UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
IN RE GLOBAL CROSSING LTD .SECURITIES LITIGATION
Case No. 02 Civ. 910 (GEL)
IN RE GLOBAL CROSSING LTD . : Case No. 02 Civ. 7453 (GEL)ERISA LITIGATION
JOHN PUSLOSKIE, et al ., on Behalf of Themselvesand All Others Similarly Situated ,
Plaintiffs,Case No. 02 Civ. 8508 (GEL)
V.
GARY WINNICK, et al .,
Defendants .
RANDAL SIMONETTI, et al., on Behalf of Themselves :and All Others Similarly Situated ,
Plaintiffs,Case No. 03 Civ. 1188 (GEL)
V.
JOSEPH PERRONE, et al .,
Defendants.
STIPULATION OF SETTLEMEN T
WHEREAS, Global Crossing Ltd ., Asia Global Crossing Ltd. (a subsidiary of
Global Crossing Ltd .) and Pacific Crossing Ltd . (a subsidiary of Asia Global Crossing
Ltd.) have each been involved in bankruptcy proceedings pursuant to the United State s
Bankruptcy Code ; and
WHEREAS, pursuant to automatic stays under the Bankruptcy Code, all action s
against Global Crossing Ltd ., Asia Global Crossing Ltd. and Pacific Crossing Ltd. were
stayed unless provided otherwise by the Court ; and
WHEREAS, pre-petition claims against Global Crossing Ltd., Asia Global
Crossing Ltd . and Pacific Crossing Ltd . are subject to the bankruptcy proceedings i n
which each company is or was involved ; and
WHEREAS, over 50 putative class actions alleging securities law violations were
filed against certain of Global Crossing Ltd .'s current and former officers, directors and
employees, and five putative class actions alleging securities law violations were filed
against certain of Asia Global Crossing Ltd .'s current and former officers, directors an d
employees ; and
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd.'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have (or had) an interest in
certain ERISA Plans ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
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WHEREAS, the Cou rt consolidated the actions alleging securities law violation s
into the Securities Action ; and
WHEREAS, the Court consolidated 15 of the putative class actions alleging
ERISA violations into the ERISA Consolidated Action, leaving two of the putative class
actions that also allege ERISA violations unconsolidated ; and
WHEREAS, Securities Lead Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs an d
Settling Defendants have agreed to a settlement of the Securities Action and the ERIS A
Actions, subject to the completion of additional factual investigation and analysis b y
Securities Lead Counsel and ERISA Plaintiffs' Counsel to evaluate further the fairness ,
reasonableness and adequacy of the proposed settlement ;
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by an d
among the undersigned , including , (i) Securities Lead Plaintiffs (individually and in thei r
representative capacities) and Securities Settling Defendants, by and through their dul y
authorized counsel, that the Securities Action and the matters raised by it hereby ar e
settled and compromised as to Securities Settling Defendants and Releasees and that th e
Securities Action will be dismissed on the merits and with prejudice as to the Securitie s
Settling Defendants and that the Released Claims will be released as to the Releasee s
based upon the terms and conditions set forth in this Settlement Agreement and the
Securities Release set forth herein, subject to the approval of the Court becom ing Fina l
and the payments required by Sections B .C.I .a, R.C . Lb, II .C.4 and II .C.S being made
into the Cash Settlement Securities Subaccount, and (ii) ERISA Plaintiffs (individuall y
and in their representative capacities ) and ERISA Settling Defendants , by and through
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their duly authorized counsel, that the ERISA Actions and the matters raised by the m
hereby are settled and compromised as to ERISA Settling Defendants and Releasees and
that the ERISA Actions will be dismissed on the merits and with prejudice and that the
Released Claims will be released as to the Releasees based upon the terms and condition s
set forth in this Settlement Agreement and the ERISA Release set forth herein, subject to
the approval of the Court becoming Final and the payments required by Sections II .C.2 .a
and II.C.3 being made into the Cash Settlement ERISA Subaccount _
I. INTRODUCTION AND DEFINITIONS
A. Procedural History
1 . Since February 2002, over 50 putative class actions alleging
securities law violations were filed against, among others, certain of Global Crossin g
Ltd.'s current and former officers, directors and employees on behalf of putative classes
of Global Crossing Securities holders .
2. In addition, 17 putative class actions were filed against, amon g
others, certain of Global Crossing's current and former officers, directors and employees
alleging ERISA violations with respect to one or more of Global Crossing's ERIS A
Plans .
3 . The Judicial Panel on Multidistrict Litigation centralized all o f
these actions before the Honorable Gerard E . Lynch of the United States District Court
for the Southern District of New York for coordinated or consolidated pretrial _
proceedings . The Panel thus transferred to this Court all actions not originally filed in the
Court .
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4. In an order dated December 13, 2002, the Court addressed, among
other things, the consolidation of the pending actions .
5 . The Securities Action
a. In its December 13, 2002 order, the Court consolidated the
actions alleging securities violations involving Global Crossing Ltd. into the Securities
Action pursuant to the provisions of Federal Rule of Civil Procedure 42(a) . The Court
appointed the Public Employees' Retirement System of Ohio and the State Teachers'
Retirement System of Ohio as Securities Lead Plaintiffs and Grant & Eisenhofer, P .A. as
Securities Lead Counsel.
b. The Court also appointed an Executive Committee,
comprised of certain counsel for plaintiffs Staro Asset Management, Richard P .
Kleinknecht, Bennett Restructuring Funds and James F. Tucker .
c. Pursuant to the Court's December 13, 2002 order ,
Securities Lead Counsel has the responsibility for, among other things, conducting
settlement negotiations with defendants on behalf of all putative class members in the
Securities Action .
d . In a May 29, 2003 order, the Court consolidated into the
Securities Action the five putative class actions involving Asia Global Crossing Ltd. It
also appointed certain counsel for plaintiffs Michael A . Bernstein Profit Sharing Plan and
Roman Foltyn as a member of the Executive Committee .
C . On August 11, 2003, Securities Lead Plaintiffs an d
Securities Plaintiffs filed their Securities Complaint, naming as defendants the followin g
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current and former officers, directors and employees of Global Crossing : Gary Winnick,
Dan J. Cohrs, David L . Lee, Barry Porter, Abbott L . Brown, Lodwrick M. Cook, John M .
Scanlon, Hillel Weinberger, James C. Gorton, Joseph P . Clayton, Robert Annunziata, Leo
J. Hindery, Jr., Thomas J . Casey, David A. Walsh, William B . Carter, Jr., S . Wallac e
Dawson, Jr., John A. Scarpati, John M. Finlayson, Jay R. Bloom, Dean C . Kehler, Jay R .
Levine, William D. Phoenix, Bruce Raben, Geoffrey J .W. Kent, Eric Hippeau, Douglas
H. McCorkindale, William E . Conway, Jr ., K. Eugene Shutler, Joseph P. Perrone ,
Thomas U. Koll, Maria Elena Lagomasino, John J . Legere, Stefan C. Riesenfeld, Pieter
Knook, Steven J. Green, Walter Beran and Anthony Christie .
f. The Securities Complaint also named as defendants certai n
entities allegedly owned and/or controlled by defendants Gary Winnick (GKW Unified
Holdings LLC, the Winnick Family Foundation and Pacific Capital Group, Inc.), Barry
Porter (Galenight Corporation) and Abbott Brown (the Brown Living Trust an d
Ridgestone Corporation); the Company's former auditor (Arthur Andersen LLP), certain
of its associated entities, and certain of its current and former partners ; Salomon Smith
Barney, one of its analysts and certain members of its research department ; Citigroup
Inc. ; Microsoft; Softbank; and certain other financial institutions allegedly involved with
either Global Crossing Ltd . or Asia Global Crossing Ltd .
g. The Securities Complaint asserts claims under section s
10(b) (and Rule 10b-5 thereunder), 14(a) (and Rule 14A-9A thereunder), 20(a) and 20A .
of the Securities Exchange Act of 1934, as well as sections 11, 12(a) and 1 5 of the
Securities Act of 1933 .
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h. The Securities Complaint pleads on behalf of a propose d
class of all persons, entities, or legal beneficiaries or participants in any entities who,
during the period from February 1, 1999 to January 28, 2002, inclusive, purchased, sold,
exchanged, otherwise acquired or disposed of, or transferred Global Crossing Securities .
Securities Lead Plaintiffs intend to file an amended consolidated complaint in which they
will plead the claims set out above, as well as claims based upon violations of stat e
securities laws and of common law, including breaches of duties allegedly owed by
certain of the defendants to putative Class Members, on behalf of a proposed class of all
persons, entities, or legal beneficiaries or participants in any entities who, during the
period from February 1, 1999 to December 8, 2003, inclusive, purchased, sold ,
exchanged, otherwise acquired or disposed of, transferred or made any other Investment
Decision involving Global Crossing Securities . This amended consolidated complaint
will be based upon allegations including, without limitation, those described in Sections
I .E.I.iiiiiii(l)-(18), I.E . l .iiiiiii(20)-(24), T .E.I .iiiiiii(34) .
6. The ERISA Action s
a. In the December 13, 2002 order, the Court consolidated 1 5
of the ERISA-based actions into the ERISA Consolidated Action . The other two putativ e
class actions -- the ERISA Pusloskie Action and the ERISA Sinionetti Action --- have no t
been consolidated with the ERISA Consolidated Action .
b. The ERISA Conso lidated Action
(1) In its December 13, 2002 order, the Cou rt appointed
an ERISA Lead Counsel Committee in the ERISA Consolidated Action . The Court
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named Lynn Lincoln Sarko of Keller Rohrback, LLP as Chairman of the Committee, and
George E . Barrett of Barrett Johnston & Parsley and Richard Schiffrin of Schiffrin &
Barroway as members .
(2) Pursuant to the Court's December 13, 2002 order ,
the ERISA Lead Counsel Committee has the responsibility for, among other things ,
conducting settlement negotiations with defendants on behalf of all putative clas s
members in the ERISA Consolidated Action .
(3) On January 28, 2003, ERISA Consolidate d
Plaintiffs filed their Consolidated Amended Master Class Action Complaint, naming as
defendants Gary Winnick, Dan J . Cohrs, John L. Comparin, Joseph P. Perrone, Linda
Woodruff, William M . Norris, Kenneth P. Schirmuhly, Robert Annunziata, William S .
Cohen, Barry Porter, Lodwrick M . Cook, Geoffrey J .W. Kent, Mark L . Attanasio ,
Thomas J . Casey, John M. Scanlon, Leo J . Hindery, Jr., David L. Lee, Joseph P. Clayton,
Abbott L . Brown, James F. McDonald and Douglas H. McCorkindaIe . The ERIS A
Consolidated Plaintiffs also named Global Crossing Ltd. as a defendant in their ERISA
Consolidated Complaint, but stated that the action would be stayed as to Global Crossing
Ltd. until the bankruptcy stay was lifted or relief from the stay was granted by the Global
Crossing Bankruptcy Court.
(4) The ERISA Consolidated Complaint seeks relief
under sections 502(a) (2) and (a)(3) of ERISA, 29 U.S .C. §§ 1132(a)(2), (a)(3) ; on behalf
of a putative class of individuals who participated or have (or had) an interest in th e
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Global Crossing Employees' Retirement Savings Plan at any time during the ERISA
Consolidated Class Period .
(5) ERISA Consolidated Plaintiffs later filed notices o f
voluntary dismissal of Robert Annunziata, Mark L . Attanasio, Abbott Brown, Geoffrey
J .W. Kent, David L . Lee, William M . Norris, Barry Porter; Linda Woodruff and Leo J.
Hindery, Jr., each of whom executed a tolling agreement with the ERISA Consolidated
Plaintiffs . They also filed a notice of voluntary dismissal as to Global Crossing Ltd .
c. The ERISA Pusloskie Action
(1) On November 26, 2002, ERISA Pusloskie Plaintiffs
filed their First Amended Complaint, naming as defendants Gary Winnick, Lodwrick M .
Cook, Thomas J . Casey, Joseph P. Clayton, William S . Cohen, John L . Comparin,
Kenneth P . Schirmuhly, Linda Woodruff , Mark L . Attanasio, Norman Brownstein,
William E. Conway, Jr ., Steven J . Green, Carl Grivner, Eric Hippeau, Geoffrey J .W .
Kent, Robert Klug, Maria Elena Lagomasino, William M . Norris, Mitchell C. Sussis,
John Does 1 through 25, and Richard Roes I through 25 . On June 26, 2003, the ERISA
Pusloskie Plaintiffs voluntarily dismissed Mark L. Attanasio, Norman Brownstein,
William E . Conway, Jr ., Steven J. Green, Carl Grivner, Eric Hippeau, Geoffrey J .W.
Kent, Robert Klug, Maria Elena Lagomasino, William M . Norris and Mitchell C. Sussis_
Their dismissal of Mark L. Attanasio, Geoffrey J .W. Kent and William M . Norris was
subject to a tolling agreement .
(2) The ERISA Pusloskie Complaint seeks relief under
sections 502(a)(2) and (a)(3) of ERISA, 29 U.S .C. §§ 1132(a)(2), (a)(3), on behalf of a
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putative class of individuals who participated or have (or had) an interest in the Frontie r
Group Bargaining Unit Employees' Retirement Savings Plan at any time during th e
ERISA Pusloskie Class Period_
d. The ERISA Simonetti Action
(1) On June 11, 2003, ERISA Simonetti Plaintiffs filed
their Amended Class Action Complaint, naming as defendants Joseph P . Perrone, Linda
Woodruff, John L . Comparin, Mark L . Attanasio, William S. Cohen, Geoffrey J .W. Kent,
William M. Norris, Kenneth P. Schirmuhly, the Change of Control Severance Plan and
John Does 1 through 30. On November 7, 2003, the ERISA Simonetti plaintiffs
voluntarily dismissed William M . Norris . On February 12, 2004, the ERISA Sinionetti
plaintiffs also voluntarily dismissed the Change of Control Plan .
(2) The ERISA Simonetti Complaint seeks relief under
sections 502(a)(2) and (a)(3) of ERISA, 29 U.S.C. §§ 1132(a)(2), (a)(3), on behalf of a
proposed class of individuals who participated or have (or had) an interest in the Chang e
of Control Severance Plan .
B . Settlement Discussion s
1. After prelim inary settlement discussions in Janua ry 2003 ,
Securities Lead Plaintiffs and ERISA Consolidated Plaintiffs each made a settlemen t
demand on certain of the Settling Defendants .
2. In February 2003, both Securities Lead Plaintiffs and ERISA
Consolidated Plaintiffs requested that the Court hold a mediation session to assist the
parties in determining whether a settlement was feasible . Pursuant to this request, the
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Court appointed Magistrate Judge Michael Dolinger to work with the parties in exploring
settlement possibilities. The mediation was conducted pursuant to an order of this Court
dated April 29, 2003, that provided, among other things, that the participation of the
Insurers in the mediation "either in person or by counsel will not be deemed by the Court
or by any of the parties to these Actions to be a submission to the jurisdiction of this court
or of any other court in the United States." It further provided that "[i]n the course of an y
activities related to this mediation, any [Insurer] participating in person or by counse l
shall be immune from service of process, pleadings, motions, injunctions or other paper s
in these Actions or in any other civil action or judicial proceeding . "
3. Beginning in May 2003, Magistrate Judge Dolinger held mediatio n
sessions with Securities Lead Plaintiffs, ERISA Plaintiffs, the Settling Defendants an d
the Insurers . Sessions including all or some of these entities continued throughout 200 3
and into 2004, and included numerous in-court conferences, as well as telephon e
conferences .
4. Throughout the settlement negotiations, Securities Lead Plaintiffs ,
ERISA Plaintiffs and Settling Defendants were advised by various consultants an d
experts, including individuals with expertise in accounting and auditing issues and i n
estimating potential damages in cases involving allegations of securities fraud .
5. Securities Lead Plaintiffs also initiated settlement negotiation s
with Simpson Thacber in January 2003. To facilitate such negotiations , the Secu rities
Lead Plaintiffs entered a tolling agreement with Simpson Thacher dated as of January 27 ,
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2003, which, as amended on January 26, 2004, extends the statute of limitations with
respect to any suit against Simpson Thacher to April 1, 2004 .
C. Pre-Settlement Discovery
1 . Before filing their respective complaints, Securities Lead Plaintiffs
and ERISA Plaintiffs conducted certain preliminary discovery .
a. Secu ri ties Lead Plaintiffs conducted, among other things ,
interviews of nearly 100 former Global Crossing employees . Securities Lead Plaintiffs
also reviewed and analyzed documents provided to them by former employees, as well a s
certain publicly available internal Global Crossing documents, including e-mails ,
memoranda, financial reports and sales documents .
b. ERISA Plaintiffs likewise reviewed and analyzed publicl y
available Global Crossing documents, as well as documents that they had obtained fro m
former Global Crossing employees . ERISA Plaintiffs also interviewed certain former
Global Crossing employees and pa rticipants in the Plans .
2. Even prior to their designation as lead plaintiffs, Securities Lea d
Plaintiffs had moved for production of all documents that Global Crossing produced t o
governmental agencies investigating the Company in connection with conduct at issue i n
the Actions . At the December 2002 hearing at which consolidation of the various case s
was discussed, ERISA Plaintiffs also made clear their desire to obtain discovery o f
documents relevant to their ERISA claims. Once settlement discussions began ,
Securities Lead Counsel and ERISA Plaintiffs' Counsel stated that they would have to
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review relevant Company documents regarding the events and transactions at issue in th e
Actions before serious discussions could be undertaken .
3. In February and March 2003, Global Crossing entered int o
confidentiality agreements pursuant to which it agreed to allow Securities Lead Counsel
and ERISA Consolidated Lead Counsel to review the documents produced by th e
Company in connection with certain governmental inquiries ,
a . The terms of the Securities Confidentiality Agreement wer e
extended to cover documents of those Securities Settling Defendants who had produce d
documents in connection with any such inquiries, and those documents wer e
subsequently produced to Securities Lead Counsel . The terms of the Securitie s
Confidentiality Agreement also were extended to cover documents produced by Asi a
Global Crossing Ltd . in connection with any such inquiries, and those documents als o
were produced to Securities Lead Counsel .
b . The terms of the ERISA Confidentiality Agreement were
extended (i) to allow ERISA Pusloskie Lead Counsel and ERTSA Simonetti Lead
Counsel to review the documents produced to ERISA Consolidated Lead Counsel an d
(ii) to include documents of those ERISA Settling Defendants who had produce d
documents in connection with the governmental inquiries . In addition, Global Crossing
produced to ERISA Plaintiffs documents specific to the ERISA Plans .
4. The documents that had been produced by the Company and
certain of the Securities Settling Defendants in connection with governmental inquirie s
and that were provided to Securities Lead Counsel and ERISA Plaintiffs' Counsel
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included 270,000 pages of documents and 80,000 e-mails (with their associated
attachments) . The documents related to, among other things, (i) transactions discussed i n
both the Securities Action and the ERISA Actions, (ii) public disclosures regarding such
transactions, (iii) internal budgets and forecasts, (iv) communications with analysts an d
the public regarding financial prospects, (v) internal policies regarding insider tradin g
transactions, (vi) records regarding trades by insiders and (vii) executive compensation .
With respect to ERISA Plaintiffs' Counsel, these documents also included material s
about the ERISA Plans .
5. As set forth in Section IIi below, this Settlement Agreement i s
subject to, among other things, Securities Lead Counsel's and ERISA Plaintiffs'
Counsel's completion of additional discovery, including the review of additional
documents, and depositions and/or interviews of current and former officers and director s
of the Company, and all of Securities Lead Counsel's, Securities Lead Plaintiffs', ERISA
Plaintiffs' Counsel's and ERISA Plaintiffs' conclusions at the completion of that
additional discovery, that the settlement terms set forth herein are fair, reasonable an d
adequate .
D. Settlement Consideration s
1 . Based upon their discovery, investigation and evaluation of th e
facts and law relating to the claims alleged in the Complaints, Securities Lead Plaintiffs ,
Securities Plaintiffs, Securities Lead Counsel, ERISA Plaintiffs and ERISA Plaintiffs' -
Counsel have agreed to settle the Action and release the Releasees pursuant to the term s
of this Settlement Agreement after considering, among other things : (i) the substantial
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benefits to Class Members under the terms of this Settlement Agreement ; (ii) the
attendant risks of litigation, especially in complex actions such as this, as well as the
difficulties and delays inherent in such litigation ; (iii) the petitions for bankruptcy
protection filed by Global Crossing Ltd ., Asia Global Crossing Ltd . and Pacific Crossing
Ltd. and the consequences of the bankruptcy proceedings for any pre-petition claims
against those companies ; (iv) the desirability of consummating this Settlement Agreement
promptly in order to provide effective relief to Class Members, including the ability to
ensure access to insurance proceeds and the preservation of such insurance proceeds that
would otherwise be depleted by Settling Defendants in defending the Actions ; and (v)
Securities Lead Plaintiffs', Securities Plaintiffs', Securities Lead Counsel's, ERISA
Plaintiffs' and ERISA Plaintiffs' Counsel's belief, subject to the additional discovery
contemplated by this Settlement Agreement, that the settlement is fair, reasonable and
adequate, and in the best interests of Class Members .
2 . Settling Defendants expressly deny the wrongdoing alleged in th e
Complaints and do not concede any wrongdoing or liability in connection with any facts
or claims that have been or could have been alleged against them in the Actions, but
consider it desirable for the Actions to be settled and dismissed because the proposed
settlement will, among other things : (i) bring to an end the substantial expense, burdens
and uncertainties associated with continued litigation of the claims made in the
Complaints, including the risk of being unable to access insurance proceeds because of,
among other things, the unavailability of such insurance proceeds in the future or the
depletion of such insurance proceeds ; (ii) finally put to rest those claims and the
15
underlying matters ; and (iii) confer substantial benefits upon Class Members and Settlin g
Defendants including, without limitation, the avoidance of further expense and disruptio n
due to the pendency and defense of the Actions . Simpson Thacher also expressly denie s
all wrongdoing. Neither this Settlement Agreement, the offer of this Settlemen t
Agreement nor compliance with thi s Settlement Agreement shall constitute or b e
construed to be an admission by Settling Defendants or Releasees, or any of the m
individually, of any wrongdoing or liability .
3. Except as provided in Sections IX.A.4 and IX.B.4 below, thi s
Settlement Agreement shall not be admissible in any judicial, administrative or othe r
proceeding or cause of action as an admission of liability or for any purpose other than to
enforce the terms of this Settlement Agreement or any related insurance release .
E. Definitions
1 . As used in this Settlement Agreement, the following terms have
the following meanings, unless a section or subsection of this Settlement Agreemen t
otherwise provides :
a. "Actions" means the Securities Action and the ERIS A
Actions .
b. "Administrator" means, subject to Court approval, The
Garden City Group, Inc ., which shall be appointed by the Court in the Hearing Order t o
implement the Notice, claims process, toll-free telephone number, and administration an d
distribution of the Net Cash Settlement Amount in accordance with the terms of thi s
Settlement Agreement .
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c. "Approval Date" means the date on which the Final
Judgment and the Order Approving Settlement are entered by the Court.
d. "Asia Global Crossing Bankers Committee" means the
committee of secured lenders in the Asia Global Crossing Bankruptcy Proceeding .
e. "Asia Global Crossing Bankruptcy Court" means the
United States Bankruptcy Court for the Southern District of New York.
1. "Asia Global Crossing Bankruptcy Proceeding" means the
proceeding styled In re Asia Global Crossing, Ltd., 02-15479 (SMB) (Bankr. S .D.N.Y.) .
g. "Asia Global Crossing Creditors Conunittee" means th e
official committee of unsecured creditors in the Asia Global Crossing Bankruptcy
Proceeding-
h . "Asia Global Crossing United States Bankruptcy Trustee"
means the trustee overseeing the Asia Global Crossing Bankruptcy Proceeding .
i. "Bar Officers" means Robert Annunziata, Abbott L.
Brown, Thomas J . Casey, Joseph P . Clayton, Dan J . Cohrs, Lodwrick M . Cook, James C.
Gorton, Leo J . Hindery, Jr ., David L. Lee, Joseph P . Perrone, Barry Porter, John M .
Scanlon, David A. Walsh and Gary Winnick.
j . "Bar Orders" means the Securities Contribution Bar Order
and the Complete Bar Order as provided for in Sections XB .A.18 and XII .A.19 below.
k. "Cash Settlement Account" means an interest-bearing
account under the joint control of Securities Lead Counsel and ERISA Plaintiffs '
Counsel, which account shall have three subaccounts : the Cash Settlement Notice an d
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Administrative Expenses Subaccount, the Cash Settlement Securities Subaccount and th e
Cash Settlement ERISA Subaccount and which account shall be maintained as a
Qualified Settlement Fund, as defined below .
1 . "Cash Settlement Amount" means the amount equal to th e
aggregate of the following : (i) the Securities Cash Settlement Amount and (ii) the
ERISA Cash Settlement Amount .
in . "Cash Settlement ERISA Subaccount" means the
subaccount of the Cash Settlement Account into which the ERISA Insurance Payment
and the Winnick ERISA Payment shall be deposited ; provided that additional monies
may be deposited into the Cash Settlement ERISA Subaccount as described in Section s
II.D.8 and X .B .5 below .
n. "Cash Settlement Notice and Administrative Expense s
Subaccount" means the subaccount of the Cash Settlement Account into which the Initia l
Payments shall be deposited; provided that additional monies may be deposited into th e
Cash Settlement Notice and Administrative Subaccounts as described in Sectio n
I.E.1 .yyyyy below .
o. "Cash Settlement Payment" means the amount equal to the
aggregate of the following : ( i) the Securities Insurance Payment, (ii) the ERISA
Insurance Payment, (iii) the Winnick ERISA Payment, (iv) the Winnick Securitie s
Payment and (v) the Simpson Thacher Payment .
p. "Cash Settlement Securities Subaccount" means the
subaccount of the Cash Settlement Account into which the Securities Insurance Payment
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and the Winnick Securities Payment shall be deposited ; provided that additional monie s
may be deposited into the Cash Settlement Securities Subaccount as described in Section s
II.D.8 and X .A.4 below .
q . "Change of Control Severance Plan" means the Employe e
Benefit Plan known as the Frontier Corporation/Global Crossing Ltd . Change of Control
Severance Plan .
r . "Claim" means any and all actions, causes of action ,
proceedings, adjustments, executions, offsets, contracts, judgments, obligations, suits,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, variances,
covenants, trespasses, damages, demands (whether written or oral), agreements ,
promises, liabilities, controversies, costs, expenses, attorneys' fees and losses
whatsoever, whether in law, in admiralty or in equity and whether based on any federa l
law, state law, foreign law or common law right of action or otherwise, foreseen o r
unforeseen, matured or unmatured, known or unknown, accrued or not accrued, existing
now or to be created in the future .
s . "Claim Reserve Account" means an interest-bearin g
account under the joint control of Securities Lead Counsel . and ERISA 401(k) Lead
Counsel into which the Securities Claim Reserve Amount Balance (if any) and th e
ERISA Claim Reserve Amount Balance (if any) shall be deposited, respectively, b y
Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to Sections ll .F.2.a
and II .F .3 .a below .
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t . "Class" or "Class Members" means the Securities Clas s
Members and the ERISA Class Members .
U . "Class Period" means the Securities Class Period, the
ERISA Consolidated Class Period, the ERISA Pusloskie Class Period and the ERISA
Sinzonetti Class Period .
v. "Company" means Global Crossing .
w. "Complaints" means the Securities Complaint, the ERISA
Consolidated Complaint, the ERISA Pusloskie Complaint and the ERISA Sinaonetti
Complaint .
X . "Complete Bar Order" means the bar order, the text of
which is set forth in Section XE .A.19below, to be entered by the Court as part of the
Order Approving Settlement .
y. "Controlling Interest" means an interest by the Company, a
Settling Defendant or a Non-Settling Defendant in an entity where the Company, the
Settling Defendant or the Non-Settling Defendant, respectively, possesses an interest in
the entity that is sufficient to allow the Company, the Settling Defendant or the Non-
Settling Defendant, as the case may be, directly or indirectly to direct or cause th e
direction of the management and policies of the entity, whether through the ownership o f
voting shares, by contract, or otherwise ; provided that any disputes as to whether the
Company, a Settling Defendant or a Non-Settling Defendant has a Controlling-Interest in
an entity shall, for purposes of determining whether a Controlling Interest exists unde r
this Settlement Agreement and for that purpose only, be submitted to the Court fo r
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resolution and the Company, Settling Defendant or Non-Settling Defendant shall, as the
case may be, bear the burden of proof as to whether its interest in an entity is or was a
Controlling Interest for purposes of this Settlement Agreement .
Z . "Court" means the Court in which the Actions are pending .
aa. "Covered Claim" means all Claims in each of the following
three categories : (i) each of the Actions ; (ii) the Claims identified on Exhibit A to this
Settlement Agreement; and (iii) any other Claim made or threatened to be made or any
potential Claim that is the subject of an investigation as to one or more Insured Releasees
with respect to which the Executive Liability Insurance Policies, the Pender Securities
Coverage or the Fiduciary Liability Insurance Policy provide coverage and/or indemnity,
including, but not limited to, a Claim made or threatened to be made or any potential
Claim that is the subject of an investigation, a claim made or threatened to be made by an
individual or entity that submits a request for exclusion pursuant to Section VII below, a
Claim made or threatened to be made by a federal or state governmental entity, a Claim.
(if any) made or threatened to be made or any potential Claim that is the subject of an
investigation arising out of the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding or the Pacific Crossing Bankruptcy Proceeding, or a
Claim made or threatened to be made in connection with any request for discovery from a
Releasee relating to a Released Claim .
bb. "Covered Claim Costs" means (i) subject to the Securities -
Implementation Cap and the ERISA Implementation Cap, respectively, any and al l
Securities Implementation Costs and ERISA Implementation Costs, (ii) Post-Fina l
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Settlement Date Costs, (iii) any and all Defense Costs incurred by an Insured Releasee
after the Execution Date in connection with any Covered Claim other than one of the
Actions, including, without limitation, all Claims identified in Exhibit A, and (iv) any
reasonable costs incurred in connection with the resolution (including, without limitation,
judgment or settlement) of any Covered Claim other than one of the Actions ; provided
however, that Covered Claim Costs shall not include the cost (or such portion of the cost)
attributable to a settlement of a Covered Claim other than one of the Actions to the exten t
that Securities Lead Counsel and ERISA 401(k) Lead Counsel dispute the inclusion of
the cost or some portion of the cost of such settlement as Covered Claim Costs ; provided
further that if Securities Lead Counsel, ERISA 401(k) Lead Counsel and the Insured
Releasee(s) who seeks to recover Covered Claim Costs in connection with a settlement of
a Covered Claim cannot resolve the portion of settlement cost that shall be included as
Covered Claim Costs, then such dispute as to the portion of settlement cost that shall be
included as Covered Claim Costs shall be resolved pursuant to the Dispute Procedure ;
provided further that, subject to Sections II_D.3 and II.D.7 below, (i) for the period
following the Execution Date until (and including) the Preliminary Approval Date, an
Insured Releasee (or the Insured Releasee's counsel) shall be reimbursed for Covere d
Claim Costs from either the Executive Liability Insurance Policies or the Fiduciary
Liability Insurance Policy, as the case may be, (ii) for the period following the
Preliminary Approval Date until (and including) the Final Settlement Date, an Insured
Releasee (or the Insured Releasee's counsel) shall be reimbursed for Covered Claim
Costs from the Securities Insurers' Insurance Escrow Account and/or the Securitie s
22
Reinsurers ' Insurance Trust Account, or from the ERISA Insurance Escrow Account, as
the case may be, and (iii) for the period following the Final Settlement Date, an Insured
Releasee (or the Insured Releasee's counsel) shall be reimbursed for Covered Clai m
Costs from the Claim Reserve Account; provided further that no Insured Releasee shall
be required to reveal privileged or protected information to obtain reimbursement fo r
Covered Claim Costs .
cc. "Defendants" means Settling Defendants and Non-Settlin g
Defendants-
dd. "Defense Costs" means reasonable costs, charges, fee s
(including, but not limited to, attorneys' fees and experts' fees) and expenses incurred in
connection with defending and investigating a Covered Claim .
ee. "Discharge Order" means the order, the text of which is set
forth in Section XR.A.5 . b below, to be entered by the Cou rt as part of the Orde r
Approving Settlement.
ff. "Dispute Procedure" means the procedure by whic h
disputes arising in connection with this Settlement Agreement (as specifically set forth in
various provisions of this Settlement Agreement and ancillary documents) shall be
resolved, which procedure shall require the disputing parties to submit such dispute to th e
Court with a request that the Court refer the dispute to Magistrate Judge Michae l
Dolinger, who shall mediate a resolution among the disputing parties, provided that, if the -
parties are unable to resolve the dispute through mediation, Magistrate Judge Dolinge r
shall resolve the dispute and such resolution shall be final and binding (without any righ t
23
of appeal or review) on all relevant parties, including, without limitation, Securities Lea d
Counsel, Securities Lead Plaintiffs, ERISA Plaintiffs' Counsel, ERISA Plaintiffs and an y
other individual or entity (including counsel for such individual or entity) involved in th e
dispute ; provided further that if Magistrate Judge Dolinger is no longer a magistrat e
judge of the United States District Court for the Southern District of New York at th e
time any dispute is submitted to the Court, the parties shall request that the Court refe r
the dispute to another magistrate judge of the United States District Court for th e
Southern District of New York-, who shall conduct the mediation or, if necessary, resolv e
the dispute as set out above ; provided further that , with respect to all disputes submitte d
to the Court other than a dispute submitted pursuant to Section II .D.7 below, any party
submitting a dispute to the Court shall provide notice of such submission and copies of
all papers submitted to the Court and/or Magistrate Judge Dolinger (or any successor
magistrate judge) to the following : Securities Lead Counsel, ERISA Plaintiffs' Counsel ,
Settling Defendants' Lead Counsel, the Insurers and any other party directly involved in
the dispute ; provided however, that, if the, dispute involves the payment of Covere d
Claim Costs and an Insured Releasee submits materials or information to the Cour t
and/or Magistrate Judge Dolinger (or any successor magistrate judge) in connection wit h
the dispute that is protected by the attorney client privilege or attorney work produc t
doctrine, (i) the Insured Releasee's submission of such materials or information shall no t
be deemed a waiver of the privilege or work product protection applicable to such - - -
materials or information and (ii) the insured Releasee shall not be required to provide
such materials or information to Securities Lead Counsel, ERISA Plaintiffs' Counsel,
24
Settling Defendants' Lead Counsel, the Insurers or any other party directly involved i n
the dispute, but shall provide such materials and/or information to the Court and/o r
Magistrate Judge Dolinger (or any successor magistrate judge) for in camera review;
provided further that any participation by Pender in the Dispute Procedure with respect to
any dispute arising under this Settlement Agreement or any ancillary documents shall be
subject to the Mediation Order and shall not override or supersede Section ILE below ;
provided further that with respect to a dispute submitted to the Court pursuant to Section
II .D.7 below, the party submitting the dispute to the Court shall provide notice of such
submission to all Settling Defendants ' Counsel , and any party submitting any papers to
the Court and/or Magistrate Judge Dolinger (or any successor magistrate judge) i n
connection with such dispute shall provide copies of such papers to all Settlin g
Defendants' Counsel .
gg. "DOL Filing" means any written statement filed o r
submitted to the United States Department of Labor .
hh. "Earnings Release" means any statement by Global
Crossing announcing to the public the financial or operational results of the Company fo r
any specific time period .
ii . "Employee Benefit Plan" means an employee benefit plan
as defined in Section 3(3) of ERISA .
jj . "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, 29 U.S .C. §§ 1001, et seq.
25
kk. "ERISA Actions" means the ERISA Consolidated Action ,
the ERISA Pusloskie Action and the ERISA Simonetri Action, including, withou t
limitation, all cases consolidated with any of the foregoing as of the Final Settlemen t
Date .
11 . "ERISA Attorneys' Fees and Expenses Applications"
means the ERISA 401(k) Attorneys' Fees and Expenses Application and the ERISA
Simonetti Attorneys' Fees and Expenses Application .
mm. "ERISA Attorneys' Fees and Expenses Awards" means the
ERISA 401(k) Attorneys' Fees and Expenses Award and the ERISA Simonetti Attorneys '
Fees and Expenses Award .
nn. "ERISA Cash Settlement Amount" means the aggregate of
(i) the ERISA Insurance Settlement Amount and (ii) the Winnick ERISA Amount .
00. "ERISA Claim Reserve Amount Balance" means the
balance (if any) of the Post-Implementation Period ERISA Claim Reserve Amount as
calculated pursuant to Section II .D.S.b below.
pp. "ERISA Class" or "ERISA Class Members" means the
ERISA Consolidated Class, the ERISA Pusloskie Class and the ERISA Simonetti Class_
qq. "ERISA Confidentiality Agreement" means the March 11 ,
2003 agreement between ERISA Consolidated Plaintiffs and Global Crossing, including
all addenda that have been or will be executed thereto .
26
rr. "ERISA Consolidated Action" means the consolidated
putative ERISA class action pending in this Court under the caption In re Global
Crossing Ltd_ ERISA Litigation , Case No. 02 Civ . 7453 (GEL) .
ss. "ERISA Consolidated Class" or "ERISA Consolidate d
Class Members" means, subject to the exclusions set out in this Section I .E.l .ss, all
individuals who were participants or have (or bad) an interest in the Global Crossing
Employees' Retirement Savings Plan at any time during the ERISA Consolidated Class
Period ; provided that such individuals shall be ERISA Consolidated Class Members only
with respect to their participation or interest in the Global Crossing Employees'
Retirement Savings Plan and not with respect to any purchases, sales, exchanges,
acquisitions, disposals, transfers or any other Investment Decisions involving Global
Crossing Securities outside of and separate from their participation or interest in th e
Global Crossing Employees' Retirement Savings Plan . The term ERISA Consolidate d
Class and ERISA Consolidated Class Members does not include :
(1) such persons or entities who, while represented by
counsel, settled an actual or threatened lawsuit or other proceeding with Global Crossing
and/or an ERISA Settling Defendant, and released Global Crossing and the Releasees
from any further claims concerning their purchase, sale, exchange, acquisition, disposal,
transfer or any other Investment Decision involving Global Crossing Securities in the
Global Crossing Employees' Retirement Savings Plan; - -
(2) such persons or entities who are or were : ERISA
Settling Defendants ; Family Members of any ERISA Settling Defendant ; any entity i n
27
which Global Crossing or an ERISA Settling Defendant has or had a Controlling Interest ;
the legal representatives, heirs, executors, successors or assigns of any person or entity
excluded pursuant to this Section LE .l .ss(2) ; or any current or former directors or officers
of a defendant in the ERISA Actions and/or of Global Crossing or of an entity in which
Global Crossing had a Controlling Interest ; provided however, that the exclusion of
directors or officers from the term ERISA Consolidated Class and ERISA Consolidate d
Class Members pursuant to this Section I.E .I .ss(2) does not apply to any officer who
filed a suit against the Company and/or any of its present or former directors or officers
before July 1, 2003 relating to his or her purchase, sale, exchange, acquisition, disposal,
transfer or any other Investment Decision involving Global Crossing ,Securities or to any
Released Claims ; or
(3) any ERISA Non-Settling Defendant (if any) ; Family
Members of any ERISA Non-Settling Defendant (if any) ; any entity in which an ERISA
Non-Settling Defendant has or had a Controlling Interest ; an affiliate (as defined in 17
C.F.R. Part 210J-02.b) of an ERISA Non-Settling Defendant ; or the legal
representatives, heirs, executors, successors or assigns of any person or entity that is
excluded from the definition of ERISA Consolidated Class or ERISA Consolidated Class
Members ; provided however, that this exclusion does not apply to any ERISA Non-
Settling Defendant (if any) to the extent it is acting as a Nominee for any ERISA Class
Member .
tt . "ERISA Consolidated Class Period" means the period of
time from September 28, 1999 through December 8, 2003, inclusive .
28
uu. "ERISA Consolidated Complaint" means the Consolidated
Amended Master Class Action Complaint filed in the ERISA Consolidated Action by the
ERISA Consolidated Plaintiffs on or about January 28, 2003 .
vv. "ERISA Consolidated Lead Counsel" means the law fi rm
of Keller Rohrback, LLP.
ww. "ERISA Consolidated Plaintiffs" means Scott Johnson ,
Janet Mahoney and Bruce Hill, both in their individual capacity and in their capacity as
representatives of the ERISA Consolidated Class .
xx. "ERISA Creditors' Payment" means three million tw o
hundred fifty thousand dollars ($3,250,000) .
yy. "ERISA Escrow Agent" means the escrow agent for the
ERISA Insurance Escrow Account-
zz. "ERISA Escrow Agreement" means the escrow agreement
pursuant to which the ERISA Insurance Escrow Account is established and administered,
which agreement shall be substantially in the form as set out in Exhibit F to thi s
Settlement Agreement and which agreement shall provide, among other things, that :
(i) separate subaccounts shall be created with respect to the payment made by the ERISA
Insurer and that made by Pender, (ii) the ERISA Escrow Agent shall (a) pay any ERISA
Pre-Execution Defense Costs not paid as of the date on which the ERISA Insurance
Escrow Account is funded and (b) administer and make the payments provided for in
Section II.D.3.b(2) subject to the ERISA Implementation Cap, the Implementation Period
ERISA Claim Reserve Amount and the Post-Implementation Period ERISA Clai m
29
Reserve Amount, such payments to be made from the subaccount into which th e
unexhausted insurance proceeds from the Fiduciary Liability Insurance Policy have been
deposited and, if the proceeds in that subaccount are exhausted, from the subaccount into
which Pender's payment has been deposited, (iii) any disputes regarding payment s
addressed in the preceding proviso shall be resolved pursuant to the Dispute Procedure,
(iv) within forty-five (45) days following the Final Settlement Date, the ERISA Insuranc e
Payment (plus interest as calculated in Section II .C.2 .a below) shall be paid into the Cas h
Settlement ERISA Subaccount pursuant to Section II .C.2 below , (v) except as specifically
provided in this Settlement Agreement , no third parties unrelated to Global Crossing
(including, without limitation, third-party individuals or entities insured under the Pender
Policy) shall have any rights respecting the monies in the escrow account, (vi) n o
payments, except as specifically provided in this Settlement Agreement, shall be mad e
from the escrow account and (vii) if approval of this Settlement Agreement does no t
become Final or this Settlement Agreement is otherwise terminated, any monies in th e
escrow account, including any interest that has accrued, shall be released and returned t o
the ERISA Insurer and Fender pursuant to the terms set out in the escrow agreement ,
aaa. "ERISA Expenses" means that portion of the Notice and
Administrative Expenses attributable to the ERISA Actions, which amount shall be equal
to the amount calculated by multiplying the total Notice and Administrative Expense s
incurred in connection with this Settlement Agreement by the ERJSA Notice Ratio :
30
bbb. "ERISA 401(k) Attorneys' Fees and Expenses Application"
means the application for fees and expenses to be made by ERISA 401(k) Lead Counsel
pursuant to Section X .B .1 below.
ccc. "ERISA 401(k) Attorneys' Fees and Expenses Award"
means the amount awarded to ERISA 401(k) Lead Counsel as provided for in Section
X$ below pursuant to the ERISA 401(k) Attorneys' Fees and Expenses Application .
ddd. "ERISA 401(k) Class" or "ERISA 401(k) Cl ass Members"
means the ERISA Consolidated Class Members and the ERISA Pusloskie Class
Members .
eee. "ERISA 401(k) Distribution Amount" means the portion of
the ERISA Net Cash Settlement Amount that shall be distributed pursuant to the ERISA
401(k) Plan of Allocation, which amount shall equal the ERISA Net Cash Settlement
Amount less the ERISA Simonetti Distribution Amount .
fff. "ERISA 401(k) Lead Counsel" means ERISA Consolidated
Lead Counsel and ERISA Pusloskie Lead Counsel .
ggg. "ERISA 401(k) Plan of Allocation" means the terms an d
procedures for allocating the ERISA 401(k) Distribution Amount among, and distributing
the ERISA 401(k) Distribution Amount to, ERISA 401(k) Class Members as set forth in
the Notice, or such other ERISA 401(k) Plan of Allocation as the Court shall approve .
- bhh_ "ERISA 401(k) Settlement Amount" means the ERISA
Cash Settlement Amount less the ERISA Sinzonetti Settlement Amount.
31
iii . "ERISA Implementation Cap" means five hundred
thousand dollars ($500,000), which amount shall be the maximum aggregate amount of
ERISA Implementation Costs paid to all ERISA Settling Defendants' Separate Counse l
and all ERISA Settling Defendants ' Co-Counsel .
jjj . "ERISA Implementation Costs" means, subject to th e
ERISA Implementation Cap, any and all costs and expenses incurred by ERISA Settling
Defendants' Counsel subsequent to the Execution Date and through (and including) th e
Final Settlement Date in connection with obtaining Court approval of this Settlemen t
Agreement (including , but not limited to, conducting the discovery contemplated by
Section III, responding to any objections to the terms of this Settlement Agreement an d
any appeal regarding approval or disapproval of the Settlement Agreement) an d
implementing its provisions; provided however, that ERISA Implementation Costs shall
not include any Covered Claim Costs for Covered Claims other than the Actions .
kkk. "ERISA Initial Payment" means the amount of fiv e
hundred thousand dollars ($500,000), which amount shall be paid pursuant to Section
ILA.2.a below .
111 . "ERISA Insurance Balance" means the ERISA Insurance
Settlement Amount less (i) the ERISA Initial Payment and (ii) ERISA Pre-Executio n
Defense Costs .
num. "ERISA Insurance Escrow Account" means an interest-
bearing account established and administered pursuant to the ERISA Escrow Agreemen t
into which the payments required by Sections H.A.21 and II .A.2.c below shall be paid ;
32
provided that the interest paid on the ERISA Insurance Escrow Account shall be no les s
than the Interest Rate .
nnn. "ERISA Insurance Payment" means the amount equal to
the ERISA Insurance Balance less the following expenses paid out of the ERISA
Insurance Escrow Account : (i) the ERISA Attorneys' Fees and Expenses Awards, (ii)
Covered Claim Costs and (iii) any fees and expenses of the ERISA Escrow Agent
associated with the administration of the ERISA Insurance Escrow Account .
ooo. "ERISA Insurance Settlement Amount" means twenty-two
million three hundred thirty thousand eight hundred fifty-one dollars and ninety-eight
cents ($22,330,851 .98) plus the Pender Supplemental Amount .
ppp. "ERISA Insurer" means Federal Insurance Company, as
well as any of its successors or assigns, with respect to the Fiduciary Liability Insuranc e
Policy.
qqq. "ERISA Lead Counsel Committee" means the law firms of
Keller Rohrback, LLP, Barrett, Johnston & Parsley and Schiffrin & Barroway .
M. "ERISA Lead Counsel Committee Chairman" means Lynn
Lincoln Sarko .
sss. "ERISA Net Cash Settlement Amount" means the balanc e
remaining in the Cash Settlement ERISA Subaccount ( including any interest that has
accrued) after the payments described in Sections H.F.1 and a:F.3 below are made from
the Cash Settlement ERISA Subaccount.
33
ttt . "ERISA Non-Settling Defendants" means any person o r
entity who is not an ERISA Settling Defendant or a Releasee and whom ERISA
Plaintiffs, the ERISA Class or any ERISA Class Member may hereafter sue on an y
Released Claim .
uuu. "ERISA Notice Ratio" means a ratio in which the
numerator is equal to the number of Notices mailed to ERISA Class Members and the
denominator is equal to the total number of Notices mailed to Class Members ; provided
that in calculating the denominator for purposes of this definition, the number of Notices
mailed shall include the total number of Notices mailed to Nominees for distribution t o
Securities Class Members .
vvv. "ERISA Plaintiffs" means the ERISA Consolidated
Plaintiffs, the ERISA Pusloskie Plaintiffs and the ERISA Simonetti Plaintiffs .
www. "ERISA Plaintiffs' Counsel" means ERISA Consolidate d
Lead Counsel, ERISA Pusloskie Lead Counsel and ERISA Simonetti Lead Counsel .
xxx. "ERISA Plans" means each and every Employee Benefit
Plans sponsored and/or administered by Global Crossing, including, without limitation,
the Frontier Group Employees' Retirement Savings Plan, the Global Crossin g
Employees' Retirement Savings Plan, the Frontier Group Bargaining Unit Employees '
Retirement Savings Plan, the Upstate Cellular Network Employees' Retirement Savings
Plan, the IPC/Lnet 401(k) Plan, the Global Crossing 401(k) Plan, the Frontie r
Corporation/Global Crossing Ltd . Change of Control Severance Plan, the Global
Crossing Ltd. Severance Plan and the Global Crossing Flexibility Plan .
34
yyy- "ERISA Plans of Allocation" means the ERISA 401(k )
Plan of Allocation and the ERISA Sinionetti Plan of Allocation .
zzz. "ERISA Pre-Execution Defense Costs" means any and all
Defense Costs incurred prior to and including the Execution Date but not paid as of the
Execution Date regarding ( i) claims for which coverage and/or indemnity is provided by
the Fiduciary Liability Insurance Policy and (ii) all Claims otherwise identified in Part 2
of Exhibit A, which Defense Costs shall be paid from the Fiduciary Liability Insuranc e
Policy and/or the Pender Supplemental Amount ; provided that all submissions by Insured
Releasees or their counsel requesting reimbursement for ERISA Pre-Execution Defens e
Costs shall be submitted to the ERISA Insurer by no later than thirty (30) days followin g
the Execution Date.
aaaa. "ERISA Pusloskie Action" means the putative ERISA clas s
action pending in this Court under the caption Pusloskie, et al. v. Winnick, et al., 02 Civ.
8508 (GEL).
bbbb . "ERISA Pusloskie Class" or "ERISA Pusloskie Clas s
Members" means, subject to the exclusions set out in this Section I.E.l .bbbb, al l
individuals who were participants or have (or had) an interest in the Frontier Group
Bargaining Unit Employees Retirement Savings Plan at any time during the ERIS A
Pusloskie Class Period; provided that such individuals shall be ERISA Pusloskie Class
Members only with respect to their participation or interest in--the Frontier Group
Bargaining Unit Employees' Retirement Savings Plan and not with respect to an y
purchases, sales, exchanges, acquisitions, disposals, transfers or any other Investmen t
3S
Decisions involving Global Crossing Securities outside of and separate from their
participation or interest in the Frontier Group Bargaining Unit Employees' Retirement
Savings Plan- The term ERISA Pusloskie Class or ERISA Pusloskie Class Members
does not include:
(1) such persons or entities who, while represented by
counsel, settled an actual or threatened lawsuit or other proceeding with Global Crossin g
andlor an ERISA Settling Defendant, and released Global Crossing and the Releasee s
from any further claims concerning their purchase, sale, exchange, acquisition, disposal ,
transfer or any other Investment Decision involving Global Crossing Securities in th e
Frontier Group Bargaining Unit Employees' Retirement Savings Plan ;
(2) such persons or entities who are or were : ERISA
Settling Defendants ; Family Members of any ERISA Settling Defendant ; any entity in
which Global Crossing or an ERISA Settling Defendant has or had a Controlling Interest ;
the legal representatives, heirs, executors, successors or assigns of any person or entity
excluded pursuant to this Section I .E.1.bbbb(2) ; or any current or former directors or
officers of a defendant in the ERISA Actions and/or of Global Crossing or of an entity in
which Global Crossing had a Controlling Interest ; provided however, that the exclusion
of directors or officers from the term ERISA Pusloskie Class or ERISA Pusloskie Class
Members pursuant to this Section 1 .E.l .bbbb(2) does not apply to any officer who filed a
suit against the Company and/or any of its present or former directors or officers before-
July 1, 2003 relating to his or her purchase, sale, exchange, acquisition, disposal, transfe r
36
or any other Investment Decision involving Global Crossing Securities or to an y
Released Claims; or
(3) any ERISA Non-Settling Defendant (if any) ; Family
Members of any ERISA Non-Settling Defendant (if any) ; any entity in which an ERIS A
Non -Settling Defendant has or had a Controlling Interest; an affiliate (as defined in 1 7
C.F.R. Part 210 .1-02.b) of an ERISA Non-Settling Defendant; or the legal
representatives, heirs, executors, successors or assigns of any person or entity that is
excluded from the definition of ERISA Pusloskie Class or ERISA Class Pusloskie
Member ; provided however, that this exclusion does not apply to any ERISA Non-
Settling Defendant (if any) to the extent it is acting as a Nominee for any ERISA Clas s
Member.
cccc. "ERISA Pusloskie Class Period" means the time period
from September 28, 1999 through the December 8, 2003, inclusive.
dddd. "ERISA Pusloskie Complaint" means the First Amended
Complaint filed in the ERISA Pusloskie Action by the ERISA Pusloskie Plaintiffs on o r
about November 26, 2002 .
eeee. "ERISA Pusloskie Lead Counsel" means the law firm of
Slevin & Hart, P .C .
ffff. "ERISA Pusloskie Plaintiffs" means John Pusloskie, Danie l
Chizuk, Dennis Thomas, Sandra Cuombe, Joanne Cunningham, Bruce Coleman, Richar d
Downey, Joanne Bauman, Robert Horvath, Thomas Nordseth, Robert Johnson, Rhonda
Rademacher, Randy Vansicle, Daniel Zabel, Dennis Dunbar, Willis Hood, Mary Baker ,
37
Dennis Rarnus and Hope Hughett, both in their individual capacity and in their capacity
as representatives of the ERISA Pusloskie Class .
gggg. "ERISA Release" means the releases and waivers set forth
in Section IX.B of this Settlement Agreement.
hhhh. "ERISA Settling Defendants" means Gary Winnick, Dan J .
Cohrs, John L . Comparin, Joseph P. Perrone, Linda Woodruff, Mark L. Attanasio,
Geoffrey LW_ Kent, Kenneth P . Schirmuhly, William S . Cohen, Lodwrick M . Cook,
Thomas J . Casey, John M . Scanlon, Joseph P . Clayton, James F . McDonald and Douglas
H. McCorkindale_
iiii . "ERISA Settling Defendants' Co-Counsel" means any firm
that is co-counsel or shadow counsel with ERISA Settling Defendants' Lead Counsel i n
representing any ERISA Settling Defendant .
jjjj . "ERISA Settling Defendants' Counsel" means ERIS A
Settling, Defendants' Lead Counsel, ERISA Settling Defendants' Co-Counsel and ERIS A
Settling Defendants' Separate Counsel .
kkkk. "ERISA Settling Defendants' Lead Counsel" means the
law firm of Debevoise & Plimpton LLP and the law firm of Sonnenschein Nath &
Rosenthal LLP; provided that neither firm represents all ERISA Settling Defendants .
MI . "ERISA Settling Defendants' Separate Counsel" means the
law firms of Christensen, Miller, Fink, Jacobs, Glaser, Weil and Shapiro LLP; Hennigan,
Bennett & Dorman ; Paul, Hastings Janofsky & Walker LLP ; and any other law firm to
38
which an ERISA Settling Defendant transfers his, her or its representation from one o f
the foregoing firms .
mznmm. "ERISA Settling Parties" means ERISA Plaintiffs
and ERISA Settling Defendants .
nnnn. "ERISA Simonetti Action" means the putative ERISA clas s
action pending in this Court under the caption Simonetti, et al. v. Perrone, et al., 03 Civ .
1188 (GEL) .
oooo. "ERISA Simonetti Attorneys' Fees and Expenses
Application" means the application for fees and expenses to be made by ERISA
Sirnonetti Lead Counsel pursuant to Section X.B .2 below.
pppp. "ERISA Simonetti Attorneys' Fees and Expenses Award "
means the amount awarded to ERISA Sinzonetti Lead Counsel as provided in Section X.B
below .
qqqq . "ERISA Simonetti Class" or "ERISA Simonetti Class
Members" means, subject to the exclusions set out in this Section I .E. I .qqqq, all
individuals who are or were participants, or who have (or had) an interest, in the Chang e
of Control Severance Plan . The term ERISA Simonetti Class or ERISA Sitnonetti Clas s
Members does not include :
(1) such persons or entities who, while represented b y
counsel, settled an actual or threatened lawsuit or other proceeding with Global Crossin g
and/or an ERISA Settling Defendant, and released Global Crossing and the Releasees
39
from any further claims concerning their participation or interest in the Change o f
Control Severance Plan ;
(2) such persons or entities who are or were; ERISA
Settling Defendants ; Family Members of any ERISA Settling Defendant ; any entity in
which Global Crossing or an ERISA Settling Defendant has or had a Controlling Interest ;
the Iegal representatives, heirs, executors, successors or assigns of any person or entity
excluded pursuant to this Section I .E.1 .gqqq(2) ; or any current or former directors or
officers of a defendant in the ERISA Actions and/or of Global Crossing or of an entity in
which Global Crossing had a Controlling Interest ; provided however, that the exclusion
of directors or officers from the term ERISA Simonetti Class and ERISA Simonetti Class
Members pursuant to this Section I.E.1 .gqqq(2) does not apply to any officer who filed a
suit against the Company and/or any of its present or former directors or officers befor e
July 1, 2003 relating to his or her participation and/or interest in the Change of Contro l
Severance Plan; or
(3) any ERISA Non-Settling Defendant (if any); Family
Members of any ERISA Non-Settling Defendant (if any) ; any entity in which an ERIS A
Non-Settling Defendant has or had a Controlling Interest ; an affiliate (as defined in 1 7
C.F.R. Part 210.1-02.b) of an ERISA Non-Settling Defendant ; or the legal
representatives, heirs, executors, successors or assigns of any person or entity that i s
excluded from the definition of ERISA Simonetti Class orrERISA Simonetti-Clas s
Members ; provided however, that this exclusion does not apply to any ERISA Non-
40
Settling Defendant (if any) to the extent it is acting as a Nominee for any ERISA Class
Member .
mr. ERISA Simonetti Class Period" means the time period from
September 28, 1999 through December 8, 2003, inclusive .
ssss. "ERISA Simonetti Distribution Amount" means the amount
of the Net Settlement Cash Amount that will be distributed pursuant to the ERISA
Simonetti Plan of Allocation, which amount shall equal 1 .28% of the Net Settlement Cash
Amount.
tttt . "ERISA Sirnonetti Lead Counsel" means the law firm of
Chamberlain, D'Amanda, Oppenheimer & Greenfield.
uuuu . "ERSSA Simonetti Plaintiffs" means Randal Simonetti,
Shamim Boyce, Robert Ebertz and Mary Jo Yatteau, both in their individual capacity and
in their capacity as representatives of the ERISA Simonetti Class .
vvvv. "ERISA Sirnonetti Plan of Allocation" means the terms and
procedures for allocating the ERISA Simonetti Distribution Amount among, and
distributing the ERISA Simonetti Distribution Amount to, ERISA Simonetti Class
Members as set forth in the Notice, or such other ERISA Simonetti Plan of Allocation as
the Court shall approve .
wwww. "ERISA Simonetti Settlement Amount" means
1 .28% of the ERISA Cash Settlement Amount .
xxxx. "ERISA Stipulation of Confidentiality" means the
stipulation, in a form approved by the Court, to which ERISA Class Members (or thei r
41
attorneys) who wish to have access to the discovery materials in the ERISA Actions mus t
agree before they are provided access to such materials .
yyyy. "Escrow Agent" means the individual or entity acting a s
escrow agent for the Cash Settlement Account .
zzzz. "Execution Date" means the date by which this Settlemen t
Agreement has been executed by all Settling Parties _
aaaaa. "Executive Committee Members" means the law firms of
Berger & Montague, P .C., Much Shelist Freed Denenberg Ament & Rubinstein, P .C . ,
Lovell Stewart Halebian LLP, Johnson & Perkinson and Weiss & Yourman .
bbbbb. "Executive Liability Insurance Policies" means the
following insurance policies : Policy No. 8159-75-02 issued by Federal Insurance
Company ; Policy Nos . 859-82-83 and 859-82-81 issued by National Union Fire
Insurance Company of Pittsburgh, Pa.; Policy No . GA0490941 issued by Gulf Insurance
Company ; and Policy No . (02) 3310-04-96 issued by Chubb Atlantic Indemnity Ltd.
ccccc. "Fairness Hearing" means the hearing at or after which th e
Court will make a final decision pursuant to Fed . R. Civ . P. 23 as to whether thi s
Settlement Agreement is fair, reasonable and adequate and, therefore, approved by th e
Court .
ddddd. "Family Members" means an individual's father, mother,
grandfather, grandmother, sister, brother, spouse/partner, son and/or daughter .
eeeee. "Fiduciary Liability Insurance Policy" means Policy No .
8151-95-14C issued by Federal Insurance Company.
42
fffff. "Final" means, when used in connection with any court
order or judgment, that the relevant order or judgment will be final :
(1) if no appeal is taken therefrom, on the date o n
which the time to appeal therefrom (including any potential extension of time) ha s
expired; or
(2) if any appeal is taken therefrom, on the date on
which all appeals therefrom, including petitions for rehearing or reargument, petitions for
rehearing en Banc and petitions for certiorari or any other form of review, have been
finally disposed of, such that the time to appeal therefrom (including any potential
extension of time) has expired, in a manner resulting in an affirmance of the Final
Judgment and the Order Approving Settlement .
ggggg. "Final Judgment" means the judgment entered by the Court
pursuant to the Order Approving Settlement, as contemplated in Section XII of this
Settlement Agreement .
hhhhh. "Final Settlement Date" means the date on which the Fina l
Judgment and the Order Approving Settlement become Final .
iiiii . "Frontier Group Bargaining Unit Employees' Retirement
Savings Plan" means the Employee Benefit Plan known as the Frontier Group Bargaining
Unit Employees' Retirement Savings Plan, which was merged into the Global Crossing
Employees' Retirement Savings Plan on December 31, 2001 .
jjjjj . "Frontier Group Employees' Retirement Savings Plan"
means the Employee Benefit Plan known as the Frontier Group Employees' Retirement
43
Savings Plan which was merged into the Global Crossing Employees' Retiremen t
Savings Plan on January 1, 2001 .
kkkkk. "Global Crossing" means each and all of Global Crossin g
Ltd. and any or all of its respective parents, predecessors, successors, affiliates (a s
defined in 17 C.F.R. Part 210 .1-02.b), divisions , business units, subsidiaries and entities
in which it has a Controlling Interest . As used in this Settlement Agreement, the terms
Global Crossing and the Company include , without limitation, Asia Global Crossing Ltd .,
Global Crossing North America , Inc . (formerly known as Frontier Corporation ), Global
Marine Services , RACAL, IPC Communications, l:Xnet and Global Crossing Limited,
and their respective parents, predecessors, successors, affiliates (as defined in 17 C .F.R.
Part 210.1-02.b), divisions, subsidiaries or entities in which any of them have a
Controlling Interest ; provided however, that the term "Global Crossing" does not mea n
Asia Netcom Corporation Limited, CXO, L .L.C. or Pivotal Telecom, L.L.C.
11111 . "Global Crossing Bankers Committee" means th e
committee of secured lenders in the Global Crossing Bankruptcy Proceeding .
rn ,rnr i . "Global Crossing Bankruptcy Court" means th e
United States Bankruptcy Court for the Southern District of New York .
nnnnn. "Global Crossing Bankruptcy Proceeding" means th e
proceeding styled In re Global Crossing Ltd., 02-40187 (REG) through 02-40241 (REG) ,
02-11982 (REG), 02-13765 (REG) (Bank-r . S .D.N.Y). -
ooooo. " Global Crossing Creditors Committee" means the officia l
committee of unsecured creditors in the Global Crossing Bankruptcy Proceeding .
44
ppppp. "Global Crossing Employees' Retirement Savings Plan "
means the Employee Benefit Plan known as the Global Crossing Employees' Retirement
Savings Plan and includes, without limitation, any predecessors to the Global Crossing
Employees' Retirement Savings Plan and any Employee Benef t Plan merged into or
combined with the Global Crossing Employees' Retirement Savings Plan, including,
without limitation, the Frontier Group Employees' Retirement Savings Plan, the Frontier
Group Bargaining Unit Employees' Retirement Savings Plan, the IPCI Xnet 401(k) Plan,
the Global Crossing 401(k) Plan and the Upstate Cellular Network Employees'
Retirement Savings Plan .
qqqqq . "Global Crossing 401(k) Plan" means the Employe e
Benefit Plan known as the Global Crossing 401(k) Plan that was merged into the Global
Crossing Employees' Retirement Savings Plan on January 1, 2001 .
ram. "Global Crossing Securities" means any securities
(i) issued by Global Crossing, including, but not limited to, stock, bonds, notes, employee
stock options, commercial paper or other evidence of indebtedness, or derivative
instruments or (ii) that trade in whole or in part based on the price or value of any
security issued by Global Crossing, including, but not limited to, put and call options and
any other derivative instruments (including, but not limited to, collars, hedges and
straddles) ; provided however that the term "Global Crossing Securities" shall not include
any bank debt, notes or other evidence of indebtedness that is the subject of any claims
brought by plaintiff in the action captioned JPMorgan Chase Bank, et at. v. Winnick et
al., currently pending in the Court as Case No . 03 Civ . 8538 (GEL) .
45
sssss . "Global Crossing Severance Plan" means the Employe e
Benefit Plan known as the Global Crossing Ltd_ Severance Plan .
ttttt . "Global Crossing United States Bankruptcy Trustee" means
the trustee overseeing the Global Crossing Bankruptcy Proceeding .
uuuuu . "Hearing Order" means the order to be entered by the Court
concerning notice., administration and the Fairness Hearing, as contemplated in Section
XI of this Settlement Agreement.
vvvvv. "Implementation Period Claim Reserve Amount" means
seven million dollars ($7,000,000) .
wwwww. "Implementation Period ERISA Claim Reserve
Amount" means one million four hundred thousand dollars ($1,400,000) .
xxxxx. "Implementation Period Securities Claim Reserve Amount"
means five million six hundred thousand dollars ($5,600,000) _
yyyyy. "Initial Payments" means the Securities Initial Payment an d
the ERISA Initial Payment, which payments shall be used by Securities Lead Counsel
and ERISA Plaintiffs' Counsel (i) to pay the Notice and Administrative Expenses that
will be incurred in preparing and mailing the Notice and in publishing the Summary
Notice and (ii) to compensate the Administrator for services that will be rendere d
pursuant to the Hearing Order; provided however, that if approval of this Settlement
Agreement does not become Final or this Settlement Agreement is otherwise terminated,
any portion of the Initial Payments (plus any accrued interest at the Interest Rate) that has
not been used or with respect to which no expenses have been incurred for such purpose s
46
as set out in Section I .E.l .kkkkkk shall be returned promptly to the Securities Insurers '
Escrow Agent and the ERISA Escrow Agent, with 2/3 of such unused Initial Payments
returned to the Securities Insurers ' Escrow Agent and 1/3 of such unused Initial
Payments returned to the ERISA Escrow Agent, such proceeds to be distributed to th e
Insurers (and/or Pender Securities Reinsurers) pursuant to the terms of the relevan t
escrow agreements ; provided further that if approval of this Settlement Agreement doe s
not become Final or this Settlement Agreement is otherwise terminated and the Initia l
Payments are not sufficient to cover all Notice and Administrative Expenses that hav e
been incurred as of the date this Settlement Agreement is terminated, Securities Lea d
Counsel and ERISA 401(k) Lead Counsel shall immediately notify the Securitie s
Insurers, and the ERISA Insurer and Pender of such insufficiency and, within fifteen (1 5 )
business days following the termination of this Settlement Agreement, present invoices t o
the Securities Insurers, and the ERISA Insurer and Pender (with 2/3 of such costs
invoiced to the Securities Insurers and 1/3 of such costs invoiced to the ERISA Insure r
and Pender), which invoices shall be paid from, respectively, (a) the Securities Insurers '
Insurance Escrow Account and/or the Securities Reinsurers ' Insurance Trust Account ,
and (b) the ERISA Insurance Escrow Account within ten (10) business days of receivin g
invoices for such amounts, such payments to be made to the Cash Settlement Notice an d
Administrative Expenses Subaccount ; provided further that , if approval of this Settlement
Agreement becomes Final, any portion of the Initial Payments (plus any accrued interest )
that is not needed for the purposes set out in the Section I .E.l .kkkkkk shall remain in the
Cash Settlement Account and shall become part of the Securities Net Cash Settlement
47
Amount and the ERISA Net Cash Settlement Amount, subject to the Notice an d
Administrative Expenses True-Up ; provided further that, if approval of this Settlemen t
Agreement becomes Final and the Initial Payments are not sufficient to reimburse al l
Notice and Administrative Expenses, any expenses in excess of the Initial Payments shal l
be paid from the Cash Settlement Payment, subject to the Notice and Administrativ e
Expenses True-Up .
zzzzz. "Insured" when used in connection with the term Releasee
means any Releasee who is identified as an insured under the Executive Liability
Insurance Policies, the Pender Securities Coverage and/or the Fiduciary Liabilit y
Insurance Policy .
aaaaaa. "Insurers" means the Securities Insurers, the ERISA Insure r
and Pender.
bbbbbb. "Interest Rate" means interest calculated on a
simple interest basis based upon the Federal Funds rate ; provided further that the rate
shall be established based upon the Federal Funds effective rate on the first (1st) day o f
each month, as published in The Wall Street Journal under the description of "Money
Rates."
cccccc. "Investment Decision" means a decision regarding an
investment in Global Crossing Securities including, without limitation, a decision to hol d
Global Crossing Securities, a decision to allow options or other rights with respect t o
Global Crossing Securities to expire, or a decision not to exercise options with respect t o
Global Crossing Securities .
48
dddddd. "IPC/IXnet 401(k) Plan" means the Employee
Benefit Plan known as the 1PC/IXnet 401(k) Plan that was merged into the Global
Crossing Employees' Retirement Savings Plan on January 1, 2001 .
eeeeee. "IRS Filing" means any written statement filed or
submitted to the Internal Revenue Service .
ffffff. "Mediation Order" means the Proposed Scheduling Order
for Mediation entered in these Actions on April 28, 2003 by Judge Lynch and Magistrat e
Judge Dolinger .
gggggg. "Net Cash Settlement Amount" means the
aggregate of the Securities Net Cash Settlement Amount and the ERISA Net Cash
Settlement Amount.
hhhhhh. "Nominees" means brokerage firms, banks and
other institutions that hold Global Crossing Securities in street names or other simila r
fashion for the benefit of another.
iiiiii . "Non-Settling Defendants" means Securities Non-Settlin g
Defendants and ERISA Non-Settling Defendants .
jjjjjj . "Notice" means the notice, as approved by the Court, that
will be made available to Class Members informing them of the settlement contemplate d
by this Settlement Agreement .
-kkkkkk. "Notice and Adminis trative Expenses " means all --
expenses associated with the administration of the settlement contemplated by thi s
Settlement Agreement, including, but not limited to, the expenses associated with :
49
printing and mailing the Notice to Class Members; publishing the Summary Notice ;
assisting Securities Class Members with filing Securities Proofs of Claim; processing
Securities Proofs of Claim ; setting up and maintaining the toll-free telephone number ;
any costs associated with converting the Pender Securities Coverage (or any portion of it)
and the Pender Supplemental Amount (or any portion of it) from GBP to United States
Dollars ; any escrow fees associated with the Cash Settlement Account, the Securities
Insurers' Insurance Escrow Account, the Securities Reinsurers' Insurance Trust Account ,
the ERISA Insurance Escrow Account, the Winnick Securities Escrow Account, the
Winnick ERISA Escrow Account and the Simpson Thacher Escrow Account to the extent
such fees are not otherwise covered by funds in the escrow accounts, as provided by the
relevant escrow agreements ; and distributing the Net Cash Settlement Amount ; provided
however, that Notice and Administrative Expenses shall not include the amount of either
the Securities Attorneys' Fees and Expenses Award or the ERISA Attorneys' Fees and
Expenses Awards .
