Stipulation and in the Proof of Claim form, as against the Defendants and certain
related persons and entities.
YOU ARE FURTHER NOTIFIED, pursuant to the Court's
2007 Order, that a
hearing (the "Settlement Hearing ) shall be held before the Honorable Nancy Gertner, located in
Courtroom 2, John Joseph Moakley U. S. Courthouse, 1 Courthouse Way, Boston,
Massachusetts 02210, on
, 2007 at
a.m./p.m., to consider : (1) whether to
certify a class for settlement purposes only; (2) whether the Settlement described above should
be approved by the Court as fair, reasonable and adequate; (3) whether this Action should be
dismissed on the merits with prejudice and judgment should be entered releasing claims against
the Defendants, as set forth in the Stipulation; (4) whether the proposed Plan of Allocation
(described in Section VI(B) of this Notice) should be approved; (5) whether the Court should
approve the application of Co-Lead Counsel for the class for payment of attorneys' fees and
reimbursement of costs and expenses; and (6) whether the Court should award reasonable costs
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and expenses to the Lead Plaintiff Ronald Erickson and Plaintiff Dr. John G. Esposito, Jr. (the
"Class Representatives ) incurred in connection with this Action.
1.
SUMMARY OF NOTICE
This Notice is not intended to be, and should not be, construed as an expression of any
opinion by the Court with respect to the truth of the allegations in the Action or the merits of the
claims or defenses asserted or the fairness or adequacy of the Settlement. This Notice is
intended only to advise you of the pendency and Settlement of the Action and of your rights in
connection with the Settlement.
A.
Statement of Plaintiffs' Recovery
Pursuant to the Settlement described herein, the Settlement Amount of $10 million (Ten
Million Dollars) is being held in escrow and is currently earning interest for the benefit of the
Class . The Settlement Amount, plus interest earned thereon, is referred to in this Notice as the
"Settlement Fund.
The Class Representatives estimate that there were approximately 29,574,000 shares of
Biopure common stock purchased and/or acquired during the Class Period, which were damaged
as a result of the alleged acts or omissions described below. Based on that estimate, the Class
Representatives estimate that the average recovery per damaged share under the Settlement will
be approximately $0.34 per share before the deduction of attorneys' fees, costs and expenses, as
approved by the Court. An individual Class Member may receive more or less than this average
amount per share, depending on the number of claims filed, when the shares were purchased
during the Class Period and, if sold, when they were sold, and the amounts awarded by the Court
for attorneys' fees, costs and expenses.
B.
Parties' Positions and Reasons for Settlement
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The Class Representatives believe that the claims asserted in the Action have merit and
that the evidence developed to date supports the claims asserted. Defendants have denied and
continue to deny each and all of the claims and contentions alleged by the Class Representatives
in the Action and do not believe any evidence supports those claims and contentions. However,
Class Representatives and Defendants recognize and acknowledge the inherent difficulties,
expense, and length of continued proceedings necessary to see the Action through trial and
possible appeals , and both have determined that the Settlement as set forth in the Stipulation is in
the best interests of all parties involved.
C.
Potential Outcome of the Case
In addition to disagreeing about the potential for proving the liability of Defendants, the
parties disagree on the average amount of damages per share that would be recoverable even if
the Class Representatives prevailed on each claim alleged. The determination of damages is a
complicated and uncertain process, typically involving conflicting expert opinions. Factors
which would be considered in the determination of damages include, among others, (i) whether
any of the alleged misrepresentations caused the price of Biopure stock to be artificially inflated
during the Class Period, (ii) whether the disclosure of truths regarding any alleged
misrepresentations was related to the drop in the price of Biopure stock during or after the Class
Period, (iii) the appropriate economic model for determining the amount by which Biopure stock
was artificially inflated (if at all) during the Class Period, (iv) the effect of various market forces
influencing the trading price of Biopure stock at various times during the Class Period, and (v)
the extent to which external factors, such as general market and industry conditions, influenced
the trading price of Biopure stock during the Class Period.
D.
Statement of Attorneys ' Fees and Costs Sought
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Co-Lead Counsel, as identified in Section E below, intend to apply for an award of
attorneys' fees in an amount up to 33 1/3% of the Settlement Fund, as well as reimbursement for
costs and expenses incurred in the prosecution of the Action of approximately $175,000. CoLead Counsel also intend to apply to the Court for the reimbursement of reasonable expenses
from the Settlement Fund to the Class Representatives to the extent permissible by law, in an
amount not to exceed $15,000(Fifteen Thousand Dollars) in the aggregate. The fees and
expenses of the Class Representatives and Co-Lead Counsel, if granted, would be, on average,
approximately $0.12 (Twelve Cents) per share of Biopure common stock, which was purchased
and/or acquired during the Class Period and was damaged as a result of the alleged acts or
omissions described below share.
E.
Identification of the Class Representatives' Counsel
The Class Representatives and the Class have been represented in this Action by the
following Co-Lead Counsel for the Class Representatives and the Class:
Howard T. Longman, Esq.
Stull, Stull & Brody
6 East 45th Street
New York, NY 10017
Tel: (212) 687-7230
Edward F. Haber, Esq.
Matthew L. Tuccillo, Esq.
Shapiro Haber & Urmy LLP
53 State Street
Boston, MA 02109
Tel: (617) 439-3939
Any questions regarding the Settlement should be directed to Co-Lead Counsel.
II.
DEFINITIONS
As used in this Notice, the following terms shall have the following meanings, which are
set forth in the Stipulation of Settlement:
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(a)
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"Authorized Claimant means any Class Member who submits a timely and valid
Proof of Claim and Release form ("Proof of Claim ) that is accepted by the Claims
Administrator.
(b)
"Claimant means any Class Member who files a Proof of Claim.
(c)
"Claims Administrator means Berdon Claims Administration LLC, which shall
administer the Settlement.
(d)
"Class and "Class Members mean all persons or entities who purchased or
otherwise acquired Biopure common stock from April 9, 2003 through December 24, 2003,
inclusive. Excluded from the Class are Defendants, the former and current officers and directors
of Biopure, members of their immediate families and their legal representatives, heirs, successors
or assigns and any entity in which Defendants have or had a controlling interest.
(e)
"Class Period means the period of time from April 9, 2003 through December
24, 2003, inclusive.
(f)
"Court means the United States District Court for the District of Massachusetts,
the Honorable Nancy Gertner presiding.
(g)
"Defendants means Biopure Corporation, Thomas A. Moore, Carl W. Rausch,
Ronald F. Richards, Howard P. Richman, Charles A. Sanders and J. Richard Crout.
(h)
"Defendants' Counsel means the law firm of Bingham McCutchen, LLP.
(i)
"Effective Date of Settlement or "Effective Date means the date upon which the
Settlement contemplated by this Stipulation shall become effective, as set forth in ¶27 below.
0)
"Escrow Agents means Co-Lead Counsel, Edward F. Haber and Howard
Longman.
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(k)
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"Final means: (i) if an appeal is filed, the date of final affirmance on an appeal
from the Order and Final Judgment, the expiration of the time for a petition for a writ of
certiorari to review the Order and Final Judgment or, if certiorari is granted, the date of final
affirmance of the Order and Final Judgment following review pursuant to that grant; or (ii) the
date of final dismissal of any appeal from the Order and Final Judgment and the final dismissal
of any proceeding on certiorari to review the Order and Final Judgment; or (iii) if no appeal is
filed, the expiration date of the time for the filing or noticing of any appeal from the Order and
Final Judgment, i.e., thirty (30) calendar days after entry of the Order and Final Judgment (or, if
the date for taking an appeal or seeking review shall be extended beyond this time by order of the
Court, by operation of law or otherwise, or if such extension is requested, the date of expiration
of any extension if any appeal or review is not sought); or (iv) if the Court enters an Order and
Final Judgment in a form other than that provided above ("Alternative Judgment ) and none of
the Parties hereto elect to terminate the Settlement, the date that such Alternative Judgment
becomes final as defined in parts (i) to (iii) above and no longer subject to appeal or review. Any
proceeding or order, or any appeal or petition for a writ of certiorari pertaining solely to any plan
of allocation and/or application for attorneys' fees, costs or expenses, or compensatory award for
Class Representatives shall not in any way delay or preclude the Order and Final Judgment from
becoming final.
