Exhibit 10.2
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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IN RE ANIKA THERAPEUTICS, INC. CIVIL ACTION NO. 00-11127-WGY
SECURITIES LITIGATION (All Actions)
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STIPULATION AND AGREEMENT OF COMPROMISE,
SETTLEMENT AND RELEASE
Plaintiffs in the above-captioned matters, on behalf of themselves, the
Class and all Class Members (as defined below); and defendant Anika
Therapeutics, Inc. ("Anika") and individual defendants J. Melville Engle and
Sean Moran ("Individual Defendants"), by and through their attorneys, hereby
enter into this Stipulation and Agreement of Compromise, Settlement and Release
(the "Stipulation"), as of May 25, 2001, subject to the approval of the Court
pursuant to Rule 23 of the Federal Rules of Civil Procedure and the Private
Securities Litigation Reform Act of 1995. For purposes of this Stipulation,
Anika and the Individual Defendants shall be collectively referred to as
"Defendants."
WHEREAS:
1. Wherever used in this Stipulation, the following terms have the
meanings set forth below:
a. "Action" means the above-captioned consolidated action pending
in the United States District Court for the District of Massachusetts.
b. "Authorized Claimant" means a Claimant who submits a Proof of
Claim in accordance with the criteria in paragraph 12, and whose Proof of Claim
is not rejected.
c. "Claimant" means a Class Member who submits a Proof of Claim to
the Claims Administrator.
d. "Claims Administrator" means the firm of Strategic Claims
Services, Inc., the claims administrator selected by Plaintiffs' Lead Counsel to
assist in the administration of the Settlement.
e. "Class" means, for purposes of this Settlement only, a plaintiff
class pursuant to Rule 23 of the Federal Rules of Civil Procedure, comprising
all Persons who purchased or otherwise acquired Anika common stock during the
period beginning and including April 15, 1998 through and including May 30,
2000, together with the successors in interest and transferees, immediate and
remote, of each of them. Excluded from the Class are the Defendants, the
officers and directors of Anika during the Class Period, members of their
immediate families (i.e., spouses, parents, siblings and children), any Person
in which any Defendant has a controlling interest, and the legal
representatives, heirs, successors in interest, and/or assigns of any such
excluded party. Also excluded from the Class are any Persons who exclude
themselves by filing a request for exclusion in accordance with the requirements
set forth in the Notice.
f. "Class Member" means any Person included in the Class.
g. "Class Period" means the period beginning and including April
15, 1998 through and including May 30, 2000.
h. "Complaint" means the Consolidated Amended Class Action
Complaint filed in this Court on or about October 30, 2000.
i. "Court" means the United States District Court for the District
of Massachusetts.
j. "Defendants' Counsel" means the law firm of Goodwin Procter LLP.
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k. "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 paragraph 21 below.
l. "Final Judgment" means an Order And Final Judgment to be entered
by the Court substantially in the form attached hereto as Exhibit B.
m. "Lead Plaintiffs" means David West and Vivian West.
n. "Notice" means the Notice of Pendency of Class Action, Proposed
Settlement Thereof, Settlement Hearing and Right to Share in the Settlement
Fund, which is to be sent to Class Members substantially in the form attached
hereto as Exhibit 1 to Exhibit A.
o. "Notice and Administration Costs" means the notice and
administrative costs described in paragraph 6 below.
p. "Person" means an individual, corporation, general or limited
partnership, joint stock company, joint venture, limited liability company,
estate, legal representative, trust, unincorporated association, and any other
business or legal entity and its heirs, successors, or assigns.
q. "Plaintiffs' Lead Counsel" means the law firm of Berman,
DeValerio & Pease LLP.
r. "Plan of Allocation" means the Plan of Allocation prepared by
Plaintiffs' Lead Counsel or such other Plan of Allocation as may be approved by
the Court.
s. "Preliminary Approval Order" means an Order of Preliminary
Approval in Connection with Settlement Procedures to be entered by the Court
substantially in the form attached hereto as Exhibit A.
