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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF CALIFORNIA
IN RE PEREGRINE SYSTEMS, INC. Case No. 02-CV-0870-BEN (RBB)SECURITIES LITIGATION
This Document Relates to: ALL ACTIONS
STIPULATION AND AGREEMENT OFSETTLEMENT WITH DEFENDANTS JOHN J. MOORES, CHARLES E. NOELL III,NORRIS VAN DEN BERG, RICHARD A. HOSLEY II, CHRISTOPHER A. COLE, AND
RODNEY F. DAMMEYER
This Stipulation and Agreement of Settlement dated as of August 8, 2008 is submitted
pursuant to Rule 23 of the Federal Rules of Civil Procedure . Capitalized terms used in this
Stipulation shall have the meanings given to them in the "Definitions" section unless otherwise
defined. The Settlement set forth in this Stipulation is subject to approval by the Court. This
Stipulation is entered into among the Loran Group (as defined herein), Waga (as defined herein),
the Class (as defined herein), and John J. Moores, Charles E. Noell III, Norris van den Berg,
Richard A . Hosley II , Christopher A. Cole, and Rodney F. Dammeyer (the "Settling Defendants")
and JMI Services ("JMI"), the Avery K. Moores 1994 Trust, Barry A. Moores 1993 Trust, Barry
0. Moores 1991 Trust, Benjamin H. Moores 1996 Trust, Melissa K. Moores 1990 Trust, Jennifer
Ann Moores Trust, John J. Moores, Jr. Trust, Anthony K. Moores 1991 Trust, Molly Moores
Schulman 1991 Trust, Jason B . Schulman 1990 Trust, Rachel E. Schulman 1990 Trust, Michael &
Debra Baas 1990 Trust, Rosanne E . Baas 1990 Trust, Christopher N. Baas 1990 Trust, Seth J.
Baas 1990 Trust, Britton L. Baas 1990 Trust, Patrick & Rosario Baas Trust; Clare C. Toner 1992
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Trust; David A. Toner 1992 Trust, and Toni L. Cruse 1994 Trust (all such Trusts referred to
herein collectively with JMI, as the "Additional Released Parties")
WHEREAS:
A. Beginning in May 2002, class action complaints alleging violations of the federal
securities laws were filed in the Court against Peregrine and other defendants. The other
defendants include former officers and directors of Peregrine, former business partners of
Peregrine, and Peregrine's former auditor. The class actions were consolidated pursuant to an
Order of the Court entered on July 23, 2002. By Order dated January 30, 2003, the Court
appointed the Loran Group as the Lead Plaintiff for securities fraud claims arising under Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 (" 1934 Act") and Heywood Waga as Lead
Plaintiff for claims on behalf of persons who held shares of either Harbinger Corporation
("Harbinger") or Remedy Corporation ("Remedy") and who acquired Peregrine registered
common stock in connection with Peregrine's acquisition of these companies (the "Subclasses").
The claims on behalf of the members of the Subclasses are for violation of Sections 11 and 15 of
the Securities Act of 1933 ("1933 Act") and Section 14(a) of the 1934 Act. The Court further
appointed the law firm of Gold Bennett Cera & Sidener LLP as Lead Counsel for the Section
10(b) claims and the law firms of Abraham Fruchter & Twersky LLP, and Stull , Stull & Brody as
Lead Counsel for the claims brought on behalf of the Harbinger and Remedy Subclasses. These
firms are collectively referred to herein as "Lead Counsel";
B. On March 18, 2003, Lead Plaintiffs filed a Consolidated Class Action Complaint
for Violations of the Federal Securities Laws (the "Consolidated Complaint"). Because Peregrine
had filed for bankruptcy in September 2002, it was no longer named as a defendant in the
Consolidated Complaint. The Consolidated Complaint generally alleged that certain defendants
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disseminated a series of materially false and misleading statements in public filings, press
releases, shareholder reports, audit opinions, and communications with securities analysts during
the Class Period that caused Peregrine securities to trade at artificially inflated prices, thereby
causing damage to purchasers of Peregrine securities. As to the Harbinger and Remedy
Subclasses, the Consolidated Complaint alleged that certain defendants signed registration
statements that contained false and misleading statements;
C. The Court , in an Order dated November 21, 2003, granted in part and denied in
part, motions to dismiss filed by various defendants, including certain of the Settling Defendants.
Specifically, the Court dismissed the Sections 10(b), 12(a)(2), 14(a), and 20(a) claims against the
Settling Defendants without prejudice and with leave to amend, and declined to dismiss the
Section 11 claims against certain of the Settling Defendants;
D. On April 5, 2004, Lead Plaintiffs filed a First Amended Consolidated Class Action
Complaint for Violations of the Federal Securities Laws (the "Complaint"). The Complaint
alleges, among other things, that certain of the Settling Defendant's in connection with their roles
at Peregrine violated Sections 10(b), 14(a), and 20(a) of the 1934 Act, and Rule I Ob-5
promulgated thereunder, 17 C.F.R. § 240.1 Ob-5, and as to the Harbinger and Remedy Subclasses,
the Complaint alleges that certain defendants signed registration statements that contained false
and misleading statements and violated Sections 11 and 15 of the 1933 Act, during the Class
Period;
E. The Court, in an Order dated March 30, 2005, dismissed all claims alleged under
the 1934 Act against the Settling Defendants . At the Loran Group' s request , the Court entered a
judgment on January 6, 2006, dismissing those claims with prejudice to allow for an appeal to the
Ninth Circuit Court of Appeals. The appeal was argued on November 6, 2007, but no decision
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has been issued. Claims under Sections 11 of the 1933 Act against certain of the Settling
Defendants were stayed pending resolution of the foregoing appeal.
F. Lead Plaintiffs asserted claims against Peregrine in Peregrine's bankruptcy case on
behalf of the Settlement Class Members. As part of the settlement agreement negotiated by Lead
Plaintiffs with Peregrine, Peregrine agreed to assign, and in its plan of reorganization did assign,
all of its claims for wrongdoing in connection with its financial failure, to the Peregrine Litigation
Trust, with the Settlement Class Members to receive all proceeds recovered by the Peregrine
Litigation Trust.
G. The Peregrine Litigation Trust acting through a Trustee filed the lawsuit captioned
Peregrine Litigation Trust v. Moores, et al., San Diego County Superior Court, Case No. GIC
788659 ("the PLT Action"), against certain former officers and directors of Peregrine and other
parties allegedly related to said former officers and directors' roles at Peregrine, including the
Settling Defendants;
H. The demurrers of the Settling Defendants and the Additional Related Parties in the
PLT Action were sustained without leave to amend on May 3, 2007, and the demurrer ruling in
the PLT Action is currently the subject of an appeal before Division One of the Fourth Appellate
Division of the State of California , 4th Civil No. D051347 ("the PLT Appeal")
The Settling Defendants are named as defendants in the Class Action and the PLT
Action (hereinafter collectively "the Actions"). The Settling Defendants deny any wrongdoing
alleged, or which could have been alleged in the Class Action and/or the PLT Action, and neither
this Stipulation nor any actions taken to obtain approval of the Settlement shall be construed or
deemed to be evidence of or an admission or concession on the part of the Settling Defendants
with respect to any claim or of any fault or liability or wrongdoing or damage whatsoever, or any
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infirmity in the defenses that the Settling Defendants have asserted. The parties to this Stipulation
recognize, however, that the Class Action has been filed by Lead Plaintiffs and the PLT Action
has been brought for the benefit of the Class and the Actions have been defended by the Settling
Defendants in compliance with the requirements of Federal Rule of Civil Procedure 11(b). The
Class Action is being voluntarily settled on the terms set forth herein after advice of counsel and
based on the recommendation of the Honorable Edward A. Infante (retired), former Chief
Magistrate Judge of the United States District Court for the Northern District of California acting
as a mediator, and the parties hereto believe that the terms of this Settlement are fair, adequate and
reasonable. This Stipulation shall not be construed or deemed to be a concession by Lead
Plaintiffs of any infirmity in the claims asserted in the Class Action;
Lead Plaintiffs' Counsel have conducted an investigation relating to the claims and
the underlying events and transactions alleged in the Class Action. Lead Plaintiffs' Counsel have
examined the filings by Peregrine with the U.S. Securities and Exchange Commission before,
during and after the Class Period which relate to the allegations in the Class Action. Lead
Plaintiffs' Counsel have also inspected hundreds of thousands of documents obtained from
Peregrine as a result of the settlement of Lead Plaintiffs' claims against Peregrine;
K. Lead Plaintiffs, by their counsel, have conducted discussions and arm's length
negotiations with counsel for the Settling Defendants with respect to a compromise and settlement
of the Class Action with a view to settling the issues in dispute and achieving the best relief
possible consistent with the interests of the Class;
L. Lead Plaintiffs' Counsel analyzed the evidence adduced during their factual
investigation. Lead Plaintiffs' Counsel also researched the applicable law with respect to the
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claims of Lead Plaintiffs and the Class against the Settling Defendants and the potential defenses
thereto;
M. Lead Plaintiffs and the Settling Defendants realize that the continued litigation of
the claims would entail substantial risk, effort and expense and Lead Plaintiffs and the Settling
Defendants believe that the claims in the Class Action are best settled on the terms as set forth
herein.
N. Based upon their investigation as set forth above, Lead Plaintiffs' Counsel have
concluded that the terms and conditions of this Stipulation are fair, reasonable and adequate to
Lead Plaintiffs and the Class, and in their best interests, and have agreed to settle the claims made
in the Class Action, as against the Settling Defendants, pursuant to the terms and provisions of this
Stipulation, after considering (a) the substantial benefits that Lead Plaintiffs and the members of
the Class will receive from this Settlement, (b) the attendant risks of litigation, and (c) the
desirability of permitting the Settlement to be consummated as provided by the terms of this
Stipulation.
NOW THEREFORE, without any admission or concession on the part of Lead Plaintiffs
of any lack of merit of the claims asserted in the Class Action whatsoever, and without any
admission or concession of any liability or wrongdoing or lack of merit in the defenses asserted by
the Settling Defendants,
It is hereby STIPULATED AND AGREED, by and among the parties to this Stipulation,
through their respective attorneys, subject to approval of the Court pursuant to Rule 23(e) of the
Federal Rules of Civil Procedure, in consideration of the benefits flowing to the parties hereto
from the Settlement, that all Released Claims as against the Settling Defendants shall be
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compromised, settled, released and dismissed with prejudice, upon and subject to the following
terms and conditions:
DEFINITIONS
1. As used in this Stipulation, the following terms shall have the following meanings:
(a) "Actions" means the Class Action and the PLT Action collectively.
(b) "Additional Released Parties" means JMI Services, the Avery K. Moores
1994 Trust, Barry A. Moores 1993 Trust, Barry 0. Moores 1991 Trust, Benjamin H. Moores 1996
Trust, Melissa K. Moores 1990 Trust, Jennifer Ann Moores Trust, John J. Moores, Jr. Trust,
Anthony K. Moores 1991 Trust, Molly Moores Schulman 1991 Trust, Jason B. Schulman 1990
Trust, Rachel E. Schulman 1990 Trust, Michael & Debra Baas 1990 Trust, Rosanne E. Baas 1990
Trust, Christopher N. Baas 1990 Trust, Seth J. Baas 1990 Trust, Britton L. Baas 1990 Trust,
Patrick & Rosario Baas Trust; Clare C. Toner 1992 Trust; David A. Toner 1992 Trust, and Toni
L. Cruse 1994 Trust.
(c) "Authorized Claimant" means any Settlement Class Member whose claim
for recovery is allowed by the Court.
(d) "Class Action" means the lawsuit captioned In re Peregrine Systems, Inc.,
Securities Litigation , United States District Court for the Southern District of California , Case No.
02-CV-0870-BEN (RBB), currently stayed , with some claims asserted therein on appeal to the
United States Court of Appeals for the Ninth Circuit, Docket No. 06-55197 ("the Class Action
Appeal").
(e) "Complaint" means the First Amended Consolidated Class Action
Complaint for Violation of the Federal Securities Laws filed in the Class Action on or about April
4, 2004.
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(f) "Class" and "Class Members" means, for the purposes of this Stipulation
only, a class consisting of all Persons (including Lead Plaintiffs) who purchased or otherwise
acquired Peregrine common stock during the Class Period and who were injured thereby, and two
Subclasses consisting of all Persons who held shares of Harbinger Corporation and who acquired
Peregrine registered common stock in connection with Peregrine's acquisition of Harbinger
Corporation , which was consummated on or about June 16 , 2000 , and all persons who held shares
of Remedy Corporation and who acquired Peregrine registered common stock in connection with
Peregrine's acquisition of Remedy Corporation, which was consummated on or about August 27,
2001. Excluded from the Class are: defendants in the Class Action, the Additional Released
Parties, members of the immediate families (parents, spouses, siblings and children) of each of the
individual defendants, any person, firm, trust, corporation, or entity in which any defendant has a
controlling interest, the officers, directors, parents, subsidiaries and affiliates of Peregrine, and the
legal representatives, heirs, successors in interest or assigns of any such excluded party. Also
excluded from the Class are any putative Settlement Class Members who exclude themselves by
filing a Request for Exclusion in accordance with the requirements set forth in the Notice or
putative Settlement Class Members who have previously released the Settling Defendants in
connection with Peregrine-related claims.
(g) "Class Period" means the period of time from July 22, 1999 through May 3,
2002, inclusive.
(h) "Court" means the United States District Court for the Southern District of
California.
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(i) "Effective Date of Settlement" or "Effective Date" means the date upon
which the Settlement contemplated by this Stipulation shall become effective, as set forth in
paragraph 26 below.
(j) "Lead Plaintiffs" means the group consisting of David Levy, Leighton
Powell, David Schenkel, John Virden, Conrad Willemse, Bill Holman, Bob Benesko, Michael
Slavitch, Richard Maheu, and Mark Rollins (hereinafter the "Loran Group") who were appointed
as Lead Plaintiffs for the claims arising under Section 10(b) of the 1934 Act, and Heywood Waga
(hereinafter "Waga"), who was appointed as Lead Plaintiff for the claims arising under Section 11
of the' 1933 Act.
(k) "Lead Plaintiffs' Counsel" means Lead Plaintiffs ' counsel for the Loran
Group , Gold Bennett Cera & Sidener LLP, and Lead Plaintiffs Counsel for Waga, Stull, Stull &
Brody and Abraham Fruchter & Twersky LLP, who were appointed pursuant to the Order of the
District Court dated January 30, 2003.
(1) "Non-Settling Defendants" means KPMG LLP, BearingPoint, Inc. and
Larry Rodda.
(m) "Notice" means the Second Notice of Pendency of Class Action and
Hearing on Proposed Partial Settlement, which is to be finalized by the Parties.
(n) "Order and Final Judgment" means the proposed order to be entered
approving the Settlement, which is to be finalized by the Parties.
(o) "Parties" means Lead Plaintiffs, the Class and the Settling Defendants.
(p) "Peregrine" or the "Company" means Peregrine Systems, Inc.
(q) "Plaintiffs" means, collectively, Lead Plaintiffs and the Class.
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(r) "Plan of Allocation of Settlement Proceeds" or "Plan of Allocation" means
the plan previously approved by the Court on November 15, 2006, for the allocation and
distribution of the net settlement proceeds to Authorized Claimants.