(1)
"Gross Settlement Fund means the Settlement Amount, plus any interest earned
thereon.
(m)
"Insurers means the Underwriters of Lloyd's, London; Old Republic Insurance
Company; and Carolina Casualty Insurance Company (the "Insurers ).
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(n)
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"Class Representatives means Lead Plaintiff Ronald Erickson and Plaintiff John
G. Esposito.
(o)
"Co-Lead Counsel means Stull , Stull & Brody and Shapiro Haber & Urmy, LLP.
(p)
"Net Settlement Fund means the Gross Settlement Fund, as defined herein, net of
any taxes, as referred to in ¶7, on the income thereof, and net of any funds to pay (i) the notice
and administrative costs referred to in ¶11, (ii) taxes and escrow fees; (iii) the attorneys' fees and
expense award referred to in ¶12; and (iv) any award to Class Representatives granted by the
Court referred to in ¶12.
(q)
"Notice means the Notice of Proposed Settlement of Class Action, Motion for
Attorneys' Fees and Settlement Fairness Hearing, which is to be sent to members of the Class
substantially in the form attached hereto as Exhibit 1 to Exhibit A.
(r)
"Order and Final Judgment means the proposed order to be entered approving
the Settlement substantially in the form attached hereto as Exhibit B.
(s)
"Person
means
an
individual,
corporation
(including
all
divisions
and
subsidiaries), 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.
(t)
"Plan of Allocation
means a plan or formula for the allocation of the Net
Settlement Fund whereby the Net Settlement Fund shall be distributed to Authorized Claimants.
(u)
"Preliminary Approval Order means the proposed order preliminarily approving
the Settlement and directing notice thereof to the Class substantially in the form attached hereto
as Exhibit A.
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(v)
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"Released Parties is defined in the Stipulation of Settlement and in the
accompanying Proof of Claim.
(w)
"Settled Claim(s)
is defined in the Stipulation of Settlement and in the
accompanying Proof of Claim.
(x)
"Defendants' Settled Claims is defined in the Stipulation of Settlement and in the
accompanying Proof of Claim.
(y)
"Settlement Amount means the consideration to be paid by the Insurers on behalf
of the Defendants pursuant to the Settlement set forth herein, which consideration shall be TEN
MILLION DOLLARS ($ 10,000,000.00 ) total, consisting of the First Deposit (as defined in the
Stipulation of Settlement), the Second Deposit (as defined in the Stipulation of Settlement), and
the Third Deposit (as defined in the Stipulation of Settlement).
(z)
"Summary Notice means the Summary Notice of Settlement of Class Action for
publication substantially in the form attached as Exhibit 3 to Exhibit A to the Stipulation.
(aa)
"Unknown Claims is defined in the Stipulation of Settlement and in the
accompanying Proof of Claim.
III.
COMMENCEMENT OF THE ACTION AND NATURE OF THE ACTION
A.
Procedural History
On or after December 30, 2003, fifteen securities fund class actions were filed in the
United States District Court for the District of Massachusetts against Biopure and certain of
Biopure's present or former officers . On May 14, 2004, the Court ordered these actions to be
consolidated into a single action under the caption In re Biopure Securities Litigation , Civ. No.
03-12628-NG (the "Action ). The Court also appointed Ronald Erickson as Lead Plaintiff and
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approved Erickson ' s choice of Stull, Stull & Brody and Shapiro Haber & Urmy LLP as Co-Lead
Counsel.
On July 23, 2004, the Class Representatives and other named Plaintiffs filed a
Consolidated Amended Class Action Complaint ("CAC ) alleging violations of Section 10b of
the Securities Exchange Act of 1934 (the "Exchange Act ), Rule 10b-5 promulgated thereunder,
Section 20(a) of the Exchange Act, and Section 20A of the Exchange Act. On October 6, 2004,
all Defendants filed a motion to dismiss the CAC.
On January 5, 2006 the Plaintiffs filed a
motion for leave to file a Second Consolidated Amended Complaint ("SCAC ) that raised the
same legal claims as were set forth in the CAC but supported them with additional factual
allegations .
On March 28, 2006, the Court issued a Memorandum and Order denying the
Defendants' motion to dismiss and granting the Plaintiffs leave to file the SCAC.
On June 5, 2006, the Class Representatives filed an amended motion for class
certification. The amended motion for class certification was pending when the Parties notified
the Court that they had reached a settlement.
IV.
INVESTIGATION, DISCOVERY AND RESEARCH
A.
Investigation, Discovery and Research Conducted by Co-Lead Counsel
Co-Lead Counsel conducted extensive discovery and factual investigation during their
prosecution of the Action, including, inter alia, (1) review and analysis of Biopure's public
filings with the Securities and Exchange Commission ("SEC ), annual reports, and other public
statements ; (2) review of transcripts of testimony in a related proceeding brought by the SEC; (3)
consultations with experts; (4) research of the applicable law with respect to the claims asserted
in the Action and the potential defenses thereto; (5) detailed review and analysis of over 40,000
pages of documents produced by Defendants in discovery.
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Based upon their investigation to date , Co-Lead Counsel believe that the causes of action
asserted in the SCAC have merit and that the evidence developed to date supports their claims.
V.
CLAIMS OF PLAINTIFFS AND BENEFITS OF SETTLEMENT
Co-Lead Counsel and Class Representatives believe that the terms and conditions of this
Stipulation are fair, reasonable and adequate to the Class Representatives and the Class
Members, and in their best interests. The Class Representatives have agreed to settle the claims
raised in the Action pursuant to the terms and provisions of this Stipulation, after considering: (1)
the substantial benefits that Class Representatives and the Class Members will receive from the
Settlement; (2) the attendant risks of litigation; and (3) the desirability of permitting the
Settlement to be consummated as provided by the terms of this Stipulation.
Co-Lead Counsel and Class Representatives recognize and acknowledge the expense and
length of time which would be consumed by continued proceedings necessary to prosecute the
Action against the Defendants through trial and appeals . Co-Lead Counsel and Class
Representatives have also taken into account the uncertain outcome and the risk of any litigation,
especially in complex actions such as this Action, as well as the difficulties and delays inherent
in such litigation . Co-Lead Counsel and Class Representatives are also mindful of the inherent
problems of proof under, and possible defenses to, the securities law violations asserted in the
Action. Further, Co-Lead Counsel and Class Representatives also considered the ability to pay
issues arising from the financial circumstances of Biopure and the ability to fund a settlement or
satisfy a verdict from limited insurance proceeds, which have been used in part to defend this
Action and a related action prosecuted by the SEC. In light of the foregoing, Co-Lead Counsel
and Class Representatives believe that the Settlement confers substantial benefits upon the Class
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and have determined that the Settlement as set forth in the Stipulation is in the best interests of
the Class Representatives and the Class Members.
VI.
THE DEFENDANTS' STATEMENT AND DENIALS OF WRONGDOING AND
LIABILITY
Defendants have denied and continue to deny each and all of the claims and contentions
alleged by the Class Representatives in the Action. Defendants expressly have denied and
continue to deny all charges of wrongdoing or liability against them arising out of any conduct,
statements , acts or omissions alleged, or that could have been alleged, in the Action. Defendants
have also denied and continue to deny, inter alia, the allegations that Class Representatives or
the Class have suffered damages, that the price of Biopure common stock was artificially inflated
by reasons of alleged misrepresentations, non-disclosures or otherwise, and that the Class
Representatives or the Class were harmed by the conduct alleged in the SCAC.
Nonetheless, Defendants have concluded that further conduct of the Action would be
protracted and expensive, have taken into account the uncertainty and risks inherent in any
litigation (especially in complex securities cases like this Action) and have concluded that it is
desirable that the Action and any Settled Claims, including Unknown Claims (as defined in the
Stipulation), be fully and finally settled in the manner and upon the terms and conditions set
forth in the Stipulation.
VII.
THE PROPOSED SETTLEMENT
The following description of the Settlement is only a summary, and reference is made to
the text of the Stipulation, on file with the Court, for a full statement of its provisions:
A.