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t. "Proof of Claim" means the Proof of Claim and Release in the
form attached hereto as Exhibit 3 to Exhibit A.
u. "Publication Notice" means the Publication Notice of Pendency of
Class Action, Proposed Settlement and Settlement Hearing in the form attached as
Exhibit 2 to Exhibit A.
v. "Released Parties" means any and all of the Defendants and their
past or present subsidiaries, parents, predecessors, officers, directors,
shareholders, agents, employees, attorneys, advisers, investment advisers,
financial advisers, underwriters, auditors, accountants, insurers, lenders,
investment bankers, affiliates, associates, general and limited partners and
partnerships, family members, legal representatives, heirs, executors,
administrators, successors in interest or assigns, 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.
w. "Settled Claims" means any and all actions, suits, claims,
demands, rights, liabilities and causes of action, of every nature and
description whatsoever, whether known or unknown, accrued or unaccrued, whether
based on federal, state, local, statutory or common law or any other law, rule
or regulation, including without limitation Unknown Claims as herein defined,
whether or not concealed or hidden, that were asserted or that could have been
asserted or could be asserted in any forum, whether brought directly, indirectly
or derivatively (including but not limited to 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 statutes, rules, duties or
regulations), that the Lead Plaintiffs, the Class, the Class Members or any of
them, or any of their heirs, executors, administrators, representatives,
attorneys, successors, assigns, agents,
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affiliates and partners, and any Persons they represent, in the past had, now
have, or might in the future have against the Released Parties or any of them,
which regard, concern, relate to, refer to, arise out of, or are based upon, in
any way: (a) the allegations, transactions, facts, matters, occurrences,
representations, omissions, disclosures, statements, failure to disclose or
failure to act involved, set forth, referred to or that were, could be, or could
have been asserted in the Action, whether known or unknown, including without
limitation Unknown Claims as herein defined, and whether or not concealed or
hidden; (b) the purchase or acquisition of shares of Anika stock during the
Class Period; (c) the Defendants' defense of or settlement of the Action; and
(d) the administration of the settlement or the distribution of funds from the
Settlement Fund. Provided, however, that the definition of Settled Claims shall
not in any way impair or restrict the rights of the settling parties to enforce
the settlement set forth in this Stipulation. As used herein, "Unknown Claims"
shall mean any and all actions, suits, claims, demands, rights, liabilities and
causes of action that the Lead Plaintiffs, the Class, or any of the Class
Members do not know of or suspect to exist in their favor at the time of the
release of the Released Parties, including but not limited to those that, if
known by them, might have affected their agreement to the Settlement. With
respect to Unknown Claims, the Lead Plaintiffs, the Class, and each of the Class
Members hereby expressly waive and relinquish, to the fullest extent permitted
by law, the benefits of Section 1542 of the California Civil Code, which states:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor;
and any and all provisions, rights, and benefits of any similar state or federal
or other law.
x. "Settlement" means the settlement contemplated by this
Stipulation.
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y. "Settlement Fund" means the $1,250,000 payment to be made by
Defendants within ten (10) business days after the Court executes the
Preliminary Approval Order, together with all interest accrued and paid therein.
z. "Settlement Hearing" means the final settlement hearing,
required by the Court, to determine, among other things, the fairness,
reasonableness, and adequacy of the Settlement.
aa. "Stipulation" means this Stipulation and Agreement of
Compromise, Settlement and Release.
2. The first of the putative class action complaints filed against the
Defendants and consolidated in this Action was filed in this Court on or about
June 8, 2000, and captioned CASAZZA, ET AL. V. ANIKA THERAPEUTICS, INC., J.
MELVILLE ENGLE AND SEAN MORAN, Civil Action No. 00-11127-WGY.
3. Thereafter, additional complaints were filed against the Defendants,
also in this Court, and consolidated in this action. The second, filed on or
about June 26, 2000, was captioned NEMETH-COSLETT, ET AL. V. ANIKA THERAPEUTICS,
INC., J. MELVILLE ENGLE AND SEAN MORAN, Civil Action No. 00-11257-WGY. The
third, filed on or about August 2, 2000, was captioned ROCKEFELLER, ET AL. V.