(s) "Preliminary Approval Order" means the proposed Order Preliminarily
Approving the Settlement and Providing for Notice, which is to be finalized by the Parties.
(t) "PLT Action" means the lawsuit captioned Peregrine Litigation Trust v.
Moores, et al., San Diego County Superior Court, Case No. GIC 788659 currently on appeal to
Division One of the Fourth Appellate Division of the State of California, 4th Civil No. D051347
("the PLT Appeal")
(u) "Recognized Loss" shall have the same meaning as that term is used in
Notice.
(v) "Released Claims" means all claims , rights, demands , suits , matters, issues
or causes of action, whether known or unknown, fixed or contingent, foreseen or unforeseen,
against the Settling Defendants and the Additional Released Parties, whether under state or federal
law, including the federal securities laws, and whether directly, indirectly, representatively,
derivatively or in any other capacity, in connection with, based upon, arising out of, or relating to
any claim that has been or could have been raised in the Class Action or the acts, facts or events
alleged in the Actions, including the claims against the Settling Defendants and the Additional
Released Parties asserted in the PLT Action. Released Claims as used herein also specifically
includes claims which the Plaintiffs do not know or suspect to exist in their favor at the time of
this Stipulation which, if known by them, might affect the Settlement and the releases herein, or
might affect their decision not to object to, or opt out of, the Settlement. With respect to any and
all claims released herein, the Parties agree that, effective upon the Effective Date, Plaintiffs
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expressly waive and relinquish, shall be deemed to have, and by operation of the Order and Final
Judgment shall have, expressly waived and relinquished, and the Settling Defendants expressly
waive and relinquish, to the fullest extent permitted by law, the provisions , rights , and benefits of
§ 1542 of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HERFAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HISOR HER SETTLEMENT WITH THE DEBTOR.
Additionally, the Parties expressly waive, upon the Effective Date and by operation of the Order
and Final Judgment shall have waived, any and all provisions, rights and benefits conferred by
any law of the United States or of any state or territory of the United States or of any other
country, whether statutory, code, or common law, which is similar, comparable or equivalent to §
1542 of the California Civil Code. The Parties may hereafter discover facts in addition to or
different from those which they now know or believe to be true with respect to the subject matter
of the claims released herein, but hereby stipulate and agree that they do release, and shall be
deemed to have, and upon the Effective Date and by operation of the Order and Final Judgment
shall have released all claims described herein, whether known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist,
or heretofore have existed, upon any theory of law or equity now existing or coming into
existence in the future, without regard to the subsequent discovery or existence of such different
or additional facts. The Parties acknowledge that the foregoing waiver was bargained for and is a
material term and condition of the Settlement.
(w) "Request(s) for Exclusion" means a written request for exclusion from the
Settlement Class as described in the Notice which provides all information requested in the
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Notice, is signed by the person or entity seeking exclusion or their counsel , and is made within the
time period specified in the Notice.
(x) "Settling Defendants" means John J. Moores, Charles E. Noell III, Norris
van den Berg, Richard A. Hosley II, Christopher A. Cole, and Rodney F. Dammeyer.
(y) "Settling Defendants' Claims" means any and all claims of the Settling
Defendants relating to the institution or prosecution of the Class Action and/or the PLT Action,
against any of the Lead Plaintiffs, Plaintiffs, Settlement Class Members, or their attorneys.
(z) "Settlement" means the settlement contemplated by this Stipulation.
(aa) "Settlement Class" means a class certified for settlement purposes only
pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure consisting of:
All Persons (including Lead Plaintiffs) who purchased or otherwise acquiredPeregrine common stock during the Class Period and who were injured thereby,and two subclasses ("Subclasses") consisting of all Persons who held shares ofHarbinger Corporation and who acquired Peregrine registered common stock inconnection with Peregrine's acquisition of Harbinger Corporation, which wasconsummated on or about June 16, 2000, and all persons who held shares ofRemedy Corporation and who acquired Peregrine registered common stock inconnection with Peregrine's acquisition of Remedy Corporation, which wasconsummated on or about August 27, 2001. Excluded from the Class are:Defendants in the Class Action, the Additional Released Parties, members of theimmediate families (parents, spouses, siblings and children) of each of theindividual Defendants, any person; firm, trust, corporation, or entity in which anyDefendant has a controlling interest, the officers, directors, parents, subsidiariesand affiliates of Peregrine, and the legal representatives, heirs, successors ininterest or assigns of any such excluded party. Also excluded from the Class areany putative Class Members who exclude themselves by filing a Request forExclusion in accordance with the requirements set forth in the Notice, or putativeClass members who have previously released the Settling Defendants in connectionwith Peregrine-related claims.
(bb) "Settling Defendants' Counsel" means the law firms of Quinn Emanuel
Urquhart Oliver & Hedges LLP, Gibbs & Bruns LLP, Bewley , Lassleben & Miller LLP, and Neal,
Gerber & Eisenberg LLP.
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(cc) "Settlement Hearing" means the hearing prescribed by Rule 23(e)(2) of the
Federal Rules of Civil Procedure.
(dd) "Stipulation" means this Stipulation and Agreement of Settlement among
the Lead Plaintiffs, the Settling Defendants and the Additional Released Parties.
(ee) "1934 Act" means the Securities Exchange Act of 1934.
(ff) "1933 Act" means the Securities Act of 1933.
CLASS CERTIFICATION
2. The Parties stipulate , solely for purposes of the Settlement , to certification of the
Settlement Class. This Stipulation to certification of a Class and Subclasses shall apply in the
event that the judgment referenced in Paragraph 7(a)(4)(D)(v) is entered . It is in the intent and
agreement of the parties hereto that such judgment be for the benefit of the Lead Plaintiffs and the
members of the Class and Subclasses which comprise the Settlement Class.
3. The Parties further stipulate to the appointment of the Lead Plaintiffs as
representatives of the Settlement Class and to the appointment of Lead Plaintiffs' Counsel as
Class Counsel, such stipulations being solely for settlement purposes.
4. If the Effective Date does not occur for any reason, each of the Settling Defendants
reserves the right to contest certification of any class in the Class Action. The execution of this
Stipulation and any actions taken to secure approval thereof shall not be used by Lead Plaintiffs in
any way to support their request for certification of a class other than in connection with the
Settlement.
SCOPE AND EFFECT OF SETTLEMENT
5. The obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Class Action, as against each of the Settling Defendants only, and any and all
Released Claims, as well as any and all Settling Defendants ' Claims . The Class Action shall not
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be dismissed or settled with respect to the Non-Settling Defendants, by operation of this
Stipulation or the Settlement.
6. (a) Upon the Effective Date of the Settlement, Lead Plaintiffs, the Class on
behalf of themselves, and their respective predecessors, successors, affiliates, heirs, executors,
administrators, successors and assigns, and any persons they represent, shall, by operation of the
Order and Final Judgment, with respect to each and every Released Claim, release and be deemed
to release and forever discharge, and shall forever be enjoined from prosecuting, any Released
Claims against the Settling Defendants including without limitation the Class Action and the PLT
Action. Such release and injunction will extend to the Settling Defendants' and the Additional
Released Parties' attorneys, agents, insurers, trusts, trustees, estates, employers, employee benefit
plans, representatives, heirs, marital community and assigns.
(b) Upon the Effective Date of the Settlement, the Settling Defendants and the
Additional Released Parties shall , by operation of the Order and Final Judgment, release and be
deemed to release and forever discharge each and every of the Settling Defendants' Claims, and
shall forever be enjoined from prosecuting the Settling Defendants' Claims.
THE SETTLEMENT CONSIDERATION
7. (a) The Settling Defendants shall pay Fifty-Five Million Nine Hundred and
Fifty Thousand Dollars ($55,950,000), plus interest as described below (the "Cash Settlement
Amount"), into an agreed-upon escrow account (the "Cash Settlement Account") as follows:
(1) Nine Hundred and Fifty Thousand Dollars ($950,000) shall
be paid by Settling Defendant Dammeyer on August 21, 2008;
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(2) Five Million Dollars ($5,000,000) shall be paid by the
Settling Defendants other than Settling Defendant Dammeyer (the "Remaining Settling
Defendants") on October 10, 2008;
(3) The Remaining Settling Defendants shall pay Twenty-Two
Million Five Hundred Thousand Dollars ($22,500,000) plus interest, on or before January 5, 2009.
Simple interest on this payment shall accrue starting November 3, 2008, at the six-month treasury
bill rate in effect on that date;
(4) Twenty-Seven Million Five Hundred Thousand Dollars
($27,500,000) (the "Final Payment") shall be paid by the Remaining Settling Defendants,
pursuant to the following terms:
(A) The Note. On or before January 5, 2009, the
Remaining Settling Defendants shall provide a promissory note (the "Note") in a form reasonably
satisfactory to Lead Plaintiffs, signed and payable by John J. Moores and Rebecca Ann Moores
jointly as individuals and as Trustees of the John and Rebecca Ann Moores Family Trust (the
"Family Trust") in the amount of Twenty-Seven Million Five Hundred Thousand Dollars
($27,500,000) plus interest, due on October 31, 2009 or on such earlier date as provided below.
The Note may be prepaid at any time at the option of the obligors. Lead Plaintiffs' Counsel will
be notified if the Family Trust is dissolved, no longer holds substantially all of John and Rebecca
Moores' assets, or if its trustees or beneficiaries change.
(B) Interest. Simple interest shall accrue on the Final
Payment starting November 3, 2008. From November 3, 2008 through March 31, 2009, the rate
of interest shall be the six-month treasury bill rate in effect on November 3, 2008; beginning
March 31, 2009, the rate of interest shall be four percent (4%) per annum.
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(C) Security via Letter of Credit. Up until delivery of the
Note, Defendant Moores will make commercially reasonable efforts to obtain a letter of credit
securing the Note.
(D) Alternative Security and Agreements. If no letter of
credit is obtained (pursuant to the preceding sub-paragraph) prior to delivery of the Note, the
following alternative terms will apply:
(i) Defendant Moores will cause JMI Holdings
LLC - Omni Project Investment Series (the "JMIH Omni Series") to grant to Lead Plaintiffs'
Counsel a security interest in its economic interest (which is between 72% and 73%) in JMIR
Investments LLC - Omni Hotel Investment Series (the "JMIR Omni Series"), which owns a 50%
interest in the San Diego Ballpark Hotel Company (the "Hotel Company"), which owns the Omni
Hotel San Diego (the "Hotel");
(ii) Lead Plaintiffs' Counsel will be provided
with (a) a written broker's valuation opinion valuing the Hotel, prepared by Holiday Fenoglio
Fowler, L.P. on or before January 5, 2009, together with information reflecting the debt balance
on the Hotel, (b) representations from Defendant Moores or JMIH Omni Series concerning the
absence of liens or encumbrances on the interest held by JMIH Omni Series in JMIR Omni Series
and the interest held by JMIR Omni Series in the Hotel Company, and (c) with information
reflecting any known recent offers or purchase proposals of these interests;
(iii) Any distributions received by JMIH Omni
Series from its interest in the JMIR Omni Series shall be applied, within ten days of receipt, to
prepay a portion of the outstanding balance of the Note; and
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(iv) The Note will be subject to additional
mandatory prepayment obligations as follows: Defendant Moores represents that the certain real
estate and other assets, enumerated to Lead Plaintiffs' Counsel, are or will be listed or otherwise
offered for sale. Any net proceeds of sales of these assets, after satisfying existing encumbrances.
taxes or debt service requirements as to the particular asset being sold, shall be used to prepay a
portion of the outstanding balance of the Note within ten days of receipt.
(v) The Remaining Settling Defendants
hereby stipulate to entry of a judgment if payment default occurs and the Note remains unpaid
after October 31, 2009, in a form to be reasonably agreed upon by the parties by January 5, 2009,
to be entered jointly and severally against the Family Trust and its beneficiaries, John J. Moores
and Rebecca Ann Moores, who are the signatories of the Note, for the full unpaid balance of the
Note as of November 1, 2009.
(b) Under no circumstances shall any of the Settling Defendants be required to pay
more than their portion of the Cash Settlement Amount plus interest as specified above in
consideration of the Settlement except for the costs of entering and executing the judgment
referenced in the subparagraph 7(a)(4)(D)(v) above and any statutory interest thereon. Lead
Plaintiffs' Counsel shall provide wire instructions for the deposit of the Cash Settlement Amount
into the Cash Settlement Account.
(c) The effectiveness of this Stipulation is contingent upon the approval of the form of
the Note described in paragraph 7(a)(4)(A) and the form of the judgment described in paragraph
7(a)(4)(D)(v) by all parties.
(d) As of the date this agreement is signed , Lead Plaintiffs ' Counsel acknowledge that
there have been no defaults.
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(e) Each Settling Defendant individually represents that his portion of the Cash
Settlement Amount of $55,950,000 is free and clear of any liens, judgments, or security interests
that relate to him, and that no portion of the Cash Settlement Amount is encumbered in any way.
Defendant Moores represents that no portion of the Cash Settlement Amount is subject to a claim
by his wife, Rebecca Moores. To the extent that anyone other than the Settling Defendants
contends that they have an interest in any portion of the Cash Settlement Amount, the Settling
Defendants shall take all actions reasonably necessary to resolve such claim as to their portion of
the Cash Settlement Amount.
8. (a) The Cash Settlement Amount, net of any Taxes (as defined below) on the
income thereof, shall be used to pay (i) the Notice and Administration Costs referred to in
paragraph 10 hereof, (ii) the fees and expense award referred to in paragraph 11 hereof, (iii) the
remaining administration expenses referred to in paragraph 12 hereof, and (iv) such amounts in
the above categories ( i) and (iii) not to exceed $100,000. The balance of the Cash Settlement
Amount after the above payments shall be held in escrow pending further order of the Court. All
funds comprising the Cash Settlement Amount shall be deemed to be in the custody of the Court
and shall remain subject to the jurisdiction of the Court until such time as the funds shall be
distributed or returned to those Settling Defendants that provided the funds, pursuant to this
Stipulation and/or further order of the Court. The Parties hereto agree that the Cash Settlement
Amount is intended to be a Qualified Settlement Fund. within the meaning of Treasury Regulation
§ 1.468B-1 and that Gilardi & Co., LLC, as administrator of the Settlement Fund within the
meaning of Treasury Regulation § 1.468B-2(k)(3), shall be responsible for filing tax returns for
the Settlement Fund and paying from the Settlement Fund any Taxes owed with respect to the
Settlement Fund. Gilardi & Co., LLC is hereafter referred to as the "Claims Administrator."
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Settling Defendants' Counsel agree to provide promptly to the Claims Administrator the statement
described in Treasury Regulation § 1.468B-3(e).
(b) All (i) taxes on the income of the Cash Settlement Amount and (ii)
expenses and costs incurred in connection with the taxation of the Cash Settlement Amount
(including, without limitation, expenses of tax attorneys and accountants) (collectively "Taxes")
shall be paid out of the Cash Settlement Account, shall be considered to be a cost of
administration of the Settlement and shall be timely paid from the Cash Settlement Account
without prior order of the Court.
ADMINISTRATION
9. The Settling Defendants shall have no responsibility for the administration of the
Settlement and shall have no liability to the Lead Plaintiffs or the Class in connection with such
administration. The Settling Defendants shall cooperate in the administration of the Settlement to
the extent reasonably necessary to effectuate its terms.