The Settlement Fund consists of the principal amount of $10 million (Ten Million
Dollars) in cash, plus interest.
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Upon approval of the Settlement by the Court, and when the Judgment has
become final and all other conditions to the Settlement are satisfied, the Settlement Fund shall be
distributed as follows:
(1)
To pay all the costs and expenses reasonably and actually incurred in
administering the Settlement;
(2)
To pay Co-Lead Counsels' fees, expenses and costs as awarded by the
(3)
To pay any award ordered by the Court to the Class Representatives for
Court;
their reasonable costs and expenses (including lost wages) directly relating to the representation
of the Class;
(4)
To pay the taxes and tax expenses owed by the Settlement Fund; and
(5)
To pay to Class Members their pro rata share of the Net Settlement Fund,
as defined below, pursuant to the Plan of Allocation set forth below.
(6)
Plan of Allocation . Subject to the approval and further Order(s) of the
Court as may be necessary, the balance of the Settlement Fund after deduction of the fees and
expenses described in paragraphs (1) through (4) above (the "Net Settlement Fund ), shall be
distributed to Authorized Claimants pursuant to the following Plan of Allocation. ("Authorized
Claimant means any Class Member who submits a timely and valid Proof of Claim that is
accepted by the Claims Administrator.)
(7)
Each Class Member seeking a distribution from the Net Settlement Fund
shall be required to timely submit a separate Proof of Claim that shall include a general release
of all Released Claims, including any Unknown Claims (as defined in the Stipulation), against
the Released Parties in the form set forth in the Proof of Claim accompanying this Notice, signed
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under penalty of perjury and supported by documented proof of all purchases (or acquisitions)
and sales (or dispositions) of Biopure common stock during the Class Period.
(8)
All Proof of Claim forms must be sent to the Claims Administrator and
postmarked on or before October 31 , 2007. Unless otherwise ordered by this Court, any Class
Member who fails to submit a Proof of Claim and Release within that period, or such other
period as may be ordered by the Court, shall be forever barred from receiving any payments
pursuant to the Stipulation, but will, in all other respects, be subject to the provisions of the
Stipulation and the final Judgment entered by the Court.
(9)
To the extent there are sufficient funds in the Net Settlement Fund, each
Authorized Claimant will receive an amount equal to the Authorized Claimant's Recognized
Loss. If, however, the amount in the Net Settlement Fund is not sufficient to permit payment of
the total Recognized Loss of each Authorized Claimant, then each Authorized Claimant shall be
paid the percentage that each Authorized Claimant's Recognized Loss bears to the total of the
Recognized Losses of all Authorized Claimants. No cash payment will be made on a claim
where the potential distribution amount is ten dollars ($10.00) or less.
(10)
A "Recognized Loss will be calculated as follows:
(a)
For the shares of Biopure common stock purchased during the
period from April 9, 2003 through October 30, 2003, inclusive, and:
(i) sold prior to the close of trading on October 30, 2003, the
Recognized Loss shall be zero; or
(ii) sold during the period from October 31, 2003 through
December 24, 2003, inclusive, the Recognized Loss shall be the difference between the purchase
price and the sale price; or
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(iii) held at the close of trading on December 24, 2003, the
Recognized Loss shall be the difference between the purchase price and $2.43 per share (the
market price at the close of trading on December 26, 2003, the first business day after the end of
the Class Period).
(b)
For the share of Biopure common stock purchased during the
period from October 31, 2003 through December 24, 2003 , inclusive, and:
(i) sold prior to the close of trading on December 24, 2003, the
Recognized Loss shall be zero; or
(ii) held at the close of trading on December 24, 2003, the
Recognized Loss shall be the difference between the purchase price and $2.43 per share (the
market price at the close of trading on December 26, 2003, the first business day after the end of
the Class Period).
(c)
The date of purchase or sale is the "contract or "trade date and
not the "settlement date.
(d)
All profits will be subtracted from all losses to determine the net
Recognized Loss of each Authorized Claimant. Brokerage commissions, fees and taxes should
be included in the purchase and sale prices of Biopure shares.
(e)
In processing claims , the first-in, first-out basis ("FIFO ) will be
applied to both purchases and sales. Sales will be matched in chronological order, by trade date,
first against the securities held as of the close of trading on April 8, 2003 (the last day before the
Class Period begins) and then against the purchases during the Class Period.
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(f)
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The date of covering a "short sale is deemed to be the date of
purchase of Biopure shares. The date of a "short sale is deemed to be the date of sale of Biopure
shares. Shares originally sold short prior to the Class Period shall have zero Recognized Loss.
(g)
Where securities were purchased/sold by reason of having
exercised an option, the option premium should be incorporated into the price accordingly.
(h)
YOUR CLAIM WILL NOT BE VALID IF YOU DID NOT
SUFFER A RECOGNIZED LOSS.
(i)
The Court has reserved jurisdiction to allow, disallow or adjust the
Claim of any Class Member on equitable grounds.
(11)
Although the Net Settlement Fund is being allocated among the Class
Members based on the formulas stated above (subject to Court approval), it should not be
assumed that an Authorized Claimant's Claim is equal to the amount of damages , if any, which
could have been recovered had this Action been fully tried instead of settled. The amount of
damages which Plaintiffs could prove, if any, is a matter of serious dispute, and the Settlement's
use of the formula set forth above does not constitute a concession, finding or admission that
liability exists or that any damages could be proven or that provable damages, if any, would be
commensurate with a Claim. The Settlement avoids the risks to the Class Members that liability
or damages might not have been proven at trial.
(12)
Distributions will be made to Authorized Claimants after all claims have
been processed and after the Court has finally approved the Settlement. If any funds remain in
the Net Settlement Fund by reason of un-cashed checks or otherwise, then, after the Claims
Administrator has made reasonable and diligent efforts to have Class members who are entitled
to participate in the distribution of the Net Settlement Fund cash their distributions, any balance
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remaining in the Net Settlement Fund one (1) year after the initial distribution of such funds shall
be re-distributed to Class members who have cashed their initial distributions and who would
receive at least ten dollars ($10.00) pro rata from such re-distribution, after payment of any
unpaid costs or fees incurred in administering the Net Settlement Fund for such re-distribution.
If after six (6) months after such re-distribution, any funds shall remain in the Net Settlement
Fund, then such balance shall be contributed to non-sectarian, not-for-profit, 501(c)(3)
organization(s) designated by Class Co-Lead Counsel.
(13)
All Class Members who fail to complete and file a valid and timely Proof
of Claim shall be barred from participating in distributions from the Net Settlement Fund, unless
they submit a valid exclusion request pursuant to Section X below or unless otherwise ordered
by the Court, but otherwise shall be bound by the Settlement and by all of the terms of the
Stipulation, including the terms of the Order and Final Judgment or of any judgment entered by
the Court.
(14)
No person shall have any claim against Plaintiffs' Counsel, the Claims
Administrator or other agent designated by Plaintiffs' Counsel, or any Defendant or any
Defendant's counsel based on the distribution made substantially in accordance with the
Stipulation and this Plan of Allocation, or further orders of the Court.
VIII.
DISMISSAL AND RELEASES
If the Settlement is approved by the Court, the Court will enter a final judgment
which will:
A.
Dismiss the Action in its entirety as against the Defendants with prejudice and
without costs to any party as against any other party; adjudge that the Class Representatives and
each Class Member, except those who both timely and validly request exclusion in accordance
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with the procedures detailed herein, shall be deemed conclusively to have released the Released
Claims and Unknown Claims (described in the Release accompanying the Proof of Claim and
in the Stipulation) against the Released Parties. Notwithstanding that the Class Representatives,
or one or more Class Members, may hereafter discover facts in addition to, or different from,
those which the Class Representatives or Class Members now know or believe to be true with
respect to the Action and Released Claims or to the subject matter of the Action, which, if
known, 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 object to the Settlement, each of the Class
Representatives and Class Members shall be deemed, upon the date of the final judgment for this
Action, to have fully, finally and forever settled and released, as against any of the Released
Parties, and all Released Claims and Unknown Claims, that have been, or might have been,
asserted by the Class Representatives or Class Members, or any of them, against Defendants, or
any of them, based upon, or related to, the purchase or acquisition of Biopure common stock by
the Class Representatives or Class Members during the Class Period, and the facts, transactions,
events , occurrences , acts or omissions which were, or could have been, alleged in the Action.