ANIKA THERAPEUTICS, INC., J. MELVILLE ENGLE AND SEAN MORAN, Civil Action No.
00-11540-WGY. Each of these putative class action complaints encompassed the
same class period and covered substantively identical allegations.
4. On or about August 7, 2000, David and Vivian West, alleged members
of the Class, filed a motion to have the Court appoint them to be Lead
Plaintiffs, to appoint Berman, DeValerio & Pease LLP as Plaintiffs' Lead
Counsel, as well as a motion for consolidation of the above cases. On or about
September 13, 2000, this Court granted David and Vivian West's
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motions, consolidated the cases referred to in paragraphs 2 and 3, above, and
recaptioned the consolidated Action IN RE ANIKA THERAPEUTICS, INC. SECURITIES
LITIGATION, Civil Action No. 00-11127-WGY.
5. On or about October 30, 2000, Lead Plaintiffs filed a Consolidated
Amended Class Action Complaint in the Action. The Complaint alleges that the
Defendants violated the federal securities laws by, INTER ALIA, making material
misrepresentations and omissions in certain public disclosures during the period
between April 15, 1998 and May 30, 2000. The alleged misrepresentations and
omissions relate to the Company's historical revenue recognition policies and
its restatement of revenues for fiscal year 1998 and the first three quarters of
1999.
6. Following negotiations, the parties reached an agreement in
principle on the terms of a settlement of the Action. Accordingly, the parties
entered into a Memorandum of Understanding ("MOU") dated March 8, 2001. The MOU
provides that the effectuation of the settlement contemplated thereunder is
subject to, among other things, (i) the parties' execution of an appropriate
Stipulation; (ii) certification of the Class for purposes of the Settlement;
(iii) Court approval of the Settlement; (iv) confirmatory discovery and (v)
dismissal of the Action with prejudice and with each party bearing his/its own
costs except as otherwise provided for herein.
7. Solely for purposes of settlement and for carrying out the terms of
this Stipulation, the parties have agreed to this Court's certification of the
Class pursuant to Rule 23 of the Federal Rules of Civil Procedure.
8. Defendants deny all liability with respect to the Action, deny that
they have engaged in any wrongdoing, deny the allegations in the Complaint filed
in the Action, deny that they committed any violation of law, deny that they
acted improperly in any way, and deny
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liability of any kind to the plaintiffs named in the initial complaints, the
Lead Plaintiffs, the Class, or the Class Members, but have agreed to the
settlement and dismissal of the Action with prejudice in order to: (i) avoid the
substantial expense, inconvenience and distraction of protracted litigation; and
(ii) finally put to rest and terminate the Action and any and all Settled
Claims.
9. Plaintiffs' Lead Counsel has conducted discussions and arms' length
negotiations with Defendants' Counsel with respect to a compromise and
settlement of the Action with a view to settling the issues in dispute and
achieving the best relief possible consistent with the interests of the Lead
Plaintiffs, the Class, and all Class Members.
10. Plaintiffs' Lead Counsel has concluded that the terms and
conditions of this Stipulation are fair, reasonable, and in the best interests
of the Lead Plaintiffs, the Class, and all Class Members; have agreed that the
Released Parties should be released from the Settled Claims pursuant to the
terms and provisions of this Stipulation; and have agreed to the dismissal of
the Action with prejudice, after considering the substantial benefits that the
Lead Plaintiffs, the Class, and all Class Members will receive from settlement
of the Action, the risks of litigation, and the desirability of permitting the
Settlement to be consummated as provided by the terms of this Stipulation.
NOW, THEREFORE, it is hereby STIPULATED AND AGREED, by and among the
parties to this Stipulation, through their respective attorneys, subject to the
approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil
Procedure and the Private Securities Litigation Reform Act of 1995, in
consideration of the benefits flowing to the parties hereto from the Settlement,
that the Settled Claims as against the Released Parties shall be compromised,
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settled, forever released, barred, and dismissed with prejudice, upon and
subject to the following terms and conditions:
RELEASE; SCOPE AND EFFECT OF RELEASE
1. The obligations incurred pursuant to this Stipulation shall be in
full and final disposition of the Action with prejudice and of any and all
Settled Claims as against all Released Parties.