111111 . "Notice and Administrative Expenses True-Up" means the
calculation of the Notice and Administrative Expenses that shall be charged to the
Securities Insurance Payment and the ERISA Insurance Payment after all Notice and
Administrative Expenses have been incurred ; provided that the amount of Notice and
Administrative Expenses charged to the Securities Insurance Payment and the ERISA
Insurance Payment shall be equal to the amount calculated by multiplying the total-
Notice and Administrative Expenses incurred in connection with this Settlement
Agreement by, respectively, the Securities Notice Ratio and the ERISA Notice Ratio ;
50
provided further that once such calculation has been made, the Escrow Agent shall,
taking into account the Securities Initial Payment and the ERISA Initial Payment, credi t
and/or debit the Cash Settlement Securities Subaccount and the Cash Settlement ERIS A
Subaccount accordingly to reflect the calculation set out in this Section I.E.1 .11I111 .
mmmmmm _ "Order Approving Settlement" means the Court's
order finally approving the settlement and this Settlement Agreement .
nnnnnn. "Pacific Crossing Bankers Committee" means the
committee of secured lenders in the Pacific Crossing Bankruptcy Proceeding .
000000. "Pacific Crossing Bankruptcy Court" means th e
United States Bankruptcy Court for the District of Delaware ,
pppppp• "Pacific Crossing Bankruptcy Proceeding" means
the proceeding styled In re PC Landing Corporation, 02-12086 (PJW) (Bankr . D. Del .) .
gqqqqq. "Pacific Crossing Creditors Committee" means the
official committee of unsecured creditors in the Pacific Crossing Bankruptcy Proceeding .
n-mi. "Pacific Crossing United States Bankruptcy Trustee "
means the trustee overseeing the Pacific Crossing Bankruptcy Proceeding .
ssssss. 'Tender" means Pender Insurance Limited, as well as it s
successors and assigns .
tttttt. "Pender Policy" means the Catastrophe Assets Business
Interruption and Legal Liability Policy, Policy No. pen/GCL99 issued by Fender .
uuuuuu. "Pender Securities Coverage" means the sum of
one hundred million GBP (£100,000,000) provided by the Directors and Officer s
51
Liability coverage of the Pender Policy, which sum shall be comprised of the Pender
Securities Payment and the Pender Securities Reinsurers' Payment .
vvvvvv. "Pender Securities Payment" means, subject to
Section I .E.l .wwwwww below, sixteen million six hundred forty-nine thousand nin e
hundred thirty GBP (£16,649,930) to be paid pursuant to Section ll .A.I .c below. ;
wwwwww. "Pender Securities Reinsurers " means those entities
that have reinsured a portion of the Pender Securities Coverage and that will pay the
Pender Securities Reinsurers' Payment ; provided however, that Pender shall b e
responsible for any portion of the Pender Securities Reinsurers' Payment that the Pender
Securities Reinsurers do not pay pursuant to the terms of this Settlement Agreement.
xxxxxx. "fender Securities Reinsurers' Payment" means
eighty-three million three hundred fifty thousand seventy GBP (£83,350,070) to be pai d
pursuant to Section II.A.I. .d below-
yyyyyy• "Pender Supplemental Amount" means eighteen
million GBP (£18,000,000) to be paid by Pender pursuant to Section ll .A.2.c below .
zzzzzz. "Plans of A llocation" means the Securities Plan o f
Allocation, the ERISA 401(k) Plan of Allocation and the ERISA Simonetti Plan of
Allocation .
aaaaaaa. "Post-Final Settlement Date Costs" means any and
all costs -and expenses (if any) incurred by Settling Defendants' Counsel after the Fina l
Settlement Date in connection with implementation of this Settlement Agreement ;
provided however, that such costs shall be reimbursed as Covered Claim Costs only if
52
Settling Defendants' Counsel who intends to seek reimbursement for such costs a s
Covered Claim Costs seeks and obtains Securities Lead Counsel and ERISA 401(k) Lea d
Counsel pre-approval of such costs (which approval shall not be unreasonably withheld) .
bbbbbbb . 'Tost-Implementation Period Claim Reserve
Amount" means twenty-five million dollars ($25,000,000) .
ccccccc. "Post-Implementation Period ERISA Claim Reserv e
Amount" means five million dollars ($5,000,000) .
ddddddd . "Post-Implementation Period Securities Clai m
Reserve Amount" means twenty million dollars ($20,000,000) .
eeeeeee_ "Preliminary Approval Date" means the date o n
which the Hearing Order is entered by the Court .
fffffff. "Preliminary Approval Hearing " means the hearing at or
after which the Court will preliminarily approve this Settlement Agreement .
ggggggg. "PSLRA" means the Private Securities Litigation
Reform Act of 1995, 15 U.S.C . § 78u-4, et seq .
hhhhbhh . "Qualified Settlement Fund" means a fund withi n
the meaning of Treasury Regulations § L468B-I .
iiiiiii . "Released Claims" means each and every Claim or
Unknown Clain), whether arising under any federal, state or foreign statutory or commo n
law or rule, that has been, could have been, or could be asserted against any of th e
Releasees (a) in the Actions or (b) in any other court, tribunal or other forum of
competent jurisdiction arising out of or related, directly or indirectly, to (z) the purchase ,
53
sale, exchange, acquisition, disposal, transfer or any other Investment Decision involving
Global Crossing Securities, during the Securities Class Period, (iz) the purchase, sale,
exchange, acquisition, disposal, transfer or any other Investment Decision involving
Global Crossing Securities in any of the ERISA Plans, during the ERISA Class Period
and (iii) the participation in the Change of Control Severance Plan and/or the Globa l
Crossing Severance Plan . Without limiting the generality of the foregoing, the term
Released Claims includes, without limitation, any Claims or Unknown Claims arising ou t
of or relating to :
(1) any or all of the acts, failures to act, omissions ,
misrepresentations, facts, events, matters, transactions, statements, occurrences, or oral o r
written statements or representations that have been, could have been or could be directly
or indirectly alleged, embraced, complained of, asserted, described, set forth or otherwise
referred to in the Actions ;
(2) the contents of any SEC Filing, DOL Filing or IRS
Filing during the Class Period by any of the Releasees (i) relating to Global Crossing
Securities or Global Crossing or (ii) relating to or made in connection with any of th e
ERISA Plans ;
(3) any forward-looking statement regarding Global
Crossing made by any of the Releasees during the Class Period ;
(4) the contents of any SEC Filing, DOL Filing, IRS
Filing or any publication, dissemination, adjustment, revision or restatement of financial
information of Global Crossing relating to the Class Period ;
54
(5) any disclosure, representation or statement of an y
sort (oral or written) made by any of the Releasees during the Class Period to any person
or entity, or to the public at large regarding, without limitation, Global Crossing's
business, its financial condition, its operational results and/or its financial or operational
prospects, including, without limitation, any press releases and/or press reports, earnings
calls, memoranda (whether internally or externally circulated), and presentations to
analysts, creditors, rating agencies, banks or other lenders, investment bankers, broker
dealers, investment advisors, investment companies, bond holders, Global Crossing
employees, potential and actual vendors or customers, participants in one or more of the
ERISA Plans, potential investors and/or shareholders ;
(6) any disclosure , representation , or statement of any
sort (oral or written) made by any of the Releasees during the Class Period to any person
or entity regarding any of the ERISA Plans ;
(7) any internal and/or external accounting memoranda ,
reports or opinions prepared by the Company or any of the Releasees during, or that
relate in any way to, the Class Period, including, without limitation, any such
memoranda, reports or opinions with respect to the Company's compliance with bank
covenants, or on which any Class Member allegedly relied during the Class Period in
purchasing, selling, exchanging, acquiring, disposing of, transferring, or making any
other Investment Decision regarding, Global Crossing Securities ;
55
(8) Global Crossing's record keeping during, or that
relates in any way to any of the transactions or other events occurring in, the Clas s
Period;
(9) any financial statement, audited or unaudited, an d
any report or opinion on any financial statement relating to Global Crossing that was
prepared or issued by the Company or any of the Releasees during, or that relates in any
way to, the Class Period, or on which any Class Member allegedly or actually relied
during the Class Period in purchasing, selling, exchanging, acquiring, disposing of,
transferring, or making any other Investment Decision involving, Global Crossing
Securities ;
(10) any statements or omissions by any of the Releasee s
as to quarterly or annual results of Global Crossing during the Class Period, including ,
without limitation, statements or omissions in connection with Earnings Releases o r
during calls and/or meetings with one or more analysts or investors, and statements or
omissions regarding the use, description or provision of information with respect to an y
GAAP measurements or with respect to Consolidated Cash Flow, Consolidated EBrIDA ,
Adjusted EBITDA, Recurring Adjusted EB1 DA, Cash Revenue, Deferred Cash
Revenue, or any other pro-forma or non-GAAP measurements (as defined in 17 C .F.R .
Part 244.101) as those terms are described or used in SEC Filings, DOL Filings, IR S
Filings, Earnings Releases or in connection with calls and/or meetings with analysts ; -
(11) any internal accounting controls or internal audits of
Global Crossing during, or that relate in any way to, the Class Period ;
56
(12) any purchases , sales, exchanges , acquisitions ,
disposals, retentions, transfers or other trading (including, without limitation, collar an d
hedge transactions) or any other Investment Decision involving Global Crossin g
Securities, any profits made or losses avoided in connection with a transaction involvin g
Global Crossing Securities during the Class Period by any of the Rele asees , or any act s
taken by Releasees to finance or pay for any such transactions, including, but not limite d
to, any personal profit, remuneration or advantage received by a Releasee in connectio n
with a transaction involving Global Crossing Securities to which he, she or it wa s
allegedly not legally entitled ;
(13) any personal profit, remuneration or advantage
received by a Releasee from any source in connection with any initial or other publi c
offering of securities to the extent such personal profit, remuneration or advantage wa s
received by the Releasee because of the Releasee's relationship with Global Crossing ;
(14) any of Global Crossing' s accounting practices o r
procedures, including any disclosure and disclosure obligations relating thereto, during
the Class Period, including, but not limited to, adoption, use and/or application of any
accounting principles or standards, or the manner in which the Company accounted for or
recorded (i) sales and/or purchases of indefeasible rights of use, (ii) sales and/o r
purchases of terrestrial back-haul, (iii) sales and/or purchases of, and payments and/o r
receipt of payments for, services, including operations, administration and maintenanc e
services, or (iv) transactions with its carrier customers in which Global Crossin g
contemporaneously purchased and sold telecommunications capacity and/or services ,
57
including, without limitation, all "swaps," reciprocal transactions, concurrent transaction s
or any other similar transactions without regard to how such transactions wer e
characterized internally by the Company or by any other parties (including, withou t
limitation, Global Crossing's carrier customers and analysts) ;
(15) any statements or omissions by any of the Releasee s
in connection with Global Crossing's acquisition of any entity, including, withou t
limitation , Frontier Corporation , Global Marine Services , RACAL, IPC Communication s
and IXnet, including, without limitation, any statements or omissions regarding the effec t
of any such acquisition on, or relationship between, any such acquisition and one or mor e
of the ERISA Plans ;
(16) the integration of Global Crossing or any of it s
divisions, business units or companies, and any of the entities that it acquired, including ,
without limitation , Frontier Corporation , Global Marine Services , RACAL, IPC
Communications and 1Xnet ;
(17) any statements or omission by any of the Releasee s
in connection with Global Crossing' s sale of any divisions, business units, companies
and/or assets to Citizens Communications Co ., including, without limitation, the
termination of any ERISA Plans or the transfer of any ERISA Plan assets in connection
with such a sale ;
(18) any and all Claims against any Releasees relating in
any way to any of the facts or allegations addressed or discussed or in any way related t o
the investigation, findings or Claims of the Special Committee on Accounting Matter s
58
formed by Global Crossing on or about February 11, 2002, including, without limitation.
any of the facts or allegations addressed or discussed or in any way related to th e
February 18, 2003 report of the Special Committee and accompanying mate rials ,
documents and exhibits, including a February 18, 2003 letter .
(19) the integration or merger of any Employee Benefi t
Plan into the Global Crossing Employees' Retirement Savings Plan ;
(20) the relationship and any transactions, actual or
contemplated, between or among Global Crossing Ltd . and any of its parents,
predecessors, successors, affiliates (as defined in 17 C .F.R. Part 210.1-02.b), divisions,
business units, subsidiaries and entities in which it has a Controlling Interest, including ,
but not limited to, Asia Global Crossing Ltd . ;
(21) any or all Claims relating to the decision to file a
bankruptcy petition on behalf of Global Crossing Ltd ., Asia Global Crossing Ltd. and/or
Pacific Crossing Ltd . ;
(22) any or all Claims relating to any relationship
between any Releasee and any company making a bid to purchase Global Crossing Ltd .,
Asia Global Crossing Ltd., Pacific Crossing Ltd. and/or any assets of Global Crossing
Ltd., Asia Global Crossing Ltd . and/or Pacific Crossing Ltd, including, without
limitation, any relationship between any Releasee and Hutchison Whampoa Limited,
Singapore Technologies Telemedia Pte . and/or KI Ventures ;
(23) any or all Claims against an individual Releasee that
are based upon or arise out of the Releasee's (i) status as a director, officer or employe e
59
of, or investor in, the Company or (ii) acts or omissions in his or her capacity as a
director, officer or employee of, or investor in, the Company ;
(24) any or all transactions between Global Crossing an d
a Releasee or any entity that is an affiliate (as defined in 17 C .F.R. Part 210 .1-02.b) of a
Releasee or in which a Releasee has a Controlling Interest ;
(25) the suitability or prudence of any ERISA Plan's
investing in Global Crossing Securities during the Class Period ;
(26) any and all activities undertaken in a fiduciary
capacity with respect to the ERISA Plans ;
(27) purchases, sales , exchanges, acquisitions, disposals,
transfers or any other Investment Decisions involving Global Crossing Securities on
behalf of the ERISA Plans or on behalf of any participant in or beneficiary of, or an y
person having an interest in, the ERISA Plans ;
(28) issuance of treasury shares of Global Crossin g
Securities to the ERISA Plans ;
(29) any decisions made, actions taken, or failures to ac t
with respect to payments under the Change of Control Severance Plan and/or the Globa l
Crossing Severance Plan, including, without limitation, decisions regarding the timing o f
such payments ;
(30) any or all Claims against-an individual Releasee that
are-, based upon or arise out or the Releasee's (i) alleged status as a fiduciary with respec t
60
to any of the ERISA Plans or (ii) acts or omissions in his or her capacity as a fiduciar y
with respect to any of the ERISA Plans;
(31) any or all Claims based upon the design, structur e
and/or terms of any of the ERISA Plans ;
(32) any or all Claims relating to benefits or payments
due under any of the ERISA Plans on or before the Execution Date ;
(33) any or all claims against any Releasee relating to
the administration of any of the ERISA Plans arising on or before the Execution Date ;
and
(34) any or all other Claims or other matters relating in
any way to Global Crossing's finances, disclosures, financial condition or accountin g
practices, or Releasees' disclosures to or communications with other parties, including ,
without limitation, the public and all lenders, creditors, shareholders and other person s
engaged in financial transactions with Global Crossing .
Provided that notwithstanding anything in this Section I .E.1 .iiiiiu, the term "Released
Claims" shall not include, and nothing in this Settlement Agreement shall interfere wit h
or bar the prosecution of, (i) any Claim asserted against Global Crossing Ltd ., Asia
Global Crossing Ltd ., Pacific Crossing Ltd . and/or any of their subsidiaries or affiliate s
(as defined in 17 C .F.R. Part 210 .1-02 .b, including, but not limited to, Asia Globa l
Crossing Development Company) in a proof of claim or request for payment of an
administrative expense filed on or before the applicable bar date, or any amendments t o
61
such proof of claim or request for payment of an administrative expense (other than an y
of the proofs of claim filed on behalf of Class Members or any of them by Securitie s
Lead Plaintiffs or ERISA Plaintiffs) in the Global Crossing Bankruptcy Proceeding, th e
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptc y
Proceeding, any bankruptcy proceeding arising out of the Global Crossing Bankruptc y
Proceeding, the Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossin g
Bankruptcy Proceeding, and/or any bankruptcy proceeding relating to any subsidiary o r
affi liate (as defined in 17 C.F . R. Part 210 . 1-02.b) of Global Crossing Ltd ., Asia Global
Crossing Ltd . or Pacific Crossing Ltd. (including, but not limited to, the bankruptc y
proceeding of Asia Global Crossing Development Company), which Claim shall be abl e
to be pursued consistent with the Final rulings of the relevant bankruptcy court o r
relevant reviewing court, (it) any Claim against any person or entity appointed by either
the Global Crossing Bankruptcy Court, the Asia Global Crossing Bankruptcy Court, th e
Pacific Crossing Bankruptcy Court, or any other bankruptcy court in a proceedin g
involving an affiliate (as de fined in. 17 C.F.R. Part 210 . 1-02 .b) or subsidiary of any of
the three preceding entities, or against Pacific Crossing Ltd ., any of its subsidiaries or
affiliates (as defined in 17 C.F.R. Part 210 .1-02 . b) acting as a debtor in possession, or
their lenders where such Claim arises out of, relates to, or is filed in response to any
Claim made by such person or entity or by Pacific Crossing Ltd. or any of Pacific
Crossing Ltd .'s subsidiaries, affiliates (as defined in 17 C.F.R. Part 210.1-02.b) or
lenders against a Class Member or a Releasee, (iii) any claim for wages (including
62
severance) asserted against Global Crossing Ltd ., Asia Global Crossing Ltd ., Pacific
Crossing Ltd. and/or any of their subsidiaries or affiliates (as defined in 17 C .F .R. Part
210.1-02.b, including, but not limited to, Asia Global Crossing Developmen t
Company) in a proof of claim or request for payment of an administrative expens e
submitted by any Class Member on or before the applicable bar date, or an y
amendments to such proof of claim or request for payment of an administrative expens e
(other than any of the proofs of claim filed on behalf of Class Members or any of the m
by Securities Lead Plaintiffs or ERISA Plaintiffs) in the Global Crossing Bankruptc y
Proceedings, the Asia Global Crossing Bankruptcy Proceedings, the Pacific Crossin g
Bankruptcy Proceeding and/or any bankruptcy proceeding relating to any subsidiary o r
affiliate (as defined in 17 C .F.R. Part 210.1-02.b) of Global Crossing Ltd ., Asia Global
Crossing Ltd . or Pacific Crossing Ltd . (including, but not limited to, the bankruptcy
proceeding of Asia Global Crossing Development Company) with respect to whic h
Claim, a Class Member shall be able to pursue the Claim consistent with the Final
rulings of the relevant bankruptcy court or relevant reviewing court , (iv) any claim
(including, but not limited to, a claim for insurance coverage) concerning any insuranc e
or indemnity policy other than the Executive Liability Insurance Policies, the Fiduciar y
Liability Insurance Policy and/or the Pender Policy or (v) any claim that woul d
otherwise be included in the foregoing clauses I . E. 1 . iiiiiii(30) through I .E . 1 .iiiiiii(34)
to the extent such claim (a) is brought under ERISA Section 502(a)(1)(A) with respec t
to any ERISA Plan other than the Frontier Group Employees' Retirement Savings Plan ,
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the Global Crossing Employees' Retirement Savings Plan, the Upstate Cellula r
Network Employees ' Retirement Savings Plan, the IPC/1Xnet 401(k) Plan, the Global
Crossing 401(k) Plan, or the Change in Control Severance Plan, or (b) is brought under
ERISA Section 502(a)(1)(B) to recover benefits or other individualized relief under o r
with respect to any ERISA Plan other than claims for benefits or other individualize d
relief (1) under or with respect to the Change in Control Severance Plan or (2) under o r
with respect to the Frontier Group Employees' Retirement Savings Plan, the Globa l
Crossing Employees' Retirement Savings Plan, the Upstate Cellular Networ k
Employees' Retirement Savings Plan, the JPC/lXnet 401(k) Plan or the Global Crossin g
401(k) Plan to the extent such claim arises out of or relates directly or indirectly to th e
purchase, sale, exchange , acquisition , disposal , transfer or any other Investment
Decision involving Global Crossing Securities in any such Plan during the ERISA Clas s
Period .
jjjjjjj . "Releasee" means each and every one of, and "Releasees "
means all of, the following : Global Crossing, each of the ERISA Plans and Simpso n
Thacher, and each of their respective past and present directors, officers, employees ,
members, partners, principals, agents, attorneys, advisors, trustees, administrators ,
fiduciaries (including, without limitation, independent fiduciaries in connection with any
ERISA Plan), consultants, representatives, accountants and auditors, as well as th e
Insurers, including, without limitation, the Settling Defendants and each of thei r
respective estates, heirs, executors, agents, attorneys, accountants, trusts, trustees ,
64
administrators and assigns, entities owned by a Settling Defendant or in which a Settling
Defendant has a Controlling Interest, Patrick Joggerst, Hank Millner, Susan Dullabh,
Thomas Robershaw, Robin Wright, Jackie Armstrong, Brian Fitzpatrick and David
Carey, and any representatives of any of the foregoing, and each of them ; provided
however, that the term Releasees does not include any individual or entity identified by
name as a Securities Non-Settling Defendant or an ERISA Non-Settling Defendant in
Sections I.E.1 .nnnnnnnn below and I .E.l. .ttt above, and does not include Asia Netcom
Corporation Limited , CXO, L.L.C. or Pivotal. Telecom, L.L.C ., or any subsidiaries or
affiliates (as defined in 17 C . F.R. Part 210.1-02 .b) of Asia Netcom Corporation Limited,
CXO, L.L.C. or Pivotal Telecom , L .L.C . ; provided further that, with respect to the
Securities Action , the term Releasees does not include any entity to the extent (and only
to such extent ) th at it is potentially liable to Class Members as a successor of Arthur
Andersen LLP, Arthur Andersen Asahi & Co. or Andersen Worldwide S .C.
kkkkkkk. "SEC Filing" means any written statement filed
with or submitted to the Securities and Exchange Commission .
11 11111 . "Securities Action" means the consolidated putative
securities class action pending in this Court under the caption In re Global Crossing Ltd.
Securities Litigation, Case No. 02 Civ . 910 (GEL), including, without limitation, all cases
consolidated with the foregoing as of the Final Settlement Date .
m m mmm. "Securities Attorneys' Fees and Expenses
Application" means the application for fees and expenses to be made by Securities Lead
Counsel pursuant to Section X .A.1 below .
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nnnnnnn. "Securities Attorneys' Fees and Expenses Award"
means the amounts awarded to Securities Lead Counsel to compensate them for their fee s
and expenses in connection with investigating, prosecuting and/or settling the Securitie s
Action as provided for in Section X.A below .
0000000 . "Securities Authorized Claimant " means a
Securities Class Member (or the representative of such Securities Class Membe r
including, without limitation, agents, administrators, executors, heirs, predecessors ,
successors, affiliates (as defined in 17 C.F.R. Part 210 .1-02.b) and assigns) who submits
a timely and valid Securities Proof of Claim _
ppppppp- "Securities Cash Settlement Amount" means the
aggregate of the following: (i) the Securities Insurance Settlement Amount, (ii) the
Winnick Securities Amount and (iii) the Simpson Thacher Amount ,
qqqqqqq . "Securities Claim Reserve Amount Balance" mean s
the balance (if any) of the Post-Implementation Period Securities Claim Reserve Amoun t
as calculated pursuant to Section I .D.5.a below .
nT . "Securities Class" or " Securities Class Members" means ,
subject to the exclusions set out in this Section I .E.l .rrr=, all persons, entities, or legal
beneficiaries or participants in any entities who, during the Securities Class Period ,
purchased, sold, exchanged, acquired, disposed of, transferred, or made any othe r
Investment Decision involving, Global Crossing Securities . The term Securities Class o r
Securities Class Members does not include :
66
(1) such persons or entities who submit valid and
timely requests for exclusion from the Securities Class ;
(2) such persons or entities who, while represented by
counsel, settled an actual or threatened lawsuit or other proceeding with Global Crossing
and/or a Securities Settling Defendant, and released Global Crossing and the Releasees
from any further claims concerning their purchase, sale, exchange, acquisition, disposal,
transfer or any other Investment Decision involving Global Crossing Securities, or their
sale of put options or other derivative instruments on Global Crossing Securities ;
(3) such persons or entities who are or were :
Securities Settling Defendants; Family Members of any Securities Defendant ; any entity
in which Global Crossing or a Securities Settling Defendant has or had a Controlling
Interest ; the legal representatives, heirs, executors, successors or assigns of any person or
entity excluded pursuant to this Section I .E .1 .rixrxrr(3) ; or any current or former directors
or officers of a defendant in the Securities Action and/or of Global Crossing or of an
entity in which Global Crossing had a Controlling Interest ; provided however, that the
exclusion of directors or officers from the term Securities Class or Securities Clas s
Members pursuant to this Section I.E. I .rrrrrrr(3) does not apply to any officer who filed a
suit against the Company and/or any of its present or former directors or officers before
July 1, 2003 relating to his or her purchase, sale, exchange, acquisition, disposal of,
transfer or any other Investment Decision involving Global Crossing Securities or to any
Released Claim ;
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(4) any Securities Non-Settling Defendant ; Family
Members of any Securities Non-Settling Defendant; Simpson Thacher; any entity in
which a Securities Non-Settling Defendant has or had a Controlling Interest ; an affiliate
(as defined in 17 C .F.R. Part 210 .1-02.b) of a Securities Non-Settling Defendant; the
legal representatives, heirs, executors, successors or assigns of any person or entity that is
excluded from the definition of Securities Class or Securities Class Member; or any
current or former directors or officers of a Securities Non-Settling Defendant or any other
party brought into the Action ; provided however, that this exclusion does not apply to any
Securities Non-Settling Defendant to the extent it is acting as a Nominee for any
Securities Class Member; or
(5) any person or entity solely to the extent that he, sh e
or it holds any claims brought by plaintiff in the action captioned JPMorgan Chase Bank,
et a!. v. Winnick, et al., , currently pending in the Court as Case No . 03 Civ . 8538 (GEL),
and the administrative agent for such person or entity in such capacity ; provided however,
that this exclusion from the definition of "Securities Class" or "Securities Clas s
Members" does not apply to any such person or entity in any other capacity .
sssssss."Securities Class Period" means the period of time fro m
February 1, 1999 through December 8, 2003, inclusive .
ttttttt . "Securities Complaint" means the Amended Consolidate d
Class Action Complaint filed in the Securities Action by Securities Lead Plaintiffs and
Securities Plaintiffs on or about August 11, 2003 .
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uuuuuuu . "Securities Confidentiality Agreement" means th e
February 10, 2003 agreement between Securities Lead Plaintiffs and Global Crossing ,
including all addenda that have been or will be executed thereto ,
vvvvvvv . "Securities Contribution Bar Order" means th e
order, the text of which is set forth in Section XII.A.18 below, to be entered by the Court
pursuant to section 21D(f)(7)(A) of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78u-4(f)(7)(A) .
wwwwwww. "Securities Creditors' Payment" means thirteen
million dollars ($13,000,000) .
xxxxxxx. "Securities Distribution Amount" means th e
Securities Net Cash Settlement Amount .
yyyyyyy. "Securities Expenses" means that portion of th e
Notice and Administrative Expenses attributable to the Securities Action, which amoun t
shall be equal to the amount calculated by multiplying the total Notice an d
Administrative Expenses incurred in connection with this Settlement Agreement by th e
Securities Notice Ratio .
zzzzzzz. "Securities Implementation Cap" means one million
five hundred thousand dollars ($1,500,000), which amount shall be the maximu m
aggregate amount of Securities Implementation Costs paid to all Securities Settling
Defendants' Co-Counsel and all Securities Settling Defendants' Separate Counsel .
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aaaaaaaa. "Securities Implementation Costs" means, subjec t
to the Securities Implementation Cap, any and all costs and expenses incurred by
Securities Settling Defendants' Counsel subsequent to the Execution Date and through
(and including) the Final Settlement Date in connection with obtaining Court approval of
this Settlement Agreement (including, but not limited to, conducting the discovery
contemplated by Section III, responding to any objections to the terms of this Settlement
Agreement and any appeal regarding approval or disapproval of the Settlement
Agreement) and implementing its provisions ; provided however, that Securities
Implementation Costs shall not include any Covered Claim Costs for Covered Claims
other than the Actions .
bbbbbbbb. "Securities Initial Payment" means the amount of
one million dollars ($ 1,000,000), which amount shall be paid pursuant to Section II .A.1 .a
below.
cccccccc. "Securities Insurance Balance" means the Securitie s
Insurance Settlement Amount less (i) the Securities Initial Payment and (ii) Securities
Pre-Execution Defense Costs .
dddddddd. "Securities Insurance Payment" means the
aggregate of the Securities Insurers' Insurance Payment and the Securities Reinsurers '
Insurance Payment .
eeeeeeee. "Securities Insurance Settlement Amount" mean s
the aggregate of (i) ten million dollars ($10,000,000) and (ii) one hundred million GBPs
(£100,000,000) .
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ffffffff. "Secu ri ties Insurers " means Federal Insurance Company ,
National Union Fire Insurance Company of Pittsburgh, Pa ., Gulf Insurance Company ,
Chubb Atlantic Indemnity Ltd ., as well as any of their successors or assigns, with respec t
to the Executive Liability Insurance Policies, and Pender, as well as any of its successor s
or assigns, with respect to the Pender Policy .
gggggggg. "Securities Insurers ' Escrow Agent" means the
escrow agent for the Securities Insurers' Insurance Escrow Account .
hhhhhhhh. "Securities Insurers' Escrow Agreement" means th e
escrow agreement pursuant to which the Securities Insurers' Insurance Escrow Accoun t
is established and administered, which agreement shall be substantially in the form as se t
out in Exhibit D to this Settlement Agreement and which agreement shall provide, amon g
other things, that: (i) separate subaccounts shall be created with respect to the payments
made by each of the Securities Insurers, (ii) the Securities Insurers' Escrow Agent shall
(a) pay any Securities Pre-Execution Defense Costs not paid as of the date on which th e
Securities Insurance Escrow Account is funded and (b) administer and make (or cause t o
be made) the payments provided for in Section H .D.3 .a(2) subject to the Securitie s
Implementation Cap, the Implementation Period Securities Claim Reserve Amount an d
the Post-Implementation Period Claim Reserve Amount, such payments to be made fro m
the subaccounts of the Securities Insurers' Escrow Account pursuant to the terms of th e
Securities Insurers' Escrow Agreement and from the subaccounts of the Securities
Reinsurers' Trust Account pursuant to the terms of the Securities Reinsurers' Trust Deed ,
(iii) any disputes regarding payments addressed in the preceding proviso shall resolve d
71
pursuant to Dispute Procedure, (iv) within forty-five (45) days following the Fina l
Settlement Date, the Securities Insurers' Insurance Payment (plus interest as calculated i n
Section H.C.l .a below) shall be paid into the Cash Settlement Securities Subaccoun t
pursuant to Section H.C . La below, (v) except as specifically provided in this Settlemen t
Agreement, no third parties unrelated to Global Crossing (including, without limitation ,
third-party individuals or entities insured under the Pender Policy) shall have any right s
respecting the monies in the escrow account, (vi) no payments, except as specificall y
provided in this Settlement Agreement, shall be made from the escrow account, (vii) i f
approval of this Settlement Agreement does not become Final or this Settlemen t
Agreement is otherwise terminated, any monies in the escrow account, including any
interest that has accrued, shall be released and returned to the Securities Insurers pursuan t
to the terms set out in the escrow agreement .
iiiiiiii . "Securities Insurers' Insurance Escrow Account" means an
interest-bearing escrow account established and administered pursuant to the Securitie s
Insurers' Escrow Agreement into which the payments required by Sections II .A.I. .b and
ILA.I .c below shall be paid ; provided that the interest paid on the Securities Insurers '
Insurance Escrow Account shall be no less than the Interest Rate .
jjjjjjjj . "Securities Insurers ' Insurance Payment" means an amount
equal to the Securities Insurance Balance less the Pender Securities Reinsurers' Paymen t
and less the following expenses (or portions of expenses) paid out of the Securitie s
Insurers' Insurance Escrow Account : (i) the Securities Attorneys' Fees and Expense s
Award, (ii) Covered Claim Costs and (iii) any fees and expenses of the Securities
72
Insurers ' Escrow Agent associated with the administration of the Securities Insurers'
Insurance Escrow Account .
kkkkkkkk . "Securities Lead Counsel" means the law firm of
Grant & Eisenhofer, P.A .
11111111 . "Securities Lead Plaintiffs" means the Public Employees '
Retirement System of Ohio and the State Teachers' Retirement System of Ohio, both in
their individual capacity and in their capacity as representatives of the Securities Class .
"Securities Net Cash Settlement Amount"nimnimnunmm
. means the balance remaining in the Cash Settlement Securities Subaccount (including
any interest that has accrued) after the payments described in Sections TI .F.1 and II.F.2
below are made from the Cash Settlement Securities Subaccount .
nnnnnnnn . "Securities Non-Settling Defendants" means any o f
the following: Andersen Worldwide S .C . ; Arthur Andersen LLP ; Arthur Andersen &
Co.; Arthur Andersen Asahi & Co .; Mark Fagan; Joseph F. Berardino; Thomas L. Elliott ;
Anthony J . Amoruso; Scott Taub ; Benjamin Neuhausen ; Carl E . Bass; Amy Ripepi ; John
Stewart; Dorsey L. Baskin Jr . ; Michael Crooch; Rick Peterson ; Thomas Hoey ; Donald L .
Weeks; Salomon Smith Barney Inc . ; Salomon Smith Barney Holding, Inc . ; Jack
Grubman; Michael Carpenter; Kevin McCaffrey; Christine Gochuico; Citigroup Inc . ; J .P.
Morgan Chase & Co .; J .P . Morgan Securities, Inc . ; Chase Securities, Inc . ; Chase H&Q ;
Canadian Imperial Bank of Commerce ; CJBC Oppenheimer Corp . ; CIBC World Markets
Corp .; CIBC Capital Partners ; C]BC Capital Partners (Cayman) ; The Goldman Sachs
Group, inc . ; Goldman, Sachs & Co . ; Merrill Lynch & Co.; Merrill Lynch, Pierce, Fenner
73
& Smith, Inc . ; Morgan Stanley Dean Witter; Morgan Stanley & Co., Inc . ; Donaldson
Lufkin & Jenrette, Inc . ; Donaldson, Lufkin & Jenrette Securities Corporation ; Credit
Suisse First Boston; Credit Suisse Group ; The Bear Stearns Companies, Inc . ; Bear
Steams & Co ., Inc . ; Stearns Securities Corp . ; Microsoft Corporation; Softbank
Corporation ; Deutsche Banc, A.G.; Deutsche Banc Securities ; ABN AMRO Rothschild
LLC; Lehman Brothers, A.G. Edwards & Sons, Inc . ; First UnionSecurities, Inc . ; RBC
Dominion Securities Corporation ; Wasserstein Perella Securities, Inc . ; Advest, Inc . ;
Gerard Klauer Mattison & Co ., Inc. (now known as Harris Nesbitt Gerard) ; Guzman &
Company ; KaufmanBros ., L.P.; McDonald Investments Inc . ; Monness, Crespi, Hardt &
Co ., Inc., Samuel A. Ramirez & Co., Inc., Raymond James & Associates, Inc . ; Scott &
Stringg ellow, Inc . ; and Stephens Inc . ; provided however, that the term Securities Non-
Settling Defendant shall also include any person or entity, other than a Releasee, that
Securities Lead Plaintiffs, Securities Plaintiffs, the Securities Class or any Securities
Class Member may hereafter sue on any Released Claim ; provided further that any and
all Claims of the Class or of Class Members against any Non-Settling Defendant are
reserved without regard to the relationship between or among any Non-Settling
Defendant and any Settling Defendant(s) and without regard to any release provided to
the Settling Defendant(s) .
00000000, "Securities Notice Ratio" means a ratio in which th e
numerator is equal to the number of Notices mailed to Securities Class Members and the
denominator is equal to the total number of Notices mailed to Class Members ; provided
that in calculating the numerator and denominator for purposes of this definition, th e
74
number of Notices mailed shall include the total number of Notices mailed to Nominee s
for distribution to Securities Class Members .
pppppppp . "Securities Plaintiffs" means Staro Asset
Management , Bennett Restructuring Funds, Richard P . Kleinknecht, James F. Tucker ,
Bella Pill, B .Z . Shuster , Michael A . Bernstein Profit Sharing Plan and Roman Foltyn .
qqqqqqqq . "Securities Plan of Allocation" means the terms and
procedures for allocating the Securities Distribution Amount among, and distributing th e
Securities Distribution Amount to, Securities Authorized Claimants as set forth in th e
Notice, or such other Securities Plan of Allocation as the Court shall approve .
rrrr r. "Securities Pre-Execution Defense Costs" means any an d
all Defense Costs incurred prior to and including the Execution Date but not paid as o f
the Execution Date regarding (a) claims for which coverage andlor indemnity is provide d
by the Executive Liability Insurance Policies and (ii) all Claims otherwise identified in
Part I of Exhibit A, which Defense Costs shall be paid from the Executive Liability
Insurance Policies and/or the Pender Securities Coverage ; provided that all submissions
by Insured Releasees or their counsel requesting reimbursement for Securities Pre-
Execution Defense Costs shall be submitted to the Securities Insurers by no later tha n
thirty (30) days following the Execution Date .
ssssssss. "Securi ties Proof of Claim" means the form, as
approved by the Court, that will be mailed to Securities Class Members with the Notice ,
pursuant to which such Securities Class Members will submit a claim under th e
procedures set out in this Settlement Agreement .
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tttttttt. "Securities Reinsurers' Insurance Payment" means the
amount equal to the Securities Insurance Balance less the Pender Securities Payment an d
less any of the following expenses (or portions of expenses) paid out of the Securitie s
Reinsurers ' Insurance Trust Account : (i) the Securities Attorneys ' Fees and Expenses
Award, (ii) Covered Claim Costs and (iii) any fees and expenses of the Securitie s
Reinsurers' Escrow Agent associated with the administration of the Securitie s
Reinsurers' Insurance Trust Account .
uuuuUUUU . "Securities Reinsurers' Insurance Trust Account"
means an interest-bearing escrow account established and administered pursuant to the
Securities Reinsurers' Trust Deed into which payments required by Section H .A_Ld
below shall be paid; provided that the interest paid on the Securities Reinsurers '
Insurance Trust Account shall be no less than the Interest Rate .
vvvvvvvv. "Securities Reinsurers ' Trust Agent " means the
escrow agent for the Securities Reinsurers' Insurance Trust Account .
wwwwwwww. "Securities Reinsurers' Trust Deed" means
the agreement pursuant to which the Securities Reinsurers' Insurance Trust Account i s
established and administered, which agreement shall be substantially in the form as se t
out in Exhibit E to this Settlement Agreement and which agreement shall provide, among
other things, that: (i) the payments provided for in Section II.D.3.a(2) shall be made as
advised by the Securities Insurers' Escrow Agent, (ii) as advised by the Securities
Insurers' Escrow Agent, within forty-five (45) days following the Final Settlement Date ,
the Securities Reinsurers' Insurance Payment (plus interest as calculated in Sectio n
76
II .C.i .b below) shall be paid into the Cash Settlement Securities Subaccount pursuant t o
Section B .C.I .b below, (iii) any disputes regarding payments addressed in the precedin g
proviso shall be resolved pursuant to the Dispute Procedure, (iii) except as specificall y
provided in this Settlement Agreement, no third parties unrelated to Global Crossin g
(including, without limitation, third-party individuals or entities insured under the Pende r
Policy) shall have any rights respecting the monies in the escrow account, (vi) n o
payments, except as specifically provided in this Settlement Agreement, shall be mad e
from the escrow account and (vii) if approval of this Settlement Agreement does no t
become Final or this Settlement Agreement is otherwise terminated, any monies in th e
escrow account, including any interest that has accrued, shall be released and returned t o
the Securities Reinsurers pursuant to the terms set out in the escrow agreement .
xxxxxxxx . "Securities Release" means the releases and waiver s
set forth in Section DLA of this Settlement Agreement .
yyyyyyyy- "Securities Settling Defendants " means Dan J .
Cohrs, David L . Lee, Barry Porter, Abbott L . Brown, Lodwrick M . Cook, John M .
Scanlon, Hillel Weinberger, James C . Gorton, Joseph P . Clayton, Robert Annunziata, Leo
J. Hindery, Jr., Thomas J . Casey, David A. Walsh, William B . Carter, Jr., S . Wallace
Dawson, Jr ., John A. Scarpati, John M . Finlayson, Jay R. Bloom, Dean C. Kehler, Jay R.
Levine, William D . Phoenix, Bruce Raben, Geoffrey J .W. Kent, Eric Hippeau, Douglas
H- McCorkindale, William E. Conway, Jr., K. Eugene Shutler, Joseph P. Perrone, Gary
Winnick, Mark L Attanasio, Thomas U . Koll, Maria Elena Lagomasino, John J . Legere ,
Stefan C . Riesenfeld, Pieter Knock, Steven J . Green, Walter Beran, Anthony Christie ,
77
GKW Unified Holdings LLC, the Winnick Family Foundation, Pacific Capital Group,
Inc., any individual or entity (i) who is or was an employee, director or officer of Global
Crossing and (ii) who is or was a named defendant in the Securities Action, or in any
case consolidated into the Securities Action, and any and all entities owned by a
Securities Settling Defendant or in which a Securities Settling Defendant has a
Controlling Interest ; provided however, that the term Securities Settling Defendants does
not include any individual or entity identified as a Securities Non-Settling Defendant in
Section T.E.1 .nnnnnnnn above.
zzzzzzzz. "Securities Settling Defendants' Co-Counsel"
means any firm that is co-counsel or shadow counsel with Securities Settling Defendants '
Lead Counsel in representing any Securities Settling Defendan t
aaaaaaaaa. "Securities Settling Defendants' Counsel" means
Securities Settling Defendants' Lead Counsel, Securities Settling Defendants' Co-
Counsel and Securities Settling Defendants' Separate Counsel .
bbbbbbbbb. "Securities Settling Defendants' Lead Counsel"
means the law firm of Debevoise & Plimpton LLP ; provided that Securities Settling
Defendants' Lead Counsel does not represent all Securities Settling Defendants .
ccccccccc. "Securities Settling Defendants' Separate Counsel"
means the law firms of Christensen, Miller, Fink, Jacobs, Glaser, Weil and Shapiro LLP ;
Hennigan, Bennett & Dorman; Howrey Simon Arnold & White, LLP ; Irell & Manella,
LLP; Mayer, Brown, Rowe & Maw LLP ; Morvillo, Abramowitz, Grand, lason &
Silberberg, P .C . ; Ropes & Gray LLP; Kaye Scholer LLP ; McNamara Spira & Smith ;
78
Sidley Austin Brown & Wood LLP. ; Sherry A. Stanley ; Quinn Emanuel Urquhart Oliver
& Hedges, LLP; Gibson, Dunn & Crutcher LLP, Willkie Farr & Gallagher LLP and any
other law firm to which a Securities Settling Defendant transfers his, her or it s
representation from one of the foregoing firms .
ddddddddd. "Securities Settling Parties" means Securities Lea d
Plaintiffs, Securities Plaintiffs, Securities Settling Defendants and Simpson Thacher .
eeeeeeeee. "Securities Stipulation of Confidentiality" mean s
the stipulation, in a form approved by the Court, to which Securities Class Members (o r
their attorneys) who wish to have access to the discovery materials in the Securitie s
Action must agree before they are provided access to the materials .
f fffffFf. "Separate Releasee Counsel " means the law firm of
Davis Polk & Wardwell, counsel for Simpson Thacher; provided that Davis Polk &
Wardwell does not represent any Releasee other than Simpson Thacher .
gggbggggg• "Settlement Agreement" means this Stipulation of
Settlement and any accompanying Exhibits, including any subsequent amendment s
thereto and any Exhibits to such amendments .
hhhhhhhhh. "Settling Defendants" means Securities Settling
Defendants and ERISA Settling Defendants .
iiiiiiiii . "Settling Defendants' Counsel" means Securities Settling
Defendants' Counsel and ERISA Settling Defendants' Counsel .
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IJ.jjI.j]]• "Settling Defendants' Lead Counsel" means the law firm of
Debevoise & Plimpton LLP ; provided that Settling Defendants' Lead Counsel does not
represent all Settling Defendants.
kkkkkkkkk. "Settling Parties" means the Securities Settling
Parties and the ERISA Settling Parties _
111111111 . "Simpson Thacher" means a New York Genera l
Partnership registered as a Limited Liability Partnership, Simpson Thacher Bartlett, a
New York General Partnership (as the partnership was named prior to its registration as a
limited liability partnership), Simpson Thacher & Bartlett MNP LLP, a New York
General Partnership registered as a Limited Liability Partnership, and all of the present
and former partners in all of their capacities of each of the foregoing (including, without
limitation, D. Rhett Brandon, in all of his capacities including as a partner of Simpso n
Thacher and as former Acting General Counsel and Vice President of Global Crossing
Ltd.) and with respect to each of the foregoing, each of their successors, agents, parents,
subsidiaries, affiliates, associates, employees, officers, directors, shareholders ,
predecessors, successors, attorneys, heirs, assigns and other representatives and servants .
"Simpson Thacher Amount" means nineteenurimnimmmm
. million five hundred thousand dollars ($19,500,000) .
nnnnnnnnn. "Simpson Thacher Escrow Account" means a n
interest-bearing escrow account established and administered pursuant to the Simpson
Thacher Escrow Agreement into which the Simpson Thacher Amount shall be paid to th e
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extent required by Section l.AA- below; provided that the Interest Rate paid on the
Simpson Thacher Escrow Account shall be no less than the Interest Rate .
ooooooo0o. "Simpson Thacher Escrow Agent" means th e
escrow agent for the Simposn Thacher Escrow Account .
ppppppppp. "Simpson Thacher Escrow Agreement" means th e
escrow agreement pursuant to which the Simpson Thacber Escrow Account is established
and administered, which agreement shall be substantially in the form as set out in Exhibit
H to this Settlement Agreement and which agreement shall provide, among other things,
that (i) within forty-five (45 ) days following the Final Settlement Date, the Simpson
Tbacher Payment shall be paid into the Cash Settlement Securities Subaccount pursuant
to Section II .C.5 below, (ii) except as specifically provided in this Settlement Agreement
and the Simpson Thacher Escrow Agreement, no persons or entities shall have any rights
respecting the contents of the Simpson Thacher Escrow Account, including any interest
that has accrued, (iii) no payments, except as specifically provided in this Settlement
Agreement and the Simpson Thacher Escrow Agreement, shall be made from the
Simpson Thacher Escrow Account, (iv) if approval of this Settlement Agreement does
not become Final or if Simpson Thacher's participation in this Settlement Agreement is
otherwise terminated,Simpson Thacher may instruct the Simpson Thacher Escrow Agent
to promptly pay, and the Simpson Thacher Escrow Agent shall promptly pay, the
contents of the Simpson Thacher Escrow Account, including any interest that has
accrued, shall be released and returned to Simpson Thacher pursuant to the terms set out
in the escrow agreement .
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qqqqqqqqq . "Simpson Thacher Payment" means the Simpson
Thacher Amount plus interest calculated pursuant to Section II .C.5 below, which amoun t
shall be paid to the Cash Settlement Securities Subaccount pursuant to Section II .C . 5
below.
rrrrrrrrr. "Summary Notice" means the notice described i n
Section W.B .
sssssssss. "Supplemental Plans of Allocation" means th e
terms and procedures for allocation of any monies received by Securities Lead Counse l
and ERISA 401(k) Lead Counsel pursuant to Section H.D.8 below, such Supplementa l
Plans of Allocation to be based upon the Securities Plan of Allocation and the ERIS A
401(k) Plan of Allocation, as such plans are approved by the Court .
ttttttttt . "Tax Expenses" means (f) all taxes on the income of the
Cash Settlement Payment and (ii) expenses and costs incurred in connection with th e
taxation of the Cash Settlement Payment (including, without limitation, expenses of ta x
attorneys and accountants) .
uuuuuuuuu. "Unknown Claim" means any claim that any Clas s
Member does not know or suspect to exist in his, her or its favor at any time on or before
the date that such Class Member's release becomes effective, and that, if known by him,
her or it, might have affected his, her or its settlement with any of the Releasees or might
have affected his, her or its decision not to request exclusion from the Class or not t o
object to this Settlement Agreement .
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vvvvvvvvv. "Winnick" means defendants Gary Winnick, GKW
Unified Holdings LLC, the Winnick Family Foundation and Pacific Capital Group, Inc .
wwwwwwwww. "Winnick ERISA Amount" means twenty-
five million dollars ($25,000,000) .
xxxxxxxxx. "Winnick ERISA Escrow Account" means the
escrow account into which Winnick deposited the Winnick ERISA Amount on or abou t
December 17, 2002 pursuant to the escrow agreement executed on that date and th e
amendment to that escrow agreement pursuant to which, among other things, the powe r
to direct payments from such escrow account is conditionally assigned from Winnick t o
the ERISA Lead Counsel Committee Chairman; provided that within forty-five (45) days
following the Final Settlement Date, the ERISA Lead Counsel Committee Chairman shal l
direct that the Winnick ERISA Payment be paid pursuant to Section II .C3 below ;
provided f urther that if approval of this Settlement Agreement does not become Final o r
if this Settlement Agreement is otherwise terminated, the amendment conditionall y
assigning from Winnick to the ERISA Lead Counsel Comm ittee Chairman the power t o
direct payments from such escrow account shall be of no further force or effect .
yyyyyyyyy. "Winnick ERISA Escrow Agent" means the escrow
agent for the Winnick ERISA Escrow Account .
zzzzzzzzz . "Winnick ERISA Escrow Agreement" means the
escrow agreement (including any amendments to such agreement) pursuant to which the
Winnick ERISA Escrow Account is established and administered .
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aaaaaaaaaa . "Winnick ERISA Payment" means the total, as o f
forty-five (45) days following the Final Settlement Date, of the Winnick ERISA Amount
plus the investment income earned in the Winnick ERISA Escrow Account less an y
escrow agent fees, attorneys fees and other designated costs associated with the formatio n
and administration of the Winnick ERISA Escrow Account pursuant to the terms of th e
December 17, 2002 escrow agreement as amended .
bbbbbbbbbb . "Winnick Securities Amount" means thirty million
dollars ($30,000,000) .
cccecccccc. "Winnick Securities Escrow Account " means an
interest bearing account under the supervision and control of Winnick and Securities
Lead Counsel into which Winnick shall pay the Winnick Securities Amount pursuant to
Section l .A.3 below.
dddddddddd . "Winnick Securities Escrow Agent" means the
escrow agent for the Winnick Securities Escrow Account .
eeeeeeeeee . "Winnick Securities Escrow Agreement " means the
escrow agreement pursuant to which the Winnick Securities Escrow Account i s
established and administered, which agreement shall be substantially in the form as se t
out in Exhibit G to this Settlement Agreement and which agreement shall provide, amon g
other things, that: (i) within forty-five (45) days following the Final Settlement Date ,
Winnick shall direct that the Winnick Securities Payment be paid pursuant to Section
ll .C.4 below and ( ii) if approval of this Settlement Agreement does not become Final or
84
if this Settlement Agreement is otherwise terminated, any monies or other assets in the
Winnick Securities Escrow Account shall be promptly released and returned to Winnick .
ffffffffff. "Winnick Securities Payment" means the Winnick
Securities Amount plus interest calculated pursuant to Section 1 .C.4 below, which
amount shall be paid to the Cash Settlement Securities Subaccount pursuant to Sectio n
II .C.4 below, less fees and expenses paid or payable under the Winnick Securities Escrow
Agreement to the Winnick Securities Escrow Agent .
2. Capitalized terms used in this Settlement Agreement, but not
defined above, shall have the meaning ascribed to them in this Settlement Agreement_
II . TERMS AND CONDITIONS OF THE SETTLEMEN T
A. Payments Following the Preliminary Approval Dat e
1 . Securities Settling Defendants shall direct the Securities Insurers to
make the following payments, and the Securities Insurers shall so pay, within five (5)
business days following the Preliminary Approval Date :
a. the Securities Insurers shall pay into the Cash Settlement
Notice and Administrative Expenses Subaccount the Securities Initial Payment ;
b. each of the Securities Insurers other than Pender shall pay
the Securities Insurers' Escrow Agent an amount equal to the balance (if any) of each of
their Executive Liability Insurance Policies as of the date upon which such payment is
made pursuant to the terms of this Settlement Agreement (less any portion of th e
Securities Initial Payment paid out of any such policy) ;
85
G. Pender shall pay or cause to be paid the Securities Insurers '
Escrow Agent an amount equal to the Pender Securities Payment (less any portion of th e
Securities Initial Payment paid out of the Pender Securities Coverage) ; and
d. subject to Section I .E . I wwwwww, Pender shall cause th e
Pender Securities Reinsurers to pay the Securities Reinsurers' Trust Agent an amount
equal to the Pender Securities Reinsurers' Payment-
2. ERISA Settling Defendants shall direct the ERISA Insurer and
Pender to make the following payments, and the ERISA Insurer and Pender shall so pay,
within five (5) business days following the Preliminary Approval Date :
a. the ERISA Insurer or , if the Fiduciary Liability Insurance
Policy proceeds are exhausted, Pender shall pay into the Cash Settlement Notice an d
Administrative Subaccount the ERISA Initial Payment ;
b. the ERISA Insurer shall pay the ERISA Escrow Agent the
balance of the Fiduciary Liability Insurance Policy as of the date upon which such
payment is made pursuant to the terms of this Settlement Agreement (less any portion o f
the ERISA Initial Payment paid out of the Fiduciary Liability Insurance Policy) ; and
c. Pender shall or cause to be paid pay the ERISA Escrow
Agent an amount equal to the Pender Supplemental Amount (less any portion of th e
ERISA Initial Payment paid out of the Pender Supplemental Amount) .
d . Notwithstanding the payment provisions set out in Section
II of this Settlement Agreement, nothing in this Agreement shall be construed as a n
admission or acknowledgement by the ERISA Insurer that it is the primary or co-primary
86
insurer with regard to Pender, or that it is obligated to make payment before Pender wit h
regard to the matters herein .
3 . Winnick shall, within five (5) days preceding the Fairness Hearing ,
pay the Winnick Securities Amount into the Winnick Securities Escrow Account .
4. Simpson Thacher shall, within twenty-five (25) business days
following the Preliminary Approval Date, pay the Simpson Thacher Amount into th e
Simpson Thacher Escrow Account .
B . Payments Following the Approval Date
1 . Subject to the terms (including, without limitation, the repaymen t
provisions) set out in Section X.A below, the Securities Insurers ' Escrow Agent and/or
the Securities Reinsurers' Trust Agent shall, as set out in the Securities Insurers '
Insurance Escrow Agreement and the Securities Reinsurers' Trust Deed, pay th e
Securities Attorneys' Fees and Expenses Award to Securities Lead Counsel from th e
Securities Insurers' Insurance Escrow Account andlor the Securities Reinsurers '
Insurance Trust Account within five (5) business days following the Approval Date .
2. Subject to the terms (including, without limitation, the repaymen t
provisions) set out in Section X,B below, the ERISA Escrow Agent shall, as set out in the
ERISA Escrow Agreement, pay the ERISA Attorneys' Fees and Expenses Award t o
ERISA Consolidated Lead Counsel from the ERISA Insurance Escrow Account within
five (5) business days following the Approval Date .
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C. Payments Following the Final Settlement Dat e
1 . Within two (2) business days following the Final Settlement Date ,
Securities Lead Counsel shall inform the Securities Insurers ' Escrow Agent, the
Securities Reinsurers' Trust Agent and the Simpson Thacher Escrow Agent that the Final
Settlement Date has occurred . Within forty-five (45) days following the Final Settlement
Date, the Securities Insurers' Escrow Agent and the Securities Reinsurers' Trust Agen t
shall, as set out in the Securities Insurers' Insurance Escrow Agreement and th e
Securities Reinsurers ' Trust Deed make the following payments :
a. from the Securities Insurers' Insurance Escrow Account ,
the Securities Insurers' Insurance Payment plus interest calculated (i) at the Interest Rate
for the period starting on the fifth (5th) business day after the Preliminary Approval Date
until and including the Approval Date and (ii) at the market rate provided by the
Securities Insurers Escrow Account for the period starting the day following the
Approval Date until paid into the Cash Settlement Securities Subaccount ; and .
b. from the Securities Reinsurers ' Insurance Trust Account ,
the Securities Reinsurers' Insurance Payment plus interest calculated (i) at the Interes t
Rate starting on the fifth (5th) business day after the Preliminary Approval Date until and
including the Approval Date and (ii) at the market rate provided by the Securities
Reinsurers Trust Account for the period starting the day following the Approval Dat e
until paid into the Cash Settlement Securities Subaccount .
2 . Within two (2) business days following the Final Settlement Date ,
ERISA 401(k) Lead Counsel shall inform the ERISA Escrow Agent that the Fina l
88
Settlement Date has occurred and, within forty-five (45) days following the Fina l
Settlement Date, the ERISA Escrow Agent shall, as set out in the ERISA Escro w
Agreement, make the following payment :
a. from the ERISA Insurance Escrow Account into the Cash
Settlement ERISA Subaccount the ERISA Insurance Payment plus interest calculate d
(i) at the Interest Rate starting on the fifth (5th) business day after the Preliminary
Approval Date until and including the Approval Date and (ii) at the market rate provided
by the ERISA Insurers Escrow Account for the period starting the day following th e
Approval Date until paid into the Cash Settlement ERISA Subaccount .
3 . The ERISA Lead Counsel Committee Chairman shall instruct th e
Winnick ERISA Escrow Agent to pay, and such escrow agent shall so pay within forty-
five (45) days following the Final Settlement Date, the Winnick ERISA Payment into the
Cash Settlement ERISA Subaccount .
4. Securities Lead Counsel shall instruct the Winnick Securities
Escrow Agent to pay, and such escrow agent shall so pay within forty-five (45) day s
following the Final Settlement Date, the Winnick Securities Amount into the Cas h
Settlement Securities Subaccount plus interest calculated (t) at the Interest Rate star ting
on the fifth (5th) day preceding the Fairness Hearing until and including the Approval
Date . and (ii) at the market rate provided by the Winnick Securities Escrow Account for
the period starting the day following the Approval Date until paid into the Cash .
Settlement Securities Subaccount .
89
5. Simpson Thacher shall instruct the Simpson Thacher Escro w
Agent to pay, and such escrow agent shall so pay within forty-five (45) days followin g
the Final Settlement Date, the Simpson Thacher Amount into the Cash Settlemen t
Securities Subaccount plust interest calculated (i) at the Interest Rate starting on the fift h
(5th) business day after the Preliminary Approval Date until and including the Approva l
Date and (ii) at the market rate provided by the Simpson Thacher Escrow Account for th e
period starting the day following the Approval Date until paid into the Cash Settlemen t
Securities Subaccount .
6. The funds in the Cash Settlement Account shall not be distribute d
except in accordance with this Settlement Agreement or by order of the Court .
7. All necessary steps to enable the Cash Settlement Account to be a
Qualified Settlement Fund shall be taken, including the timely filing by Securities Lea d
Counsel, ERISA 401(k) Lead Counsel, the Escrow Agent, the Administrator and/or thei r
agents of all elections and statements required pursuant to Treas . Reg . §§ 1 .468B-0
through 1 .468B-5,. or any other relevant statutes, regulations or published rulings now o r
hereafter enacted or promulgated, for all taxable years of the Cash Settlement Account ,
beginning with the date of its establishment . The Escrow Agent shall be th e
"administrator" of the Qualified Settlement Fund for purposes of the Cash Settlement
Account. The Escrow Agent, on behalf of the Cash Settlement Account, shall file or
cause to be filed on a timely basis all required, federal, state and local tax returns and shall
pay taxes in a manner consistent with treatment of the Cash Settlement Account as a
Qualified Settlement Fund, as provided in Treas . Reg. §§ 1 .46813-0 through 1 .468B-5. In
90
no event shall Settling Defendants have any responsibility whatsoever for filing election
or other required statements, or tax returns, or for paying the costs associated therewith ,
the payment of any taxes due, or the expenses of notice or administration of the Cas h
Settlement Account . Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants shall cooperate with the Escrow Agent to the extent necessary for the Escro w
Agent to comply with this Section II .C.7 .
Upon request by Securities Settling Defendants' Counsel, ERIS A
Settling Defendants' Counsel or Separate Releasee Counsel, the Escrow Agent shal l
promptly provide to Securities Settling Defendants' Counsel, to ERISA Settlin g
Defendants' Counsel or to Separate Releasee Counsel, as the case may be, all informatio n
requested in connection with any tax returns a Settling Defendant or Releasee must file o r
with any other report or filing a Settling Defendant or Releasee must make with respec t
to the Cash Settlement Payment .
D. Covered Claim Cost s
1 . As of the Execution Date until (and including) the Final Settlement6
Date, Covered Claim Costs (including Securities Implementation Costs) shall be
reimbursed to Insured Releasees (or their counsel) within 30 days of the date on which a
request for reimbursement is submitted, subject to the following:
a . Reimbursements for Covered Claim Costs that are covere d
by the Executive Liability Insurance Policies (whether paid from the insurance proceeds- -.
of an Executive Liability Insurance Policy or from the Pender Securities Coverage) shal l
be limited in the aggregate for a ll Insured Releasees to no more than the aggregate of the
91
Implementation Period Securities Claim Reserve Amount and the Post-Implementatio n
Period Securities Claim Reserve Amount ;
b. Reimbursements for Securities Implementation Costs shal l
be limited by the Securities Implementation Cap ;
c. The Securities Insurers' Escrow Agent shall keep trac k
(consistent with the Implementation Period Securities Claim Reserve Amount, the Post-
Implementation Period Securities Claim Reserve Amount and the Securitie s
Implementation Cap) of all payments of Covered Claim Costs made to Insured Releasees
(or their counsel) during the period from the Execution Date to the date on which the
Securities Insurers' Escrow Agent and the Securities Reinsurers' Trust Agent make the
payments required by Section II.C.l above, whether such payments are made from (i) th e
Executive Liability Insurance Policies, the Pender Securities Coverage prior to the dat e
on which such amounts are deposited into the relevant escrow accounts or (ii) the
Securities Insurers' Insurance Escrow Account and/or the Securities Reinsurers' Trust
Account ; provided that, to the extent Insured Releasees reach an agreement or a fina l
ruling is issued regarding the administration and allocation of the Implementation Period
Claim Reserve Amount and/or the Post-Implementation Period Claim Reserve Amount
pursuant to Section II .D.7 below prior to Final Settlement Date, the Securities Insurers'
Escrow Agent shall reimburse (or cause reimbursement of) Covered Claim Cost s
consistent with such agreement or ruling ; provided further that all reimbursements o f
Covered Claim Costs made (or caused to be made) by the Securities Insurers' Escro w
Agent shall, subject to the Securities Implementation Cap, be first offset against th e
92
Implementation Period Securities Claim Reserve Amount and, once such amount ha s
been exhausted, be offset against the Post-Implementation Period Securities Clai m
Reserve Amount ; and
d. The Securities Insurers' Escrow Agent shall provide th e
following:
( 1) within five (5) business days following receipt of a
triggering invoice under this Section II.D.Ld(1), notice to Securities Lead Counsel ,
ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of any invoice from
anyone other that Settling Defendants' Lead Counsel for Covered Claim Costs in excess
of two hundred fifty thousand dollars ($250,000) and any invoice from Settlin g
Defendants' Lead Counsel for Covered Claim Costs other than Implementation Costs i n
excess of two hundred fifty thousand dollars ($250,000) ; provided that notice as set out in
this Section II . D.1.d(1) shall be provided if (i) an Insured Releasee (or Insured Releasees
represented by the same counsel other than Settling Defend ants ' Lead Counsel) submits
more than one invoice for Covered Claim Costs in any thi rty (30) day period and such
invoices in the aggregate are in excess of two hundred fifty thousand dollars ($250,000)
or (ii) Settling Defendants ' Lead Counsel submits more than one invoice for Covered
Claim Costs other than Implementation Costs in any thirty (30) day period and such
invoices in the aggregate are in excess of two hundred fifty thousand dollars ($250,000) ;
provided further that if Securities Lead Counsel and/or ERISA-901(k) Lead Counsel have - -
any dispute with the amount of any invoice with respect to which notice has been
provided, they shall so notify the Securities Insurers' Escrow Agent and the dispute shal l
93
be resolved pursuant to the Dispute Procedure ; provided that the Securities Insurers '
Escrow Agent (or the Securities Reinsurers' Trust Agent) shall refrain from paying suc h
invoice until the dispute is resolved ;
(2) on a monthly basis, an accounting of all Covere d
Claim Costs paid out of the Securities Insurers' Insurance Escrow Account and/or th e
Securities Reinsurers' Insurance Trust Account to Magistrate Judge Michael Dolinger (o r
any successor magistrate judge pursuant to Section I .E.l_ff above), Securities Lead
Counsel, ERISA 401(k) Lead Counsel, the Insurers, Settling Defendants' Lead Counse l
and all Insured Releasees ' counsel to whom reimbursement for Covered Claim Costs
have been made, including a calculation of the balance of the Implementation Perio d
Securities Claim Reserve Amount and of the Post-Implementation Period Securitie s
Claim Reserve Amount, and the aggregate amount of Securities Implementation Cost s
paid subject to the Securities Implementation Cap ; and
(3) if the Implementation Period Securities Clai m
Reserve Amount is exhausted, notice to Magistrate Judge Michael Dolinger (or an y
successor magistrate judge pursuant to Section I .E.l .ff above), Securities Lead Counsel,
ERISA 401(k) Lead Counsel, the Insurers and Settling Defendants' Lead Counsel of suc h
exhaustion .
2. As of the Execution Date and until (and including) the Fina l
Settlement Date, Covered Claim Costs (including ERISA Implementation Costs) shall be
reimbursed to Insured Releasees (or their counsel) from the Fiduciary Liability Insuranc e
Policy proceeds and, if the Fiduciary Liability Insurance Policy proceeds are exhausted ,
94
from the Pender Supplemental Amount, within 30 days of the date on which a request fo r
reimbursement is submitted, subject to the following :
a. Reimbursements for Covered Claim Costs that are covered
by the Fiduciary Liability Insurance Policy (whether paid from proceeds of the Fiduciar y
Liability Insurance Policy or from the Pender Supplemental Amount) shall be limited i n
the aggregate for all Insured Releasees to no more than the aggregate of th e
Implementation Period ERISA Claim Reserve Amount and the Post-Implementatio n
Period ERISA Claim Reserve Amount;
b. Reimbursements for ERISA Implementation Costs shall be
limited by the ERISA Implementation Cap ;
c. The ERISA Escrow Agent shall keep track (consistent with
the Implementation Period ERISA Claim Reserve Amount , the Post-Implementatio n
Period ERISA Claim Reserve Amount and the ERISA Implementation Cap) of al l
payments of Covered Claim Costs made to Insured Releasees (or their counsel) durin g
the period from the Execution Date to the date on which the ERISA Escrow Agent make s
the payment required by Section II.C.2 above, whether such payments of Covered Claim
Costs are made from (i) the Fiduciary Liability Insurance Policy proceeds, or, if such
policy proceeds are exhausted, from the Pender Supplemental Amount prior to the date
on which such amounts are deposited into the ERISA Insurance Escrow Account or
(ii) .the ERISA Insurance Escrow Account; provided that, to the extent Insured Releasee s
reach an agreement or a final ruling is issued regarding the administration and allocatio n
of the Implementation Period Claim Reserve Amount and/or Post-Implementation Period
95
Claim Reserve Amount pursuant to Section II .D.7 below prior to Final Settlement Date,
the ERISA Escrow Agent shall reimburse Covered Claim Costs consistent with suc h
agreement or ruling ; provided further that all reimbursement of Covered Claim Costs
made by the ERISA Escrow Agent shall, subject to the ERISA Implementation Cap, b e
first offset against the Implementation Period ERISA Claim Reserve Amount and, onc e
such amount has been exhausted, be offset against the Post-Implementation Perio d
ERISA Claim Reserve Amount; and
d. The ERISA Insurers' Escrow Agent shall provide th e
following :
(1) within five (5) business days following receipt of a
triggering invoice under this Section l .D.2.d(l), notice to Securities Lead Counsel ,
ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of any invoice from
anyone other than Settling Defendants' Lead Counsel for Covered Claim Costs in excess
of two hundred fifty thousand dollars ($250,000) and any invoice from Settling
Defendants' Lead Counsel for Covered Claim Costs other than Implementation Costs in
excess of two hundred fifty thousand dollars ($250,000) ; provided that notice as set out in
this Section II.D.2.d(l) shall be provided if (i) an Insured Releasee (or Insured Releasee s
represented by the same counsel other than Settling Defendants' Lead Counsel ) submits
more than one invoice for Covered Claim Costs in any thirty (30) day period and suc h
invoices in the aggregate are in excess of two hundred fifty thousand dollars ($250,000 )
or (ii) Settling Defendants' Lead Counsel submits more than one invoice for Covered
Claim Costs other than Implementation Costs in any thirty (30) day period and such
96
invoices in the aggregate are in excess of two hundred fifty thousand dollars ($250,000) ;
provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead Counsel hav e
any dispute with the amount of any invoice with respect to which notice has bee n
provided, they shall so notify the ERISA Escrow Agent and the dispute shall be resolved
pursuant to the Dispute Procedure ; provided that the ERISA Escrow Agent shall refrai n
from paying such invoice until the dispute is resolved ;
(2) on a monthly basis an accounting of all Covere d
Claim Costs paid out of the ERISA Insurance Escrow Account to Magistrate Judg e
Michael Dolinger (or any successor magistrate judge pursuant to Section I .E. l .ff above) ,
Securities Lead Counsel, ERISA 401(k) Lead Counsel, the Insurers, Settling Defendants '
Lead Counsel and all Insured Releasees' counsel to whom reimbursements for Covere d
Claim Costs have been made, including a calculation of the balance of th e
Implementation Period ERISA Claim Reserve Amount and of the Post-Implementatio n
Period ERISA Claim Reserve Amount, and the aggregate amount of ERISA
Implementation Costs paid subject to the ERISA Implementation Cap ; and
(3) if the Implementation Period ERISA Claim Reserv e
Amount is exhausted, notice to Magistrate Judge Michael Dolinger (or any succsso r
magistrate judge pursuant to Section LE.l .ff above), Securities Lead Counsel, ERISA
401(k) Lead Counsel, the Insurers and Settling Defendants' Lead Counsel of such
exhaustion . .
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3 . Subject to Sections II .D.1 and II .D.2 above and Section H.D.7
below, from the time of the Execution Date until (and including) the Final Settlement
Date, an Insured Releasee may seek reimbursement for Covered Claim Costs as follows :
a. with respect to Covered Claims for which coverage and/or
indemnity is provided by the Executive Liability Insurance Policies and the Pende r
Securities Coverage and all Claims otherwise identified in Part 1 of Exhibit A--
(1) for reimbursements sought after the Execution Date
until (and including) the Preliminary Approval Date, an Insured Releasee may see k
reimbursement from the Securities Insurers, such reimbursements to be made from th e
Executive Liability Insurance Policies, or , if all of the Executive Liability Insurance
Policies are exhausted, from the Pender Securities Coverage ;
(2) for reimbursements sought after the Preliminar y
Approval Date until (and including) the Final Settlement Date, an Insured Releasee ma y
seek reimbursement from the Securities Insurers' Escrow Agent, which shall pay such
reimbursements from the Securities Insurers' Insurance Escrow Account and/or direc t
that payment be made from the Securities Reinsurers' Insurance Trust Account pursuant
to the terms of the Securities Insurers' Insurance Escrow Agreement and the Securitie s
Reinsurers' Trust Deed ;
b. with respect to Covered Claims for which coverage and/or
indemnity is provided by the Fiduciary Liability Insurance Policy and all Claim s
otherwise identified in Part 2 of Exhibit A :
98
(1) for reimbursements sought after the Execution Date
until (and including) the Preliminary Approval Date, an Insured Releasee may seek
reimbursement from the ERISA Insurer, such reimbursement to be made from th e
Fiduciary Liability Insurance Policy or, if the Fiduciary Liability Insurance Policy i s
exhausted, from Pender, such reimbursement to be made from the Pender Supplemental
Amount ;
(2) for reimbursements sought after the Preliminar y
Approval Date until (and including) the Final Settlement Date, an Insured Releasee may
seek reimbursement from the ERISA Escrow Agent, which shall pay such reimbursemen t
from the ERISA Insurance Escrow Account pursuant to the terms of the ERISA Escro w
Agreement.
