UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YOR K IN RE GLOBAL CROSSING LTD . SECURITIES LITIGATION Case No. 02 Civ . 910 (GEL ) IN RE GLOBAL CROSSING LTD . : Case No. 02 Civ . 7453 (GEL) ERISA LITIGATIO N JOHN PUSLOSKIE, et al ., on Behalf of Themselves and All Others Similarly Situated , Plaintiffs, Case No . 02 Civ . 8508 (GEL) V. GARY WINNICK, et al ., Defendants . RANDAL SIMONETTI, et al ., on Behalf of Themselves : and All Others Similarly Situated , Plaintiffs, Case No. 03 Civ. 1188 (GEL) V . JOSEPH PERRONE, et al ., Defendants . STIPULATION OF SETTLEMEN T WHEREAS, Global Crossing Ltd ., Asia Global Crossing Ltd . (a subsidiary of Global Crossing Ltd .) and Pacific Crossing Ltd . (a subsidiary of Asia Global Crossing
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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
IN RE GLOBAL CROSSING LTD .SECURITIES LITIGATION
Case No. 02 Civ. 910 (GEL)
IN RE GLOBAL CROSSING LTD . : Case No. 02 Civ. 7453 (GEL)ERISA LITIGATION
JOHN PUSLOSKIE, et al ., on Behalf of Themselvesand All Others Similarly Situated ,
Plaintiffs,Case No. 02 Civ. 8508 (GEL)
V.
GARY WINNICK, et al .,
Defendants .
RANDAL SIMONETTI, et al., on Behalf of Themselves :and All Others Similarly Situated ,
Plaintiffs,Case No. 03 Civ. 1188 (GEL)
V.
JOSEPH PERRONE, et al .,
Defendants.
STIPULATION OF SETTLEMEN T
WHEREAS, Global Crossing Ltd ., Asia Global Crossing Ltd. (a subsidiary of
Global Crossing Ltd .) and Pacific Crossing Ltd . (a subsidiary of Asia Global Crossing
Ltd.) have each been involved in bankruptcy proceedings pursuant to the United State s
Bankruptcy Code ; and
WHEREAS, pursuant to automatic stays under the Bankruptcy Code, all action s
against Global Crossing Ltd ., Asia Global Crossing Ltd. and Pacific Crossing Ltd. were
stayed unless provided otherwise by the Court ; and
WHEREAS, pre-petition claims against Global Crossing Ltd., Asia Global
Crossing Ltd . and Pacific Crossing Ltd . are subject to the bankruptcy proceedings i n
which each company is or was involved ; and
WHEREAS, over 50 putative class actions alleging securities law violations were
filed against certain of Global Crossing Ltd .'s current and former officers, directors and
employees, and five putative class actions alleging securities law violations were filed
against certain of Asia Global Crossing Ltd .'s current and former officers, directors an d
employees ; and
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd.'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have (or had) an interest in
certain ERISA Plans ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
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WHEREAS, the Cou rt consolidated the actions alleging securities law violation s
into the Securities Action ; and
WHEREAS, the Court consolidated 15 of the putative class actions alleging
ERISA violations into the ERISA Consolidated Action, leaving two of the putative class
actions that also allege ERISA violations unconsolidated ; and
WHEREAS, Securities Lead Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs an d
Settling Defendants have agreed to a settlement of the Securities Action and the ERIS A
Actions, subject to the completion of additional factual investigation and analysis b y
Securities Lead Counsel and ERISA Plaintiffs' Counsel to evaluate further the fairness ,
reasonableness and adequacy of the proposed settlement ;
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by an d
among the undersigned , including , (i) Securities Lead Plaintiffs (individually and in thei r
representative capacities) and Securities Settling Defendants, by and through their dul y
authorized counsel, that the Securities Action and the matters raised by it hereby ar e
settled and compromised as to Securities Settling Defendants and Releasees and that th e
Securities Action will be dismissed on the merits and with prejudice as to the Securitie s
Settling Defendants and that the Released Claims will be released as to the Releasee s
based upon the terms and conditions set forth in this Settlement Agreement and the
Securities Release set forth herein, subject to the approval of the Court becom ing Fina l
and the payments required by Sections B .C.I .a, R.C . Lb, II .C.4 and II .C.S being made
into the Cash Settlement Securities Subaccount, and (ii) ERISA Plaintiffs (individuall y
and in their representative capacities ) and ERISA Settling Defendants , by and through
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their duly authorized counsel, that the ERISA Actions and the matters raised by the m
hereby are settled and compromised as to ERISA Settling Defendants and Releasees and
that the ERISA Actions will be dismissed on the merits and with prejudice and that the
Released Claims will be released as to the Releasees based upon the terms and condition s
set forth in this Settlement Agreement and the ERISA Release set forth herein, subject to
the approval of the Court becoming Final and the payments required by Sections II .C.2 .a
and II.C.3 being made into the Cash Settlement ERISA Subaccount _
I. INTRODUCTION AND DEFINITIONS
A. Procedural History
1 . Since February 2002, over 50 putative class actions alleging
securities law violations were filed against, among others, certain of Global Crossin g
Ltd.'s current and former officers, directors and employees on behalf of putative classes
of Global Crossing Securities holders .