2. On the Effective Date, the Lead Plaintiffs, the Class, and the Class
Members, on behalf of themselves, their heirs, executors, administrators,
representatives, attorneys, successors, assigns, agents, affiliates and
partners, and any Persons they represent ("Releasing Parties"), shall be deemed
to have, and by operation of the Final Judgment shall have, fully, finally and
forever released, relinquished, and discharged the Released Parties of and from
any and all of the Settled Claims, and the Releasing Parties shall forever be
barred and enjoined from bringing or prosecuting any Settled Claim against any
of the Released Parties.
SETTLEMENT CONSIDERATION
3. Within ten (10) business days after the Court executes the
Preliminary Approval Order, Defendants shall pay or cause to be paid
$1,250,000.00 ("the Settlement Fund") into an interest bearing escrow account to
be established by Plaintiffs' Lead Counsel. Plaintiffs' Lead Counsel shall
administer the Settlement Fund. The Settlement Fund, less any amounts reasonably
incurred for notice, administration, and/or taxes pursuant to the Stipulation,
shall revert to the Defendant(s) making the payment of the settlement amount if
the Settlement does not become effective.
4. (a) The Settlement Fund, net of any taxes on the income thereof,
shall be used to pay (i) the reasonable Notice and Administration Costs referred
to in paragraph 6 hereof, and
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(ii) the award of attorneys' fees and reimbursement of expenses referred to in
paragraph 7 hereof. The balance of the Settlement Fund after the above payments
shall be distributed to the Authorized Claimants in this Action as provided in
paragraphs 8-16 hereof. All funds held by Plaintiffs' Lead Counsel in the
Settlement Fund shall be deemed to be IN CUSTODIA LEGIS and shall remain subject
to the jurisdiction of the Court until such time as the funds shall be
distributed or returned to Defendants pursuant to this Stipulation and/or
further order of the Court. Plaintiffs' Lead Counsel shall invest any funds in
excess of $50,000 in United States Government obligations with a maturity of 180
days or less, and shall collect and reinvest in the Settlement Fund all interest
accrued thereon. Any funds held in escrow in an amount of less than $50,000 may
be held in an interest bearing bank account insured by the Federal Deposit
Insurance Corporation (FDIC).
(b) The parties hereto agree that the Settlement Fund is intended
to be a Qualified Settlement Fund within the meaning of Income Tax Regulation
ss. 1.468B-1 and that the Claims Administrator, as administrator of the
Settlement Fund within the meaning of Income Tax Regulation ss. l.468B-2(k)(3),
shall be responsible for filing tax returns for the Settlement Fund and paying
from the Settlement Fund any taxes owed with respect to the Settlement Fund.
Defendants' Counsel agree to provide promptly to Plaintiffs' Lead Counsel the
statement described in Income Tax Regulation ss. 1.468B-3(e).
(i) ADMINISTRATION.
5. The Claims Administrator shall administer the Settlement under
Plaintiffs' Lead Counsel's supervision and subject to the jurisdiction of this
Court. The allocation of the Settlement Fund among the Class Members shall be
subject to a plan of allocation to be proposed by Plaintiffs' Lead Counsel and
approved by the Court. Except as stated in the last sentence of
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this paragraph, Defendants shall have no responsibility for the administration
of the Settlement, the maintenance or investments of the Settlement Fund, or
distribution of the Settlement Fund, and shall have no liability to the Lead
Plaintiffs, the Class, or any Class Member in connection with such
administration or distribution or the maintenance or investment of the
Settlement Fund. Defendants agree to provide Plaintiffs' Lead Counsel, within
ten (10) business days after signing this Stipulation, such information from
Defendants' stock transfer records concerning the identity of Class Members as
made available by Defendants' stock transfer agent following request by
Defendants as appropriate for providing Notice to the Class.