4. To the extent not resolved by agreement of the Insured Releasees
or a final ruling pursuant to Section ll .D.7 below, any disputes regarding the
reimbursement described in Section II.D.3 above shall be resolved pursuant to th e
Dispute Procedure .
5 . Within two (2) business days following the Final Settlement Date ,
a . Securities Lead Counsel shall inform the Securitie s
Insurers' Escrow Agent and the Securities Reinsurers' Trust Agent of the occurrence o f
the Final Settlement Date and , within forty-five (45) days followin g the Final Settlement
Date, the Securities Insurers' Escrow Agent shall calculate or cause to be calculated th e
Securities Claim Reserve Amount Balance (if any) by subtracting from the Post-
Implementation Period Securities Claim Reserve Amount any Covered Claim Costs tha t
99
(i) have been (consistent with Section II .D.1.c above) offset against the Post-
Implementation Period Securities Claim Reserve Amount or (ii) will be (consistent with
Section II.D.Lc above) offset against the Post-Implementation Period Securities Claim
Reserve Amount prior to the date on which the payments required by Section II .C .I are
made ; provided that, consistent with Sections II.D.I above and II .D.7 below, the
Securities Insurers' Escrow Agent shall pay and/or cause to be paid all outstanding
requests for Covered Claim Costs that have been received by no later than the thirtieth
(30th) day following the Final Settlement Date ; provided further that, if a Securities
Claim Reserve Amount Balance exists, the Securities Insurers' Escrow Agent shall, by no
later than the forty-fifth (45th) day after the Final Settlement Date, advise Securities Lead
Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of the
Securities Claim Reserve Amount Balance, which amount shall be paid by Securities
Lead Counsel into the Claim Reserve Account pursuant to Section II .F.2 .a below. Any
request for reimbursement for Covered Claim Costs received by the Securities Insurers
after the thirtieth (30th) day following the Final Settlement Date shall be returned to the
submitting Insured Releasee, who (subject to Section .i1 .D.7 below) shall be able to seek
payment for such Covered Claim Costs from the Claim Reserve Account pursuant to
Section II.D.6 below .
b. ERISA 401(k) Lead Counsel shall inform the ERISA
Escrow Agent of the occurrence of the Final Settlement Date and, within forty-five (45)
days following the Final Settlement Date, the ERISA Escrow Agent shall calculate or
cause to be calculated the ERISA Claim Reserve Amount Balance (if any) by subtractin g
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from the Post-Implementation Period ERISA Claim Reserve Amount any Covered Claim
Costs that (i) have been (consistent with Section II .D.2.c above) offset against the Post-
Implementation Period ERISA Claim Reserve Amount or (it) will be (consistent with
Section II.D.2.c above) offset against the Post-Implementation Period ERISA Clai m
Reserve Amount prior to the date on which the payment required by Section II .C.2 above
is made ; provided that, consistent with Sections II .D.2 above and II .D .7 below, the
ERIS,A Escrow Agent shall pay all outstanding requests for Covered Claim Costs that
have been received by no later than the thirtieth (30th) day following the Final Settlemen t
Date; provided further that, if an ERISA Claim Reserve Amount Balance exists, the
ERISA Escrow Agent shall, by no later than the forty-fifth (45th) day after the Final
Settlement Date, advise ERISA 401(k) Lead Counsel, Securities Lead Counsel and
Settling Defendants' Lead Counsel of the ERISA Claim Reserve Amount Balance, whic h
amount shall be paid by ERISA 401(k) Lead Counsel into the Claim Reserve Account
pursuant to Section II .F .3 .a below. Any request for reimbursement for Covered Claim
Costs received by the ERISA Insurer and/or Pender after the thirtieth (30th) day
following the Final Settlement Date shall be returned to the submitting Insured Releasee,
who (subject to Section II.D .7 below) shall be able to seek payment for such Covered
Claim Costs from the Claim Reserve Account pursuant to Section II .D.6 below .
6. Subject to section u.D .7 below, as of and subsequent to the date o n
which Securities Lead Counsel and ERISA 401(k) Lead Counsel deposit, respectively ,
the Securities Claim Reserve Balance Amount and the ERISA Claim Reserve Balance .
Amount into the Claim Reserve Account, the proceeds in the Claim Reserve Account, i f
101
any (including any interest earned on the proceeds in the Claim Reserve Account) shal l
be available to any Insured Releasee for reimbursement for Covered Claim Costs .
Subject to Section II .D .7 below, an Insured Releasee will have complete discretion in
defending a Covered Claim and may, pursuant to the terms and conditions set out in
Exhibit B to this Settlement Agreement, seek reimbursement for all Covered Claim Costs
from the Claim Reserve Account ; provided that the information required to be provided
pursuant to this Section II .D.6 shall be subject to the final proviso in Section i .E.l .bb
above .
7. As soon as practical after the Execution Date, Insured Releasee s
(through their counsel) shall agree among themselves as to how the Implementation
Period Claim Reserve Amount and/or the Post-Implementation Period Claim Reserve
Amount shall be administered and allocated among Insured Releasees, in connection with
all Covered Claim Costs other than Securities Implementation Costs and ERISA
Implementation Costs (which shall paid consistent with Sections I .E.l .iii, I .E.l .jjj,
I .E.l .zzzzzzz and I .E.l .aaaaaaaa above) including, without limitation, how responsibilit y
for the defense of Covered Claims (other than the Actions) shall be divided among the
counsel of Insured Releasees involved in such claims ; provided that such administration
and allocation of the Implementation Period Claim Reserve Amount and/or the Post-
Implementation Period Claim Reserve Amount shall emphasize and maximize the
efficient expenditure of such amounts, taking into account the differing degrees of risk
presented to Insured Releasees, the need to provide adequate representation to Insured
Releasees against whom claims have been or will be targeted, the avoidance of
102
duplicative work by Insured Releasees' counsel, the experience of counsel in connection
with the claims made against Insured Releasees and the billing rates and efficiency of the
various insured Releasees' counsel in defending such claims . If Insured Releasees'
counsel are unable to agree on the administration and/or allocation of the Implementation
Period Claim Reserve Amount and/or the Post-Implementation Claim Reserve Amount,
including, without limitation, how responsibility for the defense of such Covered Claim s
shall be divided among the counsel of Insured Releasees involved in such claims, th e
dispute shall be resolved pursuant to the Dispute Procedure taking into account the sam e
factors referenced in the preceding proviso ; provided that to the extent Covered Clai m
Costs are incurred prior to the date on which a plan for administrating and allocating the
Implementation Period Claim Reserve Amount and/or the Post-Implementation Claim .
Reserve Amount has been completed pursuant to this Section II .D.7, reimbursements
shall be made by the Securities Insurers, the Securities Insurers' Escrow Agent, the
Securities Reinsurers ' Trust Agent, the ERISA Insurer, or the ERISA Escrow Agen t
consistent with Sections ILD. 1, H .D.2, H.D-3, If.D.4 , II.D.5 and EI .D. 6 above, or
pursuant to Exhibit B to this Settlement Agreement (as the case may be) .
8 . At the earlier of (i) the date on which there are no Covered Claims
or all Covered Claims have been finally resolved or (ii) the date that is four years after
the Execution Date, any monies remaining in the Claim Reserve Account (if any) (a) if
the Cash Settlement Account is still in existence, then eighty percent (80%) shall be paid
to the Securities Subaccount of the Cash Settlement Account and twenty percent (20% )
shall be paid to the ERISA Subaccount of the Cash Settlement Account, such payments
103
to become part of, respectively, the Securities Net Cash Settlement Amount and th e
ERISA Net Cash Settlement Amount to be disbursed pursuant to Sections H.H and H.1 ,
respectively, below or (b) if the Cash Settlement Account has been terminated and th e
Securities Net Cash Settlement Amount and the ERISA Net Cash Settlement Amount
disbursed, then eighty percent (80%) of any such monies shall be paid to Securities Lead
Counsel and twenty percent (20%) to ERISA 401(k) Lead Counsel, which amounts
counsel shall distribute to, respectively, Securities Class Members and ERISA 401(k)
Class Members pursuant to the Supplemental Plans of Allocation ; provided however, that
if Securities Lead Counsel and/or ERISA 401() Lead Counsel determine that the amount
of money paid to them pursuant to this Section II.D.8 is too small to be economically
disbursed to Securities Class Members and/or ERISA 401(k) Class Members, then the
counsel reaching this determination shall seek Court approval to distribute the money
such counsel has received under this Section II_D .8 in some other manner.
E. Effect of Payments
1 . The payments made by Pender and Chubb Atlantic Indemnity Ltd ,
will be made pursuant to a settlement resulting from the mediation contemplated by the
Mediation Order. These payments shall vest this Court with subject matter jurisdiction
only over the payments made or caused to be made by Pender and Chubb Atlantic
Indemnity Ltd. to the extent necessary to implement and give effect to this Settlement
Agreement and shall not constitute a basis for nor give rise to personal jurisdiction over
Pender or Chubb Atlantic Indemnity Ltd .
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F. The Net Cash Settlement Amoun t
I . Notice and Administrative Expenses not covered by the Initial
Payments (if any) and all Tax Expenses (if any) shall be paid out of the Cash Settlemen t
Payment , subject to the Notice and Administrative Expenses True-Up .
2. Within five (5) business days following the date on which the Cash
Settlement Payment is paid, Securities Lead Counsel shall pay (or cause to be paid) the
following :
a. the Securities Claim Reserve Amount Balance (if any)
(plus interest on the Securities Claim Reserve Amount Balance beginning as of the fifth
(5th) business day after the Preliminary Approval Date and ending as of the date th e
Securities Claim Reserve Amount Balance is paid by Securities Lead Counsel pursuant t o
this Section II .F.2.a, such interest to be calculated at the Interest Rate) into the Clai m
Reserve Account from the Securities Insurance Payment ; an d
b. the Securities Creditors' Payment (plus interest on th e
Securities Creditors' Payment beginning as of the fifth (5th) business day after th e
Preliminary Approval Date and ending as of the date the Securities Creditors' Payment i s
paid by Securities Lead Counsel pursuant to this Section H.F.2.b, such interest to be
calculated at the Interest Rate) pursuant to the terms of the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v. Winnick , Case No. 03-Civ . 8535
(GEL) (S.D .N.Y.).
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3. Within five (5) business days following the date on which the Cash
Settlement Payment is paid, ERISA 401(k) Lead Counsel shall pay (or cause to be paid)
the following :
a. the ERISA Claim Reserve Amount Balance (if any) (plus
interest on the ERISA Claim Reserve Amount Balance beginning as of the fifth (5th)
business day after the Preliminary Approval Date and ending as of the date the ERISA
Claim Reserve Amount Balance is paid by ERISA 401(k) Lead Counsel pursuant to this
Section H .F.3 .a, such interest to be calculated at the Interest Rate) into the Claim Reserve
Account from that portion of the ERISA Insurance Payment attributable to the Pender
Supplemental Amount ; and
b. the ERISA Creditors ' Payment (plus interest on the ERISA
Creditors' Payment beginning as of the fifth (5th) business day after the Preliminary
Approval Date and ending as of the date the ERISA Creditors' Payment is paid by
ERISA 401(k) Lead Counsel pursuant to this Section II .F .3 .b, such interest to be
calculated at the Interest Rate) pursuant to the terms of the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v. Winnick, Case No. 03-Civ . 8535
(GEL) (S.D.N.Y.), such payment to be made from that portion of the ERISA Insurance
Payment attributable to the Pender Supplemental Amount .
4. The balance of the monies remaining in the Cash Settlement
Account after the expenses and payments described in Sections II .F.1, II .F.2 and II .F .3
above are paid shall constitute the Net Cash Settlement Amount .
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G. Distribution of the Net Cash Settlement Amount
1 . The Net Cash Settlement Amount shall be distributed pursuant to
the Plans of Allocation, as described below.
2. No person or entity shall have any claim against Securities Lead
Plaintiffs, Securities Plaintiffs, Securities Lead Counsel, Executive Committee Members,
ERISA Plaintiffs' Counsel, ERISA Plaintiffs, the Administrator, the Escrow Agent or an y
of their agents, or against Securities Settling Defendants' Counsel, ERISA Settling
Defendants' Counsel, Separate Releasee Counsel or any Releasee with respect to or
arising out of any distributions or lack thereof made under any of the Plans of Allocation ,
this Settlement Agreement or orders of the Court .
3. It is understood and agreed to by the Settling Parties that ,
notwithstanding any other provision of this Settlement Agreement, none of the proposed
Plans of Allocation is a part of this Settlement Agreement, and no order or proceedings
relating to one or more of the Plans of Allocation shall operate to modify, terminate or
cancel this Settlement Agreement or affect the finality of the Final Judgment or any other
orders entered by the Court giving effect or pursuant to this Settlement Agreement .
4. The Settling Defendants, Releasees and/or their respective counsel ,
including, but not limited to, Securities Settling Defendants' Counsel, ERISA Settling
Defendants' Counsel and Separate Releasee Counsel, shall have no role in, responsibility
for, or liability with respect to any of the Plans of Allocation, the form, substance,
method or manner of allocation, administration, or distribution of the Net Cash
Settlement Amount, any tax liability that a Class Member may incur as a result of this
107
Settlement Agreement, or as a result of any action taken pursuant to this Settlement
Agreement, the administration or processing of claims, including, without limitation,
determinations as to the validity of Securities Proofs of Claim, the amounts of claims or
distribution of the Net Cash Settlement Amount, or (except as specifically set out i n
Section II .C.7 above) the maintenance of the Cash Settlement Account as a Qualifie d
Settlement Fund .
5 . Unless otherwise ordered by the Court, Class Members shall loo k
solely to the Net Cash Settlement Amount for settlement and satisfaction of all Released
Claims. Under no circumstances will any of the Settling Parties or any Releasee be
responsible for the payment of any fees, costs, expenses or other funds associated with or
arising out of the settlement contemplated by this Settlement Agreement . Except as
expressly provided by this Settlement Agreement, the Plans of Allocation or order of the
Court, no Class Member shall have any interest in the Net Cash Settlement Amount o r
any portion of the Net Cash Settlement Amount .
6. To the extent that any monies remain in the Cash Settlement
Account after the Administrator has caused distributions to be made from the Cas h
Settlement Payment to all Securities Authorized Claimants and to all ERISA Clas s
Members, such monies shall be disbursed at such time and in such manner as directe d
and ordered by the Court .
H . Securities Plan of Allocation
I . Subject to Section lI.G above, Securities Lead Plaintiffs shal l
propose to the Court a Securities Plan of Allocation pursuant to which the Securities
108
Distribution Amount shall be distributed to Securities Authorized Claimants, and shal l
seek approval of the Court for such Securities Plan of Allocation .
2. All cash distributions to Securities Authorized Claimants shall b e
from the Securities Net Cash Settlement Amount pursuant to the Securities Plan o f
Allocation .
3. To receive a cash distribution from the Securities Net Cas h
Settlement Amount pursuant to the Securities Plan of Allocation, a Securities Class
Member must be a Securities Authorized Claimant pursuant to the procedures set out in
this Settlement Agreement or by order of the Court, and must submit a Securities Proof o f
Claim .
4. - Each Securities Authorized Claimant who wishes to receive a
distribution from the Securities Net Cash Settlement Amount must complete and submit a
Securities Proof of Claim (1) by first-class mail, such that it is postmarked no later than
forty-five (45) days after the Fairness Hearing or (ii) so that it is actually received at the
address on the Securities Proof of Claim form by the date stated in the Notice, unless that
date is extended by order of the Court . The address to which the Securities Proof o f
Claim must be mailed shall be stated in the Securities Proof of Claim form itself and shal l
also be printed in the Notice .
5 . A draft of the Securities Proof of Claim shall be prepared by
Securities Lead Counsel as soon as practicable ; provided however, that Securities Lead
Counsel shall provide a draft of such Securities Proof of Claim to Securities Settling
Defendants' Lead Counsel and to Separate Releasee Counsel no later than March 30 ,
109
good faith in resolving any disputes that may arise in the implementation of the terms of
this Settlement Agreement.
00. The Settling Parties, their successors and assigns, and their attorneys agree
to cooperate fully with one another in seeking Court approval of this Settlemen t
Agreement and to use all reasonable efforts to effect the prompt consummation of thi s
Settlement Agreement and the proposed settlement .
PP. This Settlement Agreement may be signed in counterparts, each of whic h
shall constitute a duplicate original . Execution by facsimile shall be fully and legall y
binding on a Settling Party .
QQ. All Releasees who are not Settling Parties are intended third-party
beneficiaries who are entitled as of the date on which all of the payments required by
Sections B .C.I .a, Il .C.I .b, B.C.2.a, ll.C.3, l .C.4, II.C_5 and 1 T.C.6 above have been mad e
to enforce the terms of the Securities Release and the ERISA Release set forth in Section s
IX.A and IX .B above-
RR_ All Insured Releasees who are not Settling Parties are intended third-part y
beneficiaries who are entitled to enforce the terms of Section liD above and Exhibit B .
Agreed to as of this 19th day of March 2004 .
211
(i) have been (consistent with Section II.D.I .c above) offset against the Post-
Implementation Period Securities Claim Reserve Amount or (ii) will be (consistent with
Section II .D.I .c above) offset against the Post-Implementation Period Securities Clai m
Reserve Amount prior to the date on which the payments required by Section R.C.I are
made; provided that, consistent with Sections IiD.I above and II.D.7 below, th e
Securities Insurers' Escrow Agent shall pay and/or cause to be paid all outstandin g
requests for Covered Claim Costs that have been received by no later than the thirtiet h
(30th) day following the Final Settlement Date; provided further that, if a Securitie s
Claim Reserve Amount Balance exists, the Securities Insurers ' Escrow Anent shall, by no
later than the forty-fifth (45th) day after the Final Settlement Date, advise Securities Lea d
Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of th e
Securities Claim Reserve Amount Balance, which amount shall be paid by Securitie s
Lead Counsel into the Claim Reserve Account pursuant to Section II .F.2.a below. Any
request for reimbursement for Covered Claim Costs received by the Securities Insurer s
after the thirtieth (30th) day following the Final Settlement Date shall be returned to the
submitting Insured Releasee, who (subject to Section ILD .7 below) shall be able to seek
payment for such Covered Claim Costs from the Claim Reserve Account pursuant t o
Section II .D_6 below.
b . ERISA 401(k) Lead Counsel shall inform the ERISA
Escrow Agent of the occurrence of the Final Settlement Date and , within forty-five (45) -
days following the Final Settlement Date, the ERISA Escrow Agent shall calculate o r
cause to be calculated the ERISA Clain. Reserve Amount Balance (if any) by subtracting
100
from the Post-Implementation Period ERISA Claim Reserve Amount any Covered Claim
Costs that (i) have been (consistent with Section l .D.2.c above) offset against the Post-
Implementation Period ERISA Claim Reserve Amount or (ii) will be (consistent with
Section u .D.2.c above) offset against the Post-Implementation Period ERISA Claim
Reserve Amount prior to the date on which the payment required by Section u .C_2 above
is made ; provided that, consistent with Sections II .D.2 above and II.D.7 below, the
ERISA Escrow Agent shall pay all outstanding requests for Covered Claim Costs that
have been received by no later than the thirtieth (30th) day following the Final Settlement
Date ; provided further that, if an ERISA Claim Reserve Amount Balance exists, the
ERISA Escrow Agent shall, by no later than the forty-fifth (45th) day after the Final
Settlement Date, advise ERISA 401(k) Lead Counsel, Securities Lead Counsel an d
Settling Defendants' Lead Counsel of the ERISA Claim Reserve Amount Balance, which
amount shall be paid by ERISA 401(k) Lead Counsel into the Claim Reserve Accoun t
pursuant to Section II .F.3_a below . Any request for reimbursement for Covered Claim
Costs received by the ERISA Insurer and/or Pender after the thirtieth (30th) day
following the Final Settlement Date shall be returned to the submitting Insured Releasee,
who (subject to Section II .D.7 below ) shall be able to seek payment for such Covered
Claim Costs from the Cla im Reserve Account pursuant to Section II .D.S below .
6. Subject to section II .D . 7 below, as of and subsequent to the date on
which Securities Lead Counsel and ERISA 401(k) Lead Counsel deposit, respectively ,
the Securities Claim Reserve Balance Amount and the ERISA Claim Reserve Balanc e
Amount into the Claim Reserve Account, the proceeds in the Claim Reserve Account, i f
101
any (including any interest earned on the proceeds in the Claim Reserve Account) shal l
be available to any Insured Releasee for reimbursement for Covered Claim Costs .
Subject to Section II .D.7 below, an Insured Releasee will have complete discretion i n
defending a Covered Claim and may, pursuant to the terms and conditions set out i n
Exhibit B to this Settlement Agreement, seek reimbursement for all Covered Claim Costs
from the Claim Reserve Account ; provided that the information required to be provided
pursuant to this Section Il .D.6 shall be subject to the final proviso in Section I .E .I .bb
above .
7. As soon as practical after the Execution Date, Insured Releasee s
(through their counsel) shall agree among themselves as to how the Implementatio n
Period Claim Reserve Amount and/or the Post-Implementation Period Claim Reserve
Amount shall be administered and allocated among Insured Releasees, in connection wit h
all Covered Claim Costs other than Securities Implementation Costs and ERIS A
Implementation Costs (which shall paid consistent with Sections I .E.I .iii, I .E.I jjj ,
I.E.I .zzzzzzz and I . E.I .aaaaaaaa above) including, without limitation, how responsibilit y
for the defense of Covered Claims (other than the Actions) shall be divided among th e
counsel of Insured Releasees involved in such claims ; provided that such administration
and allocation of the Implementation Period Claim Reserve Amount and/or the Post-
Implementation Period Claim Reserve Amount shall emphasize and maximize the
efficient expenditure of such amounts, taking into account the differing degrees of risk
presented to Insured Releasees, the need to provide adequate representation to Insure d
Releasees against whom claims have been or will be targeted, the avoidance o f
102
duplicative work by Insured Releasees' counsel, the experience of counsel in connection
with the claims made against Insured Releasees and the billing rates and efficiency of the
various Insured Releasees' counsel in defending such claims . If Insured Releasees '
counsel are unable to agree on the administration and/or allocation of the Implementation
Period Claim Reserve Amount and/or the Post-Implementation Claim Reserve Amount,
including, without limitation, how responsibility for the defense of such Covered Claims
shall be divided among the counsel of Insured Releasees involved in such claims, the
dispute shall be resolved pursuant to the Dispute Procedure taking into account the same
factors referenced in the preceding proviso ; provided that to the extent Covered Claim
Costs are incurred prior to the date on which a plan for administrating and allocating the
Implementation Period Claim Reserve Amount and/or the Post-Irrmplementation Claim-
Reserve Amount has been completed pursuant to this Section II .D.7, reimbursements
shall be made by the Securities Insurers, the Securities Insurers' Escrow Agent, the
Securities Reinsurers' Trust Agent, the ERISA Insurer, or the ERISA Escrow Agent
consistent with Sections 111), 1, II.D .2, II.D .3, u.D.4, u.D.5 and H.D. 6 above, or
pursuant to Exhibit B to this Settlement Agreement (as the case may be) .
At the earlier of (1) the date on which there are no Covered Claim s
or all Covered Claims have been finally resolved or (ii) the date that is four years after
the Execution Date, any monies remaining in the Claim Reserve Account (if any) (a) if
the Cash Settlement Account is still in existence, then eighty percent (80%) shall be paid
to the Securities Subaccount of the Cash Settlement Account and twenty percent (20%)
shall be paid to the ERISA Subaccount of the Cash Settlement Account, such payment s
103
to become part of, respectively, the Securities Net Cash Settlement Amount and th e
ERISA Net Cash Settlement Amount to be disbursed pursuant to Sections II .H and II .I ,
respectively, below or (b) if the Cash Settlement Account has been terminated and th e
Securities Net Cash Settlement Amount and the ERISA Net Cash Settlement Amoun t
disbursed, then eighty percent (80%) of any such monies shall be paid to Securities Lea d
Counsel and twenty percent (20%) to ERISA 401(k) Lead Counsel, which amount s
counsel shall distribute to, respectively, Securities Class Members and ERISA 401(k )
Class Members pursuant to the Supplemental Plans of Allocation ; provided however, that
if Securities Lead Counsel and/or ERISA 401(k) Lead Counsel determine that the amoun t
of money paid to them pursuant to this Section III.D.8 is too small to be economicall y
disbursed to Securities Class Members and/or ERISA 401(k) Class Members, then th e
counsel reaching this determination shall seek Court approval to distribute the money
such counsel has received under this Section I1 .D.8 in some other manner.
E. Effect of Payments
1 . The payments made by Fender and Chubb Atlantic Indemnity Ltd .
will be made pursuant to a settlement resulting from the mediation contemplated by the
Mediation Order. These payments shall vest this Court with subject matter jurisdiction
only over the payments made or caused to be made by Pender and Chubb Atlantic
Indemnity Ltd. to the extent necessary to implement and give effect to this Settlemen t
Agreement and .shall not constitute a basis for nor give rise to personal jurisdiction ove r
Pender or Chubb Atlantic Indemnity Ltd .
104
F. The Net Cash Settlement Amount
1 . Notice and Administrative Expenses not covered by the Initial
Payments (if any) and all Tax Expenses (if any) shall be paid out of the Cash Settlement
Payment, subject to the Notice and Administrative Expenses True-Up .
2. Within five (5) business days following the date on which the Cash
Settlement Payment is paid, Securities Lead Counsel shall pay (or cause to be paid) the
following :
a. the Securities Claim Reserve Amount Balance (if any)
(plus interest on the Securities Claim Reserve Amount Balance beginning as of the fifth
(5th) business day after the Preliminary Approval Date and ending as of the date the
Securities Claim Reserve Amount Balance is paid by Securities Lead Counsel pursuant to
this Section H .F.2.a, such interest to be calculated at the Interest Rate) into the Claim
Reserve Account from the Securities Insurance Payment; and
b. the Securities Creditors' Payment (plus interest on th e
Securities Creditors' Payment beginning as of the fifth (5th) business day after the
Preliminary Approval Date and ending as of the date the Securities Creditors ' Payment is
paid by Secu rities Lead Counsel pursuant to this Section B .F.2.b, such interest to be
calculated at the Interest Rate ) pursuant to the terms of the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v. Winnick, Case No . 03-Civ. 8535
(GEL) (S.D.N.Y.) .
105
3. Within five (5) business days following the date on which the Cas h
Settlement Payment is paid, ERISA 401(k) Lead Counsel shall pay (or cause to be paid )
the following :
a, the ERISA Claim Reserve Amount Balance (if any) (plu s
interest on the ERISA Claim Reserve Amount Balance beginning as of the fifth (5th )
business day after the Preliminary Approval Date and ending as of the date the ERISA
Claim Reserve Amount Balance is paid by ERISA 401(k) Lead Counsel pursuant to thi s
Section II.F3 .a, such interest to be calculated at the Interest Rate) into the Claim Reserve
Account from that portion of the ERISA Insurance Payment attributable to the Pende r
Supplemental Amount ; and
b. the ERISA Creditors' Payment (plus interest on the ERISA
Creditors' Payment beginning as of the fifth (5th) business day after the Preliminary
Approval Date and ending as of the date the ERISA Creditors' Payment is paid by
ERISA 401(k) Lead Counsel pursuant to this Section II .F.3.b, such interest to be
calculated at the Interest Rate) pursuant to the terms of the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v. Winnick, Case No. 03-Civ . 853 5
(GEL) (S.D .N.Y.), such payment to be made from that portion of the ER .ISA Insurance
Payment attributable to the Pender Supplemental Amount .
4. The balance of the monies remaining in the Cash Settlemen t
Account after the expenses and payments described in Sections II .F.1, II .F.2 and II.F . 3
above are paid shall constitute the Net Cash Settlement Amount .
106
G. Distribution of the Net Cash Settlement Amoun t
I . The Net Cash Settlement Amount shall be distributed pursuant to
the Plans of Allocation, as described below .
2. No person or entity shall have any claim against Securities Lead
Plaintiffs, Securities Plaintiffs, Securities Lead Counsel, Executive Committee Members,
ERISA Plaintiffs' Counsel, ERISA Plaintiffs, the Administrator, the Escrow Agent or an y
of their agents, or against Securities Settling Defendants' Counsel, ERISA Settling
Defendants' Counsel, Separate Releasee Counsel or any Releasee with respect to or
arising out of any distributions or lack thereof made under any of the Plans of Allocation ,
this Settlement Agreement or orders of the Court .
3. It is understood and agreed to by the Settling Parties that ,
notwithstanding any other provision of this Settlement Agreement, none of the proposed
Plans of Allocation is a part of this Settlement Agreement, and no order or proceedings
relating to one or more of the Plans of Allocation shall operate to modify, terminate or
cancel this Settlement Agreement or affect the finality of the Final Judgment or any other
orders entered by the Court giving effect or pursuant to this Settlement Agreement .
4. The Settling Defendants, Releasees and/or their respective counsel ,
including, but not limited to, Securities Settling Defendants' Counsel, ERISA Settling
Defendants' Counsel and Separate Releasee Counsel, shall have no role in, responsibility
for, or liability with respect to any of the Plans.of Allocation, the form, substance,
method or manner of allocation, administration, or distribution of the Net Cash
Settlement Amount, any tax liability that a Class Member may incur as a result of thi s
107
Settlement Agreement, or as a result of any action taken pursuant to this Settlemen t
Agreement, the administration or processing of claims, including, without limitation ,
determinations as to the validity of Securities Proofs of Claim, the amounts of claims o r
distribution of the Net Cash Settlement Amount, or (except as specifically set out i n
Section a .C .7 above) the maintenance of the Cash Settlement Account as a Qualified
Settlement Fund.
5. Unless otherwise ordered by the Court, Class Members shall loo k
solely to the Net Cash Settlement Amount for settlement and satisfaction of all Release d
Claims. Under no circumstances will any of the Settling Parties or any Releasee be
responsible for the payment of any fees, costs, expenses or other funds associated with o r
arising out of the settlement contemplated by this Settlement Agreement . Except as
expressly provided by this Settlement Agreement, the Plans of Allocation or order of th e
Court, no Class Member shall have any interest in the Net Cash Settlement Amount o r
any portion of the Net Cash Settlement Amount .
6. To the extent that any monies remain in the Cash Settlemen t
Account after the Administrator has caused distributions to be made from the Cas h
Settlement Payment to all Securities Authorized Claimants and to all ERISA Class
Members, such monies shall be disbursed at such time and in such manner as directe d
and ordered by the Court .
H. Securities Plan of Allocation
I . Subject to Section II .G above, Securities Lead Plaintiffs shal l
propose to the Court a Securities Plan of Allocation pursuant to which the Securitie s
108
Distribution Amount shall be distributed to Securities Authorized Claimants, and shal l
seek approval of the Court for such Securities Plan of Allocation-
2_ All cash distributions to Securities Authorized Claimants shall b e
from the Securities Net Cash Settlement Amount pursuant to the Securities Plan o f
Allocation.
3 . To receive a cash distribution from the Securities Net Cash
Settlement Amount pursuant to the Securities Plan of Allocation, a Securities Clas s
Member must be a Securities Authorized Claimant pursuant to the procedures set out i n
this Settlement Agreement or by order of the Court, and must submit a Securities Proof of
Claim
4. Each Securities Authorized Claimant who wishes to receive a
distribution from the Securities Net Cash Settlement Amount must complete and submit a
Securities Proof of Claim (z) by first-class mail, such that it is postmarked no later than
forty-five (45) days after the Fairness Hearing or (ii) so that it is actually received at the
address on the Securities Proof of Claim form by the date stated in the Notice, unless that
date is extended by order of the Court . The address to which the Securities Proof of
Claim must be mailed shall be stated in the Securities Proof of Claim form itself and shal l
also be printed in the Notice .
5. A draft of the Securities Proof of Claim shall be prepared by
Securities Lead Counsel as soon as practicable ; providedhowEver, that Securities Lad
Counsel shall provide a draft of such Securities Proof of Claim to Securities Settlin g
Defendants' Lead Counsel and to Separate Releasee Counsel no later than March 30 ,
109
2004. Such draft is subject to the approval of the Securities Settling Defendants' Lead
Counsel and Separate Releasee Counsel . Securities Lead Counsel, Securities Settlin g
Defendants' Lead Counsel and Separate Releasee Counsel shall agree to a final versio n
of the Securities Proof of Claim by no later than April 15, 2004 . A copy of the Securitie s
Proof of Claim shall be submitted to the Court for its approval within thirty (30) days
following the Preliminary Approval Date _
6 . The Securities Proof of Claim must be sworn on oath or mad e
subject to the penalties of perjury pursuant to 28 U .S . C. § 1746, and be supported b y
such documents and other information as called for in the Securities Proof of Claim .
7 . The Securities Proof of Claim shall provide that the Securitie s
Class Member expressly .
a . agrees to the terms of the Securities Release that are
contained in this Settlement Agreement and that are included as an Appendix to th e
Notice ;
b. consents to the jurisdiction of the Court for purposes of
making a claim ;
c. agrees to be subject to discovery with respect to the validit y
and/or amount of his, her or its claim ; provided that such discovery shall be completed
within sixty (60) days following the date on which a question regarding the validity o r
amount of his, her or its claims is first raised ;
110
d. consents to summary disposition by the Court, without an y
right of appeal or review, with respect to the validity and/or amount of, or any other
dispute regarding, his, her or its claim ; and
C . waives trial by jury ( to the extent any such right may exist )
in connection with the Court's summary disposition of the validity or amount of his, he r
or its claim .
8 . The validity of each Securities Proof of Claim filed will be initially
determined by the Administrator, acting under Securities Lead Counsel's supervision, i n
accordance with the Securities Plan of Allocation approved by the Court . The
Administrator shall promptly advise the Securities Class Member in writing if it
determines to reject the claim. Neither Securities Lead Counsel, its designees or agents,
Securities Lead Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs' Counsel, ERISA
Plaintiffs, Securities Settling Defendants' Counsel, ERISA Settling Defendants' Counsel,
Separate Releasee Counsel nor Releasees shall have any liability arising out of such
determination . If a Securities Authorized Claimant disagrees with such determination
and the parties are unable to resolve the dispute, the Securities Authorized Claimant shall,
within thirty (30) days of the dispute's having first been raised, submit the dispute to the
Court for summary resolution, without any right of appeal or review . Any such
Securities Class Member shall be responsible for his, her or its own costs, including,
without limitation, attorneys' fees, incurred in pursuing any_dispute . . _ . .
9. All initial determinations as to the validity of a Securities Proof o f
Claim, the amount of any claims and the calculation of the extent to which eac h
ill
Securities Authorized Claimant will participate in the Securities Net Cash Settlement
Amount, the preparation and mailing of distributions to Securities Authorized Claimants,
and the distribution of the Cash Settlement Payment and the Securities Net Cash
Settlement Amount shall be made by Securities Lead Counsel, its designees or agents, the
Administrator, or such other persons or entities as Securities Lead Counsel may, in its
sole discretion, deem necessary or advisable to assist it in the administration of this
Settlement Agreement. The administration of the Cash Settlement Payment and the
Securities Net Cash Settlement Amount, and decisions on all disputed questions of law
and fact with respect to the validity of any Securities Proof of Claim or regarding the
rejection or amount of any claim, shall remain under the jurisdiction of the Court . All
Class Members and Settling Parties expressly waive trial by jury (to the extent any such
right may exist) and any right of appeal or review with respect to such determinations .
10. Unless otherwise ordered by the Court, any Securities Class
Member who fails to submit a valid and timely Securities Proof of Claim shall be barred
from receiving a distribution from the Securities Net Cash Settlement Amount, but shall
nevertheless be bound by the Securities Release and all proceedings, orders and
judgments in the Action even if he, she or it has pending, or subsequently initiates, any
litigation, arbitration or other proceeding, or has any Claim, against any or all of the
Releasees that is, or relates in any way to, any Released Claim _
I_ ERISA Plans of Allocation- _
1. Subject to Section II.G above, ERISA Plaintiffs shall propose to
the Court, and seek the Court's approval of, (z) an ERISA 401(k) Plan of Allocatio n
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pursuant to which the ERISA 401(k) Distribution Amount shall be distributed to ERIS A
401(k) Class Members and (ii) an ERISA Simonetti Plan of Allocation pursuant to whic h
the ERISA Szmonetti Distribution shall be distributed to ERISA Simonetti Class
Members .
2 . All initial determinations as to the extent to which each ERIS A
Class Member will participate in the ERISA Net Cash Settlement Amount, and th e
distribution of the Cash Settlement Payment and the ERISA Net Cash Settlement Amoun t
shall be made by ERISA Plaintiffs' Counsel, their designees or agents, the Administrator ,
or such other persons or entities as ERISA Plaintiffs' Counsel may, in their sole
discretion, deem necessary or advisable to assist them in the administration of this
Settlement Agreement . The administration of the Cash Settlement Payment and the
ERISA Net Cash Settlement Amount, and decisions on all disputed questions of law and
fact with respect to distribution of the ERISA Net Cash Settlement Amount, shall remain
under the jurisdiction of the Court . All Class Members and Settling Parties expressl y
waive trial by jury ( to the extent any such right may exist ) and any right of appeal or
review with respect to such determ inations .
3. Cooperation in Remaining Litigation
1 . Securities Settling Defendants agree reasonably to cooperate wit h
Securities Lead Counsel in connection with any continued prosecution of any claims in
the Securities Action ; provided however, that any Securities Settling Defendant who is or _
was an officer, director or employee of a Securities Non-Settling Defendant shall not b e
obligated to cooperate in the prosecution of claims against that Securities Non-Settlin g
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Defendant ; provided further that, to the extent any Securities Settling Defendant incur s
any expense in connection with cooperating with Securities Lead Counsel pursuant to thi s
provision, Securities Lead Counsel shall reimburse such Securities Settling Defendant for
such expense; provided however, that the expenses that shall be reimbursed by Securitie s
Lead Counsel shall be limited to reasonable out-of-pocket expenses, including, withou t
limitation, attorneys' fees, and such expenses must be pre-approved by Securities Lead
Counsel (which approval shall not be unreasonably withheld) prior to being incurred ;
provided further that Securities Settling Defendants expressly retain and do not waive
any applicable claim of any privilege or work-product protection in connection with any
cooperation provided to Securities Lead Counsel pursuant to this Section H .J . 1 . The
cooperation contemplated by this Section U .J.I includes, but is not limited to, interviews
of Securities Settling Defendants and the production of relevant documents related to th e
Claims against Securities Non-Settling Defendants raised by the allegations in th e
Securities Action to the extent such documents are not protected from disclosure by th e
attorney-client privilege, work-product doctrine or other applicable privileges-
2. Securities Settling Defendants and Securities Lead Plaintiff shal l
modify the existing Securities Confidentiality Agreement to allow Securities Lead
Plaintiff to use Settlement Disclosure Material (as that term is defined in the Securities
Confidentiality Agreement ) in the continued prosecution of the Securities Class Actio n
with respect to Non-Settling Defendants ; provided however, that Securities Lead Plaintiff
shall not directly share such Settlement Disclosure Material and/or the informatio n
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contained in such Settlement Disclosure Material with any individuals or entities who are
not directly involved in the Securities Class Action .
3. If, notwithstanding the Bar Orders, a person or entity obtains a
judgment against any of the Releasees on any claim that is based upon, arises out of, o r
relates to any Released Claim, including, but not limited to, any claim that is based upon ,
arises out of or relates to the Actions, or the transactions and occurrences referred to i n
the Complaints, or on any other claim, however denominated, to recover, directly or
indirectly from such Releasee, (i) any amounts that the person or entity obtaining the
judgment against the Releasee might become liable to pay to any of the Class Members
or (ii) any costs, expenses, or attorneys' fees that such person or entity might incur in
defending any claim made against him, her or it by any of the Class Members, the Class
and the Class Members agree that they will reduce or credit any judgment or settlement
(up to the amount of such judgment or settlement) that they might obtain against that
person or entity by an amount equal to the amount of that person's or entity's judgment
against the Releasee, which amount shall be credited to the Releasee .
4. If a final judgment is entered in favor of a class certified in any o f
the Actions against any person or entity before the adjudication of such person's or such
entity's claims against any Releasee, any funds collected on account of such judgment
shall not be distributed to such class that has obtained the judgment, but shall be held in
trust pending final adjudication of such claim, and such funds shall be used as a credit
against any judgment rendered in favor of the person or entity against the Releasee as
provided in Section 11 . .1 .3 above .
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Securities Lead Plaintiffs, ERISA Plaintiffs and/or any class that
has been certified in any of the Actions will use their best efforts in settling any claim
with any person or entity to obtain from such person or entity a release of any and all
claims based upon, arising out of or relating to the Actions or any of the Released Claims
that the person or entity may have against any of the Releasees .
III. PRE-APPROVAL DISCOVERY
A. Subject to the provisions of the Securities Confidentiality Agreement and
the ERISA Confidentiality Agreement (both of which will be amended following the
Execution Date to address use of discovery in connection with implementation of this
Settlement Agreement), Securities Lead Counsel and ERISA Plaintiffs' Counsel will
continue to conduct reasonable discovery into the facts underlying the claims in the
Complaints or relating to any of the Settling Defendants to assure themselves and
Securities Lead Plaintiffs, Securities Plaintiffs and ERISA Plaintiffs that such underlying
facts are consistent with their understanding, based on the discovery and investigation
they have already conducted (as described in Section LC above), and that this Settlement
Agreement is fair, reasonable and adequate .
B. Securities Lead Counsel and ERISA Plaintiffs' Counsel have stated tha t
such additional discovery will include, but not be limited to, review of additional
documents, as well as depositions and/or interviews of current or former Global Crossing
officers, directors and/or employees, and potentially of other witnesses to be identified by
Securities Lead Counsel and/or ERISA Plaintiffs' Counsel .
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C. All discovery relating to Settling Defendants shall be conducted as soon as
practicable after the Execution Date, but in any case shall be completed no later than
forty-five (45) days before the Fairness Hearing ; provided that all Settling Parties shall
provide full cooperation in completing discovery by this date, and no Settling Party shall
take any step to obstruct the discovery contemplated by this Section 111 ; provided further
that Securities Lead Counsel and ERISA Plaintiffs' Counsel may terminate this
Settlement Agreement if discovery is not completed by forty-five (45) days before the
Fairness Hearing as a result of a failure by one or more Settling Defendants to cooperat e
in completing discovery .
D. If, as a result of conducting the additional discovery contemplated by thi s
Section III, Securities Lead Counsel, Securities Lead Plaintiffs, Securities Plaintiffs ,
ERISA Plaintiffs' Counsel and ERISA Plaintiffs continue to believe that this Settlemen t
Agreement is fair, reasonable and adequate, then the Settling Parties shall execute a n
amendment to this Settlement Agreement stating that the discovery contemplated by thi s
Settlement Agreement has been completed and setting out Securities Lead Counsel's ,
Securities Lead Plaintiffs', Securities Plaintiffs', ERISA Plaintiffs' Counsel's and ERIS A
Plaintiffs' conclusions that this Settlement Agreement is fair, reasonable and adequate .
E. If, as a result of conducting the additional discovery contemplated by this
Section III, Securities Lead Counsel, Securities Lead Plaintiffs, Securities Plaintiffs ,
ERISA Plaintiffs' Counsel and ERISA Plaintiffs reasonably and in good faith do no t
believe that this Settlement Agreement is fair, reasonable and adequate, then they may
terminate or seek to renegotiate this Settlement Agreement .
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IV. NOTICE TO THE CLASS
A. Mailing of the Notice
I . Subject to the requirements of the Hearing Order and not later than
forty-five (45) days before the Fairness Hearing, Securities Lead Counsel and ERISA
401(k) Lead Counsel shall cause to be mailed, by first-class mail, postage prepaid, a cop y
of the Notice and Securities Proof of Claim (i) to each person or entity in the Class who
can be identified by reasonable effort and (ii) in cases of pending litigation, arbitration or
other proceeding, or any other Claim, against any Releasee involving any Released
Claims, to all legal counsel known by Securities Lead Counsel, ERISA Plaintiffs'
Counsel, or Settling Defendants' Lead Counsel to represent a Class Member ; provided
that Settling Defendants' Lead Counsel shall notify Securities Lead Counsel and/or
ERISA Plaintiffs' Counsel of all such legal counsel of which it is aware within twenty
(20) days following the Execution Date .
2. No later than forty-five (45) days before the Fairness Hearing,
Securities Lead Counsel, ERISA Plaintiffs' Counsel and the Administrator shall cause the
Notice to be published on their respective websites .
3. A draft of the Notice shall be prepared by Securities Lead Counsel ,
ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel in plain English as
soon as practicable after the Execution Date ; provided however, that Securities Lead
Counsel, ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel shall provide
a draft to Securities Settling Defendants' Lead Counsel, ERISA Settl ing Defendants'
Lead Counsel and Separate Releasee Counsel for their review no later than March 30,
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2004. Such draft is subject to the approval of Settling Defendants' Lead Counsel, ERIS A
Settling Defendants' Lead Counsel and Separate Releasee Counsel . Securities Lead
Counsel, ERISA 401(k) Lead Counsel, ERISA Simonetti Lead Counsel, Settling
Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel and Separate
Releasee Counsel shall agree on a final version of the Notice by no later than April 15 ,
2004. A copy of the agreed upon Notice shall be submitted to the Court within thirty (30)
days following the Preliminary Approval Date.
4. "lie Notice shall, among other things ,
a. contain a short, plain statement of the background of the
Actions ;
b, explain that the Court has certified the Securities Class for
settlement purposes and identify the Securities Class Members ;
c. explain that the Court has certified the ERISA Consolidated
Class for settlement purposes and identify the ERISA Consolidated Class Members ;
d. explain that the Court has certified the ERISA Pusloskie
Class for settlement purposes and identify the ERISA Pusloskie Class Members ;
e. explain that the Court has certified the ERISA Simonetti
Class for settlement purposes and identify the ERISA Sirnonetti Class Members ;
f, describe each of the Plans of Allocation and state that each
Plan of Allocation may be modified in connection with, among other things, a ruling by
the Court, an objection filed by a Class Member or a settlement with a person or entity
requesting exclusion from the Securities Class ;
119
g. state that any receipt of a distribution or other relief by a
Class Member is contingent on Court approval of this Settlement Agreement and such
approval becoming Final ;
h. state that all available proceeds from all of the relevant
insurance policies will be exhausted in their entirety if this Settlement Agreement i s
approved and that the insurers will be discharged and released with respect to all of their
obligations to insureds under the relevant policies ;
i . explain that (i) the Pender Securities Coverage and the
Pender Supplemental Amount shall be paid in GBP, (ii) the rate at which such GBP can
be converted to United States Dollars shall be subject to fluctuation and (iii) fluctuations
in the rate at which GBP can be converted to United States Dollars will affect the amoun t
of monies ultimately available to the Securities Class and the ER1SA Class ;
j. explain how and when a Securities Proof of Claim is to b e
submitted ;
k. state that a Securities Class Member may exclude himself,
herself or itself from the Securities Class ;
1. state that an ERISA Class Member may not exclude
himself or herself from the ERISA Class ;
rn. explain how a Securities Class Member may request
exclusion from the Securities Class and state that exclusion is necessary even if th e
Securities Class Member has pending, or subsequently initiates, any litigation, arbitratio n
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or any other proceeding, or has any Claim, against any or all of the Releasees relating to
any of the Released Claims ;
n. explain how a Class Member may object to any term or
aspect of this Settlement Agreement ;
o_ explain that, if this Settlement Agreement is approved, the
Bar Orders described in Sections XII.A.18 and XII .A.19 below will be entered by the
Court and request that any person or entity who objects to the Bar Orders should appea r
at the Fairness Hearing so that he, she or it may be heard by the Court regarding why th e
Bar Orders should not be entered by the Court as set out in this Settlement Agreement ;
p . describe the Securities Attorneys' Fees and Expense s
Application that will be submitted to the Court for approval by Securities Lead Counsel
and the amount of the ERISA Attorneys' Fees and Expenses Applications that will b e
submitted to the Court for approval by ERISA Plaintiffs' Counsel ;
q . identify the date, time and location of the Fairness Hearing,
and explain that the date and time may change without further notice ;
r . set forth in an appendix or otherwise the complete languag e
of the Securities Release and the ERISA Release, as well as the relevant definitions fo r
terms in the Securities Release and the ERISA Release ; and
s . direct Class Members who have questions about the tax
consequences of participating in the settlement to consult their-own tax .advisors
regarding such consequences .
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S. The Notice shall conform to all applicable requirements of the
Federal Rules of Civil Procedure, the United States Constitution (including the Due
Process Clause), the PSLRA, the Rules of the Court and any other applicable law, and
shall otherwise be in the manner and form agreed upon by the Settling Parties and
approved by the Court.
B. Summary Notice
I . No later than forty-five (45) days before the Fairness Hearing ,
Securities Lead Counsel and ERISA Consolidated Lead Counsel shall cause the
Summary Notice to be published on at least one occasion in the newspapers identified o n
Exhibit C.
2. A draft of the Summ ary Notice shall be prepared by Securitie s
Lead Counsel, ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel in plain
English as soon as practicable after the Execution Date ; provided however, that Securities
Lead Counsel, ERISA 401(k) Lead Counsel and ERISA Sifnonetti Lead Counsel shal l
provide a draft to Securities Settling Defendants' Lead Counsel, ERISA Settling
Defendants' Lead Counsel and Separate Releasee Counsel for their review no later than
March 30, 2004. Such draft is subject to the approval of Settling Defendants' Lead
Counsel, ERISA Settling Defendants' Lead Counsel and Separate Releasee Counsel_
Securities Lead Counsel, ERISA 401(k) Lead Counsel, ERISA Sifnonetti Lead Counsel ,
Settling Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel an d
Separate Releasee Counsel shall agree on a final version of the Summary Notice by n o
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later than April 15, 2004 . A copy of the agreed upon Summary Notice shall be submitte d
to the Court within thirty (30) days following the Preliminary Approval Date .
V. RETENTION OF ADMINISTRATO R
A. As ordered in the Hearing Order, Securities Lead Counsel and ERISA
401(k) Lead Counsel shall retain the Administrator to help implement the settlement
contemplated by this Settlement Agreement .
B. The Administrator may assist with various tasks, including, withou t
limitation: (1) mailing or arranging for the mailing of the Notice to Class Members ;
(ii) arranging for publication of the Summary Notice ; (iii) publication of the Notice on
the Administrator's website ; (iv) answering written inquiries from Class Members andlo r
forwarding such inquiries to Securities Lead Counsel, ERISA 401(k) Lead Counsel or
their designee(s) ; (v) providing additional copies of the Notice, upon request, t o
Nominees or Class Members, with respect to which the Administrator shall separately
record the number of Notices sent to ERISA Class Members and to Securities Clas s
Members (or Nominees); (w) receiving and maintaining on behalf of the Court an y
requests for exclusion from the settlement received from potential Securities Clas s
Members ; (vii) receiving and processing Securities Proofs of Claim from Securities Clas s
Members ; (viii) mailing or causing to be mailed to Securities Authorized Claimants their
distributions under the Securities Plan of Allocation ; and (ix) otherwise assisting
Securities Lead Counsel and ERISA 401(k) Lead Counsel with administration and,
implementation of this Settlement Agreement.
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C. As ordered by the Court in the Hearing Order, the Administrator shal l
establish and staff with representatives knowledgeable about this Settlement Agreemen t
and the Plans of Allocation a toll-free telephone number for responding to inquiries from
Class Members about this Settlement Agreement and any issues relating to the Actions .
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel shall agree to a protocol for operating the telephone number consistent with
industry standards, and Securities Lead Counsel and ERISA 401(k) Lead Counsel shall
require the Administrator to operate the toll-free telephone number consistent with suc h
agreed-upon standard .
VI . RIGHT TO COMMUNICATION WITH CLASS MEMBERS
A. Securities Lead Plaintiffs, Securities Plaintiffs, Securities Lead Counsel ,
Executive Committee Members, ERISA Plaintiffs and ERISA Plaintiffs' Counse l
acknowledge and agree that Global Crossing has the right to communicate orally and i n
writing with, and to respond to inquiries from, Class Members, including, without
limitation :
L communications between Class Members and representatives o f
Global Crossing whose responsibilities include ( z) investor relations or (ii) administerin g
the Company's ERISA Plans to the extent such communications are initiated by Clas s
Members; and
2. communications as may be necessary to implement the terms of
this Settlement Agreement and to conduct the Company's normal business .
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B. Subject to Section XIV.C below, Securities Lead Plaintiffs, Securitie s
Lead Counsel, ERISA Plaintiffs, ER.ISA Plaintiffs' Counsel, Settling Defendants '
Counsel and Separate Releasee Counsel agree to cooperate in good faith to ensure that
any comments about or descriptions of the settlement contemplated by this Settlemen t
Agreement are balanced, fair and accurate .
VII. REQUESTS FOR EXCLUSION
A. Any potential Secu rities Class Member who wishes to be excluded from
the Securities Class must mail by first-class mail or otherwise deliver a written reques t
for exclusion to the Administrator, care of the address provided in the Notice, such that i t
is postmarked or delivered no later than ten (10) days before the Fairness Hearing, or a s
the Court may otherwise direct; provided that a request for exclusion from the Securitie s
Class with respect to any ERISA Plan shall be valid only if submitted by a person o r
entity authorized by the relevant ERISA Plan documents to act on behalf of such ERISA
Plan . A list of the persons and entities who have validly and timely requested exclusio n
from the Securities Class shall be provided by the Settling Parties to the Court at o r
before the Fairness Hearing .
B. A potential Securities Class Member's request for exclusion shall includ e
the following information : (i) name, ( ii) address , ( iii) telephone number, ( iv) number and
type of Global Crossing Securities purchased, sold, exchanged, acquired or retained ,
(v) prices paid or value at receipt and (vi) the date of each transaction .
C. Unless otherwise ordered by the Court, any potential Securities Clas s
Member who does not file a timely written request for exclusion as provided by thi s
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Section VII shall be bound by the Securities Release and by all proceedings, orders and
judgments in the Securities Action, even if he, she or it has pending, or subsequently
initiates, litigation, arbitration or any other proceeding, or has any Claim, against any or
all of the Releasees relating to any of the Released Claims ; provided further that any
potential Securities Class Member who also is an ERISA Class Member shall remain a n
ERISA Class Member and be bound by the ERISA Release even if he or she files a
timely written request for exclusion from the Securities Class pursuant to this Sectio n
VII.
VIII . OBJECTIONS TO SETTLEMEN T
A. Any Class Member who wishes to object to the fairness, re asonableness o r
adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to any term(s) of
this Settlement Agreement, or to the proposed Securities Attorneys' Fees and Expenses
Award or the proposed ERISA Attorneys' Fees and Expenses Award must both effect
service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel and file with the Court by no later than ten (10) days before
the Fairness Hearing, or as the Court may otherwise direct, a statement of his, her or it s
objection(s) ; provided however, that a potential Securities Class Member who request s
exclusion from the Securities Class pursuant to Section VII above shall not be able t o
submit an objection pursuant to this Section VIII .
B. The statement of objection of the Class Member shall state (i) whether th e
Class Member is a Securities Class Member, an ERISA Class Member or both, (ii) whic h
part of this Settlement Agreement (that relating to the Securities Action, the ERISA
126
Actions or the Actions) the Class Member objects to and ( iii) the specific reason(s), if
any, for each such objection made by the Class Member, including any legal support th e
Class Member wishes to bring to the Court's attention and any evidence the Clas s
Member wishes to introduce in support of such objection-
C. Any Class Member may file an objection on his, her or its own, or throug h
an attorney hired at his, her or its own expense . If a Class Member hires an attorney t o
represent him, her or it in connection with filing an objection, the attorney must both
effect service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel and file with the Court a notice of appearance no later than te n
(10) days before the Fairness Hearing, or as the Court otherwise may direct .
D. Securities Class Members and any attorneys hired at their expense ma y
obtain access to the discovery materials in the Securities Action for the sole purpose o f
assessing this Settlement Agreement, but must first agree in writing to be bound by th e
Securities Stipulation of Confidentiality .
A draft of the Securities Stipulation of Confidentiality shall be
prepared by Securities Lead Counsel and Settling Defendants ' Lead Counsel as soon as
practicable after the Execution Date, but not later than March 31, 2004.
2. The discovery materials in the Securities Action shall be made
available for inspection at the offices of Settling Defendants' Lead Counsel in New York,
New York; provided that a Securities Class Member (or his, her or its attorney (if any) )
shall be provided access to discovery materials for a period of no more than thirty (30 )
days from the date on which a request for access is made .
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E. ERISA Class Members and any attorneys hired at their expense ma y
obtain access to the discovery materials in the ERISA Actions for the sole purpose o f
assessing this Settlement Agreement, but must first agree in writing to be bound by th e
ERISA Stipulation of Confidentiality .
1. A draft of the ERISA Stipulation of Confidentiality shall be
prepared by ERISA 401(k) Lead Counsel and ERISA Settling Defendants' Lead Counsel
as soon as practicable after the Execution Date, but not later than March 31, 2004 .
2. The discovery materials in the ERISA Actions shall be made
available for inspection at the offices of Settling Defendants' Lead Counsel i n
Washington, D.C. ; provided that an ERISA Class Member (or his, her or its attorney (i f
any)) shall be provided access to discovery materials for a period of no more than thirt y
(30) days from the date on which a request for access is made .
F. Settling Defendants' Lead Counsel shall inform Securities Lead Counsel
and ERISA 401(k) Lead Counsel promptly of any request by Class Members or thei r
attorneys for access to the discovery materials in either the Securities Action or th e
ERISA Actions, and identify for Securities Lead Counsel and ERISA 401(k) Lead
Counsel any such Class Member (as well as his, her or its attorney (if any)) who request s
access to the discovery materials and the date on which such access is requested .
G. Any Class Member who files and serves a written objection pursuant t o
this Section VIII- and only such Class Members - may appear at the Fairness Hearing ,
either in person or through counsel hired at the Class Member's expense, to object to th e
fairness, reasonableness or adequacy of this Settlement Agreement, to the Plan(s) of
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Allocation, to any term(s) of this Settlement Agreement, or to the proposed Securitie s
Attorneys' Fees and Expenses Award or the proposed ERISA Attorneys' Fees and .
Expenses Awards . Class Members or their attorneys intending to make an appearance at
the Fairness Hearing must both effect service on Securities Lead Counsel, ERISA 401(k)
Lead Counsel and Settling Defendants' Lead Counsel and file with the Court a notice of
intention to appear by no later than ten (10) days before the Fairness Hearing, or as th e
Court otherwise may direct.
H. Any Class Member who fails to comply with any of the provisions of thi s
Section VIII shall waive and forfeit any and all rights he, she or it may otherwise have t o
appear separately at the Fairness Hearing and/or to object to this Settlement Agreement ,
and shall be bound by all the terms of this Settlement Agreement and by all proceedings ,
orders and judgments in the Actions .
IX. RELEASE AND WAIVER, AND ORDER OF DISMISSAL
A. Securities Release and Waiver
1 . Without further action by anyone, and subject to Sectio n
IX.A.4 below, on and after the date on which all of the payments required by Section s
II .C. La, H.C. Lb, R.C.4 and H.C.5 have been made into the Cash Settlement Securitie s
Subaccount, any and all Securities Class Members (including those Securities Clas s
Members who are parties to any other litigation, arbitration or other proceedings against ,
or have any Claim against any of the Releasees that is, or relates in any way to, an y
Released Claim that is pending on the Final Settlement Date), on behalf of themselves ,
their heirs, executors, administrators, beneficiaries, predecessors, successors, affiliates (a s
129
defined in 17 C .F.R. Part 210.1-021), assigns, any person or entity claiming by or
through any of the Securities Class Members and any person or entity representing any or
all Securities Class Members, for good and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, shall be deemed to have, and by operation
of law and of the Final Judgment shall have, fully, finally, and forever released ,
relinquished, settled, and discharged:
all Released Claims against each and every one of th e
Releasees, including such Released Claims as already have been, could have been o r
could be asserted in any pending litigation, arbitration, or other proceeding, or othe r
Claims, and whether or not a Securities Proof of Claim has been executed and/or
delivered by, or on behalf of, any such Securities Class Member,
b. all claims, damages and liability as to Securities Lead
Counsel or any or all Securities Lead Plaintiffs, Executive Committee Members ,
Securities Plaintiffs, Settling Defendants' Counsel, Separate Releasee Counsel and eac h
and every one of the Releasees that relate in any way to any or all acts, omissions ,
nondisclosures, facts, matters, transactions, occurrences or oral or written statements o r
representations in connection with or directly or indirectly relating to the prosecution ,
defense or settlement of the Securities Action or to this Settlement Agreement, and an y
and all claims for attorneys' fees, costs or disbursements incurred by Securities Lead
Counsel or other counsel representing Securities Lead Plaintiffs, Securities Plaintiffs o r
the Securities Class Members in the Securities Action, or any of them, in connection with
or related in any manner to the Securities Action, the ERISA Actions, the settlement of
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the Securities Action and/or the ERISA Actions, or the administration of the Securitie s
Action, the ERISA Actions and/or the settlement of such Actions except to the extent
otherwise specified in this Settlement Agreement ; and
c. all claims, damages and liabilities as to the Securitie s
Insurers' Escrow Agent, the Securities Reinsurers' Trust Agent, the ERISA Escro w
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent an d
the Winnick ERISA Escrow Agent for anything done or omitted by such agent in
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, the
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thacher
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERISA
Escrow Agreement except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers ' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's, the Winnick Securities Escrow Agent's and/or th e
Winnick ERISA Securities Escrow Agent's (as the case may be) bad faith, gros s
negligence, willful misconduct or breach of, respectively, the Securities Insurers' Escrow
Agreement, the Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, th e
Simpson Thacher Escrow Agreement, the Winnick Securities Escrow Agreement and th e
Winnick ERISA Escrow Agreement .
2. Without further action by anyone, and subject to Section
JX.A.4 below , on and after the date on which all of the payments required by Sections
U.C.l .a, II .C.I .b, II .C.4 and II .C.S have been made into the Cash Settlement Securitie s
Subaccount, all Securities Settling Defendants' Counsel and any or all Securities Settlin g
131
Defendants, Simpson Thacher and Separate Releasee Counsel on behalf of themselves,
their heirs, executors, administrators, predecessors, successors, affiliates (as defined in 17
C.F.R. Part 210 .1-02.b), assigns, any person or entity claiming by or through any of the
Securities Settling Defendants and any person or entity representing any or all Securities
Settling Defendants, for good and sufficient consideration, the receipt and adequacy of
which are hereby acknowledged, shall be deemed to have, and by operation of law and of
the Final Judgment shall have, fully, finally, and forever released, relinquished, settled,
and discharged (1) Securities Lead Counsel and any or all Securities Lead Plaintiffs and
Securities Plaintiffs from any and all Claims and/or Unknown Claims that relate in any
way to any or all acts directly or indirectly relating to the prosecution, defense or
settlement of the Securities Action, the ERISA Actions or to this Settlement Agreement .
(ii) the Securities Insurers' Escrow Agent, the Securities Reinsurers' Trust Agent, the
ERISA Escrow Agent, the Simpson Thacher Escrow Agent, the Winnick Securities
Escrow Agent and the Winnick ERISA Escrow Agent from all claims, damages and
liabilities as to anything done or omitted by such agent in performing its duties under,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the
Winnick Securities Escrow Agreement and the Winnick ERISA Escrow Agreement
except such claims that are based upon the Securities Insurers' Escrow Agent's, the
Securities Reinsuers' Escrow Agent's, the ERISA Escrow Agent's, the Simpson _
Thacher's Escrow Agent's, the Winnick Securities Escrow Agent's and/or the Winnick
ERISA Escrow Agent's (as the case may be) bad faith, gross negligence, willfu l
132
misconduct or breach of, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thacher
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERISA
Escrow Agreement and (iii) the Insurers from all claims, damages and liabilities as to
anything done or omitted by the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers ' Trust Agent and the ERISA Escrow Agent in performing duties under ,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed and the ERISA Escrow Agreement.
3 . Without further action by anyone, and subject to Sectio n
IX.A .4 below, on and after the date on which all of the payments required by Section s
II .C.1 .a, II.C.Lb, H.C.4 and II .CS have been made into the Cash Settlement Securities
Subaccount, Securities Lead Counsel, Executive Committee Members, and any or al l
Securities Lead Plaintiffs or Securities Plaintiffs, on behalf of themselves, their heirs ,
executors, administrators , predecessors, successors, affiliates (as defined in 17 C.F.R .
Part 210 .1-02.b), assigns, any person or entity claiming by or through any of them an d
any person or entity representing any or all Securities Lead Plaintiffs and/or Securitie s
Plaintiffs, for good and sufficient consideration, the receipt and adequacy of which ar e
hereby acknowledged, shall be deemed to have, and by operation of law and of the Fina l
Judgment shall have, fully, finally, and forever released, relinquished, settled, an d
discharged (i) Settling Defendants' Counsel, Separate Releasee Counsel and any or all
Releasees from any and all Claims and/or Unknown Claims that relate in any way to any
or all acts directly or indirectly relating to the prosecution, defense or settlement of th e
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Securities Action, the ERISA Actions or to this Settlement Agreement, (ii) the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escro w
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent from all claims, damages and liabilities as to anythin g
done or omitted by the such agent in performing its duties under, respectively, the
Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust Deed, th e
ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the Winnick
Securities Escrow Agreement and the Winnick ERISA Escrow Agreement except such
claims that are based upon the Securities Insurers' Escrow Agent's, the Securitie s
Reinsuers' Escrow Agent's, the ERISA Escrow Agent's, the Simpson Thacher Escro w
Agent's, the Winnick Securities Escrow Agent's and/or the Winnick ERISA Escro w
Agent's (as the case may be) bad faith, gross negligence, willful misconduct or breach of,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, th e
Winnick Securities Escrow Agent and the Winnick ERISA Escrow Agreement an d
(iii) the Insurers from all claims, damages and liabilities as to anything done or omitted
by the Securities Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent and the
ERISA Escrow Agent in performing duties under, respectively, the Securities Insurers '
Escrow Agreement, the Securities Reinsurers' Trust Deed and the ERISA Escro w
Agreement .
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4. Notwithstanding Sections IX .A.1,1X.A .2 and IX.A.3 above ,
nothing in the Final Judgment shall bar any action or claim by the Securities Settlin g
Parties to enforce the terms of this Settlement Agreement or the Final Judgment .
5 . Notwithstanding Sections IX.A.1, IX.A.2 and IX.A.3 above ,
nothing in this Settlement Agreement or the Final Judgment shall release, interfere with
or bar the prosecution of, any claims brought by plaintiff in the action captioned
JPMorgan Chase Bank, et al. v. Winnick, et al., currently pending in the court as Case
No. 03 Civ. 8535 (GEL).
6 . With respect to any and all Released Claims, the Securities Settlin g
Parties stipulate and agree that, by the terms of the Final Judgment, each Securities Class
Member shall have and be deemed to have waived and relinquished, to the fullest extent
permitted by law, any and all provisions, rights and benefits conferred by Section 1542 of
the California Civil Code or any federal, state, or foreign law, rule, regulation or common
law doctrine that is similar, comparable, equivalent, or identical to, or which has the
effect of, Section 1542 of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does no t
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.
Notwithstanding the provisions of Section 1542 and any similar provisions, rights an d
benefits conferred by any law, rule, regulation or common law doctrine of California or
in any federal, state or foreign jurisdiction, Securities Class Members understand an d
135
agree that , subject to Section IX.A.4 above, the Securities Release is intended to include
all Released Claims Securities Class Members have or may have, including Released
Claims that are Unknown Claims. Securities Class Members hereby stipulate and agree
that they shall have and be deemed to have, on or after the date on which all of the
payments required by Sections II .C.l .a, B.C.I .b, II .C.4 and l .C.5 have been made into
the Cash Settlement Securities Subaccount , fully, finally and forever settled and release d
any and all Released Claims whether or not they are Unknown Claims .
7. With respect to the releases provided in Sections IX.A.2 and
IX.A.3, each individual and entity providing such release stipulates and agrees that, by
the terms of the Final Judgment, each such individual and entity shall have and be
deemed to have waived and relinquished, to the fullest extent permitted by law, any and
all provisions, rights and benefits conferred by Section 1542 of the California Civil Code
or any federal, state, or foreign law, rule, regulation or common law doctrine that is
similar, comparable, equivalent, or identical to, or which has the effect of, Section 1542
of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does no t
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.
Notwithstanding the provisions of Section 1542 and any similar provisions, rights-an d
benefits conferred by any law, rule, regulation or common law doctrine of California o r
in any federal, state or foreign jurisdiction, each individual and entity providing a releas e
136
in either Section CA .2 or Section IX .A .3 above understands and agrees that the
Securities Release is intended to include all Claims and/or Unknown Claims that be, sh e
or it has or may have that relate in any way to any or a ll acts directly or indirectly relating
to the prosecution , defense or settlement of the Securities Action or to this Settlement
Agreement , including such Claims that are Unknown Claims . Each such individual and
entity hereby stipulates and agrees that he, she or it shall have and be deemed to have, on
or after the date on which all of the payments required by Sections II .C.l .a , II.C.I .b,
u.C .4 and II .C.5 have been made into the Cash Settlement Securities Subaccount , fully ,
finally and forever settled and released any and all Claims that relate in any way to any o r
all acts directly or indirectly relating to the prosecution, defense or settlement of th e
Securities Action, the ERISA Actions or to this Settlement Agreement whether or no t
they are Unknown Claims .
8 . The releases and waivers contained in this Section IX_A were
separately bargained for and are essential elements of this Settlement Agreement .
B. ERISA Release and Waive r
1 . Without further action by anyone, and subject to Sectio n
IX.B .4 below, on and after the date on which all of the payments required by Section s
II .C .2 .a and II.C.3 have been made into the Cash Settlement ERISA Subaccount, any and
all ERISA Class Members (including those who are parties to any other litigation ,
arbitration or other proceedings, or have any Claim against any of the Releasees that is ,
or relates in any way to, any Released Claim that is pending on the Final Settlemen t
Date), on behalf of themselves, their heirs, executors, administrators, beneficiaries ,
137
predecessors, successors, affiliates (as defined in 17 C .F.R. Part 210 .1-02.b), assigns, any
person or entity claiming by or through any of the ERISA Class Members and any person
or entity representing any or all ERISA Class Members, for good and sufficien t
consideration, the receipt and adequacy of which are hereby acknowledged, shall be
deemed to have, and by operation of law and of the Final Judgment shall have, fully,
finally, and forever released, relinquished, settled, and discharged :
a . all Released Claims against each and every one of th e
Releasees, including such Released Claims as already have been, could have been or
could be asserted in any pending litigation, arbitration, or other proceeding, or other
Claims ;
b. all claims, damages and liabilities as to ERISA Plaintiffs '
Counsel or any or all ERISA Plaintiffs, Settling Defendants' Counsel or Releasees that
relate in any way to any or all acts, omissions, nondisclosures, facts, matters,
transactions, occurrences or oral or written statements or representations in connection
with or directly or indirectly relating to the prosecution, defense or settlement of the
ERISA Actions or to this Settlement Agreement, and any and all claims for attorneys'
fees, costs or disbursements incurred by ERISA Plaintiffs Counsel or other counsel
representing ERISA Plaintiffs or the ERISA Class Members in the ERISA Actions, or
any of them, in connection with or related in any manner to the ERISA Actions, the
Securities Action, the settlement of the ERISA Actions and/or the Securities Action, or
the administration of the ERISA Actions, the Securities Action and/or the settlement of
such Actions except to the extent otherwise specified in this Settlement Agreement ; and
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c. all claims, damages and liabilities as to the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escrow
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent for anything done or omitted by the such agent i n
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers ' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's the Winnick Securities Escrow Agent's and/or th e
Winnick ERISA Securities Escrow Agent's (as the case may be) bad faith, gros s
negligence, willful misconduct or breach of, respectively, the Securities Insurers' Escrow
Agreement, the Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, th e
Simpson Thacher Escrow Agreement, the Winnick Securities Escrow Agreement and th e
Winnick ERISA Escrow Agreement .