2. In addition, 17 putative class actions were filed against, amon g
others, certain of Global Crossing's current and former officers, directors and employees
alleging ERISA violations with respect to one or more of Global Crossing's ERIS A
Plans .
3 . The Judicial Panel on Multidistrict Litigation centralized all o f
these actions before the Honorable Gerard E . Lynch of the United States District Court
for the Southern District of New York for coordinated or consolidated pretrial _
proceedings . The Panel thus transferred to this Court all actions not originally filed in the
Court .
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4. In an order dated December 13, 2002, the Court addressed, among
other things, the consolidation of the pending actions .
5 . The Securities Action
a. In its December 13, 2002 order, the Court consolidated the
actions alleging securities violations involving Global Crossing Ltd. into the Securities
Action pursuant to the provisions of Federal Rule of Civil Procedure 42(a) . The Court
appointed the Public Employees' Retirement System of Ohio and the State Teachers'
Retirement System of Ohio as Securities Lead Plaintiffs and Grant & Eisenhofer, P .A. as
Securities Lead Counsel.
b. The Court also appointed an Executive Committee,
comprised of certain counsel for plaintiffs Staro Asset Management, Richard P .
Kleinknecht, Bennett Restructuring Funds and James F. Tucker .
c. Pursuant to the Court's December 13, 2002 order ,
Securities Lead Counsel has the responsibility for, among other things, conducting
settlement negotiations with defendants on behalf of all putative class members in the
Securities Action .
d . In a May 29, 2003 order, the Court consolidated into the
Securities Action the five putative class actions involving Asia Global Crossing Ltd. It
also appointed certain counsel for plaintiffs Michael A . Bernstein Profit Sharing Plan and
Roman Foltyn as a member of the Executive Committee .
C . On August 11, 2003, Securities Lead Plaintiffs an d
Securities Plaintiffs filed their Securities Complaint, naming as defendants the followin g
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current and former officers, directors and employees of Global Crossing : Gary Winnick,
Dan J. Cohrs, David L . Lee, Barry Porter, Abbott L . Brown, Lodwrick M. Cook, John M .
Scanlon, Hillel Weinberger, James C. Gorton, Joseph P . Clayton, Robert Annunziata, Leo
J. Hindery, Jr., Thomas J . Casey, David A. Walsh, William B . Carter, Jr., S . Wallac e
Dawson, Jr., John A. Scarpati, John M. Finlayson, Jay R. Bloom, Dean C . Kehler, Jay R .
Levine, William D. Phoenix, Bruce Raben, Geoffrey J .W. Kent, Eric Hippeau, Douglas
H. McCorkindale, William E . Conway, Jr ., K. Eugene Shutler, Joseph P. Perrone ,
Thomas U. Koll, Maria Elena Lagomasino, John J . Legere, Stefan C. Riesenfeld, Pieter
Knook, Steven J. Green, Walter Beran and Anthony Christie .
f. The Securities Complaint also named as defendants certai n
entities allegedly owned and/or controlled by defendants Gary Winnick (GKW Unified
Holdings LLC, the Winnick Family Foundation and Pacific Capital Group, Inc.), Barry
Porter (Galenight Corporation) and Abbott Brown (the Brown Living Trust an d
Ridgestone Corporation); the Company's former auditor (Arthur Andersen LLP), certain
of its associated entities, and certain of its current and former partners ; Salomon Smith
Barney, one of its analysts and certain members of its research department ; Citigroup
Inc. ; Microsoft; Softbank; and certain other financial institutions allegedly involved with
either Global Crossing Ltd . or Asia Global Crossing Ltd .
g. The Securities Complaint asserts claims under section s
Separate Releasee Counsel nor Releasees shall have any liability arising out of such
determination . If a Securities Authorized Claimant disagrees with such determination
and the parties are unable to resolve the dispute, the Securities Authorized Claimant shall,
within thirty (30) days of the dispute's having first been raised, submit the dispute to the
Court for summary resolution, without any right of appeal or review . Any such
Securities Class Member shall be responsible for his, her or its own costs, including,
without limitation, attorneys' fees, incurred in pursuing any_dispute . . _ . .