6. Prior to the Effective Date, Plaintiffs' Lead Counsel may expend
from the Settlement Fund, without further approval from the Defendants or the
Court, up to the sum of $50,000.00 to pay the reasonable costs and expenses
actually incurred in the administration of the Settlement, including without
limitation the costs of identifying members of the Class, mailing the Notice,
and publishing the Publication Notice. Such amounts shall include, without
limitation, the reasonable actual costs of publication, printing and mailing the
Notice, reasonable reimbursements to nominee owners for forwarding notice to
their beneficial owners, and the reasonable administrative expenses incurred and
fees charged by the Claims Administrator in connection with providing notice and
processing the claims filed. All such amounts are the "Notice and Administration
Costs." All Notice and Administration Costs shall be paid solely from the
Settlement Fund, and none of the Defendants shall be required to pay any portion
of the Notice and Administration Costs.
(ii) ATTORNEYS' FEES AND EXPENSES.
7. Plaintiffs' Lead Counsel will apply to the Court for an award from
the Settlement Fund of attorneys' fees and reimbursement of out-of-pocket
expenses on behalf of plaintiffs'
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counsel. Defendants agree that they will take no position with regard to
Plaintiffs' Lead Counsel's application for an award of attorneys' fees and
reimbursement of expenses. Such attorneys' fees and reimbursement of expenses as
are awarded by the Court shall be paid from the Settlement Fund to Plaintiffs'
Lead Counsel immediately upon entry by the Court of an order awarding them,
notwithstanding the existence of any timely-filed objections thereto or
potential for appeal therefrom, or collateral attack on the Settlement, subject
to the joint and several obligation of all Plaintiffs' counsel to make
appropriate refunds or repayments to the Settlement Fund plus accrued interest
at the rate paid on the Settlement Fund by the financial institution holding it,
if and when, as a result of any appeal and/or further proceedings on remand, or
a successful collateral attack, the award is reduced or reversed or does not
become final. All such attorneys' fees and reimbursement of expenses shall be
paid solely from the Settlement Fund, and none of the Defendants shall be
required to pay any portion of such attorneys' fees and reimbursement of
expenses.
(iii) CLASS DISTRIBUTION.
8. The Claims Administrator shall determine for each Authorized
Claimant the appropriate PRO RATA share of the Settlement Fund, based upon each
Authorized Claimant's Recognized Loss (as defined in the Plan of Allocation).
9. Each Authorized Claimant shall be allocated a PRO RATA share of the
Settlement Fund based on his or her Recognized Loss compared to the total
Recognized Losses of all accepted claimants. In no case, however, shall an
Authorized Claimant's PRO RATA share of the Settlement Fund be greater than such
Authorized Claimant's Recognized Loss. The Claims Administrator shall pay each
Authorized Claimant the appropriate distribution amount from the Settlement
Fund, net of attorneys' fees, expenses, and other costs described above. If any
funds remain in the Settlement Fund after all Authorized Claimants have been
paid, then such funds shall be donated to charity.
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ADMINISTRATION OF THE SETTLEMENT
10. Any Class Member who does not submit a Proof of Claim is not
eligible to receive any portion of the Settlement Fund, but otherwise shall 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 and enjoined from bringing or
prosecuting any action against the Released Parties concerning the Settled
Claims.
11. Plaintiffs' Lead Counsel shall be responsible for supervising the
administration of the Settlement and disbursement of the Settlement Fund by the
Claims Administrator. Defendants shall have no responsibility for the
administration of the Settlement or distribution of the Settlement Fund and
shall have no liability to the Lead Plaintiffs, the Class, or any Class Member
in connection with such administration or distribution. Plaintiffs' Lead Counsel
shall have the right, but not the obligation, to waive what they deem to be
formal or technical defects in any submitted Proof of Claim in the interests of
achieving substantial justice.