2. Without further action by anyone, and subject to Sectio n
IX.B.4 below, on and after the date on which all of the payments required by Section s
II.C.2 .a and II .C3 have been made into the Cash Settlement ERISA Subaccount, all
ERISA Settling Defendants' Counsel and any or all ERISA Settling Defendants on behalf
of themselves, their heirs, executors, administrators, predecessors, successors, affiliate s
(as defined in 17 C .F.R. Part 210 .1-02.b), assigns, any person or entity claiming by o r
through any of the ERISA Settling Defendants and any person or entity representing an y
139
or all ERISA Settling Defendants, for good and sufficient consideration, the receipt an d
adequacy of which are hereby acknowledged, shall be deemed to have, and by operation
of law and of the Final Judgment shall have, fully, finally, and forever released,
relinquished, settled, and discharged (i) ERISA Plaintiffs' Counsel and any or all ERIS A
Plaintiffs from any and all Claims and/or Unknown Claims that relate in any way to any
or all acts directly or indirectly relating to the prosecution, defense or settlement of the
ERISA Actions, the Securities Action or to this Settlement Agreement, (it) the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escrow
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent from all claims, damages and liabilities as to anythin g
done or omitted by the such agent in performing its duties under, respectively, th e
Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust Deed, th e
ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the Winnick
Securities Escrow Agreement and the Winnick ERISA Escrow Agreement, except such
claims that are based upon the Securities Insurers' Escrow Agent's, the Securitie s
Reinsuers' Escrow Agent's, the ERZSA Escrow Agent's, the Simpson Thacher Escrow
Agent's, the Winnick Securities Escrow Agent's and/or the Winnick ERISA Escro w
Agent's (as the case may be) bad faith, gross negligence, willful misconduct or breach of,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, th e
Winnick Securities Escrow Agreement and the Winnick ERISA Escrow Agreement an d
(zip) the Insurers from all claims, damages and liabilities as to anything done or omitte d
140
by the Securities Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent and th e
ERISA Escrow Agent in performing duties under, respectively, the Securities Insurers '
Escrow Agreement, the Securities Reinsurers' Trust Deed and the ERISA Escro w
Agreement .
3. Without further action by anyone , and subject to Section
IX.B.4 below, on and after the date on which all of the payments required by Section s
H.C.2.a and II .C.3 have been made into the Cash Settlement ERISA Subaccount, ERIS A
Plaintiffs' Counsel and any or all ERISA Plaintiffs, on behalf of themselves, their heirs,
executors, administrators, predecessors, successors, affiliates (as defined in 17 C .F.R .
Part 210.1-02.b), assigns, any person or entity claiming by or through any of them and
any person or entity representing any or all ERISA Plaintiffs, for good and sufficient
consideration, the receipt and adequacy of which are hereby acknowledged, shall be
deemed to have, and by operation of law and of the Final Judgment shall have, fully ,
finally, and forever released, relinquished, settled, and discharged (i) ERISA Settling
Defendants' Counsel and any or all Releasees from any and all Claims and/or Unknow n
Claims that relate in any way to any or all acts directly or indirectly relating to th e
prosecution , defense or settlement of the ERISA Actions, the Securities Action or to this
Settlement Agreement, (ii) the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers' Trust Agent, the ERISA Escrow Agent, the Simpson Thacher Escrow Agent ,
the Winnick Securities Escrow Agent and the Winnick ERISA Escrow Agent from al l
claims, damages and liabilities as to anything done or omitted by the such agent in
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, the
141
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement, except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers ' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's, the Winnick Securities Escrow Agent's and/or the
Winnick ERISA Escrow Agent's (as the case may be) bad faith, gross negligence, willfu l
misconduct or breach of, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement and (iii) the Insurers from all claims, damages and liabilities as t o
anything done or omitted by the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers' Trust Agent and the ERISA Escrow Agent in performing duties under ,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed and the ERISA Escrow Agreement .
4. Notwithstanding Sections IX.B.1, IX . B.2 and IX.B3 above,
nothing in the Final Judgment shall bar any action or claim by the ERISA Settling Parties
to enforce the terms of this Settlement Agreement or the Final Judgment.
With respect to any and all Released Claims, the ERISA Settling
Parties stipulate and agree that, by the terms of the Final Judgment, each ERISA Clas s
Member shall have and be deemed to have waived and relinquished, to the fullest exten t
permitted by law, any and all provisions , rights and benefits conferred by Section 1542 of
the Californi a Civil Code or any federal , state, or foreign law, rule, regulation or common
142
law doctrine that is similar, comparable, equivalent, or identical to, or which has th e
effect of, Section 1542 of the California Civil Code, which provides :
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 wit h
the debtor .
Notwithstanding the provisions of Section 1542 and any similar provisions, rights and
benefits conferred by any law, rule, regulation or common law doctrine of California or
in any federal, state or foreign jurisdiction, ERISA Class Members understand and agree
that, subject to Section lX .B .4 above, the ERISA Release is intended to include all
Released Claims ERISA Class Members have or may have, including Released Claims
that are Unknown Claims . ERISA Class Members hereby stipulate and agree that the y
shall have and be deemed to have, on or after the date on which all of the payments
required by Sections II .C.2.a and II .C.3 have been made into the Cash Settlement ERISA
Subaccount, fully, finally and forever settled and released any and all Released Claims
whether or not they are Unknown Claims .
6. With respect to the releases provided in Sections pX .B.2 and
IX.B.3, each individual and entity providing such release stipulates and agrees that, by
the terms of the Final Judgment, each such individual and entity shall have and be
deemed to have waived and relinquished, to . the fullest extent permitted by law, any and
all provisions, rights and benefits conferred by Section 1542 of the California Civil Code
or any federal, state, or foreign law, rule, regulation or common law doctrine that i s
143
similar, comparable, equivalent, or identical to, or which has the effect of, Section 1542
of the California Civil Code, which provides :
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 wit h
the debtor .
Notwithstanding the provisions of Section 1542 and any similar provisions, rights an d
benefits conferred by any law, rule, regulation or common law doctrine of California o r
in any federal, state or foreign jurisdiction, each individual and entity providing a release
in either Section IX .B.2 or Section ]X.B3 above understands and agrees that the ERIS A
Release is intended to include all Claims and/or Unknown Claims that he, she or it has or
may have that relate in any way to any or all acts directly or indirectly relating to the
prosecution, defense or settlement of the ERISA Actions or to this Settlement Agreement,
including such Claims that are Unknown Claims . Each such individual and entity hereby
stipulates and agrees that he, she or it shall have and be deemed to have, on or after the
date on which all of the payments required by Sections H.C.2.a and II .C.3 have bee n
made into the Cash Settlement ERISA Subaccount, fully, finally and forever settled an d
released any and all Claims that relate in any way to any or all acts directly or indirectly
relating to the prosecution, defense or settlement of the ERISA Actions, the Securitie s
Action or to this Settlement Agreement whether or not they are Unknown Claims .
7_ The releases and waivers contained in this Section IX.B were
separately bargained for and are essential elements of this Settlement Agreement .
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C. Order of Dismissa l
1 . The Settling Parties will seek and obtain from the Court a Fina l
Judgment and an Order Approving Settlement as further described in Section X II below.
The Final Judgment and Order Approving Settlement shall, among other things, (i)
approve this Settlement Agreement as fair, reasonable and adequate, (ii) dismiss the
Actions with prejudice and on the merits, (iii) enter the Bar Orders, and (iv) incorporate
the Securities Release and the ERISA Release .
X. ATTORNEYS' FEES AND EXPENSE S
A. Securities Attorneys' Fees and Expense s
1 . Securities Lead Counsel will make a Securities Attorneys' Fee s
and Expenses Application at the time of the Fairness Hearing, which application shall
seek an award of attorneys' fees not in excess of thirty eight million four hundred
thousand dollars ($38,400,000) (approximately 16% of the Securities Cash Settlement
Amount) as well as reimbursement of expenses not to exceed two million nine hundred
thousand dollars ($2,900,000) . Releasees shall take no position with respect to Securities
Lead Counsel's Securities Attorneys' Fees and Expenses Application or cause any third
party to take any position with respect to Securities Lead Counsel's Securities Attorneys'
Fees and Expenses Application, and Securities Lead Counsel may represent that
Releasees do not oppose a Securities Attorneys' Fees and Expenses Applicatio n
consistent with this Section X .A.1 . The apportionment and distribution among securities _
plaintiffs' counsel of Securities Attorneys Fees & Expenses shall be within the sole
discretion of Securities Lead Counsel .
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2. Subject to Sections X .A.3, X.A_4 and X .A.5 below, the Securities
Attorneys' Fees and Expenses Award shall be paid to Securities Lead Counsel within five
(5) business days after the later of the Approval Date or such other date that the Court
issues the order setting out the Securities Attorneys' Fees and Expenses Award .
3. If this Settlement Agreement is properly and timely terminated i n
accordance with the terms of this Settlement Agreement, then Securities Lead Counsel
shall within five (5) business days following such termination return to the Securities
Insurers or to Pender Securities Reinsurers, to be allocated among them pursuant to the
terms of the escrow agreement and trust deed applicable to, respectively, the Securities
Insurers' Insurance Escrow Account and the Securities Reinsurers' Insurance Trust
Account, the Securities Attorneys' Fees and Expenses Award with interest at the Interest
Rate, such interest being calculated beginning as of the day the Securities Attorneys' Fees
and Expenses Award was paid pursuant to Section II .B .I above and ending as the day the
Securities Attorneys' Fees and Expenses Award is returned to the Securities Insurers or
Pender Securities Reinsurers pursuant to this Section X .A.3 .
4. If, after entry of the Final Judgment and Order Approving
Settlement, the Securities Attorneys' Fees and Expenses Award is reduced, then
Securities Lead Counsel shall within five (5) business days pay to the Securities Insurers'
Insurance Escrow Account or the Securities Reinsurers' Insurance Trust Account, as the
case may be, the difference between the Securities Attorneys' Fees and Expenses Award
and the reduced amount, plus interest on such difference at the Interest Rate, such interest
being calculated beginning as of the day the Securities Attorneys' Fees and Expense s
146
Award was paid pursuant to Section H .B .labove and ending as of the day the difference
between the Securities Attorneys' Fees and Expenses Award and the reduced amount is
paid to the Securities Insurers' Insurance Escrow Account and/or the Securitie s
Reinsurers' Insurance Trust Account pursuant to this Section X.A.4 ; provided that, if an y
portion of the Securities Attorneys' Fees and Expenses Award is paid in GBP and ,
pursuant to this Section X .A.3, Securities Lead Counsel is required to return such monie s
to the Securities Insurers or Pender Securities Reinsurers, Securities Lead Counsel shall
be required to return such monies, plus interest at the Interest Rate, in GBP in the same
amount as paid to Securities Lead Counsel .
5 . Securities Lead Counsel's obligation to return any of the Securitie s
Attorneys ' Fees and Expenses Award, as described in Sections X.A.3 and X.A.4 above,
shall be evidenced by a promisso ry note , which shall be executed on behalf of the firm,
and individually by the members of the executive committee, of Grant & Eisenhofer,
P.A. In addition, as a condition of receiving the Securities Attorneys' Fees and Expense s
Award, Grant & Eisenhofer, P .A., on behalf of itself and each of its partners and/o r
shareholders, agrees that the law firm and its partners and/or shareholders are subject t o
the jurisdiction of the Court for the purpose of enforcing this Section X.A.5 : provided
that if any Executive Committee Member or any other law firm receives any portion o f
the Securities Attorneys' Fees and Expenses Award from Securities Lead Counsel prior
to Final Settlement Date, such Executive Comnditee Member or law firm shall, prior to
the receipt of any such fees or expenses , provide Securities Lead Counsel with a
promissory note and/or a letter of credit respecting such payment (at Securities Lead
147
Counsel's sole discretion), which promissory note and/or letter of credit shall be executed
on behalf of the firm receiving the payment to the satisfaction of Securities Lead
Counsel ; provided further that Securities Lead Counsel shall remain liable with respect to
the entire amount of Securities Attorneys' Fees and Expenses consistent with the terms of
this Section X . Without limitation, Grant & Eisenbofer, P .A . and each of its partners
and/or shareholders agree that the Court may, upon application of Securities Settling
Defendants, on notice to Grant & Eisenhofer, P .A ., summarily issue orders, including,
but not limited to, judgments and attachment orders, and may make appropriate findings
of or sanctions for contempt, against them or any of them (if applicable) should Grant &
Eisenhofer, P.A. fail timely to repay any amounts pursuant to this Section X .A.S .
6. No Releasee shall be liable or obligated to pay any fees, expenses ,
costs or disbursements to, or incur any expense on behalf of, any person or entity
(including, without limitation, Securities Lead Plaintiffs and/or Securities Plaintiffs),
directly or indirectly, in connection with the Securities Action, the ERISA Actions or this
Settlement Agreement, except as expressly provided for in this Settlement Agreement .
B. ERISA Attorneys' Fees and Expense s
1 . ERISA 401(k) Lead Counsel will make an ERISA 401(k )
Attorneys' Fees and Expenses Application at the time of the Fairness Hearing, which
application shall seek an award of attorneys' fees not in excess of twenty percent (20%)
of the ERISA 401(k) Settlement Amount and reimbursement of, expenses . Releasees
shall take no position with respect to ERISA 401(k) Lead Counsel's ERISA 401(k)
Attorneys' Fees and Expenses Application or cause any third party to take any positio n
148
with respect to ERISA 401(k) Lead Counsel's Attorneys' Fees and Expenses Application,
and ERISA 401(k) Lead Counsel may represent that Releasees do not oppose an ERISA
401(k) Attorneys' Fees and Expenses Application consistent with this Section X .B.I. _
2. ERISA Sironetti Lead Counsel will make an ERISA Simonetti
Attorneys' Fees and Expenses Application at the time of the Fairness Hearing, which
application shall seek an award of attorneys' fees not in excess of twenty percent (20%)
of the ERISA Simonetti Settlement Amount and reimbursement of expenses . Releasee s
shall take no position with respect to ERISA Siinonetti Lead Counsel's ERISA Attorneys'
Fees and Expenses Application or cause any third party to take any position with respect
to ERISA Sirnonetti Lead Counsel's Attorneys' Fees and Expenses Application, and
ERISA Simonetti Counsel may represent that Releasees do not oppose an ERISA
Simonetti Attorneys' Fees and Expenses Application consistent with this Section X .B.2 .
3. Subject to Sections X .A.4, X.A.S and X .A.6 below, the ERIS A
Attorneys' Fees and Expenses Awards shall be paid to ERISA Consolidated Lead
Counsel within five (5) business days after the later of the Approval Date or such other
date that the Court issues the order setting out the ERISA Attorneys' Fees and Expenses
Awards ; provided that ERISA Consolidated Lead Counsel shall hold the Attorneys' Fees
and Expenses Awards in trust for all other ERISA Plaintiffs' Counsel that are entitled to
receive any portion of such awards following the Final Settlement Date .
4 . If this Settlement Agreement is properly and timely terminated in
accordance with the terms of this Settlement Agreement, then ERISA Consolidated Lead
Counsel shall within five (5) business days following such termination return to th e
149
ERISA Insurer and Pender, to be allocated among them pursuant to the terms of the
escrow agreement applicable to the ERISA Insurance Escrow Account, the ERISA
Attorneys' Fees and Expenses Awards with interest at the Interest Rate, such interest to
be calculated beginning as of the day the ERISA Attorneys' Fees and Expenses Awards
were paid pursuant to Section II .B .2 above and ending as of the day the ERISA
Attorneys' Fees and Expenses Award are returned to the ERISA Insurer and Pender
pursuant to this Section XIU .B .4 ; provided that, if any portion of the ERISA Attorneys'
Fees and Expenses Award is paid in GBP and, pursuant to this Section X.B.4, Securities
Lead Counsel is required to return such monies to the ERISA Insurer or Pander, ERISA
Consolidated Lead Counsel shall be required to return such monies, plus interest at the
Interest Rate, in GBP in the same amount as paid to ERISA Consolidated Lead Counsel .
5. If, after entry of the Final Judgment and Order Approving
Settlement, the ERISA 441(k) Attorneys' Fees and Expenses Award and/or the ERISA
Sirnonetti Attorneys' Fees and Expenses Award are reduced, then ERISA Consolidated
Lead Counsel shall within five (5) business days pay to the ERISA Insurance Escrow
Account the difference between the ER.ISA Attorneys' Fees and Expenses Awards and
the reduced amount of the ERISA 401(k) Attorneys' Fees and Expenses Award and/or
the ERISA Sitnonetti Attorneys' Fees and Expenses Award (as the case may be), plus
interest on such difference at the Interest Rate, such interest to be calculated beginning as
of the day the ERISA Attorney's Fees and Expenses Awards were paid pursuant to
Section 11 .13-2 above and ending as of the day the difference between the ERISA 401(k)
Attorneys' Fees and Expenses Award and/or the ERISA Simonetti Attorneys' Fees and
150
Expenses Award (as the case may be) and the reduced amount is paid to the ERISA
Insurance Escrow Account pursuant to this Section X .B .S .
6 . ERISA Consolidated Lead Counsel's obligation to return any of
the ERISA Attorneys' Fees and Expenses Award, as described in Sections X .B_4 and
X.B.5 above, shall be evidenced by a promissory note, which shall be executed on behalf
of the firm, and individually by the members of the executive committee, of Keller
Rohrback, LLP. In addition, as a condition of receiving the ERISA Attorneys' Fees an d
Expenses Award, Keller Rohrback, LLP, on behalf of itself and each of its partners
and/or shareholders, agree that the law firm and its partners and/or shareholders are
subject to the jurisdiction of the Court for the purpose of enforcing this Section X .B .6 .
Without limitation, Keller Rohrback, LLP and each of its partners and/or shareholders
agrees that the Court may, upon application of ERISA Settling Defendants, on notice to
Keller Rohrback, LLP, summarily issue orders, including, but not limited to, judgments
and attachment orders, and may make appropriate findings of or sanctions for contempt,
against them or any of them (if applicable) should Keller Rohrback, LLP fail timely to
repay any amounts pursuant to this Section X .B.6 .
C. No Releasee shall be liable or obligated to pay any fees, expenses, costs or
disbursements to, or incur any expense on behalf of, any person or entity (including,
without limitation, ERISA Plaintiffs), directly or indirectly, in connection with the
ERISA Actions, the-Securities Action or this Settlement Agreement, except as expressly
provided for in this Settlement Agreement .
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XI. PRELIMINARY APPROVAL HEARING AND HEARING ORDER
A. Unless otherwise agreed to by the Settling Parties, within thirty (30) days
after the Execution Date, the Settling Parties shall submit this Settlement Agreement t o
the Court and apply for a Hearing Order that contains provisions addressing each of the
following issues ; provided that any modification to the language set out in Section XI .A.6
below must be approved by the Insurers, such approval to be evidenced in writing by th e
Insurers :
1 . providing for the certification of an opt-out Securities Class
pursuant to Federal Rule of Civil Procedure 23(b)(3) for settlement purposes only;
2. providing for the certification of a non-opt-out ERISA
Consolidated Class pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) fo r
settlement purposes only ;
3. providing for the certification of a non-opt-out ERISA Pusloskie
Class pursuant to Federal Rule of Civil Procedure 23(b)(1) anchor (2) for settlemen t
purposes only ;
4. providing for the certification of a non-opt-out ERISA Simonetti
Class pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement
purposes only ;
5. finding, subject to completion of the discovery contemplated by
Section III above and Securities Lead Counsel's, Securities Lead Plaintiffs', Securities
Plaintiffs', ERISA Plaintiffs' Counsel's and ERISA Plaintiffs' continued belief as a resul t
of that discovery that the settlement is fair, reasonable and adequate, that the settlemen t
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contemplated by this Settlement Agreement is sufficient to warrant sending notice thereof
to the Class;
6, preliminarily providing that, to the extent they pay and distribute
the insurance proceeds of the Executive Liability Insurance Policies, the Fiduciary
Liability Insurance Policy and the Pender Policy in accordance with the terms of this
Settlement Agreement, (i) the Insurers will not be acting inconsistently with either their
obligations to act in good faith or their respective obligations and duties under the
Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and the
Pender Policy, (ii) the Insurers will be fully, adequately and finally discharging all of
their respective obligations under such policies with respect to all insureds under the
policies (all of which insureds will receive substantial benefits as Releasees under the
terms of this Settlement Agreement) as to all past, present and future claims and issues
that have been or could have been asserted in these Actions or in any other action, lawsuit
or proceeding, including, but not limited to, any claims and issues that are based upon,
arise out of or relate to the Actions, or the transactions and occurrences referred to in the
Complaints and (iii) none of the Insurers will be acting in bad faith in connection with
such payments with respect to any insured under any such policies ;
7 . scheduling the Fairness Hearing to be held on such date as the
Court may direct, to consider the fairness, reasonableness and adequacy of the settlement
contemplated by this Settlement Agreement and whether it should be approved by the
Court;
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8. approving Securities Lead Counsel and ERISA Consolidated Lead
Counsel's retention of The Garden City Group, Inc . as the Administrator;
9. approving the proposed Notice and Summary Notice and the notice
methodology described in this Settlement Agreement ;
10. directing that, if Securities Lead Counsel, Securities Lea d
Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs' Counsel and ER1SA Plaintiffs continu e
to believe at the completion of the discovery contemplated by Section III above that the
settlement is fair, reasonable and adequate, Securities Lead Plaintiffs and ERIS A
Plaintiffs shall :
a. cause the Notice substantially in the form as described i n
Section IV.A.4 to be mailed to each Class Member and, in cases of any pendin g
litigation, arbitration or other proceeding, or any other Claims, against any Releasee
relating to any of the Released Claims, also to all legal counsel known by Securities Lead
Counsel, ERISA Plaintiffs' Counsel or Settling Defendants' Lead Counsel to represent a
Class Member by first-class mail, postage prepaid, to his, her or its last known address no
later than forty-five (45) days before the Fairness Hearing;
b. cause the Summary Notice to be published as described in
this Settlement Agreement no later than forty-five (45) days before the Fairness Hearing ;
and
c . cause Securities Lead Counsel, ERISA Plaintiffs' Counsel
and the Administrator to publish the Notice on their respective websites no later than
forty-five (45) days before the Fairness Hearing ;
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11 . determining that the notice to be provided to Class Members ,
including the Notice, the Summary Notice and the methodology employed to disseminate
both, (i) is the best practicable notice, (ii) is reasonably calculated, under the
circumstances, to apprise Class Members of the pendency of the Actions, of the effect o f
this Settlement Agreement, including the Securities Release and the ERISA Release, o f
their right to object to the proposed settlement, and of the right of Securities Clas s
Members to exclude themselves from the Securities Class, (iii) is reasonable and
constitutes due, adequate and sufficient notice to all persons and entities entitled to
receive notice and ( iv) meets all applicable requirements of the Federal Rules of Civil
Procedure, the United States Constitution (including the Due Process Clause), th e
PSLRA, the Rules of the Cou rt and any other applicable law ;
12, directing the creation of the toll-free telephone number ;
13. requiring each potential Securities Class Member who wishes t o
exclude himself, herself or itself from the Securities Class to submit a valid and timel y
written request for exclusion, postmarked or delivered no later than ten (10) days befor e
the Fairness Hearing or as the Court may otherwise direct, to the Clerk of the Court at th e
address provided in the Notice ;
14_ prelim inarily enjoining (i) all ERISA Class Members (and thei r
heirs, executors and administrators, predecessors, successors, affiliates (as defined in 1 7
C .F.R. Part 210 .1.02.b) and assigns) and (ii) all Securities Class Members who have no t
validly and timely excluded themselves from the Class (and their heirs, executors an d
administrators, predecessors, successors, affiliates (as defined in 17 C.F.R. Part 210 .1-
1 55
02.b) and assigns) from filing, commencing, prosecuting, intervening in, participating in
as class members or otherwise, or receiving any benefits or other relief from, any other
lawsuit, arbitration or adr iinistrative, regulatory or other proceeding or order in any
jurisdiction, based on or relating in any way to (i) the claims and causes of action, or the
facts and circumstances relating thereto, in the Actions and/or (ii) the Released Claims ;
provided however, that notwithstanding anything in this Section X1. 14, this Section X1. 14
of the Hearing Order does not enjoin (i) any Class Member from pursuing, or receiving
any benefits or other relief from, a proof of claim or request for payment of an
administrative expense filed against Global Crossing Ltd ., Asia Global Crossing Ltd .,
Pacific Crossing Ltd . and/or any of their subsidiaries or affiliates (as defined in 17 C .F.R .
Part 21 0 .1-O2.b, including, but not limited to, Asia Global Crossing Development
Company), on or before the applicable bar date, or any amendments to such proofs of
claim or request for payment of an administrative expense (other than any of the proofs
of claim filed on behalf of Class Members or any of them by Securities Lead Plaintiffs or
ERISA Plaintiffs) in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (as
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd., Asia Global Crossing Ltd.
or Pacific Crossing Ltd . (including, but not limited to, the bankruptcy proceeding of Asia
Global Crossing Development Company), which . Claim shall be able to be pursue d
156
consistent with the Final rulings of the relevant bankruptcy court or relevant reviewin g
court, (ii) any Claim asserted by a Class Member against any person or entity appointed
by either the Global Crossing Bankruptcy Court, the Asia Global Crossing Bankruptc y
Court, the Pacific Crossing Bankruptcy Court, or any other bankruptcy court in a
proceeding involving an affiliate (as defined in 17 C .F.R. Part 210 .1--02.b) or subsidiary
of any of Global Crossing Ltd ., Asia Global Crossing Ltd . or Pacific Crossing Ltd ., o r
against Pacific Crossing Ltd . or any of its subsidiaries or affiliates (as defined in 1 7
C .F.R. Part 210 .1-02.b) acting as a debtor in possession or their lender where such Clai m
arises out of, or relates to, any Claim by such person or entity or Pacific Crossing Ltd . or
any of its subsidiaries or affiliates (as defined in 17 C.F.R. Part 210 .1-02) acting as a
debtor in possession or their lenders against a Class Member or (iii) any claim for wage s
(including severance) asserted against Global Crossing Ltd ., Asia Global Crossing Ltd . ,
Pacific Crossing Ltd. and/or any of their subsidiaries or affiliates (as defined in 17 C .F.R,
Part 210 .1-02.b, including, but not limited to, Asia Global Crossing Developmen t
Company) in a proof of claim or request for payment of an administrative expens e
submitted by a Class Member on or before the applicable bar date, or any amendments to
such proof of claim or request for payment of an administrative expense (other than any
of the proofs of claim filed on behalf of Class Members or any of them by Securities
Lead Plaintiffs or ERISA Plaintiffs) in the Global Crossing Bankruptcy Proceedings, the
Asia Global Crossing Bankruptcy Proceedings, the Pacific Crossing Bankruptc y
Proceeding and/or any bankruptcy proceeding relating to any subsidiary or affiliate (a s
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing Ltd .
157
or Pacific Crossing Ltd. (including, but not limited to, the bankruptcy proceeding of Asia
Global Crossing Development Company) with respect to which Claim, a Class Member
shall be able to pursue the Claim consistent with the Final rulings of the relevant
bankruptcy court or relevant reviewing court, (iv) any claims brought by plaintiff in the
action captioned JPMorgan Chase Bank, et al. v. Winnick, et al., currently pending in the
Court as Case No. 03 Civ . 8538 (GEL) or (v) any claim (including, but not limited to, a
claim for insurance coverage) concerning any insurance or indemnity policy other than
the Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and/or
the Pender Policy ;
15 . preliminarily enjoining all persons and entities from filing,
commencing or prosecuting any other lawsuit as a class action (including by seeking to
amend a pending complaint to include class allegations or by seeking class certification
in a pending action in any jurisdiction) on behalf of any Class Members, including
Securities Class Members who have not timely excluded themselves from the Securities
Class, if such other lawsuit is based on or relates in any way to the claims and causes of
action, or the facts and circumstances relating thereto, in the Actions and/or the Released
Claims ;
1 6 . ruling that (i) all Securities Class Members who do not submi t
valid and timely written requests for exclusion from the Securities Class (and their heirs,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C.F.R.
Part 210.1-02.b) and assigns) and (ii) all ERISA Class Members (and their heirs ,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
158
Part 210.1-02_b) and assigns) will be bound by all proceedings, orders and judgment s
relating to this Settlement Agreement, even if such Class Members have previousl y
initiated or subsequently initiate litigation, arbitration or other proceedings, or have any
other Claim against any or all of the Release-es relating to any of the Released Claims ;
17. requiring each Class Member who wishes to object to the fairness ,
reasonableness or adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to
any term(s) of this Settlement Agreement, or to the proposed Securities Attorneys' Fees
and Expenses Award, the proposed ERISA 401(k) Attorneys' Fees and Expenses Award s
and/or the proposed ERISA Simonetti Attorneys' Fees and Expenses Award both to effect
service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel and to file with the Court by no later than ten (10) days before
the Fairness Hearing, or as the Court may otherwise direct, a statement of his, her or it s
objection and whether the Class Member is a Securities Class Member, an ERISA Clas s
Member or both, as well as to which part of this Settlement Agreement (that relating t o
the Securities Action, the ERISA Actions or the Actions) the Class Member objects an d
the specific reason(s), if any, for each objection, including any legal support the Clas s
Member wishes to bring to the Court's attention and any evidence the Class Membe r
wishes to introduce in support of such objection, or be forever barred from objecting ;
18 , requiring any attorney hired by a Class Member, at the Clas s
Member's expense, for the purpose of objecting to the fairness, reasonableness o r
adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to any term(s) o f
this Settlement Agreement, or to the proposed Securities Attorneys' Fees and Expense s
159
Award, the proposed ERISA 401(k) Attorneys' Fees and Expenses Awards and/or the
proposed ERISA Shnonetti Attorneys' Fees and Expenses Award, both to effect service
on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel and to file with the Court a notice of appearance by no later than ten (10) days
before the Fairness Hearing, or as the Court otherwise may direct ;
19. requiring any Class Member who files and serves a writte n
objection and who intends to make an appearance at the Fairness Hearing, either in
person or through counsel hired at the Class Member's expense, both to effect service on
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel and to file with the Court a notice of intention to appear at the Fairness Hearing
by no later than ten (10) days before the Fairness Hearing, or as the Court otherwise may
direct ;
20. directing Securities Lead Counsel, ERISA 401(k) Lead Counsel or
their designated agents to assign a post-office box or boxes to be used for receiving
requests for exclusion and any other communications, and providing that, other than the
Court or the Clerk of the Court, only Settling Defendants' Lead Counsel, Securities Lead
Counsel, ERISA 401(k) Lead Counsel and their designated agents shall have access to
such post-office box or boxes ;
21 . directing Settling Defendants' Counsel, Separate Releasee
Counsel, Securities Lead Counsel and ERISA Plaintiffs' Counsel, and any other counsel
for Securities Plaintiffs, ERISA Plaintiffs or the Class, promptly to furnish each othe r
160
with copies of any and all objections or written requests for exclusion that come into thei r
possession ;
22. providing a means for Securities Class Members filing objection s
to obtain access, at their own expense, at Settling Defendants' Lead Counsel's office in
New York, New York, to the discovery materials in the Securities Action, provided that
such individuals or their counsel shall not be given access to these materials unless and
until they enter into the Securities Stipulation of Confidentiality, as described above i n
Section VIED ;
23. providing a means for ERISA Class Members filing objections t o
obtain access, at their own expense, at Settling Defendants' Lead Counsel's office in
Washington, D.C., to the discovery materials in the ERISA Actions, provided that such
individuals or their counsel shall not be given access to these materials unless and until
they enter into the ERISA Stipulation of Confidentiality, as described above in Sectio n
VIILE; and
24, containing any additional provisions that might be necessary to
implement and administer the terms of this Settlement Agreement .
B. A proposed Hearing Order shall be drafted by Securities Lead Counsel ,
ERISA 401(k) Lead Counsel, Securities Settling Defendants' Lead Counsel, ERISA
Settling Defendants' Lead Counsel and Separate Releasee Counsel, and shall be
submitted to the Court for its approval at the time the Settling Parties submit this
Settlement Agreement to the Court pursuant to this Section XI .
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XII. FINAL APPROVAL, AND FINAL JUDGMENT AND ORDERAPPROVING SETTLEMENT
A. After the Fairness Hearing, and upon the Court's approval of this
Settlement Agreement, the Settling Parties shall seek and obtain from the Court a Fina l
Judgment and an Order Approving Settlement , which shall, among other things :
I . find that the Court has personal jurisdiction over all Clas s
Members and that the Court has subject matter jurisdiction to approve the terms of the
settlement that is set out in this Settlement Agreement, including its exhibits, and
including all documents submitted to the Court in connection with the implementation of
this Settlement Agreement ;
2, approve the settlement embodied in this Settlement Agreement as
fair, reasonable and adequate, consistent and in compliance with all applicable
requirements of the Federal Rules of Civil Procedure, the United States Constitution
(including the Due Process Clause), the PSLRA, the Rules of the Court and any other
applicable law, and in the best interests of each of the Settling Parties and the Clas s
Members ;
3 . find that, with respect to (a) the settlement of the ERISA Action s
(i) ERISA Plaintiffs are asserting , among other things, claims on behalf of the ERIS A
Plans, (ii) the settlement of the ERISA Actions arises from a genuine controvers y
between the ERISA Plaintiffs and the ERISA Settling Defendants, is not the result o f
collusion and was not procured by fraud or misrepresentation, (iii) the settlement was
negotiated by counsel appointed by the Court in each of the ERISA Actions and suc h
162
counsel have acted in the best interest of ERISA Plaintiffs, ERISA Class Members and
the ERISA Plans in negotiating this Settlement Agreement vigorously and at arm's
length, (iv) ERISA Plaintiffs' Counsel have no relationship to, or interest in, any of the
Settling ERISA Defendants that might affect their judgment as counsel for ERISA
Plaintiffs or ERISA Class Members ; (v) the interests of ERISA Plaintiffs are identical to
the interests of the ERZSA Plans and ERISA Class Members, (vi) the ERISA Plans do no t
have any additional or independent claims that arise out of the Claims made in the
ERISA Actions above and beyond those asserted by ERISA Plaintiffs on behalf of
ERESA Class Members and the ERISA Plans' participation in the settlement is not less
favorable than that of ERISA Plaintiffs and ERISA Class Members, (vii) the settlement is
not part of an agreement, arrangement or understanding designed to benefit a party in
interest, but rather is designed to benefit the ERISA Plans and ERISA Class Members
(who are all participants in the ERISA Plans), and (viii) accordingly, the negotiation and
consummation of the Settlement Agreement by ERISA Plaintiffs on behalf of the ERISA
Plans and ERISA Class Members satisfy the conditions of the class exemption published
by the Department of Labor at 68 Fed . Reg. 75632 (Dec. 31, 2003), and, in any event, do
not constitute "prohibited transactions" as defined by ERISA §§ 406(a)-(b), 29 U.S .C _
§§ 1106(a)-(b) and (b) the settlement of the Securities Action, (i) Securities Lead
Plaintiffs are asserting, among other things, claims on behalf of the ERISA Plans as
Securities Class Members, (ii) the settlement of the Securities Action arises from a
genuine controversy between the Securities Class Members and the Securities Settling
Defendants, is not the result of collusion and was not procured by fraud or
163
misrepresentation, (iii) the settlement was negotiated by counsel appointed by the Court
in the Securities Action and such counsel have acted in the best interest of Securities
Lead Plaintiffs, Securities Class Members and the ERISA Plans in negotiating this
Settlement Agreement vigorously and at arm's length, (iv) Securities Lead Counsel has
no relationship to, or interest in, any of the Settling ERISA Defendants that might affect
their judgment as counsel for Securities Lead Plaintiffs or Securities Class Members ,
(v) the interests of Securities Lead Plaintiffs are identical to the interests of the ERIS A
Plans as they relate to the ERISA Plans' securities claims, (vi) the ERISA Plans do not
have any additional or independent claims that arise out of the Claims made in the
Securities Action above and beyond those asserted by Securities Lead Plaintiffs on behalf
of Securities Class Members and the ERISA Plans' participation in the settlement is not
less favorable than that of Securities Lead Plaintiffs and Securities Class Members,
(vii) the settlement is not part of an agreement, arrangement or understanding designed to
benefit a party in interest, but rather is designed to benefit the ERISA Plans, an d
(viii) accordingly, the negotiation and consummation of the Settlement Agreement by
Securities Lead Plaintiffs on behalf of the ERISA Plans and Securities Class Members
satisfy the conditions of the class exemption published by the Department of Labor at 68
Fed. Reg. 75632 (Dec . 31, 2003), and, in any event, do not constitute "prohibited
transactions" as defined by ERISA §§ 406(a)-(b), 29 U .S.C. §§ 1106(a)-(b) ;
4, direct the Settling Parties and their counsel to implement and
consummate this Settlement Agreement according to its terms and provisions an d
164
approve the documents submitted to the Court in connection with implementation of this
Settlement Agreement ;
S_ declare that
a_ the Court has jurisdiction over the Executive Liability
Policies, the Fiduciary Liability Insurance Policy and the Pender Policy and the proceeds
thereof and
b. to the extent they pay and distribute the insurance proceed s
of the Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and
the Pender Policy in accordance with the terms of this Settlement Agreement, (i) the
Insurers will not be acting inconsistently with either their obligations to act in good faith
or their respective obligations and duties under the Executive Liability Insurance Policies,
the Fiduciary Liability Insurance Policy and the Pender Policy, (ii) the Insurers will be
fully, adequately and finally discharging all of their respective obligations under such
policies with respect to all insureds under the policies (all of which insureds will receive
substantial benefits as Releasees under the terms of this Settlement Agreement) as to all
past, present and future claims and issues that have been or could have been asserted in
these Actions or in any other action, lawsuit or proceeding, including, but not limited to,
any claims and issues that are based upon, arise out of or relate to the Actions, or the
transactions and occurrences referred to in the Complaints and (iii) none of the Insurers
will be acting in bad faith in connection with such payments with respect to any insured
under any such policies ;
165
6. declare this Settlement Agreement, as to all claims that have or
could have been raised in the Securities Action, including Released Claims, to be binding
on Securities Lead Plaintiffs, Securities Plaintiffs and all other Securities Class Members,
as well as all of their heirs, executors and administrators, predecessors, successors,
affiliates (as defined in 17 C .F.R. Part 210 .1-02.b) and assigns ;
7. declare this Settlement Agreement, as to all claims that have o r
could have been raised in the ERISA Actions, including Released Claims,to be binding
on ER1SA Plaintiffs and all other ERISA Class Members, as well as all of their heirs,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
Part 210.1-02.b) and assigns ;
8 . finally certify the Securities Class as an opt-out class pursuant to
Federal Rule of Civil Procedure 23(b)(3) for settlement purposes ;
9 . finally certify the ERISA Consolidated Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
10 , finally certify the ERISA Pusloskie Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
11 . finally certify the ERISA Sirnonetti Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
12_ find that the Notice, the Summary Notice and the notic e
methodology implemented pursuant to .this Settlement Agreement (i) constituted the best
practicable notice, (ii) constituted notice that was reasonably calculated, under the
circumstances, to apprise Class Members of the pendency of the Actions, of the effect o f
166
this Settlement Agreement, including the Securities Release and the ERISA Release, of
their right to object to the. proposed settlement, of the right of Securities Class Members
to exclude themselves from the Securities Class, and of the right of Class Members to
appear at the Fairness Hearing, (iii) were reasonable and constituted due, adequate and
sufficient notice to all persons or entities entitled to receive notice and (iv) met all
applicable requirements of the Federal Rules of Civil Procedure, the United States
Constitution (including the Due Process Clause), the PSLRA, the Rules of the Court and
any other applicable law ;
13. find that Securities Lead Counsel and Securities Lead Plaintiffs
adequately represented the Securities Class for purposes of entering into and
implementing the settlement ;
14. find that ERISA Consolidated Lead Counsel and ERISA
Consolidated Plaintiffs adequately represented the ERISA Consolidated Class for
purposes of entering into and implementing the settlement ;
15 . find that ERISA Pusloskie Lead Counsel and ERISA Pusloskie
Plaintiffs adequately represented the ERISA Pusloskie Class for purposes of entering into
and implementing the settlement ;
16. find that ERISA Simonetti Lead Counsel and ERISA Simonetti
Plaintiffs adequately represented the ERISA Simonetti Class for purposes of entering into
and implementing the settlement;
17 . declare any and all tolling agreements executed in connection with
any of the Actions to be null and void ab initio, and of no effect whatsoever;
167
18. enter a Securities Contribution Bar Order submitted to the Court as
follows: In accordance with 15 U.S .C. § 78u-4(f)(7)(A), any and all claims for
contribution arising out of any Released Claim, including, but not limited to, any claim
that is based upon, arises out of or relates to the Securities Action, or the transactions and
occurrences referred to in the Securities Complaint (a) by any person or entity against a
Securities Settling Defendant and (b) by any Securities Settling Defendant against any
person or entity other than as set out in 15 U .S .C. § 78u-4(f)(7)(A)(ii) are hereby
permanently barred, extinguished, discharged, satisfied, and unenforceable . Accordingly,
without limitation to any of the above, (a) any person or entity, including, withou t
limitation, each and every Securities Non-Settling Defendant, is hereby permanently
enjoined from commencing, prosecuting, or asserting against any of the Securities
Settling Defendants any such claim for contribution, and (b) each and every Securities
Settling Defendant is hereby permanently enjoined from commencing, prosecuting, or
asserting against any person or entity, including, without limitation, any Securities Non-
Settling Defendant, any such claim for contribution . In accordance with 15 U .S .C. § 78u-
4(f)(7)(B), any final verdict or judgment that may be obtained by or on behalf of the
Securities Class or a Securities Class Member against a Securities Non-Settling
Defendant shall be reduced by the greater of (i) an amount that corresponds to the
percentage of responsibility of the Settling Defendants for the loss to the Securities Class
or a Securities Class Member or (ii) the amount paid by or on behalf of the Settling
Defendants to the Securities Class in connection with this Settlement Agreement .
However, (x) nothing in this Securities Contribution Bar Order shall prevent a Settling
168
Defendant from seeking to enforce any agreement with the Insurers to pay the Cash
Settlement Payment and (y) notwithstanding anything stated in this Contribution Bar
Order or in this Settlement Agreement, in the event that any person or entity (for
purposes of this proviso, a "petitioner") commences against any of the Releasees any
action asserting a claim that is based upon, arises out of, or relates to any Released Claim,
including, but not limited to, any claim that is based upon, arises out of or relates to the
Actions, or the transactions and occurrences referred to in the Complaints and such claim
is not barred pursuant to this Section XII .A.18 or is otherwise not barred by the Securities
Contribution Bar Order, neither the Securities Contribution Bar Order nor this Settlemen t
Agreement shall bar claims by that Releasee against (i) such petitioner ; (ii) any person or
entity who is or was controlled by, controlling or under common control with the
petitioner, whose assets or estate are or were controlled, represented or administered by
the petitioner, or as to whose claims the petitioner has succeeded ; and (iii) any person or
entity that participated with any of the preceding persons or entities described in item s
(i) and (ii) of this proviso in connection with the conduct, transactions or occurrences that
are the subject of the claim brought against the Releasee(s), or any person or entity that
was involved in the issues and damages alleged by the petitioner ; provided further that
nothing in the Securities Contribution Bar Order shall prevent a Releasee from pursuing a
proof of claim or request for payment of an administrative expense, or an amendment as
to either (other than any of the proofs of claim filed on behalf of Class Members or any of
them by Securities Lead Plaintiffs or ERISA Plaintiffs), as to Global Crossing Ltd ., Asia
Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or affiliate s
169
(as defined in 17 C .F.R. Part 210 .1-02.b), which proof of claim or request for payment o f
an administrative expense was filed by or on behalf of the Releasee on or before th e
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Globa l
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, an y
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, th e
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptc y
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (a s
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing Ltd .
or Pacific Crossing Ltd ., which claim a Releasee shall be able to pursue consistent with
the Final rulings of the relevant bankruptcy court or relevant reviewing court ;
19. enter a Complete Bar Order submitted to the Court as follows :
a. Any and all persons and entities are permanently barred,
enjoined and restrained from commencing, prosecuting or asserting any claim against an y
Releasee arising under state, federal or common law, however styled, whether fo r
indemnification or contribution or otherwise denominated, including, without limitation ,
claims for breach of contract and for misrepresentation, where the claim is based upon ,
arises out of, or relates to any Released Claim, including, but not limited to, any claim
that is based upon, arises out of or relates to the Actions, or the transactions and
occurrences referred to in the Complaints, whether such claims are legal or equitable ,
known or unknown, foreseen or unforeseen, matured or unmatured, accrued or
unaccrued, including, without limitation, any claim in which a person or entity seeks to
recover from any of the Releasees (i) any amounts such person or entity may becom e
170
liable to pay to any of the Class Members and/or (ii) any costs, expenses, or attorneys '
fees from defending any claim by any of the Class Members . All such claims are hereby
extinguished, discharged, satisfied and unenforceable, subject to a hearing to be held b y
the Court, if necessary . The provisions of this Section XR.A_19_a are intended to
preclude any liability of any of the Releasees to any person or entity for indemnification ,
contribution , or otherwise on any claim based upon , arising out of, or relating to any
Released Claim, including, but not limited to, any claim that is based upon, arises out of
or relates to the Actions, or the transactions and occurrences referred to in th e
Complaints ; provided that, with respect to any judgment against any person or entity on
behalf of the Class or a Class Member based upon, arising out of, or relating to any
Released Claim, including, but not limited to, any claim that is based upon, arises out of
or relates to the Actions, or the transactions and occurrences referred to in the
Complaints, that person or entity shall be entitled to a credit of the greater of (1) a n
amount that corresponds to the percentage of responsibility of the Settling Defendants fo r
the loss to the Class or a Class Member or (ii) the amount of the Securities Cas h
Settlement Amount (if the judgment is on behalf of the Securities Class or a Securitie s
Class Member) or the amount of the ERISA Cash Settlement Amount (if the judgment i s
on behalf of the ER.ISA Class of an ERISA Class Member) ; provided further that nothin g
in this Complete Bar Order shall prevent a putative Securities Class Member who validl y
requests exclusion from the Securities Class pursuant to Section VII above from pursuin g
any claim other than a claim barred by the Securities Contribution Bar Order against an y
Releasee where such claim is based upon, arises out of, or relates to any Released Claim,
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including, but not limited to, any claim that is based upon, arises out of or relates to the
Actions, or the transactions and occurrences referred to in the Complaints- If any
provision of this Section Xl .A.19.a is subsequently held to be unenforceable, such
provision shall be substituted with such other provision as may be necessary to afford all
of the Releasees the fullest protection permitted by law from any claim that arises out of,
or relates to any Released Claim, including, but not limited to, any claim that is based
upon, arises out of or relates to the Actions, or the transactions and occurrences referred
to in the Complaints ;
b. Each and every Releasee is permanently barred, enjoined
and restrained from commencing, prosecuting or asserting any claim against any person
or entity (including any other Releasee) arising under state, federal, or common law,
however styled, whether for indemnification or contribution, or otherwise denominated,
including, without limitation, claims for breach of contract and for misrepresentation,
where the claim is based upon, arises out of, or relates to any Released Claim, including,
but not limited to, any claim that is based upon, arises out of or relates to the Actions, or
the transactions and occurrences referred to in the Complaints, whether such claims are
legal or equitable, known or unknown, foreseen or unforeseen, matured or unrnatured,
accrued or unaccrued, including, without limitation, any claim in which any Releasee
seeks to recover from any person or entity, including another Releasee, (i) any amounts
any such Releasee has or may become liable to pay to any of the Class Members and/or
(ii) any costs, expenses, or attorneys' fees from defending any claim by any of the Class
Members . All such claims are hereby extinguished, discharged, satisfied, an d
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unenforceable . However, notwithstanding anything stated in this Complete Bar Order o r
in this Settlement Agreement, in the event that any person or entity (for purposes of thi s
proviso, a "petitioner") commences against any of the Releasees any action asserting a
claim that is based upon, arises out of, or relates to any Released Claim, including, bu t
not limited to, any claim that is based upon, arises out of or relates to the Actions, or th e
transactions and occurrences referred to in the Complaints and such claim is not barre d
by a court pursuant to Sections XII .A_ 18 and Xu.A.19.a above or is otherwise not barred
by the Complete Bar Order, neither the Complete Bar Order nor this Settlement
Agreement shall bar claims by that Releasee against (i) such petitioner ; (ii) any person or
entity who is or was controlled by, controlling or under common control with the
petitioner, whose assets or estate are or were controlled, represented or administered by
the petitioner, or as to whose claims the petitioner has succeeded ; and (iii) any person or
entity that participated with any of the preceding persons or entities described in items (i)
and (ii) of this proviso in connection with the conduct, transactions or occurrences that
are the subject of the claim brought against the Releasee(s), or any person or entity that
was involved in the issues and damages alleged by the petitioner ; provided further that
this Settlement Agreement and the Complete Bar Order shall not bar or enjoin (i) the
individuals designated as the Estate Representative in their capacities as members of the
Estate Representative and as Liquidating Trustees (as each of these capitalized terms is
defined in the Joint Plan of Reorganization dated October 28, 2002 and confirmed on
December 22, 2002, as amended, in the Global Crossing Bankruptcy Proceeding) (for
purposes of this proviso , the "Estate Representative ") from bringing any and all claims,
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including, without limitation, Released Claims, against any Releasee(s), Settling
Defendant(s) or Non-Settling Defendant(s) (or any other individual or entity), including,
without limitation, any current or former officer, director or employee of Globa l
Crossing, and nothing in this Complete Bar Order or Settlement Agreement shall limit the
right or ability of the Estate Representative to seek all relief and damages available to it at
law or equity, (ii) any entity appointed by the Asia Global Crossing Bankruptcy Court
from pursuing claims (if any) on behalf of Asia Global Crossing Ltd . against any current
or former officer, director or employee of Asia Global Crossing Ltd. or (iii) any entity
appointed by the Pacific Crossing Bankruptcy Court from pursuing claims (if any) on
behalf of Pacific Crossing Ltd . against any current or former officer, director or employee
of Pacific Crossing Ltd . ; provided that, subject to the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v . Winnick, Case No. 03-Civ . 8535
(GEL) (S .D.N.Y.), nothing in this Settlement Agreement or the Complete Bar shall bar or
enjoin the plaintiff in that case from prosecuting such case against the individuals and
entities named in the October 27, 2003 complaint filed in such case ; provided further that
nothing in the Complete Bar Order shall prevent a Bar Officer who is adjudged jointly
and severally liable for damages in either (x) any action or proceeding brought by an
entity appointed by the Global Crossing Bankruptcy Court against any Bar Officer or (y)
the action brought by the plaintiff pending in the Court under the caption JPMorgan
Chase Bank v. Winnick, et at., Case No . 03 Civ . 8535 (GEL) (for purposes of this
proviso, such action in (x) and (y) is a "covered action," such entity in (x) and plaintiff in
(y) is a "plaintiff' and each such Bar Officer is a "claimant"), from seeking, pursuant to
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applicable law, equity or contract existing as of the filing date of the Securities Complaint
and after a contested, adverse adjudication on the merits becomes final (for purposes of
this proviso, "final" means the time at which a Bar Officer is obligated to fund a
judgment or verdict, such obligation to fund not being subject to any stay), to recover
contribution from any other Bar Officer who is a defendant in the covered action in
which the adjudication has occurred and who either (a) is found to be liable in a judgment
in such covered action that becomes final, (b) settles with the plaintiff in such covered
action, (c) is a Bar Officer on whom the plaintiff fails to serve the operative complaint or
(d) is dismissed from such covered action (any such defendant in (a), (b), (c) or (d), a
"covered person," it being the case that a "covered person" does not include a Bar Officer
who prevails on the merits based upon a judge or jury determination against the plaintiff
in such covered action), unless, as to each of (b), (c) or (d), such covered person attest s
under oath by affidavit that he neither formally nor informally provided material
cooperation to the plaintiff in the continued prosecution of the covered action against an y
other Bar Officer (it being the case that the mere providing of testimony under oath eithe r
in a deposition or at trial, or responding to third-party discovery requests, shall not alone
be regarded as "material cooperation"), except that any covered person's total liability for
damages by way of contribution to any and all claimants under this proviso shall b e
capped (in the aggregate as to all claimants) at the lesser of (i) the percentage of
responsibility of such covered person, measured as a percentage of the total fault of all
persons who caused or contributed to the loss incurred by the plaintiff and considerin g
among other things the nature of the conduct of such person found to have caused o r
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contributed to the loss incurred by the plaintiff, and the nature and extent of the causal
relationship between the conduct of such person and such loss or (ii) ten percent (10%) of
such covered person's net worth, excluding his or her personal residences ; provided
further that nothing in the preceding proviso creates or is intended to create any new right
to seek contribution or any other new remedy, whether by contract or otherwise ; provided
further that nothing in the Complete Bar Order shall prevent a Settling Defendant from
seeking to enforce any agreement with the Insurers to pay the Cash Settlement Payment ;
provided further that nothing in the Complete Bar Order shall prevent any person
(including, without limitation, a Releasee or a Class Member) (i) from pursuing a proof
of claim or request for payment of an administrative expense, or an amendment as to
either (other than any of the proofs of claim filed on behalf of Class Members or any of
them by Securities Lead Plaintiffs or ERISA Plaintiffs), as to Global Crossing Ltd ., Asia
Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or affiliates
(as defined in 17 C .F.R. Part 210 .1-02.b), which proof of claim or request for payment of
an administrative expense was filed by or on behalf of the Releasee on or before the
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (as
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing, Ltd .
or Pacific Crossing Ltd ., which claim a Releasee shall be able to pursue consistent wit h
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the Final rulings of the relevant bankruptcy court or relevant reviewing court, or (ii)
pursuing a claim for wages (including severance) in connection with a proof of claim or
request for payment of an administrative expense, or an amendment as to either (other
than any of the proofs of claim filed on behalf of Class Members or any of them by
Securities Lead Plaintiffs or ERISA Plaintiffs) as to Global Crossing Ltd ., Asia Global
Crossing Ltd., Pacific Crossing Ltd . and/or any of their subsidiaries or affiliates (a s
defined in 17 C.F.R. Pa rt 210 . 1 -02 .b), which proof of claim or request for payment of an
adminis trative expense (a) was filed by or on behalf of such person on or before the
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding , the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding , the Pacific Crossing Bankruptcy
Proceeding , and/or any bankruptcy proceeding relating to any subsidiary or affi liate (as
defined in 17 C.F.R. Pa rt 210 .1-02 .b) of Global Crossing Ltd ., Asia Global Crossing, Ltd.
or Pacific Crossing Ltd . (including , without limitation , Asia Global Crossing
Development Co .) and (b) is pursued consistent with the Final rulings on the relevant
rulings of the relevant bankruptcy court or relevant reviewing cou rt ; provided further,
that nothing in the Complete Bar Order or in this Settlement Agreement or in any
documents executed in connection therewith shall release , interfere with , limit or bar the
assertion by any Releasee of any claim (including, but not limited to , a claim for
insurance coverage) concerning any insurance or indemnity po licy other than the
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Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and/or the
Pender Policy ;
c. If, notwithstanding the Bar Orders, a person or entit y
obtains a judgment against any of the Releasees on any claim that is based upon, arises
out of, or relates to any Released Claim, including, but not limited to, any claim that is
based upon, arises out of or relates to the Actions, or the transactions and occurrences
referred to in the Complaints, or on any other claim, however denominated, to recover,
directly or indirectly from such Releasee, (i) any amounts that the person or entity obtains
in the judgment against the Releasee might become liable to pay to any of the Class
Members or (ii) any costs, expenses, or attorneys' fees that such person or entity might
incur in defending any claim against him, her or it by any of the Class Members, the
Class and the Class Members agree that they will reduce or credit any judgment or
settlement (up to the amount of such judgment or settlement) that they might obtain
against that person or entity by an amount equal to the amount of that person's or entity's
judgment against the Releasee, which amount shall be credited to the Releasee ;
d. If a final judgment is entered in favor of a class certified in
any of the Actions against any person or entity before the adjudication of such person's
or entity's claims against any Releasee, any funds collected on account of such judgment
shall not be distributed to the class that has obtained the judgment, but shall be held in
trust pending final adjudication of such claim, and such funds shall be used as a credit
against any judgment rendered in favor of the person or entity against the Releasee as
provided in Section XII .A.19.c above ;
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e. Securities Lead Plaintiffs, ERISA Plaintiffs and/or any
class that has been certified in any of the Actions will use their best efforts in settling any
claim with any person or entity to obtain from such person or entity a release of any and
all claims based upon, arising out of or relating to the Actions or any of the Released
Claims that the person or entity may have against any of the Releasees ;
20. dismiss the Actions (including all individual claims and Class
claims presented thereby) on the merits and with prejudice as of the Final Settlement
Date, without fees or costs to any Settling Party except as provided in this Settlement
Agreement ;
21 . incorporate the Securities Release and the ERISA Release set forth
above in Section IX.A and Section IX.B, make the Securities Release and the ERISA
Release effective as of Final Settlement Date, and forever discharge all of the Releasees
from any and all claims or liabilities arising from or related to the Released Claims;
22. permanently bar and enjoin (i) all Class Members (and their heirs ,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
Part 210.1-02.b) and assigns) from filing, commencing, prosecuting, intervening in,
participating in (as class members or otherwise), or receiving any benefits or other relief
from, any other lawsuit, arbitration or other proceeding or order in any jurisdiction that is
based upon, arises out of or relates to any Released Claims, including, but not limited to,
any claim that is based upon, arises out of or relates to the Actions or the transactions and
occurrences referred to in the Complaints and (ii) all persons or entities from organizing
any Class Members for purposes of pursuing as a purported class action (including b y
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seeking to amend a pending complaint to include class allegations, or by seeking class
certification in a pending action) any lawsuit that is based upon, arises out of or relates to
any Released Claims, including, but not limited to, any claim that is based upon, arises
out of or relates to the Actions or the transactions and occurrences referred to in th e
Complaints ; provided however, that notwithstanding anything in this Section XII .A.22,
this Section XII .A.22 does not enjoin any Class Member from filing, commencing,
prosecuting, participating in, or receiving any benefits or other relief from (i) a proof of
claim or request for payment of an administrative expense filed against Global Crossing
Ltd., Asia Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or
affiliates (as defined in 17 C .F.R. Part 210-1-02-b, including, but not limited to, the
bankruptcy proceeding of Asia Global Crossing Development Company), on or before
the applicable bar date, or any amendment to such proof of claim or request for payment
of an administrative expense (other than any of the proofs of claim filed on behalf of
Class Members or any of them by Securities Lead Plaintiffs or ERISA Plaintiffs) in the
Global Crossing Bankruptcy Proceeding, the Asia Global Crossing Bankruptcy
Proceeding, the Pacific Crossing Bankruptcy Proceeding, any bankruptcy proceeding
arising out of the Global Crossing Bankruptcy Proceeding, the Asia Global Crossing
Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, and/or any
bankruptcy proceeding relating to any subsidiary or affiliate (as defined in 17 C .F.R. Part
210J-02.b) of Global Crossing Ltd ., Asia Global Crossing, Ltd . or Pacific Crossing Ltd.
(including, but not limited to, the bankruptcy proceeding of Asia Global Crossing
Development Company), which Claim shall be able to be pursued consistent with th e
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Final rulings of the relevant bankruptcy court or relevant reviewing court, (ii) any Claim
asserted by a Class Member against any person or entity appointed by either the Globa l
Crossing Bankruptcy Court, the Asia Global Crossing Bankruptcy Court, the Pacifi c
Crossing Bankruptcy Court, or any other bankruptcy court in a proceeding involving a n
affiliate (as defined in 17 C .F.R. Part 210 .1-02.b) or subsidiary of any of the thre e
preceding entities, or against Pacific Crossing Ltd . or any of its subsidiaries or affiliate s
(as defined in 17 C .F.R. Part 210 .1-02 .b) acting as a debtor in possession where suc h
Claim arises out of, or relates to, any Claim by such person or entity against a Clas s
Member, (iii) any claim for wages (including severance) asserted against Global Crossin g
Ltd., Asia Global Crossing Ltd., Pacific Crossing Ltd, and/or any of their subsidiaries or
affiliates (as defined in 17 C .F.R. Part 210 .1-02.b, including, but not limited to, Asi a
Global Crossing Development Company) in a proof of claim or request for payment of an
administrative expense submitted by a Class Member on or before the applicable bar
date, or any amendments to such proof of claim or request for payment of an
administrative expense (other than any of the proofs of claim filed on behalf of Class
Members or any of them by Securities Lead Plaintiffs or ERISA Plaintiffs) in the Globa l
Crossing Bankruptcy Proceedings, the Asia Global Crossing Bankruptcy Proceedings, th e
Pacific Crossing Bankruptcy Proceeding and/or any bankruptcy proceeding relating t o
any subsidiary or affiliate (as defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing
Ltd., Asia Global Crossing Ltd. or Pacific Crossing Ltd . (including, but not limited to, the
bankruptcy proceeding of Asia Global Crossing Development Company) with respect t o
which Claim, a Class Member shall be able to pursue the Claim consistent with the Final
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rulings of the relevant bankruptcy court or relevant reviewing court or (iv) any clai m
(including, but not limited to, a claim for insurance coverage) concerning any insuranc e
or indemnity policy other than the Executive Liability Insurance Policies, the Fiduciar y
Liability Insurance Policy and/or the Pender Policy ;
23 , authorize the Settling Parties with the written approval of the
Insurers, without further approval from the Court, to agree to and adopt such
amendments, modifications and expansions of this Settlement Agreement and all exhibits
attached to this Settlement Agreement as (i) are not materially inconsistent with the Final
Judgment and Order Approving Settlement and (ii) do not materially limit the rights o f
Class Members under this Settlement Agreement ; provided that any modification in th e
Plan(s) of Allocation that involves an amount equal to or less than ten percent (10%) of
the total distribution amount involved in the Plan(s) of Allocation shall be deemed to b e
materially consistent with the Final Judgment and Order Approving Settlement and shal l
be deemed not to materially limit the rights of Class Members under this Settlemen t
Agreement;
24. direct the Settling Parties to prepare proposed findings of fact an d
conclusions of law in support of the Court 's Final Judgment and Order Approvin g
Settlement;
25 . expressly determine that there is no just reason to delay the Final
Judgment respecting this Settlement Agreement and expressly direct that the Fina l
Judgment regarding this Settlement Agreement be entered as to less than all parties an d
all claims in the Securities Action pursuant to Federal Rule of Civil Procedure 54(b) ;
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26. without affecting the extent to which the Final Judgment and Order
Approving Settlement are final for purposes of any appeal, retain jurisdiction as to all
matters relating to the administration, consummation, enforcement and interpretation of
this Settlement Agreement, the Final Judgment and the Order Approving Settlement ,
including, without limitation, enforcement of the Bar Orders, and for any other
reasonably necessary purpose ; provided however, that, with respect to Pender, such
retention of jurisdiction shall be limited solely to subject matter jurisdiction over the
payments made or caused to be made by Pender to the extent necessary to enforce the
payment provisions found at Sections ILA-D of this Settlement Agreement ; and
27 , incorporate any other provisions that the Court deems necessary
and just .
B . A proposed Final Judgment and Order Approving Settlement shall be
drafted by Securities Lead Counsel, ERISA Plaintiffs Counsel, Securities Settling
Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel and Separate
Releasee Counsel as soon as practicable after the Execution Date and shall be approved
by all Securities Settling Defendants' Separate Counsel and all ERISA Settling
Defendants' Separate Counsel . A copy of the proposed Final Judgment and the proposed
Order Approving Settlement shall be submitted to the Court at least 10 days prior to the
Fairness Hearing.
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XHL MODIFICATION OR TERMINATION OF THISSETTLEMENT AGREEMENT
A. The terms and provisions of this Settlement Agreement may be amended ,
modified or expanded by agreement of the Settling Parties and the Insurers with approva l
of the Court ; provided however, that, after entry of the Final Judgment and Orde r
Approving Settlement, the Settling Parties may by written agreement effect an y
amendments, modifications or expansions of this Settlement Agreement and it s
implementing documents (including all exhibits to this Settlement Agreement) withou t
notice to or approval by the Court if such changes are not materially inconsistent with the
Court's Final Judgment and Order Approving Settlement and do not materially limit th e
rights of Class Members under this Settlement Agreement ; provided further that a
decision by Securities Lead Plaintiffs and/or ERISA Plaintiffs to modify the Plan(s) o f
Allocation in connection with an objection raised by a Class Member or a settlement with
a person or entity that requested exclusion from the Securities Class shall not be deemed
to be a change that materially limits the rights of Class Members under this Settlement
Agreement to the extent such modification involves an amount equal to or less than ten
percent (10%) of the total distribution amount involved in the Plan(s) of Allocation that is
subject to such modification .
B . Subject to Sections XM.C, XM.D and XH1.F below, this Settlemen t
Agreement will terminate at the sole option and discretion of Settling Defendants' Lea d
Counsel (on behalf of all Settling Defendants other than Winnick and Simpson Thacher),
Winnick (on his own behalf), Simpson Thacher (on its own behalf, as specifically limited
184
by Section XIH .F below), Securities Lead Counsel (on behalf of Securities Lead
Plaintiffs) or ERISA 401(k) Lead Counsel (on behalf of ERISA Plaintiffs) if (i) th e
Court, or any appellate court(s), rejects, modifies or denies approval of any portion of this
Settlement Agreement or the proposed settlement that the terminating Settling Party
reasonably and in good faith determines is material, including, without limitation, the
terms of relief, the Bar Orders, the findings of the Court, the provisions relating to notice,
the definition of the Securities Class, the ERISA Consolidated Class, the ERISA
Pusloskie Class and/or the ERISA Simonetti Class, and/or the terms of the Securitie s
Release or the ERISA Release, (ia) the Court, or any appellate court(s), does not enter or
completely aff=, or alters or expands, any portion of the Hearing Order, the Final
Judgment or the Order Approving Settlement, or any of the Court's findings of fact or
conclusions of law as proposed by Settling Defendants' Lead Counsel, Separate Releasee
Counsel, Securities Lead Counsel and ERISA 401 (k) Lead Counsel, including the Bar
Orders, that the terminating Settling Party reasonably and in good faith believes is
material or (iii) all necessary approvals (if any) by the Global Crossing Bankruptcy
Court, the Asia Global Crossing Bankruptcy Court and/or the Pacific Crossing
Bankruptcy Court are not obtained by the Final Settlement Date ; provided that any
decision to terminate the Settlement Agreement pursuant to this Section XIMB shall be
subject to review by the Court as to whether the decision was reasonable and made in
good faith . The terminating Settling Party must exercise the option to withdraw from and
terminate this Settlement Agreement, as provided in this Section XIII.B, no later than ten
(10) days after receiving actual notice of the event prompting the termination.
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C. Notwithstanding the preceding Section XIII .B, neither Securities Lead
Plaintiffs, Securities Lead Counsel, ERISA Plaintiffs nor ERISA Plaintiffs' Counsel ma y
terminate this Settlement Agreement on the basis of the Securities Attorneys' Fees and
Expenses Award and/or the ERISA Attorneys' Fees and Expenses Awards ordered, or a s
modified, by the Court or any appellate cou rt(s) .
D. Notwithstanding any other terms or provisions of this Settlemen t
Agreement, this Settlement Agreement shall terminate if :
1 . the Discharge Order that is entered by the Court or that is affirme d
by any appellate court contains language that is different than the language set out in
Section XII .A.5 .b above unless the language of the Discharge Order that is entered by the
Court or that is affirmed by any appellate court is acceptable to the Insurers whose policy
proceeds have not been exhausted at the time the Discharge Order is entered, such
acceptance to be evidenced in writing o r
2. the Court does not specifically exercise jurisdiction over th e
Policies and the proceeds thereof and, on or prior to the Final Settlement Date, one o r
both of the Asia Global Crossing Bankruptcy Court or the Global Crossing Bankruptcy
Court has not entered a order that has become Final to the same effect as the Discharge
Order unless the Insurers whose policy proceeds have not been exhausted as of the Fina l
Settlement Date waive such requirement, such waiver to be evidenced in writing .
E. Without limiting any other rights under this Settlement Agreement and
subject to Section XIII.F below, by no later than two (2) days before the Fairnes s
Hearing, Settling Defendants' Lead Counsel (on behalf of all Settling Defendants other
186
than Winnick and Simpson Thacher), Winnick (on his own behalf) or Simpson Thacker
(on its own behalf, as limited by Section XIH.F below) may unilaterally withdraw from
and terminate this Settlement Agreement if requests for exclusion are received from
potential Securities Class Members whose claims, in the aggregate, as calculated
pursuant to the Securities Plan of Allocation, would have exceeded an amount equal to or
larger than two and two-tenths percent (2 .2%) of the Cash Settlement Amount had they
not requested exclusion from the Securities Class, calculated using the information
provided by such potential Securities Class Members in their requests for exclusion
pursuant to Section VII above ; provided however, that, for those potential Securities
Class Members who fail to provide the information required by the request for exclusion,
the Securities Settling Parties will substitute an estimate of the amount such potential
Securities Class Members would have received under the Securities Plan of Allocation
from an expert to be agreed to by Securities Settling Defendants' Lead Counsel, Separate
Releasee Counsel and Securities Lead Counsel or, failing such agreement, to be
appointed by the Court ; provided farther that any Settling Defendant or Simpson Thacher
may seek review by the Court of any decision to terminate the Settlement Agreement
pursuant to this Section XIII .E, such review to determine whether the decision to
terminate was reasonable and made in good faith .
F. Any decision by Simpson Thacher to terminate this Settlement Agreement
shall only be with respect to Simpson Thacher's participation in this Settlement
Agreement and shall have no effect whatsoever on the other Settling Parties'
consummation and implementation of this Settlement Agreement ; provided that, if
187
Simpson Thacher terminates its participation in this Settlement Agreement, but the
Settlement Agreement is not otherwise terminated, the remaining Settling Parties shal l
amend this Settlement Agreement to provide that Simpson Thacher is not a Release e
under this Settlement Agreement, to remove any provisions regarding payments to b e
made by Simpson Thacker and to remove any contingencies based upon Simpso n
Thacher's payment under this Settlement Agreement .
G. If an option to withdraw from and terminate this Settlement Agreement
arises under Sections III .E, XIII .B or XIT1 .E, (a) neither Settling Defendants, Simpso n
Thacher, ERISA Plaintiffs nor Securities Lead Plaintiffs will be required for any reaso n
or under any circumstance to exercise that option, and (ii) any exercise of that optio n
shall be made in good faith.