B.
Bar and permanently enjoin each of the Class Representatives and the Class
Members from prosecuting the Released Claims (including Unknown Claims) against the
Released Parties, as set forth in the Release accompanying the Proof of Claim;
C.
Reserve jurisdiction, without affecting the finality of the judgment entered, over:
(1)
Implementation of this Settlement and any award or distribution of the Net
Settlement Fund, including interest earned or accrued thereon;
(2)
Disposition of the Gross Settlement Fund;
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(3)
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Hearing and determining Co-Lead Counsel's applications for attorneys'
fees, costs, interest, and expenses, including fees and costs of experts and/or consultants and the
award of reasonable costs and expenses (including lost wages) directly relating to the
representation of the Class, to the Class Representatives;
(4)
Enforcing and administering the Stipulation, including any Releases
executed in connection therewith; and
(5)
Other matters related or ancillary to any of the foregoing.
As part of the Settlement, the Defendants have released and agreed not to sue the
Class Representatives, Co-Lead Counsel, or any Class Member for any claims that arise out of or
relate in any way to the institution, prosecution, or settlement of the Action.
IX.
SPECIAL NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES
To all banks, brokerage firms, institutions and other Persons that are nominees who
purchased or otherwise acquired the common stock of Biopure for the beneficial interest of other
Persons during the Class Period (April 9, 2003 through December 24, 2003, inclusive): within
ten (10) days after you receive this Notice and the accompanying Proof of Claim and Release,
you must either (1) provide the Claims Administrator with the names and addresses of such
beneficial owners , preferably on computer-generated mailing labels or, electronically, in MS
Word or WordPerfect files (label size Avery # 5162), or in an MS Excel data table setting
forth (a) title/registration , (b) street address, (c) city/state/zip; or (2) send copies of the
Notice and the Proof of Claim and Release to all beneficial owners by first-class mail and
provide the Claims Administrator with written confirmation of having done so. Additional
copies of the Notice may be requested by contacting the Claims Administrator at:
In re Biopure Corporation Securities Litigation
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c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
Telephone: (800) 766-3330
Fax: (516) 931-0810
Website: www.berdonclaims.com
You are entitled to the reimbursement of any reasonable expenses actually incurred in
connection with the research of records and (1) the generating of labels or electronic media or (2)
the mailing of this Notice, after submission to the Claims Administrator of a written request,
together with appropriate supporting documentation.
X.
THE RIGHTS AND OBLIGATIONS OF CLASS MEMBERS
If you are a Member of the Class, you may receive the benefit of, and you will be bound
by, the terms of the Settlement described in Section VI of this Notice, and recited more fully in
the Stipulation, upon approval of the Settlement by the Court.
If you are eligible to be a Class Member (that is, if you purchased or otherwise acquired
Biopure common stock during the period of April 9, 2003 through December 24, 2003,
inclusive), you have the following options:
A.
You may file a Proof of Claim. If you choose this option, you will remain a Class
Member; you will share in the proceeds of the Settlement if the Settlement is finally approved by
the Court and if your claim is timely and validly filed and supports a Recognized Loss; and you
will be bound by the Judgment and Releases.
B.
If you do not wish to be a Class Member or be included in the Class, and you do
not wish to participate in the Settlement described in this Notice, you may request to be
excluded. To do so, you must state in writing that you wish to be excluded from the Settlement.
Your written request for exclusion must also set forth: (1) the name of this Action: In re Biopure
Corporation Securities Litigation, Case No.: 03-12628 (NG); (2) your name, address and
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telephone number; (3) the name, address and telephone number of the record owner of Biopure
Common Stock, if different from your own as the beneficial owner; (4) the number of Biopure
common shares that you owned as of April 8, 2003; (5) the number of Biopure common shares
that you purchased or otherwise acquired during the Class Period, including the price and the
dates of those purchases or acquisitions; and (6) the number of Biopure common shares you sold
during the Class Period, including the price and the dates of those sales . The written exclusion
request should be sent to the Claims Administrator at:
In re Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
To be considered valid, the exclusion request must be postmarked no later than
, 2007.
NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF
THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN THE REQUEST.
C.
If you validly request exclusion from the Class : ( 1) you will be excluded from the
Class; (2) you will not share in the proceeds of the Settlement described herein; (3) you will not
be bound by any judgment entered in the Action; and (4) you will not be precluded by this
Settlement from otherwise prosecuting an individual claim, if timely, at your own expense
against Defendants, based on the matters complained of in the Action.
D.
If you do not request to be excluded from the Class, you will be bound by any and
all determinations or judgments in the Action concerning the Settlement entered or approved by
the Court, whether favorable or unfavorable to the Class Members, including, without limitation,
the Judgment described above. If you do not exclude yourself from the Class, you will be
deemed to have released all Claims which you may have against the Defendants, whether
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or not you submit a Proof of Claim. If you have filed or intend to file other claims against
any Defendants, you may need to request exclusion from the Class to retain such claims,
and you should consult your attorney.
E.
If you do not request to be excluded from the Class, you may object to the
Settlement, the Plan of Allocation and/or the applications of Co-Lead Counsel for an award of
attorneys' fees and reimbursement of expenses in the manner set forth below. The filing of a
Proof of Claim and Release by a Class Member does not preclude a Class Member from
objecting to the Settlement, the Plan of Allocation, and/or the fees and expenses applied for by
Co-Lead Counsel. However, if your objection is rejected, you will be bound by the Settlement
and the Final Judgment just as if you had not objected. In order to object to any aspects of this
settlement, you must follow the procedure set forth in Section X below.
F.
You may do nothing at all. If you choose this option, you will not share in the
proceeds of the Settlement, but you will be bound by the Final Judgment, and you will be
deemed to have released Defendants, including Biopure, just as if you had filed a Proof of Claim
and Release.
G.
If you are a Class Member, you may, but are not required to, enter an appearance
in writing through counsel of your own choosing at your own expense. If you do not do so, you
will be represented by Co-Lead Counsel.
XI.
THE RIGHT TO BE HEARD AT THE SETTLEMENT HEARING
At the Settlement Hearing, the Court will consider whether the Settlement is fair,
reasonable and adequate; whether it should be approved by the Court; whether Judgment should
be entered dismissing the Action on the merits and with prejudice as against Defendants; whether
the proposed Plan of Allocation is fair and reasonable; and whether Co-Lead Counsel's
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applications for attorneys' fees and reimbursement of costs and expenses should be approved.
The Settlement Hearing may be adjourned, from time to time, by the Court at or prior to the
Settlement Hearing, or any adjourned session thereof, without further notice.
Any Member of the Class, who has not requested exclusion, may appear at the Settlement
Hearing to show cause why the Settlement should or should not be approved and the Action
should or should not be dismissed on the merits with prejudice, and/or to present any opposition
to the Plan of Allocation or the application of Co-Lead Counsel for fees and expenses . However,
no such Person shall be heard, unless the objection or statement of support is made in writing and
filed, together with copies of all other papers and briefs, with the Court at Clerk of the Court,
John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Suite 2300, Boston, MA 02210, no
later than
, 2007, and showing due proof of service on all of the following: (1)
both Howard T. Longman, Esq., Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017,
Tel: (212) 687-7230, Fax: (212) 490-2202 and Edward F. Haber, Esq. and Matthew L. Tuccillo,
Esq., Shapiro Haber & Urmy LLP, 53 State Street, Boston, MA 02109, Tel: (617) 439-3939,
Fax: (617) 439-0134, Co-Lead Counsel; and (2) Robert A. Buhlman, Esq. and Michael D.
Blanchard, Esq., Bingham McCutchen LLP, 150 Federal Street, Boston, MA 02110, Tel: (617)
951-8000, Fax: (617) 951-8736, Defendants'Attorneys.