12. 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 complete and
executed Proof of Claim (see attached Exhibit 3 to Exhibit A), supported by such
documents as are designated therein, including proof of the Class Member's loss,
or such other documents or proof as Plaintiffs' Lead Counsel, in their
discretion, 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
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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 otherwise shall be bound
by all of the terms of this Stipulation and Settlement, including the terms of
the Final Judgment to be entered in the Action and the releases provided for
herein, and will be barred and enjoined from bringing or prosecuting any action
against the Released Parties concerning the Settled Claims. A Proof of Claim
shall be deemed to have been submitted when postmarked, if received with a
postmark indicated on the envelope and if mailed first class, 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 the Claims
Administrator and shall be reviewed by the Claims Administrator under the
supervision of Plaintiffs' Lead Counsel, who shall determine in accordance with
this Stipulation 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 Class Member submitting the Proof of
Claim ("the Claimant") in order to remedy any curable deficiencies in the Proof
of Claim submitted. The Claims Administrator, under supervision of Plaintiffs'
Lead Counsel, shall notify, in a timely fashion and in writing, all Claimants
whose Proofs of Claim it proposes to reject in whole or in part, setting forth
the reasons therefore, 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; and
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(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, Plaintiffs' Lead Counsel shall
thereafter present the notice and statement of reasons to the Court for its
review.
13. Each Claimant shall be deemed to have submitted to the jurisdiction
of the Court with respect to the Claimant's Proof of Claim, and the Proof of
Claim will be subject to investigation and discovery under the Federal Rules of
Civil Procedure, provided that such investigation and discovery shall be limited
to that Claimant's status as a Class Member and the validity and amount of the
Claimant's Proof of Claim. No discovery shall be allowed on the merits of the
Action or the Settlement.
14. Payment pursuant to this Stipulation shall be deemed final and
conclusive against all Class Members. Any Class Member whose claim is rejected
shall be barred from participating in distributions from the Settlement Fund,
but otherwise shall be bound by all of the terms of this Stipulation and the
Settlement, including the terms of the Final Judgment to be entered in the
Action and the releases provided for herein, and will be barred and enjoined
from bringing or prosecuting any action against the Released Parties concerning
the Settled Claims.
15. All proceedings with respect to the administration, processing, and
determination of Claims described by paragraphs 8-16 of this Stipulation and the
determination of all controversies relating thereto, including disputed
questions of law and fact with respect to the validity of any Proof of Claim,
shall be subject to the jurisdiction of the Court.
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16. The 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 Proofs of Claim have been rejected
or disallowed, in whole or in part, have been notified and provided the
opportunity to be heard, pursuant to this Stipulation and the Preliminary
Approval Order, concerning such rejection or disallowance; (ii) all objections
with respect to all rejected or disallowed Proofs of Claim have been resolved by
the Court, and all appeals from such rulings by the Court have been resolved or
the time for such appeal has expired; (iii) all matters with respect to
attorneys' fees and reimbursement of expenses have been resolved by the Court,
and all appeals from such rulings by the Court have been resolved or the time
for such appeals has expired; and (iv) all costs of administration pursuant to
the Stipulation have been paid.
RIGHT TO REQUEST EXCLUSION FROM THE CLASS
17. Class Members shall have the right to request exclusion from the
Class by submitting a written request for exclusion to Plaintiffs' Lead Counsel
and Defendants' Counsel in accordance with procedures to be approved by the
Court. Any Class Member who properly and timely requests exclusion from the
Class shall not be bound by the Final Judgment and shall have no right to
participate in any distribution from the Settlement Fund. In order to be
effective, a request for exclusion ("Request for Exclusion") must be postmarked
by the date set forth in the Preliminary Approval Order, must set forth the
information required by the Preliminary Approval Order and must be signed by the
Class Member seeking exclusion.
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TERMS OF ORDER FOR NOTICE AND HEARING
18. Concurrently with their filing of this Stipulation, Plaintiffs'
Lead Counsel and Defendants' Counsel shall jointly apply to the Court for
preliminary Court approval of the Settlement contemplated by this Stipulation
and entry of a Preliminary Approval Order, substantially in the form appended
hereto as Exhibit A.
TERMS OF ORDER AND FINAL JUDGMENT
19. If the Settlement contemplated by this Stipulation is approved by
the Court, counsel for the parties shall request that the Court enter Final
Judgment substantially in the form appended hereto as Exhibit B.