10. Lead Plaintiffs' Counsel may expend from the Cash Settlement Account, without
further approval from the Settling Defendants or the Court, up to the sum of $100,000 to pay the
reasonable costs and expenses associated with the administration of the Settlement, including
without limitation, the costs of identifying members of the Class and effecting mailed Notice and
Publication Notice. Such amounts shall include, without limitation, the actual costs of
publication, printing and mailing the Notice, reimbursements to nominee owners for forwarding
notice to their beneficial owners, and the administrative expenses incurred and fees charged by the
Claims Administrator in connection with providing notice (collectively "Notice and
Administrative Costs"). If the Settlement is not consummated, a refund will be made to those
Settling Defendants that provided the funds of remaining non-expended amounts of the $100,000
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allocated for Notice and Administrative Costs less amounts that were incurred but not yet
expended.
ATTORNEYS' FEES AND EXPENSES
11. (a) Lead Plaintiffs' Counsel intend to apply to the Court for an award from the
Cash Settlement Amount of attorneys' fees, and will also request reimbursement of expenses, plus
interest thereon, from the proceeds of this Settlement at the same time as final approval of the
Settlement is requested. The Settling Defendants will take no position on Lead Plaintiffs'
Counsel's prospective fee application or request for reimbursement of expenses. Such attorneys'
fees, expenses, and interest as are awarded by the Court shall only be paid from the Cash
Settlement Account to Lead Plaintiffs' Counsel after the occurrence of the Effective Date as
provided in paragraph 26 hereof.
(b) Any order or proceedings relating to the fee and expense applications or
any appeal from any order relating thereto or reversal or modification thereof shall not operate to
terminate or cancel this Stipulation or the Settlement or affect the finality of any final judgment
approving the Stipulation or the Settlement of the Class Action.
DISTRIBUTION TO AUTHORIZED CLAIMANTS
12. In connection with the distribution of the settlement funds generated by this
Settlement, the Claims Administrator shall determine each Settlement Class Member's share of
the settlement funds based upon the Plan of Allocation.
13. (a) Each Authorized Claimant shall be allocated a pro rata share of the cash
portion of the settlement funds based on his or her Recognized Loss compared to the total
Recognized Loss of all Authorized Claimants and consistent with the Plan of Allocation. This is
not a claims-made settlement. The Settling Defendants shall not be entitled to get back any of the
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settlement consideration once the Settlement becomes Final. The Settling Defendants shall have .
no involvement in reviewing or challenging claims.
(b) Any order or proceedings relating to the Plan of Allocation or any appeal
from any order relating thereto or modification thereof shall not operate to terminate or cancel this
Stipulation or the Settlement or affect the entry of any final judgment approving the Stipulation or
the Settlement of the Class Action except as set forth in the Supplemental Agreement described in
paragraph 23 herein.
ADMINISTRATION OF THE SETTLEMENT
14. Any member of the Class who has not timely submitted a valid Proof of Claim as
and when required by the Court, will be barred from receiving any distribution of the proceeds of
this Settlement. Any member of the Settlement Class who does not submit a valid Request for
Exclusion in connection with this Settlement will otherwise be bound by all of the terms of this
Stipulation and the Settlement, including the terms of the Order and Final Judgment to be entered
in the Class Action and the releases provided for herein, and will be barred from bringing any
action against the Settling Defendants concerning the Released Claims, even if such member of
the Settlement Class has not submitted a Proof of Claim.
15. Lead Plaintiffs' Counsel shall be responsible for supervising the administration of
the Settlement and allocation of the Net Settlement Fund by the Claims Administrator. Except for
their obligation to pay the Cash Settlement Amount, the Settling Defendants shall have no
liability, obligation or responsibility for any administration of the Settlement or allocation of the
Net Settlement Fund. Lead Plaintiffs' Counsel shall have the right, but not the obligation, to
waive what they deem to be formal or technical defects in any Proofs of Claim submitted in the
interests of achieving substantial justice.
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16. For purposes of determining the extent, if any, to which a Settlement Class
Member shall be entitled to be treated as an "Authorized Claimant," the following conditions shall
apply.
(a) Each Settlement Class Member will be required to submit a Proof of Claim
supported by such documents as are designated therein, including proof of the Settlement Class
Member's loss, or such other documents or proof as Lead Plaintiffs' Counsel, in their discretion,
may deem acceptable;
(b) All Proofs of Claim shall be submitted in a timely fashion pursuant to such
schedule as may be set by Order of the Court. Any Settlement Class Member who fails to submit
a timely Proof of Claim, and who does not submit a valid Request for Exclusion in connection
with this Settlement, shall be forever barred from receiving any payment pursuant to this
Stipulation (unless, by Order of the Court, a later submitted Proof of Claim by such Settlement
Class Member is approved), but shall in all other respects be bound by all of the terms of this
Settlement including the terms of the Order of Final Judgment to be entered in the Class Action
and the releases provided for herein, and will be barred from bringing any action against the
Settling Defendants concerning the Released Claims;
(c) Each Proof of Claim will be submitted to and reviewed by a Claims
Administrator, under the supervision of Lead Plaintiffs' Counsel, who shall determine the extent,
if any, to which each claim shall be allowed, subject to review by the Court pursuant to
subparagraph (e) below;
(d) Proofs of Claim that do not meet the submission requirements may be
rejected. Prior to rejection of a Proof of Claim, the Claims Administrator will communicate with
the Settlement Class Member in order to remedy curable deficiencies in the Proof of Claim
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submitted. The Claims Administrator, under supervision of Lead Plaintiffs' Counsel, will notify,
in a timely fashion and in writing, all Settlement Class Members whose Proofs of Claim they
propose to reject in whole or in part, setting forth the reasons therefore, and shall indicate in such
notice that the Settlement Class Member whose claim is to be rejected has the right to a review by
the Court if the Settlement Class Member so desires and has complied with the relevant
requirements;
(e) The administrative determinations of the Claims Administrator accepting
and rejecting claims shall , at a time to be determined in the future, be presented to the Court for
approval.
17. The Proof of Claim shall include a provision that each Settlement Class Member
shall be conclusively deemed to have submitted to the jurisdiction of the Court with respect to the
Settlement Class Member's claim and the enforcement of the release provided for therein.
18. Payment pursuant to this Stipulation and Court approval shall be deemed final and
conclusive against all Settlement Class Members. All Settlement Class Members whose claims
may not be approved by the Court and who do not submit a valid Request for Exclusion in
connection with this Settlement shall be barred from participating in distributions from the Net
Settlement Fund, but otherwise shall be bound by all of the terms of this Stipulation and the
Settlement, including the terms of the Order of Final Judgment to be entered in the Class Action
and the releases provided for herein, and will be barred from bringing any action against the
Settling Defendants concerning the Released Claims.
19. Except as set forth in the Supplemental Agreement described in paragraph 23
herein, all proceedings with respect to the administration, processing and determination of claims
described by paragraph 16 of this Stipulation and the determination of all controversies relating
02433/2736731.1 23
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thereto, including disputed questions of law and fact with respect to the validity of claims, shall be
subject to the jurisdiction of the Court, and the Settling Defendants shall have no role with regard
thereto.
20. The Net Settlement Fund shall be distributed to Authorized Claimants, subject to
Court Approval, by the Claims Administrator only after the Effective Date and at a time subject to
the discretion of Lead Plaintiffs' Counsel, and after: (i) all Claims have been processed, and all
Claimants whose Claims have been rejected or disallowed, in whole or in part, have been notified
and provided the opportunity to be heard concerning such rejection or disallowance; (ii) all
objections with respect to all rejected or disallowed claims have been resolved by the Court; (iii)
all matters with respect to attorneys' fees, costs, and disbursements have been resolved by the
Court, all appeals therefrom have been resolved or the time therefore has expired ; and (iv) all
costs of administration have been paid . Any funds remaining which have not been claimed by
Authorized Claimants shall, after a reasonable period of time, be donated to a charity of Lead
Plaintiffs' Counsel's choice.
PRELIMINARY APPROVAL ORDER
21. Promptly after this Stipulation has been fully executed, Lead Plaintiffs' Counsel
shall apply to the Court for entry of the Preliminary Approval Order.
ORDER AND FINAL JUDGMENT
22. The parties shall jointly request that the Court enter an Order and Final Judgment,
and this Stipulation.and Agreement of Settlement shall not become effective until such time as an
Order and Final Judgment substantially in such form (with only such changes as may be agreed to
by Lead Plaintiffs and the Settling Defendants) is entered and becomes final , as provided in
paragraph 26 hereof. The parties hereto agree that they will seek entry of the Order and Final
Judgment as soon as practicable.
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SUPPLEMENTAL AGREEMENT
23. Substantially simultaneously herewith, Lead Plaintiffs and the Settling Defendants
are executing a "Supplemental Agreement" setting forth, among other things, certain conditions
under which this Stipulation may be withdrawn or terminated by the Settling Defendants if
potential Settlement Class Members who purchased in excess of a certain number of shares of
common stock traded during the Class Period exclude themselves from the Class. The
Supplemental Agreement shall not be filed with the Court unless a dispute arises as to its terms or
if the Settling Defendants exercise their rights thereunder. In the event of a withdrawal from this
Stipulation pursuant to the Supplemental Agreement, this Stipulation shall become null and void
and of no further force and effect and the provisions of paragraph 28 shall apply. Notwithstanding
the foregoing, the Stipulation shall not become null and void as a result of the election by the
Settling Defendants to exercise their option to withdraw from the Stipulation pursuant to the
Supplemental Agreement until the conditions for termination set forth in the Supplemental
Agreement have been satisfied.
OPTION TO TERMINATE
24. Any or all Settling Defendants , in their sole discretion , shall have the option to
terminate the Settlement in the event that, prior to the Effective Date, a court renders a decision in
either the PLT Appeal as to the Settling Defendants or the Class Action Appeal. Each Settling
Defendant shall be entitled to exercise the option to terminate described in this paragraph only if
he provides Lead Plaintiffs' Counsel with written notice exercising that option and files that notice
with the Court within thirty (30) days of entry of a decision in the PLT Appeal or Class Action
Appeal. The Settling Defendants shall use reasonable efforts to obtain a stay of proceedings in the
PLT Appeal after execution of this Stipulation and on the Settling Defendants ' request Lead
Plaintiffs will cooperate in such efforts. Failure to exercise the option set forth in this paragraph
02433/2736731.1 25
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following a decision in the PLT Appeal or a decision as to the Settling Defendants in the Class
Action Appeal does not waive the Settling Defendants ' rights to exercise the option following a
subsequent decision of either appeal. In the event of a withdrawal by a Settling Defendant from
this Stipulation pursuant to this paragraph , this Stipulation shall become null and void as to that
Settling Defendant and of no further force and effect and the provisions of paragraph 28 shall
apply.
THE SUCCESSOR TRUSTEE ORDER
25. If the Order and Final Judgment is not entered substantially in the form agreed to
by the Parties, including without limitation if the Order and Final Judgment does not expressly
with respect to each and every Released Claim, release and forever discharge, and forever enjoin
Lead Plaintiffs, the Class on behalf of themselves, and their respective predecessors, successors,
affiliates, heirs, executors, administrators, successors and assigns, and any persons they represent
from prosecuting any Released Claims, including the PLT Action, against the Settling Defendants;
or, if any court should construe the release and injunction described herein to permit the continued
prosecution of the PLT Action against the Settling Defendants, Lead Plaintiffs and the Class agree
that they will (a) obtain an order from the Court declaring that the Peregrine Litigation Trustee is
currently Richard M. Kipperman, and (b) use best efforts to cooperate with the Settling
Defendants to obtain dismissal of any Released Claims brought by the PLT against the Settling
Defendants and to obtain an executed release from the then Trustee. Nothing herein prevents any
of the Settling Parties from making such further motions as may be necessary.
EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION
26. The Effective Date of Settlement as to any Settling Defendant shall be the date
when all of the following conditions have occurred:
(a) the Court has entered the Preliminary Approval Order;
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(b) each Settling Defendant has timely deposited his portion of the Cash
Settlement Amount and/or with respect to Settling Defendants other than Dammeyer, paid the
January 2009 payment and given adequate security for the October 2009 payment pursuant to this
Stipulation;
(c) the Court has approved the Settlement, following Notice to the Class and a
Settlement Hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure and the
Preliminary Approval Order;
(d) the Court has entered an Order and Final Judgment, in all material respects
in the form agreed to by the Parties (with only such changes in form as may be accepted by Lead
Plaintiffs and the Settling Defendants), and the expiration of any time for appeal or review of such
Order and Final Judgment, or, if any appeal is filed and not dismissed, after such Order and Final
Judgment is upheld on appeal in all material respects and is no longer subject to review upon
appeal or review by writ of certiorari;
(e) dismissal with prejudice has been entered in the PLT Appeal as to all
Respondents therein and the expiration for any time for appeal or review of such order of final
judgment or dismissal, or, if any appeal therefrom is filed, such dismissal has been upheld on
appeal in all material respects and is no longer subject to review upon appeal or review by writ of
certiorari;
(f) withdrawal or termination has not occurred pursuant to the Supplemental
Agreement or pursuant to paragraph 24 and any remaining rights of withdrawal or termination
under the Supplemental Agreement have been waived by the Settling Defendants; and
(g) Lead Plaintiffs, as required by the Settling Defendants, and as a condition
precedent to the effectiveness of the Settlement, have entered into a settlement agreement or
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agreements with defendants Frederic B. Luddy, Richard T. Nelson, Stephen P. Gardner, and
Matthew C. Gless, for the release by the Class of all Peregrine-related claims, to be finally
approved by the District Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure.
27. The Settling Defendants and Lead Plaintiffs shall each have the right to terminate
the Settlement and this Stipulation by providing written notice of their election to do so
("Termination Notice") to the other party hereto within thirty (30) days of (a) the Court's
declining to enter the Preliminary Approval Order in any material respect; (b) the Court's refusal
to approve this Stipulation or any material part of it or to enter the Order and Final Judgment in
any material respect; or (c) the date upon which the Order and Final Judgment is modified or
reversed in any material respect.
28. Except as otherwise provided herein, in the event the Settlement is terminated or
the Effective Date fails to occur for any reason, then all parties whose rights are affected by this
Stipulation shall be deemed to have reverted to their respective status in the Class Action as of
March 21, 2008 and, except as otherwise expressly provided, the parties shall proceed in all
respects as if this Stipulation and any related orders had not been entered, and any portion of the
Cash Settlement Amount previously paid by any terminating Settling Defendant(s), together with
any interest earned thereon, less any Taxes paid or due with respect to such income, and less the
Notice and Administrative Costs actually incurred and paid or payable from the Cash Settlement
Account (not to exceed $100,000 without the prior approval of the Settling Defendants and the
Court), shall be returned to the Settling Defendant(s) who paid such amounts, by wire transfer,
within ten (10) business days of the event causing termination or non-compliance with the
conditions to effectiveness of the Settlement.