H. If this Settlement Agreement is terminated pursuant to the terms hereof,
then:
1 . this Settlement Agreement shall be null and void and shall have no
force or effect, and no party to this Settlement Agreement shall be bound by any of it s
terms, except for the terms set out in this Section XI .H ;
2 . this Settlement Agreement, all of its provisions, and all
negotiations, statements and proceedings relating to it .shall be without prejudice to the
rights of Settling Defendants, Simpson Thacher, Securities Lead Plaintiffs, Securitie s
Plaintiffs, ERISA Plaintiffs or any other Class Member, all of whom shall be restored t o
their respective positions existing immediately before the execution of this Settlemen t
Agreement, except with respect to (i) the payment of Notice and Administrative
188
Expenses, which payment is described in Section LE. Lyyyyy above and (it) the paymen t
of any Defense Costs (whether as Securities Pre-Execution Defense Costs, ERISA Pre-
Execution Defense Costs or Covered Claim Costs) made to an Insured Releasee (or the
Insured Releasee's counsel), which payment shall be retained by such Insured Release e
and/or the Insured Releasee's counsel ;
3. Releasees and their current and former predecessors, successors ,
heirs, affiliates (as defined in 17 C.F.R. Part 210 .1-02.b), agents , attorneys ,
representatives or assigns expressly and affirmatively reserve all defenses, arguments an d
motions as to all claims that have been or might later be asserted in the Actions, includin g
(without limitation) any argument that the Actions may not be litigated as a class action ;
4. Securities Lead Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs
and their current and former predecessors, successors, heirs, affiliates (as defined in 1 7
C.F.R. Part 210.I-02.b), agents, attorneys, representatives or assigns expressly and
affirmatively reserve all motions as to, and arguments in support of, all claims that have
been or might later be asserted in the Actions, including (without limitation) any
argument concerning class certification ;
5. neither this Settlement Agreement, nor the fact of its having bee n
made, shall be admissible or entered into evidence for any purpose whatsoever ;
6 . to the extent any monies are deposited in the Cash Settlemen t
Account, Securities Lead Plaintiffs and ERISA Plaintiffs shall promptly distribute (o r
cause to be distributed) such monies as follows :
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a. Securities Lead Plaintiffs and ERISA Plaintiffs shall retur n
(or cause to be returned) to the Insurers and Pender's Securities Reinsurers (to b e
allocated among them pursuant to the terms of the escrow agreements applicable to th e
Securities Insurers' Insurance Escrow Account, the Securities Reinsurers' Insuranc e
Trust Account and the ERISA Insurance Escrow Account) any monies remaining in th e
Cash Settlement Account ( including any interest ) less ( :) the Winnick ERISA Paymen t
(as well as any interest attributable to it), (ix) the Winnick Securities Payment (as well a s
any interest attributable to it) and (iii) any Notice and Administrative Expenses incurred
but not yet paid ; provided that any monies not returned to an Insurer shall reduce tha t
Insurer's respective policy limits ;
b. Securities Lead Plaintiffs and ERISA Plaintiffs shall return
(i) the Winnick ERISA Payment plus any interest that has accrued with respect to th e
Winnick ERISA Payment to the Winnick ERISA Escrow Account, (ii) the Winnic k
Securities Payment plus any interest that has accrued with respect to the Winnic k
Securities Payment to Winnick and (iii) the Simpson Thacher Payment plus any interes t
that has accrued with respect to the Simpson Thacher Payment to Simpson Thacher ;
7 . to the extent any monies are deposited in (i) the Securitie s
Insurers' Insurance Escrow Account, (ii) the Securities Reinsurers' Insurance Trus t
Account and/or (iii) the ERISA Insurance Escrow Account, such monies shall be release d
and returned to, respectively, (i) the Securities Insurers, (ii) Pender's Securitie s
Reinsurers and (iii) the ERISA Insurer and Pender pursuant to the terms set out in each of
the escrow agreements;
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8 . to the extent any monies are deposited in the (i) Winnick ERISA
Escrow Account, ( ii) the Winnick Securities Escrow Account or ( iii) the Simpso n
Thacher Escrow Account, such monies shall be distributed pursuant to the terms set ou t
in each of the escrow agreements ;
9_ Securities Lead Plaintiffs may retain all Confidential Disclosur e
Material (as that term is defined in the Securities Confidentiality Agreement) that the y
obtained pursuant to the Securities Confidentiality Agreement, which Confidential
Disclosure Material shall remain subject to the terms of the Securities Confidentiality
Agreement; provided that paragraph 10 of the Securities Confidentiality Agreement is
hereby amended to allow Securities Lead Plaintiffs to use all Confidential Disclosur e
Material in connection with the prosecution of the Securities Action ; provided however,
that Securities Lead Plaintiffs shall not be able to use any Confidential Disclosure
Material in connection with responding to or opposing a motion to dismiss made by any
Settling Defendant or Releasee in the Securities Action ;
10. ERISA Consolidated Plaintiffs may retain all Confidentia l
Disclosure Material (as that term is defined in the ERISA Confidentiality Agreement )
that they obtained pursuant to the ERISA Confidentiality Agreement, which Confidentia l
Disclosure Material shall remain subject to the terms of the ERISA Confidentialit y
Agreement ; provided that paragraph 10 of the ERISA Confidentiality Agreement i s
hereby amended to allow ERISA Plaintiffs to use all Confidential Disclosure Material i n
connection with the prosecution of the Securities Action ; provided however, that ERISA
Plaintiffs shall not be able to use any Confidential Disclosure Material in connection with
191
responding or opposing a motion to dismiss made by any Settling Defendant or Release e
in any of the ERISA Actions ;
11, nothing in this Settlement Agreement shall create any obligatio n
on the part of any Settling Party to pay any other Settling Party 's fees or expenses ; an d
12. Settling Defendants and any Releasee added as a defendant shal l
have forty-five (45) days to respond to the Securities Complaint .
I . If this Settlement Agreement is terminated only with respect to Simpson
Thacher's participation, then :
1 . this Settlement Agreement shall be null and void with respect t o
Simpson Thacher and its rights and obligations under this Settlement Agreement
(including, without limitation, its obligations to make any payments under this Settlement
Agreement or its right to obtain any release from Securities Settling Class Members) and
shall have no force or effect as to Simpson Thacher, and neither Simpson Thacher nor
Securities Class Members shall be bound by any of the terms of this Settlement
Agreement as such terms relate to Simpson Thacher's participation in this Settlemen t
Agreement, except for the terms set out in this Section XIILI ;
2_ this Settlement Agreement, all of its provisions, and al l
negotiations, statements and proceedings relating to it shall be without prejudice to th e
rights of Simpson Thacher, on the one hand, and Securities Lead Plaintiffs, Securitie s
Plaintiffs or any other Securities Class Member as such rights relate to Simpson Thacher ,
on the other hand, all of whom shall be restored to their respective positions existin g
immediately before the execution of this Settlement Agreement ;
192
3 . Simpson Thacher expressly and affirmatively reserves all defenses ,
arguments and motions as to all claims that have been or might later be asserted in th e
Actions, including (without limitation) any argument that the Actions may not b e
litigated as a class action ;
4. Securities Lead Plaintiffs and Securities Plaintiffs and their curren t
and former predecessors, successors, heirs, affiliates (as defined in 17 C .F.R. Part 210 .1-
02.b), agents, attorneys, representatives or assigns expressly and affirmatively reserve all
motions as to, and arguments in support of, all claims as to Simpson Thacker that have
been or might later be asserted in the Actions, including (without limitation) any
argument concerning class certification ;
5. neither this Settlement Agreement, nor the fact of its having bee n
made, shall be admissible or entered into evidence for any purpose whatsoever wit h
respect to any claims between Simpson Thacher, on the one hand, and Securities Lea d
Plaintiffs, Securities Plaintiffs and/or Securities Class Members, on the other hand ;
to the extent any portion of the Simpson Thacher Payment i s
deposited in the Cash Settlement Account, Securities Lead Plaintiffs shall promptl y
distribute (or cause to be distributed) such monies to Simpson Thacher :
7_ to the extent the Simpson Thacher Payment or any portion thereo f
is deposited in the Simpson Thacher Escrow Account, Simpson Thacher may instruct th e
Simpson Thacher Escrow Agent to promptly pay, and the Simpson Thacher Escro w
Agent shall promptly pay, the Simpson Thacher Payment to Simpson Thacker ; and
193
8. nothing in this Settlement Agreement shall create any obligation
on the part of Simpson Thacher to pay Securities Lead Plaintiffs', Securities Plaintiffs' or
Securities Class Members' fees or expenses, or on the part of Securities Lead Plaintiffs ,
Securities Plaintiffs or Securities Class Members to pay Simpson Thacher's fees o r
expenses .
XN. GENERAL MATTERS AND RESERVATION S
A. This Settlement Agreement shall not be implemented , and will have n o
force and effect, and no payments shall be made by the Insurers, unless prior to the date
the Settling Parties submit this Settlement Agreement to the Court and apply for a
Hearing Order, the Insurers have given their approval to the Settlement Agreement and t o
the proposed Hearing Order, such approval to be evidenced by execution of a writte n
release agreement in a form acceptable to the Settling Defendants and the Insurers, an d
the Insurers have each agreed to provide, in combination, indemnity and/or coverage fo r
the full amount of the Cash Settlement Amount less the Winnick ERISA Amount, th e
Winnick Securities Amount and the Simpson Thacher Amount. Such approval shall be a
condition precedent to this Settlement Agreement .
B. Subject to Section XIlI .F above, the obligation, although not the ability, o f
the Settling Parties to implement all of the terms of this Settlement Agreement is and wil l
be contingent upon each of the following and any of the Settling Parties may terminate43
this Settlement Agreement if the conditions set forth below are not fully satisfied :
funding of each of the Securities Insurers' Insurance Escro w
Account, the Securities Reinsurers ' Insurance Trust Account, the ERISA Insurance
194
Escrow Account, the Winnick Securities Escrow Account and the Simpson Thacher
Escrow Account as required by, respectively, Sections MA . Lb-c, u.A.1 .d, II .A.2.b-c,
II.A.3 and II .A.4 above, and the absence of any lien, garnishment , attachment or pledge
of any funds in the accounts identified in this subsection ;
2. subject to Section XM.C above, payment of the Securitie s
Attorneys' Fees and Expenses Award and the ERISA Attorneys' Fees and Expenses
Award as required by, respectively, Sections II.B .I and 11.13 -2 above ;
3. payment of the Securities Insurers' Insurance Payment, th e
Securities Reinsurers' Insurance Payment, the ERISA Insurance Payment, the Winnic k
ERISA Payment , the Winnick Securities Payment and the Simpson Thacher Payment
consistent with, respectively, Sections lI .C.1 .a, II.C_l .b, a .C.2.a, II .C.3, MCA and II.C. 5
above ;
4. obtaining any necessary approvals (if any) from the Globa l
Crossing Bankruptcy Court and/or the Asia Global Crossing Bankruptcy Court ; provided
that such contingency shall be deemed to be waived if not exercised by the fifth (5th) day
before the Fairness Hearing ;
5 . obtaining a resolution of the pending United States Department o f
Labor inquiry; provided that such resolution must be acceptable to the Settling
Defendants ; providedfurther that such contingency sha ll be deemed to be waived if not
exercised by the fifth (5th) day before the Fairness Hearing ; provided further that a
Settling Defendant may seek review by the Court of any decision to invoke th e
195
contingency set out in this Section XIV .B . 5, such review to determine whether the
decision to invoke this contingency was reasonable and made in good faith ;
6. establishment of ERISA-qualified accounts within an Employe e
Benefit Plan for ERISA 401(k) Class Members into which monies distributed pursuant t o
the ERISA 401(k) Plan of Allocation shall be deposited ; and
7. any other conditions stated in this Settlement Agreement .
C. Except as provided in this Section XIV .C, or as may otherwise be required
by law, the Settling Parties and their counsel agree to keep the contents of this Settlemen t
Agreement and all related negotiations confidential until the Execution Date and, with
respect to any initial press release announcing the settlement described in this Settlemen t
Agreement, to attempt in good faith to coordinate the timing of such press release(s) ;
provided however, that this Section XIV.C shall not prevent earlier disclosure of suc h
information by Settling Defendants' Counsel, Separate Releasee Counsel, Securities Lea d
Counsel or ERISA 401(k) Lead Counsel to any person or entity (such as other Securities
Plaintiffs or ERISA Plaintiffs, Executive Committee Members, the ER .ISA Lead Counsel
Committee, experts, courts, regulatory entities and/or Administrators) to whom the
Settling Parties agree disclosure must be made to effectuate the terms and conditions of
this Settlement Agreement ; provided facrther that Settling Defendants and Simpson
Thacher shall be able to make, without prior notification to, or review or approval by ,
Securities Lead Counsel or ERISA Plaintiffs' Counsel, any and all disclosures regarding
this Settlement Agreement that they believe may be required or appropriate to th e
Insurers, the Securities and Exchange Commission, the United States Department o f
196
Labor, the Department of the Treasury, the Internal Revenue Service and/or any other
regulatory body (including, without limitation, any Committee of the United States
Congress), the Global Crossing Bankruptcy Court, the Asia Global Crossing Bankruptc y
Court, the Pacific Crossing Bankruptcy Court, the Global Crossing United States
Bankruptcy Trustee, the Asia Global Crossing United States Bankruptcy Trustee, the
Pacific Crossing United States Bankruptcy Trustee, the Global Crossing Creditors
Committee, the Asia Global Crossing Creditors Committee, the Pacific Crossing
Creditors Committee, the Global Crossing Bankers Committee, the Asia Global Crossin g
Bankers Committee, the Pacific Crossing Bankers Committee, the Company's curren t
independent auditors, accountants, attorneys, financial institutions or lenders whe n
disclosure to such individuals or entities is required in the normal course of a Settlin g
Defendant's business, and the persons and entities who might become securities holder s
in Global Crossing Ltd. at the time Global Crossing Ltd .'s plan of reorganization in th e
Global Crossing Bankruptcy Proceeding becomes effective, as required in connectio n
with a judicial or regulatory proceeding or as required by any other obligations to whic h
they may be or become subject ; provided however, that any and all such disclosures shall
be balanced , fair and accurate ; provided fisrther that Securities Lead Counsel , ERISA
Plaintiffs' Counsel, Settling Defendants ' Lead Counsel, Simpson Thacher, Separat e
Releasee Counsel and Winnick shall also be able to speak with media representative s
regarding the terns of this Settlement Agreement prior to the Execution Date, but only t o
the extent they obtain an agreement from such media representatives not to publish an y
information regarding this Settlement Agreement until on or after the Execution Date.
197
D. Subject to Section II.J .2 above, Securities Lead Plaintiffs and Securities
Lead Counsel agree that the terms and provisions of the Securities Confidentiality
Agreement shall continue to be in effect regarding the Settlement Disclosure Material (as
that term is defined in the Securities Confidentiality Agreement) .
E. ERISA Plaintiffs and ERISA Plaintiffs' Counsel agree that the terms and
provisions of the ERISA Confidentiality Agreement shall continue to be in effect
regarding the Settlement Disclosure Material (as that term is defined in the ERISA
Confidentiality Agreement) .
F. Jay W. Eisenhofer represents that be is authorized to enter into this
Settlement Agreement on behalf of Securities Lead Plaintiffs, and, as authorized by the
Court's December 13, 2002 order, on behalf of Securities Plaintiffs and Securities Class
Members, and any other attorneys, including, but not limited to, Executive Committe e
Members, who have represented or who now represent Securities Lead Plaintiffs,
Securities Plaintiffs or Securities Class Members in the Securities Action with respect to
the claims in the Securities Action and/or the Released Claims ; provided that Mr .
Eisenhofer undertakes to obtain from each of the Securities Plaintiffs, either individually
or through a duly authorized representative, a representation and certification that he, she
or it (i) has been kept apprised of the progress of the Securities Action and the settlement
negotiations among the Settling Parties, and has either read this Settlement Agreement,
including the exhibits attached to this Settlement Agreement, or has received a
description of it from Securities Lead Counsel or an Executive Committee Member, and
has agreed to its terms ; (ii) has consulted with Securities Lead Counsel or an Executiv e
198
Committee Member about the Securities Action and this Settlement Agreement ; and
(iii) will remain in and not request exclusion from the Securities Class .
G. Lynn Lincoln Sarko represents that he is authorized to enter into thi s
Settlement Agreement on behalf of the ERISA Consolidated Plaintiffs and, as authorize d
by the Court 's December 13, 2002 order , on behalf of ERISA Consol idated Class
Members, and any other attorneys, including, but not limited to, members of the ERIS A
Lead Counsel Committee, who have represented or who now represent ERISA
Consolidated Plaintiffs and ERISA Consolidated Class Members in the ERIS A
Consolidated Action with respect to the claims in the ERISA Consolidated Action and/o r
the Released Claims .
H. Thomas J. Hart represents that he is authorized to enter into thi s
Settlement Agreement on behalf of the ERISA Pusloskie Plaintiffs and any other
attorneys who have represented or who now represent the ERISA Pusloskie Plaintiffs in
the ERISA Pusloskie Action with respect to the claims in the ERISA Pusloskie Action
and/or the Released Claims .
1 . Matthew J . Fusco represents that he is authorized to enter into this
Settlement Agreement on behalf of the ERISA Simonetti Plaintiffs and any othe r
attorneys who have represented or who now represent the ERISA Simonetti Plaintiffs i n
the ERISA Simonetti Action with respect to the claims in the ERISA Sirnonetti Action
and/or the Released Claims .
J . Each of Securities Lead Plaintiffs, through a duly authorize d
representative, represents and certifies that it (i) has agreed to serve as a representative o f
199
the Securities Class proposed to be certified herein ; ( ii) is willing, able and ready to
perform all of the duties and obligations as a representative of the Securities Class,
including, but not limited to, being available for, and involved in, discovery and fact
finding ; (iii) has read the pleadings in the Securities Action, or has had the contents of
such pleadings described to it ; (iv) has been kept apprised of the progress of the
Securities Action and the settlement negotiations among the Settling Parties, and has
either read this Settlement Agreement, including the exhibits attached to this Settlement
Agreement, or has received a description of it from Securities Lead Counsel, and has
agreed to its terms ; (v) has consulted with Securities Lead Counsel about the Securities
Action, this Settlement Agreement and the obligations of a representative of the
Securities Class ; (vi) has authorized Securities Lead Counsel to execute this Settlemen t
Agreement on its behalf ; and (vii) will remain in and not request exclusion from the
Securities Class and will serve as a representative of the Securities Class until the terms
of this Settlement Agreement are effectuated, this Settlement Agreement is terminated in
accordance with its terms, or the Court at any time determines that such Securities Lead
Plaintiff cannot represent the Securities Class .
K. Each ERISA Consolidated Plaintiff, either individually or through a duly
authorized representative, represents and certifies that he or she (i) has read the pleadings
in the ERISA Consolidated Action, or has had the contents of such pleadings described to
him or her ; (ii) has been kept apprised of the progress of the ERISA Consolidated Action
and the settlement negotiations among the Settling Parties, and has either read thi s
Settlement Agreement, including the exhibits attached to this Settlement Agreement, o r
200
has received a description of it from ERISA Consolidated Counsel or a member of
ERISA Lead Counsel Committee, and has agreed to its terms ; (iii) has consulted with
ERISA Consolidated Lead Counsel or a member of ERISA Lead Counsel Committee
about the ERISA Consolidated Action and this Settlement Agreement ; (iv) has authorized
ERISA Consolidated Lead Counsel to execute this Settlement Agreement on his or her
behalf ; and (v) if also a Securities Class Member, will remain in and not request
exclusion from the Securities Class either on behalf of himself or herself, or on behalf of
any ERISA Plan.
L_ Each ERISA Pusloskie Plaintiff, either individually or through a dul y
authorized representative, represents and certifies that he or she (i) has read the pleadings
in the ERISA Pusloskie Action, or has had the contents of such pleadings described to
him or her; (ia) has been kept apprised of the progress of the ERISA Pusloskie Action and
the settlement negotiations among the Settling Parties, and has either read this Settlement
Agreement, including the exhibits attached to this Settlement Agreement, or has received
a description of it from ERISA Pusloskie Lead Counsel, and has agreed to its terms ;
(iii) has consulted with ERISA Pusloskie Lead Counsel about the ERISA Pusloskie
Action and this Settlement Agreement ; (iv) has authorized ERISA Pusloskie Lead
Counsel to execute this Settlement Agreement on his or her behalf ; and (v) if also a
Securities Class Member, will remain in and not request exclusion from the Securities
Class either on behalf of himself or herself, or on behalf of any ERISA Plan .
M . Each ERISA Sirnonetti Plaintiff, either individually or through a duly
authorized representative, represents and certifies that he or she (i) has read the pleading s
201
in the ERISA Sirnonetti Action, or has had the contents of such pleadings described to
him or her; (ii) has been kept apprised of the progress of the ERISA Simonetti Action and
the settlement negotiations among the Settling Parties, and has either read this Settlement
Agreement, including the exhibits attached to this Settlement Agreement, or has received
a description of it from ERISA Simonetri Lead Counsel, and has agreed to its terms ;
(iii) has consulted with ERISA Sinionetti Lead Counsel about the ERISA Sirnonetti
Action and this Settlement Agreement ; (iv) has authorized ERISA Simonetti Lead
Counsel to execute this Settlement Agreement on his or her behalf, and (v) if also a
Securities Class Member, will remain in and not request exclusion from the Securities
Class either on behalf of himself or herself, or on behalf of any ERISA Plan.
N. Ralph C . Ferrara represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Dan J . Cohrs, Joseph P. Clayton, Robert Annunziata,
Thomas J . Casey, David A. Walsh, S . Wallace Dawson, Jr., John A. Scarpati, John M .
Finlayson, Geoffrey J .W. Kent, Eric Hippeau, Douglas H . McCorkindale, William E .
Conway, Jr ., K. Eugene Shutler, Joseph P . Perrone, Anthony Christie, William B_ Carter,
Mark L . Attanasio, John L. Comparin, Linda Woodruff, Kenneth P . Schirmuhly, William
S. Cohen, Steven J . Green and any other attorneys who have represented or who now
represent any of these individuals or entities in the Actions or any of the putative class
actions that have been consolidated into the Actions _
0. D. Ward Kallstrom represents that he is authorized to enter into this
Settlement Agreement in connection with the ERISA Actions on behalf of Gary Winnick,
Joseph P_ Clayton, Thomas J . Casey, Geoffrey J .W. Kent, Joseph P. Perrone, Mark L.
202
Attanasio, John L . Comparin, Linda Woodruff, Kenneth P . Schirmuhly, William S .
Cohen and Lodwrick M. Cook, and any other attorneys who have represented or who
now represent any of these individuals or entities in the ERISA Actions or any of the
putative class actions that have been consolidated into the ERISA Actions .
P. Terry N_ Christensen represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Gary Winnick, Lodwrick M . Cook, Pacific Capital
Group, Inc ., GKW Unified Holdings LLP and the Winnick Family Foundation and any
other attorneys who have represented or who now represent these individuals or entities
in the Actions or any of the putative class actions that have been consolidated into the
Actions .
Q. Robert B. Fiske, Jr. represents that he is authorized to enter into this
Settlement Agreement on behalf of Simpson Thacher, including, without limitation, D .
Rhett Brandon, and any other attorneys who have represented or who now represent
Simpson Thacher and D. Rhett Brandon in connection with this matter .
R. Jeanne Irving represents that she is authorized to enter into this Settlement
Agreement on behalf of John M. Scanlon and any other attorneys who have represented
or who now represent Mr . Scanlon in the Actions or any of the putative class actions that
have been consolidated into the Actions .
S . Robert E. Gooding, Jr. represents that he is authorized to enter into this
Settlement Agreement on behalf of Abbott L . Brown and any other attorneys who have
represented or who now represent Mr. Brown in the Actions or any of the putative class
actions that have been consolidated into the Actions .
203
T. David Siegel represents that he is authorized to enter into this Settlemen t
Agreement on behalf of David L. Lee and Barry Porter, and any other attorneys who hav e
represented or who now represent Mr. Lee or Mr. Porter in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
U. Aaron Rubinstein represents that he is authorized to enter into this
Settlement Agreement on behalf of Hillel Weinberger and any other attorneys who hav e
represented or who now represent Mr. Weinberger in the Actions or any of the putative
class actions that have been consolidated into the Actions .
V. T. Mark McLaughlin represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Jay Bloom, Dean Kehler, Jay Irvine, Bruce Raben
and William Phoenix, and any other attorneys who have represented or who now
represent these individuals in the Actions or any of the putative class actions that have
been consolidated into the Actions .
W. Edward M. Spiro represents that he is authorized to enter into thi s
Settlement Agreement on behalf of James C . Gorton and any other attorneys who hav e
represented or who now represent Mr. Gorton in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
X . Philip S. Khinda represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Leo J . Hindery, Jr. and any other attorneys who hav e
represented or who now represent Mr. Hindery in the Actions or any of the putative class
actions that have been consolidated into the Actions _
204
Y. Kirsten Spira represents that she is authorized to enter into this Settlemen t
Agreement on behalf of Stefan C . Riesenfeld and any other attorneys who have
represented or now represent Mr. Riesenfeld in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
Z. J. Allen Maines represents that he is authorized to enter into thi s
Settlement Agreement on behalf of James F. McDonald and any other attorneys wh o
have represented or who now represent Mr . McDonald in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
AA. Richard A. Schirtzer represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Maria Elena Lagomasino and any other attorneys wh o
have represented or who now represent Ms . Lagornasino in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
BB . James W. Ducayet represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Thomas U . Koll and Pieter Knook and any othe r
attorneys who have represented or who now represent these individuals in the Actions o r
any of the putative class actions that have been consolidated into the Actions .
CC. Benito Romano represents that he is authorized to enter into thi s
Settlement Agreement on behalf of John J . Legere and any other attorneys who hav e
represented or who now represent Mr. Legere in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
DD. Joel Feuer represents that he is authorized to enter into this Settlemen t
Agreement on behalf of Walter Beran and any other attorneys who have represented o r
205
who now represent Mr_ Beran in the Actions or any of the putative class actions that have
been consolidated into the Actions .
EE. This Settlement Agreement sets forth the entire agreement among the
Settling Parties with respect to its subject matter and may not be altered or modifie d
except by a written instrument executed by Securities Lead Counsel, ERISA Plaintiffs '
Counsel, Securities Settling Defendants' Lead Counsel, ERISA Settling Defendants '
Lead Counsel, Securities Settling Defendants' Separate Counsel, ERISA Settlin g
Defendants' Separate Counsel and Separate Releasee Counsel . The Settling Parties
expressly acknowledge that there are no agreements, arrangements or understanding s
other than those expressed or referred to in this Settlement Agreement among or betwee n
them. In entering into this Settlement Agreement, no Settling Party has relied upon an y
representation or warranty not set forth expressly herein .
FF. This Settlement Agreement and any ancillary agreements shall b e
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions ; provided however, that any agreements between and among
the Settling Defendants, on the one hand, and the Insurers, on the other, shall be governed
by the choice of law provisions set forth in any such agreements .
GG. Any action arising under or to enforce this Settlement Agreement shall be
commenced and maintained only in this Court .
HH. Whenever this Settlement Agreement requires or contemplates that a
Settling Party shall or may give notice to the other, notice shall be provided by facsimil e
and/or next-day (excluding Saturday and Sunday) express delivery service as follows an d
206
shall be deemed effective upon such facsimile transmission, or delivery, to the facsimil e
number or address, as the case may be, below :
1 . If to Settling Defendants, then to :
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N.W.Suite 1100EWashington, D.C. 20004Telephone: (202) 383-8000Facsimile: (202) 383-8118
Provided that within three (3) business days of receipt of such notice, Securities Settlin g
Defendants' Lead Counsel shall transmit such notice to all other Settling Defendants '
Counsel .
2. If to Simpson Thacher, then to
Robert B. Fiske, Jr., Esq.James P. Rouhandeh, Esq .Davis Polk & Wardwell450 Lexington Avenu eNew York, New York 10017Telephone: (212) 450-4000Facsimile: (212) 450-3800
3. If to Securities Lead Plaintiffs, then to :
Jay W. Eisenhofer, Esq .Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A .1201 North Market Street
Suite 2100Wilmington, DE 19801Telephone: (302) 622-7000Facsi le: (302) 622-7100
4_ If to ERISA Plaintiffs' Counsel, then to :
207
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq .Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone: (206) 623-1900Facsimile: (206) 623-3384
Thomas J . Hart , Esq .Marc A . Tenebaum, Esq.Slevin & Hart , P.C.1625 Massachusetts Avenue, N.W.Suite 450Washington , D.C. 20036Telephone : (202) 797-8700Facsimile : (202) 234-823 1
Matthew J . Fusco, Esq .K. Wade Eaton, Esq .Chamberlain, D'Amanda
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State StreetRochester, NY 14614Telephone: (585) 232-3720Facsimile : (585) 232-3882
M All time periods set forth herein shall be computed in calendar days unles s
otherwise expressly provided . In computing any period of time prescribed or allowed b y
this Settlement Agreement or by order of court, the day of the act, event, or default from
which the designated period of time begins to run shall not be included . The last day of
the period so computed shall be included, unless it is a Saturday, a Sunday or a legal
holiday, or, when the act to be done is the filing of a paper in Court, a day on which
weather or other conditions have made the office of the Clerk of the Court inaccessible,
in which event the period shall run until the end of the next day that is not one of th e
208
aforementioned days . As used in this Section, "legal holiday" includes New Year's Day,
the observance of Birthday of Martin Luther King, Jr., Presidents ' Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day,
Christmas Day and any other day appointed as a federal or New York state holiday .
JJ . The Settling Parties reserve the right, subject to the Court's approval, to
make any reasonable extensions of time that might be necessary to carry out any of th e
provisions of this Settlement Agreement .
KK. All Settling Parties agree that this Settlement Agreement was drafted b y
counsel for the Settling Parties at arm's length, and that no parol or other evidence may
be offered to explain , construe, contradict or clarify its terms , the intent of the Settling
Parties or their counsel, or the circumstances under which this Settlement Agreement wa s
made or executed. Nor shall there be any presumption for or against any Settling Part y
that drafted all or any portion of this Settlement Agreement .
LL. This Settlement Agreement, offer of this Settlement Agreement an d
compliance with this Settlement Agreement shall not constitute or be construed as an
admission by any of the Releasees of any wrongdoing or liability . This Settlemen t
Agreement is to be construed solely as a reflection of the Settling Parties' desire to
facilitate a resolution of the Claims in the Complaints and of the Released Claims . The
Settling Parties agree that no party was or is a "prevailing party" in this case . In no event
shall this Settlement Agreement, any of its provisions, or any negotiations, statements o r
court proceedings relating to its provisions in any way be construed as, offered as ,
received as, used as or deemed to be evidence of any kind in the Actions, any othe r
209
action, or any judicial, administrative, regulatory or other proceeding, except a
proceeding to enforce this Settlement Agreement . Without limiting the foregoing, neithe r
this Settlement Agreement nor any related negotiations, statements or court proceedings
shall be construed as, offered as, received as, used as or deemed to be evidence or an
admission or concession of any liability or wrongdoing whatsoever on the part of any
person or entity, including, but not limited to, Settling Defendants, or as a waiver by
Settling Defendants of any applicable defense or as a waiver by Securities Lead
Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs or the Class of any claims, causes o f
action or remedies .
MM. No opinion or advice concerning the tax consequences of the proposed
settlement to individual Class Members is being given or will be given by Settlin g
Defendants' Counsel, Separate Releasee Counsel, Securities Lead Counsel and/or ERISA
Plaintiffs' Counsel; nor is any representation or warranty in this regard made by virtue of
this Settlement Agreement. The Notice will direct Class Members to consult their ow n
tax advisors regarding the tax consequences of the proposed settlement and any ta x
reporting obligations they may have with respect thereto . Each Class Member's tax
obligations, and the determination thereof, are the sole responsibility of the Clas s
Member, and it is understood that the tax consequences may vary depending on th e
particular circumstances of each individual Class Member .
NN. The Settling Parties, their successors and assigns , and their attorney s
undertake to implement the terms of this Settlement Agreement in good faith and to us e
210
good faith in resolving any disputes that may arise in the implementation of the terms of
this Settlement Agreement.
00. The Settling Parties, their successors and assigns , and their attorneys agree
to cooperate fully with one another in seeking Court approval of this Settlemen t
Agreement and to use all reasonable efforts to effect the prompt consummation of thi s
Settlement Agreement and the proposed settlement .
PP. This Settlement Agreement may be signed in counterparts, each of whic h
shall constitute a duplicate original . Execution by facsimile shall be fully and legall y
binding on a Settling Party .
QQ. All Releasees who are not Settling Parties are intended third-party
beneficiaries who are entitled as of the date on which all of the payments required b y
Sections a.C.l .a, H.C. Lb, II.C .2.a, II.C.3, u.C.4, II .C.5 and 1J.C.6 above have been made
to enforce the terms of the Securities Release and the ERISA Release set forth in Section s
IX.A and IX.B above .
RR. All Insured Releasees who are not Settling Parties are intended third-part y
beneficiaries who are entitled to enforce the terms of Section II .D above and Exhibit B.
Agreed to as of this 19th day of March 2004.
211
Jay W Ei enhofer` Grant & Eisenhofer, P .A ,1201 North Market Street, Suite 2100Wilmington, DE 1980 1
ON 13EHALF OF SECURITIES LEADPLADIT'IFFS, SECURTTI S PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback L .LP1701 Third Avenue, Suite 3200Seat tle, Washington 951 01.3052
ON BEHALF OP THE ERJSACONSOLIDATED PLAINTIFFS ANDTHE ERJSA CONSOLIDATED CLASS
Ralph C, FerraraDebcvoise & Plimpton LLP555 13th St ecr, N.W., Suite 1100EWashington, D.C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S . WALLACEDAWSON, JR., JOHN A. SCARPATE,JOHN M. FINLAYSON, GEOFFREYJ.W . KENT . MUC HIPPEAU, DOUGLASH. McCORK1NDALB, WILLIAM E .CONWAY, 3R, K . EUGENE SHIJTLER,JOSEPH P. PERRONE, ANTHONYCHRIS-IM, WILLIAM B . CARTER,MARK L. ATrANASIO, JOHN LCOMPARIN, LINDA WOODRUFF,KENNETH P . SCHJ1 MUHLY,WILT. AM S . COMPN AND STEVEN 7 .GREEN
D. Ward Knllstro mSonnenschein Nath & Rosenthal LLP685 Market Street, 6th Floo rSan Francisco, California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P . CLAYTON, THOMAS J.CASEY, GEOFFREY J.W. KENT,JOSEPH P. PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF. KENNETH P.SCR RMUBLY, WILLIAM S . COHENAND LODWRICK M . COOK
Jay W . EisenhoferGrant & Eisenhofer, P .A .1201 North Market Street, Suite 2100Wilmington, DE 1980 1
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-305 2
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
ON BEHALF OF DAN J. COHRS,JOSEPH P . CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S. WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M. FINLAYSON, GEOFFREYJ.W. KENT, ERIC HIPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E.CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P. PERRONE, ANTHONYCHRISTIE, WILLIAM B. CARTER,MARK L . ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J .GREEN
D. Ward KalistromSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco, California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J.W. KENT,JOSEPH P . PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF, KENNETH P .SCHIRMUHLY, WILLIAM S . COHENAND LODWRICK M . COOK
Debevoise & Plimpton LL P555 13th Street, N .W., Suite 1100EWashington, D.C. 20004
Jay W. EisenhoferGrant & Eisenhofer, P.A.1201 North Market Street, Suite 2100Wilmington, DE 19801
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
55
incoln Sarko
eller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-305 2
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
Ralph C. FerraraDebevoise & Plimpton LLP555 13th Street, N.W., Suite 1100EWashington, D .C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J. CASEY,DAVID A . WALSH, S. WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M. FINLAYSON, GEOFFREYJ.W. KENT, ERIC HJPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E .CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P. PERRONE, ANTHONYCHRISTIE, WILLIAM B . CARTER,MARK L. ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J.GREEN
D. Ward KallstromSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco, California 9410 5
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J .W. KENT,JOSEPH P. PERRONE, MARKATTANASIO, JOHN L. COMPARJN,LINDA WOODRUFF, KENNETH P .SCHIRMUHLY, WILLIAM S . COHENAND LODWRICK M. COOK
Jay W . EisenhoferGrant & Eisenhofer, P .A .1201 North Market Street, Suite 2100Wilmington, DE 19801
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-3052
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
Ralph C. FerraraDebevoise & Plimpton LLP555 13th Street, N.W., Suite 1100EWashington , D.C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S . WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M . FINLAYSON, GEOFFREYJ.W. KENT, ERIC HIPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E .CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P . PERRONE, ANTHONYCHRISTIE, WILLIAM B. CARTER,MARK L . ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J.GREEN
D. Ward Kalistro mSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco , California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J .W. KENT,JOSEPH P . PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF, KENNETH P.SCH]RMUHLY, WILLIAM S. COHENAND LODWRICK M . COOK
/'Thomas J . HSlevin & Hart, P .C.1625 Massachusetts Avenue, N .W.Suite 450Washington, D .C. 2003 6
ON BEHALF OF THE ERISAP USLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLAS S
Matthew J . FuscoChamberlain , D'Amanda,
Oppenheimer & Greenfield1600 Crosssroads BuildingTwo State S treetRochester, New York 14614
ON BEHALF OF THE ERISASIMONE?TIPLAINTIFFS AND THEERISA SIMONET77 CLASS
Terry N. ChristensenChristensen, Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard, 19th FloorLos Angeles, California 90067
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
Jeanne IrvingHennigan, Bennett & Dorman601 South Figueroa Street, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLON
Robert E . Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
ON BEHALF OF ABBOTT L . BROWN
03-08-04 03 ;02pa Fron-CHRISTENSEN1131I1LER 310-550-2920 7-564 P.003/012 F-48 4
Thomas J. Hart erry N_ ChristensenSlevin & Hart, P .C. Christensen, Miller, Fink, Jacobs, Glaser,1625 Massachusetts Avenue, N.W. Well and Shapiro LLPSuite 450 10259 Constellation Boulevard, 19th FloorWashington, D.C. 20036 Los Angeles, California 9005 7
ON BEHALF OF THE ERISA ON BEHALF OF GARY WINNJCK ANDPUSLOSKFE PLAINTIFFS AND TILE LODWRICK M_ COOKERJSA PUSLOSKIE CLASS
Matthew J. Fusco Jeanne IrvingChamberlain, D'Arzanda, Hennigan, Bennett & DormanOppenheimer & Greenfield 601 South Figueroa Street, Suite 3300
1600 Crossroads Building Los Angeles, California 9001 7Two State StreetRochester, New York 14614 ON BEHALF OF JOHN M . SCANLON
ON BEHALF OF THE ERISASIMON= PLAINTIFFS AND THEERISA SIMONE7TI CLASS
Robert E. Gooding, Jr_Howrey Simon Arnold & White, LLP2020 Main Street, Suite 100 0Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
Thomas J . HartSlevin & Hart, P .C .1625 Massachusetts Avenue, N_W .Suite 450Washington, D .C. 20036
ON BEHALF OF THE ERISAPUSLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
M tthew 3_ FuscoChamberlain, D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State Stree tRochester, New York 14614
ON BEHALF OF THE ERISASIMONEfl7 PLAINTIFFS AND THEERISA SIMONE7 CLASS
Terry N . ChristensenChristensen, Miller, Fink, Jacobs, Glaser,Well and Shapiro LLP10259 Constellation Boulevard, 19th FloorLos Angeles, California 9GO67
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
Jeanne Irvin gHennigan , Bennett & Dorman601 South Figueroa Street, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLON
Robert E. Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
Thomas J . HartSlevin & Hart, P.C.1625 Massachusetts Avenue, N.W.Suite 450Washington, D.C. 20036
ON BEHALF OF THE ERIS AP USLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
Matthew J . FuscoChamberlain, D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State Stree tRochester, New York 14614
ON BEHALF OF THE ERISASIMONE2TI PLAINTIFFS AND THEERISA SIMONE7TI CLASS
Terry N . ChristensenChristensen , Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard , 19th FloorLos Angeles, California 9006 7
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
eanne IrvingHannigan , Bennett & Dorman601 South Figueroa S treet, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLO N
Robert E . Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
Thomas J . HartSlevin & Hart, P .C .1625 Massachusetts Avenue, N .W .Suite 450Washington, D .C. 20036
ON BEHALF OF THE ERISAPUSLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
Matthew J . FuscoChamberlain , D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State StreetRochester, New York 14614
ON BEHALF OF THE ERISASIMONETTI PLAINTIFFS AND THE .ERISA SIMONETTI CLASS
Terry N. Christense nChristensen , Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard , 19th FloorLos Angeles , California 9006 7
ON BEHALF OF,GARY WINNICK ANDLODWRICK M. COOK
Jeanne IrvingHennigan, Bennett & Dorma n601 South Figueroa Street, Suite 3300Los Angeles, California 9001 7
ON BEHALF OF JOHN M . SCANLON
Robert E. Gooding, Jr.Howrey Simon Amol & te, LLP2020 Main Street, Suite 10 0Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
1800 Avenue of thePt~ rsLos Angeles, Califo a 90067
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park Avenu eNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughli nMayer, Brown, Rowe & Maw LLP190 South LaSalle StreetChicago, Illinois 6060 3
ON BEHALF OF JAY BLOOM, DEANKEELER, JAY LEV INE, BRUCERABEN AND WILLIAM PHOENI X
Edward M. SpiroMorvillo, Abramowitz, Grand, Jason &Silberberg, P .C .565 Fifth Avenu eNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
David SiegelIrell & Manella LLP1800 Avenue of the StarsLos Angeles, California 9006 7
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park AvenueNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughli nMayer, Brown, Rowe & Maw LLP190 South LaSalle StreetChicago, Illinois 6060 3
ON BEHALF OF JAY BLOOM, DEANKEHLER, JAY LEVINE, BRUCERABEN AND WILLIAM PHOENIX
Edward M. SpiroMorvillo, Abramowitz, Grand, Jason &Silberberg, P .C .565 Fifth AvenueNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
David SiegelIrell & Manella LLP1500 Avenue of the StarsLos Angeles , California 9006 7
ON BEHALF OF DAVID L LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park Avenu eNew York, New York. 10022
ON BEHALF OF HI .LEL
Mayer, Brown, Rowe & Maw190 South LaSalle StreetChicago, Illinois 60603
ON BEHALF OF JAY BLOOM, DEANKEHLER, JAY LEV I NE, BRUCERABEN AND WILLIAM PHOENIX
Edward M. SpiroMorviilo, Abramowitz , Grand , Jason &Silberberg, P_C.565 Fifth AvenueNew York, New York 10017
ON BEHALF OF JAMES C. GORTON
f1AR BED 2004 119 :10 FR TO 12 0238381 19-*** 1 o P, e2
David SiegelIrell & Manella LLP1800 Avenue of the S tarsLos Angeles, California 9006 7
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scloler LLP425 Park Avenu eNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughlinMayer, Brown , Rowe & Maw LLP1 90 South LaSa lle StreetChicago, Illinois 60603
ON BEHALF OF S'A'Y BLOOM, DEANKEH.I ER, JAY LEVINE, BRUCERABEN AND WILLIAM PHOENIX
~=b m -~'zEdward M. SpiroMorvillo, Abramowitz, Grand, Iason &Silberberg, P .C .565 Fifth AvenueNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
:€ : :I : TOTAL PAGE . 03 :r :, :
Mar-A-04 O1 :16pm From-%FNY2l-2i flowpartOdpw• com T-066 P .C06/666 F-01 4
4obert Fisk , r.Dk & ardw450 Lexington AvenueNew York, New York 1001 7
ON BEHALF OF SZ PSON 'i',F ACHER
Philip S. AdaRopes & Gray LLP70012th Street, N.W.Suite 90DWashington , U.C. 20005
ON BEHALF OF LEO L HINDERY . JR
Kirsten SpiraMcNamara Spira & Smith12121 Wilshire BoulevardSuite 1300Los Angeles, California 90025
ON BEHALF OF S=AN C.RIESE iELD
J, Allen MainesPaul, Hastings, Janofsky & Walker LLP600 Peachtree Street, N. .Twenty-Pow FloorAtlanta, Georgia 3030 8
ON BEHALF Olt YAMS B. tvIcDONAZ Dt
{
03;'6512e 4 11 :15 2926263992 ROPES GRAY PAGE 03/0 :3
Robert B. Fiske, Jr .Davis Polk & Wardwell450 Lexington Avenu eNew York, New York. 10017
ON 1ALT, QF• SINIP1Q THACHE R
Philip S Kh' •daRopes Gr y LLP700 12th \S met, N.W.Suite •900-Washin;ton, D.C. 20005
ON BEHALF OP LEO J . HINDERY, JR .
Kirsten SpiraMcNamara Spira & Smith12121 Wilshire BoulevardSuite 13.00Los Angeles, California 90025
ON BEHALF OF STEFAN C .RIESENFIELD
5_ Alleix Ma uesPaul, Hastings, 3anofskyA, Walker LLP600 Peachtree Street, N.E.Twenty-Vourth. FloorAtlanta, Georgia 30308
ON 13EHALF OF JAMES F . McDONALD
Robert B. Fiske, Jr .Davis Polk & Wardwell450 Lexington AvenueNew York, New York 1001 7
ON BEHALF OF SIMPSON THACHER
Philip S . KhindaRopes & Gray LLP70012th Street, N.W.Suite 900Washington, D .C. 20005
ON BEHALF OF LEO J . HINDERY, JR.
ten Sp .McNamara Spira & Smith12121 Wilshire BoulevardSuite 1300Los Angeles, California 90025
ON BEHALF OF STEFAN C .RIESENFIEU
7. Allen Main sPaul, Hastings, Janofsky & Walker LLP600 Peachtree Street, N .E .Twenty-Fourth FloorAtlanta, Georgia 30308
ON BEHALF OF JAMES F. McDONALD
03/08 /2004 17 :42 FAX 4048152424 Paul, Hastings1 0)002
Robert B. Fiske, Jr.Davis Polk & Wardwell450 Lexington Avenu eNew York, New York 1001 7
ON BEHALF OF SIMPSON THACHE R
Philip S . KhindaRopes & Gray LLP700 12th Street, N .W .Suite 900Washington, D.C. 20005
ON BEHALF OF LEO J . HINDERY, JR
Kirstea SpiraMcNamara Spira & Smith.12121 Wilshire BoulevardSuite 1300Los Angeles, Californ ia 90025
ON BEHALF OF STEFAN C .RIESENFIELD
/ar 4-7. Allen MaanesPaul, Hast ings , Janofsky & Walker LLP600 Peach tree S treet, N.E . 'r~rliTwenty-Fourth FloorAtlanta, Georgia 30308
ON BEHALF OF JAMES F . McDONALD
Rich d A . SchiQuinn Emanuel Urquha rt Oliver & Hedges,LLP865 South Figueroa Street, 10th FloorLos Angeles, California 90017
ON BEHALF OF MARIA ELENALAGOMASIN O
James W. Ducaye tSidley Austin Brown & Wood LPBank One Plaza10 South Dearborn S treetChicago, Illinois 60603
ON BEHALF OF THOMAS U . KOLLAND PIETER KNOO K
Joel Feu e rGibson, Dunn & Crutcher LLP2029 Century Park EastLos Angeles, California 90067-3026
ON BEHALF OF WALTER BERAN
Benito Roman oWK We Farr & Gallagher LLP787 Seventh AvenueNew York, New York 10019-609 9
ON BEHALF OF JOHN J . LEGERE
Richard A . SclhirtzerQuinn Emanuel Urquhart Oliver & Hedges,LLP865 South Figueroa Street , 10th FloorLos Angeles , California 9001 7
ON BEHALF OF MARIA ELENALAGOMASINO
cji~ W. DucayetSidley Austin Brown & WoodlLPBank One Plaz a10 South Dearborn StreetChicago, Illinois 6060 3
ON BEHALF OF THOMAS U. KOLLAND PIETER KNOOK
Joel FeuerGibson, Dunn & Crutcher LLP2029 Century Park Eas tLos Angeles, California 90067-3026
ON BEHALF OF WALTER BERAN
Benito RomanoWilkie Farr & Gallagher LLP787 Seventh Avenu eNew York, New York 10019-6099
ON BEHALF OF JOHN J. LEGERE
lIAR 09 '04 O9:3BAM GD&C LA 4971 P. 3
Richard A . SchirtzerQuinn Emanuel Urquhart Oliver & Hedges,LLP865 South Figueroa Street , 10th FloorLos Angeles , Califo rn ia 90017
ON BEHALF OF MARIA ELENALAGOMASINO
James W. Ducaye tSidley Austin Brown & Wood-LPBank One Plaza10 South Dearborn StreetChicago, Elinois 6060 3
ON BEHALF OF THOMAS U. KOLLAND PIETER KNOO K
dg~ -
J41 FeuerGibson, Dunn & Crutcher LLP2029 Century Park Eas tLos Angeles, California 90067-3026
ON BEHALF OF WALTER BERAN
Benito Roman oWillie Farr & Gallagher LLP787 Seventh AvenueNew York, New York 10019-609 9
ON BEHALF OF JOHN J . LEGS
{
MAR-03-2004 10:51 WILLKIE FRRR 39FAX135-110 05330200710 P.04/04
Richard A. Sclhi;rtzerQuinn Emanuel Urquhart Oliver & Hedges,LLP865 South Figueroa Streat, 10th FloorLos Angeles, California 9001 7
ON BEHALF OF MARIA ELENALAGOMASINO
James W. Ducaye tSidley Austin Brown & Wood LPBank the Plaza10 South Dearborn StreetChicago, Illinois 6060 3
ON BEHALF OF THOMAS U. KOLLAND PIETER KNOOK
Joel FeuerGibson, Dunn & Crutcher LLP2029 Century Park EastLos Angeles, California 90067-302 6
ON BEHALF OF WALTER 'RERAN
B ito Romanoillkie Farr & Gallagher LLP
?S7 Seventh AvenueNew York, New York 10019-6099
ON BEHALF OF JOHN J_ LEGERE
TOTAL FP .04
03-08-04 03 :03prn From-CHRISTENSE , MILLER 310-55G-2920 T-564 P.007/012 F-46 4
Terry N . ChristensenChristensen, Miller, Fink, Jacobs, Glaser .Well and Shapiro LL P10259 Constellation Boulevard, 19th FloorLos Angeles, California 90067
ON BEHALF OF PACIFIC CAPITALGROUP, INC, GKW UNIFIEDHOLDINGS LLC AND THE WIN-NICKFAMILY FOUNDATION
EXHIBIT A'
PART I
Na me of "endin Casc or _ ''
of.Th reatenotei tial ClaimDesGtaptio n edJFStyle of Pending Case
Beightol v. UBS PaineWebber, et al. Case No. 03 Civ . 1] 86 (GEL) (S .D.N.Y . )
Claims arising out of any investigation oraction brought by the Asia Global Crossin g'Bankruptcy Trustee, Litigation Trustee ,Liquidation Trustee or any other entityappointed in connection with the Asia Globa lCrossing Bankruptcy Proceedin g
Claims arising out of any investigation o raction brought by the Global Crossing Ltd .Bankruptcy Trustee, Litigation Trustee ,Liquidation Trustee, Estate Representative o rany other entity appointed in connection wit hthe Global Crossing Bankruptcy Proceeding . .Claims arising out of any investigation o raction brought by Pacific Crossing Ltd . and/orany of its subsidiaries or by the Pacifi cCrossing Ltd. Bankruptcy Trustee, LitigationTrustee, Liquidation Trustee or any otherentity appointed in connection with thePacific Crossing Bankruptcy Proceeding
Claims arising out of the Department o fJustice's investigation of Global Crossingand/or current and former directors an dofficers
All capitalized terms in this Exhibit A shall have the same meaning as ascribed tothem in the accompanying Stipulation of Settlement, except that, for purposes ofthis Exhibit A and for that purpose only, the term "Global Crossing" means each
and all of Global Crossing Ltd . and any or all of its parents, predecessors,affiliates (as defined in 17 C.F.R. Part 210 .1-02.b), divisions and subsidiaries .
Naime of Pending Case orStyle of Penditt" f age s
Desu-iptiotn of Thr6atenMX-oteiltial' Clai m
Claims arising out of the facts andcircumstances described in the August 4 ,
2003 letter from Hennigan Bennett & Dormanto insurance carriers
Claims arising out of the facts an dcircumstances described in the August 15 ,2003 letter from Hennigan Bennett & Dorma n
to insurance carriers
Claims arising out of the facts an dcircumstances described in the August 18 ,2003 letter from Fried Frank Harris Shriver &
Jacobson to R. Ferrara and 1 . Eisenhofe r
Claims arising out of the facts andcircumstances described in the March 31 ,2003 letter from Gary Swinhart to PenderInsurance Ltd .
Claims arising out of the facts andcircumstances described in the November 12 ,
2003 letter from Golenbock Eiseman Assor
Bell & Peskoe to Hennigan Bennett &Dorma n
Claims arising out of the facts an dcircumstances described in the September 25 ,2003 letter from Colin Jones to insurancecarriers to the extent the Executive Liabilit yInsurance Policies, the Fiduciary LiabilityInsurance Policy and/or the Pender Polic yprovide coverage with respect to any suchclaims
Claims arising out of the facts an dcircumstances described in the September 25 ,2003 letter from McNamara, Spira & Smith t oinsurance carriers to the extent the ExecutiveLiability Insurance Policies, the FiduciaryLiability Insurance Policy and/or the Pende rPolicy provide coverage with respect to an ysuch claims
2
Naive of Pending C' se or _Style of Pertdina C ace s
Description of '1 hreatencd/Potential Claim . -
Claims arising out of the facts an dcircumstances described in the September 26,2003 letter from Bruce Comer to insuranc ecarriers to the extent the Executive LiabilityInsurance Policies, the Fiduciary LiabilityInsurance Policy and/or the Pender Polic yprovide coverage with respect to any suchclaims
Claims arising out of the facts andcircumstances described in the September 26,2003 letter from Hennigan, Bennett &Dorman LLP to insurance carriers (whic hsupplements a September 25, 2003 letter fro mHennigan, Bennett & Dorman LLP) to theextent the Executive Liability InsurancePolicies, the Fiduciary Liability InsurancePolicy and/or the Pender Policy providecoverage with respect to any such claim s
Claims arising out of the facts an dcircumstances described in the September 26,2003 letter from John McShane to insuranc ecarriers
Claims arising out of the July 16, 2003demand letter from Kronish Lieb Weiner &Hellman LLP on behalf of Pacific Crossin gLtd . eta.] .
Claims arising out of the March 24, 200 3demand letters from Kronish Lieb Weiner &Hellman LLP, on behalf of Pacifi cCrossing Ltd .
Claims arising out of the March 25, 200 3demand letter from O'Melveny & Myers LL Pon behalf of lenders to Pacific Crossing Ltd .
3
Name ofPendir g Cash; it -
~eSer tiori o€,ThreatenedlPotential laimStyle of Pen ing ['a eti
Claims arising out of subpoenas ducas tecu missued to Global Crossing and/or current an dformer directors and officers in connectionwith the New York Attorney General' sinvestigation of securities analyst s
Claims arising out of the Securities an dExchange Commission proceeding In reGlobal Crossing Ltd., LA-2563
Claims arising out of the Securities an dExchange Commission proceeding In reQwest Communications International, Inc. ,D-02455-A
Claims arising out of the United StatesCongressional investigations of GlobalCrossing and/or current and former directorsand officers
Clark v. UBS PaineWebber, et at. Case No. 03 Civ. 1187 (GEL) (S .D.N.Y)
Garcia v. Winnick, et al. Case No . 02 Civ. 8890 (GEL) (S .D.N.Y. )
Global Crossing Estate Representative, foritself and as the Liquidating Trustee of theGlobal Crossing Liquidating Trust v.
Case No . 02-40188 (REG) (Bankr. S .D.N.Y. )
Winnick, et al.
Goldman Sachs & Co ., et al. v . Cohrs, et al. Case No. 04 Civ . 00588 (GEL) (S .D.N.Y.)
Hesselman v. ArthurAndersen, L .L.P., et al . Case No . 02 Civ . 10199 (GEL) (S .D.N.Y . )
In re Initial Public Offering SecuritiesLitigation (originally Pludo v. Global Case No . 21 MC 92 (SAS) (S .D.N.Y. )Crossing Ltd., Case No. 01 CIV 7023 (SAS))
JPMorgan Chase Bank v. Cook Case No. 03 CV 2690 (GEL) (S .D.N.Y . )
JPMorgan Chase Bank v. Winnick, et al. Case No. 03-Civ . 8535 (GEL) (S .D.N.Y . )
Kalimi v. Pacific Capital Group, et al. Case No. 03 Civ . 893 (GEL) (S .D.N.Y . )
Nachom v. Citigroup Inc ., et al. Case No. 03 Civ . 4521 (GEL) (S .D.N.Y . )
4
' ame of Pendi g Case ofe4 Peadinr _ sesSO
Descrz Ptwoii of I hr€ tenecl/Potentfal l : ann
Olofson v. Winnick, el al. Case No. 03 Civ . 1185 (GEL) (S .D.N.Y.)
PCL Japan, Ltd v . Asia Netcom Corporation Case No. 02-12086 (Bankr . D . Del .) and Case No. 03-Limited, ei al_ 500 (D. Del . )
Reeves-Collins v. Winnick, et al. Case No . 03 Civ. 1189 (GEL) (S .D.N.Y.)
Thompson v . Winnick, et al. Case No . 02 Civ. 8503 (GEL) (S .D.N.Y.)
Tucker v . Pacific Capital Group, Inc., et al. Case No. 03 Civ . 705 (GEL) (S .D.N.Y .)
PART 2
5
TERMS AND CONDITIONS FOR REIMBURSEMEN TFOR COVERED CLAIM COSTS FROM CLAIM RESERVE ACCOUNT '
A . Subject to and specifically conditioned upon the agreement of the Insure d
Releasees or final ruling of the Court pursuant to Section II .D.7 of the Settlemen t
Agreement, any Insured Releasee may (as set out in Sections II .D_5 and I .D_6 of the
Settlement Agreement) seek reimbursement from the Claim Reserve Account fo r
Covered Claim Costs . Acknowledging that the proceeds in the Claim Reserve Accoun t
are finite, each Insured Releasee agrees to minimize, to the extent possible, his, her or it s
Covered Claim Costs for which it seeks such reimbursement .
B. All determinations whether Covered Claim Costs shall be reimbursed t o
an Insured Releasee under Sections H .D.5 and II .D.6 of the Settlement Agreement shal l
be subject to any agreement of the Insured Releasees or final ruling pursuant to Sectio n
II .D.7 of the Settlement Agreement and to the terms and conditions of this Exhibit B ;
provided that if there are any inconsistencies between the agreement of the Insure d
Releasees reached, or final ruling entered, pursuant to Section II .D.7 (on the one hand )
and the terms and conditions of this Exhibit B (on the other hand), the agreement of th e
Insured Releasees or final ruling that results from Section II.D.7 shall take precedence
over the terms and conditions of this Exhibit B .
I . All capitalized terms in this Exhibit B shall have the same meaning as ascribed tothem in the accompanying Stipulation of Settlement .
C. A ll requests for reimbursement shall be submitted to the person(s )
identified by Securities Lead Counsel and ERISA 401(k) Lead Counsel to receive suc h
requests (the "Reimbursement Administrator") . For an Insured Releasee to b e
reimbursed, requests must be submitted to the Reimbursement Administrator by no late r
than the end of the month following the month in which Covered Claim Costs wer e
incurred .
D. In seeking reimbursement for Covered Claim Costs, the Insured Release e
(or his, her or its attorney) shall provide the Reimbursement Administrator with a written
description of the reasons for which the reimbursement is sought, which requirement, t o
the extent the requested reimbursement is for an Insured Releasee's attorneys' fees o r
expenses, shall be satisfied by such attorney submitting a summary invoice for the
amount sought ; provided that the information required to be provided pursuant to this
Section D of Exhibit B shall be subject to the final proviso in Section I .E . Lbb of the
Settlement Agreement regarding privileged and protected information .
E. Determinations whether an Insured Releasee is entitled to reimbursemen t
pursuant to any request made pursuant to the Settlement Agreement and this Exhibit B
shall be subject to the following:
1 . To the extent the Claim giving rise to the request for
reimbursement is not a Claim that is identified on Exhibit A to the Settlement Agreement,
costs with respect to which reimbursement are sought will only be reimbursed to the
extent that the Reimbursement Administrator determines in good faith that such Claim is
a Covered Claim and that the Releasee is an Insured Releasee .
2
2. Each reimbursement sought by an Insured Releasee for Covere d
Claim Costs shall be subject to and conditioned upon (i) the existence of a balance in the
Claim Reserve Account, at the time that reimbursement would be made, that is sufficien t
to make such reimbursement and (ii ) the allocation and administration of the proceeds i n
the Claim Reserve Account among Insured Releasees pursuant to Section II .D.7 of the
Settlement Agreement, the terms of which allocation and administration shall be provided
to the Reimbursement Administrator by Securities Settling Defendants' Lead Counsel .
3 . To the extent the Covered Claim Costs for which reimbursement i s
sought are settlement amounts Insured Releasee(s) intends to pay to a plaintiff or other
claimant with respect to a Covered Claim ("Settlement Costs"), the Reimbursement
Administrator shall notify Securities Lead Counsel and ERISA 401(k) Lead Counsel and
such counsel shall, pursuant to Section I .E .1 .bb of the Settlement Agreement, determin e
whether such Settlement Costs shall be reimbursed in accordance with the following :
a. In seeking reimbursement for such Settlement Costs, th e
requirement in Section C above of this Exhibit B that the Insured Releasee(s) hav e
incurred the costs prior to seeking reimbursement shall be satisfied by the Insure d
Releasee(s) having agreed to pay such Settlement Costs contingent on being reimburse d
for such costs from the Claim Reserve Account .
b. To the extent Securities Lead Counsel and ERISA 401(k )
Lead Counsel determine that the entirety of the amount of such Settlement Costs shall b e
reimbursed, Securities Lead Counsel and ERISA 401(k) Lead Counsel shall, subject t o
Section E.2 above of this Exhibit B, instruct the Reimbursement Administrator t o
3
reimburse the Insured Releasee(s) for such Settlement Costs or to pay such Settlement
Costs, on behalf of the Insured Releasee(s), directly to the person or entity with which the
Insured Releasee(s) has entered into a contingent settlement .
c. To the extent Securities Lead Counsel and ERISA 401(k )
Lead Counsel reasonably believe upon their initial review that such Settlement Costs (or
some portion of them) should not be reimbursed, Securities Lead Counsel, ERISA 401 (k)
Lead Counsel, the Insured Releasee(s) requesting such reimbursement and Securities
Settling Defendants' Lead Counsel shall meet to discuss the reimbursement request and
to attempt to reach an agreement regarding whether and to what extent the requested
Settlement Costs shall be reimbursed ; provided that, after such meeting, Securities Lead
Counsel and ERISA 401(k) Lead shall in good faith determine whether to reimburse such
Settlement Costs (or some portion of them), and, after making such determination ,
(i) shall communicate their determination to the Insured Releasee(s) and (ii) shall, if there
is no dispute between Securities Lead Counsel, ERISA 401(.k) Lead Counsel and the
Insured Releasee(s) regarding the reimbursement, take whatever steps are necessary to
implement such determination, including payment of such Settlement Costs pursuant to
Section E.3 .b above of this Exhibit B .
4. To the extent the Covered Claim Costs for which reimbursement is
sought involve reimbursement for Covered Claim Costs other than Settlement Costs
("Non-Settlement Costs"), the Reimbursement Administrator shall determine whether the
Non-Settlement Costs shall be reimbursed in accordance with the following :
4
a. To the extent the Reimbursement Administrator finds the
amount of such Non-Settlement Costs for which reimbursement is sought to b e
reasonable, the Reimbursement Administrator shall reimburse the Insured Releasee for
such Non-Settlement Costs subject to Section E .2 above of this Exhibit B; provided that
in determining the reasonableness of any invoice received, the Reimbursemen t
Administrator shall consult with Securities Lead Counsel and ERISA 401(k) Lead
Counsel (0 regarding any invoice for Covered Claim Costs in excess of two hundred fifty
thousand dollars ($250,000) or (ii) if an Insured Releasee (or Insured Releasees
represented by the same counsel ) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
b . To the extent the Reimbursement Administrator reasonabl y
believes upon his or her initial review that all or some of such Non-Settlement Costs fo r
which reimbursement is sought are unreasonable, the Reimbursement Administrator, the
Insured Releasee seeking such reimbursement and Securities Settling Defendants' Lead
Counsel shall meet to discuss the reimbursement request and to attempt to reach an
agreement regarding whether and to what extent the requested Non-Settlement Costs
shall be reimbursed; provided that, after such meeting, the Reimbursement Administrator
shall in good faith determine whether to reimburse such Non-Settlement Costs (or some
portion of them) and, after making such determination, (i) shall communicate his or her
determination to the Insured Releasee and (ii) shall, if there is no dispute between the
Reimbursement Administrator and the Ensured Releasee regarding the reimbursement ,
5
take whatever steps are necessary to implement such determination, including payment o f
such Non-Settlement Costs pursuant to Section E .4.a above of this Exhibit B .
F. Any good faith disputes regarding (i) whether a Claim is a Covered Claim ,
(ii) whether a Releasee is an Insured Release and/or (iii) whether and to what extent
Covered Claim Costs are to be reimbursed pursuant to the Settlement Agreement and/or
this Exhibit B, including without limitation any determinations made pursuant to Sections
E. 1, E .3 .c and E.4.b, shall be resolved pursuant to the Dispute Procedure ; provided
further that the Reimbursement Administrator shall provide an accounting of all Covered
Claim Costs paid out of the Claim Reserve Account on a monthly basis to the following :
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant to
Section I.E.1 .ff of the Settlement Agreement) ; Securities Lead Counsel, ERISA 401(k)
Lead Counsel, Settling Defendants' Lead Counsel and all Insured Releasees' counsel to
whom reimbursements for Covered Claim Costs have been made .
G. Determinations regarding reimbursements for Covered Claim Costs shal l
be made as set out in this Exhibit B within twenty (20) calendar days following th e
Reimbursement Administrator's receipt of the request for reimbursement .
H. The Reimbursement Administrator shall endeavor to pay reimbursemen t
for Covered Claim Costs within ten (10) calendar days following a determination to
reimburse such costs as set out in this Exhibit B ; provided that if a dispute exists
regarding the payment of a portion of Non-Settlement Costs, that portion (if any) of Non-
Settlement Costs as to which there is no dispute shall be paid pursuant to Section E .4.a
above of this Exhibit B .
6
Neither Securities Lead Counsel, ERISA 401(k) Lead Counsel, Securitie s
Settling Defendants' Lead Counsel, the Reimbursement Administrator, any Insurer nor
any Releasee shall have any liability whatsoever with respect to any actions taken,
including any determinations made or views provided, pursuant to this Exhibit B or
Section I .E . 1 .bb of the Settlement Agreement .
7
EXHIBIT C
NEWSPAPERS IN WHICHSUMMARY NOTICE WILL BE PUBLISHE D
The New York Times (National Edition)
The Wall Street Journal (National Edition)
USA Today (National Edition )
The Rochester Democrat and Chronicle
Minneapolis Star Tribune
Des Moines Register
Newark Star Ledger
Los Angeles Times
Washington Post
Chicago Tribune
Houston Chronicle
Seattle Times
Arizona Republic
Atlanta Constitution
Detroit Free Press
Rocky Mountain News
Miami HeraldlEl Nuevo Herald
San Francisco Chronicle
Exhibit D
SECURITIES INSURERS' ESCROW AGREEMEN T
This SECURITIES INSURERS' ESCROW AGREEMENT is entered into as o f
March 19, 2004 by and among Chubb Atlantic Indemnity Ltd_ and Pender Insuranc e
Limited, Grant & Eiserhofer, P .A ., as Securities Lead Counsel, and Wachovia Bank ,
National Association, as escrow agent.
WHEREAS, over 50 putative class actions alleging securities law violations hav e
been filed against certain of Global Crossing Ltd.'s current and former officers, director s
and employees, and five putative class actions alleging securities law violations hav e
been filed against certain of Asia Global Crossing Ltd.'s current and former officers ,
directors and employees ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pre trial proceedings; and
WHEREAS, the Court consolidated these actions into the Securities Action ; and
WHEREAS, Chubb Atlantic and Pender have issued one or more insuranc e
policies providing coverage and indemnity for the current and former officers, directors
and employees of Global Crossing Ltd . and Asia Global Crossing Ltd ., which policies
provide coverage and indemnity in connection with losses and costs incurred with respec t
to, among other things, the Securities Action and which policies have not been exhauste d
as of the date of this Securities Insurers' Escrow Agreement ; and
WHEREAS, Securities Lead Plaintiffs, Securities Plaintiffs and Securities
Settling Defendants have agreed t _a settlement of the Securities Action, subject to th e
completion of additional factual investigation and analysis by Securities Lead Counsel t o
evaluate further the fairness, reasonableness and adequacy of the proposed settlement;
and
WHEREAS, the terms and conditions of the settlement are contained in a Marc h
19, 2004 Stipulation of Settlement (and accompanying exhibits) (the "Settlemen t
Agreement"), a copy of which has been provided to the Securities Insurers' Escro w
Agent; and
WHEREAS, in connection with the settlement of the Securities Action, th e
Securities Insurers, including Chubb Atlantic, have agreed to pay the balance of their
Policy Limits under their Policies and Pender has agreed to pay or cause to be paid th e
Pender Securities Coverage in consideration for releases from .certain Insured Releasee s
pursuant to a March 1 9, 2004 Release and Settlement Agreement ; and
WHEREAS, pursuant to the terms of such Release and Settlement Agreement and
the Settlement Agreement, Chubb Atlantic and Pender are required to deposit suc h
insurance proceeds into an escrow account within five (5) business days following th e
Court's preliminary approval of the Settlement Agreement ; and
WHEREAS, a portion of the Pender Securities Coverage will be deposited b y
certain of the Pender Securities Reinsurers into the Securities Reinsurers' Insurance Trus t
Account .
2
NOW, THEREFORE, the Securities Insurer Part ies , Securities Lead Counsel and
the Securities Insurers ' Escrow Agent agree as follows:
1 . Definitions and Interpretations
a. As used in this Securities Insurers ' Escrow Agreement,
capitalized terms either ( i) have the same meaning as ascribed to them in the Settlement
Agreement or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday,
Sunday or a "legal holiday," as that term is defined in Section XIV.II of the Settlemen t
Agreement.
(2) "Chubb Atlantic" means Chubb Atlantic Indemnity
Ltd., which issued Policy No. (02) 3310-04-96 with a Policy Limit of $10,000,000 (the
"Chubb Atlantic Policy") .
(3) "Chubb Atlantic Policy Closing Balance" means the
balance (if any) of unexhausted Policy proceeds remaining as of the Final Payment Date
in the Chubb Atlantic Subaccount .
(4) "Chubb Atlantic Policy Opening Balance" means
the balance of unexhausted Policy proceeds in the Chubb Atlantic Policy as of the
Deposit Date (less any portion of the Securities Initial Payment to be paid out of such
Policy) .
(5) "Chubb Atlantic Subaccount" means the Securities
Subaccount into which the Chubb Atlantic Policy Opening Balance is deposited .
3
(6) "Chubb Reinsurance Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Chubb Reinsurance Subaccount.
(7) "Chubb Reinsurance Opening Balance" means five
million GBP (£5,000,000) (less any portion of the Securities Initial Payment to be paid
out of this amount) .
(8) "Chubb Reinsurance Subaccount" means the
Securities Subaccount into which the Chubb Reinsurance Opening Balance is deposited .
(9) "CNA Reinsurance Level One Closing Balance"
means the balance (if any) of unexhausted policy proceeds remaining as of the Final
Payment Date in the CNA Reinsurance Level One Subaccount .
(10) "CNA Reinsurance Level One Opening Balance"
means nine hundred thousand eighty GBP (£900,080) (less any portion of the Securities
Initial Payment to be paid out of this amount) .
(11) "CNA Reinsurance Level One Subaccount" means
the Securities Subaccount into which the CNA Reinsurance Level One Opening Balance
is deposited-
(12) "CNA Reinsurance Level Two Closing Balance"
means the balance (if any) of unexhausted policy proceeds remaining as of the Final
Payment Date in the CNA Reinsurance Level Two Subaccount .
4
(13) "CNA Reinsurance Level Two Opening Balance "
means two million four hundred ninety-nine thousand nine hundred GBP (E2,499,900 )
(less any portion of the Securities Initial Payment to be paid out of this amount) .
(14) "CNA Reinsurance Level Two Subaccount" means
the Securities Subaccount into which the CNA Reinsurance Level Two Opening Balanc e
is deposited .
(15) "Deposit Date" means the date on which each of
Chubb Atlantic and Pender deposits (or, in the case of Pender, Pender causes to be
deposited by certain of its reinsurers) the unexhausted proceeds of their respectiv e
Policies into the Securities Insurers' Insurance Escrow Account pursuant to Section 3 .b
below; provided that the Deposit Date for each insurer or reinsurer, as the case may be ,
shall be that date on which that entity deposits such proceeds into the Securities Insurers '
Insurance Escrow Account.