9. All initial determinations as to the validity of a Securities Proof o f
Claim, the amount of any claims and the calculation of the extent to which eac h
ill
Securities Authorized Claimant will participate in the Securities Net Cash Settlement
Amount, the preparation and mailing of distributions to Securities Authorized Claimants,
and the distribution of the Cash Settlement Payment and the Securities Net Cash
Settlement Amount shall be made by Securities Lead Counsel, its designees or agents, the
Administrator, or such other persons or entities as Securities Lead Counsel may, in its
sole discretion, deem necessary or advisable to assist it in the administration of this
Settlement Agreement. The administration of the Cash Settlement Payment and the
Securities Net Cash Settlement Amount, and decisions on all disputed questions of law
and fact with respect to the validity of any Securities Proof of Claim or regarding the
rejection or amount of any claim, shall remain under the jurisdiction of the Court . All
Class Members and Settling Parties expressly waive trial by jury (to the extent any such
right may exist) and any right of appeal or review with respect to such determinations .
10. Unless otherwise ordered by the Court, any Securities Class
Member who fails to submit a valid and timely Securities Proof of Claim shall be barred
from receiving a distribution from the Securities Net Cash Settlement Amount, but shall
nevertheless be bound by the Securities Release and all proceedings, orders and
judgments in the Action even if he, she or it has pending, or subsequently initiates, any
litigation, arbitration or other proceeding, or has any Claim, against any or all of the
Releasees that is, or relates in any way to, any Released Claim _
I_ ERISA Plans of Allocation- _
1. Subject to Section II.G above, ERISA Plaintiffs shall propose to
the Court, and seek the Court's approval of, (z) an ERISA 401(k) Plan of Allocatio n
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pursuant to which the ERISA 401(k) Distribution Amount shall be distributed to ERIS A
401(k) Class Members and (ii) an ERISA Simonetti Plan of Allocation pursuant to whic h
the ERISA Szmonetti Distribution shall be distributed to ERISA Simonetti Class
Members .
2 . All initial determinations as to the extent to which each ERIS A
Class Member will participate in the ERISA Net Cash Settlement Amount, and th e
distribution of the Cash Settlement Payment and the ERISA Net Cash Settlement Amoun t
shall be made by ERISA Plaintiffs' Counsel, their designees or agents, the Administrator ,
or such other persons or entities as ERISA Plaintiffs' Counsel may, in their sole
discretion, deem necessary or advisable to assist them in the administration of this
Settlement Agreement . The administration of the Cash Settlement Payment and the
ERISA Net Cash Settlement Amount, and decisions on all disputed questions of law and
fact with respect to distribution of the ERISA Net Cash Settlement Amount, shall remain
under the jurisdiction of the Court . All Class Members and Settling Parties expressl y
waive trial by jury ( to the extent any such right may exist ) and any right of appeal or
review with respect to such determ inations .
3. Cooperation in Remaining Litigation
1 . Securities Settling Defendants agree reasonably to cooperate wit h
Securities Lead Counsel in connection with any continued prosecution of any claims in
the Securities Action ; provided however, that any Securities Settling Defendant who is or _
was an officer, director or employee of a Securities Non-Settling Defendant shall not b e
obligated to cooperate in the prosecution of claims against that Securities Non-Settlin g
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Defendant ; provided further that, to the extent any Securities Settling Defendant incur s
any expense in connection with cooperating with Securities Lead Counsel pursuant to thi s
provision, Securities Lead Counsel shall reimburse such Securities Settling Defendant for
such expense; provided however, that the expenses that shall be reimbursed by Securitie s
Lead Counsel shall be limited to reasonable out-of-pocket expenses, including, withou t
limitation, attorneys' fees, and such expenses must be pre-approved by Securities Lead
Counsel (which approval shall not be unreasonably withheld) prior to being incurred ;
provided further that Securities Settling Defendants expressly retain and do not waive
any applicable claim of any privilege or work-product protection in connection with any
cooperation provided to Securities Lead Counsel pursuant to this Section H .J . 1 . The
cooperation contemplated by this Section U .J.I includes, but is not limited to, interviews
of Securities Settling Defendants and the production of relevant documents related to th e
Claims against Securities Non-Settling Defendants raised by the allegations in th e
Securities Action to the extent such documents are not protected from disclosure by th e
attorney-client privilege, work-product doctrine or other applicable privileges-
2. Securities Settling Defendants and Securities Lead Plaintiff shal l
modify the existing Securities Confidentiality Agreement to allow Securities Lead
Plaintiff to use Settlement Disclosure Material (as that term is defined in the Securities
Confidentiality Agreement ) in the continued prosecution of the Securities Class Actio n
with respect to Non-Settling Defendants ; provided however, that Securities Lead Plaintiff
shall not directly share such Settlement Disclosure Material and/or the informatio n
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contained in such Settlement Disclosure Material with any individuals or entities who are
not directly involved in the Securities Class Action .