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NO ADMISSION OF WRONGDOING
29. This Stipulation, whether or not consummated, and any proceedings taken pursuant
to it:
(a) shall not be offered or received against the Settling Defendants or
Additional Released Parties or against the Lead Plaintiffs or the Class as evidence of or construed
as or deemed to be evidence of any presumption, concession, or admission by the Settling
Defendants or the Additional Released Parties or by any of the Lead Plaintiffs or the Class with
respect to the truth of any fact alleged by Plaintiffs or the validity of any claim that had been or
could have been asserted in the Class Action or in any litigation, or the deficiency of any defense
that has been or could have been asserted in the Class Action or in any litigation, or of any
liability, negligence, fault, or wrongdoing of the Settling Defendants or the Additional Released
Parties or in support of a motion for class certification;
(b) shall not be offered or received against the Settling Defendants or the
Additional Released Parties as evidence of a presumption , concession or admission of any fault,
misrepresentation or omission with respect to any statement or written document approved or
made by the Settling Defendants , or the Additional Released Parties, or against the Lead Plaintiffs
or the Class as evidence of any infirmity in the claims of Lead Plaintiffs or the Class;
(c) shall not be offered or received against the Settling Defendants, or the
Additional Released Parties, or against the Plaintiffs as evidence of a presumption, concession or
admission with respect to any liability, negligence, fault or wrongdoing, or in any way referred to
for any other reason as against any of the parties to this Stipulation, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be necessary to effectuate
the provisions of this Stipulation; provided, however, that if this Stipulation is approved by the
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Court, the Settling Defendants and the Additional Released Parties may use its provisions to
effectuate the liability protection granted them hereunder;
(d) shall not be construed against the Settling Defendants, or the Additional
Released Parties, or the Lead Plaintiffs or the Class as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have been
recovered after trial; and
(e) shall not be construed as or received in evidence as an admission,
concession or presumption against the Lead Plaintiffs or the Class or any of them that any of their
claims are without merit or that damages recoverable in the Class Action would not have
exceeded the Cash Settlement Amount.
BAR ORDER
30. It is the intention of the parties to this Stipulation that the Settlement documented
herein eliminate all further risk and liability of the Settling Defendants relating to the Released
Claims. Accordingly, the parties agree that as of the Effective Date:
(a) In accordance with paragraph 5 hereof, Plaintiffs and each person in the
Settlement Class, whether or not that person is an Authorized Claimant and whether or not that
person receives a distribution under the Plan of Allocation will release and be deemed to release
the Settling Defendants from all Released Claims.
(b) In accordance with paragraph 22 hereof, the Order and Final Judgment shall
provide for the dismissal of the Released Claims with prejudice as to the Settling Defendants
pursuant to Fed. R. Civ. P. 54(b).
(c) The Order and Final Judgment shall, in accordance with Section 4(f) of the
Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(f)(7)(A), bar, extinguish,
discharge and satisfy all claims for contribution against the Settling Defendants, which claims
02433/2736731.1 30
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shall be discharged as a matter of law thereunder. Such bar order shall permanently bar, enjoin
and restrain all persons from commencing, prosecuting or asserting any claim against the Settling
Defendants, however styled, whether legal or equitable, whether arising under state, federal or
common law, whether for indemnification, contribution or otherwise denominated, where the
claim is based upon, arises out of or relates to the claims in the Class Action including, without
limitation, any claim in which a Non-Settling Defendant seeks to recover from the Settling
Defendants (1) any amounts a Non-Settling Defendant has paid, becomes liable to pay or may
become liable to pay (whether in cash or other form of consideration ) in the Class Action, and (2)
any costs, fees, expenses or attorneys' fees that a Non-Settling Defendant incurred or may incur in
the Class Action. Nothing in this paragraph shall be construed to divest any Non-Settling
Defendant of the right to obtain an appropriate judgment reduction or settlement credit available
to such Non-Settling Defendant under any applicable statutory or common law rule.
MISCELLANEOUS PROVISIONS
31. All of the related agreements finalized by the Parties on or before August 8, 2008
are hereby incorporated by reference as though fully set forth herein.
32. If there is a conflict between this Stipulation and any exhibit to this Stipulation, the
language of this Stipulation shall be controlling.
33. The parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Lead Plaintiffs or the Class
against the Settling Defendants with respect to the Released Claims. Accordingly, Lead Plaintiffs
and the Settling Defendants agree that the Class Action was brought by Lead Plaintiffs and
defended by the Settling Defendants in compliance with the requirements of Fed. R. Civ. P. 11(b).
The parties have no claims of any violation of Rule 11 of the Federal Rules of Civil Procedure
relating to the prosecution, defense , or settlement of the Class Action by any of the Lead
02433/2736731.1 31
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Plaintiffs, the Class or the Settling Defendants or their counsel. The parties agree that the amount
paid and the other terms of the Settlement were negotiated at arm's length in good faith by the
parties, and reflect a settlement that was reached voluntarily after consultation with experienced
legal counsel.
34. This Stipulation may not be modified or amended, nor may any of its provisions be
waived except by a writing signed by all parties hereto or their successors-in-interest.
35. The headings herein are used for the purpose of convenience only and are not
meant to have legal effect.
36. The administration and consummation of the Settlement as embodied in this
Stipulation shall be under the authority of the Court and the Court shall retain jurisdiction for the
purpose of entering orders providing for awards of attorneys' fees and expenses to Lead Plaintiffs'
Counsel and enforcing the terms of this Stipulation.
37. The waiver by any one party of any breach of this Stipulation by any other party
shall not be deemed a waiver of any other prior or subsequent breach of this Stipulation or a
waiver by any other party.
38. This Stipulation and related documents, together with the Supplemental
Agreement, constitute the entire agreement among the parties hereto concerning the Settlement of
the Action as to the Settling Defendants, and no representations, warranties, or inducements have
been made by any party hereto concerning this Stipulation and related documents finalized by the
Parties and the Supplemental Agreement other than those contained and memorialized in such
documents.
39. This Stipulation may be executed in one or more facsimile counterparts. All
executed counterparts and each of them shall be deemed to be one and the same instrument
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provided that counsel for the parties to this Stipulation shall exchange among themselves original
signed counterparts.
40. This Stipulation shall be binding upon, and inure to the benefit of, the parties
hereto, and the successors and assigns of the parties hereto.
41. The construction, interpretation, operation, effect and validity of this Stipulation,
and all documents necessary to effectuate it, shall be governed by the laws of the State of
California without regard to conflicts of laws, except to the extent that federal law requires that
federal law govern.
42. This Stipulation shall not be construed more strictly against one party than another
merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one of
the parties, it being recognized that it is the result of arm's-length negotiations between the parties
and all parties have contributed substantially and materially to the preparation of this Stipulation.
43. All counsel and any other person executing this Stipulation and related documents
finalized by the Parties, warrant and represent that they have the full authority to do so and that
they have the authority to take appropriate action required or permitted to be taken pursuant to the
Stipulation to effectuate its terms.
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44. Lead Plaintiffs' Counsel and the Settling Defendants' Counsel agree to cooperate
reasonably with one another in seeking Court approval of the Preliminary Approval Order, the
Stipulation and the Settlement, and to promptly agree upon and execute all such other
documentation as may be reasonably required to obtain final approval by the Court of the
Settlement.
DATED: DecemberO 2008 GOLD BENNETT CERA & SIDENER LLP
By: ^ly^cSolomon B. Cera
Attorneys for Section I0(b) Lead Plaintiff
The Loran Group
DATED: Deccmber , 2008 ABRAHAM FRUCHTER & TWERSKY LLP
By:Lawrence D. Levit
DATED: December_, 2008 STULL, STULL & BRODY
By:Howard T. Longman
Attorneys for Section I I Lead PlaintiffHeywood Waga
DATED: Decembea 2008 QUINN EMANUEL URQUHARTOLIVER & HEDGES, LLP
By:_John B. QuinnHarry A. Olivar, Jr.
Attorneys for John J. Mooresand JMI Services, Inc.
02433a736731.1 34
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44. Lead Plaintiffs' Counsel and the Settling Defendants' Counsel agree to cooperate
reasonably with one another in seeking Court approval of the Preliminary Approval Order, the
Stipulation and the Settlement, and to promptly agree upon and execute all such other
documentation as may be reasonably required to obtain final approval by the Court of the
Settlement.
DATED: December _, 2008
DATED: December , 2008
DATED: December-, 2008
DATED: December 1, 2008
GOLD BENNETT CERA & SIDENER LLP
By:Solomon B. Cera
Attorneys for Section 10(b) Lead PlaintiffThe Loran Group
ABA UCHT Y
Lawrence D. Levit
STULL, STULL & BRODY
By:Howard T. Longman
Attorneys for Section 11 Lead Plaintiff
Heywood Waga
QUINN EMANUEL URQUHARTOLIVER & HEDGES, LLP
By:John B. QuinnHarry A. Olivar, Jr.
Attorneys for John J. Mooresand JMI Services, Inc.
0243312736731.1 34
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44. Lead Plaintiffs ' Counsel and the Settling Defendants ' Counsel agree to cooperate
reasonably with one another in seeking Court approval of the Preliminary Approval Order, the
Stipulation and the Settlement, and to promptly agree upon and execute all such other
documentation as may be reasonably required to obtain final approval by the Court of the
Settlement,
DATED: December 2008 . GOLD BENNETT CERA & SIDENER LLP
By:Solomon B. Cera
Attorneys for Section 10(b) Lead PlaintiffThe Loran Group
DATED: December , 2008 ABRAHAM FRUCHTER & TWERSKY LLP
By:Lawrence D. Levit
DATED: December 7- 008 S . S L & BRO '"-7
By: Gam'Ho dd T. Longman
Attorneys for Section 11 Lead PlaintiffHeywood Waga
DATED: December 1, 2008 QUINN EMANUEL URQUHARTOLIVER & HEDGES, LLP
By:John B. QuinnHarry A. Olivar, Jr.
Attorneys for John J. Mooresand JMI Services, Inc.
02433;2736731.1 34
Case 3:02-cv-00870-BEN-RBB Document 826 Filed 02/09/2009 - Page37 39
DATED: December 2008 GIBBS &
By: , , t,.' -r
R in C. GibbsJ. hristopher3^eylds
Cotner
Attorneys for Charles E. Noell III,Richard A. Hosley II, and Norris van den Berg
DATED: December 2008 BEWLEY, LASSLEBEN & MILLER, LLP
By:Leighton M. Anderson
Attorneys for Christopher A. Cole
DATED: December 2008 NEAL GERBER & EISENBERG LLP
By:Phillip L. Stern
Attorneys for Respondent Rodney F.Dammeyer
02433.2740682.1 35
Case 3 : 02-cv-00870-BEN-RBB Document 826 Filed 02/09/2009 Page 38 of 39
DATED: December 2008 GIBBS & BRUNS LLP
By:Robin C. GibbsJ. Christopher ReynoldsJeffry J. Cotner
Attorneys for Charles E. Noell III,Richard A. Hosley II, and Norris van den Berg
DATED: December U 2008 BEWLEY, LA LEBEN LER,
By:Lei to . Ande son
Attorneys for Christopher A. Cole
DATED: December-, 2008 NEAL GERBER & EISENBERG LLP
By:Phillip L. Stem
Attorneys for Respondent Rodney F.Dammeyer
LLP
02433/2736731.1 35
Case 3:02-cv-00870-BEN-RBB Document 826 Filed 02/09/2009 Page 39 of 39
By:Leighton M. Anderson
Attorneys for Christopher A. Cole
DATED: December --, 2008 NEAL GERBER & EISENBERG LLP
By:P illip . tern
Attorneys for Respondent Rodney F.Dammeyer
0243317139273.1 35
Case 3:02-cv-00870-BEN-RBB Document 826-2 Filed 02/09/2009 Page 1 of 27
EXHIBIT 1
Case 3:02-cv-00870-BEN-RBB Document 826-2 Filed 02/09/2009 Page 2 of 27
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF CALIFORNIA
IN RE PEREGRINE SYSTEMS, INC.SECURITIES LITIGATION
Case No. 02-CV-0870- BEN (RBB)
This Document Relates to:ALL ACTIONS
SECOND NOTICE OF PENDENCY OF CLASS ACTION ANDHEARING ON ADDITIONAL PROPOSED PARTIAL SETTLEMENTS
TO: ALL PERSONS WHO PURCHASED OR ACQUIRED PEREGRINE SYSTEMS, INC.SECURITIES DURING THE PERIOD FROM JULY 22, 1999 THROUGH MAY 3,2002, INCLUSIVE, INCLUDING ALL PERSONS WHO OWNED SHARES OFHARBINGER CORP. OR REMEDY CORP. STOCK AND EXCHANGED THOSESHARES FOR PEREGRINE SHARES.
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTSMAY BE AFFECTED BY PROCEEDINGS IN THIS ACTION. IF YOU ARE ASETTLEMENT CLASS MEMBER, AS DEFINED HEREIN, YOU MAY BE ENTITLED TORECEIVE A CASH BENEFIT PURSUANT TO THE PROPOSED PARTIAL SETTLEMENTSDESCRIBED IN THIS NOTICE.
EXCLUSION DEADLINE: REQUESTS FOR EXCLUSION MUST BE SUBMITTEDPOSTMARKED ON OR BEFORE [55 DAYS AFTER DATE OF PRELIMINARYAPPROVAL ORDER].
SECURITIES BROKERS AND OTHER NOMINEES: PLEASE SEE INSTRUCTIONS ONPAGE _ HEREIN.
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I. SUMMARY OF SETTLEMENT AND RELATED MATTERS
This Notice of Pendency of Class Action and Hearing on Proposed Partial
Settlements (the "Notice") is given pursuant to Rule 23 of the Federal Rules of Civil Procedure
and an Order of the United States District Court for the Southern District of California (the
"Court") dated , 2009. The purpose of this Notice is to inform you of additional
proposed settlements (collectively referred to as the "Settlement") in the aggregate principal
amount of $56,075,000, which will affect your rights in this Class Action relating to Peregrine
Systems, Inc. ("Peregrine"). Final approval of the Settlement will be considered at a hearing to
be held by the Court to consider its fairness, reasonableness, and adequacy. This Notice
describes your rights under the Settlement and what steps you may take in relation to this Class
Action. Capitalized terms used in this Notice have the meanings given to them in the
"Definitions" section below unless otherwise defined. The Settlement discussed herein relates to
claims against the following defendants , who were former outside directors of Peregrine: John J.
Moores, Charles E. Noell III , Norris van den Berg, Richard A. Hosley II, Christopher A. Cole,
and Rodney F. Dammeyer (at times collectively referred to as the "Outside Director Settling
Defendants"); and the following defendants who were former officers of Peregrine : Stephen P.
Gardner, Matthew C. Gless, Frederic B . Luddy, and Richard T. Nelson ( at times collectively
referred to as the "Officer Settling Defendants"). The Outside Director Settling Defendants and
the Officer Settling Defendants are collectively referred to as the "Settling Defendants." The
Class previously settled claims against Peregrine in connection with Peregrine 's Bankruptcy
Court proceedings. Prior settlements were also reached with defendants Arthur Andersen LLP,
Douglas S. Powanda, William D . Savoy and Thomas G. Watrous. These prior settlements,
approved by the Court, were described in a previous notice dated July 31, 2006. This Notice is
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not an expression of any opinion by the Court as to the merits of any claims or any defenses
asserted by any party in this Class Action or as to the fairness or adequacy of the Settlement.
H. STATEMENT OF PLAINTIFFS' RECOVERY
2. The Settlement, if finally approved, will consist of $56,075,000 plus
approximately $5,000,000 which is being held by the Peregrine Litigation Trust, resulting in a
Settlement Fund of approximately $61,075,000. The Settlement Fund will be available for
distribution to Settlement Class Members, subject to deduction for costs of notice and
administration, and for attorneys' fees, costs and expenses as approved by the Court. Attorneys'
fees equal to 20% of the Settlement Fund and expenses of up to $500,000 are being requested.