(16) "Dispute Procedure" means the procedure by which
disputes arising in connection with this Securities Insurers' Escrow Agreement (a s
specifically set forth in various provisions of the Settlement Agreement and thi s
Securities Insurers' Escrow Agreement) shall be resolved, which procedure shall requir e
the disputing parties to submit such dispute to the Court with a request that the Court
refer the dispute to Magistrate Judge Michael Dolinger, who shall mediate a resolutio n
among the disputing parties, provided that, if the parties are unable to resolve the disput e
through mediation, Magistrate Judge Dolinger shall resolve the dispute and such
resolution shall be final and binding (without any right of appeal or review) on al l
5
relevant parties, including, without limitation, Securities Lead Counsel, Securities Lead
Plaintiffs, ERISA Plaintiffs' Counsel, ERISA Plaintiffs and any other individual or entity
(including counsel for such individual or entity) involved in the dispute ; provided further
that if Magistrate Judge Dolinger is no longer a magistrate judge of the United States
District Court for the Southern District of New York at the time any dispute is submitted
to the Court, the parties shall request that the Court refer the dispute to another magistrate
judge of the United States District Court for the Southern District of New York, who
shall conduct the mediation or, if necessary, resolve the dispute as set out above ;
provided further that, with respect to all disputes submitted to the Court other than a
dispute submitted pursuant to Section II .D.7 of the Settlement Agreement, any part y
submitting a dispute to the Court shall provide notice of such submission and copies of
all papers submitted to the Court and/or Magistrate Judge Dolinger (or any successor
magistrate judge) to the following: Securities Lead Counsel, ERISA Plaintiffs' Counsel,
Settling Defendants' Lead Counsel, the Insurers and any other party directly involved in
the dispute; provided however, that, if the dispute involves the payment of Covered
Claim Costs and an Insured Releasee submits materials or information to the Court
and/or Magistrate Judge Dolinger (or any successor magistrate judge) in connection with
the dispute that is protected by the attorney client privilege or attorney work product
doctrine, (i) the Insured Releasee's submission of such materials or information shall not
be deemed a waiver of the privilege or work product protection applicable to such
materials or information and (ii) the Insured Releasee shall not be required to provide
such materials or information to Securities Lead Counsel, ERISA Plaintiffs' Counsel ,
6
Settling Defendants' Lead Counsel, the Insurers or any other party directly involved in
the dispute, but shall provide such materials and/or information to the Court and/or
Magistrate Judge Dolinger (or any successor magistrate judge) for in camera review;
provided further that any participation by Pender or Chubb Atlantic in the Dispute
Procedure with respect to any dispute arising under this Securities Insurers' Escrow
Agreement or the Settlement Agreement shall be subject to the Mediation Order and shal l
not override or supersede Section ILE of the Settlement Agreement or Section 5 . e below ;
provided further that with respect to a dispute submitted to the Court pursuant to Section
II .D.7 of the Settlement Agreement, the pa rty submitting the dispute to the Court shal l
provide notice of such submission to all Settling Defendants' Counsel, and any party
submitting any papers to the Court and/or Magistrate Judge Dolinger (or any successor
magistrate judge) in connection with such dispute shall provide copies of such papers to
all Settling Defendants' Counsel .
(17) "Final Payment Date" means the date on which al l
proceeds from the Securities Insurers' Insurance Escrow Account are paid out pursuant to
Section 41. below .
(18) "Level One Reinsurers' Closing Balance" has th e
meaning set forth in the Securities Reinsurers ' Trust Deed .
(19) "Level Two Reinsurers' Closing Balance" has the
meaning set forth in the Securities Reinsurers' Trust Deed .
7
(20) "Mediation Order" means the Proposed Scheduling
Order for Mediation entered in the Actions on April 28, 2003 by Judge Lynch an d
Magistrate Judge Dolinger .
(21) "Pender Closing Balance" means the balance (if
any) of unexhausted policy proceeds remaining as of the Final Payment Date in the
Securities Subaccount into which the Pender Opening Balance was deposited .
(22) "Fender Holdback Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Pender Holdback Subaccount .
(23) "Fender Holdback Opening Balance" means two
million GPB (£2,000,000) (less any portion of the Securities Initial Payment to be pai d
out of such Policy) .
(24) "Pender Holdback Sub account" means the
Securities Subaccount into which the Pender Holdback Balance is deposited .
(25) "Pender Opening Balance" means five million GBP
(£5,000,000 ) (less any portion of the Securities Initial Payment to be paid out of th e
Fender Securities Payment) .
(26) "Pender Subaccount" means the Securitie s
Subaccount into which the Fender Opening Balance is deposited .
(27) "Policy" or "Policies" means (either individually or
collectively, as the context requires) the Chubb Atlantic Policy and the Fender Securitie s
Coverage .
8
(28) "Policy Limit" means (1) with respect to the Chub b
Atlantic Policy, the unexhausted portion of the limit of liability provided by such Policies
with respect to the Securities Action and (ii) with respect to the Pender Policy, the Pende r
Securities Coverage .
(29) "Reinsurers' Level Once Subaccount" has th e
meaning set forth in the Securities Reinsurers' Trust Deed.
(30) "Reinsurers' Level Two Subaccount" has the
meaning set forth in the Securities Reinsurers' Trust Deed.
(31) "Remaining Securities Insurer Parties" means, in
connection with any provision of this Securities Insurers' Escrow Agreement, each
insurer with respect to which Securities Escrow Funds in the Securities Subaccoun t
established pursuant to Section 3.a below for such insurer have not been exhausted as o f
the date on which the relevant provision is triggered .
(32) "Royal Reinsurance Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Royal Reinsurance Subaccount .
(33) "Royal Reinsurance Opening Balance" means one
million two hundred forty nine thousand nine hundred fifty GBP (£ 1,249,950) (less any
portion of the Securities Initial Payment to be paid out of this amount) .
(34) "Royal Reinsurance Subaccount " means the
Securities Subaccount into which the Royal Reinsurance Opening Balance is deposited .
9
(35) "Securities Account" means the Securities Insurers'
Insurance Escrow Account established pursuant to Section 3 .a below .
(36) "Securities Subaccount" means any of th e
subaccounts established pursuant to Section 3 .a below .
(37) "Securities Escrow Funds" has the meaning
ascribed to it in Section 3 .c below .
(38) "Securities Insurers' Escrow Agent" means
Wachovia Bank, National Association.
(39) "Securities Insurers' Escrow Agreement" means
this Securities Insurers' Escrow Agreement .
(40) "Securities Insurer Parties" means Chubb Atlantic
and Pender.
(41) "Securities Lead Counsel " means the law firm of
Grant & Eisenhofer, P.A.
(42) "Securities Reinsurers' Insurance Trust Account'
means the trust account into which certain of the Pender Securities Reinsurers shal l
deposit eighty-three million three hundred fifth thousand seventy GBP (£83,350,070),
payment from which trust account shall be made by the Securities Reinsurers' Trust
Agent upon the approval of the Trustees pursuant to the terms set out in the Settlement
Agreement and the Securities Reinsurers' Trust Deed .
10
(43) "Securities Reinsurers' Trust Agent" means the
agent for the Securities Reinsurers' Insurance Trust Account, which agent shall be the
same entity as the Securities Insurers' Escrow Agent .
(44) "Securities Reinsurers' Trust Deed" means the
agreement pursuant to which the Securities Reinsurers' Insurance Trust Account shall be
established, a copy of which will be provided to the Securities Insurers' Escrow Agent .
(45) "Trustees" means the entities defined as th e
Trustees in the Securities Reinsurers' Trust Deed .
b. A reference to a party means a party to this Agreement .
c. Unless stated otherwise, a reference to a Section means a
Section of this Agreement .
d. The plural shall include the singular and vice versa .
C . A reference to "including" shall be deemed to be followed
by "without limitation . "
f. Section headings in this Securities Insurers' Escrow
Agreement are for convenience only and shall not be construed as part of this Securities
Insurers' Escrow Agreement.
2. Appointment of Securities Insurers' Escrow Agent
a. The Securities Insurer Parties and Securities Lead Counsel
hereby appoint Wachovia Bank, National Association to act as the Securities Insurers'
Escrow Agent and Wachovia Bank, National Association hereby accepts this
11
appointment and agrees to act as Securities Insurers' Escrow Agent pursuant to the terms
and conditions set out in this Securities Insurers' Escrow Agreement.
3. Establishment of Securities Account and Subaccount s
a. Upon execution of this Securities Insurers' Escrow
Agreement, the Securities Insurers ' Escrow Agent shall establish the Securities Accoun t
as an interest -bearing account consisting of the following seven (7) subaccounts : the
Chubb Atlantic Subaccount , the Pender Subaccount, the Chubb Reinsurance Subaccount ,
the CNA Reinsurance Level One Subaccount , the CNA Reinsurance Level Two
Subaccount, the Royal Reinsurance Subaccount and the Pender Holdback Subaccount .
The Securities Insurers ' Escrow Agent shall promptly verify to the Securities Insurer
Parties, Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants '
Lead Counsel the establishment of the Securities Account and subaccounts, and provid e
to them all relevant account information .
b . Within five (5) business days following the Preliminary
Approval Date,
(1) Chubb Atlantic shall pay to the Securities Insurers'
Escrow Agent, by wire transfer of immediately available funds, the Chubb Atlantic
Policy Opening Balance ; and
(2) Pender shall pay (or cause to be paid) to the
Securities Insurers' Escrow Agent, by wire transfer of immediately available funds, the
Pender Opening Balance, the Pender Holdback Opening Balance, the CNA Reinsurance
Level One Opening Balance and the CNA Reinsurance Level Two Opening Balance .
12
(3) Fender shall cause the appropriate Pender Securities
Reinsurers to pay to the Securities Reinsurers' Trust Agent, by wire transfer of
immediately available funds, the Chubb Reinsurance Opening Balance and the Royal
Reinsurance Opening Balance .
c. Upon receipt of the monies described in Section 3 .b above,
the Securities Insurers' Escrow Agent shall deposit, the Chubb Atlantic Policy Opening
Balance, the Pender Opening Balance, the Chubb Reinsurance Opening Balance, the
CNA Reinsurance Level One Opening Balance, the CNA Reinsurance Level Two
Opening Balance, the Royal Reinsurance Opening Balance and the Pender Holdback
Opening Balance into, respectively, the Chubb Atlantic Subaccount, the Fender
Subaccount, the Chubb Reinsurance Subaccount, the CNA Reinsurance Level On e
Subaccount, the CNA Reinsurance Level Two Subaccount, the Royal Reinsurance
Subaccount and the Pender Holdback Subaccount . The Securities Insurers' Escrow
Agent shall acknowledge the receipt of such cash (the "Securities Escrow Funds") and
deposit of it into the relevant subaccounts to the Securities Insurer Parties, Securitie s
Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel ;
provided that to the extent the monies received by the Securities Insurers' Escrow Agent
are received in GBPs, the Securities Insurers' Escrow Agent shall hold such monies i n
GBPs .
d. The Securities Insurers' Escrow Agent is instructed and
authorized to hold the Securities Escrow Funds in cash deposit accounts of the Securities
Insurers' Insurance Escrow Account that pay interest that is no less than the Interest Rate.
13
e . The Securities Insurers' Escrow Agent shall hold th e
Securities Escrow Funds in the Securities Subaccounts and shall not withdraw any
proceeds from a Securities Subaccount except as provided in this Securities Insurers '
Escrow Agreement. The Securities Escrow Funds (as such funds may be reduced by
distributions required to be made under this Securities Insurers' Escrow Agreement) shall
be held only for the purposes set forth, and subject to the terms and conditions in, this
Securities Insurers' Escrow Agreement, and shall not be subject to any lien, attachment ,
trusteeship or any other judicial process . Unless specifically provided in the Settlement
Agreement or in this Securities Insurers' Escrow Agreement, no third parties or their
respective creditors (including third-party individuals or entities unrelated to Global
Crossing Ltd. that are insureds under the Pender Policy) shall have any right to, or clai m
respecting, the Securities Escrow Funds _
f. The Securities Insurers' Escrow Agent shall (i) make all o f
the payments described in this Securities Insurers' Escrow Agreement to the extent such
payments are required to be made from the Securities Insurers' Insurance Escrow
Account and (ii) notify the Trustees of the Securities Reinsurers' Insurance Trus t
Account of the requirement to make payments described in this Securities Insurers'
Escrow Agreement to the extent such payments are required to be made from the
Securities Reinsurers' Insurance Trust Account and request that the Trustees authorize
the Securities Insurers' Trust Agent to make all such payments .
14
4. Payments of Securities Escrow Fund s
a. Administration of Payments
(1) With respect to all payments to be made from th e
Securities Account or from the Securities Reinsurers ' Insurance Trust Account pursuan t
to this Section 4, the Securities Insurers' Escrow Agent shall make or, subject to
obtaining the required approval of the Trustees of the Securities Reinsurers' Insuranc e
Trust Account to make payments out of the Securities Reinsurers' Insurance Trust
Account, cause the Securities Reinsurers' Trust Agent to make (as the case may be) suc h
payments as follows :
(a) The Securities Insurers' Escrow Agent shal l
make payments from the Chubb Atlantic Subaccount until the Securities Escrow Funds
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount have been
exhausted .
(b) When the Securities Escrow Fund s
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount are exhausted,
the Securities Insurers' Escrow Agent shall make payments from the Pender Subaccount
until the Securities Escrow Funds (including interest at the Interest Rate) in the Pende r
Subaccount have been exhausted .
(c) When the Securities Escrow Fund s
(including interest at the Interest Rate) in the Pender Sub account are exhausted, th e
Securities Insurers' Escrow Agent shall make payments from the Chubb Reinsurance
Subaccount until the Securities Escrow Funds (including interest at the Interest Rate) i n
15
the Chubb Reinsurance Subaccount have been exhausted . Immediately upon exhaustio n
of the Securities Escrow Funds (including interest at the Interest Rate) in the Chubb
Reinsurance Subaccount, the Securities Insurers' Escrow Agent shall inform the Trustees
of the Securities Reinsurers' Insurance Trust Account, the Securities Insurer Parties ,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lea d
Counsel that the Chubb Reinsurance Subaccount is exhausted.
(d) Following exhaustion of the Securitie s
Escrow Funds (including interest at the Interest Rate) in the Chubb Reinsuranc e
Subaccount, the Securities Insurers ' Escrow Agent shall make payments from the CNA
Reinsurance Level One Subaccount and the Pender Holdback Subaccount and seek th e
approval of the Trustees of the Securities Reinsurers' Insurance Trust Account to hav e
the Securities Reinsurers' Trust Agent make payments from the Reinsurers' Level On e
Subaccount of the Securities Reinsurers' Insurance Trust Account in the followin g
proportions: 2.2502% from the CNA Reinsurance Level One Subaccount, 2.2906% from
the Pender Holdback Subaccount and 95.4592% from the Securities Reinsurers' Leve l
One Subaccount of the Securities Reinsurers' Insurance Trust Account . Payment shall be
made pursu ant to this Section 4.a(2)(d) until all Securities Escrow Funds ( includin g
interest at the Interest Rate) in the CNA Reinsurance Level One Subaccount and the
Reinsurers' Level One Subaccount of the Securities Reinsurers' Insurance Trust Accoun t
are exhausted .
(e) Following exhaustion of the Securities
Escrow Funds (including interest at the Interest Rate) in the CNA Reinsurance Level One
16
Subaccount and the Reinsurers ' Level One Subaccount of the Securities Reinsurers '
Insurance Trust Account, the Securities Insurers' Escrow Agent shall make payment s
from the CNA Reinsurance Level Two Subaccount , the Pender Holdback Subaccount ,
the Royal Subaccount and seek the approval of the Trustees of the Securities Reinsurers '
Insurance Trust Account to have the Securities Reinsurers' Trust Agent make payment s
from the Reinsurers ' Level Two Subaccount of the Securities Reinsurers ' Insurance Trus t
Account in the following proportions: 4.9998% from the CNA Reinsurance Level Two
Subaccount, 2.1676% from the Pender Holdback Subaccount, 2 .4999% from the Royal
Subaccount and 90.3327% from the Securities Reinsurers ' Level Two Subaccount of th e
Securities Reinsurers' Securities Trust Account. Payment shall be made pursuant to thi s
Section 4 .a(I)(e) until all Securities Escrow Funds (including interest at the Interest Rate)
in each such subaccount are exhausted.
(2) During the period from Execution Date to the date
on which the Securities Insurers' Escrow Agent and the Securities Reinsurers' Trus t
Agent make the payments required by Section 4 .f below, the Securities Insurers' Escro w
Agent shall keep an accounting (consistent with the Implementation Period Securitie s
Claim Reserve Amount, the Post-Implementation Period Securities Claim Reserv e
Amount and the Securities Implementation Cap) of all payments of Covered Claim Costs
(specifically identifying all Covered Claim Costs that are Securities Implementatio n
Costs based on the representation of Insured Releasees' counsel submitting such costs )
whether such payments are made from (a) the Executive Liability Insurance Policies o r
the Fender Securities Coverage prior to the date on which the payments required b y
17
Section 3 .b above are made or (ii) the Securities Insurers ' Insurance Escrow Account
and/or the Securities Reinsurers' Insurance Trust Account .
(3) With respect to Covered Claim Costs, the Securitie s
Insurers' Escrow Agent shall pay (or seek the approval of the Trustees to have the
Securities Insurers' Trust Agent pay) such costs pursuant to invoices it receives directly
from Insured Releasees or their counsel, or that are forwarded to it from Securitie s
Insurer Parties .
(4) The Securities Insurers' Escrow Agent shall, withi n
five (5) business days following the end of each calendar month in which the Securitie s
Insurers' Insurance Escrow Account and/or Securities Reinsurers' Insurance Trus t
Account are in existence, provide to the Securities Insurer Parties, Securities Lea d
Counsel, ERISA 401(k) Lead Counsel, Settling Defendants' Lead Counsel, U .S .
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant t o
Section I.E.I .ff of the Settlement Agreement) and all Insured Releasees' counsel to
whom reimbursement for Covered Claim Costs has been made during the prior calenda r
month the following, information respecting the Securities Insurers' Insurance Escro w
Account and the Securities Reinsurers ' Insurance Trust Account : (i) an accounting of al l
Securities Escrow Funds paid out of the Securities Insurers' Escrow Account and/or the
Securities Reinsurers ' Insurance Trust Account during such calendar month, including an
accounting of all Covered Claim Costs paid from such accounts , (ii) all fees an d
expenses , including amounts paid to the Securities Insurers' Escrow Agent or Securitie s
Reinsurers' Trust Agent, charged to any subaccount of the Securities Insurers' Escro w
18
Account or Securities Reinsurers' Insurance Trust Account during such calendar month,
(iii) the interest earned on each subaccount of the Securities Insurers' Escrow Account or
Securities Reinsurers' Insurance Trust Account during such calendar month ; (iv) the
balance remaining in each subaccount of the Securities Insurers' Escrow Account o r
Securities Reinsurers' Insurance Trust Account as of the date of the accounting and (v) a
calculation of the balance of the Implementation Period Securities Claim Reserve
Amount and of the Post-Implementation Period Securities Claim Reserve Amount, and
the aggregate amount of Securities Implementation Costs paid subject to the Securities
Implementation Cap ; provided that the Securities Insurers' Escrow Agent shall also
provide notice to all such individuals and entities identified in this Section 4 .a(4) when
the Implementation Period Securities Claim Reserve Amount has been exhausted-
(5) The Securities Insurers' Escrow Agent shal l
calculate the Securities Claim Reserve Amount Balance (if any) pursuant to Section
II .D.5.a of the Settlement Agreement and, if a balance exists, shall, no later than the
forty-fifth (45th) day after the Final Settlement Date advise the Remaining Securities
Insurer Parties, Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel of the amount of the Securities Claim Reserve Amoun t
Balance .
b . Securities Pre-Execution Costs
(1) The Securities Insurer Parties shall provide to th e
Securities Insurers' Escrow Agent copies of all invoices for Securities Pre-Executio n
Costs received from an Insured Releasee (or his or her counsel) that they have as of the
19
Execution Date or that they receive within thirty (30) days following the Execution Date,
which invoices are unpaid as of the date on which the the payments required by Section
3 .b above are required . Within forty-five (45) days following the Execution Date, the
Securities Insurers' Escrow Agent shall pay (or seek the approval of the Trustees to have
the Securities Insurers' Trust Agent pay) to each submitting insured Releasee (or his or
her counsel) all Securities Pre-Execution Costs with respect to which the Securitie s
Insurers' Escrow Agent has received an invoice .
c. Securities Implementation Costs
(1) Each Remaining Securities Insurer Party shall ,
promptly upon receipt, provide to the Securities Insurers' Escrow Agent all invoices for
Covered Claim Costs that are marked as Securities Implementation Costs .
(2) Within five ( 5) days following receipt of a
triggering invoice under this Section 4 .c(2), the Securities Insurers' Escrow Agent shall
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants'
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollar s
($250,000) ; provided that notice as set out in this Section 4 .c(2) shall be provided if an
Insured Releasee (or Insured Releasees represented by the same counsel other than
Settling Defendants' Lead Counsel) submits more than one invoice for Covered Clai m
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of tw o
hundred fifty thousand dollars ($250,000) .
20
(3) The Securities Insurers' Escrow Agent shall pay (or
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) all
Securities Implementation Costs to the submitting Insured Releasee (or his or her
counsel) as follows :
(a) all payments shall be subject to (i) the
Securities Implementation Cap and (ii) the aggregate of the Implementation Perio d
Securities Claim Reserve Amount and the Post-Implementation Period Securities Clai m
Reserve Amount; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4_c(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
Securities Lead Counsel and/or ERISA 401 (k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify the
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolved
through the Dispute Procedure; provided further that the Securities Insurers' Escro w
Agent shall refrain from paying such invoice (or portion of such invoice) until the dispute
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion an invoice within seven (7) business days after
notice pursuant to Section 4c(2) above has been provided, such invoice shall be deeme d
approved in its entirety .
21
(4) Subject to Section 4 .c(3) above, within thirty (30)
business days following receipt of an invoice for Covered Claim Costs that is marked a s
Securities Implementation Costs, the Securities Insurers' Escrow Agent shall (i) pay al l
Defense Costs identified in the invoice, (ii) inform the Insured Releasee of the Securitie s
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) inform
the Insured Releasee of Securities Lead Counsel 's and/or ERISA 401(k) Lead Counsel' s
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4_c(2) above : provided that, if any portion of an invoice is not
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of the
Trustees to have the Securities Insurers' Trust Agent pay) that portion of the invoice
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .c(2)
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to thi s
Section 4 .c(4) .
d. Other Covered Claire Costs
(1) Each Remaining Securities Insurer Party shall,
promptly upon receipt , provide to the Securities Insurers ' Escrow Agent all invoices fo r
Covered Claim Costs other than Securities Implementation Costs.
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .d(2), the Securities Insurers' Escrow Agent shall
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants'
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollar s
22
($250,000) and any invoice from Settling Defendants' Lead Counsel for Covered Clai m
Costs other than Implementation Costs in excess of two hundred fifty thousand dollars
($250,000) ; provided that notice as set out in this Section 4.d(2) shall be provided if (i) an
Insured Releasee (or Insured Releasees represented by the same counsel other than
Settling Defendants ' Lead Counsel) submits more than one invoice for Covered Clai m
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of tw o
hundred fifty thousand dollars ($250,000) or (ii) Settling Defendants' Lead Counse l
submits more than one invoice for Covered Claim Costs other than Implementation Cost s
in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
(3) The Securities Insurers' Escrow Agent shall pay (o r
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) al l
such Covered Claim Costs to the submitting Insured Releasee (or his or her counsel) a s
follows:
(a) all payments shall be subject to (i) th e
aggregate of the Implementation Period Securities Claim Reserve Amount and the Post-
Implementation Period Securities Claim Reserve Amount and ( ii) any agreement agree d
to by Insured Releasees or final ruling pursuant to Section I[ .D.7 of the Settlement
Agreement ; and
(b) with respect to any invoice for which notic e
has been provided pursuant to Section 4.d(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that i f
23
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify the
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolved
through the Dispute Procedure; provided further that the Securities Insurers' Escrow
Agent shall refrain from paying such invoice (or portion of such invoice) until the dispute
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion of an invoice within seven (7) business days
after notice pursuant to Section 4d(2) above has been provided, such invoice shall b e
deemed approved in its entirety-
(4) Subject to Section 4.d(3), within thirty (30) busines s
days following receipt of an invoice for Covered Claim Costs other than Securitie s
Implementation Costs, the Securities Insurers' Escrow Agent shall (i) pay all Defens e
Costs identified in the invoice, (ii) inform the Insured Releasee of the Securitie s
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) infor m
the Insured Releasee of Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel' s
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4.d(2) above : provided that, if any portion of an invoice is no t
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of th e
Trustees to have the Securities Insurers' Trust Agent pay) that portion of the invoic e
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .d(2)
24
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to thi s
Section 4.d(4) .
C, Securities Attorneys' Fees and Expenses Awar d
(1) Within two (2) business days following the
Approval Date, Securities Lead Counsel shall inform the Securities Insurers' Escro w
Agent of the occurrence of that date and provide the Securities Insurers' Escrow Agen t
with a copy of the Court order setting out the Securities Attorneys' Fees and Expenses
Award_
(2) Subject to the terms (including without limitatio n
the repayment provisions) set out in Section X .A of the Settlement Agreement, within
five (5) business days following the Approval Date, or such other date as the Court issues
an order setting out the Securities Attorneys' Fees and Expenses Award, the Securitie s
Insurers' Escrow Agent shall pay to Securities Lead Counsel the Securities Attorneys'
Fees and Expenses Award ; provided that to the extent any portion of the Securities
Attorneys' Fees and Expenses Award are required pursuant to Section 4 .a above to be
made from the Securities Reinsurers' Insurance Trust Account, the Securities Insurers '
Escrow Agent shall seek the approval of the Trustees of the Securities Reinsurers'
Insurance Trust Account to have the Securities Reinsurers' Trust Agent pay such portion
of the Securities Attorneys' Fees and Expenses from the Securities Reinsurers' Insuranc e
Trust Account .
25
f. Payment into Cash Settlement Account
(1) Within two (2) business days following the Fina l
Settlement Date, Securities Lead Counsel shall inform the Securities Insurers' Escrow
Agent of the occurrence of that date, with copies of such notice provided to the
Remaining Securities Insurer Parties, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel .
(2) The Securities Insurers' Escrow Agent, withi n
forty-five (45) days following the Final Settlement Date, shall pay (or seek the approval
of the Trustees to have the Securities Insurers' Trust Agent pay) to Insured Releasees any
Covered Claim Costs for which invoices have been received as of the thirtieth (30th) day
following the Final Settlement Date; provided that any invoices that are received after the
thirtieth (30th) day following Final Settlement Date shall be returned to the submitting
Insured Releasee .
(3) Subject to making the payments required by Section
4 .f(2) above and making the calculation required by Section 4.a(5) above, within forty-
five (45) days following the Final Settlement Date, the Securities Insurers' Escrow Agent
shall pay into the Cash Settlement Securities Subaccount by wire transfer of immediately
available funds, the Chubb Atlantic Policy Closing Balance, the Pender Closing Balance,
the Chubb Reinsurance Closing Balance, the CNA Reinsurance Level One Closing
Balance, the CNA Reinsurance Level Two Closing Balance, the Pender Holdback
Closing Balance and the Royal. Reinsurance Closing Balance, plus interest calculated on
each such balance, which interest is to be calculated (i) at the Interest Rate for the perio d
26
starting on the fifth (5th) business day after the Preliminary Approval Date until and
including the Approval Date and (ii) at the market rate provided by the Securities Insurers
Escrow Account for the period starting the day following the Approval Date until the date
of the wire transfer of such funds pursuant to this Section 4 .f(3) .
(4) The Securities Insurers ' Escrow Agent shall see k
the approval of the Trustees of the Securities Reinsurers Insurance Trust Account to have
the Securities Reinsurers' Trust Agent pay (by wire transfer of immediately available
fund), within forty-five (45) days following the Final Settlement Date, into the Cash
Settlement Securities Subaccount the Level One Reinsurers' Closing Balance and the
Level Two Reinsurers' Closing Balance in the Securities Reinsurers' Insurance Trust
Account plus interest on such proceeds calculated (i) at the Interest Rate for the period
starting on the fifth (5th) business day after the Preliminary Approval Date until and
including the Approval Date and (ii) at the market rate provided by the Securities
Reinsurers' Insurance Trust Account for the period starting the day following the
Approval Date until the date of the wire transfer of such funds pursuant to this Section
4.f(4) .
(5) If there are any remaining monies in any Securities
Subaccount after the payments required by Section 4.f(3) above have been made and
after all applicable fees and expenses incurred in connection with the administration of
the Securities Insurers' Escrow Account have been paid, such monies shall be returned to
the Securities Insurer Party on whose behalf the Securities Subaccount had been
established and maintained pursuant to Section 3 .a above .
27
g. Fees and Expenses
(1) The Securities Insurers' Escrow Agent shall be pai d
fees in the amounts provided in Exhibit A. The Securities Insurers ' Escrow Agent shall
also be reimbursed for reasonable expenses incurred in connection with this Securitie s
Insurers' Escrow Agreement, including with respect to the payment of any taxes due on
any monies in the Securities Account _
(2) Subject to Section 4 .g .(5) below, invoices for fees
and expenses shall be submitted by the Securities Insurers' Escrow Agent to the
Remaining Securities Insurer Parties and Securities Lead Counsel on a timely basis, an d
in no event later than the month following the month in which the fees and expenses were
incurred.
(3) Upon their receipt of an invoice for fees and
expenses pursuant to Section 4 .g(2) above, each of the Remaining Securities Insurer
Parties and Securities Lead Counsel shall, within ten (10) days from the date of th e
invoice, advise the Securities Insurers' Escrow Agent whether they approve all or a
portion of the fees and expenses; provided further that if Remaining Securities Insurer
Parties and Securities Lead Counsel fail to disapprove all or a portion an invoice withi n
fourteen (14) business days after having been provided with same, such invoice shall b e
deemed approved in its entirety .
(4) Upon being notified of approval of an invoice (or
upon the passage of fourteen days time as provided above) for fees and expenses both by
all of the Remaining Securities Insurer Parties and by Securities Lead Counsel, th e
28
Securities Insurers' Escrow Agent is authorized to pay to itself such fees and expenses (o r
the approved portion of such fees and expenses) out of the appropriate Securitie s
Subaccount pursuant to the terms of Section 4.a(1) above .
(5) Upon being notified of disapproval of an invoice (or
any portion of an invoice) for fees and expenses either by any of the Remaining
Securities Insurer Parties or by Securities Lead Counsel, the Securities Insurers' Escrow
Agent (i) is authorized to pay to itself any portion (if any) of the fees and expenses that
the all of the Remaining Securities Insurer Parties and Securities Lead Counsel hav e
approved and (ii) may, in its discretion , submit any dispute with respect to the
disapproved fees and expenses to the Court pursuant to Section 5 .a below ; provided
however, notwithstanding Section 4 .f, with respect to any dispute in connection with
disapproved fees and expenses relating to the final invoice submitted pursuant to Section
4.g(6), the pa rties agree that such dispute must be resolved before the Securities Insurers'
Escrow Agent makes the payment into the Cash Settlement Account pursuant to Section
41.
(6) Within twenty (20) business days following the
Final Settlement Date, the Securities Insurers' Escrow Agent shall submit its final invoic e
for fees and expenses to the Remaining Securities Insurer Party and to Securities Lead
Counsel . Such final invoice shall include all accrued fees and expenses and all
anticipated fees and expenses until the termination of this Securities Insurers' Escrow
Agreement, including any fees and expenses expected to be incurred with respect to th e
payments to be made pursuant to Section 41 .
29
h. Termination of Settlement Agreemen t
(1) If the Settlement Agreement is terminated pursuant
to the terms of the Settlement Agreement, the Remaining Securities Insurer Parties shal l
promptly notify the Securities Insurers' Escrow Agent of such termination, which
notification shall include a signed certification from Settling Defendants' Lead Counsel
that the Settlement Agreement has been terminated, which certification shall not be
unreasonably withheld ; provided that if the Remaining Securities Insurer Parties give
notice of termination of settlement, but a signed certification from the Settling
Defendants' Lead Counsel is not provided, then no further monies shall be paid and the
Securities Insurers' Escrow Agent shall take all appropriate steps to hold the monies safe
pursuant to Section 5.c below while the dispute as to this issue is resolved pursuant to the
Dispute Procedure.
(2) Within five (5) business days following receipt o f
notification of the termination of the Settlement Agreement pursuant to Section 4 .h(l)
above, the Securities Insurers' Escrow Agent shall submit its final invoice to the
Remaining Securities Insurer Parties for fees and expenses . Such final invoice shall
include all accrued fees and expenses and all anticipated fees and expenses expected to be
incurred with respect to the payments to be made pursuant to this Section 4 .h. As to such
final invoice, each of the Remaining Securities Insurer Parties shall, within ten (10) days
from the date of the invoice, advise the Securities Insurers' Escrow Agent whether i t
approves all or a portion of the fees and expenses .
30
(3) To the extent that, following termination of th e
Settlement Agreement, the Securities Insurers' Escrow Agent receives, pursuant to
Section I .E.1 .yyyyy of the Settlement Agreement, any reimbursement with respect to the
Securities Initial Payment, the Securities Insurers Escrow Agent shall deposit (or cause to
be deposited) such reimbursement in that Securities Subaccount and/or into that
subaccount of the Securities Reinsurers' Insurance Trust Account from which any
payments required by this Securities Insurers' Escrow Agreement are then currently
being paid pursuant to Section 4.a(1) above, such deposits to be in the same proportions
as set out in Section 4.a(l)(e) or Section 4.a(1)(f), as the case may be, of this Securities
Insurers' Escrow Agreement if payments are then currently being paid to such sections ;
provided that if such deposit of the reimbursement would cause such Securities
Subaccount or such subaccount of the Securities Reinsurers' Insurance Trust Account t o
have insurance proceeds in excess of the amount deposited into such subaccount at its
inception plus interest accrued, the Securities Insurers Escrow Agent shall deposit (or
cause to be deposited) that portion of such reimbursement that would be in excess of such
insurance proceeds into the Securities Subaccount and/or the subaccount of the Securities
Reinsurers' Insurance Trust Account from which payments had been made prior to the
time that payments began to be made from the Securities Subaccount and/or subaccount
the Securities Reinsurers' Insurance Trust Account then currently making payments .
(4) Within twenty (20) business days following receipt
of notification of the termination of the Settlement Agreement pursuant to Section 4 .h(2)
above, the Securities Insurers' Escrow Agent shall, subject to Section 4_h(5) below, pa y
31
to the Remaining Securities Insurer Parties , after subtracting (i) any approved outstanding
fees and expenses incurred pursuant to Section 4 .g above, ( ii) any disputed disapproved
fees or expenses with respect to which the Securities Insurers ' Escrow Agent has
submitted such dispute to the Court pursuant to Section 5 .a below and (iii) any payment
required by Section LE.I .yyyyy of the Settlement Agreement , the following amounts :
(a) to Chubb Atlantic, all monies ( if any)
remaining in the Chubb Atlantic Subaccount ;
(b) to Pender, all monies (if any) remaining in
the Pender Subaccount, the Chubb Reinsurance Subaccount, the CNA Reinsurance Leve l
One Subaccount, the CNA Reinsurer Level Two Subaccount, and the Pender Holdbac k
Subaccount;
(c) as directed by Fender, the amount of an y
monies (if any) remaining in the Royal Reinsurance Subaccount shall be paid to the
reinsurer that paid the Royal Reinsurance Opening Balance into the Royal Reinsuranc e
Subaccount.
(d) With respect to any disputed disapproved
fees and expenses subtracted from the Securities Insurers' Insurance Escrow Account
pursuant to Section 4.h(4)(ii) above, the Securities Insurers' Escrow Agent shall continue
to hold the amount of such disapproved fees and expenses in trust until the disput e
regarding such fees and expenses is resolved pursuant to Section 5 below. Upon
resolution of the dispute, the Securities Insurers' Escrow Agent shall promptly give effec t
to the resolution reached regarding such fees and expenses .
32
(5) The Remaining Securities Insurer Parties may, i n
their discretion, provide the Securities Insurers' Escrow Agent with instructions fo r
distributing the amounts set out in Section 4.h.(4) above in a manner different from that
set out in Section 4 .h(4) . If the Remaining Securities Insurer Parties intend to provide
such instructions, they must notify the Securities Insurers' Escrow Agent of thei r
intention to do so within five (5) business days following the Securities Insurers' Escrow
Agent's receipt of notification of the termination of the Settlement Agreement . If the
Securities Insurers' Escrow Agent receives such instructions from the Remaining
Securities Insurer Parties, the Securities Insurers' Escrow Agent shall continue to hold all
Securities Escrow Funds that would otherwise have been distributed pursuant to Section
4.h.(4) in trust until such time as the Securities Insurers' Escrow Agent receives written
instructions from the Remaining Securities Insurer Parties . Upon receipt of such
instructions, which instructions shall be endorsed by all Remaining Securities Insurer
Parties, the Securities Insurers' Escrow Agent shall promptly pay out the proceeds
described in Section 4 .h(4) above pursuant to the instructions received from the
Remaining Securities Insurer Parties pursuant to this Section 4 .h(4) .
5. Settlement of Disputes
a. If a dispute regarding a payment (or a failure to make a
payment) pursuant to Section 4 arises, the Securities Insurers' Escrow Agent shall
immediately inform the following of the dispute : (z) the insurer from whose Securities
Subaccount the relevant payment has been made (or would be made) under Section 4 .a(1)
above or, in the case in which the relevant payment has been made (or would be made )
33
under Section 4.a(1) from the Chubb Reinsurance Subaccount , the CNA Reinsuranc e
Level One Subaccount , the CNA Reinsurance Level Two Subaccount and the Pender
Holdback Subaccount, Pender, ( ii) Securities Lead Counsel , (iii) ERISA 401(k) Lead
Counsel, (iv) Settling Defendants' Lead Counsel and (v) (if the dispute involves a
payment under Sections 4 .b, 4 .c or 4_d above) the Insured Releasee (or his or her counsel)
who submitted the invoice for payment ; provided that any participation by Pender or
Chubb Atlantic in the Dispute Procedure with respect to any dispute arising under this
Securities Insurers' Escrow Agreement shall be subject to the Mediation Order and shal l
not override or supersede Section II.E of the Settlement Agreement .
(1) If the dispute does not involve fees and expenses to
be paid to the Securities Insurers' Escrow Agent and if the notified individuals an d
entities are able to resolve the dispute among themselves, they shall so inform th e
Securities Insurers' Escrow Agent, and the insurer involved in the dispute shall instruc t
the Securities Insurers' Escrow Agent to effect the resolution .
(2) If the notified individuals and entities are unable t o
resolve the dispute among themselves, or if the dispute involves the disapproval of fee s
and expenses to be paid to the Securities Insurers' Escrow Agent, the dispute shall be
resolved pursuant to the Dispute Procedur e
(3) Prior to the resolution of any dispute described in
Section 5 .a above, the Securities Insurers' Escrow Agent is authorized and directed t o
retain in the appropriate Securities Subaccount, without liability to anyone, that portion o f
the Securities Escrow Funds that are the subject of the dispute .
34
(4) The Securities Insurers' Escrow Agent has no duty
to institute or defend any proceeding described in Section 5 .a, unless requested to do s o
by any party and then only on receiving full indemnity, in character reasonably
satisfactory to the Securities Insurers' Escrow Agent, against any claims, liabilities an d
expenses relating to such proceedings .
b. The Securities Insurer Parties and Securities Lead Counse l
shall promptly notify each other, ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel of any claim by one or more of them that the Securities Insurers' Escrow
Agent has breached any term or condition of this Securities Insurers' Escrow Agreement
other than with respect to a payment under Section 4. Such claim shall be resolved
pursuant to the Dispute Procedure .
C. If the Securities Insurers ' Escrow Agent is uncertain as t o
its duties or rights under this Securities Insurers' Escrow Agreement, or receive s
instructions, claims or demands from a party that, in its opinion, conflict with the terms o f
this Securities Insurers' Escrow Agreement, it may refrain from taking action i n
connection with the Securities Escrow Funds or the funds in the Securities Reinsurers '
Insurance Trust Account with respect to which such uncertainty or conflict exists, until it
is able to obtain a resolution of the issue pursuant to the Dispute Procedure . During the
period in which the issue remains unresolved, the Securities Insurers' Escrow Agent's
sole obligation with respect to the Securities Escrow Funds that are the subject of the
dispute shall be to keep safely such Securities Escrow Funds and related books and
records it holds under this Securities Insurers' Escrow Agreement and to notify th e
35
Trustees of the Securities Reinsurers' Insurance Trust Account to instruct the Securitie s
Reinsurers' Trust Agent to keep safe the funds in the Securities Reinsurers' Insuranc e
Trust Account that are the subject of the dispute, as well as the related books and records
the Securities Reinsurers' Trust Agent holds under the Securities Reinsurers' Trust
Agreement ; provided that with respect to all other Securities Escrow Funds as to which
there is no dispute, the Securities Insurers' Escrow Agent shall be bound by the terms and
conditions of this Securities Insurers' Escrow Agreement, including the payment term s
and conditions set out in Section 4 above .
d. EACH OF THE PARTIES IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OU T
OF, RELATING TO OR IN CONNECTION WITH T HIS AGREEMENT, OR ITS
BREACH, TERMINATION OR VALIDITY . EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT:
(I) NO REPRESENTATIVE, AGENT O R
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY O R
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT O F
LITIGATION SEEK TO ENFORCE T HIS WAIVER ;
(2) EACH SUCH PARTY UNDERSTAND AND HA S
CONSIDERED THE IMPLICATIONS OF THIS WAIVER ;
(3) EACH SUCH PARTY MAKES THIS WAIVE R
VOLUNTARILY; AND
36
(4) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUA L
WAIVERS AND CERTIFICATION IN THIS SECTION .
e. The payments made by Pender and Chubb Atlantic
pursuant to the terms of this Securities Insurers' Escrow Agreement and the Settlement
Agreement will be made pursuant to a settlement resulting from the mediation
contemplated by the Mediation Order. These payments shall vest this Court or any other
court with subject matter jurisdiction only over the payments made or caused to be mad e
by Pender or by Chubb Atlantic to the extent necessary to implement and give effect to
this Securities Insurers' Escrow Agreement and the Settlement Agreement and shall not
constitute a basis for nor give rise to personal jurisdiction over Pender or Chubb Atlantic .
6. Termination of Securities Insurers' Escrow Agreemen t
a. This Securities Insurers ' Escrow Agreement (z) may be
terminated by Securities Lead Counsel if the Preliminary Approval Date does not occur
within one (1) year after the date of this Securities Insurers' Escrow Account, (ii) shall
terminate in the event that the Final Settlement Date has not occurred before January 1 ,
2008, unless the parties agree to extend the date referenced in this Section 6 .a(ii) and
(iii) shall terminate on the distribution of all of the Securities Escrow Funds by the
Securities Insurers' Escrow Agent pursuant to this Securities Insurers' Escro w
Agreement .
37
7. Provisions Regarding the Securities Insurers ' Escrow Agent
a. The Securities Insurers ' Escrow Agent has no duties or
responsibilities except those expressly provided in this Agreement . The Securities
Insurers' Escrow Agent has no liability under this Securities Insurers' Escrow Agreement
except for its own bad faith, gross negligence, willful misconduct or breach of thi s
Securities Insurers' Escrow Agreement- It may rely on any notice, instruction, certificate,
statement, request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a prope r
person or persons .
b. The Securities Insurers' Escrow Agent has no duties with
respect to any agreement or agreements with respect to the Securities Escrow Funds other
than as provided in this Securities Insurers' Escrow Agreement. The Securities Insurers'
Escrow Agent has no interest in the Securities Escrow Funds except as provided in this
Securities Insurers' Escrow Agreement . This Section 7 .b shall survive notwithstandin g
the termination of this Securities Insurers' Escrow Agreement or the Securities Insurers '
Escrow Agent's resignation or removal .
c. The Securities Insurers ' Escrow Agent shall keep proper
books of record and account, and make full and correct entries of the receipts and
disbursements in the Securities Account and Securities Subaccounts .
d . In addition to the accountings that the Securities Insurers '
Escrow Agent shall provide pursuant to Sections 4.a(2) and 4 .a(4), the Securities
Insurers ' Escrow Agent shall provide to one or more of the Remaining Securities Insurer
38
Parties and/or Securities Lead Counsel, on written request and without additional cost, a
statement of transaction details on completion of any transaction involving the Securitie s
Insurers ' Insurance Escrow Account
e. The Securities Insurers ' Escrow Agent may resign as
escrow agent by giving sixty (60) days notice by registered or certified mail to th e
Remaining Securities Insurer Parties and Securities Lead Counsel, which notice the
Remaining Securities Parties and Securities Lead Counsel shall provide to ERISA 401(k)
Lead Counsel and Settling Defendants' Lead Counsel . Subject to Section 7.g below,
such resignation shall take effect at the end of such sixty (60) days or on the Securitie s
Insurers' Escrow Agent's earlier receipt of an instrument of acceptable executed by a
successor securities insurers' escrow agent .
f. The Remaining Securities Insurer Parties and Securitie s
Lead Counsel may jointly remove the Securities Insurers' Escrow Agent by a notice
signed by each Remaining Securities Insurer Party and Securities Lead Counsel an d
delivered by registered or certified mail to the Securities Insurers' Escrow Agent. Such
removal shall be effective on the date set forth in such notice .
g. Notwithstanding anything in Sections 7.e and 7.f, the
resignation or removal of the Securities Insurers' Escrow Agent shall not be effectiv e
unless and until the Remaining Securities Parties and Securities Lead Counsel jointly
appoint a successor securities insurers' escrow agent . If no instrument of acceptance
signed by a successor securities insurers' escrow agent has been delivered to the
Securities Insurers' Escrow Agent within sixty (60) days after it delivers its notice o f
39
resignation or by the effective date of its removal, the resigning or removed Securities
Insurers' Escrow Agent may, at the Remaining Securities Insurer Parties' and Securities
Lead Counsel's expense (which expense shall be paid out of the Securities Escrow
Funds), petition the Court for appointment of a successor securities insurers' escrow
agent . The Securities Insurers' Escrow Agent's resignation or removal shall not
discharge any liability or obligations of the Securities Insurers' Escrow Agent arising
before the effective date of its resignation or removal .
h . The Remaining Securities Insurer Parties and Securitie s
Lead Counsel shall jointly appoint a successor securities insurers' escrow agent to fill any
vacancy resulting from (i) the Securities Insurers' Escrow Agent being dissolved or
otherwise becoming incapable of acting, (ii) the Securities Insurers' Escrow Agent bein g
taken over by a government official, agency, department or board or (iii) the Securitie s
Insurers' Escrow Agent's position becoming vacant for any other reason .
i . The Remaining Securities Insurer Parties and Securitie s
Lead Counsel shall cause any successor securities insurers' escrow agent appointed
pursuant to this Securities Insurers' Escrow Agreement to execute, acknowledge and
deliver to the Securities Insurers' Escrow Agent, and to the Securities Insurer Parties,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel, an instrument in writing accepting its appointment, at which point :
(1) The Securities Insurers' Escrow Agent shall delive r
to its successor, as directed in writing by the Remaining Securities Insurer Parties an d
Securities Lead Counsel, all property and moneys it holds under this Securities Insurers '
40
Escrow Agreement, and the books of records and account (including the accounting
described in Sections 4 .a(2) and 4 .a(4) above), and any other information, required by th e
successor securities insurers' escrow agent to perform its obligations under this escrow
agreement among the Remaining Securities Insurer Part ies , Securities Lead Counsel and
such successor securities insurers' escrow agent .
j . Pursuant to Sections IX.A.1 .c,1X.A.2, IX.A.3, IIX.B .l .c ,
1X.B2 and IX .B .3 of the Settlement Agreement, Securities Lead Counsel, Securities
Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA Plaintiffs, Settling Defendants,
Settling Defendants Counsel and Securities Class Members shall release the Securities
Insurers' Escrow Agent with respect to all claims, damages and liabilities for anything
done or omitted by the Securities Insurers' Escrow Agent in performing its duties under
this Securities Insurers' Escrow Agreement, except such claims that are based upon the
Securities Insurers' Escrow Agent's bad faith, gross negligence, willful misconduct o r
breach of this Securities Insurers' Escrow Agreement .
k_ The Secu ri ties Insurers ' Escrow Agent shall not be liable
for special, indirect or consequential loss or damage (including lost profits), even if th e
Securities Insurers' Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action .
1. The Securities Insurers ' Escrow Agent is acting under thi s
Securities Insurers' Escrow Agreement as a stakeholder only and is an independent
contractor with respect to each party . No provision of this Securities Insurers' Escro w
Agreement is intended to create any principal, joint venture, partnership o r
41
debtor/creditor relationship between or among the Securities Insurers' Escrow Agent an d
any of the parties . The parties hereto, for themselves and anyone claiming under, by or
through them with respect to this Securities Insurers' Insurance Escrow Account, release
the Securities Insurers' Escrow Agent from any claim of self-dealing or conflict o f
interest which could be asserted to the extent any settling party is an affiliate of th e
Settling Insurers' Escrow Agent .
8. General Matters
a. This Securities Insurers' Escrow Agreement shall be
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions . All disputes arising under this Securities Insurers' Escrow
Agreement shall be resolved through the Dispute Procedure.
b . This Securities Insurers' Escrow Agreement is binding on
and shall inure to the benefit of the parties' heirs, executors, administrators, legal
representatives, successors and permitted assigns
c. This Securities Insurers' Escrow Agreement may be
executed in one or more counterparts which, taken together, constitute one and the sarn .e
instrument. Execution by facsimile shall be fully and legally binding on a party .
d. No amendment or discharge of this Securities Insurers'
Escrow Agreement, or waiver under it, shall be valid or binding unless set forth in
writing and duly signed by the party against whom enforcement of the amendment,
discharge or waiver is sought and by the Securities Insurers' Escrow Agent . Any such
waiver shall waive only the specific matter described in the writing and shall not impair
42
the rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Securities Insurers'
Escrow Agreement, nor the failure by a party, on one or more occasions, to enforce a
provision of this Securities Insurers' Escrow Agreement, or to exercise a right or
privilege under this Securities Insurers' Escrow Agreement, shall constitute a waiver of
any other breach of a similar nature, or a waiver of any of such provisions, rights o r
privileges under this Secu rities Insurers ' Escrow Agreement .
e . The invalidity or unenforceability of any provision of thi s
Securities Insurers' Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this Securities Insurers' Escrow Agreement in that
jurisdiction or the validity or enforceability of this Securities Insurers' Escrow
Agreement (including that provision) in any other jurisdiction . If any restriction or
provision of this Securities Insurers' Escrow Agreement is held unreasonable, unlawful
or unenforceable in any respect, such restriction or provision shall be interpreted, revised
or applied in a manner that makes it lawful and enforceable to the fullest extent possible
under law .
f. Notices, requests, demands and other communication s
under this Securities Insurers' Escrow Agreement shall be in writing and shall be deemed
to have been given (unless otherwise specifically provided for in this Securities Insurers'
Escrow Agreement) if delivered by hand, delivered by a nationally recognized overnight
courier for next-day delivery, mailed (registered or certified mail, postage prepaid) or
telecopied (which telecopy is confirmed by a transmission receipt)-
43
If to Chubb Atlantic, then to
Jonathan Constine, Esq .Hogan & Hartson L .L.P_555 13th Street, N .W .Washington, D .C. 20004Telephone: (212) 637-5870Facsimile: (212) 637-5910
If to Pender, then to
Francis Kean, Esq.Barlow Lyde & GilbertBeaufort Hous e15 St. Botolph StreetLondon, EC3A 7NJTelephone : 01 1-44-20-7643-8586Facsimile: 011-44-20-7071-911 0
If to the Securities Insurers ' Escrow Agent, then to
Wachovia Bank, N .A .
Attn: Howard Parker123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone (215-670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then t o
The Honorable Michael DolingerUnited States Magistrate JudgeDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 1 0007-1312
Telephone: (212) 805-0204
Facsimile : (212) 805-7928
44
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq .Sidney S . Liebesman, Esq.
Grant & Eisenhofer, P .A.
1201 North Market StreetSuite 2100
Wilmington, Delaware 19801Telephone: (302) 622-7000Facsimile: (302) 622-710 0
If to ERISA 401(k) Lead Counsel, then to :
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq .Keller Rohrback LLP1201 Third Avenue, Suite 3200
Seattle, WA 98101-3052Telephone : (206) 623-1900
Facsimile : (206) 623-3384
Thomas J . Hart, Esq-Marc A. Tenebaum, Esq .Slevin & Hart, P .C.1625 Massachusetts Avenue, N .W .Suite 450Washington, D .C. 20036Telephone: (202) 797-8700Facsimile : (202) 234-823 1
If to Settling Defendants, then to:
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq.Debevoise & Plimpton LLP
555 13th Street, N .W.Suite I IOOEWashington, D.C. 20004Telephone: (202) 383-8000Facsimile: (202) 383-811 8
If to the Trustees, then t o
45
Jay W. Eisenhofer, Esq .Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A.1201 North-Market StreetSuite 2100Wilmington, Delaware 19801Telephone: (302) 622-7000Facsimile: (302) 622-7100
Raymond J . Jast, Esq .James K. Thurston, Esq .Wilson, Elser, Moskowitz, Edelman & Dicker LLP120 North LaSalle Stree t26th FloorChicago, Illinois 60602-2412Telephone: (312) 704-0550Facsimile : (312) 704-1522
If to an Insured Releasee (or his or her counsel), then to the address identified in the
invoice submitted by or on behalf of the Insured Releasee . Notices, requests, demands
and communications shall be deemed to have been given (1) on the date on which so
hand-delivered (or, if not delivered before 5 :00 p .m. Eastern Time, on the next business
day), (ii) on the next business day if delivered by a nationally recognized overnight
courier, (iii) on the third business day after the date on which so mailed or (iv) on the date
on which telecopied and confirmed (or, if this does not occur before 5 :00 p.m. Eastern
Time on a business day, on the next business day) .
g. The Securities Insurers' Escrow Agent represents an d
warrants that (i) this Securities Insurers' Escrow Agreement has been duly authorized ,
executed and delivered on its behalf and constitutes its legal, valid and binding obligatio n
and (ii) its execution, delivery and performance of this Securities Insurers' Escrow
Agreement does not and will not violate any statute, law, rule or regulation-
46
h . Securities Lead Counsel represents and warrants that (i) i t
is authorized to execute and deliver this Securities Insurers' Escrow Agreement on behal f
of Securities Lead Plaintiffs and, as authorized by the Court's December 13, 2002 order ,
on behalf of Securities Plaintiffs and Securities Class Members and (ii) its execution ,
delivery and performance of this Securities Insurers' Escrow Agreement does not an d
will not violate any statute, law, rule or regulation .
i . Jonathan Constine represents that (1) he is authorized to
execute and deliver this Securities Insurers' Escrow Agreement on behalf of Chubb
Atlantic and (ii) Chubb Atlantic's execution, delivery and performance of this Securitie s
Insurers' Escrow Agreement does not and will not violate any statute, law, rule o r
regulation .
Francis Kean represents that (i) he is authorized to execut e
and deliver this Securities Insurers' Escrow Agreement on behalf of Pender an d
(ii) Pender ' s execution , delivery and performance of this Securities Insurers' Escro w
Agreement does not and will not violate any statute, law, rule or regulation .
ic . Each party shall take (or cause to be taken) such furthe r
actions to execute, deliver and file (or cause to be executed, delivered or filed) suc h
further documents and instruments, and to obtain such consents, as may be necessary o r
reasonable requested to effectuate fully the purposes, terms and conditions of this
Securities Insurers' Escrow Agreement .
1 . Except as provided in this Securities Insurers ' Escrow
Agreement, no parties sha ll assign, encumber or otherwise transfer any of its rights an d
47
obligations under this Securities Insurers' Escrow Agreement to any person without th e
consent of the other parties . Any such purported assignment, encumbrance or other
transfer shall be void and unenforceable .
M . The Securities Insurers' Escrow Agent shall keep, and shal l
cause its agents to keep, confidential the information it receives under this Securitie s
Insurers' Escrow Agreement, except for:
(1) information that is or becomes publicly known
other than as a result of a breach of this Section 8_m ;
(2) information obtained by the Securities Insurers '
Escrow Agent from sources other than a Securities Insurer Party, Securities Lead
Counsel, ERISA 401(k) Lead Counsel , Settling Defendants ' Counsel or an Insure d
Releasee (or his or her counsel) and not subject to a confidentiality obligation ;
(3) information requested or required to be disclosed
(i) by a statute, law, rule or regulation, (ii) to any government agency or regulatory bod y
having or claiming authority to regulate or oversee the Securities Insurers' Escro w
Agent's business, (iii) under any subpoena, civil investigative demand or similar deman d
or request of a court, regulatory authority, arbitrator or arbitration to which the Securities
Insurers' Escrow Agent or any affiliate, or an officer, director, employer or shareholder
of the Securities Insurers' Escrow Agent or such affiliate, is a party, or (iv) to any
affiliate, independent or internal auditor, agent, employee or attorney of the Securities
Insurers' Escrow Agent having a need to know the information, provided that the
48
Securities Insurers' Escrow Agent advises the recipient of the confidential nature of th e
information being disclosed ; or
(4) any other disclosure authorized by the person
submitting such information .
n. All time periods set forth herein shall be computed in
calendar days unless otherwise expressly provided. In computing any period of tim e
prescribed or allowed by this Securities Insurers' Escrow Agreement or by order of court,
the day of the act, event, or default from which the designated period of time begins to
run shall not be included. The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is the
filing of a paper in Court, a day on which weather or other conditions have made the
office of the Clerk of the Court inaccessible, in which event the period shall run until the
end of the next day that is not one of the aforementioned days .
o. A ll Insured Releasees are intended third-party beneficiaries
with respect to Sections 4 .b, 4.c and 4.d above and shall be entitled to enforce the terms
of this Securities Insurers' Escrow Agreement with respect to such provisions .
Executed this 19th day of March 2004 .
CHUBB ATLANTIC INDENIN] YU E'I'ED
BY :than Constine
oanan & Hartson L.L.P.555 13th Street, N.W .Washington, D.C. 20004
49
19-MAR-2004 21 :27 FROM BLG TO 570719244 P.02
[
'
PBDER 1NSIMUNCE L:%ITED
Y.cis1 n
Barlow Lyde & GilbetBeaufort Eouae15 SL Botalph StreetLondon, E 3A 7N3
WACHOVIA BANK, NATIONAL ASSOCIATION
as Pscrow Agent
flyHoward Parker . .Vice President
GRANT & EXSENHO? R, P.A.as Securities Lead Counsel
Jay W. ElsenhoferGrant & Pasenbofer, F.A.1201 North Market Stet, Suite 2100 {Wilmirtgti n, DE 19801
50
[
•
TOTAL P .02
. . . ~'.` i s _'. -~; -
~f'
PENDER INSURANCE LIMITED
By:Francis KeanBarlow Lyde & GilbertBeaufortHouse15 St. Botolph StreetLondon, EC3A 7NJ
WACHOVIA BANK, NATIONALASSOCIATIONas Escrow Agen t
By:Howard ParkerVice Presiden t
GRANT &EISENHOFER, P.A.as Securities Lead Counsel .
By: yjpJ . EisenhoferGrant & Eisenhofer, P.A.1201 North Maxket Street, Suite 210(}Wilmington, DE 1980 1
SO
Exhibit E
SECURITIES REINSURERS' TRUST DEE D
This Trust Deed is made this 19`h day of March 2004 between the law firm of Grant &
Eisenhofer, P .A., (hereinafter "Securities Lead Counsel"), for and on behalf of Securitie s
Lead Plaintiffs, and Wilson, Elser, Moskowitz, Edelman & Dicker LLP (hereinafter
"WEMED") for and on behalf of Pender Securities Reinsurers, and Wachovia Bank,
National Association ("Wachovia Bank") . Securities Lead Counsel, Securities Lead
Plaintiffs, WEMED, Pender Securities Reinsurers, and Wachovia Bank shall be referred
to collectively herein as "the Parties ." Securities Lead Counsel and WEMED shall be
referred to collectively herein as "the Trustees ." Wachovia Bank shall be referred to as
"Securities Reinsurers' Trust Agent . "
The Parties refer to and repeat the recitals set forth in the March 19, 2004 Stipulation of
Settlement (hereinafter referred to as "the Settlement Agreement") in the lawsuit
captioned In Re Global Crossing Ltd. Securities Litigation, filed in the United States
District Court for the Southern District of New York, Case No . 02 Civ. 910 (the
"Securities Action"), a copy of which has been provided to the Securities Reinsurers '
Trust Agent .
In consideration of the mutual promises, covenants and conditions contained in this Trus t
Deed, and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties agree as follows :
Definitions and Interpretations
1 . As used in this Securities Reinsurers' Trust Deed, capitalized terms either (i) have
the same meaning as ascribed to them in the Settlement Agreement or (it) have
the following meanings :
208994.1
a. "Business day" means a day other than a Saturday, Sunday or a "legal
holiday," as that term is defined in Section XIV .II of the Settlemen t
Agreement-
b. "Deposit Date" means the date on which the Level One Reinsurers '
Opening Balance and the Level Two Reinsurers' Opening Balance are
deposited into, respectively, the Reinsurers' Level One Subaccount and
the Reinsurers' Level Two Subaccount .
c. "Final Payment Date" means the date on which all proceeds from the
Securities Reinsurers' Insurance Trust Account are paid out pursuant t o
Sections 15 or 16 below.
d. "Interest Rate" means interest calculated on a simple interest basis based
upon the Federal Funds rate; provided further that the rate shall be
established based upon the Federal Funds effective rate on the first (1st )
day of each month, as published in The Wall Street Journal under the
description of "Money Rates ."
C . "Level One Reinsurers' Closing Balance" means the balance (if any) of
the Level One Reinsurers' Opening Balance remaining as of the Final
Payment Date in the Reinsurers' Level One Subaccount .
f. "Level One Reinsurers' Opening Balance" means the amount of thirty-
eight million one hundred eighty-three thousand six hundred ninety-five
and 33/100 Pounds Sterling (£38,1$3,695 .33) (less any portion of the
Securities Initial Payment to be paid out of this amount) .
g . "Level Two Reinsurers' Closing Balance" means the balance (if any) of
Level Two Reinsurers' Opening Balance remaining as of the Final
Payment Date in the Reinsurers' Level Two Subaccount .
2
20B994.1
h. "Level Two Reinsurers' Opening Balance" means the amount of forty-five
million one hundred sixty-six thousand three hundred seventy-four and
67/100 Pounds Sterling (f45,166,374.67) (less any portion of the
Securities Initial Payment to be paid out of this amount) .
i . "fender Securities Reinsurers" means those entities that have reinsured a
portion of the fender Securities Coverage and that will pay the fender
Securities Reinsurers' Payment ; provided however, that fender shall be
responsible for any portion of the Fender Securities Reinsurers' Payment
that the fender Securities Reinsurers do not pay pursuant to the terms of
this Settlement Agreement.
"Pender Securities Reinsurers' Payment" means eighty-three million three
hundred fifty thousand seventy GBP (£83,350,070) to be paid pursuant to
Section H.A.Ld of the Settlement Agreement.
k. "Reinsurers' Level One Subaccount" means the subaccount established
pursuant to Section 3 below, into which the Level One Reinsurers'
Opening Balance shall be deposited on the Deposit Date .
1 . "Reinsurers' Level Two Subaccount" means the subaccount established
pursuant to Section 3 below, into which the Level Two Reinsurers'
Opening Balance shall be deposited on the Deposit Date .
M. "Securities Insurers' Escrow Agreement" means the escrow agreement
pursuant to which the Securities Insurers' Insurance Escrow Account shall
be established, a copy of which will be provided to the Securities
Reinsurers' Trust Agent .
3
208994 .1
D . "Securities Insurers' Escrow Agent" means the escrow agent for the
Securities Insurers' Insurance Escrow Account, which agent shall be the
same entity as the Securities Reinsurers' Trust Agent .
o. "Securities Reinsurers' Insurance Trust Account" means the Securities
Reinsurers' Insurance Trust Account established pursuant to Section 3
below.
p. "Securities Reinsurers' Trust Deed" means this Securities Reinsurers'
Trust Deed.
q. "Securities Reinsurers' Trust Agent" means Wachovia Bank .
r. "Securities Reinsurers' Subaccount" means either of the subaccounts
established pursuant to Section 3 below.
s. A reference to a party means a party to this Trust Deed _
t. Unless stated otherwise, a reference to a Section means a Section of this
Trust Deed.
U . The plural shall include the singular and vice versa .
V . A reference to "including" shall be deemed to be followed by "without
limitation."
w . Section headings in this Securities Reinsurers' Trust Deed are for
convenience only and shall not be construed as part of this Securities
Reinsurers' Trust Deed .
4
208994 .1
Appointment of Securities Reinsurers ' Trust Agent
2. Securities Lead Counsel and WEMED hereby appoint Wachovia Bank to act as
the Securities Reinsurers' Trust Agent and Wachovia Bank hereby accepts this
appointment and agrees to act as Securities Reinsurers' Trust Agent pursuant to
the terms and conditions set out in this Securities Reinsurers' Trust Deed .
Establishment of Securities Account and Subaccounts
3 . Upon execution of this Securities Reinsurers' Trust Deed, the Securities
Reinsurers' Trust Agent shall establish the Securities Reinsurers' Insurance Trust
Account as an interest-bearing account created and maintained at all times, unless
otherwise agreed by the Parties, at Wachovia Bank, National Association, London
Branch, 3 Bishopsgate, London EC2N 3AB England, consisting of the following
two (2) subaccounts: Reinsurers' Level One Subaccount and Reinsurers' Level
Two Subaccount (the "Subaccounts"). The accounts shall be held in the names of
Securities Lead Counsel and WEMED, as trustees, in accordance with the terms
of this Securities Reinsurers' Trust Deed . The Securities Reinsurers' Trust Agent
shall promptly verify to WEMED and Securities Lead Counsel the establishment
of the Securities Reinsurers' Insurance Trust Account and the Subaccounts, and
provide to them all relevant account information. Securities Lead Counsel shall
verify the establishment of the Securities Reinsurers' Insurance Trust Account
and the Subaccounts to ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel .
4. The Trustees shall hold the balance of the Securities Reinsurers ' Insurance Trust
Account (including all interest as per Section 15 of this Trust Deed) from time to
time on trust for the Securities Plaintiffs and the Securities Lead Plaintiffs for the
purposes of, and in accordance with the terms of, the Settlement Agreement .
5
208994.1
5 . The Trustees will jointly give instructions with respect to the Securitie s
Reinsurers ' Insurance Trust Account .
6 . Each of the Trustees shall designate at least two members or officers to sign the
bank mandate for the Securities Reinsurers' Insurance Trust Account . No funds
may be withdrawn from the Securities Reinsurers' Insurance Trust Account
without the signatures of one authorized signatory from each of the Trustees .
7. Within five [5] business days following the Preliminary Approval Date, the
Pender Securities Reinsurers and each of them shall severally pay or cause to be
paid to the Securities Reinsurers' Trust Agent, by wire transfer of immediately
available funds, the Level One Reinsurers' Opening Balance and the Level Two
Reinsurers' Opening Balance. The payment obligation as to each Pender
Securities Reinsurer is several and no Pender Securities Reinsurer shall be liable
for the obligation of another Pender Securities Reinsurer.
8. Upon receipt of the monies described in Section 7 above, the Securities
Reinsurers' Trust Agent shall deposit the Level One Reinsurers' Opening Balance
and the Level Two Reinsurers' Opening Balance into, respectively, . the
Reinsurers' Level One Subaccount and the Reinsurers' Level Two Subaccount, as
set forth in Schedule A to this Securities Reinsurers' Trust Deed . The Securities
Reinsurers' Trust Agent shall acknowledge to WEMED and Securities Lead
Counsel the receipt of such cash (the "Reinsurers' Trust Funds") and deposit of it
into the appropriate Subaccounts. Securities Lead Counsel shall promptly notify
ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of such
acknowledgement . All such Reinsurers' Trust Funds shall be held in Pound s
Sterling .
9. The interest paid on the Securities Reinsurers ' Insurance Trust Account and each
of the Subaccounts shall be no less than the Interest Rate.
6
208994 .1
10, Each of the Trustees and the Securities Insurers' Escrow Agent shall promptly
receive a copy of the monthly statements for the Securities Reinsurers' Insurance
Trust Account from, the Securities Reinsurers' Trust Agent .
11 . Neither the Securities Lead Plaintiffs nor the Fender Securities Reinsurers shal l
grant any charge, lien, security or other encumbrance over the Securities
Reinsurers' Insurance Trust Account. No term of this Agreement is enforceabl e
under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement .
Payments of Reinsurers' Trust Fund s
12. Payments from the Securities Reinsurers' Subaccounts shall be made i n
accordance with the terms of the Settlement Agreement, unless otherwise set forth
herein, and the Trustees shall authorize the Securities Reinsurers' Trust Agent t o
make such payments.
13. Upon receipt of notice from the Securities Insurers' Escrow Agent that payments
are due to be made from the Reinsurers' Trust Funds pursuant to Section 12
above, the Trustees shall, pursuant to Sections 6 and 12 above, provide the
appropriate signatures authorizing the Securities Reinsurers' Trust Agent to make
such payments only as set forth in Section 4 of the Securities Insurers' Escrow
Agreement (attached hereto as Exhibit 1) .
14. All bank charges relating to the Securities Reinsurers ' Insurance Trust Account,
any taxes on the interest income earned in the Securities Reinsurers' Trus t
Account, and the expenses and costs incurred in connection with the taxation o f
the Securities Reinsurers' Insurance Trust Account (including, without limitation,
expenses of tax accountants) (collectively, the "Trust Expenses") shall be paid
solely from the interest accrued up to the Interest Rate from the Securities
Reinsurers' Insurance Trust Account . To the extent that the interest accrued at the
7
208994 .1
Interest Rate is insufficient to pay the Trust Expenses, the Trust Expenses i n
excess of the interest accrued at the Interest Rate shall be Notice and
Administrative Expenses and shall be paid consistent with the Settlement
Agreement, unless all layers of available insurance proceeds below the Pender
Securities Reinsurers have been exhausted in which case the Trust Expenses in
excess of the interest accrued at the Interest Rate shall be the joint and several
responsibility of the Securities Lead Plaintiffs and the Securities Plaintiffs .
15 . Within forty-five [451 days following the Final Settlement Date, the Trustees shal l
authorize the Securities Reinsurers' Trust Agent to pay and the Securities
Reinsurers' Trust Agent shall so pay, in accordance with the Settlement
Agreement and as set forth in Section 4 of the Securities Insurers' Escrow
Agreement, the Level One Reinsurers' Closing Balance and the Level Two
Reinsurers' Closing Balance into the Cash Settlement Securities Subaccount, plus
interest calculated on each such balance less any Trust Expenses, which interest is
to be calculated (i) at the Interest Rate for the period starting on the fifth (5th)
business day after the Preliminary Approval Date until and including the
Approval Date and (ii) at the market rate provided by the Securities Reinsurers'
Insurance Trust Account for the period starting the day following the Approval
Date until the date of the wire transfer of such funds pursuant to this Section 15 .
If there are any remaining monies in any Securities Reinsurers' Subaccount after
the payment into the Cash Settlement Securities Subaccount required by this
Section 1 5 has been made, such monies shall be returned to WEMED for
distribution to the Pender Securities Reinsurers . Immediately thereafter, the
Securities Reinsurers' Insurance Trust Account will be closed, the Trust Deed
terminated, and neither WEMED nor the Pender Securities Reinsurers shall have
any interest in the funds held in the Cash Settlement Securities Subaccount .
8
205994 .1
16, In the event of a Final refusal of an Order Approving Settlement and/or a Final
refusal to enter Final Judgment or in the event that the Final Settlement Date ha s
not occurred before January 1, 2008, the funds held upon the Securities
Reinsurers' Insurance Trust Account, less any taxes and bank charges relating t o
the Securities Reinsurers ' Insurance Trust Account, shall be returned to th e
Pender Securities Reinsurers, the Securities Reinsurers' Insurance Trust Accoun t
will be closed and the Trust Deed terminated, unless the parties agree to extend
the date referenced in this Section 16, subject always to Section 17 of this Trust
Deed .
17. The perpetuity period for the purposes of this Trust Deed shall be 80 years from
the date of this Trust Deed .