3. If, notwithstanding the Bar Orders, a person or entity obtains a
judgment against any of the Releasees on any claim that is based upon, arises out of, o r
relates to any Released Claim, including, but not limited to, any claim that is based upon ,
arises out of or relates to the Actions, or the transactions and occurrences referred to i n
the Complaints, or on any other claim, however denominated, to recover, directly or
indirectly from such Releasee, (i) any amounts that the person or entity obtaining the
judgment against the Releasee might become liable to pay to any of the Class Members
or (ii) any costs, expenses, or attorneys' fees that such person or entity might incur in
defending any claim made against him, her or it by any of the Class Members, the Class
and the Class Members agree that they will reduce or credit any judgment or settlement
(up to the amount of such judgment or settlement) that they might obtain against that
person or entity by an amount equal to the amount of that person's or entity's judgment
against the Releasee, which amount shall be credited to the Releasee .
4. If a final judgment is entered in favor of a class certified in any o f
the Actions against any person or entity before the adjudication of such person's or such
entity's claims against any Releasee, any funds collected on account of such judgment
shall not be distributed to such class that has obtained the judgment, but shall be held in
trust pending final adjudication of such claim, and such funds shall be used as a credit
against any judgment rendered in favor of the person or entity against the Releasee as
provided in Section 11 . .1 .3 above .
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Securities Lead Plaintiffs, ERISA Plaintiffs and/or any class that
has been certified in any of the Actions will use their best efforts in settling any claim
with any person or entity to obtain from such person or entity a release of any and all
claims based upon, arising out of or relating to the Actions or any of the Released Claims
that the person or entity may have against any of the Releasees .
III. PRE-APPROVAL DISCOVERY
A. Subject to the provisions of the Securities Confidentiality Agreement and
the ERISA Confidentiality Agreement (both of which will be amended following the
Execution Date to address use of discovery in connection with implementation of this
Settlement Agreement), Securities Lead Counsel and ERISA Plaintiffs' Counsel will
continue to conduct reasonable discovery into the facts underlying the claims in the
Complaints or relating to any of the Settling Defendants to assure themselves and
Securities Lead Plaintiffs, Securities Plaintiffs and ERISA Plaintiffs that such underlying
facts are consistent with their understanding, based on the discovery and investigation
they have already conducted (as described in Section LC above), and that this Settlement
Agreement is fair, reasonable and adequate .
B. Securities Lead Counsel and ERISA Plaintiffs' Counsel have stated tha t
such additional discovery will include, but not be limited to, review of additional
documents, as well as depositions and/or interviews of current or former Global Crossing
officers, directors and/or employees, and potentially of other witnesses to be identified by
Securities Lead Counsel and/or ERISA Plaintiffs' Counsel .
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C. All discovery relating to Settling Defendants shall be conducted as soon as
practicable after the Execution Date, but in any case shall be completed no later than
forty-five (45) days before the Fairness Hearing ; provided that all Settling Parties shall
provide full cooperation in completing discovery by this date, and no Settling Party shall
take any step to obstruct the discovery contemplated by this Section 111 ; provided further
that Securities Lead Counsel and ERISA Plaintiffs' Counsel may terminate this
Settlement Agreement if discovery is not completed by forty-five (45) days before the
Fairness Hearing as a result of a failure by one or more Settling Defendants to cooperat e
in completing discovery .
D. If, as a result of conducting the additional discovery contemplated by thi s
Section III, Securities Lead Counsel, Securities Lead Plaintiffs, Securities Plaintiffs ,
ERISA Plaintiffs' Counsel and ERISA Plaintiffs continue to believe that this Settlemen t
Agreement is fair, reasonable and adequate, then the Settling Parties shall execute a n
amendment to this Settlement Agreement stating that the discovery contemplated by thi s
Settlement Agreement has been completed and setting out Securities Lead Counsel's ,
Securities Lead Plaintiffs', Securities Plaintiffs', ERISA Plaintiffs' Counsel's and ERIS A
Plaintiffs' conclusions that this Settlement Agreement is fair, reasonable and adequate .
E. If, as a result of conducting the additional discovery contemplated by this
Section III, Securities Lead Counsel, Securities Lead Plaintiffs, Securities Plaintiffs ,
ERISA Plaintiffs' Counsel and ERISA Plaintiffs reasonably and in good faith do no t
believe that this Settlement Agreement is fair, reasonable and adequate, then they may
terminate or seek to renegotiate this Settlement Agreement .