Your recovery from these funds will depend on a number of variables, including the number and
timing of Peregrine shares you purchased, whether they were acquired on the open market or
through an exchange of shares, and the number of claims submitted. It is estimated that if all
eligible Peregrine securities purchasers or exchangers covered by this Settlement were to file
claims to share therein , then the average recovery per damaged share of common stock under the
Settlement would be $0.11 per share (before the deduction of any Court-awarded attorneys' fees
and expenses).
III. STATEMENT OF POTENTIAL OUTCOME OF CASE
The Lead Plaintiffs (defined hereinafter) and the Settling Defendants disagree as
to both liability and damages and do not agree on the average amount of damages per share, if
any, that would be recoverable if Lead Plaintiffs were to prevail on the claims alleged against the
Settling Defendants. In addition to the numerous risks of litigation and liability issues on which
the parties disagree, the damage-related issues on which the parties disagree include: (a) whether
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any affirmative misstatements were made by any Settling Defendant; (b) whether the alleged
misstatements or omissions were made intentionally, recklessly, negligently, or innocently; (c)
the appropriate economic model for determining the amount by which Peregrine's securities
were allegedly artificially inflated (if at all) during the Class Period (defined below); (d) the
amount by which Peregrine's securities were allegedly artificially inflated (if at all) during the
Class Period; (e) the effect of various market forces influencing the trading price of Peregrine's
securities at various times during the Class Period; (f) the extent to which external factors, such
as general market and industry conditions, influenced the trading price of Peregrine's securities
at various times during the Class Period; (g) the extent to which the various matters that Lead
Plaintiffs allege were materially false or misleading influenced (if at all) the trading price of
Peregrine's securities at various times during the Class Period; (h) the extent to which the
various allegedly adverse material facts that Lead Plaintiffs allege were omitted influenced (if at
all) the trading price of Peregrine's securities at various times during the Class Period; and (i)
whether any statements made or facts allegedly omitted were material or otherwise actionable
under the federal securities laws. Under the relevant securities laws, a claimant's recoverable
damages are limited to the losses attributable to the alleged fraud or material misrepresentations
or omissions. Losses which resulted from factors other than the alleged fraud or material
misrepresentations or omissions are not compensable under the federal securities laws.
4. Lead Counsel believe that there was a substantial risk that Lead Plaintiffs and the
Settlement Class might not have recovered anything from the Settling Defendants in light of the
status of the litigation, the absence of insurance to satisfy the claims asserted in the Class Action
not exhausted by defense costs, and the defenses asserted to the claims. Absent the Settlement,
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Lead Plaintiffs could have recovered nothing or substantially less than the settlement amount
herein described.
The Settling Defendants deny that they are liable to the Lead Plaintiffs or the
Settlement Class and deny that Lead Plaintiffs or the Settlement Class have suffered any
damages.
IV. STATEMENT OF ATTORNEYS' FEES AND REIMBURSEMENT OFEXPENSES SOUGHT
6. Lead Counsel intend to apply for fees equal to 20% of the Settlement Fund (an
average of $0.03 per damaged share). This amount is based on the recommendation of the
retired federal Magistrate Judge who served as a mediator for various settlement negotiations in
this Action. Lead Counsel have expended considerable time and effort in the prosecution of this
litigation on a contingent fee basis, and have advanced the expenses of the litigation, with the
expectation that if they were successful in obtaining a recovery for the Settlement Class they
would be compensated for their efforts from such recoveries. In this type of litigation, it is
customary for counsel to be awarded a percentage of the common fund they have created as their
attorneys' fees. Lead Counsel are not seeking a fee on the amounts distributed in connection
with assets forfeited by Defendant Gardner to the United States government.
7. Lead Counsel are also seeking reimbursement of expenses in an amount not to
exceed $500,000 incurred in this litigation from April 30, 2006 through the date on which final
approval of the Settlement is granted.
V. REASONS FOR THE SETTLEMENT
8. The principal reason for the Settlement is the immediate substantial cash benefit
to be made available to Settlement Class Members if the Settlement is finally approved and
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becomes effective. This benefit must be compared to the risk that no recovery might be achieved
from the Settling Defendants in view of the current status of the litigation, the significant delay
that may arise from continued litigation against these defendants, and the possibility that some or
all of the Settling Defendants might ultimately be found not liable to Lead Plaintiffs and/or the
Settlement Class.
VI. BACKGROUND OF THE LITIGATION
9. Peregrine at all times during the Class Period was a publicly traded company
headquartered in San Diego, California that developed and marketed software products, and
whose stock was traded on NASDAQ.
10. Beginning in May 2002, class action complaints alleging violations of the federal
securities laws were filed in the Court against Peregrine and other defendants. The other
defendants include former officers and directors of Peregrine, former strategic alliance partners
of Peregrine, and Peregrine's former auditor. The class actions were consolidated pursuant to an
Order of the Court entered on July 23, 2002. By Order dated January 30, 2003, the Court
appointed the Loran Group as the Lead Plaintiff for securities fraud claims arising under Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 (" 1934 Act") and Heywood Waga as
Lead Plaintiff for claims on behalf of persons who held shares of either Harbinger Corporation
("Harbinger") or Remedy Corporation ("Remedy") and who acquired Peregrine registered
common stock in connection with Peregrine's acquisition of these companies (the "Subclasses").
The claims on behalf of the members of the Subclasses are for violation of Sections 11 and 15 of
the Securities Act of 1933 and Section 14(a) of the 1934 Act. The Court further appointed the
law firm of Gold Bennett Cera & Sidener LLP as Lead Counsel for the Sections 10(b) and 20(a)
claims and the law firms of Abraham Fruchter & Twersky LLP, and Stull, Stull & Brody as Lead
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Counsel for the claims brought on behalf of the Harbinger and Remedy Subclasses (collectively
referred to as "Lead Counsel").
11. On March 18, 2003, Lead Plaintiffs tiled a Consolidated Class Action Complaint
for Violations of the Federal Securities Laws (the "Consolidated Complaint"). The Consolidated
Complaint generally alleged that certain defendants disseminated a series of materially false and
misleading statements in public filings, press releases, shareholder reports, audit opinions, and
communications with securities analysts during the Class Period that caused Peregrine securities
to trade at artificially inflated prices, thereby causing damage to purchasers of Peregrine
securities. As to the Harbinger and Remedy Subclasses, the Consolidated Complaint alleged that
certain defendants signed registration statements that contained false and misleading statements.
12. The Court, in an Order dated November 21, 2003, granted in part and denied in
part motions to dismiss tiled by various defendants, including certain of the Settling Defendants.
Specifically, the Court dismissed the Section 10(b), 12(a)(2), 14(a), 15 and 20(a) claims against
certain of the Outside Director Settling Defendants without prejudice and with leave to amend,
and refused to dismiss the Section 11 claims against certain of the Outside Director Settling
Defendants. The motions to dismiss filed by Defendants Nelson and Luddy were granted in their
entirety. The motions to dismiss filed by Defendants Gardner and Gless were granted with
respect to the Section 12(a)(2) and 14 claims, but denied as to the Section 10(b), 11, 15 and 20(a)
claims.
13. On April 5, 2004, Lead Plaintiffs filed a First Amended Consolidated Class
Action Complaint for Violations of the Federal Securities Laws (the "Complaint"). Because
Peregrine had filed for bankruptcy in September 2002, it was no longer named as a defendant in
the Complaint. The Complaint generally alleges that certain defendants disseminated a series of
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materially false and misleading statements in public filings, press releases, shareholder reports,
audit opinions, and communications with securities analysts during the Class Period which
caused Peregrine securities to trade at artificially inflated prices, thereby causing damage to
purchasers of Peregrine securities . As to the Harbinger and Remedy Subclasses , the Complaint
alleges that certain defendants signed registration statements that contained false and misleading
statements.
14. The Complaint alleges that material overstatements of the Company' s revenues
and earnings disseminated during the Class Period resulted from the Company's failure to
recognize revenue properly when it was earned under applicable accounting rules and to report
Peregrine's true financial results accurately. Peregrine restated earnings for fiscal years 2000
and 2001. The primary reason for the restatements was the overstatement of revenue.
15. The Complaint further alleges that Lead Plaintiffs and other Class Members
purchased or otherwise acquired Peregrine securities during the Class Period at artificially
inflated prices as a result of certain defendants' dissemination of false and misleading statements
and suffered losses when the truth about Peregrine's financial condition became known and
Peregrine's stock price declined.
16. The Settling Defendants deny all allegations of wrongdoing or liability in the
Class Action. The Settling Defendants (excluding Stephen P. Gardner, Matthew C. Gless, and
Richard T. Nelson) also deny all other accusations of wrongdoing or violations of law, and have
asserted numerous defenses to the claims were this litigation to proceed against them. Stephen
P. Gardner, Matthew C. Gless, and Richard T. Nelson have pled guilty to criminal charges, but
otherwise deny all allegations of wrongdoing or violations of law. The Settlement is not and
shall not be construed or be deemed to be evidence or an admission or a concession on the part
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of the Settling Defendants of any fault or liability or damages whatsoever, and they do not
concede any infirmity in the defenses which they have asserted or intended to assert in the Class
Action.
17. The Court, in an Order dated March 30, 2005, granted in part and denied in part
motions to dismiss filed by various defendants, including certain of the Settling Defendants.
Specifically, the Court dismissed the Sections 10(b) and 20(a) claims against the Settling
Defendants, and refused to dismiss the Sections 11 and 14(a) claims against certain of the
Settling Defendants. Thereafter, the Court entered a Rule 54(b) judgment as to the Section 10(b)
claims in favor of the Settling Defendants and stayed prosecution of the Section 11 claims until
final resolution of an appeal as to the Section 10(b) claims. Lead Plaintiff the Loran Group
appealed the dismissal of the Section 10(b) claims to the Ninth Circuit Court of Appeals. The
appeal was argued on November 6, 2007. If this Settlement is finalized , the appeal will be
withdrawn as to the Settling Defendants. On January 23, 2009, the Ninth Circuit affirmed the
dismissal of the claims against defendants KPMG LLP, BearingPoint , Inc. and Larry Rodda.
VII. BACKGROUND TO THE SETTLEMENT
18. Lead Counsel has conducted an investigation relating to the claims and the
underlying events and transactions alleged in the Complaint. Lead Counsel has examined
relevant filings by Peregrine with the United States Securities and Exchange Commission before,
during and after the Class Period. Further, Lead Counsel was able to obtain access to Peregrine's
business records during the relevant period as a result of Lead Counsel's negotiations with
Peregrine during its Bankruptcy Court proceedings. Based on the foregoing, Lead Counsel
believe that in light of the current status of the litigation against the Settling Defendants, the
Settlement represents a significant and highly beneficial recovery for Settlement Class Members.
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19. Lead Counsel have analyzed the evidence adduced during their factual
investigation and have researched the applicable law with respect to the claims of Lead Plaintiffs
and the Settlement Class against the Settling Defendants and the potential defenses thereto. Prior
to entering into the Settlement described herein, Lead Counsel conducted an extensive
investigation of the claims, including the analysis of hundreds of thousands of documents and e-
mails produced by Peregrine.
20. Lead Plaintiffs, through Lead Counsel, have conducted discussions and arms'
length negotiations with counsel for the Settling Defendants regarding a compromise and
settlement of the Class Action with a view to settling the issues in dispute and achieving the best
relief possible consistent with the interests of the Settlement Class Members. As to the Outside
Director Settling Defendants, the parties were assisted in these efforts by a retired United States
Magistrate Judge serving as a settlement mediator.
21. Lead Plaintiffs and the Settling Defendants realize that the continued litigation of
the claims would entail substantial effort and expense and involve considerable risk and
uncertainty, and believe that the claims in the Class Action as against the Settling Defendants are
best settled as set forth herein.
22. No determination has been made by the Court as to liability or the amount, if any,
of damages suffered by the Class, nor the proper measure of any such damages. The Settlement
will provide a substantial cash benefit for Settlement Class Members and avoid the risk that
liability or damages might not be proven against the Settling Defendants, or that if liability and
damages are proven against them, that any ensuing judgment might not be collectible from them.
Under relevant law, the ultimate liability of these Non-Settling Defendants, if any, may be
reduced by the larger of the amount of the settlement payments or the proportionate
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responsibility of the Settling Defendants for any damage ultimately proven to have been incurred
by the Settlement Class.
23. A FINAL DETERMINATION HAS NOT BEEN MADE ON THE MERITS OF
THE LEAD PLAINTIFFS' CLAIMS AGAINST THE SETTLING DEFENDANTS OR THEIR
DEFENSES THERETO. ALTHOUGH THE COURT HAS MADE CERTAIN RULINGS ON
LEAD PLAINTIFFS' CLAIMS, AS DESCRIBED IN PARAGRAPHS 12 AND 17 ABOVE,
THIS NOTICE DOES NOT IMPLY THAT THERE HAS BEEN OR WOULD BE ANY
FINDING OF VIOLATION OF THE LAW OR THAT RECOVERY COULD BE HAD IN
ANY AMOUNT IF THE ACTION WERE NOT SETTLED.
VIII. DEFINITIONS
24. "Actions" means the Class Action and the PLT Action collectively.
25. "Additional Released Parties" means JMI Services, the Avery K. Moores 1994
Trust, Barry A. Moores 1993 Trust, Barry O. Moores 1991 Trust, Benjamin H. Moores 1996
Trust, Melissa K. Moores 1990 Trust, Jennifer Ann Moores Trust, John J. Moores, Jr. Trust,
Anthony K. Moores 1991 Trust, Molly Moores Schulman 1991 Trust, Jason B. Schulman 1990
Trust, Rachel E. Schulman 1990 Trust, Michael & Debra Baas 1990 Trust, Rosanne E. Baas
1990 Trust, Christopher N. Baas 1990 Trust, Seth J. Baas 1990 Trust, Britton L. Baas 1990
Trust, Patrick & Rosario Baas Trust; Clare C. Toner 1992 Trust; David A. Toner 1992 Trust, and
Toni L. Cruse 1994 Trust.
26. "Authorized Claimant" means any Settlement Class member whose Claim for
recovery is allowed by the Court.
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27. "Class Action" means the lawsuit captioned In re Peregrine Systems, Inc.,
Securities Litigation, United States District Court for the Southern District of California, Case
No. 02-CV-0870-BEN (RBB).
28. "Class Period" means the period of time from July 22, 1999 through May 3, 2002,
inclusive.
29. "Court" means the United States District Court for the Southern District of
California.
30. "Excluded Settlement Class Members" means any Settlement Class member who
validly requests exclusion from the Settlement, as set forth in this Notice.
31. "Lead Counsel" means the law firms appointed as lead counsel in the Court's
January 30, 2003 Order: Gold Bennett Cera & Sidener LLP as Lead Counsel for the Section
10(b) and 20(a) claims and Abraham Fruchter & Twersky LLP and Stull, Stull & Brody as Lead
Counsel for the claims brought on behalf of the Harbinger and Remedy Subclasses.