OPTION TO WITHDRAW
20. Defendants shall have the option to withdraw from this Stipulation
without prejudice if holders of a certain number of shares of Anika
publicly-traded common stock as set forth in a letter agreement among counsel
for the parties, purchased during the Class Period by members of the Class
(which purchasers would otherwise be entitled to participate as members of the
Class), timely and validly request exclusion from the Class pursuant to the
Preliminary Approval Order. The procedure for making such an election is as
follows:
(a) Plaintiffs' Lead Counsel and/or the Claims Administrator will
inform Defendants' Counsel no later than fourteen (14) days before the
Settlement Hearing of the number of Class Members who requested exclusion from
the Class and the number of shares purchased by each such Class Member during
the Class Period.
(b) Such option to withdraw shall be exercised by serving written
notice, signed by Defendants' Counsel, upon Plaintiffs' Lead Counsel, but not
fewer than four (4) business days before the Settlement Hearing.
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(c) If Defendants exercise their option to withdraw from the Settlement
as provided herein, this Stipulation will be null and void and of no further
force and effect, except that the provisions of paragraphs 23 and 24 will
survive and apply.
EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION
21. 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 appended hereto as Exhibit A;
(b) approval by the Court of the Settlement, following notice to
the Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil
Procedure; and
(c) entry by the Court of Final Judgment, in all material respects
in the form appended hereto as Exhibit B, and the expiration of any time for
appeal or review of such Final Judgment, or, if any appeal is filed and not
dismissed, after such Final 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 order and final judgment
in a form other than that provided above ("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 by
writ of certiorari.
22. Defendants' Counsel or Plaintiffs' Lead Counsel shall have the
right 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 days of (a) the Court's declining to enter the Preliminary
Approval Order or modification of that Preliminary Approval Order in any
material respect; (b) the Court's declining to approve the Settlement embodied
in this
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Stipulation, or any material part of it; (c) the Court's declining to enter the
Final Judgment or modification of the Final Judgment in any material respect;
(d) the date upon which the Final Judgment is modified, reversed, or vacated in
any material respect by the Court, the Court of Appeals or the United States
Supreme Court; or (e) the date upon which an Alternative Judgment is modified,
reversed, or vacated in any material respect by the Court, the Court of Appeals
or by the United States Supreme Court.
23. Except as otherwise provided herein, in the event the Settlement is
terminated or modified in any material respect or fails to become effective for
any reason, then the Settlement shall be without prejudice and none of its terms
shall be effective or enforceable; 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; 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 any portion of
the Settlement Fund previously paid by Defendants, together with any interest
earned thereon, less any taxes due with respect to such income and less Notice
and Administration Costs actually incurred and paid or payable from the
Settlement Fund pursuant to this Stipulation, shall be returned to such
Defendant(s) as paid the settlement amount into the Settlement Fund. In the
event the Settlement is terminated or modified in any material respect, the
Defendants shall be deemed to have retained all rights to object to the
maintenance of the Action as a class action or the appropriateness of the Lead
Plaintiffs as class representatives pursuant to Rule 23 of the Federal Rules of
Civil Procedure and shall further be deemed not to have waived, modified, or be
estopped from asserting any additional defenses available to them.
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NO ADMISSION OF WRONGDOING
24. This Stipulation, whether or not consummated, and any proceedings
taken pursuant to it:
(a) shall not be offered or received against the Defendants as
evidence of, or construed as or deemed to be evidence of, any presumption,
concession, or admission by any of the Defendants of the truth of any fact
alleged by the Plaintiffs or the validity of any claim that had been or could
have been asserted in the Action or in any litigation, whether directly or
derivatively, or the deficiency of any defense that has been or could have been
asserted in the Action, or of any liability, negligence, fault, or wrongdoing of
the Defendants;
(b) shall not be offered or received against the Defendants as
evidence of a presumption, concession, or admission of any fault,
misrepresentation, or omission with respect to any statement or written document
approved or made by any Defendant, or against the Plaintiffs and the Class as
evidence of any infirmity in the claims of the Plaintiffs and the Class;
(c) shall not be offered or received against the Defendants as
evidence of a presumption, concession, or admission of any liability,
negligence, fault or wrongdoing, or in any way referred to for any other reason
as against any of the parties to this Stipulation, in any other civil, criminal,
or administrative action or proceeding, other than such proceedings as may be
necessary to effectuate the provisions of this Stipulation; provided, however,
that if this Stipulation is approved by the Court, Defendants may refer to it
and rely upon it to effectuate the liability protection granted them hereunder;
and
(d) shall not be construed against the Defendants or the Plaintiffs
and the Class as an admission or concession that the consideration to be given
hereunder represents the amount that could be or would have been recovered after
trial.