18. The Parties agree that this Trust Deed shall be construed in accordance with, and
all disputes relating to this Trust Deed hereunder shall be governed by, the Laws
of England & Wales without regard to choice of law rules . The Parties agree to
submit any dispute relating to this Trust Deed to the exclusive jurisdiction of the
High Court of England & Wales . The Parties shall meet and confer prior to
submitting any dispute relating to this Trust Deed to a court . In the event of a
claim being issued in relation to this Trust Deed, the Pender Securities Reinsurers
and each of them hereby irrevocably appoint Wilson, Elser, Moskowitz, Edelman
& Dicker of 65 Fenchurch Street, London, EC3M 4BE as their agent for service
of any claim form, and Securities Lead Plaintiffs, Securities Plaintiffs and each of
them hereby irrevocably appoint Norose Notices Limited (AA53637) at the
address of its registered office (currently located at Kempson House, Camomile
Street, London, EC3A 7AN) as their agent for the purposes of service of an y
claim form .
9
208994 .1
Provisions Regarding the Securities Reinsurers' Trust Agen t
19. The Securities Reinsurers' Trust Agent has no duties or responsibilities excep t
those expressly provided in this Trust Deed . The Securities Reinsurers' Trust
Agent has no liability under this Securities Reinsurers' Trust Deed except for it s
own bad faith, gross negligence, or willful misconduct . It may rely on any notice,
instruction, certificate, statement, request, consent, confirmation, agreement or
other instrument which it reasonably believes to be genuine and to have bee n
signed or presented by a proper person or persons .
20. The Securities . Reinsurers' Trust Agent has no duties with respect to any
agreement or agreements with respect to the Reinsurers' Trust Funds other than as
provided in this Securities Reinsurers' Trust Deed. The Securities Reinsurers'
Trust Agent has no interest in the Reinsurers' Trust Funds except as provided in
this Securities Reinsurers' Trust Deed. This Section 20 shall survive
notwithstanding the termination of this Securities Reinsurers' Trust Deed or the
Securities Reinsurers' Trust Agent's resignation or removal .
21 . The Securities Reinsurers' Trust Agent shall keep proper books of record an d
account, and make full and correct entries of the receipts and disbursements in th e
Securities Reinsurers' Insurance Trust Account and Securities Reinsurers '
Subaccounts .
22. The Securities Reinsurers' Trust Agent may resign as Securities Reinsurers' Trust
Agent by giving sixty (60) days notice by registered or certified mail to the
Securities Lead Counsel and WEMED, which notice the Securities Lead Counsel
shall provide to ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel . Subject to Section 24 below, such resignation shall take effect at the end
of such sixty (60) days or on the Securities Reinsurers' Trust Agent's earlie r
1 0
208994.1
receipt of an instrument of acceptance executed by a successor securitie s
reinsurers' trust agent .
23. WEMED and Securities Lead Counsel may jointly remove the Securities
Reinsurers' Trust Agent by a notice signed by each and delivered by registered or
certified mail to the Securities Reinsurers' Trust Agent. Such removal shall b e
effective on the date set forth in such notice .
24. Notwithstanding anything in Sections 22 and 23, the resignation or removal of the
Securities Reinsurers' Trust Agent shall not be effective unless and until
WEMED and Securities Lead Counsel jointly appoint a successor securities
reinsurers' trust agent . If no instrument of acceptance signed by a successor
securities reinsurers' trust agent has been delivered to the Securities Reinsurers'
Trust Agent within sixty (60) days after it delivers its notice of resignation or by
the effective date of its removal, the resigning or removed Securities Reinsurers'
Trust Agent may petition the Court for appointment of a successor securities
reinsurers' trust agent. The Securities Reinsurers' Trust Agent's resignation or
removal shall not discharge any liability or obligations of the Securities
Reinsurers' Trust Agent arising before the effective date of its resignation or
removal .
25 . WEMED and Securities Lead Counsel shall jointly appoint a successor securities
reinsurers' trust agent to fill any vacancy resulting from (i) the Securities
Reinsurers' Trust Agent being dissolved or otherwise becoming incapable of
acting, (ii) the Securities Reinsurers' Trust Agent being taken over by a
government official, agency, department or board or (iii) the Securities
Reinsurers' Trust Agent's position becoming vacant for any other reason .
26. WEMED and Securities Lead Counsel shall cause any successor securities
reinsurers ' trust agent appointed pursuant to this Securities Reinsurers' Trust
1 1
206994 .1
Deed to execute, acknowledge and deliver to the Securities Reinsurers' Trust
Agent, and to WEMED and Securities Lead Counsel, an instrument in writing
accepting its appointment, at which point the Securities Reinsurers' Trust Agent
shall deliver to its successor, as directed in writing by WEMED and Securitie s
Lead Counsel, all property and moneys it holds under this Securities Reinsurers'
Trust Deed, and the books of records and account, and any other information ,
required by the successor securities reinsurers' trust agent to perform it s
obligations under this trust deed among WEMED, Securities Lead Counsel and
such successor securities reinsurers' trust agent .
27. Pursuant to Sections IX. .A.I .c, IX.A.2, IX.A.3, IX.B.I .c, IX.B.2 and IX .B.3 of the
Settlement Agreement, Securities Lead Counsel ; Securities Lead Plaintiffs,
Securities Plaintiffs, Executive Committee Members, ER .ISA 401(k) Lead
Counsel, ERISA Plaintiffs, Settling Defendants, Settling Defendants Counsel and
Securities Class Members shall release the Securities Reinsurers' Trust Agent
with respect to all claims, damages and liabilities for anything done or omitted by
the Securities Reinsurers' Trust Agent in performing its duties under this
Securities Reinsurers' Trust Deed, except such claims that are based upon the
Securities Reinsurers' Trust Agent's bad faith, gross negligence, or willful
misconduct .
28_ The Securities Reinsurers' Trust Agent is acting under this Securities Reinsurers '
Trust Deed as a stakeholder only and is an independent contractor with respect to
each party . No provision of this Securities Reinsurers' Trust Deed is intended to
create any principal, joint venture, partnership or debtor/creditor relationship
between or among the Securities Reinsurers' Trust Agent and any of the parties .
The Parties hereto and anyone claiming under, by or through them hereby release
the Securities Reinsurers' Trust Agent from any claim in the nature of self dealin g
12
208994 .1
or conflict of interest that could be raised in the event any affiliate of Securities
Reinsurers' Trust Agent is_ a settling claimant in the underlying litigation .
General Matters
29 . This Securities Reinsurers' Trust Deed is binding on and shall inure to the benefit
of the Parties' heirs, executors, administrators, legal representatives, successor s
and permitted assigns .
30. This Securities Reinsurers' Trust Deed may be executed in one or more
counterparts which, taken together, constitute one and the same instrument .
Execution by facsimile shall be fully and legally binding on a party .
31 . No amendment or discharge of this Securities Reinsurers' Trust Deed, or waiver
under it, shall be valid or binding unless set forth in writing and duly signed by
the party against whom enforcement of the amendment, discharge or waiver is
sought and by the Securities Reinsurers' Trust Agent . Any such waiver shall
waive only the specific matter described in the writing and shall not impair the
rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Securities
Reinsurers' Trust Deed, nor the failure by a party, on one or more occasions, to
enforce a provision of this Securities Reinsurers' Trust Deed, or to exercise a right
or privilege under this Securities Reinsurers' Trust Deed, shall constitute a waiver
of any other breach of a similar nature, or a waiver of any of such provisions,
rights or privileges under this Securities Reinsurers' Trust Deed .
32. The invalidity or unenforceability of any provision of this Securities Reinsurers'
Trust Deed in any jurisdiction shall not affect the validity or enforceability of the
rest of this Securities Reinsurers' Trust Deed in that jurisdiction or the validity or
enforceability of this Securities Reinsurers' Trust Deed (including that provision)
in any other jurisdiction . If any restriction or provision of this Securitie s
13
208994 .1
Reinsurers' Trust Deed is held unreasonable, unlawful or unenforceable in an y
respect, such restriction or provision shall be interpreted, revised or applied in a
manner that makes it lawful and enforceable to the fullest extent possible under
law .
33. Subject to Section 17 of this Trust Deed , notices , requests, demands and othe r
communications under this Securities Reinsurers' Trust Deed shall be in writing
and shall be deemed to have been given (unless otherwise specifically provided
for in this Securities Reinsurers' Trust Deed) if delivered by hand, delivered by a
nationally recognized overnight courier for next-day delivery, mailed (registered
or certified mail, postage prepaid) or telecopied (which telecopy is confirmed by a
transmission receipt) :
If to WEMED, then to
Raymond J . Jast, Esq .James K. Thurston, Esq _Wilson, Elser, Moskowitz, Edelman & Dicker LLP120 North LaSalle Street26th FloorChicago, Illinois 60602-2412Telephone : (312) 704-0550Facsimile : (312) 704-1522
If to the Securities Reinsurers' Trust Agent, then t o
Wachovia Bank , National AssociationAttn : Howard Parker123 S_ Broad StreetPA 4944Philadelphia , PA 19109Telephone : (215) 670-4541Facsimile : (215) 670-473 3
14
208994 .1
If to the Securities Insurers' Escrow Agent then t o
Wachovia Bank, National AssociationAttn: Howard Parker123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone: (215) 670-4541Facsimile: (215) 670-4733
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq.Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A .1201 North Market StreetSuite 2100Wilmington, DE 19801Telephone: (302) 622-7000Facsimile : (302) 622-7100
If to ERISA 401(k) Lead Counsel, then to :
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq .
Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone: (206) 623-1900Facsimile: (206) 623-3384
Thomas J. Hart, Esq .Marc A . Tenebaum, Esq_Slevin & Hart, P .C .1625 Massachusetts Avenue, N.W .Suite 45 0Washington, D.C. 20036Telephone: (202) 797-8700Facsimile : (202) 234-823 1
1 5
208994.1
If to Settling Defendants Lead Counsel, then to :
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N .W .Suite I IODEWashington, D .C. 20004Telephone: (202) 383-8000Facsimile: (202) 383-811 8
Notices, requests, demands and communications shall be deemed to have been
given (i) on the date on which so hand-delivered (or, if not delivered before 5 :00
p.m. Eastern Time, on the next business day), (ii) on the next business day if
delivered by a nationally recognized overnight courier, (iii) on the third business
day after the date on which so mailed or (iv) on the date on which telecopied and
confirmed (or, if this does not occur before 5 :00 p .m. Eastern Time on a busines s
day, on the next business day) .
34. The Securities Reinsurers' Trust Agent represents and warrants that this Securities
Reinsurers' Trust Deed has been duly authorized, executed and delivered on its
behalf and constitutes its legal, valid and binding obligation .
35 . Securities Lead Counsel represents and warrants that it is authorized to execute
and deliver this Securities Reinsurers' Trust Deed on behalf of Securities Lea d
Plaintiffs and, as authorized by the Court's December 13, 2002 order, on behalf of
Securities Plaintiffs and Securities Class Members .
36. Raymond J. Jast represents that he is authorized to execute and deliver this
Securities Reinsurers' Trust Deed on behalf of the Pender Securities Reinsurers .
37. Each party shall take (or cause to be taken) such further actions to execute, deliver
and file (or cause to be executed, delivered or filed) such further documents an d
instruments, and to obtain such consents, as may be necessary or reasonable
16
208994.E
requested to effectuate fully the purposes, terms and conditions of this Securities
Reinsurers' Trust Deed .
38. The Securities Reinsurers' Trust Agent shall keep, and shall cause its agents to
keep, confidential the information it receives under this Securities Reinsurers '
Trust Deed, except for :
a. information that is or becomes publicly known other than as a result of a
breach of this Section 38 ;
b. information obtained by the Securities Reinsurers' Trust Agent from
sources other than a WEMED or Securities Lead Counsel and not subjec t
to a confidentiality obligation ;
c. information requested or required to be disclosed (1) by a statute, law, rule
or regulation, (ii) to any government agency or regulatory body having or
claiming authority to regulate or oversee the Securities Reinsurers' Trust
Agent's business, (iii) under any subpoena, civil investigative demand or
similar demand or request of a court, regulatory authority, arbitrator or
arbitration to which the Securities Reinsurers' Trust Agent or any affiliate,
or an officer, director, employer or shareholder of the Securities
Reinsurers' Trust Agent or such affiliate, is a party, or (iv) to any affiliate ,
independent or internal auditor, agent, employee or attorney of the
Securities Reinsurers' Trust Agent having a need to know the information,
provided that the Securities Reinsurers' Trust Agent advises the recipient
of the confidential nature of the information being disclosed ; or
d . any other disclosure authorized by the person submitting such information .
39. All time periods set forth herein sha ll be computed in calendar days unless
otherwise expressly provided . In computing any period of time prescribed o r
17
208994 .1
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the act, event, or default from which the designated period of time begins to run
shall not be included . The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED )
FOR AND ON BEHALF OF )
Wilson, Elser, Moskowitz, Edelman & Dicker LLP )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Grant & Eisenhofer, P .A. )
for themselves as Trustee and on behalf of )
the Securities Lead Plaintiffs and Securities Plaintiffs )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )
1 8
209984 .1
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the act, event, or default from which the designated period of time begins to run
shall not be included . The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED )
by 62
FOR AND ON BEHALF OF )
Wilson, Elser , Moskowitz, Edelman & Dicker LLP )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
E D S A DEED )
by t )iFO ON BEHALF OF )
Grant & Eisenhofer, PA-
for themselves as Trustee and on behalf of )
the Securities Lead Plaintiffs and Securities Plaintiffs
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )
1 8
208994 .1
83-1°-2004 17 :53 From -Wachovla Bank,NA +215 STO 4733 T-208 P . 002/002 F-52 0
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the not, event, or default from which the designated period of time begins to r Lm
shall not be included. The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED
by
FOR AND ON BEHALF OF )
Wilson, Elser, Moskowitz, Edelman & Dicker LL? )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Grant & Eisenhofer, P.A. )
for them selves as Trustee and on behalf of )
the securities Lead Plaintiffs and Securities Plaintiffs )
EXE nby
FOR AND ON BEHALF OT )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )Howard Parker, VP
Wachovia Bangs, NA
i s209994.1
EXHIBIT I
EXHIBIT 1
4. Payments of Securities Escrow Fund s
a. Administration of Payments
(1) With respect to all payments to be made from the
Securities Account or from the Securities Reinsurers' Insurance Trust Account pursuan t
to this Section 4, the Securities Insurers' Escrow Agent shall make or, subject to
obtaining the required approval of the Trustees of the Securities Reinsurers' Insuranc e
Trust Account to make payments out of the Securities Reinsurers' Insurance Trus t
Account, cause the Securities Reinsurers' Trust Agent to make (as the case may be) suc h
payments as follows :
(a) The Securities Insurers' Escrow Agent shal l
make payments from the Chubb Atlantic Subaccount until the Securities Escrow Funds
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount have been
exhausted .
(b) When the Securities Escrow Funds
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount are exhausted,
the Securities Insurers' Escrow Agent shall make payments from the Pender Subaccount
until the Securities Escrow Funds (including interest at the Interest Rate) in the Pender
Subaccount have been exhausted .
(c) When the Securities Escrow Funds
(including interest at the Interest Rate ) in the Pender Subaccount are exhausted, the
Securities Insurers' Escrow Agent shall make payments from the Chubb Reinsuranc e
Subaccount until the Securities Escrow Funds (including interest at the Interest Rate) i n
the Chubb Reinsurance Subaccount have been exhausted. Immediately upon exhaustio n
of the Securities Escrow Funds (including interest at the Interest Rate) in the Chub b
Reinsurance Subaccount, the Securities Insurers' Escrow Agent shall inform the Trustee s
of the Securities Reinsurers' Insurance Trust Account, the Securities Insurer Parties ,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lea d
Counsel that the Chubb Reinsurance Subaccount is exhausted .
(d) Following exhaustion of the Securitie s
Escrow Funds (including interest at the Interest Rate) in the Chubb Reinsurance
Subaccount , the Securities Insurers ' Escrow Agent shall make payments from the CNA
Reinsurance Level One Subaccount and the Pender Holdback Subaccount and seek th e
approval of the Trustees of the Securities Reinsurers' Insurance Trust Account to hav e
the Securities Reinsurers ' Trust Agent make payments from the Reinsurers ' Level One
Subaccount of the Securities Reinsurers' Insurance Trust Account in the followin g
proportions: 2 .2502%a from the CNA Reinsurance Level One Subaccount, 2 .2906% from
the Fender Holdback Subaccount and 95 .4592% from the Securities Reinsurers' Level
One Subaccount of the Securities Reinsurers' Insurance Trust Account . Payment shall be
made pursuant to this Section 4 .a(1)(d) until all Securities Escrow Funds (includin g
interest at the Interest Rate) in the CNA Reinsurance Level One Subaccount and th e
Reinsurers' Level One Subaccount of the Securities Reinsurers' Insurance Trust Accoun t
are exhausted .
(e) Following exhaustion of the Securitie s
Escrow Funds (including interest at the Interest Rate) in the CNA Reinsurance Level One
Subaccount and the Reinsurers' Level One Subaccount of the Securities Reinsurers'
Insurance Trust Account, the Securities Insurers' Escrow Agent shall make payments
from the CNA Reinsurance Level Two Subaccount, the Pender Holdback Subaccount,
the Royal Subaccount and seek the approval of the Trustees of the Securities Reinsurers'
Insurance Trust Account to have the Securities Reinsurers' Trust Agent make payments
from the Reinsurers' Level Two Subaccount of the Securities Reinsurers' Insurance Trust
Account in the following proportions : 4.9998% from the CNA Reinsurance Level Two
Subaccount, 2 .1676% from the Pender Holdback Subaccount, 2.4999% from the Royal
Subaccount and 903327%a from the Securities Reinsurers' Level Two Subaccount of the
Securities Reinsurers' Securities Trust Account . Payment shall be made pursuant to this
Section 4.a(I)(e) until all Securities Escrow Funds (including interest at the Interest Rate)
in each such subaccount are exhausted .
(2) During the period from Execution Date to the dat e
on which the Securities Insurers' Escrow Agent and the Securities Reinsurers' Trust
Agent make the payments required by Section 4 .f below, the Securities Insurers' Escrow
Agent shall keep an accounting (consistent with the Implementation Period Securities
Claim Reserve Amount, the Post-Implementation Period Securities Claim Reserve
Amount and the Securities Implementation Cap) of all payments of Covered Claim Costs
(specifically identifying all Covered Claim Costs that are Securities Implementation
Costs based on the representation of Insured Releasees' counsel submitting such costs )
3
whether such payments are made from ( i) the Executive Liability Insurance Policies or
the Fender Securities Coverage prior to the date on which the payments required b y
Section 3 .b above are made or (ii) the Securities Insurers Insurance Escrow Accoun t
and/or the Securities Reinsurers ' Insurance Trust Account.
(3) With respect to Covered Claim Costs, the Securitie s
Insurers' Escrow Agent shall pay (or seek the approval of the Trustees to have the
Securities Insurers' Trust Agent pay) such costs pursuant to invoices it receives directly
from Insured Releasees or their counsel, or that are forwarded to it from Securitie s
Insurer Parties .
(4) The Securities Insurers' Escrow Agentshall, , withi n
five (5) business days following the end of each calendar month in which the Securitie s
Insurers' Insurance Escrow Account and/or Securities Reinsurers' Insurance Trus t
Account are in existence, provide to the Securities Insurer Parties, Securities Lea d
Counsel, ERISA 401(k) Lead Counsel, Settling Defendants' Lead Counsel, U_S .
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant t o
Section I .E .1 .ff of the Settlement Agreement) and all Insured Releasees' counsel to
whom reimbursement for Covered Claim Costs has been made during the prior calenda r
month the following information respecting the Securities Insurers' Insurance Escrow
Account and the Securities Reinsurers' Insurance Trust Account : (i) an accounting of all
Securities Escrow Funds paid out of the Securities Insurers' Escrow Account and/or the
Securities Reinsurers' Insurance Trust Account during such calendar month, including an
accounting of all Covered Claim Costs paid from such accounts, ( ii) all fees and
4
expenses, including amounts paid to the Securities Insurers' Escrow Agent or Securities
Reinsurers' Trust Agent, charged to any subaccount of the Securities Insurers' Escro w
Account or Securities Reinsurers' Insurance Trust Account during such calendar month ,
(iii) the interest earned on each subaccount of the Securities Insurers' Escrow Account o r
Securities Reinsurers' Insurance Trust Account during such calendar month ; (iv) the
balance remaining in each subaccount of the Securities Insurers' Escrow Account o r
Securities Reinsurers' Insurance Trust Account as of the date of the accounting and (v) a
calculation of the balance of the Implementation Period Securities Claim Reserve
Amount and of the Post-Implementation Period Securities Claim Reserve Amount, and
the aggregate amount of Securities Implementation Costs paid subject of the Securitie s
Implementation Cap .
(5) The Securities Insurers' Escrow Agent shall
calculate the Securities Claim Reserve Amount Balance (if any) pursuant to Section
II .D.5.a of the Settlement Agreement and, if a balance exists, shall, no later than the
forty-fifth (45th) day after the Final Settlement Date advise the Remaining Securities
Insurer Parties, Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of the amount of the Securities Claim Reserve Amoun t
Balance.
b. Securities Pre-Execution Costs
(1) The Securities Insurer Parties shall provide to the
Securities Insurers' Escrow Agent copies of all invoices for Securities Pre-Execution
Costs received from an Insured Releasee (or his or her counsel) that they have as of the
Execution Date or that they receive within thirty (30) days following the Execution Date ,
which invoices are unpaid as of the date on which the the payments required by Sectio n
3.b above are required . Within forty-five (45) days following the Execution Date, the
Securities Insurers ' Escrow Agent shall pay (or seek the approval of the Trustees to have
the Securities Insurers' Trust Agent pay) to each submitting Insured Releasee (or his or
her counsel) all Securities Pre-Execution Costs with respect to which the Securitie s
Insurers ' Escrow Agent has received an invoice .
c. Securities Implementation Costs
(1) Each Remaining Securities Insurer Party shall ,
promptly upon receipt, provide to the Securities Insurers' Escrow Agent all invoices fo r
Covered Claim Costs that are marked as Securities Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .c(2), the Securities Insurers' Escrow Agent shal l
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants '
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollars
($250,000) ; provided that notice as set out in this Section 4 .c(2) shall be provided if an
Insured Releasee (or Insured Releasees represented by the same counsel other tha n
Settling Defendants' Lead Counsel) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
6
(3) The Securities Insurers' Escrow Agent shall pay (or
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) al l
Securities Implementation Costs to the submitting Insured Releasee (or his or her
counsel) as follows :
(a) all payments shall be subject to (i) the
Securities Implementation Cap and (ii) the aggregate of the Implementation Perio d
Securities Claim Reserve Amount and the Post-Implementation Period Securities Clai m
Reserve Amount; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4 .c(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoic e
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify th e
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolve d
through the Dispute Procedure ; provided further that the Securities Insurers ' . Escrow
Agent shall refrain from paying such invoice (or portion of such invoice) until the disput e
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion an invoice within seven (7) business days after
notice pursuant to Section 4c(2) above has been provided, such invoice shall be deemed
approved in its entirety .
7
(4) Subject to Section 4 .c(3) above, within thirty (30)
business days following receipt of an invoice for Covered Claim Costs that is marked a s
Securities Implementation Costs, the Securities Insurers ' Escrow Agent shall (i) pay al l
Defense Costs identified in the invoice, (ii) inform the Insured Releasee of the Securities
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) inform
the Insured Releasee of Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel's
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4 .c(2) above : provided that, if any portion of an invoice is not
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of the
Trustees to have the Securities Insurers' Trust Agent pay) that portion of the invoice
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .c(2)
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to this
Section 4.c(4)-
d. Other Covered Claim Costs
(1) Each Remaining Securities Insurer Party shall ,
promptly upon receipt, provide to the Securities Insurers' Escrow Agent all invoices fo r
Covered Claim Costs other than Securities Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .d(2), the Securities Insurers' Escrow Agent shall
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants'
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollar s
8
($250,000) and any invoice from Settling Defendants' Lead Counsel for Covered Clai m
Costs other than Implementation Costs in excess of two hundred fifty thousand dollars
($250,000) ; provided that notice as set out in this Section 4 .d(2) shall be provided if (i) an
Insured Releasee (or Insured Releasees represented by the same counsel other than
Settling Defendants' Lead Counsel) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) or (ii) Settling Defendants' Lead Counsel
submits more than one invoice for Covered Claim Costs other than Implementation Cost s
in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
(3) The Securities Insurers' Escrow Agent shall pay (or
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) al l
such Covered Claim Costs to the submitting Insured Releasee (or his or her counsel) a s
. .. follows:
(a) all payments shall be subject to (i) th e
aggregate of the Implementation Period Securities Claim Reserve Amount and the Post-
Implementation Period Securities Claim Reserve Amount and (ii) any agreement agreed
to by Insured Releasees or final ruling pursuant to Section I1 .D.7 of the Settlement
Agreement; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4.d(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
9
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of 'such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counse l
shall, within five (5) business days following receipt of notice, of the invoice, notify th e
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolve d
through the Dispute Procedure; provided further that the Securities Insurers' Escrow
Agent shall refrain from paying such invoice (or portion of such invoice) until the dispute
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion of an invoice within seven (7) business day s
after notice pursuant to Section 4d(2) above has been provided, such invoice shall b e
deemed approved in its entirety .
(4) Subject to Section 4 .d(3), within thirty (30) business
days following receipt of an invoice for Covered Claim Costs other than Securitie s
Implementation Costs, the Securities Insurers' Escrow Agent shall (i) pay all Defens e
Costs identified in the invoice, (ii) inform the Insured Releasee of the Securitie s
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) infor m
the Insured Releasee of Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel' s
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4.d(2) above : provided that, if any portion of an invoice is no t
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of th e
Trustees to have the Securities Insurers ' Trust Agent pay) that portion of the invoice
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .d(2)
10
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to thi s
Section 4.d(4) .
e. Securities Attorneys' Fees and Expenses Award
(1) Within two (2) business days following the
Approval Date, Securities Lead Counsel shall inform the Securities Insurers' Escro w
Agent of the occurrence of that date and provide the Securities Insurers' Escrow Agen t
with a copy of the Court order setting out the Securities Attorneys' Fees and Expense s
Award.
(2) Subject to the terms (including without limitation
the repayment provisions ) set out in Section X.A of the Settlement Agreement , within
five (5) business days following the Approval Date, or such other date as the Court issue s
an order setting out the Securities Attorneys' Fees and Expenses Award, the Securitie s
Insurers' Escrow Agent shall pay to Securities Lead Counsel the Securities Attorneys '
Fees and Expenses Award; provided that to the extent any portion of the Securitie s
Attorneys' Fees and Expenses Award are required pursuant to Section 4_a above to b e
made from the . Securities Reinsurers' Insurance Trust Account , the Securities Insurers '
Escrow Agent shall seek the approval of the Trustees of the Securities Reinsurers '
Insurance Trust Account to have the Securities Reinsurers' Trust Agent pay such portio n
of the Securities Attorneys' Fees and Expenses from the Securities Reinsurers ' Insurance
Trust Account.
11
f. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Fina l
Settlement Date, Securities Lead Counsel shall inform the Securities Insurers' Escro w
Agent of the occurrence of that date, with copies of such notice provided to the
Remaining Securities Insurer Parties, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel .
(2) The Securities Insurers' Escrow Agent, within
forty-five (45) days following the Final Settlement Date, shall pay (or seek the approva l
of the Trustees to have the Securities Insurers' Trust Agent pay) to insured Releasees an y
Covered Claire. Costs for which invoices have been received as of the thirtieth (30th) da y
following the Final Settlement Date ; provided that any invoices that are received after th e
thirtieth (30th) day following Final Settlement Date shall be returned to the submittin g
Insured Releasee .
(3) Subject to making the payments required by Sectio n
4_f(2) above and making the calculation required by Section 4 .a(5) above, within forty-
five (45) days following the Final Settlement Date, the Securities Insurers ' Escrow Agent
shall pay into the Cash Settlement Securities Subaccount by wire transfer of immediatel y
available funds, the Chubb Atlantic Policy Closing Balance, the Pender Closing Balance ,
the Chubb Reinsurance Closing Balance, the CNA Reinsurance Level One Closing
Balance, the CNA Reinsurance Level Two Closing Balance, the Pender Holdbac k
Closing Balance and the Royal Reinsurance Closing Balance, plus interest calculated o n
each such balance, which interest is to be calculated (i) at the Interest Rate for the perio d
12
starting on the fifth (5th) business day after the Preliminary Approval Date until an d
including the Approval Date and (ii) at the market rate provided by the Securities Insurers
Escrow Account for the period starting the day following the Approval Date until the date
of the wire transfer of such funds pursuant to this Section 4.f(3) .
(4) The Secu ri ties Insurers ' Escrow Agent shall see k
the approval of the Trustees of the Securities Reinsurers Insurance Trust Account to hav e
the Securities Reinsurers' Trust Agent pay (by wire transfer of immediately availabl e
fund), within forty-five (45) days following the Final Settlement Date, into the Cash
Settlement Securities Subaccount the Level One Reinsurers' Closing Balance and th e
Level Two Reinsurers ' Closing Balance in the Securities Reinsurers ' Insurance Trus t
Account plus interest on such proceeds calculated (t) at the Interest Rate for the perio d
starting on the fifth (5th) business day after the Preliminary Approval Date until and
including the Approval Date and (ii) at the market rate provided by the Securitie s
Reinsurers' Insurance Trust Account for the period starting the day following th e
Approval Date until the date of the wire transfer of such funds pursuant to this Sectio n
4.f(4) .
(5) If there are any remaining monies in any Securities
Subaccount after the payments required by Section 4 .f(3) above have been made and
after all applicable fees and expenses incurred in connection with the administration o f
the Securities Insurers' Escrow Account have been paid, such monies shall be returned to
the Securities Insurer Party on whose behalf the Securities Subaccount had bee n
established and maintained pursuant to Section 3.a above .
13
g. Fees and Expenses
(1) The Securities Insurers' Escrow Agent shall be pai d
fees in the amounts provided in Exhibit A . The Securities Insurers ' Escrow Agent shal l
also be reimbursed for reasonable expenses incurred in connection with this Securitie s
Insurers' Escrow Agreement, including with respect to the payment of any taxes due o n
any monies in the Securities Account .
(2) Subject to Section 4 .g .(5) below, invoices for fee s
and expenses shall be submitted by the Securities Insurers' Escrow Agent to th e
Remaining Securities Insurer Parties and Securities Lead Counsel on a timely basis, an d
in no event later than the month following the month in which the fees and expenses were
incurred .
(3) Upon their receipt of an invoice for fees and
expenses pursuant to Section 4 .g(2) above, each of the Remaining Securities Insurer
Parties and Securities Lead Counsel shall, within ten (10) days from the date of the
invoice, advise the Securities Insurers' Escrow Agent whether they approve all or a
portion of the fees and expenses ; provided further that if Remaining Securities Insurer
Parties and Securities Lead Counsel fail to disapprove all or a portion an invoice within
fourteen (14) business days after having been provided with same, such invoice shall b e
deemed approved in its entirety .
(4) Upon being notified of approval of an invoice (o r
upon the passage of fourteen days time as provided above) for fees and expenses both b y
all of the Remaining Securities Insurer Parties and by Securities Lead Counsel, th e
14
Securities Insurers' Escrow Agent is authorized to pay to itself such fees and expenses (o r
the approved portion of such fees and expenses) out of the appropriate Securitie s
Subaccount pursuant to the terms of Section 4.a(1) above .
(5) Upon being notified of disapproval of an invoice (or. ... .... . .. .. .
any portion of an invoice) for fees and expenses either by any of the Remainin g
Securities Insurer Parties or by Securities Lead Counsel, the Securities Insurers' Escrow
Agent ( i) is authorized to pay to itself any portion (if any) of the fees and expenses that
the all of the Remaining Securities Insurer Parties and Securities Lead Counsel have
approved and (i i ) may, in its discretion, submit any dispute with respect to th e
disapproved fees and expenses to the Court pursuant to Section 5 .a below ; provided
however, notwithstanding Section 4 .f, with respect to any dispute in connection with
disapproved fees and expenses relating to the final invoice submitted pursuant to Section
4.g(6), the part ies agree that such dispute must be resolved before the Securities Insurers'
Escrow Agent makes the payment into the Cash Settlement Account pursuant to Section
4_f.
(6) Within twenty (20) business days following the
Final Settlement Date, the Securities Insurers' Escrow Agent shall submit its final invoic e
for fees and expenses to the Remaining Securities Insurer Party and to Securities Lea d
Counsel . Such final invoice shall include all accrued fees and expenses and al l
anticipated fees and expenses until the termination of this Securities Insurers' Escrow
Agreement, including any fees and expenses expected to be incurred with respect to th e
payments to be made pursuant to Section 41.
15
h. Termination of Settlement Agreement
(1) If the Settlement Agreement is terminated pursuan t
to the terms of the Settlement Agreement, the Remaining Securities Insurer Parties shall
promptly notify the Securities Insurers' Escrow Agent of such termination, whic h
notification shall include a signed certification from Settling Defendants' Lead Counse l
that the Settlement Agreement has been terminated, which certification shall not b e
unreasonably withheld ; provided that if the Remaining Securities Insurer Parties giv e
notice of termination of settlement, but a signed certification from the Settling
Defendants' Lead Counsel is not provided, then no further monies shall be paid and th e
Securities Insurers' Escrow Agent shall take all appropriate steps to hold the monies safe
pursuant to Section 5 .c below while the dispute as to this issue is resolved pursuant to th e
Dispute Procedure .
(2) Within five (5 ) business days following receipt o f
notification of the termination of the Settlement Agreement pursuant to Section 4 .h(l )
above, the Securities Insurers' Escrow Agent shall submit its final invoice to th e
Remaining Securities Insurer Parties for fees and expenses . Such final invoice shal l
include all accrued fees and expenses and all anticipated fees and expenses expected to b e
incurred with respect to the payments to be made pursuant to this Section 4 .h . As to such
final invoice, each of the Remaining Securities Insurer Parties shall, within ten (10) day s
from the date of the invoice, advise the Securities Insurers' Escrow Agent whether i t
approves all or a portion of the fees and expenses .
16
(3) To the extent that, following termination of th e
Settlement Agreement, the Securities Insurers' Escrow Agent receives, pursuant t o
Section I .E.1 .yyyyy of the Settlement Agreement , any reimbursement with respect to the
Securities Initial Payment, the Securities Insurers Escrow Agent shall deposit (or cause t o
be deposited) such reimbursement in that Securities Subaccount and/or into that
subaccount of the Securities Reinsurers' Insurance Trust Account from which any
payments required by this Securities Insurers' Escrow Agreement are then currentl y
being paid pursuant to Section 4 .a(l) above, such deposits to be in the same proportion s
as set out in Section 4 .a(l)(e) or Section 4 .a(l)(f), as the case may be, of this Securities
Insurers' Escrow Agreement if payments are then currently being paid to such sections ;
provided that if such deposit of the reimbursement would cause such Securitie s
Subaccount or such subaccount of the Securities Reinsurers' Insurance Trust Account t o
have insurance proceeds in excess of the amount deposited into such subaccount at it s
inception plus interest accrued, the Securities Insurers Escrow Agent shall deposit (o r
cause to be deposited) that portion of such reimbursement that would be in excess of such
insurance proceeds into the Securities Subaccount and/or the subaccount of the Securities
Reinsurers' Insurance Trust Account from which payments had been made prior to th e
time that payments began to be made from the Securities Subaccount and/or sub account
the Securities Reinsurers' Insurance Trust Account then currently making payments .
(4) Within twenty (20) business days following receip t
of notification of the termination of the Settlement Agreement pursuant to Section 4 .h(2)
above, the Securities Insurers' Escrow Agent shall, subject to Section 4 .h(5) below, pay
17
to the Remaining Securities Insurer Parties, after subtracting (i) any approved outstandin g
fees and expenses incurred pursuant to Section 4 .g above, (ii) any disputed disapproved
fees or expenses with respect to which the Securities Insurers' Escrow Agent ha s
submitted such dispute to the Court pursuant to Section 5 .a below and (iii) any payment
required by Section I.E.I .yyyyy of the Settlement Agreement, the following amounts :
(a) to Chubb Atlantic, all monies (if any)
remaining in the Chubb Atlantic Subaccount ;
(b) to Pender, all monies (if any) remaining i n
the Pender Subaccount, the Chubb Reinsurance Subaccount , the CNA Reinsurance Level
One Subaccount , the CNA Reinsurer Level Two Subaccount , and the Pender Holdback
Subaccount ;
(c) as directed by Pender, the amount of an y
monies (if any) remaining in the Royal Reinsurance Subaccount shall be paid to th e
reinsurer that paid the Royal Reinsurance Opening Balance into the Royal Reinsurance
Subaccount .
(d) With respect to any disputed disapprove d
fees and expenses subtracted from the Securities Insurers' Insurance Escrow Accoun t
pursuant to Section 4_h(4)(ii) above, the Securities Insurers' Escrow Agent shall continu e
to hold the amount of such disapproved fees and expenses in trust until the disput e
regarding such fees and expenses is resolved pursuant to Section 5 below- Upo n
resolution of the dispute, the Securities Insurers' Escrow Agent shall promptly give effec t
to the resolution reached regarding such fees and expenses .
18
(5) The Remaining Securities Insurer Parties may, i n
their discretion, provide the Securities Insurers ' Escrow Agent with instructions fo r
distributing the amounts set out in Section 4 .h .(4) above in a manner different from that
set out in Section 4.h(4) . If the Remaining Securities Insurer Pa rt ies intend to provid e
such instructions, they must notify the Securities Insurers' Escrow Agent of thei r
intention to do so within five (5) business days following the Securities Insurers' Escro w
Agent' s receipt of notification of the termination of the Settlement Agreement . If the
Securities Insurers' Escrow Agent receives such instructions from the Remainin g
Securities Insurer Parties, the Securities Insurers' Escrow Agent shall continue to hold al l
Securities Escrow Funds that would otherwise have been distributed pursuant to Section
4.h.(4) in trust until such time as the Securities Insurers ' Escrow Agent receives written
instructions from the Remaining Securities Insurer Parties- Upon receipt of suc h
instructions , which instructions shall be endorsed by all Remaining Securities Insure r
Parties, the Securities Insurers' Escrow Agent shall promptly pay out the proceed s
described in Section 4.h(4) above pursuant to the instructions received from th e
Remaining Securities Insurer Parties pursuant to this Section 4 .h(4) .
19
Exhibit F
ERISA ESCROW AGREEMENT
This ERISA ESCROW AGREEMENT is entered into as of March 19, 2004 b y
and among Federal Insurance Company and Pender Insurance Limited, Keller Rohrback ,
LLP and Slevin & Hart, P_C ., as ERISA 401(k) Lead Counsel, and Wachovia Bank ,
National Association, as escrow agent .
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd .'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have an interest in certain
ERISA Plans ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of these
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated 15 of the putative class actions allegin g
ERISA violations into the ERISA Consolidated Action, leaving two of the putative clas s
actions that also allege ERISA violations unconsolidated; and
WHEREAS, Federal and Pender have issued one or more insurance policie s
providing coverage and indemnity for the current and former officers, directors an d
employees of Global Crossing Ltd . and Asia Global Crossing Ltd ., which policies
Settling Defendants contend provide coverage and indemnity in connection with losses
and costs incurred with respect to, among other things, the ERISA Actions and whic h
policies have not been exhausted as of the date of this ERISA Escrow Agreement ; and
WHEREAS, ERISA Plaintiffs and ERISA Settling Defendants have agreed to a
settlement of the ERISA Actions, subject to the completion of additional factual
investigation and analysis by ERISA Plaintiffs' Counsel to evaluate further the fairness ,
reasonableness and adequacy of the proposed settlement ; an d
WHEREAS, the terms and conditions of the settlement are contained in a Marc h
19, 2004 Stipulation of Settlement (and accompanying exhibits) (the "Settlemen t
Agreement"), a copy of which has been provided to the ERISA Escrow Agent ; and
WHEREAS, in connection with the settlement of the ERISA Actions, Federal ha s
agreed to pay the balance of its Policy Limit under its Policy and Pender has agreed to
pay the Pender Supplemental Amount in consideration for releases from certain Insured
Releasees pursuant to a March 19, 2004 Release and Settlement Agreement ; and
WHEREAS, pursuant to the terms of such Release and Settlement Agreement an d
the Settlement Agreement, Federal and Pender are required to deposit such insuranc e
proceeds into an escrow account within five (5) business days following the Court' s
preliminary approval of the Settlement Agreement .
NOW, THEREFORE, the ERISA Insurer Pa rties , ERISA Plaintiffs'401(k) Lea d
Counsel and the ERISA Escrow Agent agree as follows:
2
1 . Definitions and Interpretations
a. As used in this ERISA Escrow Agreement, capitalized
terms either (i) have the same meaning as ascribed to them in the Settlement Agreemen t
or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday,
Sunday or a "legal holiday ," as that term is defined in Section XN.II of the Settlemen t
Agreement-
(2) "Deposit Date" means the date on which Federal
deposits the Federal Policy Opening Balance into the ERISA Insurance Escrow Account
and Pender deposits the Pender Supplemental Amount pursuant to Section 3 .b below;
provided that the Deposit Date for Federal and Pender shall be that date on which tha t
entity deposits such proceeds into the ERISA Insurance Escrow Account .
(3) "Dispute Procedure" means the procedure by which
disputes arising in connection with this ERISA Escrow Agreement (as specifically set
forth in various provisions of the Settlement Agreement and this ERISA Escrow
Agreement) shall be resolved, which procedure shall require the disputing parties to
submit such dispute to the Court with a request that the Court refer the dispute to
Magistrate Judge Michael Dolinger, who shall mediate a resolution among the disputing
parties, provided that, if the parties are unable to resolve the dispute through mediation,
Magistrate Judge Dolinger shall resolve the dispute and such resolution shall be final and
binding (without any right of appeal or review) on all relevant parties, including, without
limitation, Securities Lead Counsel, Securities Lead Plaintiffs, ERISA Plaintiffs '
3
Counsel, ERISA Plaintiffs and any other individual or entity (including counsel for such
individual or entity) involved in the dispute ; provided f urther that if Magistrate Judge
Dolinger is no longer a magistrate judge of the United States District Court for the
Southern District of New York at the time any dispute is submitted to the Court, the
parties shall request that the Court refer the dispute to another magistrate judge of the
United States District Court for the Southern District of New York, who shall conduct th e
mediation or, if necessary, resolve the dispute as set out above ; provided further that,
with respect to all disputes submitted to the Court other than a dispute submitted pursuant
to Section II .D .7 of the Settlement Agreement, any party submitting a dispute to the
Court shall provide notice of such submission and copies of all papers submitted to the
Court and/or Magistrate Judge Dolinger (or any successor magistrate judge) to the
following: Securities Lead Counsel, ERISA Plaintiffs' Counsel, Settling Defendants'
Lead Counsel, the Insurers and any other party directly involved in the dispute ; provided
however, that, if the dispute involves the payment of Covered Claim Costs and an Insured
Releasee submits materials or information to the Court and/or Magistrate Judge Dolinger
(or any successor magistrate judge) in connection with the dispute that is protected by the
attorney client privilege or attorney work product doctrine, (i) the Insured Releasee's
submission of such materials or information shall not be deemed a waiver of the privilege
or work product protection applicable to such materials or information and (ii) the
Insured Releasee shall not be required to provide such materials or information to
Securities Lead Counsel, ERISA Plaintiffs' Counsel, Settling Defendants' Lead Counsel,
the Insurers or any other party directly involved in the dispute, but shall provide suc h
4
materials and/or information to the Court and/or Magistrate Judge Dolinger (or any
successor magistrate judge) for in camera review; provided further that any participation
by Pender in the Dispute Procedure with respect to any dispute arising under this ERISA
Escrow or the Settlement Agreement shall be subject to the Mediation Order and shall not
override or supersede Section R.E of the Settlement Agreement or Section 5 .e below;
provided further that with respect to a dispute submitted to the Court pursuant to Section
H.D.7 of the Settlement Agreement, the party submitting the dispute to the Court shall
provide notice of such submission to all Settling Defendants' Counsel, and any part y
submitting any papers to the Court and/or Magistrate Judge Dolinger (or any successo r
magistrate judge) in connection with such dispute shall provide copies of such papers to
all Settling Defendants' Counsel .
(4) "ERISA Account" means the ERISA Insuranc e
Escrow Account established pursuant to Section 3 .a below.
(5) "ERISA Escrow Agent" means Wachovia Bank,
National Association .
(6) "ERISA Escrow Agreement" means this ERISA
Escrow Agreement.
(7) "ERISA Escrow Funds" has the meaning ascribe d
to it in Section 3 .c below.
(8) "ERISA 401(k) Lead Counsel" means the law firms
of Keller Rohrback, LLP and Slevin & Hart, P .C.
(9) "ERISA Insurer Parties" means Federal and Pender .
5
(10) "ERISA Subaccount" means any of the subaccounts
established pursuant to Section 3 .a below .
(11) "Federal" means Federal Insurance Company,
which issued Policy No . Policy 8151-95-14C with a Policy Limit of $25,000,000 (the
"Federal Policy")-
(12) "Federal Policy Closing Balance" means the
balance (if any) of unexhausted Policy proceeds remaining as of the Final Payment Date
in the Federal Subaccount .
(13) "Federal Policy Opening Balance" means the
balance of unexhausted Policy proceeds in the Federal Policy as of the Deposit Date (less
any portion of the ERISA Initial Payment to be paid out of such Policy) .
(14) "Federal Subaccount" means the ERISA
Subaccount into which the Federal Policy Opening Balance is deposited .
(15) "Final Payment Date" means the date on which al l
proceeds from the ERISA Insurance Escrow Account are paid out pursuant to Section 4.f.
below .
(16) "Mediation Order" means the Proposed Scheduling
Order for Mediation entered in the Actions on April 28, 2003 by Judge Lynch and
Magistrate Judge Dolinger .
(17) "Pender ERISA Closing Balance" means th e
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the ERISA Subaccount into which the Pender Opening Balance was deposited.
6
(18) 'Tender ERISA Opening Balance" means eighteen
GBP (£18,000,000) (less any portion of the ERISA Initial Payment to be paid out of the
Fender Supplemental Amount) .
(19) 'Tender ERISA Subaccount" means the ERISA
Subaccount into which the Pender ERISA Opening Balance is deposited-
(20) "Policy" or "Policies" means (either individually or
collectively, as the context requires) the Federal Policy and the Pender Supplemental
Amount .
(21) "Policy Limit" means (i) with respect to the Federal
Policy, the unexhausted portion of the limit of liability provided by such Policy with
respect to the ERISA Actions and (ii) with respect to the Pender Policy, the fender
Supplemental Amount .
(22) "Remaining ERISA Insurer Parties" means, in
connection with any provision of this ERISA Escrow Agreement, each insurer with
respect to which ERISA Escrow Funds in the ERISA Subaccount established pursuant to
Section 3 .a below for such insurer have not been exhausted as of the date on which the
relevant provision is triggered .
b. A reference to a party means a party to this Agreement-
c. Unless stated otherwise, a reference to a Section means a
Section of this Agreement .
d. The plural shall include the singular and vice versa.
7
e. A reference to "including" shall be deemed to be followe d
by "without limitation ."
f. Section headings in this ERISA Escrow Agreement are fo r
convenience only and shall not be construed as part of this ERISA Escrow Agreement .
2 . Appointment of ERISA Escrow Agent
a. The ERISA Insurer Parties and ERISA 401(k) Lead
Counsel hereby appoint Wachovia Bank, National Association to act as the ERISA
Escrow Agent and Wachovia Bank, National Association hereby accepts thi s
appointment and agrees to act as ERISA Escrow Agent pursuant to the terms an d
conditions set out in this ERISA Escrow Agreement .
3_ Establishment of ERISA Account and Subaccounts
a. Upon execution of this ERISA Escrow Agreement, the
ERISA Escrow Agent shall establish the ERISA Escrow Insurance Account as a n
interest-bearing account consisting of the following two (2) subaccounts : the Federal
Subaccount and the Pender ERISA Subaccount . The ERISA Escrow Agent shall
promptly verify to the ERISA Insurer Parties, ERISA 401(k) Lead Counsel, Securities
Lead Counsel and Settling Defendants' Lead Counsel the establishment of the ERIS A
Account and subaccounts, and provide to them all relevant account in .for nation .
b. Within five (5) business days following the Preliminar y
Approval Date,
(1) Federal shall pay to the ERISA Escrow Agent, by
wire transfer of immediately available funds, the Federal Policy Opening Balance ; and
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(2) Pender shall pay (or cause to be paid) to the ERISA
Escrow Agent, by wire transfer of immediately available funds, the Pender ERISA
Opening Balance .
c . Upon receipt of the monies described in Section 3 .b above,
the ERISA Escrow Agent shall deposit the Federal Policy Opening Balance and the
Pender ERISA Opening Balance into, respectively, the Federal Subaccount and the
Pender ERISA Subaccount . The ERISA Escrow Agent shall acknowledge the receipt o f
such cash (the "ERISA Escrow Funds") and the deposit of it into the relevan t
subaccounts to the ERISA Insurer Parties, Securities Lead Counsel, ERISA 401(k) Lead
Counsel and Settling Defendants' Lead Counsel ; provided that to the extent the monies
received by the ERISA Escrow Agent are received in GBPs, the ERISA Escrow Agent
shall hold such monies in GBPs .
d. The ERISA Escrow Agent is instructed and authorized t o
hold the ERISA Escrow Funds in cash deposit accounts of the ERISA Insurance Escro w
Account that pay interest that is no less than the Interest Rate .
e. The ERISA Escrow Agent shall hold the ERISA Escrow
Funds on trust in the ERISA Subaccounts and shall not withdraw any proceeds from an
ERISA Subaccount except as provided in this ERISA Escrow Agreement . The ERISA
Escrow Funds (as such funds may be reduced by distributions required to be made under
this ERISA Escrow Agreement) shall be held only for the purposes set forth, and subject
to the terms and conditions in, this ERISA Escrow Agreement, and shall not be subject t o
any lien, attachment, trusteeship or any other judicial process . Unless specifically
9
provided in the Settlement Agreement or in this ERISA Escrow Agreement, no third
parties or their respective creditors (including third-party individuals or entities unrelated
to Global Crossing Ltd . that are insureds under the Pender Policy) shall have any right to ,
or claim respecting, the ERISA Escrow Funds.
f. The ERISA Escrow Agent shall make or cause to be made
all of the payments described in this ERISA Escrow Agreement .
4. Payments of ERISA Escrow Fund s
a. Administration of Payments
(1) With respect to all payments to be made from the
ERISA Account pursuant to this Section 4, the ERISA Escrow Agent shall make or cause
to made such payments as follows :
(a) The ERISA Escrow Agent shall mak e
payments from the Federal Subaccount until the ERISA Escrow Funds (including interes t
at the Interest Rate) in the Federal Subaccount have been exhausted .
(b) When the ERISA Escrow Funds (including
interest at the Interest Rate) in the Federal Subaccount are exhausted, the ERISA Escro w
Agent shall make payments from the Fender ERISA Subaccount until the ERISA Escrow
Funds (including interest at the Interest Rate ) in the Pender ERISA Subaccount have been
exhausted .
(2) During the period from Execution Date to the date
on which the ERISA Escrow Agent makes the payments required by Section 41 below,
the ERISA Escrow Agent shall keep an accounting (consistent with the Implementation
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Period ERISA Claim Reserve Amount, the Post-Implementation Period ERISA Claim
Reserve Amount and the ERISA Implementation Cap) of all payments of Covered Claim
Costs (specifically identifying all Covered Claim Costs that are ERISA Implementation
Costs based on the representation of Insured Releasees' counsel submitting such costs)
whether such payments are made from (i) the Fiduciary Liability Insurance Policy or, if
that policy is exhausted, from the Pender Supplement Amount, prior to the date on which
the payments required by Section 3 .b above are made or (ii) the ERISA Insurance Escrow
Account.
(3) With respect to Covered Claims Costs, the ERISA
Escrow Agent shall pay such costs pursuant to invoices it receives directly from Insured
Releasees or their counsel, or that are forwarded to it from the ERISA Insurer Partie s
(4) The ERISA Escrow Agent shall, within five (5 )
business days following the end of each calendar month in which the ERISA Insurance
Escrow Account is in existence, provide to the ERISA Insurer Parties, Securities Lead
Counsel, ERISA 401(k) Lead Counsel, Settling Defendants' Lead Counsel, U .S .
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant to
Section I .E.I .ff of the Settlement Agreement) and all Insured Releasees' counsel to
whom reimbursement for Covered Claim Costs has been made during the prior calendar
month the following information: (i) an accounting of all ERISA Escrow Funds paid out
of the ERZSA Insurance Escrow Account during such calendar month, including an
accounting of all Covered Claim Costs paid from such account, (ii) all fees and expenses,
including amounts paid to the ERISA Escrow Agent, charged to any subaccount of th e
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ERISA Insurance Escrow Account during such calendar month, (iii) the interest earned
on each subaccount of the ERISA Escrow Insurance Account during such calendar
month, (iv) the balance remaining in each subaccount of the ERISA Insurance Escrow
Account as of the date of the accounting and (v) a calculation of the balance of the
Implementation Period ERISA Claim Reserve Amount and of the Post-Implementation
Period ERISA Claim Reserve Amount, and the aggregate of ERISA Implementatio n
Costs paid subject to the ERISA Implementation Cap ; provided that the Securitie s
Insurers' Escrow Agent shall also provide notice to all such individuals and entitie s
identified in this Section 4_a(4) when the Implementation Period ERISA Claim Reserv e
Amount has been exhausted .
(5) The ERISA Escrow Agent shall calculate the
ERISA Claim Reserve Amount Balance (if any) pursuant to Section II .D.5.b of the
Settlement Agreement and, if a balance exists, shall, no later than the forth-fifth (45th)
day after the Final Settlement Date advise the Remaining ERISA Insurer Parties,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lea d
Counsel of the amount of the ERISA Claim Reserve Amount Balance .
b. ERISA Pre-Execution Costs
(1) The ERISA Insurer Parties shall provide to th e
ERISA Escrow Agent copies of all invoices for ERISA Pre-Execution Costs receive d
from an Insured Releasee (or his or her counsel) that they have as of the Execution Date
or that they receive within thirty (30) days following the Execution Date, which invoices
are unpaid as of the date on which the payments required by Section 3 .b above are
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required . Within forty-five (45) days following the Execution Date, the ERISA Escro w
Agent shall pay to each submitting Insured Releasee (or his or her counsel) all ERIS A
Pre-Execution Costs with respect to which the ERISA Escrow Agent has received an
invoice .
C, ERISA Implementation Costs
( 1) Each Remaining ERISA Insurer Party shall ,
promptly upon receipt, provide to the ERISA Escrow Agent all invoices for Covere d
Claim Costs that are marked as ERISA Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .c(2), the ERISA Escrow Agent shall provide
notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel of any invoice from anyone other than Settling Defendants' Lead Counsel
for Covered Claim Costs in excess of two hundred fifty thousand dollars ($250,000) ;
provided that notice as set out in this Section 4 .c(2) shall be provided if an Insured
Releasee (or Insured Releasees represented by the same counsel other than Settling
Defendants' Lead Counsel) submits more than one invoice for Covered Claim Costs i n
any thirty (30) day period and such invoices in the aggregate are in excess of two hundred
fifty thousand dollars ($250,000) .
(3) The ERISA Escrow Agent shall pay all ERIS A
Implementation Costs to the submitting Insured Releasee (or his or her counsel) a s
follows:
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(a) all payments shall be subject to (1) the
ERISA Implementation Cap and (ii) the aggregate of the Implementation Period ERISA
Claim Reserve Amount and the Post-Implementation Period ERISA Claim Reserv e
Amount ; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4 .c(2) above, Securities Lead Counsel's an d
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that i f
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counse l
shall, within five (5) business days following receipt of notice of the invoice, notify the
ERISA Escrow Agent of their disapproval and such dispute shall be resolved through th e
Dispute Procedure ; provided further that the ERISA Escrow Agent shall refrain fro m
paying such invoice (or portion of such invoice) until the dispute is resolved ; provided
further that if Securities Lead Counsel and/or ERISA 401 (k) Lead Counsel fail to
disapprove all or a portion of an invoice within seven (7) business days after notic e
pursuant to Section 4c(2) above has been provided, such invoice shall be deeme d
approved in its entirety .
(4) Subject to Section 4 .c(3) above, within thirty (30)
business days following receipt of an invoice for Covered Claim Costs that is marked as
ERISA Implementation Costs, the ERISA Escrow Agent shall (i) pay all Defense Costs
identified in the invoice, (ii) inform the Insured Releasee of the ER1SA's Escrow Agent' s
decision not to pay all or a portion of an invoice or (iii) inform the Insured Releasee o f
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Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel's disapproval of all or a
portion of an invoice for which notice was provided to them pursuant to Section 4 .c(2)
above : provided that, if any portion of an invoice is not approved, the ERISA Escrow
Agent shall pay that portion of the invoice approved by the ERISA Escrow Agent and (if
required by Section 4 .c(2) above) by Securities Lead Counsel and ERISA 401(k) Lead
Counsel pursuant to this Section 4 .c(4) .
d. Other Covered Claim Costs
(1) Each Remaining ERISA Insurer Party shall,
promptly upon receipt, provide to the ERISA Escrow Agent all invoices for Covered
Claim Costs other than ERISA Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .d(2), the ERISA Escrow Agent shall provide
notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel of any invoice from anyone other than Settling Defendants' Lead Counsel
for Covered Claim Costs in excess of two hundred fifty thousand dollars ($250,000) and
any invoice from Settling Defendants' Lead Counsel for Covered Claim Costs other than
Implementation Costs in excess of two hundred fifty thousand dollars ($250,000) ;
provided that notice as set out in this Section 4 .d(2) shall be provided if (1) an Insured
Releasee (or Insured Releasees represented by the same counsel other than Settling
Defendants' Lead Counsel) submits more than one invoice for Covered Claim Costs in
any thirty (30) day period and such invoices in the aggregate are in excess of two hundred
fifty thousand dollars ($250,000) or (ii) Settling Defendants' Lead Counsel submits mor e
15
than one invoice for Covered Claim Costs other than Implementation Costs in any thirt y
(30) day period and such invoices in the aggregate are in excess of two hundred fifty
thousand dollars ($250,000) .
(3) The ERISA Escrow Agent shall pay all suc h
Covered Claim Costs to the submitting Insured Releasee- (or his or her counsel) a s
follows:
(a) all payments shall be subject to (i) the
aggregate of the Implementation Period ERISA Claim Reserve Amount and the Post-
Implementation Period ERISA Claim Reserve Amount and (ii) any agreement agreed to
by Insured Releasees or final ruling pursuant to Section II .D.7 of the Settlement
Agreement; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4.d(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify the
ERISA Escrow Agent of their disapproval and such dispute shall be resolved through the
Dispute Procedure; provided further that the ERISA Escrow Agent shall refrain from
paying such invoice (or portion of such invoice) until the dispute is resolved; provided
frtrther that if Securities Lead Counsel and/or ERISA 401(k) Lead Counsel fail to
disapprove all or a portion of an invoice within seven (7) business days after notice
16
pursuant to Section 4d(2) above has been provided , such invoice shall be deemed
approved in its entirety .
(4) Subject to Section 4 .d (3), within thirty (30)
business days following receipt of an invoice for Covered Claim Costs other than ERISA
Implementation Costs, the ERISA Escrow Agent shall (i) pay all Defense Costs identified
in the invoice, (ii) inform the insured Releasee of the ERISA Escrow Agent's decisio n
not to pay all or a portion of an invoice or (iii) inform the Insured Releasee of Securities
Lead Counsel's and/or ERISA 401(k) Lead Counsel's disapproval of all or a portion of
an invoice for which notice was provided to them pursuant to Section 4.d(2) above:
provided that, if any portion of an invoice is not approved, the ERISA Escrow Agent
shall pay that portion of the invoice approved by the ERISA Escrow Agent and (if
required by Section 4.d(2) above) by Securities Lead Counsel and ERISA 401(k) Lead
Counsel pursuant to this Section 4.d(4) .
e. ERISA Attorneys' Fees and Expenses Awards
(1) Within two (2) business days following th e
Approval Date, ERISA 401(k) Lead Counsel shall inform the ERISA Escrow Agent of
the occurrence of that date and provide the ERISA Escrow Agent with a copy of the
Court order setting out the ERISA Attorneys' Fees and Expenses Awards .
(2) Subject to the terms (including without limitation
the repayment provisions) set out in Section X .A of the Settlement Agreement, within
five (5) business days following the Approval Date, or such other date as the Court issues
an order setting out the ERISA Attorneys' Fees and Expenses Awards, the ERIS A
17
Escrow Agent shall pay to ERISA Consolidated Lead Counsel the ERISA Attorneys '
Fees and Expenses Awards .
f. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Final
Settlement Date, ERISA 401(k) Lead Counsel shall inform the ERISA Escrow Agent of
the occurrence of that date, with copies of such notice provided to the Remaining ERIS A
Insurer Part ies , ERISA 401 (k) Lead Counsel and Settling Defendants' Lead Counsel .
(2) The ERISA Escrow Agent, within forty-five (45 )
days following the Final Settlement Date, shall pay to Insured Releasees any Covered
Claim Costs for which invoices have been received as of the thirtieth (30th) day
following the Final Settlement Date ; provided that any invoices that are received after th e
thirtieth (30th:) day following Final Settlement Date shall be returned to the submittin g
Insured Releasee .
(3) Subject to making the payments required by Section
4.f(2) above and making the calculation required by Section 4 .a(5) above, within forty-
five (45) days following the Final Settlement Date, the ERISA Escrow Agent shall pa y
into the Cash Settlement ERISA Subaccount by wire transfer of immediately availabl e
funds, the Federal Policy Closing Balance and the Pender ERISA Closing Balance, plu s
interest calculated on each such balance, which interest is to be calculated (i) at th e
Interest Rate for the period starting on the fifth (5th) business day after the Preliminar y
Approval Date until and including the Approval Date and (ii) at the market rate provided
by the ERISA Insurance Escrow Account for the period starting the day following the
18
Approval Date until the date of the wire transfer of such funds pursuant to this Section
4.f(3) .
(4) If there are any remaining monies in any ERISA
Subaccount after the payments required by Section 4_f(3) above have been made and afte r
all applicable fees and expenses incurred in connection with the administration of th e
ERISA Insurance Escrow Account have been paid, such monies shall be returned to th e
ERISA Insurer Party on whose behalf the ERISA Subaccount had been established an d
maintained pursuant to Section 3 .a above.
g. Fees and Expenses
(1) The ERISA Escrow Agent shall be paid fees in the
amounts provided in Exhibit A. The ERISA Escrow Agent shall also be reimbursed fo r
reasonable expenses incurred in connection with this ERISA Escrow Agreement,
including with respect to the payment of any taxes due on any monies in the ERIS A
Account.
(2) Subject to Section 4 .g.(5) below, invoices for fees
and expenses shall be submitted by the ERISA Escrow Agent to the Remaining ERIS A
Insurer Parties and ERISA 401(k) Lead Counsel on a timely basis, and in no event later
than the month following the month in which the fees and expenses were incurred .
(3) Upon their receipt of an invoice for fees an d
expenses pursuant to Section 4.g(2) above, each of the Remaining ERISA Insurer Partie s
and ERISA 401(k) Lead Counsel shall, within ten (10) days from the date of the invoice,
advise the ERISA Escrow Agent whether they approve all or a portion of the fees and
19
expenses ; provided further that if Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel fail to disapprove all or a portion an invoice within fourteen (14) busines s
days after having been provided with same, such invoice shall be deemed approved in it s
entirety .
(4) Upon being notified of approval of an invoice for
fees and expenses both by all of the Remaining ERISA Insurer Parties and by ERISA
401(k) Lead Counsel, the ERISA Escrow Agent is authorized to pay to itself such fees
and expenses (or the approved portion of such fees and expenses) out of the appropriat e
ERISA Subaccount pursuant to the terms of Section 4 .a(l) above.
(5) Upon being notified of disapproval of an invoice (o r
any portion of an invoice) for fees and expenses either by any of the Remaining ERISA
Insurer Parties or by ERISA 401(k) Lead Counsel, the ERISA Escrow Agent (i) is
authorized to pay to itself any portion (if any) of the fees and expenses that the all of the
Remaining ERISA Insurer Parties and ERISA 402(k) Lead Counsel have approved and
(ii) may, in its discretion, submit any dispute with respect to the disapproved fees and
expenses to the Court pursuant to Section S.a below ; provided however, notwithstanding
Section 4.f, with respect to any dispute in connection with disapproved fees and expense s
relating to the final invoice submitted pursuant to Section 4 .g(6), the parties agree tha t
such dispute must be resolved before the ERISA Escrow Agent makes the payment into
the Cash Settlement Account pursuant to Section 41.
(6) Within twenty (20) business days following the
Final Settlement Date, the ERISA Escrow Agent shall submit its final invoice for fee s
20
and expenses to the Remaining ERISA Insurer Party and to ERISA 401(Ik) Lead Counsel .
Such final invoice shall include all accrued fees and expenses and all anticipated fees an d
expenses until the termination of this ERISA Escrow Agreement, including any fees an d
expenses expected to be incurred with respect to the payments to be made pursuant t o
Section 41.
h. Termination of Settlement Agreement
(1) If the Settlement Agreement is terminated pursuan t
to the terms of the Settlement Agreement, the Remaining ERISA Insurer Parties shall
promptly notify the ERISA Escrow Agent of such termination, which notification shall
include a signed certification from Settling Defendants' Lead Counsel that the Settlement
Agreement has been terminated, which certification shall not be unreasonably withheld ;
provided that if the Remaining ERISA Insurer Parties give notice of termination o f
settlement, but a signed certification from the Settling Defendants' Lead Counsel is no t
provided, then no further monies sha ll be paid and the ERISA Escrow Agent shall take al l
appropriate steps to hold the monies safe pursuant to Section 5 .c below while the dispute
as to this issue is resolved pursuant to the Dispute Procedure .
(2) Within five (5) business days following receipt of
notification of the termination of the Settlement Agreement pursuant to Section 41(l )
above, the ERISA Escrow Agent shall submit its final invoice to the Remaining ERIS A
Insurer Parties for fees and expenses . Such final invoice shall include all accrued fee s
and expenses and all anticipated fees and expenses expected to be incurred with respec t
to the payments to be made pursuant to this Section 4_h_ As to such final invoice, each o f
21
the Remaining ERISA Insurer Parties shall, within ten (10) days from the date of th e
invoice, advise the ERISA Escrow Agent whether it approves all or a portion of the fee s
and expenses .
(3) To the extent that, following termination of the
Settlement Agreement, the ERISA Escrow Agent receives, pursuant to Sectio n
I.E.l .yyyyy of the Settlement Agreement , any reimbursement with respect to the ERIS A
Initial Payment , the ERISA Escrow Agent shall deposit (or cause to be deposited) suc h
reimbursement in that ERISA Subaccount from which any payments required by thi s
ERISA Escrow Agreement are then currently being paid pursuant to Section 4 .a(1 )
above; provided that if such deposit of the reimbursement would cause such ERIS A
Subaccount to have insurance proceeds in excess of the amount deposited into the
account at its inception, the ERISA Escrow Agent shall deposit (or cause to be deposited)
that portion of such reimbursement that would be in excess of such insurance proceed s
into the ERISA Subaccount from which payments had been made prior to the time tha t
payments began to be made from the ERISA Subaccount then currently makin g
payments .
(4) Within twenty (20) business days following receip t
of notification of the termination of the Settlement Agreement pursuant to Section 4.h(2)
above, the ERISA Escrow Agent shall, subject to Section 4.h(5) below, pay to the
Remaining ERISA Insurer Parties, after subtracting (i) any approved outstanding fees an d
expenses incurred pursuant to Section 4 .g above, (ii) any disputed disapproved fees or
expenses with respect to which the ERISA Escrow Agent has submitted such dispute t o
22
the Court pursuant to Section 5 .a below and (iii) any payment required by Section
LE.i.yyyyy of the Settlement Agreement, the following amounts :
(a) to Federal, all monies (if any) remaining in
the Federal Subaccount; and
(b) to Pender, all monies (if any) remaining in
the Pender ERISA Subaccount .
(c) With respect to any disputed disapproved
fees and expenses subtracted from the ERISA Insurance Escrow Account pursuant to
Section 4 .h(4)(ii) above, the ERISA Escrow Agent shall continue to hold the amount of
such disapproved fees and expenses in trust until the dispute regarding such fees and
expenses is resolved pursuant to Section 5 below. Upon resolution of the dispute, the
ERISA Escrow Agent shall promptly give effect to the resolution reached regarding suc h
fees and expenses .
(5) The Remaining ERISA Insurer Parties may, in their
discretion, provide the ERISA Escrow Agent with instructions for distributing the
amounts set out in Section 4 .h.(4) above in a manner different from that set out in Sectio n
4.h(4) . If the Remaining ERISA Insurer Parties intend to provide such instructions, they
must notify the ERISA Escrow Agent of their intention to do so within five (5) busines s
days following the ERISA Escrow Agent's receipt of notification of the termination of
the Settlement Agreement. If the ERISA Escrow Agent receives such instructions from
the Remaining ERISA Insurer Parties, the ERISA Escrow Agent shall continue to hold all
ERISA Escrow Funds that would otherwise have been distributed pursuant to Sectio n
23
4.h.(4) in trust until such time as the ERISA Escrow Agent receives written instructions
from the Remaining ERISA Insurer Parties . Upon receipt of such instructions, which
instructions shall be endorsed by all Remaining ERISA Insurer Parties, the ERISA
Escrow Agent shall promptly pay out the proceeds described in Section 41(4) above
pursuant to the instructions received from the Remaining ERISA Insurer Parties pursuan t
to this Section 4.h(4) .
5. Settlement of Disputes
a . If a dispute regarding a payment (or a failure to make a
payment) from an ERISA Subaccount pursuant to Section 4 arises, the ERISA Escrow
Agent shall immediately inform the following of the dispute : (i) the insurer from whose
ERISA Subaccount the relevant payment has been made (or would be made) under
Section 4.a(I) above, (ii) Securities Lead Counsel, (iii) ERISA 401(k) Lead Counsel,
(iv) Settling Defendants' Lead Counsel and (v) (if the dispute involves a payment under
Sections 4 .b, 4 .c or 4.d above) the Insured Releasee (or his or her counsel) who submitted
the invoice for payment ; provided that any participation by Pender in the Dispute
Procedure with respect to any dispute arising under this Securities Insurers' Escrow
Agreement shall be subject to the Mediation Order and shall not override or supersed e
Section ME of the Settlement Agreement .
(1) If the dispute does not involve fees and expenses t o
be paid to the ERISA Escrow Agent and if the notified individuals and entities are able to
resolve the dispute among themselves, they shall so inform the ERISA Escrow Agent ,
24
and the insurer involved in the dispute shall instruct the ERISA Escrow Agent to effec t
the resolution .
(2) If the notified individuals and entities are unable to
resolve the dispute among themselves, or if the dispute involves the disapproval of fee s
and expenses to be paid to the ERISA Escrow Agent, the dispute shall be resolved
pursuant to the Dispute Procedur e
(3) Prior to the resolution of any dispute described in
Section 5 .a above, the ERISA Escrow Agent is authorized and directed to retain in the
appropriate ERISA Subaccount, without liability to anyone, that portion of the ERISA
Escrow Funds that are the subject of the dispute .
(4) The ERISA Escrow Agent has no duty to institute
or defend any proceeding described in Section 5 .a, unless requested to do so by any party
and then only on receiving full indemnity, in character reasonably satisfactory to th e
ERISA Escrow Agent, against any claims, liabilities and expenses relating to such
proceedings .
b . The ERISA Insurers Parties and ERISA 401(k) Lead
Counsel shall promptly notify each other, Securities Lead Counsel and Settling
Defendants' Lead Counsel of any claim by one or more of them that the ERISA Escro w
Agent has breached any term or condition of this ERISA Escrow Agreement other than
with respect to a payment under Section 4 . Such claim shall be resolved pursuant to the
Dispute Procedure.