32. "Lead Plaintiffs" means the group consisting of David Levy, Leighton Powell,
David Schenkel, John Virden, Conrad Willemse, Bill Holman , Bob Benesko , Michael Slavitch,
Richard Maheu, and Mark Rollins (hereinafter the "Loran Group") who were appointed as Lead
Plaintiffs for the claims arising under Section 10(b) of the 1934 Act, and Heywood Waga
(hereinafter "Waga"), who was appointed as Lead Plaintiff for the claims arising under Section
11 of the 1933 Act.
33. "Person" means an individual or entity, including any corporation (including any
division or subsidiary), partnership, limited partnership, association, joint stock company, estate,
legal representative, trust , unincorporated association, or government or any political subdivision
or agency thereof.
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34. "Plan of Allocation" means the plan, previously approved by the Court on
November 15, 2006, for the allocation and distribution of the Settlement proceeds to Authorized
Claimants.
35. "PLT Action" means the lawsuit captioned Peregrine Litigation Trust v. Moores,
et al., San Diego Superior Court, Case No. GIC 788659, which is currently on appeal to Division
One of the Fourth Appellate Division of the State of California, Civil No. D051347.
36. "Released Claims" means all claims, rights, demands, suits, matters, issues or
causes of action, whether known or unknown, fixed or contingent, foreseen or unforeseen,
against the Settling Defendants and the Additional Released Parties, whether under state or
federal law, including the federal securities laws, and whether directly, indirectly,
representatively, derivatively or in any other capacity, in connection with, based upon, arising
out of, or relating to any claim that has been or could have been raised in the Actions or the acts,
facts or events alleged in the Actions, including the claims against the Settling Defendants and
the Additional Released Parties asserted in the PLT Action. Released Claims also specifically
include claims the Lead Plaintiffs and Settlement Class do not know or suspect to exist in their
favor at the time of the Settlement which, if known by them, might affect the Settlement and the
releases therein, or might affect their decision not to object to, or opt out of, the Settlement.
With respect to any and all claims released herein, the Parties agree that, effective upon the
Effective Date, Plaintiffs expressly waive and relinquish, shall be deemed to have, and by
operation of the Order and Final Judgment shall have, expressly waived and relinquished, and
the Settling Defendants expressly waive and relinquish, to the fullest extent permitted by law, the
provisions, rights, and benefits of § 1542 of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS ORHER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
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IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTEDHIS OR HER SETTLEMENT WITH THE DEBTOR.
Additionally, the Parties expressly waive, upon the Effective Date and by operation of the Order
and Final Judgment shall have waived, any and all provisions, rights and benefits conferred by
any law of the United States or of any state or territory of the United States or of any other
country, whether statutory, code, or common law, which is similar, comparable or equivalent to
§ 1542 of the California Civil Code. The Parties may hereafter discover facts in addition to or
different from those which they now know or believe to be true with respect to the subject matter
of the claims released herein, but hereby stipulate and agree that they do settle and release, and
shall be deemed to have, and upon the Effective Date and by operation of the Order and Final
Judgment shall have, settled and released all claims described herein, whether known or
unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or
hidden, which now exist, or heretofore have existed, upon any theory of law or equity now
existing or coming into existence in the future, without regard to the subsequent discovery or
existence of such different or additional facts. The Parties acknowledge that the foregoing
waiver was bargained for and is a material term and condition of the Settlement.
37. "Settlement" refers to the agreements to settle claims in the Class Action, which,
if approved, will result in dismissal of the claims in the PLT Action, as set forth in the
Stipulation and Agreement of Settlement with defendants John J. Moores, Charles E. Noell III,
Norris van den Berg, Richard A. Hosley II, Christopher A. Cole, and Rodney F. Dammeyer
dated as of August 8, 2008, and the Stipulation and Agreement of Settlement with Defendants
Stephen P. Gardner, Matthew C. Gless, Frederic B. Luddy, and Richard T. Nelson dated as of
December 22, 2008, both of which are on file with the Court.
38. "Settlement Class" means:
All Persons (including Lead Plaintiffs) who purchased or otherwiseacquired Peregrine common stock during the Class Period and whowere injured thereby, and two subclasses ("Subclasses") consistingof all Persons who held shares of Harbinger Corporation and who
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acquired Peregrine registered common stock in connection withPeregrine's acquisition of Harbinger Corporation, which wasconsummated on or about June 16, 2000, and all Persons who heldshares of Remedy Corporation and who acquired Peregrineregistered common stock in connection with Peregrine'sacquisition of Remedy Corporation, which was consummated onor about August 27, 2001.
Excluded from the Settlement Class are: defendants in the Actions, the Additional Released
Parties, members of the immediate families (parents, spouses, siblings and children) of each of
the individual defendants; any person, firm, trust, corporation, or entity in which any defendant
has a controlling interest; the officers, directors, parents, subsidiaries, and affiliates of Peregrine;
and the legal representatives, heirs, successors in interest or assigns of any such excluded party.
Also excluded from the Settlement Class are any putative class members who exclude
themselves by filing a Request for Exclusion in accordance with the requirements set forth in this
Notice, or putative class members who have previously released the Settling Defendants in
connection with Peregrine-related claims.
39. "Settlement Fund" means all funds deposited in an escrow account by the Settling
Defendants, including accumulated interest or other earnings, less any costs, expenses, reserves,
taxes, or attorneys' fees paid therefrom (as authorized by the Stipulation or by Court Order) and
the balance of funds held by the Peregrine Litigation Trust, which totaled approximately
$5,000,000 as of January 31, 2009. The funds from the PLT are being included in the Settlement
Fund in accordance with an Order of the Bankruptcy Court as conceived and structured by Lead
Counsel.
40. "Settling Defendants" means, collectively, John J. Moores, Charles E. Noell III,
Norris van den Berg, Richard A. Hosley II, Christopher A. Cole, Rodney F. Dammeyer, Stephen
P. Gardner, Matthew C. Gless, Frederic B. Luddy, and Richard T. Nelson.
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IX. TERMS OF THE PROPOSED SETTLEMENTS
41. In full and complete resolution of the claims which have or could have been
asserted against the Settling Defendants in the Class Action and of the additional claims
described in paragraph 44 below, and subject to the terms and conditions of the Settlement,
which is on file with the Court and available for inspection, the Settling Defendants have paid or
will pay $56,075,000 in cash into an escrow account as follows:
(a) Settling Defendant Dammeyer paid $950,000 into escrow on August 21,
2008.
(b) Settling Defendants Moores, Noell, van den Berg, Hosley, and Cole paid
$5,000,000 into escrow on October 10, 2008, paid $22,500,000 into escrow on January 5, 2009,
and will pay $27,500,000 into escrow on or before October 31, 2009. The October 31, 2009
payment obligation is reflected in a promissory note from defendant John J. Moores and Rebecca
Ann Moores jointly as individuals and as Trustees of the John and Rebecca Ann Moores Family
Trust, which may be prepaid at any time and will be secured by the security and agreements set
forth in paragraph 7(a)(4)(D) of the Stipulation and Agreement of Settlement. Simple interest
shall accrue on the outstanding balance starting November 3, 2008. From November 3, 2008
through March 31, 2009, the rate of interest shall be the six-month Treasury bill rate in effect on
November 3, 2008; beginning March 31, 2009, the rate of interest shall be four percent (4%) per
annum.
(c) Settling Defendant Luddy will pay One Hundred Thousand Dollars
($100,000) into an agreed upon escrow account, half of such amount within ten (10) days of
entry of an order granting preliminary approval of the Officer Settling Defendants' settlement
and the other half five days before the final approval hearing.
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(d) Settling Defendant Nelson will pay Twenty-Five Thousand Dollars
($25,000) into an agreed upon escrow account within ten (10) days of entry of an order granting
preliminary approval of the Officer Settling Defendants' settlement.
(e) Settling Defendants Gardner and Gless will not be required to pay any
cash in light of their current financial condition. In January 2009, Gardner filed for bankruptcy
protection. Gardner previously forfeited to the United States government certain assets pursuant
to his guilty plea in the criminal case captioned United States v. Gardner, et al., Criminal Case
No. 04CR2605W (S.D. Cal.). These assets consist of approximately $1,354,684.44 in cash and
three parcels of real property located in Maine. It is anticipated that some amount of these
previously-forfeited assets will be distributed to the Authorized Claimants in accordance with the
Plan of Allocation. Such distribution will need to be approved at a later date by the U.S.
Department of Justice and the federal district court overseeing Gardner's criminal case. No
attorneys' fees will be claimed on any amounts so distributed. As to Gless, he has provided Lead
Counsel with a financial statement showing essentially no assets. Settling Defendants Gardner
and Gless will also be required, consistent with their rights in connection with the criminal cases
pending against them and to the extent their respective criminal counsel indicates it is advisable,
to cooperate with Lead Counsel in pursuing any remaining claims. Such cooperation may
include providing relevant documents in their possession, custody and control, as well as
interviews and testimony upon request from Lead Counsel.
In addition to resolving the claims against the Settling Defendants in the Class Action, the
Settlement will, if finally approved, also release the claims brought against the Settling
Defendants and certain Additional Released Parties in the PLT Action. Such actions would
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resolve claims that Lead Plaintiffs asserted against Peregrine in Peregrine's bankruptcy case on
behalf of the Settlement Class members.
42. The Settling Defendants deny the wrongdoing alleged, or that could have been
alleged in both the Class Action and the PLT Action. The Settlement shall not be construed as
evidence or an admission by the Settling Defendants regarding any claim, fault, liability,
wrongdoing, or damage, or of any infirmity in the defenses that the Settling Defendants have
asserted.
43. If the Settlement is approved by the Court, all claims which have or could have
been asserted in the Actions against the Settling Defendants or the Additional Released Parties
will be released and dismissed on the merits, with prejudice, as to all Settlement Class members.
All Persons, except Excluded Settlement Class Members, will be forever barred from
prosecuting the Actions, or any other action raising any Settled Claims against the Settling
Defendants or the Additional Released Parties.
44. The Settlement will become effective once, among other things, a final judgment
is entered in the Class Action approving the Settlement, the PLT Action is dismissed with
prejudice, and neither order is subject to appeal and the entire settlement amount has been
deposited into escrow account by the Settling Defendants.
X. NOTICE OF SETTLEMENT FAIRNESS HEARING
45. NOTICE IS HEREBY GIVEN, pursuant to Rule 23 of the Federal Rules of Civil
Procedure and an Order of the Court dated , 2009, that a hearing will be held
before the Honorable Roger T. Benitez, in the United States Courthouse, 880 Front Street, Fourth
Floor, Courtroom 3, San Diego , CA 92101-8900, at _:_, on , 2009 (the
"Settlement Fairness Hearing") to determine whether the Settlement is fair, reasonable and
#120595 17
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adequate, and to consider the application of Lead Counsel for an award of attorneys' fees and
reimbursement of expenses.
46. The Court, by its Order Preliminarily Approving Settlements and Providing for
Notice, dated , 2009, has, for settlement purposes , certified (a) a Settlement Class
consisting of all persons who purchased Peregrine securities during the period from July 22,
1999 through May 3, 2002, inclusive; (b) a subclass consisting of all persons who held shares of
Harbinger stock and who acquired Peregrine registered common stock in connection with
Peregrine's acquisition of Harbinger on or about June 16, 2000; and (c) a subclass consisting of
all persons who held shares of Remedy stock and who acquired Peregrine registered common
stock in connection with Peregrine ' s acquisition of Remedy on or about August 27, 2001.
Excluded from the Settlement Class are: (i) all defendants in the Class Action; (ii) all members
of the immediate families (parents, spouses, siblings and children) of such defendants; (iii) the
Additional Released Parties; (iv) any entity affiliated with any defendant in the Class Action or
with any member of the immediate family of such defendant , including without limitation any
entity in which any such defendant or any member of the immediate family of such defendant
has a controlling interest; (v) the officers, directors, parents, subsidiaries and affiliates of
Peregrine ; (vi) the legal representatives , heirs, successors in interest and assigns of any of the
foregoing; and (vii) with respect to the Settling Defendants, any Person who has previously
released them from claims relating to Peregrine.
XI. DISTRIBUTION OF SETTLEMENT PROCEEDS
47. In addition to the $56,075,000 total settlement consideration, an additional
amount of approximately $5,000,000, which is being held by the Peregrine Litigation Trust,
together with the interest earned thereon, less all taxes, approved costs, fees and expenses shall
#120595 18
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be distributed to members of the Settlement Class and Subclasses who previously filed
acceptable Proofs of Claim ("Authorized Claimants") pursuant to the Notice dated July 31, 2006.
The Proof of Claim forms previously submitted by Settlement Class Members have been
processed by the Claims Administrator and will be used to determine the amount of each
Authorized Claimant's recovery. The Allowed Losses previously calculated by the Claims
Administrator will be used to determine each Authorized Claimant's pro rata share of the money
recovered. If you did not previously file a Proof of Claim and wish to do so at this time, you
may download the form at www.gilardi.com. Any such newly filed Proofs of Claim must be
submitted by no later than [55 days after date of Preliminary Approval Order].
48. Each Authorized Claimant shall receive, on a pro rata basis, that share of the
Settlement Fund that the Authorized Claimant ' s "Recognized Loss" bears to the total
Recognized Losses of all Authorized Claimants as calculated pursuant to the Plan of Allocation
of Settlement Proceeds previously approved by the Court on November 15, 2006.
49. Checks will be issued to Authorized Claimants as soon as possible after the Court
has finally approved the Settlement. It is possible that there will be two separate distributions in
light of the staggered dates of the Settlement payments.
XII. THE RIGHTS OF SETTLEMENT CLASS MEMBERS
50. The Court has certified a Settlement Class allowing the Settlement to proceed for
the benefit of the members of the Settlement Class. If you purchased Peregrine securities and/or
received them in an exchange for Harbinger or Remedy shares during the period from July 22,
1999 through May 3, 2002, inclusive, then you are a Settlement Class Member. However, if you
previously released claims against any of the Settling Defendants relating to Peregrine, you are
#120595 19
Case 3 : 02-cv-00870-BEN-RBB Document 826-2 Filed 02/09/2009 Page 22 of 27
not entitled to any share of the settlement proceeds paid by them. Settlement Class Members
have the following options pursuant to Rule 23(c)(2) of the Federal Rules of Civil Procedure:
(a) If you wish to remain a member of the Settlement Class, you do not have
to do anything at this time. Settlement Class Members will be represented by Lead Plaintiffs and
Lead Counsel, unless you enter an appearance through counsel of your own choice at your own
expense. You are not required to retain your own counsel, but if you choose to do so, such
counsel must file an appearance on your behalf on or before [55 days after date of Preliminary
Approval Order], and must serve copies of such appearance on the attorneys listed in paragraph
55 below.
(b) If you do not wish to remain a member of the Settlement Class, you may
exclude yourself from the Settlement Class by following the instructions in paragraph 53 below.
Persons who exclude themselves from the Settlement Class will NOT be entitled to receive any
share of the Settlement proceeds and will not be bound by the Settlement.
(c) If you object to the Settlement, or to Lead Counsel's application for fees or
expenses, and if you do not exclude yourself from the Settlement Class, you may present your
objections by following the instructions in paragraph 55 below.