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IV. NOTICE TO THE CLASS
A. Mailing of the Notice
I . Subject to the requirements of the Hearing Order and not later than
forty-five (45) days before the Fairness Hearing, Securities Lead Counsel and ERISA
401(k) Lead Counsel shall cause to be mailed, by first-class mail, postage prepaid, a cop y
of the Notice and Securities Proof of Claim (i) to each person or entity in the Class who
can be identified by reasonable effort and (ii) in cases of pending litigation, arbitration or
other proceeding, or any other Claim, against any Releasee involving any Released
Claims, to all legal counsel known by Securities Lead Counsel, ERISA Plaintiffs'
Counsel, or Settling Defendants' Lead Counsel to represent a Class Member ; provided
that Settling Defendants' Lead Counsel shall notify Securities Lead Counsel and/or
ERISA Plaintiffs' Counsel of all such legal counsel of which it is aware within twenty
(20) days following the Execution Date .
2. No later than forty-five (45) days before the Fairness Hearing,
Securities Lead Counsel, ERISA Plaintiffs' Counsel and the Administrator shall cause the
Notice to be published on their respective websites .
3. A draft of the Notice shall be prepared by Securities Lead Counsel ,
ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel in plain English as
soon as practicable after the Execution Date ; provided however, that Securities Lead
Counsel, ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel shall provide
a draft to Securities Settling Defendants' Lead Counsel, ERISA Settl ing Defendants'
Lead Counsel and Separate Releasee Counsel for their review no later than March 30,
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2004. Such draft is subject to the approval of Settling Defendants' Lead Counsel, ERIS A
Settling Defendants' Lead Counsel and Separate Releasee Counsel . Securities Lead
Counsel, ERISA 401(k) Lead Counsel, ERISA Simonetti Lead Counsel, Settling
Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel and Separate
Releasee Counsel shall agree on a final version of the Notice by no later than April 15 ,
2004. A copy of the agreed upon Notice shall be submitted to the Court within thirty (30)
days following the Preliminary Approval Date.
4. "lie Notice shall, among other things ,
a. contain a short, plain statement of the background of the
Actions ;
b, explain that the Court has certified the Securities Class for
settlement purposes and identify the Securities Class Members ;
c. explain that the Court has certified the ERISA Consolidated
Class for settlement purposes and identify the ERISA Consolidated Class Members ;
d. explain that the Court has certified the ERISA Pusloskie
Class for settlement purposes and identify the ERISA Pusloskie Class Members ;
e. explain that the Court has certified the ERISA Simonetti
Class for settlement purposes and identify the ERISA Sirnonetti Class Members ;
f, describe each of the Plans of Allocation and state that each
Plan of Allocation may be modified in connection with, among other things, a ruling by
the Court, an objection filed by a Class Member or a settlement with a person or entity
requesting exclusion from the Securities Class ;
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g. state that any receipt of a distribution or other relief by a
Class Member is contingent on Court approval of this Settlement Agreement and such
approval becoming Final ;
h. state that all available proceeds from all of the relevant
insurance policies will be exhausted in their entirety if this Settlement Agreement i s
approved and that the insurers will be discharged and released with respect to all of their
obligations to insureds under the relevant policies ;
i . explain that (i) the Pender Securities Coverage and the
Pender Supplemental Amount shall be paid in GBP, (ii) the rate at which such GBP can
be converted to United States Dollars shall be subject to fluctuation and (iii) fluctuations
in the rate at which GBP can be converted to United States Dollars will affect the amoun t
of monies ultimately available to the Securities Class and the ER1SA Class ;
j. explain how and when a Securities Proof of Claim is to b e
submitted ;
k. state that a Securities Class Member may exclude himself,
herself or itself from the Securities Class ;
1. state that an ERISA Class Member may not exclude
himself or herself from the ERISA Class ;
rn. explain how a Securities Class Member may request
exclusion from the Securities Class and state that exclusion is necessary even if th e
Securities Class Member has pending, or subsequently initiates, any litigation, arbitratio n
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or any other proceeding, or has any Claim, against any or all of the Releasees relating to
any of the Released Claims ;
n. explain how a Class Member may object to any term or
aspect of this Settlement Agreement ;
o_ explain that, if this Settlement Agreement is approved, the
Bar Orders described in Sections XII.A.18 and XII .A.19 below will be entered by the
Court and request that any person or entity who objects to the Bar Orders should appea r
at the Fairness Hearing so that he, she or it may be heard by the Court regarding why th e
Bar Orders should not be entered by the Court as set out in this Settlement Agreement ;
p . describe the Securities Attorneys' Fees and Expense s
Application that will be submitted to the Court for approval by Securities Lead Counsel
and the amount of the ERISA Attorneys' Fees and Expenses Applications that will b e
submitted to the Court for approval by ERISA Plaintiffs' Counsel ;
q . identify the date, time and location of the Fairness Hearing,
and explain that the date and time may change without further notice ;
r . set forth in an appendix or otherwise the complete languag e
of the Securities Release and the ERISA Release, as well as the relevant definitions fo r
terms in the Securities Release and the ERISA Release ; and
s . direct Class Members who have questions about the tax
consequences of participating in the settlement to consult their-own tax .advisors
regarding such consequences .