25
C, If the ERISA Escrow Agent is uncertain as to its duties or
rights under this ERISA Escrow Agreement, or receives instructions , claims or demands
from a party that, in its opinion, conflict with the terms of this ERISA Escro w
Agreement, it may refrain from taking action in connection with the ERISA Escrow
Funds or the funds in the ERISA Insurance Escrow Account with respect to which such
uncertainty or conflict exists, until it is able to obtain a resolution of the issue pursuant to
the Dispute Procedure. During the period in which the issue remains unresolved, the
ERISA Escrow Agent's sole obligation with respect to the ERISA Escrow Funds that are
the subject of the dispute shall be to keep safely such ERISA Escrow Funds and related
books and records it holds under this ERISA Escrow Agreement ; provided that with
respect to all other ERISA Escrow Funds as to which there is no dispute, the ERISA
Escrow Agent shall be bound by the terms and conditions of this ERISA Escrow
Agreement, including the payment terms and conditions set out in Section 4 above .
d. EACH OF THE PARTIES IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OU T
OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR IT S
BREACH, TERMINATION OR VALIDITY . EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT:
(1) NO REPRESENTATIVE, AGENT O R
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY O R
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT O F
LITIGATION SEEK TO ENFORCE THIS WAIVER ;
26
(2) EACH SUCH PARTY UNDERSTAND AND HA S
CONSIDERED THE IMPLICATIONS OF THIS WAIVER ;
(3) EACH SUCH PARTY MAKES THIS WAIVE R
VOLUNTARILY; AND
(4) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUA L
WAIVERS AND CERTIFICATION IN THIS SECTION .
e. The payments made by Pender pursuant to the terms of this
ERISA Escrow Agreement and the Settlement Agreement will be made pursuant to a
settlement resulting from the mediation contemplated by the Mediation Order. These
payments shall vest this Court or any other court with subject matter jurisdiction onl y
over the payments made or caused to be made by Fender to the extent necessary t o
implement and give effect to this ERISA Escrow Agreement and the Settlement
Agreement and shall not constitute a basis for nor give rise to personal jurisdiction over
Pender.
6. Termination ofERISA Escrow Agreemen t
a. This ERISA Escrow Agreement (i) may be terminated b y
ERISA 401(k) Lead Counsel if the Preliminary Approval Date does not occur within on e
(1) year after the date of this ERISA Insurance Escrow Account, (ii) shall terminate in the
event that the Final Settlement Date has not occurred before January 1, 2008, unless the
parties agree to extend the date referenced in this Section 6 .a(ii) and (iii) shall terminat e
27
on the distribution of all of the ERISA Escrow Funds by the ERISA Escrow Agen t
pursuant to this ERISA Escrow Agreement .
7. Provisions Regarding the ERISA Escrow Agen t
a. The ERISA Escrow Agent has no duties or responsibilitie s
except those expressly provided in this Agreement . The ERISA Escrow Agent has no
liability under this ERISA Escrow Agreement except for its own bad faith, gross
negligence, willful misconduct or breach of this ERISA Escrow Agreement . It may rely
on any notice, instruction, certificate, statement, request, consent, confirmation,
agreement or other instrument which it reasonably believes to be genuine and to hav e
been signed or presented by a proper person or persons .
b . The ERISA Escrow Agent has no duties with respect to an y
agreement or agreements with respect to the ERISA Escrow Funds other than as provided
in this ERISA Escrow Agreement. The ERSIA Escrow Agent has no interest in the
ERISA Escrow Funds except as provided in this ERISA Escrow Agreement . This
Section 7 .b shall survive notwithstanding the termination of this ERISA Escrow
Agreement or the ERISA Escrow Agent's resignation or removal .
c . The ERISA Escrow Agent shall keep proper books of
record and account, and make full and correct entries of the receipts and disbursements in
the ERISA Account and ERISA Subaccounts .
d. In addition to the accountings that the ERISA Escrow
Agent shall provide pursuant to Sections 4.a(2) and 4 .a(4), the ERISA Escrow Agent
shall provide to one or more of the Remaining ERISA Insurer Parties and/or ERIS A
28
401(k) Lead Counsel, on written request and without additional cost, a statement of
transaction details on completion of any transaction involving the ERISA Insuranc e
Escrow Account
e. The ERISA Escrow Agent may resign as escrow agent b y
giving sixty (60) days notice by registered or certified mail to the Remaining ERIS A
Insurer Parties and ERISA 401(k) Lead Counsel, which notice the Remaining ERIS A
Part ies and ERISA 401(k) Lead Counsel shall provide to Securities Lead Counsel an d
Settling Defendants' Lead Counsel . Subject to Section 7 .g below, such resignation shal l
take effect at the end of such sixty (60) days or on the ERISA Escrow Agent's earlier
receipt of an instrument of acceptable executed by a successor ERISA escrow agent .
f. The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel may jointly remove the ERISA Escrow Agent by a notice signed by each
Remaining ERISA Insurer Party and ERISA 401(k) Lead Counsel and delivered by
registered or certified mail to the ERISA Escrow Agent . Such removal shall be effective
on the date set forth in such notice .
g. Notwithstanding anything in Sections 7 .e and 7.f, the
resignation or removal of the ERISA Escrow Agent shall not be effective unless and unti l
the Remaining ERISA Parties and ERISA 401(k) Lead Counsel jointly appoint a
successor ERISA escrow agent- If no instrument of acceptance signed by a successo r
ERISA escrow agent has been delivered to the ERISA Escrow Agent within sixty (60)
days after it delivers its notice of resignation or by the effective date of its removal, the
resigning or removed ERISA Escrow Agent may, at the Remaining ERISA Insurer
29
Parties' and ERISA 401(k) Lead Counsel's expense (which expense shall be paid out of
the ERISA Escrow Funds, petition the Court for appointment of a successor ERIS A
escrow agent . The ERISA Escrow Agent's resignation or removal shall not discharg e
any liability or obligations of the ERISA Escrow Agent arising before the effective date
of its resignation or removal .
h_ The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel shall jointly appoint a successor ERISA escrow agent to fill any vacanc y
resulting from (i) the ERISA Escrow Agent being dissolved or otherwise becomin g
incapable of acting, (ii) the ERISA Escrow Agent being taken over by a government
official, agency, department or board or (iii) the ERISA Escrow Agent's position
becoming vacant for any other reason .
i . The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel shall cause any successor ERISA escrow agent appointed pursuant to thi s
ERISA Escrow Agreement to execute, acknowledge and deliver to the ERISA Escro w
Agent, and to the ERISA Insurer Parties, Securities Lead Counsel , ERISA 401(k) Lea d
Counsel and Settling Defendants' Lead Counsel, an instrument in writing accepting it s
appointment, at which point :
(1) The ERISA Escrow Agent shall deliver to it s
successor, as directed in writing by the Remaining ERISA Insurer Parties and ERIS A
401(k) Lead Counsel, all property and moneys it holds under this ERISA Escro w
Agreement, and the books of records and account (including the accounting described i n
Sections 4.a(2) and 4.a(4) above), and any other information, required by the successo r
30
ERISA escrow agent to perform its obligations under this escrow agreement among the
Remaining ERISA Insurer Parties, ERISA 401(k) Lead Counsel and such successor
ERISA escrow agent .
j. Pursuant to Sections IX.A.I .c,1X.A.2, IX.A.3, IX.B .I .c ,
IX.B.2 and IX.B.3 of the Settlement Agreement , Securities Lead Counsel , Securities
Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA Plaintiffs, Settling Defendants ,
Settling Defendants Counsel and Securities Class Members shall release the ERIS A
Escrow Agent with respect to all claims, damages and liabilities for anything done o r
omitted by the ERISA Escrow Agent in performing its duties under this ERISA Escro w
Agreement, except such claims that are based upon the ERISA Escrow Agent's bad faith ,
gross negligence, willful misconduct or breach of this ERISA Escrow Agreement .
k. The ERISA Escrow Agent shall not be liable for special ,
indirect or consequential loss or damage (including lost profits), even if the ERISA
Escrow Agent has been advised of the likelihood of such loss or damage and regardles s
of the form of action .
1 . The ERISA Escrow Agent is acting under this ERIS A
Escrow Agreement as a stakeholder only and is an independent contractor with respect to
each party . No provision of this ERISA Escrow Agreement is intended to create any
principal, joint venture, partnership or debtorlcreditor relationship between or among the
ERISA Escrow Agent and any of the parties . The parties hereto, for themselves and
anyone claiming under, by or through them with respect to the ERISA Escrow Account ,
31
release the Escrow Agent from any claim of self-dealing or conflict of interest which
could be asserted to the extent any settling party is an affiliate of the Escrow Agent .
8. General Matters
a. This ERISA Escrow Agreement shall be governed by and
interpreted according to the laws of the State of New York, excluding its conflict of laws
provisions . All disputes arising under this ERISA Escrow Agreement shall be resolved
through the Dispute Procedure .
b. This ERISA Escrow Agreement is binding on and shall
inure to the benefit of the parties' heirs, executors, administrators, legal representatives,
successors and permitted assigns .
C . This ERISA Escrow Agreement may be executed in one o r
more counterparts which, taken together, constitute one and the same instrument .
Execution by facsimile shall be fully and legally binding on a party .
d_ No amendment or discharge of this ERISA Escro w
Agreement, or waiver under it, shall be valid or binding unless set forth in writing and
duly signed by the party against whom enforcement of the amendment, discharge or
waiver is sought and by the ERISA Escrow Agent . Any such waiver shall waive only the
specific matter described in the writing and shall not impair the rights of the party
granting the waiver in any other respect or at any other time . Neither the waiver by a
party of a breach of a provision of this ERISA Escrow Agreement, nor the failure by a
party, on one or more occasions, to enforce a provision of this ERISA Escrow
Agreement, or to exercise a right or privilege under this ERISA Escrow Agreement, shall
32
constitute a waiver of any other breach of a similar nature, or a waiver of any of such
provisions, rights or privileges under this ERISA Escrow Agreement .
e. The invalidity or unenforceability of any provision of thi s
ERISA Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this ERISA Escrow Agreement in that jurisdiction or the
validity or enforceability of this ERISA Escrow Agreement (including that provision) in
any other jurisdiction . If any restriction or provision of this ERISA Escrow Agreement i s
held- unreasonable, unlawful or unenforceable in any respect, such restriction or provisio n
shall be interpreted, revised or applied in a manner that makes it lawful and enforceable
to the fullest extent possible under law .
f. Notices, requests, demands and other communications
under this ERISA Escrow Agreement shall be in writing and shall be deemed to hav e
been given (unless otherwise specifically provided for in this ERISA Escrow Agreement)
if delivered by hand, delivered by a nationally recognized overnight courier for next-da y
delivery, mailed (registered or certified mail, postage prepaid) or telecopied (whic h
telecopy is confirmed by a transmission receipt) :
If to Federal, then to
Jonathan Constine, Esq .Hogan & Hanson L.L.P .555 13th Street, N.W.Washington, D .C. 20004Telephone: (212) 637-5870Facsimile: (212) 637-5910
33
If to Pender , then to
Francis Kean, Esq.Barlow Lyde & GilbertBeaufort House15 St . Botolph StreetLondon, EC3A 7NJTelephone: 011-44-20-7643-8586Facsimile : 011-44-20-7071-911 0
If to the ERISA Escrow Agent, then to
Wachovia Bank, N .A.Attn: Howard Parker123 S. Broad StreetPA 4944Philadelphia, PA 19109Telephone (215) 670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then to
The Honorable Michael DolingerUnited States Magistrate Judge
Daniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile: (212) 805-7928
34
If to Securities Lead Counsel, then to :
Jay W_ Eisenhofer, Esq .Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A.1201 North Market StreetSuite 2100Wilmington, Delaware 19801Telephone : (302) 622-7000
Facsimile: (302) 622-7100
If to ERISA 401(k) Lead Counsel, then to :
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq.Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone : (206) 623-1900Facsimile: (206) 623-3384
Thomas J. Hart, Esq .Marc A. Tenebaum, Esq .
Slevin & Hart, P .C .1625 Massachusetts Avenue, N .W .
Suite 450
Washington, D.C. 20036Telephone : (202) 797-8700Facsimile: (202) 234-823 1
If to Settling Defendants, then to :
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N .W.Suite 1100EWashington, D.C. 20004Telephone : (202) 383-8000Facsimile: (202) 383-811 8
35
If to an Insured Releasee (or his or her counsel), then to the address identified in th e
invoice submitted by or on behalf of the Insured Releasee . Notices, requests, demand s
and communications shall be deemed to have been given (i) on the date on which s o
hand-delivered (or, if not delivered before 5 :00 p .m. Eastern Time, on the next busines s
day), (it) on the next business day if delivered by a nationally recognized overnigh t
courier, ( iii) on the third business day after the date on which so mailed or (iv) on the date
on which telecopied and confirmed (or, if this does not occur before 5 :00 p.m. Eastern
Time on a business day, on the next business day) .
g. The ERISA Escrow Agent represents and warrants that
(i) this ERISA Escrow Agreement has been duly authorized, executed and delivered o n
its behalf and constitutes its legal, valid and binding obligation and (ii) its execution ,
delivery and performance of this ERISA Escrow Agreement does not and will not violat e
any statute, law, rule or regulation .
h . ERISA 401(k) Lead Counsel represents and warrants that
(i) they are authorized to execute and deliver this ERISA Escrow Agreement on behalf o f
ERISA Plaintiffs and, as authorized by the Court's December 13, 2002 order, on behalf
of ERISA Class Members and (ii) its execution , delivery and performance of this ERISA
Escrow Agreement does not and will not violate any statute, law, rule or regulation .
i . Jonathan Constine represents that (i) he is authorized t o
execute and deliver this ERISA Escrow Agreement on behalf of Federal an d
(ii) Federal's execution, delivery and performance of this ERISA Escrow Agreemen t
does not and will not violate any statute, law, rule or regulation .
36
j . Francis Kean represents that (i) he is authorized to execute
and deliver this ERISA Escrow Agreement on behalf of Pender and (ii) Pender' s
execution, delivery and performance of this ERISA Agreement does not and will no t
violate any statute, law, rule or regulation .
k. Each party shall take (or cause to be taken) such further
actions to execute, deliver and file (or cause to be executed, delivered or filed) suc h
further documents and instruments, and to obtain such consents, as may be necessary or
reasonable requested to effectuate fully the purposes, terms and conditions of this ERISA
Escrow Agreement .
1 . Except as provided in this ERISA Escrow Agreement, no
parties shall assign, encumber or otherwise transfer any of its rights and obligations under
this ERISA Escrow Agreement to any person without the consent of the other parties .
Any such purported assignment, encumbrance or other transfer shall be void and
unenforceable.
M. The ERISA Escrow Agent shall keep, and shall cause its
agents to keep, confidential the information it receives under this ERISA Escro w
Agreement, except for:
(1) information that is or becomes publicly known
other than as a result of a breach of this Section 8 .m;
(2) information obtained by the ERISA Escrow Agent
from sources other than an ERISA Insurer Party, Securities Lead Counsel, ERISA 401(k)
37
Lead Counsel, Settling Defendants' Counsel or an Insured Releasee (or his or he r
counsel) and not subject to a confidentiality obligation ;
(3) information requested or required to be disclose d
(i) by a statute, law, rule or regulation, (ii) to any government agency or regulatory bod y
having or claiming authority to regulate or oversee the ERISA Escrow Agent's business ,
(iii) under any subpoena, civil investigative demand or similar demand or request of a
court, regulatory authority, arbitrator or arbitration to which the ERISA Escrow Agent o r
any affiliate, or an officer, director, employer or shareholder of the ERISA Escrow Agen t
or such affiliate, is a party, or (iv) to any affiliate, independent or internal auditor, agent ,
employee or attorney of the ERISA Escrow Agent having a need to know the
information , provided that the ERISA Escrow Agent advises the recipient of the
confidential nature of the information being disclosed ; or
(4) any other disclosure authorized by the perso n
submitting such information .
n_ All time periods set forth herein shall be computed i n
calendar days unless otherwise expressly provided . In computing any period of time
prescribed or allowed by this ERISA Escrow Agreement or by order of court, the day o f
the act, event, or default from which the designated period of time begins to run shall not
be included. The last day of the period so computed shall be included, unless it is a
Saturday, a Sunday or a legal holiday, or, when the act to be done is the filing of a paper
in Court, a day on which weather or other conditions have made the office of the Clerk of
38
the Cou rt inaccessible , in which event the period shall ran until the end of the next day
that is not one of the aforementioned days .
o . All Insured Releasees are intended third -party bene ficiaries
wi th respect to Sections 4.b, 4 .c and 4 . d above and shall be en titled to enforce the terms
of this ERISA Escrow Agreement with respect to such provisions .
Executed this 19th day of March 2004.
FEDERAL INSURANCE COMP
By4effJ- r.4 jA . C av~s
Title: Q vt-~S , Grp vl n . 1
FENDER INSURANCE LIMfIED
By.Name :Title:
WACHOVIA BANK, NATIONALASSOCIA'I'ONas Escrow Agen t
By:Howard ParkerVice President
39
19-MAR-2004 21 :42 FROM BLG TO 970719244
the Court inaccessible , in which dvent the period shall run until the end of the next day
that is not one of the aforementioned days .
a . AIliInsurcd Releasees are intended third party beneficiaries
with respect to Sections 4 .b, 4.c and 4.d above and shall be entitled to enforce the terms
of this ERIS A Escrow Agm--ment with respect to such provisions .
Executed this 19t day of Mach 2004.
FEDERAL INSURANCE COMPANY
By,
Name:Title :
FENDER INSURANCE 12MM
Name: lac . .T • W ~`C.~ c r;
Title :
WACHOVIA BANK, NATIONALASSOCIATIO Nas Escrow Agen t
By :Howard ParkerVice President
39
P.01
3 '
1 • ,
e{ . s,
1
MI-ER ROHRBACK, LLP and SLEVIN& HART, P.C .as ERISA 401 (k) Lead Counsel
By:N Lyr✓~v L. io
it e: J<e [tom ~witi,r~bv- c K.
By. '42-tC, IA.N
Title: kj:-. .4- 4 rf , P
40
3
Exhibit G
WINNICK SECURITIES ESCROW AGREEMEN T
This WIN-NICK SECURITIES ESCROW AGREEMENT ( the "Escrow
Agreement" or the "Agreement") is entered into as of March , 2004 by and among
Gary Winnick, on behalf of himself and his affiliates ("Winnick") ; Grant & Eisenhofer
P.A. as Securities Lead Counsel in the Securities Action ("G&E") and Wachovia Bank ,
National Association, as escrow agent ("Escrow Agent") . (Winnick, G&E and Escro w
Agent and their respective successors as defined below are sometimes hereinafte r
referred to as the "Party" or "Parties .")
RECITALS
WHEREAS, over 50 putative class actions alleging securities law violations have
been filed against certain of Global Crossing Ltd .'s current and former officers, director s
and employees, including Winnick, and five putative class actions alleging securities la w
violations have been filed against certain of Asia Global Crossing Ltd .'s current an d
former officers, directors and employees , including Winnick; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E. Lynch of the United States District Court for th e
Southern . District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated these actions into the Securities Action with
G&E approved as Securities Lead Counsel ; and
WHEREAS, Securities Lead Plaintiffs , Securities Plaintiffs and Securities
Settling Defendants have agreed to a settlement of the Securities Action, subject to th e
completion of additional factual investigation and analysis by Securities Lead Counsel to
evaluate further the fairness, reasonableness and adequacy of the proposed settlement ;
and
WHEREAS, the terms and conditions of the settlement are contained in a March
, 2004 Stipulation of Settlement (and accompanying exhibits), a copy of which ha s
been provided to the Escrow Agent (the "Settlement Agreement") (Capitalized term s
contained herein which are not defined herein have the same meaning as ascribed to the m
in the Settlement Agreement) ; and
WHEREAS, Winnick has agreed to pay $30 million ("Winn ick Securitie s
Amount") together with interest thereon at the rates set forth in this Agreement as part o f
the consideration for the settlement of the Securities Action ; and
WHEREAS, pursuant to the terms of the Se tt lement Agreement, Winnick i s
required to deposit the Winnick Securities Amount into an escrow account within five (5)
business days preceding the hearing at which the Court will make a final decision
pursuant to Federal Rule of Civil Procedure 23 as to the fairness, reasonableness and
adequacy of the Settlement Agreement (the "Fairness Hearing") ;
NOW, THEREFORE, Winnick, G&E and the Escrow Agent agree as follows :
AGREEMENT
The Escrow Agent
(a) Appointment. Escrow Agent is hereby appointed to act as escrow agent in
accordance with the terms hereof, and Escrow Agent hereby accepts such appointment .
Escrow Agent shall have all the rights, powers, duties and obligations provided herein .
The sole duties of the Escrow Agent shall be to comply with this Escrow Agreement and
any instructions given pursuant hereto .
(b) Qualifications . Escrow Agent shall at all times be a bank, savings and
loan association or trust company in good standing, organized and doing business under
the laws of the United States or a State of the United States, having combined capital an d
surplus of not less than one hundred million dollars ($100,000,000) and shall be
authorized under the laws governing its organization to exercise corporate trust powers
and shall be authorized under such laws to enter into and perform this Agreement . If
Escrow Agent at any time ceases to have the foregoing qualifications, Escrow Agent will
give notice of resignation to Winnick and G&E, and a qualified successor escrow agent
will be appointed in accordance with Section 7 herein .
(c) Termination. This Agreement and the Escrow Account established
pursuant to Section 2 shall terminate on the distribution of all of the Escrowed Funds (as
defined in this Agreement) by the Escrow Agent pursuant to this Escrow Agreement .
2 . Establishment and Administration of the Escrow Account
(a) Within five (5) business days preceding the Fairness Hearing ("Escro w
Deposit Date"), Winnick shall transfer to the Escrow Agent the Winnick Securities
Amount (in the form of cash and/or securities) for deposit into an account held by Escrow
Agent (the "Escrow Account") . Thereafter the Escrow Agent shall invest and reinvest
the Escrowed Funds at the direction of the following Party or Parties during the following
time periods :
(i) from the Escrow Deposit Date until the Approval Date (the "Pre-
Approval Period"), the Escrow Agent shall follow the written directions of
Winnick respecting where the Escrowed Funds are to be invested
consistent with the terms of the Settlement Agreement . Absent such
direction, Escrow Agent will invest the Escrowed Funds in a federal
government backed fund earning at least the Federal Funds Rate (as
published in the Wall Street Journal under the description of "Money
Rates") so long as such investment is consistent with the terms of the
Settlement Agreement. Within twenty days following the Approval Date ,
the Escrow Agent shall pay to Winnick investment proceeds earned on the
Winnick Securities Amount as of the Approval Date in excess of the
proceeds which would have been earned at the Federal Funds Rate (as
published in the Wall Street Journal under the description of "Money
Rates"), if any .
ii) from the Approval Date until payment into the Cash Settlement
Securities Subaccount which shall occur within 45 days following the
Final Settlement Date (the "Post-Approval Period"), the Escrow Agent
shall follow the written direction of G&E respecting where the Escrowed
Funds are to be invested consistent with the terms of the Settlement
Agreement. Absent such direction, Escrow Agent shall maintain the
Escrowed Funds as invested as of and on the Approval Date so long as
such investment is consistent with the terms of the Settlement Agreement .
The total Escrowed Funds to be paid into the Cash Settlement Securities
Subaccount within 45 days following the Final Settlement Date shall be referred to herein
as the "Final Securities Payment ." The term "Escrowed Funds" referred to in this
provision and elsewhere in this Agreement means the initial deposit of the Winnick
Securities Amount, and the interest earnings accruing thereon from the investment
thereof less the amount of payments made from the Escrow Account in accordance with
the terms of this Escrow Agreement.
(b) Interest and earnings on the Escrowed Funds in accordance with this Agreement
will be added to the Escrow Account and applied to the payment of Escrow Agent fees
and expenses in accordance with Section 3 . For federal and state income tax purposes,
the amount earned on, or with respect to any investment of amounts in the Escrow
Account will be reported as (i) income of Winnick during the Pre-Approval Period and
(ii) as income of the Securities Class during the Post-Approval Period . Escrow Agent is
directed to file all required reports and returns with the appropriate taxing authorities
reflecting that the income earned on the amounts held in the Escrow Account is the
income of the above-referenced Parties during the above-referenced Periods as referred to
in the preceding sentence . The Parties will provide Escrow Agent with such information
as may be necessary to enable Escrow Agent to make any tax filings in accordance with
this Agreement .
3 . Fees and Expenses
(a) The Escrow Agent shall be paid fees in the amounts provided in Exhibit
A. The Escrow Agent shall also be reimbursed for reasonable expenses incurred in
connection with this Escrow Agreement .
(b) Subject to Section 4(f) below, invoices for fees and expenses incurred b y
the Escrow Agent within the Pre-Approval Period shall be submitted by the Escrow
Agent to Winnick and G&E for approval, and invoices for fees and services incurred by
the Escrow Agent in the Post-Approval Period shall be submitted to G&E only for
approval. All such invoices shall be submitted on a timely basis and in no event later
than 30 days after the end of the month in which the fees and expenses were incurred .
(c) Upon receipt within the Pre-Approval Period of an invoice for fees and
expenses pursuant to Section 4(b) above, Winnick and G&E shall, within ten (10) days of
such receipt, advise the Escrow Agent whether they approve all or a portion of the fees
and expenses, and if Winnick and G&E, or either of them, fail to advise Escrow Agent
whether the invoices are approved or disapproved within fourteen (14) business days of
their having been submitted, they shall be deemed approved .
(d) Upon receipt of an invoice for fees and expenses incurred by the Escrow
Agent within the Post-Approval Period, G&E shall, within ten (10) days of such receipt,
advise the Escrow Agent whether he approves all or a portion of the fees and expenses
incurred , and if G&E shall fail to advise Escrow Agent whether the invoices ar e
approved or disapproved within fourteen (14) business days of their having been
submitted, they shall be deemed approved .
(e) Upon being notified of approval of an invoice for fees and expenses, o r
upon the passage of the fourteen day period described above without notice of approva l
or disapproval, the Escrow Agent shall deduct such fees and expenses (or the approve d
portion of such fees and expenses) from the Escrow Account pursuant to the terms o f
Section 4(a) above .
(f) Upon being notified of disapproval of an invoice (or any portion of an
invoice) for fees and expenses, the Escrow Agent may, at its discretion, submit th e
dispute to the Court pursuant to Section 6 below .
(g) Within twenty (20) days following the Final Settlement Date, the Escro w
Agent shall submit its final invoice for fees and expenses to G&E .
4 . Payments of Escrowed Funds
Within forty-five days following the Final Settlement Date, G&E shall instruct th e
Escrow Agent to pay, and the Escrow Agent shall pay into the Cash Settlement Securitie s
Subaccount, by wire transfer of immediately available funds, the Final Securitie s
Payment .
5 . Termination of Settlement Agreemen t
(a) If the Settlement Agreement is terminated pursuant to Section XIII of the
Settlement Agreement, Winnick and G&E shall promptly notify the Escrow Agent i n
writing of such termination. In the event that any dispute arises between Winnick an d
any other party to the Settlement Agreement (including G&E) concerning the terminatio n
of the Settlement Agreement and the return of the Escrowed Funds to Winnick base d
thereon pursuant to this Section, then such disputed issues(s) shall be promptly submitted
to the Court and resolved pursuant to the Dispute Procedure, as such term is defined in
the Settlement Agreement. (with copies of submissions under the Dispute Procedure to
go to Winnick, G&E and Settling Defendants' Lead Counsel) . During the period in
which such disputed issue(s) remain unresolved under the Dispute Procedure, the Escrow
Agent shall continue to follow the terms of this Escrow Agreement unless doing so would
impact the issue in dispute .
(b) Within five (5) business days of receiving notification of the termination
of the Settlement Agreement pursuant to Section 6(a) above, the Escrow Agent shall
promptly release and return to Winnick all Escrowed Funds, after subtracting any
outstanding fees and expenses incurred pursuant to Section 4 hereof .
6 . Se tt lement of Disputes
(a) If the Escrow Agent is uncertain as to its duties or rights under this Escrow
Agreement, or receives instructions, claims or demands from Winnick and G&E (during
the Pre-Approval Period) or G&E only (during the Post-Approval Period) that, in its
opinion, conflict with the terms of this Escrow Agreement, it may refrain from taking
action, until it is able to obtain a resolution of the issue . It shall obtain a resolution of
such issue by submitting the issue to the Court for resolution pursuant to the Dispute
Procedure (with copies of submissions under the Dispute Procedure to go to Winnick,
G&E and Settling Defendants' Lead Counsel) . During the period in which the issue
remains unresolved under the Dispute Procedure, the Escrow Agent shall continue to
follow the terms of this Agreement unless doing so would impact the issue(s) in dispute .
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF, RELATIN G
TO OR IN CONNECTION WITH THIS AGREEMENT, OR ITS BREACH,
TERMINATION OR VALIDITY . EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT :
(c) NO REPRESENTATIVE, AGENT OR ATTORNEY FOR ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION SEEK T O
ENFORCE THIS WAIVER ;
(d) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERE D
THE IMPLICATIONS OF THIS WAIVER;
(e) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY ; AND
(f) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THI S
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AN D
CERTIFICATION IN THIS SECTION .
7 . Provisions Regarding the-Escrow Agent
(a) The Escrow Agent has no duties or responsibilities except those expressl y
provided in this Escrow Agreement- The Escrow Agent has no liability under this
Escrow Agreement except for its own bad faith, gross negligence, or willful misconduct .
It may rely on any notice, instruction, certificate, statement, request, consent ,
confirmation, agreement or other instrument which it reasonably believes to be genuin e
and to have been signed or presented by a proper person or persons .
(b) The Escrow Agent has no duties with respect to any agreement or
agreements with respect to the Escrowed Funds other than as provided in this Escrow
Agreement . The Escrow Agent has no interest in the Escrowed Funds except as provided
in this Escrow Agreement . This Section 7(b) shall survive notwithstanding the
termination of this Escrow Agreement or the Escrow Agent's resignation or removal .
(c) The Escrow Agent shall keep proper books of record and account, and
make full and correct entries of the receipts and disbursements in the Escrow Account .
(d) The Escrow Agent may resign as escrow agent by giving sixty (60) days
notice by registered or certified mail to Winnick and G&E during the Pre-Approval
Period and to G&E only during the Post-Approval Period, which notice in each instance
shall also be provided to Securities Lead Counsel and Settling Defendants' Lead Counsel .
Subject to Section 7(g) below, such resignation shall take effect at the end of such sixty
(60) days or on the Escrow Agent's earlier receipt of an instrument of acceptable form
executed by a successor escrow agent .
(e) Winnick and G&E (during the Pre-Approval Period) or G&E alone
(during the Post-Approval Period) may remove the Escrow Agent by a signed notice
delivered by registered or certified mail to the Escrow Agent .
(f) Notwithstanding anything in Sections 7(e) and 7(f), the resignation o r
removal of the Escrow Agent shall not be effective unless and until Winnick and G&E
(during the Pre-Approval Period) or G&E alone (during the Post-Approval Period
appoints a successor escrow agent . In each instance, Winnick and G&E (during the Pre-
Approval Period) or G&E alone (during the Post-Approval Period) shall consult with,
and obtain the approval of, Settling Defendants' Lead Counsel prior to appointing a
successor escrow agent . If no instrument of acceptance signed by a successor escrow
agent has been delivered to the Escrow Agent within sixty (60) days after it delivers its
notice of resignation or it receives a notice of removal, the resigning or removed Escrow
Agent may petition the Court for appointment of a successor escrow agent . The Escrow
Agent's resignation or removal shall not discharge any liability or obligations of the
Escrow Agent arising before the effective date of its resignation or removal .
(g) Winnick and G&E (during the Pre-Approval Period) or G&E alone
(during the Post-Approval Period) shall (upon consultation with, and the approval of,
Settling Defendants' Lead Counsel) appoint a successor escrow agent to fill any vacancy
resulting from (i) the Escrow Agent being dissolved or otherwise becoming incapable of
acting, (ii) the bank or trust company acting as the Escrow Agent being taken over by a
government official, agency, department or board or (iii) the Escrow Agent's position
becoming vacant for any other reason .
(h) Every successor escrow agent appointed under this Escrow Agreement
shall execute, acknowledge and deliver to its predecessor, and also to Winnick and G&E
(during the Pre-Approval Period) or G&E alone (during the Post-Approval Period), an
instrument in writing accepting its appointment under this Escrow Agreement, at which
point :
(1) the successor escrow agent, without further act, shall become fully
vested with the rights, immunities and powers, and subject to the duties and obligation of
its predecessor Escrow Agent as if originally named in this Escrow Agreement ; and
(2) every predecessor escrow agent shall deliver to its successor, a s
directed in writing by Winnick and G&E (during the Pre-Approval Period), G&E alon e
(during the Post-Approval Period) or the successor escrow agent, all property, monies
and other assets it holds under this Escrow Agreement, and the books of records an d
account, and any other information, required properly to perform the escrow agent' s
obligations under this Escrow Agreement .
(i) Pursuant to Section - of the Settlement Agreement, Securities Lead
Counsel, Securities Lead Plaintiffs, Settling Defendants, Settling Defendants Counsel and
Securities Class Members (the "Settling Parties") release the Escrow Agent with respect
to all claims, damages and liabilities for anything done or omitted by the Escrow Agent i n
performing its duties under this Escrow Agreement, except such claims that are base d
upon the Escrow Agent's bad faith, gross negligence or willful misconduct .
{j) The Escrow Agent shall not be liable for special, indirect or consequential
loss or damage (including lost profits), even if the Escrow Agent has been advised of th e
likelihood of such loss or damage and regardless of the form of action .
(k) The Escrow Agent is acting under this Escrow Agreement as a stakeholde r
only and is an independent contractor with respect to Winnick and G&E . No provision of
this Escrow Agreement is intended to create any principal, joint venture, partnership o r
debtor/creditor relationship between or among the Escrow Agent, Win nick and/or G&E .
The Parties hereto, for themselves and anyone claiming under, by or through them with
respect to the Escrow Account, release the Escrow Agent from any claim of self dealing
or conflict of interest that could be filed to the extent any Settling Party is an affiliate o f
the Escrow Agent.
(1) The Escrow Agent represents and warrants that (i) this Escrow Agreemen t
has been duly authorized, executed and delivered on its behalf and constitutes its legal ,
valid and binding obligation and (ii) its execution, delivery and performance of this
Escrow Agreement does not violate any statute, law, rule or regulation applicable to it .
8 . Successors to Winnick
In the event of the death or disability of Winnick, or during any temporary
inability of Winnick to act hereunder, all rights of Winnick under this Agreement,
including without limitation the right to approve expenses for disbursement hereunder
and to direct the payment or distribution of funds from the Escrow Account, shall pass to
and be fully exercisable by Winnick's wife, Karen Winnick, and, in the event or for such
period that she shall for any such reason be unable to exercise such rights, by the then-
serving successor trustee of the GKW Trust .
9 . General Matters
(a) This Escrow Agreement shall be governed by and interpreted according t o
the laws of the State of New York, including its conflict of laws provisions .
(b) This Escrow Agreement is binding on and shall inure to the benefit of th e
Parties' heirs, executors, administrators, legal representatives, successors and permitte d
assigns .
(c) This Escrow Agreement may be executed in one or more counterparts
which, taken together, constitute one and the same instrument . Execution by facsimile
shall be fully and legally binding on a Party .
(d) No amendment or discharge of this Escrow Agreement, or waiver under it,
shall be valid or binding unless set forth in writing and duly signed by Winnick, G&E
and the Escrow Agent .
(e) The invalidity or unenforceability of any provision of this Escrow
Agreement in any jurisdiction shall not affect the validity or enforceability of the rest o f
this Escrow Agreement in that jurisdiction or the validity or enforceability of this Escrow
Agreement (including that provision) in any other jurisdiction . If any restriction or
provision of this Escrow Agreement is held unreasonable, unlawful or unenforceable in
any respect, such restriction or provision shall be interpreted, revised or applied in a
manner that makes it lawful and enforceable to the fullest extent possible under law .
(f) Notices, requests, demands and other communications under this Escro w
Agreement shall be in writing and shall be deemed to have been given (unless otherwise
specifically provided for in this Escrow Agreement) if delivered by hand, delivered by a
nationally recognized overnight courier for next-day delivery, mailed (registered or
certified mail, postage prepaid) or telecopied (which telecopy is confirmed by a
transmission receipt) :
If to Winnick, then to
Gary Winnickc/o Pacific Capital Group1999 Avenue of the Stars, 39th FloorLos Angeles, California 90067Telephone :Facsimile :
With copies to
Gerry Ginsberg, Esq .c/o Pacific Capital Group1999 Avenue of the Stars, 39`' FloorLos Angeles, California 90067Telephone :Facsimile :
If to the Escrow Agent, then to
Wachovia Bank, N.A.Attn: Howard Parker123 S. Broad StreetPA 4944Philadelphia, PA 19109Telephone (215) 670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then to
The Honorable Michael DolingerUnited States Magistrate JudgeDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile: (212) 805-7928
If to G&E, then to :
Jay W. Eisenhofer, Esq .Grant & Eisenhofer, P .A.1201 North Market StreetSuite 210 0Wilmington, Delaware 1 9801Telephone: (302) 622-7000Facsimile : (302) 622-7100
If to Settling Defendants Lead Counsel, then to :
Ralph C. Ferrara, Esq.Debevoise & Plimpton LLP555 13th Street, N .W .Suite 1100EWashington, D .C . 20004Telephone : (202) 383-8000Facsimile: (202) 383-811 8
Notices, requests, demands and communications shall be deemed to have been given (i)
on the date on which so hand-delivered (or, if not delivered before 5 p.m. ET, on the next
business day), (ii) on the next business day if delivered by a nationally recognize d
overnight courier, (iii) on the third business day after the date on which so mailed or (iv)
on the date on which telecopied and confirmed (or, if this does not occur before 5 p .m .
ET on a business day, on the next business day) .
(g) Each Party shall take (or cause to be taken) such further actions to execute ,
deliver and file (or cause to be executed, delivered or filed) such further documents an d
instruments, and to obtain such consents, as may be necessary or reasonably requested to
effectuate fully the purposes, terms and conditions of this Escrow Agreement .
(h) Except as provided in this Escrow Agreement, no Parties shall assign ,
encumber or otherwise transfer any of its rights and obligations under this Escro w
Agreement to any person without the consent of the other Parties . Any such purporte d
assignment, encumbrance or other transfer shall be void and unenforceable .
(i) The Escrow Agent shall, and shall cause its agents , to keep confidentia l
the information it receives under this Escrow Agreement, except for :
(1) information that is or becomes publicly known other than as a
result of a breach of this Section 9(i) ;
(2) information obtained by the Escrow Agent from sources other tha n
Winnick and not subject to a confidentiality obligation ; or
(3) information requested to be disclosed (i) by a statute, law, rule o r
regulation, (ii) to any government agency or regulatory body having or claiming authorit y
to regulate or oversee the Escrow Agent's business, (iii) under any subpoena, civi l
investigative demand or similar demand or request of a court, regulatory authority ,
arbitrator or arbitration to which the Escrow Agent or any affiliate, or an officer, director,
employer or shareholder of the Escrow Agent or such affiliate, is a party, or (iv) to any
affiliate, independent or internal auditor, agent, employee or attorney of the Escro w
Agent having a need to know the information, provided that the Escrow Agent advise s
the recipient of the confidential nature of the information being disclosed .
() All time periods set forth herein shall be computed in calendar days unles s
otherwise expressly provided. In computing any period of time prescribed or allowed b y
this Agreement or by order of court, the day of the act, event, or default from which the
designated period of time begins to run shall not be included. The last day of the period
so computed shall be included, unless it is a Saturday, a Sunday or a legal holiday, or,
when the act to be done is the filing of a paper in Court, a day on which weather or other
conditions have made the office of the Clerk of the Court inaccessible, in which event th e
period shall run until the end of the next day that is not one of the aforementioned days .
As used in this Section, "legal holiday" includes New Year's Day, the observance of
Birthday of Martin Luther King, Jr_, Presidents' Day, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day and any
other day appointed as a federal or New York state holiday .
Executed this day of March _, 2004 .
Jay Eisenhofer, Esq .as Securities Lead Counsel
Gary Winnick
Wachovia Bank, N.A .as Escrow Agent
By-Name-Title :
Exhibit H
SIMPSON THACHER ESCROW AGREEMEN T
This SIMPSON THACHER ESCROW AGREEMENT is entered into as of
March , 2004 by and among Simpson Thacher, Grant & Eisenhofer, P .A., a s
Securities Lead Counsel, and Wachovia Bank, National Association ("Wachovia Bank") ,
as escrow agent .
WHEREAS, over 50 putative class actions alleging securities law violations hav e
been filed against certain of Global Crossing Ltd .'s current and former officers, director s
and employees, and five putative class actions alleging securities law violations have
been filed against certain of Asia Global Crossing Ltd .'s current and former officers ,
directors and employees; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for the
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated these actions into the Securities Action; and
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd.'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have an interest in certai n
ERISA Plans; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E. Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated 15 of the putative class actions alleging
ERISA violations into the ERISA Consolidated Action, leaving two of the putative clas s
actions that also allege ERISA violations unconsolidated ; and
WHEREAS, pursuant to the terms and conditions of a March - 2004 Settlement
Agreement, Simpson Thacher will be released from the Released Claims pursuant to th e
terms and conditions of such Settlement Agreement ;
WHEREAS, pursuant to the terms and conditions of such Settlement Agreement,
Simpson Thacher is required to deposit the Simpson Thacher Amount into an escro w
account within twenty five (25) business days following the Court's preliminary approva l
of the Settlement Agreement .
NOW, THEREFORE , Simpson Thacher , Securities Lead Counsel and the
Simpson Thacher Escrow Agent agree as follows :
1 . Definitions and Interpretation s
a. As used in this Simpson Thacher Escrow Agreement,
capitalized terms either (i) have the same meaning as ascribed to them in the Settlement
Agreement or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday ,
Sunday or a "legal holiday ," as that term is defined in Section XIV.HH of the Settlemen t
Agreement-
b. A reference to a party means a party to this Agreement .
c . Unless stated otherwise, a reference to a Section means a
Section of this Agreement .
d. The plural shall include the singular and vice versa.
e. A reference to "including" shall be deemed to be followe d
by "without limitation . "
f. Section headings in this Simpson Thacher Escro w
Agreement are for convenience only and shall not be construed as part of this Simpso n
Thacher Escrow Agreement .
2. Appointment of Simpson Thacker Escrow Agent
a. Simpson Thacher and Securities Lead Counsel hereb y
appoint Wachovia Bank to act as the Simpson Thacher Escrow Agent and Wachovia
Bank hereby accepts this appointment and agrees to act as the Simpson Thacher Escro w
Agent pursuant to the terms and conditions set out in this Simpson Thacher Escro w
Agreement.
3 . Establishment of Simpson Thacher Escrow Accoun t
a. Within twenty-five (25) business days following th e
Preliminary Approval Date, Simpson Thacher shall pay to the Simpson Thacher Escro w
Agent, by wire transfer of immediately available funds, the Simpson Thacher Amount .
b_ The Simpson Thacher Escrow Agent, promptly after
receiving the cash described in Section 3 .a above, shall establish the Simpson Thache r
Escrow Account. The Simpson Thacher Escrow Agent shall promptly notify Securitie s
Lead Counsel and Simpson Thacher of the receipt of such cash and the establishment of
the Simpson Thacher Escrow Account .
c. The Simpson Thacher Escrow Agent is instructed an d
authorized to establish the Simpson Thacher Escrow Account as a cash deposit account
that pays interest at no less than the Interest Rate .
d. The Simpson Thacher Escrow Agent shall hold the contents
of the Simpson Thacher Escrow Account in trust in the Simpson Thacher Escrow
Account and shall not withdraw any contents from the Simpson Thacher Escrow Accoun t
or allow such contents to be withdrawn except as provided in this Simpson Thache r
Escrow Agreement. The contents of the Simpson Thacher Escrow Account shall be held
only for the purposes set forth, and subject to the terms and conditions in, this Simpso n
Thacher Escrow Agreement, and shall not be subject to any lien, attachment, trusteeshi p
or any other judicial process . Unless specifically provided in the Settlement Agreement
or in this Simpson Thacher Escrow Agreement, no third parties or their respectiv e
creditors (including third-party individuals or entities unrelated to Global Crossing Ltd . )
shall have any right to, or claim respecting, or interest in the contents of the Simpson
Thacher Escrow Account .
e. The Simpson Thacher Escrow Agent shall make or cause to
be made all of the payments described in this Simpson Thacher Escrow Agreement .
4. Payment of Simpson Thacher Amount Into Cash Settlemen t
Account
a. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Fina l
Settlement Date, Securities Lead Counsel shall inform the Simpson Thacher Escrow
Agent of the occurrence of that date, with copies of such notice provided to Simpson
Thacher and Davis Polk & Wardwell .
(2) Within forty-five (45) days following the Fina l
Settlement Date, Simpson Thacher shall instruct the Simpson Thacher Escrow Agent to
pay and such Escrow Agent shall pay into the Cash Settlement Securities Subaccount b y
wire transfer of immediately available funds, the Simpson Thacher Payment .
b. Fees and Expenses
(1) The Simpson Thacher Escrow Agent shall be paid
fees in the amounts provided in Exhibit A . The Simpson Thacher Escrow Agent shal l
also be reimbursed for reasonable expenses incurred in connection with this Simpson
Thacher Escrow Agreement, including with respect to the payment of any taxes due on
any monies in the Securities Account .
(2) Subject to Section 4 .b.(5) below, invoices for fee s
and expenses shall be submitted by the Simpson Thacher Escrow Agent to Simpso n
Thacher and Securities Lead Counsel on a timely basis, and in no event later than th e
month following the month in. which the fees and expenses were incurred .
(3) Upon their receipt of an invoice for fees and
expenses pursuant to Section 4 .b(2) above, Simpson Thacher and Securities Lead
Counsel shall, within ten (10) days from the date of the invoice, advise the Simpso n
Thacher Escrow Agent whether they approve all or a portion of the fees and expenses .
(4) Upon being notified of approval of an invoice fo r
fees and expenses both by Simpson Thacher and by Securities Lead Counsel, th e
Simpson Thacher Escrow Agent is authorized to pay to itself such fees and expenses (or
the approved portion of such fees and expenses) out of the Simpson Thacher Escrow
Account .
(5) Upon being notified of disapproval of an invoice (o r
any portion of an invoice) for fees and expenses either by Simpson Thacher or by
Securities Lead Counsel, the Simpson Thacher Escrow Agent (i) is authorized to pay to
itself any portion (if any) of the fees and expenses that Simpson Thacher and Securities
Lead Counsel have approved and (ii) may, in its discretion, submit any dispute with
respect to the disapproved fees and expenses to the Court pursuant to Section 5 .a below;
provided however, notwithstanding Section 4 .a, with respect to any dispute in connection
with disapproved fees and expenses relating to the final invoice submitted pursuant to
Section 4.b(6), the parties agree that such dispute must be resolved before the Simpson
Thacher Escrow Agent makes the payment into the Cash Settlement Account pursuant to
Section 4 .a .
(6) Within twenty (20) business days following the
Final Settlement Date, the Simpson Thacher Escrow Agent shall submit its final invoice
for fees and expenses to Simpson Thacher and to Securities Lead Counsel . Such final
invoice shall include all accrued fees and expenses and all anticipated fees and expenses
until the termination of this Simpson Thacher Escrow Agreement, including any fees and
expenses expected to be incurred with respect to the payments to be made pursuant to
Section 4 .a .
C. Termination of Settlement Agreement
(1) If Simpson Thacher terminates the Settlemen t
Agreement pursuant to the terms thereof, Simpson Thacher may send a signed and
certified notification of such termination to the Simpson Thacher Escrow Agent,
instructing the Simpson Thacher Escrow Agent to pay all contents of the Simpson
Thacher Escrow Account to Simpson Thacher pursuant to this Section 4 .c .
Notwithstanding anything to the contrary in the Settlement Agreement or in this Simpson
Thacher Escrow Agreement, or in any other agreement of any kind, in the event that
Simpson Thacher sends such a notification of termination to the Simpson Thacher
Escrow Agent, (i) the Simpson Thacher Escrow Agent shall hold the contents of the
Simpson Thacher Escrow Account in trust solely for Simpson Thacher and such contents
shall not be subject to any lien, attachment, trusteeship or any other judicial process ; and
(ii) no entity or person (other than Simpson Thacher), including any party to this Simpson
Thacher Escrow Agreement or to the Settlement Agreement or any other entity or person ,
or any creditor of any of the foregoing, shall have any right to, or claim respecting, or
interest in the contents of the Simpson Thacher Escrow Account, and such contents shall
be held in trust for Simpson Thacher provided, however, that the Simpson Thacher
Escrow Agent may be entitled to deduct certain of its fees and expenses from such
contents to the extent provided by this Simpson Thacher Escrow Agreement .
(2) Within three (3) business days following receipt of
notification of the termination of the Settlement Agreement pursuant to Section 4 .c(l)
above, the Simpson Thacher Escrow Agent shall submit its final invoice to Simpson
Thacher for fees and expenses . Such final invoice shall include all accrued fees and
expenses and all anticipated fees and expenses expected to be incurred with respect to the
payments to be made pursuant to this Section 4 .c. As to such final invoice, Simpson
Thacher shall, within ten (10) days from the date of the invoice, advise the Simpson
Thacher Escrow Agent whether it approves all or a portion of the fees and expenses .
(3) Within five (5) business days following receipt o f
notification of the termination of the Settlement Agreement pursuant to Section 4 .c(1)
above, the Simpson Thacher Escrow Agent shall, subject to Section 4 .c(4) below, pay to
Simpson Thacher, after subtracting (i) any approved outstanding fees and expenses
incurred pursuant to Section 4.b above, and (ii) any disputed disapproved fees or
expenses with respect to which the Simpson Thacher Escrow Agent has submitted such
dispute to the Court pursuant to Section 5 .a below, all contents of the Simpson Thacher
Escrow Account by wire transfer of immediately available funds . Notwithstanding
Section 5 .c of this Simpson Thacher Escrow Agreement, the Simpson Thacher Escrow
Agent shall be entitled to and shall conclusively rely on any notification of termination of
the Settlement Agreement sent by Simpson Thacher pursuant to Section 4 .c(l) above, and
shall promptly pay the contents of the Simpson Thacher Escrow Account to Simpson
Thacher pursuant to this Section 4 .c(3) irrespective of any objection, instruction, claims
or demands from any person or party other than Simpson Thacher, and without liability
of any kind, unless expressly prohibited from doing so by a specific order of a court of
competent jurisdiction .
(4) With respect to any disputed disapproved fees and
expenses subtracted from the Simpson Thacher Escrow Account pursuant to Section
4.c(3)(ii) above, the Simpson Thacher Escrow Agent shall continue to hold the amount of
such disapproved fees and expenses in trust until the dispute regarding such fees and
expenses is resolved pursuant to Section 5 below. Upon resolution of the dispute, the
Simpson Thacher Escrow Agent shall promptly give effect to the resolution reached
regarding such fees and expenses .
5. Settlement of Disputes
a. In the event a dispute arises under this Simpson Thacher
Escrow Agreement, including any dispute that is to be resolved pursuant to the Dispute
Procedure, the part ies involved in the dispute shall immediately notify each of (i) the
Simpson Thacher Escrow Agent ; (ii) Simpson Thacher, (iii) Securities Lead Counsel, and
(iv) Davis Polk & Wardwell .
(1) If the dispute does not involve fees and expenses to
be paid to the Simpson Thacher Escrow Agent and if the notified individuals and entitie s
are able to resolve the dispute among themselves, they shall so inform the Simpso n
Thacher Escrow Agent, and Simpson Thacher shall instruct the Simpson Thacher Escro w
Agent to effect the resolution.
(2) If the notified individuals and entities are unable to
resolve the dispute among themselves, or if the dispute involves the disapproval of fee s
and expenses to be paid to the Simpson Thacher Escrow Agent, the dispute shall b e
resolved pursuant to the Dispute Procedure .
(3) Prior to the resolution of any dispute described i n
Section 5 .a(I) or (2) above, the Simpson Thacher Escrow Agent is authorized and
directed to retain in the Simpson Thacher Escrow Account, without liability to anyone ,
that portion of the Simpson Thacher Amount that is the subject of the dispute .
(4) The Simpson Thacher Escrow Agent has no duty t o
institute or defend any proceeding described in Section 5 .a, unless requested to do so by
Simpson Thacher or Securities Lead Counsel and then only on receiving an indemnity, in
character reasonably satisfactory to the Simpson Thacher Escrow Agent, against any
claims, liabilities and expenses relating to such proceedings from Simpson Thacher
and/or Securities Lead Counsel on behalf of Securities Lead Plaintiffs and/or Securitie s
Plaintiffs .
b. Simpson Thacher and Securities Lead Counsel shal l
promptly notify each other of any claim by one or more of them that the Simpson
Thacher Escrow Agent has breached any term or condition of this Simpson Thacher
Escrow Agreement . Such claim shall be resolved pursuant to the Dispute Procedure .
Except as to the duties or rights imposed by Section 4 .c of
this Simpson Thacher Escrow Agreement, if the Simpson Thacher Escrow Agent is
uncertain as to its duties or rights under this Simpson Thacher Escrow Agreement, or
receives instructions, claims or demands from a party that, in its opinion, conflict with the
terms of this Simpson Thacher Escrow Agreement, it may refrain from taking action in
connection with the Simpson Thacher Amount or the funds in the Simpson Thacher
Escrow Account with respect to which such uncertainty or conflict exists, until it is able
to obtain a resolution of the issue pursuant to the Dispute Procedure . During the period
in which the issue remains unresolved, the Simpson Thacher Escrow Agent's sole
obligation with respect to the portion of the Simpson Thacher Amount that is the subject
of the dispute shall be to keep safely such portion of the Simpson Thacher Amount and
related books and records it holds under this Simpson Thacher Escrow Agreement ;
provided that with respect to all other portions of the Simpson Thacher Amount as to
which there is no dispute, the Simpson Thacher Escrow Agent shall be bound by the
terms and conditions of this Simpson Thacher Escrow Agreement, including the payment
terms and conditions set out in Section 4 above .
d. EACH OF THE PARTIES IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT
OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR ITS
BREACH, TERMINATION OR VALIDITY. EACH PARTY CERTIFIES AN D
ACKNOWLEDGES THAT :
(1) NO REPRESENTATIVE, AGENT OR
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY O R
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION SEEK TO ENFORCE THIS WAIVER ;
(2) EACH SUCH PARTY UNDERSTANDS AN D
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER ;
(3) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY ; AND
(4) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATION IN THIS SECTION.
6. Termination of Simpson Thacher Escrow Agreement
a. This Simpson Thacher Escrow Agreement may b e
terminated by Simpson Thacher if (i) the Preliminary Approval Date does not occur
within six (6) months after the date of this Simpson Thacher Escrow Account ; or (ii) if
Simpson Thacher otherwise terminates the Settlement Agreement pursuant to the terns
thereof. This Simpson Thacher Escrow Agreement shall terminate on the distribution of
the contents of the Simpson Thacher Escrow Account by the Simpson Thacher Escro w
Agent pursuant to this Simpson Thacher Escrow Agreement .
7. Provisions Regarding the Simpson Thacher Escrow Agen t
a. The Simpson Thacher Escrow Agent has no duties o r
responsibilities except those expressly provided in this Agreemen t . The Simpson
Thacher Escrow Agent has no liability under this Simpson Thacher Escrow Agreement
except for its own bad faith, gross negligence, willful misconduct or breach of thi s
Simpson Thacher Escrow Agreement. It may rely on any notice, instruction, certificate ,
statement, request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a proper party .
b. The Simpson Thacher Escrow Agent has no duties with
respect to any agreement or agreements with respect to the Simpson Thacher Amount
other than as provided in this Simpson Thacher Escrow Agreement . The Simpson
Thacher Escrow Agent has no interest in the Simpson Thacher Amount except as
provided in this Simpson Thacher Escrow Agreement . This Section 7 .b shall survive
notwithstanding the termination of this Simpson Thacher Escrow Agreement or th e
Simpson Thacher Escrow Agent' s resignation or removal .
The Simpson Thacher Escrow Agent shall keep proper
books of record and account, and make full and correct entries of the receipts an d
disbursements in the Simpson Thacher Escrow Account. The Simpson Thacher Escrow
Agent shall provide to Simpson Thacher and/or Securities Lead Counsel, on writte n
request and without additional cost, a statement of transaction details on completion o f
any transaction involving the Simpson Thacher Escrow Account .
d. The Simpson Thacher Escrow Agent may resign as escrow
agent by giving sixty (60) days notice by registered or certified mail to Simpson Thacher
and Securities Lead Counsel . Subject to Section 7.g below, such resignation shall take
effect at the end of such sixty (60) days or on the Simpson Thacher Escrow Agent's
earlier receipt of an instrument of acceptance executed by a successor Simpson Thacher
Escrow Agent .
e. Simpson Thacker and Securities Lead Counsel may jointly
remove the Simpson Thacher Escrow Agent by a notice signed by Simpson Thacher and
Securities Lead Counsel and delivered by registered or certified mail to the Simpson
Thacher Escrow Agent. Such removal shall be effective on the date set forth in such
notice .
f. Notwithstanding anything in Sections 7 .e and 7 .f, the
resignation or removal of the Simpson Thacher Escrow Agent shall not be effective
unless and until Simpson Thacher and Securities Lead Counsel jointly appoint a
successor Simpson Thacher Escrow Agent acceptable to Simpson Thacher and Securities
Lead Counsel . If no instrument of acceptance signed by a successor Simpson Thacher
Escrow Agent has been delivered to the Simpson Thacher Escrow Agent within sixty
(60) days after it delivers its notice of resignation or by the effective date of its removal,
the resigning or removed Simpson Thacher Escrow Agent may, at Securities Lead
Counsel's expense, petition the Court for appointment of a successor Simpson Thacher
Escrow Agent. The Simpson Thacher Escrow Agent's resignation or removal shall not
discharge any liability or obligations of the Simpson Thacher Escrow Agent arising
before the effective date of its resignation or removal .
g. Simpson Thacher and Securities Lead Counsel shall jointl y
appoint a successor Simpson Thacher Escrow Agent acceptable to Simpson Thacher and
Securities Lead Counsel to fill any vacancy resulting from (i) the Simpson Thacher
Escrow Agent being dissolved or otherwise becoming incapable of acting, (ii) the
Simpson Thacher Escrow Agent being taken over by a government official, agency,
department or board or (iii) the Simpson Thacher Escrow Agent's position becoming
vacant for any other reason.
h. Simpson Thacher and Securities Lead Counsel shall cause
any successor Simpson Thacher Escrow Agent appointed pursuant to this Simpson
Thacher Escrow Agreement to execute, acknowledge, and deliver to the Simpson
Thacher Escrow Agent, and to Simpson Thacher, Securities Lead Counsel, ERISA 401(k)
Lead Counsel, and Davis Polk & Wardwell, an instrument in writing accepting its
appointment, at which point :
(1) The Simpson Thacher Escrow Agent shall deliver to
its successor, as directed in writing by Simpson Thacher and Securities Lead Counsel, all
property and moneys it holds under this Simpson Thacher Escrow Agreement, and the
books of records and account, and any other information, required by the successor
Simpson Thacher Escrow Agent to perform its obligations under this escrow agreement
among Simpson Thacher, Securities Lead Counsel and such successor Simpson Thacher
Escrow Agent.
i . Securities Lead Counsel, Securities Plaintiffs, Executiv e
Committee Members, Securities Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA
Plaintiffs, Settling Defendants, Settling Defendants Counsel, Securities Class Members,
Simpson Thacher, and Davis Polk & Wardwell release the Simpson Thacher Escrow
Agent with respect to all claims, damages and liabilities for anything done or omitted by
the Simpson Thacher Escrow Agent in performing its duties under this Simpson Thacher
Escrow Agreement, except such claims that are based upon the Simpson Thacher Escrow
Agent's bad faith, gross negligence, willful misconduct or breach of this Simpso n
Thacher Escrow Agreement.
j . The Simpson Thacher Escrow Agent is acting under thi s
Simpson Thacher Escrow Agreement as a stakeholder only and is an independent
contractor with respect to each party . No provision of this Simpson Thacher Escrow
Agreement is intended to create any principal, joint venture, partnership or
debtor/creditor relationship between or among the Simpson Thacher Escrow Agent and
any of the parties. The Parties, for themselves and any person claiming under, by or
through them, release the Simpson Thacher Escrow Agent from any claim . in the nature
of self dealing or conflict of interest which may arise to the extent an affiliate of the
Simpson Thacher Escrow Agent is a party to the underlying litigation .
Genera l Matters
a. This Simpson Thacher Escrow Agreement shall b e
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions. All disputes arising under this Simpson Thacher Escrow
Agreement shall be resolved through the Dispute Procedure .
b. This Simpson Thacher Escrow Agreement is binding o n
and shall inure to the benefit of the parties' heirs, executors, administrators, legal
representatives, successors and permitted assigns .
c. This Simpson Thacher Escrow Agreement may be execute d
in one or more counterparts which, taken together, constitute one and the same
instrument . Execution by facsimile shall be fully and legally binding on a party .
d. No amendment or discharge of this Simpson Thacke r
Escrow Agreement, or waiver under it, shall be valid or binding unless set forth in
writing and duly signed by the party against whom enforcement of the amendment,
discharge or waiver is sought and by the Simpson Thacher Escrow Agent . Any such
waiver shall waive only the specific matter described in the writing and shall not impair
the rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Simpson Thacher Escrow
Agreement, nor the failure by a party, on one or more occasions, to enforce a provision of
this Simpson Thacher Escrow Agreement, or to exercise a right or privilege under this
Simpson Thacher Escrow Agreement, shall constitute a waiver of any other breach of a
similar nature, or a waiver of any of such provisions, rights or privileges under this
Simpson Thacher Escrow Agreement .
The invalidity or unenforceability of any provision of thi s
Simpson Thacher Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this Simpson Thacher Escrow Agreement in that jurisdiction
or the validity or enforceability of this Simpson Thacher Escrow Agreement (including
that provision) in any other jurisdiction. If any restriction or provision of this Simpson
Thacher Escrow Agreement is held unreasonable, unlawful or unenforceable in any
respect, such restriction or provision shall be interpreted, revised or applied in a manner
that makes it lawful and enforceable to the fullest extent possible under law .
f. Notices, requests, demands and other communications
under this Simpson Thacher Escrow Agreement shall be in writing and shall be deemed
to have been given (unless otherwise specifically provided for in this Simpson Thacher
Escrow Agreement) if delivered by hand, delivered by a nationally recognized overnight
courier for next-day delivery, mailed (registered or certified mail, postage prepaid) or
telecopied (which telecopy is confirmed by a transmission receipt) :
If to Magistrate Judge Michael Dolinger, then t o
The Honorable Michael DolingerUnited States Magistrate Judg eDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile : (212) 805-792 8
If to Simpson Thacher , then to :
Peter Thomas, Esq .Simpson Thacher & Bartlett LLP425 Lexington AvenueNew York, New York 10017Telephone: (212) 455-2000Facsimile : (212) 455-250 2
If to Davis Polk & Wardwell, then to :
Robert B . Fiske, Jr., Esq.James P . Rouhandeh, Esq .Davis Polk & Wardwell450 Lexington Avenu eNew York, New York 10017Telephone: (212) 450-4000Facsimile: (212) 450-3800
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq .Sidney S. Liebesman, Esq .Grant & Eisenhofer, P .A.1201 North Market StreetSuite 2100Wilmington, Delaware 19801Telephone : (302) 622-7000Facsimile : (302) 622-7100
If to ERISA 401(k) Lead Counsel , then to :
Lynn Lincoln Sarko, Esq .Gary A. Lotto, Esq .Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-3052Telephone : (206) 623-1900Facsimile : (206) 623-3384
Thomas J . Hart, Esq .Marc A. Tenebaum, Esq .Slevin & Hart, P .C.1625 Massachusetts Avenue, N .W .Suite 450Washington, D .C. 20036Telephone : (202) 797-8700Facsimile : (202) 234-823 1
If to Simpson Thacher Escrow Agent, then to :
Wachovia Bank, National AssociationAttn: Howard Parke r123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone : (215) 670-4541Facsimile : (215) 670-4733
Notices, requests, demands and communications shall be deemed to have been given (i )
on the date on which so hand-delivered (or, if not delivered before 5 :00 p.m. Eastern
Time on a business day, on the next business day), (ii) on the next business day if
delivered by a nationally recognized overnight courier, (iii) on the third business day afte r
the date on which so mailed or (iv) on the date on which telecopied and confirmed (or, i f
this does not occur before 5 :00 p.m. Eastern Time on a business day, on the next busines s
day) .
g. The Simpson Thacher Escrow Agent represents and
warrants that (i) this Simpson Thacher Escrow Agreement has been duly authorized ,
executed and delivered on its behalf and constitutes its legal, valid and binding obligatio n
and (ii) its execution, delivery and performance of this Simpson Thacher Escrow
Agreement does not and will not violate any statute, law, rule or regulation .
h. Securities Lead Counsel represents and warrants that (i) i t
is authorized to execute and deliver this Simpson Thacher Escrow Agreement on behal f
of Securities Lead Plaintiffs and, as authorized by the Court's December 13, 2002 order ,
on behalf of Securities Plaintiffs and Securities Class Members and (ii) its execution ,
delivery and performance of this Simpson Thacher Escrow Agreement does not and wil l
not violate any statute, law, rule or regulation .
i. James P. Rouhandeh represents that he is authorized to
enter into this Simpson Thacher Escrow Agreement on behalf of Simpson Thacher ,
including without limitation D . Rhett Brandon and any other attorneys who hav e
represented or who now represent Simpson Thacher and D . Rhett Brandon in connection
with this matter.
j. Each party shall take (or cause to be taken) such furthe r
actions to execute, deliver and file (or cause to be executed, delivered or filed) such
further documents and instruments, and to obtain such consents, as may be necessary or
reasonable requested to effectuate fully the purposes, terms and conditions of thi s
Simpson Thacher Escrow Agreement .
k. Except as provided in this Simpson Thacher Escro w
Agreement, no party shall assign, encumber or otherwise transfer any of its rights an d
obligations under this Simpson Thacher Escrow Agreement to any person without th e
consent of the other parties . Any such purported assignment, encumbrance or other
transfer shall be void and unenforceable .
The Simpson Thacher Escrow Agent shall keep, and shal l
cause its agents to keep, confidential the information it receives under this Simpson
Thacher Escrow Agreement, except for information requested or required to be disclose d
by a court order statute, law, rule or regulation, (i) to any government agency or
regulatory body having or claiming authority to regulate or oversee the Simpson Thacher
Escrow Agent's business, or (ii) under any subpoena, civil investigative demand or
similar demand or request of a court, regulatory authority, arbitrator or arbitration to
which the Simpson Thacher Escrow Agent or any affiliate, or an officer, director ,
employer or shareholder of the Simpson Thacher Escrow Agent or such affiliate, is a
party-
m. All time periods set forth herein shall be computed in
calendar days unless otherwise expressly provided . In computing any period of tim e
prescribed or allowed by this Simpson Thacher Escrow Agreement or by order of court ,
the day of the act, event, or default from which the designated period of time begins to
run shall not be included. The last day of the period so computed shall be included ,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is the
filing of a paper in Court, a day on which weather or other conditions have made th e
office of the Clerk of the Court inaccessible, in which event the period shall run until th e
end of the next day that is not one of the aforementioned days .
Executed this day of March -, 2004 .
Wachovia Bank, National Association, asEscrow Agent
By:Name : Howard ParkerTitle: Vice Presiden t
GRANT & EISENHOFER, P .A .as Securities Lead Counsel
Name :Title :
By:
DAVIS POLK & WARDWELLon behalf of Simpson Thache r
By :Name:
Title-
CERTIFICATE OF SERVIC E
Sidney S. Liebesman hereby certifies that on the date listed below, copie s
of the foregoing document were served by the method listed below upon the followin g
counsel at the addresses listed below :
Via First Class Mail on Mach 22, 2004
DEBEVOISE & PL,IMPTONJonathan E . Richman
919 Third AvenueNew York, NY 10022
SIDLEY AUSTIN BROWN & WOOD, LLP
Daniel A. McLaughlin
787 Seventh AvenueNew York, NY 10019
PAUL, WEISS , R.I 'IUND, WHARTON& GARRISON LLP
Joyce S . HuangMartin LondonRichard RosenBrad S . KarpEric S . Goldstein1285 Avenue of the AmericasNew York, NY 10019-606 4
WILMRR, CUTLER & PICKERING
Peter K. Vigeland
3 99 Park AvenueNew York, NY 10022
DEB VOISE & PLIMPTONRalph C. Ferrara
Ann. M. Ashton555 13th Street N. W .Washington, DC 20004
SHEPPARD, M JLLIN, RICHTER &HAMPTON, LLPRobert S. GerberMartha Sottosanti12544High Bluff Drive, Suite 300San Diego, CA 92130-305 1
SIDLEY AUSTIN BROWN & WOOD, LLP
Charles W . Dougla s
David F . GrahamJames W. Ducayet, Esq.Bank One Plaza10 S . Dearborn StreetChicago, IL 60603
CURTIS MALLET-PRLVOST, COLT& MOSLE LL P
Peter FlemingEliot LauerJacques Seznmelzn anJonathan Harri s101 Park AvenueNew York, NY 10178
MAYER , BROWN, ROWE, & MAWRobert J. Ward
1675 BroadwayNew York, NY 1001 9
PAUL, HASTINGS, JANOFSKY& WALKER LLP
J. Allen Maines600 Peachtree Street, NE, Suite 2400Atlanta, GA 30308
040319150035 . DOC
MAYER, BROWN, ROWE & Maw KAYE SCHOLER, LLPT. Mark McLaughlin Aaron Stiefel
Robert J. Ward 425 Park Avenue190 South LaSalle Street New York, NY 10022Chicago, IL 6060 3
CHRISTENSEN, MILLER, FINK, JACOBS, IRELL & NLANELLA, LLP
GLASER, WEIL AND SHAPIRO LLP Charles Elder
Terry N. Christensen David SiegelSuite 1900 1800 Avenue of the Stars10250 Constellation Blvd . Los Angeles, CA 90067Los Angeles, CA 9006 7
HENNIGAN, BENNETT & DORMAN DAVIS, POLK & WARDWELL
Jeanne Irving Thomas P. Ogden601 South Figueroa Street, Suite 330 450 Lexington Avenu eLos Angeles, CA 90017 New York, NY 1001 7
ROPES & GRAY SHE, ARMAN & STERLIN G
Philip S. Khinda Kenneth M. KramerRobert Jones Richard SchwedOne Franklin Square, Suite 800 East Amy L. Newhardt
1301 K Street, N W 599 Lexington Ave .Washington, D .C. 20005 New York, NY 10022-6069
HOWRE-Y SIMON ARNOLD & WHITE , LLP SONNENSCHEIN NATH & ROSENTHALRobert E . Gooding, Jr. D. Ward Kalls trom
2020 Main Street, Suite 1000 685 Market Street, 6`h FloorIrvine, CA 92614 San Francisco , CA 9410 5
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON
Peter L . SimmonsHoward W. GoldsteinOne New York PlazaNew York, NY 10004
CLIFFORD CHANCE US LLP
George A. Schieren
Ignatius GrandeMet Life Building200 Park Ave .New York, NY 10165
MORVILLO, ABRAMOWITZ , GRAND, JASON
& SILBERBERG, P.C.
Edward M. SpiroLawrence Iason565 Fifth AvenueNew York, NY 10017
O'MELVENY & MYERS LLP
Jonathan Rosenberg
400 South Hope StreetLos Angeles, CA 90071-2899
0403l9150035 .DOC
SHEPPARD, MIJLLIN, RICHTER &HAMPTON, LLPJohn FornaciariJohn J . Vecchione11th Floor Eas t1300 I Street, NWWashington, D .C. 20005
Cl/fSi . Lie esman
0403191 50035.DOC
SCHEDULE A
Schedule A
SECURITIES REINSURERS' ESCROW ACCOUNT S
Wachovia Bank NA-London3 BishopsgateLondon EC2 N3AB, Englan d
Funds for the Securities Reinsurers' Escrow will be held at Wachovia Bank NA-Londonin British Pound Sterling in the Wachovia Global Custody Demand A/C -05270036 onbehalf of
Securities Reinsurers Level One Opening Balance Account number-I 556598660 andSecurities Reinsurers Level Two Opening Balance Account number-155659866 2
The current call rate for the Wachovia Bank London is 3 .00% subject to marketfluctuation