51. IF YOU ARE A SETTLEMENT CLASS MEMBER AND YOU DO NOT
PROPERLY EXCLUDE YOURSELF FROM THE SETTLEMENT CLASS, YOU WILL BE
BOUND BY THE SETTLEMENT, INCLUDING RELEASES, AND THE FINAL
JUDGMENT OF THE COURT DISMISSING THIS ACTION AGAINST THE SETTLING
DEFENDANTS. IF YOU EXCLUDE YOURSELF, YOU WILL NOT BE BOUND BY THE
JUDGMENT BUT YOU WILL NOT BE ENTITLED TO ANY SHARE OF THE NET
SETTLEMENT FUND.
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XIII. EXCLUSION FROM THE SETTLEMENT
52. Each Member of the Settlement Class shall be bound by all determinations and
judgments in this Class Action concerning the Settlement, whether favorable or unfavorable,
unless such Person shall mail, by first class mail, a written request for exclusion from the
Settlement Class, postmarked no later than [55 days after date of Preliminary Approval Order],
addressed to In re Peregrine Systems, Inc. Securities Litigation Exclusions, c/o Gilardi & Co.
LLC, Claims Administrator , Post Office Box 8040, San Rafael , CA 94912-8040. No Person
may be excluded from the Settlement Class after that date. In order to be valid, each such
request for exclusion must set forth the name and address of the Person requesting exclusion,
must state that such Person "requests exclusion from the Settlement Class in In re Peregrine
Systems, Inc. Securities Litigation," and must be signed by such Person. Persons requesting
exclusion must also provide: (1) for every purchase or acquisition of Peregrine stock during the
Class Period, the date of the purchase or acquisition, the purchase or acquisition price, and the
number of shares purchased or acquired; and (2) for every sale of Peregrine stock during the
Class Period, the date of the sale, the sale price, and the number of shares sold. Persons
requesting exclusion should indicate whether any or all of their Peregrine shares were acquired in
connection with the Harbinger or Remedy mergers. Persons requesting exclusion are also
requested to provide a telephone number. The request for exclusion shall not be effective unless
it provides the required information and is made within the time stated above, or the exclusion is
otherwise accepted by the Court.
XIV. RIGHTS IN CONNECTION WITH SETTLEMENT FAIRNESS HEARING
53. At the Settlement Fairness Hearing, the Court will determine whether finally to
approve the Settlement and to dismiss the Class Action and the claims of the Settlement Class
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Members as against the Settling Defendants only, including a release of all claims in the PLT
Action. If the Settlement is approved, an additional hearing will be held to determine whether
the application of Lead Counsel for attorneys' fees and expenses shall be approved. These
hearings may be adjourned from time to time by the Court without further written notice to the
Settlement Class Members.
54. At the Settlement Fairness Hearing, any Settlement Class Member who has not
properly submitted a Request for Exclusion from the Settlement Class may appear in person or
by counsel and be heard to the extent allowed by the Court in opposition to the fairness,
reasonableness and adequacy of the Settlement or the application for attorneys' fees and
reimbursement of expenses; provided, however, that in no event shall any person be heard in
opposition thereto and in no event shall any paper or brief submitted by any such person be
accepted or considered by the Court, unless, on or before [55 days after date of Preliminary
Approval Order], such person (a) files with the Clerk of the Court notice of such person's
intention to appear, showing proof of such person's membership in the Settlement Class, and
providing a statement that indicates the basis for such opposition, along with any documentation
in support of such objection, and (b) simultaneously serves copies of such notice, proof,
statement and documentation, together with copies of any other papers or briefs such person files
with the Court, in person or by mail upon each of the following: Solomon B . Cera, Esq., Gold
Bennett Cera & Sidener LLP, 595 Market Street , Suite 2300, San Francisco , CA 94105-2835;
Howard T. Longman, Esq., Stull Stull & Brody, 6 East 45th Street, New York, NY 10017; and
Lawrence D. Levit, Esq., Abraham Fruchter & Twersky LLP, One Penn Plaza, Suite 2805, New
York, NY 10119-0165, on behalf of Lead Plaintiffs ; and Harry A. Olivar, Jr., Esq ., Quinn
Emanuel Urquhart Oliver & Hedges, LLP, 865 South Figueroa Street, 10th Floor, Los Angeles,
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California 90017, on behalf of Defendants John J. Moores and JMI Services, Inc.; Robin C.
Gibbs, Esq ., Gibbs & Bruns LLP, 1 100 Louisiana , Suite 5300, Houston , TX 77002, on behalf of
Defendants Charles E. Noell III, Richard A. Hosley 11, and Norris van den Berg; Leighton M.
Anderson, Esq., Bewley, Lassleben & Miller, LLP, 13215 East Penn Street, Suite 510, Whittier,
CA 90602-1797, on behalf of Defendant Christopher A. Cole; Phillip L. Stern, Esq., Neil , Gerber
& Eisenberg LLP, 2 North LaSalle Street, 22nd Floor, Chicago, IL 60602, on behalf of
Defendant Rodney F. Dammeyer; Christopher H. McGrath, Esq., Paul Hastings Janofsky &
Walker, LLP, 4747 Executive Drive, 12th Floor, San Diego , CA 92121, on behalf of Defendant
Frederic B. Luddy; Christian D. Humphreys, Esq., McKenna Long & Aldridge, LLP, Symphony
Towers, 750 B Street, Suite 3300, San Diego, CA 92101-8105, on behalf of Defendant Richard
T. Nelson; Caroline McIntyre, Esq., Bergeson, LLP, 303 Almaden Blvd, Suite 500, San Jose, CA
95110-2712, on behalf of Defendant Stephen P. Gardner; and Thomas L. Vance, Esq., Vance &
Blair, LLP , 853 Camino Del Mar, Suite 202 , Del Mar, CA 92014, on behalf of Defendant
Matthew C. Gless.
XV. FURTHER INFORMATION
55. For a more detailed statement of the matters involved in this Class Action,
reference is made to the pleadings, to the Stipulations of Settlement, to the Orders entered by the
Court and to the other papers filed in the Class Action, which may be inspected at the Office of
the Clerk of the Court, United States District Court, Southern District of California, 880 Front
Street , Suite 4290, San Diego , CA 92101-8900, during regular business hours.
56. Further information regarding the Settlement referred to in this Notice may also
be obtained by contacting Lead Counsel: Solomon B. Cera, Esq., Gold Bennett Cera & Sidener
LLP, 595 Market Street , Suite 2300 , San Francisco , CA 94105 , (415) 777-2230 ; Howard T.
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Longman, Esq., Stull Stull & Brody, 6 East 45th Street, New York, NY 10017, (212) 687-7230;
and Lawrence D. Levit, Esq., Abraham Fruchter & Twersky LLP, One Penn Plaza, Suite 2805,
New York, NY 101 19-0165, (212) 279-5050.
XVI. SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
56. If you purchased or acquired securities of Peregrine Systems, Inc. during the
period from July 22, 1999 through May 3, 2002, inclusive for the beneficial interest of a person
or organization other than yourself, the Court has directed that, within seven days of your receipt
of this Notice, you either (a) provide to the Claims Administrator the name and last known
address of each person or organization for whom or which you purchased or acquired such
Peregrine securities during such time period or (b) request additional copies of this Notice, which
will be provided to you free of charge, and within seven days mail the Notice directly to the
beneficial owners of Peregrine securities. If you choose to follow alternative procedure (b), the
Court has directed that, upon such mailing, you send a statement to the Claims Administrator
confirming that the mailing was made as directed. You are entitled to reimbursement from the
Settlement Fund of your reasonable expenses actually incurred in connection with the foregoing,
including reimbursement of postage expense and the cost of ascertaining the names and
addresses of beneficial owners. Those expenses will be paid upon request and submission of
appropriate supporting documentation. All communications concerning the foregoing should be
addressed to the Claims Administrator:
In re Peregrine Systems, Inc. Securities Litigationc/o Gilardi & Co. LLCP.O. Box 8040San Rafael, CA 94912-8040(800) 654-5763www.gilardi.com
DO NOT CONTACT THE COURT.
#120595 24
Case 3:02-cv-00870-BEN-RBB
Dated : February_, 2009
Document 826-2 Filed 02/09/2009 Page 27 of 27
By Order of the CourtClerk of the Court
#120595 25
Case 3:02-cv-00870-BEN-RBB Document 826-3 Filed 02/09/2009 Page 1 of 4
EXHIBIT 2
Case 3:02-cv-00870-BEN-RBB Document 826-3 Filed 02/09/2009 Page 2 of 4
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF CALIFORNIA
Case No . 02-CV-0870-BEN (RBB)IN RE PEREGRINE SYSTEMS, INC.SECURITIES LITIGATION
This Document Relates to:ALL ACTIONS
SECOND SUMMARY NOTICE OF PENDENCY OFCLASS ACTION AND HEARING ON PROPOSED SETTLEMENTS
TO: ALL PERSONS WHO PURCHASED OR OTHERWISE ACQUIRED SECURITIES OFPEREGRINE SYSTEMS, INC. FROM JULY 22, 1999 THROUGH MAY 3, 2002,INCLUSIVE, INCLUDING ALL PERSONS WHO OWNED SHARES OFHARBINGER CORP. OR REMEDY CORP. STOCK AND EXCHANGED THOSESHARES FOR PEREGRINE SHARES (THE "CLASS").
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil
Procedure and an Order of the Court dated , 2009, that the above-captioned action has
been certified as a class action for settlement purposes and that additional settlements of
$56,075,000 have been proposed with regard to defendants John J. Moores, Charles E. Noell III,
Norris van den Berg, Richard A. Hosley II , Christopher A. Cole, Rodney F . Dammeyer, Stephen
P. Gardner, Matthew C. Gless, Frederic B. Luddy, and Richard T. Nelson. A hearing will be held
before the Honorable Roger T. Benitez, in the United States District Court for the Southern
District of California, 880 Front Street, Courtroom 3, 4"' Floor, San Diego, California 92101-
8900, at _:_, on , 2009 to determine whether the proposed settlements should be
approved by the Court as fair, reasonable, and adequate and to consider the application of
Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses. In addition to settling the
#119554 -1-
Case 3:02-cv-00870-BEN-RBB Document 826-3 Filed 02/09/2009 Page 3 of 4
above-captioned action, the proposed Settlements will release all claims that have been, or could
have been, brought against the Settling Defendants and Additional Released Parties in Peregrine
Litigation Trust v. Moores, San Diego Superior Court, Case No. GIC 788659, which is currently
on appeal in the California Court of Appeal.
IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS
WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT
FUNDS. If you have not yet received the full printed Second Notice of Pendency of Class
Action and Hearing on Additional Proposed Partial Settlements (the "Notice"), you may obtain a
copy by identifying yourself as a member of the Settlement Class and by calling or writing to:
In re Peregrine Systems, Inc. Securities Litigationc/o Gilardi & Co. LLCClaims AdministratorP.O. Box 8040San Rafael, California 94912-8040(800) 654-5763www.gilardi.com
Inquiries, other than requests for the Notice, may be made to Lead Plaintiff's Counsel:
Solomon B. Cera, Esq.Gold Bennett Cera & Sidener LLP595 Market Street, Suite 2300San Francisco, California 94105
Lawrence D. Levit, Esq.Abraham Fruchter & Twersky LLPOne Penn Plaza, Suite 2805New York, New York 10119-0165
Howard T. Longman, Esq.Stull Stull & Brody6 East 45' StreetNew York, New York 10017
The recovery of each Settlement Class member will be based on the Allowed Loss
determined from the Proof of Claim forms previously submitted to the Claims Administrator. To
exclude yourself from the Settlement Class you must submit a request for exclusion, postmarked
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no later than [55 dates after date of Preliminary Approval Order], setting forth certain
information ordered by the Court and described in the Notice. If you are a Settlement Class
member and do not exclude yourself you will be bound by the final orders and judgments of the
Court.
PLEASE DO NOT CONTACT THE COURT.
By Order of The Court
#119554 -3-
Case 3:02-cv-00870-BEN-RBB Document 826-4 Filed 02/09/2009 Page 1 of 13
EXHIBIT 3
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
IN RE PEREGRINE SYSTEMS, INC.SECURITIES LITIGATION
This Document Relates to:
ALL ACTIONS.
Master File No. 02-CV-0870-BEN (RBB)
CLASS ACTION
FINAL ORDER AND JUDGMENTDISMISSING ACTION AGAINSTDEFENDANTS JOHN J. MOORES,CHARLES A. NOELL HI, NORRIS VANDEN BERG, RICHARD A. HOSLEY II,CHRISTOPHER A. COLE, ANDRODNEY F. DAMMEYER,CONFIRMING RELEASES, ANDBARRING CERTAIN CLAIMS
Judge: Honorable Roger T. Benitez
JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-BEN(RBB)
3:02-cv-00870-BEN-RBB Document 826-4 Filed 02/09/2009 Page 3 of 13
By Stipulation and Agreement of Settlement dated as of August 9, 2008 (the
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"Stipulation"), Lead Plaintiffs and defendants John J. Moores, Charles E. Noell III, Norris van den
Berg, Richard A. Hosley II, Christopher A. Cole, and Rodney F. Dammeyer (the "Settling
Defendants") have entered into a settlement of this Class Action. By Order dated , 2009
(the "Preliminary Approval Order"), this Court: (a) preliminarily approved the Settlement;
(b) certified, for settlement purposes only, the Settlement Class identified in the Stipulation; and
(c) provided for notice to be disseminated to the Settlement Class members. On , 2009,
this Court held a final hearing to consider whether to approve the Settlement under the provisions
of Rule 23 of the Federal Rules of Civil Procedure. Due and adequate notice of the hearing was
given to Settlement Class members and all parties in the Class Action. The Court has considered
the Stipulation, all papers filed and proceedings had herein, and all oral and written comments
received regarding the Settlement, and has reviewed the entire record in the Class Action.
NOW, THEREFORE, GOOD CAUSE APPEARING, IT IS HEREBY ORDERED,
ADJUDGED AND DECREED that:
1. Defmitions . For purposes of this Judgment, the Court adopts all defined terms set
forth in the Stipulation.
2. Jurisdiction . The Court has jurisdiction over the subject matter of the Class
Action, Lead Plaintiffs, and the Settling Defendants.
3. Requirements of Class Action Satisfied . With respect to the Settlement Class,
the Court finds and concludes that: (a) the Settlement Class members are so numerous that joinder
of all Settlement Class members in the Class Action is impracticable; (b) questions of law and fact
common to the Settlement Class predominate over any individual questions; (c) the claims of Lead
Plaintiffs are typical of the claims of the Settlement Class; (d) Lead Plaintiffs and Plaintiffs'
Counsel have, at all times, fairly and adequately represented and protected the interests of the
Settlement Class members; and (e) a class action is superior to other available methods for the fair
and efficient adjudication of the controversy, considering: (i) the interests of the Settlement Class
members in individually controlling the prosecution of the separate actions; (ii) the extent and
nature of any litigation concerning the controversy already commenced by Settlement Class
JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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I members; (iii) the desirability or undesirability of continuing the litigation of these claims in this
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particular forum; and (iv) the difficulties likely to be encountered in the management of the Class
Action.
4. Adequacy of Notice. The Court finds that the distribution of the Second Notice of
Pendency of Class Action and Hearing on Additional Proposed Partial Settlement and the
publication of the summary notice (as provided for in the Preliminary Approval Order) constituted
the best notice practicable under the circumstances to apprise the Settlement Class members of the
terms of the proposed Settlement and their rights. Settlement Class members were given an
opportunity to present their objections, if any, to the Stipulation. The Court finds that the
provision of notice to Settlement Class members fully met the requirements of Rule 23 of the
Federal Rules of Civil Procedure, federal law, due process, the United States Constitution, and any
other applicable law.