Any Class Member who does not make his, her or its objection or statement of support in
the manner provided, shall be deemed to have waived all objections and opposition to the
fairness , reasonableness and adequacy of the Settlement, to the Plan of Allocation, and to the
request of Co-Lead Counsel for attorneys' fees and expenses.
XII.
EXAMINATION OF PAPERS AND INQUIRIES
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For a more detailed statement of the matters involved in the Action and the Settlement
thereof, reference is made to the pleadings, to the Stipulation and to other papers filed in the
Action, which may be inspected at the Office of the Clerk of the United States District Court,
John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Suite 2300, Boston, MA 02210,
during the business hours of each business day.
Inquiries regarding the submission of proofs of claim should be addressed to the Claims
Administrator at:
In re Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
Telephone: (800) 766-3330
Fax: (516) 931-0810
Website: www.berdonclaims.com
However, communications which convey confidential information should be sent directly
to Co-Lead Counsel, or to your own attorney.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE
REGARDING THIS NOTICE.
Dated:
, 2007
BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS
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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION
SECURITIES LITIGATION
)
)
CIVIL ACTION
NO. 03-12628-NG
PROOF OF CLAIM AND RELEASE
DEADLINE FOR SUBMISSION: October 31, 2007
IF YOU PURCHASED OR OTHERWISE ACQUIRED COMMON STOCK OF BIOPURE
CORPORATION ("BIOPURE ) DURING THE PERIOD FROM APRIL 9, 2003 THROUGH DECEMBER 24, 2003, INCLUSIVE (THE "CLASS PERIOD ), YOU AREA "CLASS
MEMBER,
AND YOU MAY BE ENTITLED TO SETTLEMENT PROCEEDS.
(EXCLUDED FROM THE CLASS ARE DEFENDANTS, MEMBERS OF THEIR
IMMEDIATE FAMILIES AND THEIR LEGAL REPRESENTATIVES,
HEIRS,
SUCCESSORS OR ASSIGNS AND ANY ENTITY IN WHICH DEFENDANTS HAVE OR
HAD A CONTROLLING INTEREST.) IF YOU ARE A CLASS MEMBER, IN ORDER
TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS, YOU MUST COMPLETE
AND SIGN THIS PROOF OF CLAIM AND RELEASE AND MAIL IT BY PREPAID, FIRST CLASS MAIL, POSTMARKED NO LATER THAN OCTOBER 31, 2007
TO:
Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
YOUR FAILURE TO SUBMIT YOUR PROOF OF CLAIM AND RELEASE POSTMARKED BY OCTOBER 31, 2007 TO THE CLAIMS ADMINISTRATOR MAY
SUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOUR RECEIVING ANY
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MONEY IN CONNECTION WITH THE SETTLEMENT OF THIS LITIGATION. DO
NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE
PARTIES OR THEIR COUNSEL, AS ANY SUCH CLAIM WILL BE DEEMED NOT TO
HAVE BEEN SUBMITTED.
ADMINISTRATOR.
SUBMIT YOUR CLAIM ONLY TO THE CLAIMS
YOU WILL BEAR ALL RISKS OF DELAY OR NON-
DELIVERY OF YOUR CLAIM.
Submission of this Proof of Claim and Release , however, does not assure that you will share in
the proceeds of Settlement in the Litigation.
If you are a Class Member, and you do not properly and timely request exclusion in connection
with the Settlement, you will be bound by the terms of any judgment entered in the Litigation,
WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM AND RELEASE.
If you are NOT a Class Member (or legal representative of a Class Member), DO NOT submit
a Proof of Claim and Release.
All terms herein are as defined in the Notice ofProposed Settlement of Class Action, Motion for
Attorneys' Fees and Settlement Fairness Hearing (the "Notice ) that accompanied this Proof of
Claim and Release and the Stipulation and Agreement of Settlement (the "Stipulation of
Settlement ) on file with the Court.
CLAIM FORM INSTRUCTIONS
1. If you purchased or acquired Biopure common stock and held the certificate(s) in your
name, you are the beneficial owner as well as the record owner. If, however, you purchased or
acquired Biopure common stock and the certificate(s) were registered in the name of a third party,
such as a nominee or brokerage firm, you are the beneficial owner and the third party is the record
owner.
2. Use Part I of this form entitled "Claimant Identification to identify each beneficial owner
and, if different, each record owner, of Biopure common stock that form the basis of this claim.
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THIS CLAIM MUST BE FILED BY THE ACTUAL BENEFICIAL
OWNER OR OWNERS, OR THE LEGAL REPRESENTATIVE OF SUCH
OWNER OR OWNERS, OF THE BIOPURE COMMON STOCK UPON
WHICH THIS CLAIM IS BASED.
3. All joint owners must sign this claim. Executors, administrators , guardians , conservators and
trustees must complete and sign this claim on behalf ofPersons represented by them, documentation
establishing their authority must accompany this claim, and their titles or capacities must be stated.
4. The Social Security or Taxpayer Identification Number and telephone number of the
beneficial owner may be used in verifying the claim. Failure to provide the foregoing information
could delay verification of your claim or result in rejection of the claim.
5. Use Part II, §§ A, B, C and D of this form entitled " Schedule of Transactions in Biopure
Common Stock to supply all required details of your transaction(s) in Biopure common stock. If
you need more space, attach separate sheets giving all of the required information in substantially
the same form. Print your name, Social Security or Taxpayer Identification Number, and "Proof of
Claim - Schedule of Transactions in Biopure Common Stock at the top of each additional sheet.
6. On the schedules, provide all of the requested information with respect to all of your
purchases and acquisitions and all of your sales of Biopure common stock that took place during the
Class Period, whether such transactions resulted in a profit or a loss. Failure to report all such
transactions may result in the rejection of your claim.
7. List each transaction during the Class Period separately and in chronological order, by trade
date, beginning with the earliest. You must accurately provide the month, day and year of each
transaction you list, as well as the number of Biopure shares involved in each transaction.
8. Brokerage commissions and transfer taxes paid by you in connection with your purchase and
sale of Biopure common stock should be included in computing the "Total Cost and netted out of
the "Net Proceeds.
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Page 4 of 14
9. The date of purchase or sale is the "contract or "trade date and not the "settlement date.
10. All profits will be subtracted from all losses to determine the net recognized loss of each
Class Member.
11. In processing claims, the first-in, first-out basis ("FIFO ) will be applied to purchases,
acquisitions and sales. Sales will be matched in chronological order by trade date, first against the
common stock held as of the close of trading on April 8, 2003 (the last day before the Class Period
begins) and then against the purchases/acquisitions during the Class Period.
12. The date of covering a "short sale is deemed to be the date ofpurchase of Biopure common
stock. The date of a "short sale is deemed to be the date of sale of Biopure common stock. Shares
originally sold short prior to the Class Period will result in a zero claim.
13. Where Biopure common stock was purchased/sold by reason of having exercised an option,
the option premium should be incorporated into the price accordingly.
14. Ifan Authorized Claimants' trading activity during the Class Period exceeds 50 transactions,
he, she or it must provide, in an electronic file, all purchase and sales information required in Part
II, §§ A, B, C and D. For a copy of instructions and parameters concerning such a submission,
contact the Claims Administrator by phone: (800) 766-3330; by fax (516) 931-0810 or via the
website: www.berdonclaims.com.
15. No cash payment will be made on a claim where the potential distribution amount is $10.00
or less.
16. Copies of brokers' confirmations, monthly statements or other documentation of your
transactions in Biopure common stock during the Class Period should be attached to your claim.
For a complete listing ofthe documentation deemed acceptable by the Claims Administrator, please
refer to the website www.berdonclaims.com. Failure to provide this documentation could delay
verification of your claim or result in rejection of your claim.
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17. All defined terms used herein, unless specifically defined herein, shall have the same
meaning as set forth in the Notice and the Stipulation.