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S. The Notice shall conform to all applicable requirements of the
Federal Rules of Civil Procedure, the United States Constitution (including the Due
Process Clause), the PSLRA, the Rules of the Court and any other applicable law, and
shall otherwise be in the manner and form agreed upon by the Settling Parties and
approved by the Court.
B. Summary Notice
I . No later than forty-five (45) days before the Fairness Hearing ,
Securities Lead Counsel and ERISA Consolidated Lead Counsel shall cause the
Summary Notice to be published on at least one occasion in the newspapers identified o n
Exhibit C.
2. A draft of the Summ ary Notice shall be prepared by Securitie s
Lead Counsel, ERISA 401(k) Lead Counsel and ERISA Simonetti Lead Counsel in plain
English as soon as practicable after the Execution Date ; provided however, that Securities
Lead Counsel, ERISA 401(k) Lead Counsel and ERISA Sifnonetti Lead Counsel shal l
provide a draft to Securities Settling Defendants' Lead Counsel, ERISA Settling
Defendants' Lead Counsel and Separate Releasee Counsel for their review no later than
March 30, 2004. Such draft is subject to the approval of Settling Defendants' Lead
Counsel, ERISA Settling Defendants' Lead Counsel and Separate Releasee Counsel_
Securities Lead Counsel, ERISA 401(k) Lead Counsel, ERISA Sifnonetti Lead Counsel ,
Settling Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel an d
Separate Releasee Counsel shall agree on a final version of the Summary Notice by n o
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later than April 15, 2004 . A copy of the agreed upon Summary Notice shall be submitte d
to the Court within thirty (30) days following the Preliminary Approval Date .
V. RETENTION OF ADMINISTRATO R
A. As ordered in the Hearing Order, Securities Lead Counsel and ERISA
401(k) Lead Counsel shall retain the Administrator to help implement the settlement
contemplated by this Settlement Agreement .
B. The Administrator may assist with various tasks, including, withou t
limitation: (1) mailing or arranging for the mailing of the Notice to Class Members ;
(ii) arranging for publication of the Summary Notice ; (iii) publication of the Notice on
the Administrator's website ; (iv) answering written inquiries from Class Members andlo r
forwarding such inquiries to Securities Lead Counsel, ERISA 401(k) Lead Counsel or
their designee(s) ; (v) providing additional copies of the Notice, upon request, t o
Nominees or Class Members, with respect to which the Administrator shall separately
record the number of Notices sent to ERISA Class Members and to Securities Clas s
Members (or Nominees); (w) receiving and maintaining on behalf of the Court an y
requests for exclusion from the settlement received from potential Securities Clas s
Members ; (vii) receiving and processing Securities Proofs of Claim from Securities Clas s
Members ; (viii) mailing or causing to be mailed to Securities Authorized Claimants their
distributions under the Securities Plan of Allocation ; and (ix) otherwise assisting
Securities Lead Counsel and ERISA 401(k) Lead Counsel with administration and,
implementation of this Settlement Agreement.
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C. As ordered by the Court in the Hearing Order, the Administrator shal l
establish and staff with representatives knowledgeable about this Settlement Agreemen t
and the Plans of Allocation a toll-free telephone number for responding to inquiries from
Class Members about this Settlement Agreement and any issues relating to the Actions .
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel shall agree to a protocol for operating the telephone number consistent with
industry standards, and Securities Lead Counsel and ERISA 401(k) Lead Counsel shall
require the Administrator to operate the toll-free telephone number consistent with suc h
agreed-upon standard .
VI . RIGHT TO COMMUNICATION WITH CLASS MEMBERS
A. Securities Lead Plaintiffs, Securities Plaintiffs, Securities Lead Counsel ,
Executive Committee Members, ERISA Plaintiffs and ERISA Plaintiffs' Counse l
acknowledge and agree that Global Crossing has the right to communicate orally and i n
writing with, and to respond to inquiries from, Class Members, including, without
limitation :
L communications between Class Members and representatives o f
Global Crossing whose responsibilities include ( z) investor relations or (ii) administerin g
the Company's ERISA Plans to the extent such communications are initiated by Clas s
Members; and
2. communications as may be necessary to implement the terms of
this Settlement Agreement and to conduct the Company's normal business .
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B. Subject to Section XIV.C below, Securities Lead Plaintiffs, Securitie s
Lead Counsel, ERISA Plaintiffs, ER.ISA Plaintiffs' Counsel, Settling Defendants '
Counsel and Separate Releasee Counsel agree to cooperate in good faith to ensure that
any comments about or descriptions of the settlement contemplated by this Settlemen t
Agreement are balanced, fair and accurate .