5. Requests for Exclusion from Settlement . The Court finds that all Settlement
Class members have been provided with an adequate opportunity to exclude themselves from the
Settlement Class by requesting exclusion though the procedures set forth in the Notice. The Court
further finds that the persons identified in Exhibit 1 hereto ("Excluded Settlement Class
Members"), and no other persons or entities, have submitted a valid Request for Exclusion as
defined in the Stipulation.
6. Approval of Settlement . The Court approves the Settlement, including the
releases, the amount of the settlement consideration, and all other Settlement terms as fair, just,
reasonable, and adequate to all of the Settlement Class members within the meaning of Rule 23 of
the Federal Rules of Civil Procedure. Lead Plaintiffs and the Settling Defendants are directed to
exercise their best efforts to consummate the Settlement as set forth in the Stipulation.
7. Dismissal of Class Action Atainst Certain Defendants and Injunction Against
Further Prosecution of Settled Claims .
(a). The Class Action and all claims contained therein, and all other Settled
Claims are dismissed with prejudice in favor of the Settling Defendants and against Lead Plaintiffs
and all other Settlement Class members, except Excluded Settlement Class Members. In
JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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accordance with Section 4(f) of the Private Securities Litigation Reform Act of 1995 , 15 U.S.C. §
78u-4(f)(7)(A), all claims for contribution against the Settling Defendants are barred,
extinguished , discharged and satisfied as a matter of law. All persons are permanently barred,
enjoined , and restrained from commencing , prosecuting or asserting any claim against the Settling
Defendants , however styled , whether legal or equitable, whether arising under state, federal or
common law, whether for indemnification , contribution or otherwise denominated , where the
claim is based upon, arises out of or relates to the facts underlying the claims in the Class Action
including, without limitation , any claim in which a Non-Settling Defendant seeks to recover from
the Settling Defendants ( 1) any amounts a Non- Settling Defendant has paid, becomes liable to pay
or may become liable to pay (whether in cash or other form of consideration) in the Class Action,
and (2) any costs , fees, expenses or attorneys ' fees that a Non-Settling Defendant incurred or may
incur in the Class Action . This bar extends to the Settling Defendants ' and the Additional
Released Parties ' attorneys, agents , insurers , trusts, trustees , estates, employers , employee benefit
plans, representatives , heirs, marital community and assigns. Nothing in this paragraph shall be
construed to divest any Non-Settling Defendant of the right to obtain an appropriate judgment
reduction or settlement credit available to such Non-Settling Defendant under any applicable
statutory or common law rule.
(b). The release and injunction described in paragraph 7(a) above is intended to
release all claims in, and stop further prosecution of the appeal in, the action encaptioned
Peregrine Litigation Trust v. Moores, et al., San Diego County Superior Court, Case No. GIC
788659 ("the PLT Action"). If any court should construe the release and injunction described in
paragraph 7(a) to permit the continued prosecution of the PLT Action, Lead Plaintiffs and the
Class must (a) move the Court for a declaration that the Peregrine Litigation Trustee is currently
Richard M. Kipperman, and (b) use best efforts to obtain the Trustee's release and dismissal of any
Settled Claims brought by the Peregrine Litigation Trust against the Settling Defendants.
Release by Lead Plaintiffs and Settlement Class Members . Upon the Effective
Date, Lead Plaintiffs fully, finally, and forever release, relinquish and discharge , and each
Settlement Class member (except Excluded Settlement Class Members) shall be deemed to have,JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,
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and by operation of this Judgment shall have, fully, finally, and forever released, relinquished and
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discharged, each of the Settling Defendants and Additional Released Parties from any and all
Settled Claims.
9. Further Releases by Recipients of Settlement Fund. Only those Settlement
Class members that file valid and timely Proofs of Claim and Release in the form prescribed by
the Court shall be entitled to receive any distribution from the Settlement Fund, except as may be
otherwise ordered by the Court. All Settlement Class members (except Excluded Settlement Class
Members) shall, upon entry of this Judgment, be bound by the releases set forth in this Judgment
whether or not they executed and submitted a valid and timely Proof of Claim and Release form or
receive a distribution of the Settlement Fund.
10. Release by the Settling Defendants . Upon the Effective Date, the Settling
Defendants fully, finally, and forever release, relinquish and discharge each of the Lead Plaintiffs
and Settlement Class members from any and all claims that the Settling Defendants and/or the
Additional Released Parties may have, or may have had, regarding the commencement,
prosecution, assertion, or resolution of the Class Action or the Settled Claims including, without
limitation, any claims for violation of Rule 11 of the Federal Rules of Civil Procedure.
Notwithstanding the foregoing, the Settled Claims do not include any claims for violation of the
Stipulation.
11. Release Includes Unknown Claims . Upon entry of this Judgment, the Settled
Claims include all claims, rights, demands, suits, matters, issues or causes of action, whether
known or unknown, fixed or contingent, foreseen or unforeseen, against the Settling Defendants
and the Additional Released Parties, whether under state or federal law, including the federal
securities laws, and whether directly, indirectly, derivatively or representatively or in any other
capacity, in connection with, based upon, arising out of, or relating to any claim that has been or
could have been raised in the Class Action or the acts, facts or events alleged in the Class Action.
Settled Claims also specifically includes claims which the Plaintiffs do not know or suspect to
exist in their favor at the time of the Stipulation which, if known by them, might affect the
Settlement and the releases in the Stipulation , or might affect their decision not to object to, or optJUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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out of, the Settlement. With respect to any and all claims released, the Parties agree that, upon the
Effective Date, Plaintiffs expressly waive and relinquish, shall be deemed to have, and by
operation of this Order and Final Judgment shall have, expressly waived and relinquished, and the
Settling Defendants expressly waive and relinquish, to the fullest extent permitted by law, the
provisions, rights, and benefits of § 1542 of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMSWHICH THE CREDITOR DOES NOT KNOW OR SUSPECTTO EXIST IN HIS OR HER FAVOR AT THE TIME OFEXECUTING THE RELEASE, WHICH IF KNOWN BY HIMOR HER MUST HAVE MATERIALLY AFFECTED HIS ORHER SETTLEMENT WITH THE DEBTOR.
Additionally, the parties waive, upon the Effective Date and by operation of this Order and Final
Judgment shall have waived, any and all provisions, rights and benefits conferred by any law of
the United States or of any state or territory of the United States or of any other country, whether
statutory, code or common law, which are similar, comparable or equivalent to § 1542 of the
California Civil Code. The Parties may hereafter discover facts in addition to or different from
those which they now know or believe to be true with respect to the subject matter of the claims
released, but hereby stipulate and agree that they do settle and release, and shall be deemed to
have, and upon the Effective Date and by operation of this Final Order and Judgment shall have,
settled and released all claims described in the Stipulation, whether known or unknown, suspected
or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now
exist, or heretofore have existed, upon any theory of law or equity now existing or coming into
existence in the future, without regard to the subsequent discovery or existence of such different or
additional facts. The Parties acknowledge that the foregoing waiver was bargained for and is a
material term and condition of the Settlement.
12. Injunction Barring Claims by the Settling Defendants for Indemnification or
Contribution . Each of the Settling Defendants is permanently barred and enjoined from
instituting or prosecuting against any person or entity in any court, state or federal, or any other
tribunal, any claim, however styled, whether denominated as a claim for indemnification or
contribution or otherwise denominated, whether legal or equitable, known or unknown, foreseen
JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES , NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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I or unforeseen, matured or unmatured, accrued or unaccrued, whether arising under state law or
2 federal law, by which said Settling Defendant seeks to recover from any other person or entity any
3 portion of: (a) any amounts that said Settling Defendant has paid, or in the future pays, or has
4 become liable to pay, or may become liable to pay (whether in cash or any other form of
5 consideration) in connection with the Class Action; and/or (b) any costs, expenses, or attorneys'
6 fees that the Additional Released Party has incurred or may incur in defending the Class Action.
7 All such claims shall be extinguished, discharged, satisfied and unenforceable. Nothing in this
8 paragraph shall bar or enjoin any of the Settling Defendants from pursuing claims against any
9 insurance companies.
10 13. Injunction Barring Claims Against the Settling Defendants for
11 Indemnification or Contribution . To the extent permitted by law, all persons or entities are
12 permanently barred and enjoined from instituting or prosecuting against any Settling Defendant or
13 Additional Released Parties in any court, state or federal, or any other tribunal, any claim,
14 however styled, whether denominated as a claim for indemnification or contribution or otherwise
15 denominated, whether legal or equitable, known or unknown, foreseen or unforeseen, matured or
16 unmatured, accrued or unaccrued, whether arising under state law or federal law, by which such
17 person or entity seeks to recover from any Settling Defendant or Additional Released Parties any
18 portion of: (a) any amounts that such person or entity has paid, or in the future pays, or has
19 become liable to pay, or may become liable to pay (whether in cash or any other form of
20 consideration) in connection with the Class Action; and/or (b) any costs, expenses, or attorneys'
21 fees that such person or entity has incurred or may incur in defending the Class Action. All such
22 claims shall be extinguished, discharged, satisfied and unenforceable.
23 14. Reduction of Judgments against Persons Whose Claims for Indemnification or
24 Contribution against the Settling Defendants Are Barred. In view of the Settlement Payment
25 made by the Settling Defendants on behalf of the Additional Released Parties, all of whom are
26 deemed to be covered persons who entered into a settlement with Lead Plaintiffs within the
27 meaning of 15 U.S.C. § 78u-4(f)(7)(B), any person or entity against whom a final judgment is
28 hereafter obtained, either in the Class Action or in any other action or proceeding by or on behalfJUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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1 of any Settlement Class member (except an Excluded Settlement Class Member) based upon any
2 claim asserted in the Class Action, shall be entitled in said action or proceeding to a reduction in
3 the amount of said judgment in accordance with, or to have the amount of damages in said
4 judgment calculated by reference to, all applicable provisions of federal statutory and common law
5 relating to the proper amounts ofjudgments or damages following a settlement between a plaintiff
6 and less than all of the parties legally liable for plaintiffs injury, including without limitation the
7 provisions of 15 U.S.C. § 78u-4(f)(7)(B).
8 15. No Admission or Evidence . Neither the Stipulation nor the Settlement, nor any
9 act performed or document executed pursuant to, or in connection with, the Stipulation or the
10 Settlement: (a) is, or may be deemed to be, or may be used as, an admission of, or evidence of, the
11 validity of any Settled Claim or of any wrongdoing or liability by the Settling Defendants; (b) is,
12 or may be deemed to be, or may be used as, an admission of, or evidence of, any fault or omission
13 of the Settling Defendants in any civil, criminal or administrative proceeding in any court,
14 administrative agency or other tribunal; or (c) shall be offered in evidence by any person or entity
15 for any purpose except to enforce the Stipulation. Any Settling Defendant and Additional
16 Released Parties may file the Stipulation and/or this Judgment in any other action that may be
17 brought against them in order to support a defense or counterclaim based on principles of res
18 judicata, collateral estoppel, release, good faith settlement, bar order, or judgment reduction or
19 credit, or in support of any theory of claim preclusion or issue preclusion or similar defense or
20 counterclaim. Lead Plaintiffs, other Settlement Class members, the Settling Defendants, the
21 Additional Released Parties, and their respective counsel, may file the Stipulation in any
22 proceeding brought to enforce any of its terms or provisions.
23 16. Pleadings in Good Faith . The Court finds that all pleadings and other court
24 papers filed by Lead Plaintiffs against the Settling Defendants, and all pleadings and other court
25 papers filed by the Settling Defendants against Lead Plaintiffs, were filed on a good faith basis in
26 accordance with Rule 11 of the Federal Rules of Civil Procedure, Section 27(c) of the Securities
27 Act, and Section 21D(c) of the Exchange Act.
28JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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17. Bear Own Costs . Lead Plaintiffs and the Settling Defendants are to bear their own
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costs, except as otherwise provided in the Stipulation.
18. Effectiveness of Judgment Not Dependent on Certain Other Rulings . The
effectiveness of this Judgment shall not be affected, in any manner, by rulings that the Court may
I make concerning the Plan of Allocation of Settlement Proceeds and/or Plaintiffs' Counsel's
application for an award of attorneys' fees or reimbursement of expenses.
19. Reversal on Appeal. In the event that this Judgment is subsequently vacated,
modified, or reversed on appeal, or in the event the PLT Action is not dismissed pursuant to
paragraph 7(b) above, this Judgment and any order entered by the Court in accordance with the
terms of the Stipulation, including without limitation any order based upon the stipulated
certification of the Settlement Class, shall be vacated, nunc pro tunc; Lead Plaintiffs and the
Settling Defendants shall be restored to their respective positions in the Class Action as of
March _, 2008; the Settlement fund shall be returned to the Settling Defendants as provided for
in the Stipulation; and the Class Action shall proceed as though no class had ever been certified.
20. Entry of Separate Judgment. The Court finds that this Judgment comes within
the provisions of Rule 54(b) of the Federal Rules of Civil Procedure and finds that there is no just
reason for delay in entering this Judgment. This Judgment disposes of all claims against the
Settling Defendants, which claims are legally and factually severable from the claims remaining in
the Class Action. Any appellate review of this Judgment will not require the appellate court to
address issues similar to those contained in claims still pending before this Court. Pursuant to
Rule 54(b), the Court directs that this Judgment be entered forthwith in the Class Action as a
separate, final judgment in the Class Action.
21. Reservation of Jurisdiction . The Court reserves exclusive and continuing
jurisdiction over the Class Action, Lead Plaintiffs, and the Settlement Class members for purposes
of supervising the administration and distribution of the Settlement Fund and any other related
matters.
22. Captions . The captions in the paragraphs of this Judgment are for convenience
only and are not to be used for construction of the meaning of the respective paragraphs.JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES, NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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IT IS SO ORDERED.
Dated: , 2009
Roger T. BenitezJudge of the United States District Court
Presented By:
GOLD BENNETT CERA & SIDENER LLP
By: Akvt',A^Solomon B. Cera595 Market Street, Suite 2300San Francisco , California 94105-2835Telephone : (415) 777-2230Facsimile : (415) 777-5189
Attorneys for Section 10(b) LeadPlaintiff The Loran Group
STULL, STULL & BRODY
By: 1
SHoward T. Longman6 East 45th Street , 5th FloorNew York, New York 10017Telephone : (212) 687-7230Facsimile : (212) 490-2022
- and -
JUDGMENT CONFIRMING ACTION AGAINST DEFENDANTS MOORES , NOELL, VAN DEN BERG, HOSLEY,COLE, AND DAMMEYER CONFIRMING RELEASES, AND BARRING CERTAIN CLAIMS - Case No. 02-CV-0870-
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ABRAHAM FRUCHTER & TWERSKY LLP
By:
Lawrence D. LevitOne Penn Plaza, Suite 2805New York, New York 10119-0165Telephone: (212) 714-2444Facsimile : (212) 279-3655
Attorneys for Section 1 I Lead PlaintiffHeywood Waga
0 3:02-cv-00870-BEN-RBB Document 826-4 Filed 02/09/2009 Page 13 of 13
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EXHIBIT 1
EXCLUDED SETTLEMENT CLASS MEMBERS
02433/2592642.1