Document 163-4
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Case 1 : 03-cv-12628 - NG
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
Page 6 of 14
In re Biopure Corporation Securities Litigation
PROOF OF CLAIM
B I OP U RE
Must be Received by Claims Administrator Postmarked No Later Than October 31, 2007
PART I: CLAIMANT IDENTIFICATION
Please Type or Print
Beneficial Owner's Name (as it appears on your brokerage statement)
Joint Beneficial Owner's Name (as it appears on your brokerage statement)
Street Address
City
State
Zip Code
Foreign Province
Foreign Country
or
Social Security Number
Taxpayer Identification Number
Specify one of the following:
Individual(s)
Partnership
Corporation
UGMA Custodian
Estate
Trust
Other:
(Day)
Area Code
IRA
(Evening)
Telephone Number
Area Code Telephone Number
Facsimile Number
E-Mail Address
Record Owner' s Name and Address (if different from beneficial owner listed above)
PART II: SCHEDULE OF TRANSACTIONS IN BIOPURE COMMON STOCK
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A. Number of shares ofBiopure common stock owned at the close of trading on April 8, 2003 (long
or short) (must be documented):
B. Separately list each and every purchase and/or acquisition of Biopure common stock during
the period April 9, 2003 through December 24, 2003, and provide the following information
(must be documented):
Trade Date
(list chronologically)
Month/Day/Year
Number of Shares Purchased
Total Cost
(including commissions, taxes,
andfees)
C. Separately list each and every sale of Biopure common stock during the period April 9, 2003
through December 24, 2003, and provide the following information (must be documented):
Trade Date
(list chronologically)
Month/Day/Year
Number of Shares Sold
Net Proceeds
(net of commissions, taxes, and
fees)
D. State the total number of shares of Biopure common stock owned at the close of trading on
December 24, 2003 (must be documented):
If additional space is needed, attach the required information on separate, numbered
sheets in the same format, and print your name, Social Security or Taxpayer Identification
Number and "Proof of Claim - Schedule of Transactions in Biopure Common Stock" at
the top of each sheet.
YOU MUST ALSO READ, AND SIGN THE SUBMISSION TO
JURISDICTION AND RELEASE WHICH FOLLOW
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SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS
A. I/We submit this Proof of Claim under the terms of the Stipulation of Settlement described
in the Notice. By submitting this Proof of Claim, I /we state that I/we believe in good faith that I
am/we are a Class Member as defined herein and in the Notice, or I am/we are acting for such
Person; that I/we have read and understand the Notice; that I/we believe that I am/we are entitled
to receive a share of the Net Settlement Fund; and that I/we elect to participate in the Settlement
described in the Notice.
B. I/We also submit to the jurisdiction of the United States District Court for the District of
Massachusetts with respect to my/our claim as a Class Member and for purposes of enforcing the
release set forth herein and any judgment that may be entered in the Litigation. I/We further
acknowledge that I am/we are bound by, and subject to, the terms of any judgment that may be
entered in the Litigation.
C. I/We hereby warrant and represent that I/we have included and have set forth where
requested above all relevant information with respect to every one of my/our purchases or
acquisitions and every one of my/our sales of Biopure common stock during the Class Period, as
well as the number of shares of Biopure common stock owned by me/us at the close of trading on
April 8, 2003 and at the close of trading on December 24, 2003 .
I/We have also enclosed
photocopies of the stockbroker' s confirmation slips , stockbroker' s statements , or other documents
evidencing each purchase, acquisition, sale or retention of Biopure common stock listed above in
support of my/our claim. [NOTE: IF ANY SUCH DOCUMENTS ARE NOT IN YOUR
POSSESSION, PLEASE OBTAIN COPIES OR EQUIVALENT DOCUMENTS FROM YOUR
BROKER OR PORTFOLIO MANAGER. THESE DOCUMENTS ARE NECESSARY TO PROVE
AND PROCESS YOUR CLAIM.] I/We agree to furnish additional information to the Claims
Administrator to support this claim if required to do so.
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D. I/We have not submitted any other claim covering the same purchases or sales of Biopure
common stock during the Class Period and know of no other Person having done so on my/our
behalf.
RELEASE
A. I/we hereby acknowledge full and complete satisfaction of, and do hereby fully, finally and
forever settle , release and discharge each and all of the Released Parties from any and all Settled
Claims. As defined in the Stipulation and as used herein, the following terms shall have the
following meanings:
1. "Released Parties means any and all of the Defendants, their past or present subsidiaries,
parents, successors and predecessors, officers, directors, agents, employees, Insurers, co-insurers,
reinsurers, controlling shareholders, attorneys, divisions, joint ventures, accountants, spouses,
personal or legal representatives, assigns, heirs, any members of an Individual Defendant's
immediate family and any trust of which any Individual Defendant is the settlor or which is for the
benefit ofan Individual Defendant's family, and any person, firm, trust, corporation, officer, director
or other individual or entity in which any Defendant has a controlling interest or which is related to
or affiliated with any of the Defendants, and the legal representatives, heirs, successors in interest
or assigns of any such party.
2. "Settled Claim(s) means any and all claims, including both known claims and Unknown
Claims (as defined below), debts, demands, rights or causes of action or liabilities of every nature
and description whatsoever (including, but not limited to, any claims for damages, interest,
attorneys' fees, expert or consulting fees, equitable or injunctive relief and any other costs, expenses
or liability whatsoever), whether based on federal, state, local, statutory or common law or any other
law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or
unliquidated, at law or in equity, matured or unmatured, whether class or individual in nature, known
or unknown, whether concealed or hidden, asserted or that could have been asserted, including,
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without limitation, claims for negligence, gross negligence , breach of duty of care and/or breach of
duty of loyalty, fraud, breach of fiduciary duty, or violations of any state or federal statutes, rules
or regulations, (i) that have been asserted in this Action by the Class Members or their attorneys or
any of them against any of the Released Parties, or (ii) that could have been asserted in any forum
by the Class Members or their attorney or any ofthem or their successors and assigns or any ofthem
against any of the Released Parties which arise out of or are based upon or relate in any way to the
allegations, transactions, facts, matters or occurrences, representations or omissions involved, set
forth, or referred to in the SCAC or relate in any way to the purchase, sale or acquisition of Biopure
common stock during the Class Period except for claims to enforce the Settlement.
3. "Defendants' Settled Claims means any and all claims, debts, demands, rights or causes of
action or liabilities whatsoever (including, but not limited to, any claims for damages, interest,
attorneys' fees, expert or consulting fees, equitable or injunctive relief and any other costs, expenses
or liability whatsoever), whether based on federal, state, local, statutory or common law or any other
law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or
unliquidated, at law or in equity, matured or unmatured, whether class or individual in nature,
including both known claims and Unknown Claims (as defined below), that have been or could have
been asserted in the Action or any forum by the Defendants or any of them or the successors and
assigns of any of them against any of the Class Representatives, Class Members or their attorneys,
which arise out of or relate in any way to the institution, prosecution, or settlement of the Action
(except for claims to enforce the Settlement).
4. "Unknown Claims
means any and all claims , rights or causes of action or liabilities
whatsoever, whether based on federal, state, local, statutory or common law or any other law, rule
or regulation which any Lead Plaintiff or 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, and any Defendants' Settled Claims
which any Defendant does not know or suspect to exist in his, her or its favor at the time of the
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release of the Defendants' Settled Claims, which, if known by him, her or it, could have been
asserted in any forum by the Class Members or any of them against any of the Released Parties
which relate to the purchase, sale or acquisition of common stock of Biopure during the Class
Period, even if unknown at the time of execution of this Stipulation, or could have been asserted by
the Defendants against the Lead Plaintiff or Class Members relating to the Action, even if unknown
at the time of the execution of this Stipulation. With respect to any and all Settled Claims and
Defendants' Settled Claims, the Parties stipulate and agree that upon the Effective Date, the Class
Representatives and the Defendants shall expressly, and each Class Member shall be deemed to
have, and by operation of the Order and Final Judgment shall have, expressly waived any and all
provisions , rights and benefits conferred by any law of any state or territory of the United States, or
principle of common law, which is similar, comparable , or equivalent to Cal. Civ. 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 Class Representatives and 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 Settled Claims, but the Class Representatives shall expressly fully, finally
and forever settle and release, and each Class Member, upon the Effective Date, shall be deemed
to have , and by operation of the Judgment shall have, fully, finally and forever settled and
released any and all Settled Claims, known or unknown, suspected or unsuspected, contingent or
non-contingent, whether 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
duty, law or rule, without regard to the subsequent discovery or existence of such different or
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additional facts. Class Representatives and Defendants acknowledge, and Class Members by
operation of law shall be deemed to have acknowledged, that the inclusion of "Unknown
Claims in the definition of Settled Claims and Settled Defendants' Claims was separately
bargained for and was a key element of the Settlement.