VII. REQUESTS FOR EXCLUSION
A. Any potential Secu rities Class Member who wishes to be excluded from
the Securities Class must mail by first-class mail or otherwise deliver a written reques t
for exclusion to the Administrator, care of the address provided in the Notice, such that i t
is postmarked or delivered no later than ten (10) days before the Fairness Hearing, or a s
the Court may otherwise direct; provided that a request for exclusion from the Securitie s
Class with respect to any ERISA Plan shall be valid only if submitted by a person o r
entity authorized by the relevant ERISA Plan documents to act on behalf of such ERISA
Plan . A list of the persons and entities who have validly and timely requested exclusio n
from the Securities Class shall be provided by the Settling Parties to the Court at o r
before the Fairness Hearing .
B. A potential Securities Class Member's request for exclusion shall includ e
the following information : (i) name, ( ii) address , ( iii) telephone number, ( iv) number and
type of Global Crossing Securities purchased, sold, exchanged, acquired or retained ,
(v) prices paid or value at receipt and (vi) the date of each transaction .
C. Unless otherwise ordered by the Court, any potential Securities Clas s
Member who does not file a timely written request for exclusion as provided by thi s
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Section VII shall be bound by the Securities Release and by all proceedings, orders and
judgments in the Securities Action, even if he, she or it has pending, or subsequently
initiates, litigation, arbitration or any other proceeding, or has any Claim, against any or
all of the Releasees relating to any of the Released Claims ; provided further that any
potential Securities Class Member who also is an ERISA Class Member shall remain a n
ERISA Class Member and be bound by the ERISA Release even if he or she files a
timely written request for exclusion from the Securities Class pursuant to this Sectio n
VII.
VIII . OBJECTIONS TO SETTLEMEN T
A. Any Class Member who wishes to object to the fairness, re asonableness o r
adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to any term(s) of
this Settlement Agreement, or to the proposed Securities Attorneys' Fees and Expenses
Award or the proposed ERISA Attorneys' Fees and Expenses Award must both effect
service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel and file with the Court by no later than ten (10) days before
the Fairness Hearing, or as the Court may otherwise direct, a statement of his, her or it s
objection(s) ; provided however, that a potential Securities Class Member who request s
exclusion from the Securities Class pursuant to Section VII above shall not be able t o
submit an objection pursuant to this Section VIII .
B. The statement of objection of the Class Member shall state (i) whether th e
Class Member is a Securities Class Member, an ERISA Class Member or both, (ii) whic h
part of this Settlement Agreement (that relating to the Securities Action, the ERISA
126
Actions or the Actions) the Class Member objects to and ( iii) the specific reason(s), if
any, for each such objection made by the Class Member, including any legal support th e
Class Member wishes to bring to the Court's attention and any evidence the Clas s
Member wishes to introduce in support of such objection-
C. Any Class Member may file an objection on his, her or its own, or throug h
an attorney hired at his, her or its own expense . If a Class Member hires an attorney t o
represent him, her or it in connection with filing an objection, the attorney must both
effect service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel and file with the Court a notice of appearance no later than te n
(10) days before the Fairness Hearing, or as the Court otherwise may direct .
D. Securities Class Members and any attorneys hired at their expense ma y
obtain access to the discovery materials in the Securities Action for the sole purpose o f
assessing this Settlement Agreement, but must first agree in writing to be bound by th e
Securities Stipulation of Confidentiality .
A draft of the Securities Stipulation of Confidentiality shall be
prepared by Securities Lead Counsel and Settling Defendants ' Lead Counsel as soon as
practicable after the Execution Date, but not later than March 31, 2004.
2. The discovery materials in the Securities Action shall be made
available for inspection at the offices of Settling Defendants' Lead Counsel in New York,
New York; provided that a Securities Class Member (or his, her or its attorney (if any) )
shall be provided access to discovery materials for a period of no more than thirty (30 )
days from the date on which a request for access is made .
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E. ERISA Class Members and any attorneys hired at their expense ma y
obtain access to the discovery materials in the ERISA Actions for the sole purpose o f
assessing this Settlement Agreement, but must first agree in writing to be bound by th e
ERISA Stipulation of Confidentiality .
1. A draft of the ERISA Stipulation of Confidentiality shall be
prepared by ERISA 401(k) Lead Counsel and ERISA Settling Defendants' Lead Counsel
as soon as practicable after the Execution Date, but not later than March 31, 2004 .