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MISCELLANEOUS PROVISIONS
25. All of the exhibits attached hereto are hereby incorporated by
reference as though fully set forth herein.
26. The parties to this Stipulation intend the Settlement to be a final
and complete resolution of all disputes asserted or that could be or could have
been asserted by the Lead Plaintiffs, the Class, and/or any of the Class Members
against the Released Parties with respect to the Settled Claims. Accordingly,
the Defendants agree not to assert that the litigation was brought in bad faith
or without a reasonable basis. The parties agree that the amount paid and the
other terms of the Settlement were negotiated at arms' length in good faith by
the parties, and reflect a settlement that was reached voluntarily by the
parties after consultation with their respective experienced legal counsel. The
parties will propose to the Court an agreed upon Final Judgment, which will
contain a finding that, at all times during the litigation, all parties hereto
and their counsel complied with Fed. R. Civ. P. 11.
27. 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.
28. The headings herein are used for the purpose of convenience only
and are not intended to have legal effect.
29. 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 reimbursement of expenses to Plaintiffs' counsel
and enforcing the terms of this Stipulation.
30. 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.
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31. This Stipulation and its exhibits 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
other than those contained and memorialized in such documents.
32. 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.
33. This Stipulation shall be binding upon, and inure to the benefit
of, the successors and assigns of the parties hereto.
34. 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 preemption by federal law
requires that federal law govern.
35. 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 by the
parties that this Stipulation is the result of arms' length negotiations between
the parties and that all parties have contributed substantially and materially
to the preparation of this Stipulation.
36. 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 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.
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37. Plaintiffs' Lead Counsel and Defendants' Counsel agree to cooperate
fully with one another in seeking Court approval of the Preliminary Order in
Connection with the Settlement Proceedings, the Stipulation and Agreement of
Settlement, 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 25, 2001
BERMAN, DEVALERIO & PEASE LLP
By: /s/ KATHLEEN M. DONOVAN-MAHER
-----------------------------
Glen DeValerio, BBO #122010
Kathleen M. Donovan-Maher, BBO #558947
One Liberty Square
Boston, MA 02109
(617) 542-8300
PLAINTIFFS' LEAD COUNSEL
LAW OFFICES OF CHARLES J. PIVEN
Charles J. Piven
The World Trade Center, Suite 2525
401 E. Pratt Street
Baltimore, MD 21202
(410) 332-0030
LAW OFFICES OF LEO W. DESMOND
Leo W. Desmond
2161 Palm Beach Lake Blvd., Suite 204
W. Palm Beach, FL 33409
(561) 712-8000
23
RABIN & PECKEL LLP
Brian Murray
275 Madison Avenue
New York, NY 10016
(212) 682-1818
WOLF HALDENSTEIN ADLER FREEMAN & HERZ
Peter C. Harrar
270 Madison Avenue
New York, NY 10016
(212) 545-4600
ADDITIONAL PLAINTIFFS' COUNSEL
GOODWIN PROCTER LLP
By: /s/ GUS P. COLDEBELLA
---------------------
Stephen D. Poss, P.C. BBO #551760
Gus P. Coldebella BBO #566918
Exchange Place
Boston, MA 02109
(617) 570-1000
COUNSEL FOR DEFENDANTS ANIKA
THERAPEUTICS, INC., J. MELVILLE ENGLE
AND SEAN MORAN
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