B. This Release shall be of no force or effect unless and until the Court approves the
Stipulation of Settlement and the Stipulation of Settlement becomes effective as to all
Defendants and all Released Parties on the Effective Date.
C. I/We hereby warrant and represent that I/we have not assigned or transferred or purported
to assign or transfer, voluntarily or involuntarily, any matter released pursuant to this Release or
any other part or portion thereof.
D. I/We certify that I am/we are NOT subject to backup withholding under the provisions of
§3406(a)(1)(c) of the Internal Revenue Code.
Note: If you have been notified by the Internal Revenue Service that you are
subject to backup withholding, please clearly strike out the word
"NOT" in the certification above.
I/We declare under penalty of perjury, under the laws of the United States of America, that
the foregoing information supplied by the undersigned and the supporting documents attached
hereto are true, correct and complete to the best of my/our knowledge, information and belief,
and that this Proof of Claim and Release form was executed this
2007 in
(City),
day of
(State/Country).
Signature of Claimant
(Print your name here)
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Signature of Joint Claimant, if any
(Print your name here)
Signature of person signing on behalf of Claimant
(Print your name here)
Capacity of person signing on behalf of Claimant, if
other than an individual, (e.g., Executor, President,
Custodian, etc.)
13
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Page 14 of 14
ACCURATE CLAIMS PROCESSING TAKES
A SIGNIFICANT AMOUNT OF TIME.
THANK YOU FOR YOUR PATIENCE.
Reminder Checklist :
1.
Please sign the above release and declaration.
2.
Remember to attach only copies of acceptable supporting
documentation to your claim form, a complete list of which can be
found on the Claims Administrator's website.
Do not send originals of common stock certificates.
4.
Keep a copy of the completed claim form and supporting
documentation for your records.
If you desire an acknowledgment of receipt of your claim form, please
send it Certified Mail, Return Receipt Requested, or its equivalent.
You will bear all risks of delay or non-delivery of your claim.
6.
If your address changes in the future, or if these documents were sent to
an old or incorrect address, please send us written notification of your
new address.
7.
If you have any questions or concerns regarding your claim, please
contact the Claims Administrator at:
In re Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
Telephone: (800) 766-3330
Fax: (516) 931-0810
Website: www.berdonclaims.com
14
Case 1:03-cv-12628-
Document 163-5
Filed 05/17/2007
Page 1 of 2
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION SECURITIES
LITIGATION
)
CIVIL ACTION
NO. 03- 12628-NG
SUMMARY NOTICE OF SETTLEMENT
TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED
COMMON STOCK OF BIOPURE CORPORATION ("BIOPURE"), DURING THE
PERIOD FROM APRIL 9, 2003 THROUGH DECEMBER 24, 2003, INCLUSIVE (THE
"CLASS PERIOD"). IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO
RECEIVE BENEFITS BY FILING A PROOF OF CLAIM FORM.
PLEASE NOTE THAT IF YOU HAVE ANY OTHER CLAIMS AGAINST BIOPURE OR
THE OTHER DEFENDANTS, YOU MAY BE DEEMED TO RELEASE SUCH CLAIMS
IF YOU REMAIN A MEMBER OF THE CLASS, EVEN IF YOU DO NOT FILE A
PROOF OF CLAIM FORM.
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil
Procedure, and a
2007 Order of the United States District Court for the District of
Massachusetts (the "Court"), that a hearing (the "Settlement Hearing") shall be held before the
Honorable Nancy Gertner, located in Courtroom 2, John Joseph Moakley U. S. Courthouse, 1
Courthouse Way, Boston, Massachusetts 02210, on
, 2007 at
a.m./p.m., to
consider whether: (1) to certify a class for settlement purposes only consisting of all persons or
entities who purchased Biopure common stock during the Class Period (the "Class"); (2) the
settlement of the above-captioned action (the "Action") in the amount of $10 million (Ten
Million Dollars) should be approved by the Court as fair, reasonable and adequate; (3) this
Action should be dismissed on the merits with prejudice and judgment should be entered
releasing claims against Biopure and the Defendants in this action; (4) the proposed plan of
allocation should be approved; (5) the Court should approve the application of Co-Lead Counsel
for the Class for payment of attorneys' fees and reimbursement of costs and expenses; and (6) the
Court should award reasonable costs and expenses to the Class Representatives incurred in
connection with this Action.
If you are a Class member, in order to share in the distribution of the Settlement fund,
you must submit a Proof of Claim and Release form ("Proof of Claim"), which must be received
by the Claims Administrator at the address listed below or postmarked no later than October 31,
2007, establishing that you are entitled to recovery. To receive a Notice of Proposed Settlement
of Class Action, Motion for Attorneys' Fees and Settlement Fairness Hearing ("Notice") and
ACTIVE/72007893.1
Case 1:03-cv-12628-
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Page 2 of 2
Proof of Claim, or for further information, please write to the Claims Administrator at the
following address:
In re Biopure Corporation Securities Litigation
c/o Berdon Claims Administration LLC
P.O. Box 9014
Jericho, NY 11753-8914
Telephone: (800) 766-3330
Fax: (516) 931-0810
Website: htto://w-ww.berdonclaims.com
If you purchased or otherwise acquired Biopure common stock during the Class
Period , you will be deemed to be a Class Member unless you expressly request to be
excluded from the Class. You must submit a valid request for exclusion to the Claims
Administrator, postmarked NO LATER THAN
, 2007. You will be bound
by any judgment rendered in the Action unless you request to be excluded in the manner set forth
in the Notice. If you submit a valid and timely request for exclusion, while you will not be
entitled to share in the proceeds of this Settlement, you will not be bound by this Settlement or
the Court's judgment in this Action.
Co-Lead Counsel for the Plaintiffs are:
Howard T. Longman, Esq.
Stull, Stull & Brody
6 East 45th Street
New York, NY 10017
Tel: (212) 687-7230
Edward F. Haber, Esq.
Matthew L. Tuccillo, Esq.
Shapiro Haber & Urmy LLP
53 State Street
Boston, MA 02109
Tel: (617) 439-3939
Any questions regarding the Settlement should be directed to the Claims Administrator or to CoLead Counsel for the Plaintiffs.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
THIS NOTICE.
Dated:
.2007
BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS
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Page 1 of 7
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE BIOPURE CORPORATION
SECURITIES LITIGATION
Civ. No. 03-12628-NG
ORDER AND FINAL JUDGMENT
WHEREAS, the parties to the above-described action (the "Action") entered into a
Stipulation And Agreement of Settlement ("Settlement Agreement ) dated as of May 17, 2007
(the "Settlement"); and
WHEREAS, on
, 2007 the Court entered an Order of Preliminary Approval
which, inter alia: (i) preliminarily approved the Settlement; (ii) confirmed that the Action has
been certified as a class action, pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil
Procedure for purposes of settlement; (iii) approved the forms of notice of the Settlement to the
Class Members; (iv) directed that appropriate notice of the Settlement be given to the Class
Members; and (v) set a hearing date for final approval of the Settlement and the plan of
allocation and a determination of whether the application of Co-Lead Counsel for the Class for
an award of attorneys' fees, costs, and expenses, including an award of reasonable costs and
expenses to the Class Representatives Plaintiffs ("Fee and Expense Petition ), should be
approved; and
WHEREAS, Notice of the Settlement and Proof of Claim forms were mailed to Class
Members and the Summary Notice of the Settlement was published in the national edition of The
Wall Street Journal, as attested to in the affidavit of the Claims Administrator filed herein; and
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WHEREAS, on
Document 163-6
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Page 2 of 7
, 2007, a hearing was held on whether the Settlement was fair,
reasonable, adequate, and in the best interests of the Class ("Settlement Hearing"); and
WHEREAS, based on the foregoing, having heard the statements of counsel for the
parties and of such persons as chose to appear at the Settlement Hearing, having considered all of
the pleadings and proceedings in the Action, and being otherwise fully advised,
IT IS HEREBY ORDERED that:
1.
The provisions of the Settlement Agreement, including definitions of the terms
used therein, are hereby incorporated by reference as though fully set forth herein.
2.
This Court has jurisdiction over the subject matter of the Action and over all
parties to the Action, including Class Members.
3.
The form, content, and method of dissemination of the notice given to the Class,
including both published notice and individual notice mailed to all Class Members who could be
identified through reasonable effort, was adequate and reasonable, and constituted the best notice
practicable under the circumstances.
4.
The notice , as given, complied with the requirements of 15 U.S.C. § 78u-4(a)(7)
and of Rule 23 of the Federal Rules of Civil Procedure, satisfied the requirements of due process,
and constituted due and sufficient notice of the matters set forth therein.
5.
The Plan of Allocation described in the notice mailed to Class Members is fair
and reasonable and it is hereby approved.
6.
The Class Representatives have fairly and adequately represented the interests of
the Class Members in connection with the Settlement.
7.
The Class Representatives and the Class Members, and all and each of them, are
hereby bound by the terms of the Settlement as set forth in the Settlement Agreement.
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Case 1:03-cv-12628-NG
8.
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Page 3 of 7
All parties and counsel appearing herein have complied with their obligations
under Rule 11(b) of the Federal Rules of Civil Procedure.
9.
This action is finally certified as a class action under Rules 23(a) and (b)(3) of the
Federal Rules of Civil Procedure. The Class consists of all persons or entities who, during the
period from April 9, 2003 through December 24, 2003, inclusive (the "Class Period ), purchased
or otherwise acquired Biopure Corporation ("Biopure ) common stock. Excluded from the Class
are Defendants in this action, the former and current officers and directors of Biopure, members
of their immediate families and their legal representatives, heirs, successors, or assigns and any
entity in which Defendants have or had a controlling interest.
10.
Excluded from the class are the persons identified in Exhibit A hereto, who have
timely and properly requested exclusion from the Class.
11.
The Settlement set forth in the Settlement Agreement is fair, reasonable, adequate,
and in the best interests of the Class, and it shall be consummated in accordance with the terms
and provisions of the Settlement Agreement.
12.
Judgment shall be, and hereby is, entered dismissing the Action with prejudice
and without taxation of costs in favor of or against any party except as provided in the Settlement
Agreement.
13.
The Class Representative Plaintiffs
and all Class Members are hereby
conclusively deemed to have released the Defendants, their past or present subsidiaries, parents,
successors and predecessors, officers, directors, agents, employees, Insurers, co-insurers,
reinsurers, controlling shareholders, attorneys, divisions, joint ventures, accountants, spouses,
personal or legal representatives, assigns, heirs, any members of an Individual Defendant's
immediate family and any trust of which any Individual Defendant is the settlor or which is for
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the benefit of an Individual Defendant's family, and any person, firm, trust, corporation, officer,
director or other individual or entity in which any Defendant has a controlling interest or which
is related to or affiliated with any of the Defendants , and the legal representatives , heirs,
successors in interest or assigns of any such party (the "Released Parties ), from any and all
Settled Claims. As defined in the Settlement Agreement, "Settled Claims means any and all
claims, debts, demands, rights or causes of action or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys' fees, expert or consulting fees, equitable
or injunctive relief and any other costs, expenses or liability whatsoever), whether based on
federal, state, local, statutory or common law or any other law, rule or regulation, whether fixed
or contingent, accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or
unmatured, whether class or individual in nature, including both known claims and Unknown
Claims (as defined in the Settlement Agreement): (i) that have been asserted in this Action by the
Class Representatives, on their own behalf and on behalf of the Class Members or any of them
against any of the Released Parties, or (ii) that could have been asserted in any forum by the
Class Members or any of them against any of the Released Parties which arise out of or are based
upon the allegations, transactions, facts, matters or occurrences, representations or omissions
involved, set forth, or referred to in the SCAC or relate to the purchase, sale or acquisition of the
common stock of Biopure during the Class Period except for claims to enforce the Settlement.
14.
The Class Representatives and all Class Members are hereby barred and
permanently enjoined from instituting, asserting or prosecuting, either directly, representatively,
derivatively or in any other capacity, any and all Settled Claims which they or any of them had,
have or may have against the Released Parties.
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15.
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Page 5 of 7
The Plan of Allocation of the Net Settlement Fund as described in the notice to
Class Members is hereby approved, subject to modification by further order of this Court. Any
order or proceedings relating to the Plan of Allocation or amendments thereto shall not operate to
terminate or cancel the Settlement Agreement or affect the finality of this Order approving the
Settlement Agreement.
16.
The Court hereby decrees that neither the Settlement Agreement nor this Final
Judgment, nor the fact of the Settlement, nor any act performed or document executed pursuant
to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be or may be
used as an admission of, or evidence of, any fault or omission of any of the Released Parties or
Class Representatives; (b) is or may be deemed to be or may be used as an admission of, or
evidence of, any fault or omission of any of the Released Parties or Class Representatives in any
civil, criminal or administrative proceeding in any court, administrative agency or other tribunal;
(c) is or may be deemed as an admission or concession that the consideration to be given
hereunder represents the amount which could be or would have been recovered after trial; or (d)
is or may be construed as or received as evidence as an admission, concession or presumption
against Lead Plaintiff or any of the Class Members that any of their claims are without merit, or
that any defenses by the Defendants have merit, or that damages recoverable under the SCAC
would not have exceeded the Gross Settlement Fund.
The Released Parties may file the
Stipulation and/or the Final Order and Judgment of this Action in any other action that may be
brought against them in order to support a defense or counterclaim based on principles of res
judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any
theory of claim preclusion or issue preclusion or similar defense or counterclaim.
The
Defendants have denied and continue to deny each and every claim alleged against them in the
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Case 1:03-cv-12628-NG
Document 163-6
Filed 05/17/2007
Page 6 of 7
Action and any wrongdoing whatsoever and this Final Judgment shall in no event be construed
or deemed to be evidence of or an admission or concession on the part of any Defendant with
respect to any claim of any fault, liability, wrongdoing or damage whatsoever, or any infirmity in
the defenses that the Defendants have asserted.
17.
The parties to the Settlement Agreement, their agents , employees , and attorneys,
and the Claims Administrator and the Escrow Agent, shall not be liable for anything done or
omitted in connection with these proceedings, the entry of this Final Judgment, or the
administration of the payments to Authorized Claimants as provided in the Settlement
Agreement and this Order, except for their own willful misconduct. No Class Member shall
have any claim against the Class Representatives or Co-Lead Counsel based on distributions
made substantially in accordance with the Plan of Allocation and orders of the Court. No Class
Member shall have any further rights or recourse against the Defendants for any matter related to
the Plan of Allocation, distributions thereunder, or the claims process generally.
18.
Class Counsel are awarded attorneys' fees in the amount of $
and reimbursement of expenses, including experts' fees and expenses, in the amount of
$
such amounts to be paid from out of the Gross Settlement Fund.
Class
Representative Plaintiff Ronald Erickson, who served as Lead Plaintiff in this Action, is awarded
the sum of $
and Class Representative Plaintiff Dr. John G. Esposito, Jr. is
awarded the sum of $
, as reasonable costs and expenses directly relating to the
representation of the Class as provided in 15 U.S.C. § 78u-4(a)(4), such amounts to be paid from
out of the Gross Settlement Fund.
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Case 1:03-cv-12628-NG
19.
Document 163-6
Filed 05/17/2007
Page 7 of 7
The attorneys' Fees and Expenses awarded herein shall be payable from the Gross
Settlement Fund when the Order and Final Judgment become Final as defined in Paragraph 1(k)
of the Settlement Agreement.
20.
The Court hereby retains and reserves jurisdiction over implementation of this
Settlement and any distribution to Authorized Claimants under the terms and conditions of the
Settlement Agreement and pursuant to further orders of this Court.
Date :
12007.
The Honorable Nancy Gertner
United States District Judge
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