2. The discovery materials in the ERISA Actions shall be made
available for inspection at the offices of Settling Defendants' Lead Counsel i n
Washington, D.C. ; provided that an ERISA Class Member (or his, her or its attorney (i f
any)) shall be provided access to discovery materials for a period of no more than thirt y
(30) days from the date on which a request for access is made .
F. Settling Defendants' Lead Counsel shall inform Securities Lead Counsel
and ERISA 401(k) Lead Counsel promptly of any request by Class Members or thei r
attorneys for access to the discovery materials in either the Securities Action or th e
ERISA Actions, and identify for Securities Lead Counsel and ERISA 401(k) Lead
Counsel any such Class Member (as well as his, her or its attorney (if any)) who request s
access to the discovery materials and the date on which such access is requested .
G. Any Class Member who files and serves a written objection pursuant t o
this Section VIII- and only such Class Members - may appear at the Fairness Hearing ,
either in person or through counsel hired at the Class Member's expense, to object to th e
fairness, reasonableness or adequacy of this Settlement Agreement, to the Plan(s) of
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Allocation, to any term(s) of this Settlement Agreement, or to the proposed Securitie s
Attorneys' Fees and Expenses Award or the proposed ERISA Attorneys' Fees and .
Expenses Awards . Class Members or their attorneys intending to make an appearance at
the Fairness Hearing must both effect service on Securities Lead Counsel, ERISA 401(k)
Lead Counsel and Settling Defendants' Lead Counsel and file with the Court a notice of
intention to appear by no later than ten (10) days before the Fairness Hearing, or as th e
Court otherwise may direct.
H. Any Class Member who fails to comply with any of the provisions of thi s
Section VIII shall waive and forfeit any and all rights he, she or it may otherwise have t o
appear separately at the Fairness Hearing and/or to object to this Settlement Agreement ,
and shall be bound by all the terms of this Settlement Agreement and by all proceedings ,
orders and judgments in the Actions .
IX. RELEASE AND WAIVER, AND ORDER OF DISMISSAL
A. Securities Release and Waiver
1 . Without further action by anyone, and subject to Sectio n
IX.A.4 below, on and after the date on which all of the payments required by Section s
II .C. La, H.C. Lb, R.C.4 and H.C.5 have been made into the Cash Settlement Securitie s
Subaccount, any and all Securities Class Members (including those Securities Clas s
Members who are parties to any other litigation, arbitration or other proceedings against ,
or have any Claim against any of the Releasees that is, or relates in any way to, an y
Released Claim that is pending on the Final Settlement Date), on behalf of themselves ,
their heirs, executors, administrators, beneficiaries, predecessors, successors, affiliates (a s
129
defined in 17 C .F.R. Part 210.1-021), assigns, any person or entity claiming by or
through any of the Securities Class Members and any person or entity representing any or
all Securities Class Members, for good and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, shall be deemed to have, and by operation
of law and of the Final Judgment shall have, fully, finally, and forever released ,
relinquished, settled, and discharged:
all Released Claims against each and every one of th e
Releasees, including such Released Claims as already have been, could have been o r
could be asserted in any pending litigation, arbitration, or other proceeding, or othe r
Claims, and whether or not a Securities Proof of Claim has been executed and/or
delivered by, or on behalf of, any such Securities Class Member,
b. all claims, damages and liability as to Securities Lead
Counsel or any or all Securities Lead Plaintiffs, Executive Committee Members ,
Securities Plaintiffs, Settling Defendants' Counsel, Separate Releasee Counsel and eac h
and every one of the Releasees that relate in any way to any or all acts, omissions ,
nondisclosures, facts, matters, transactions, occurrences or oral or written statements o r
representations in connection with or directly or indirectly relating to the prosecution ,
defense or settlement of the Securities Action or to this Settlement Agreement, and an y
and all claims for attorneys' fees, costs or disbursements incurred by Securities Lead
Counsel or other counsel representing Securities Lead Plaintiffs, Securities Plaintiffs o r
the Securities Class Members in the Securities Action, or any of them, in connection with
or related in any manner to the Securities Action, the ERISA Actions, the settlement of
130
the Securities Action and/or the ERISA Actions, or the administration of the Securitie s
Action, the ERISA Actions and/or the settlement of such Actions except to the extent
otherwise specified in this Settlement Agreement ; and
c. all claims, damages and liabilities as to the Securitie s
Insurers' Escrow Agent, the Securities Reinsurers' Trust Agent, the ERISA Escro w
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent an d
the Winnick ERISA Escrow Agent for anything done or omitted by such agent in
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, the
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thacher
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERISA
Escrow Agreement except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers ' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's, the Winnick Securities Escrow Agent's and/or th e
Winnick ERISA Securities Escrow Agent's (as the case may be) bad faith, gros s
negligence, willful misconduct or breach of, respectively, the Securities Insurers' Escrow
Agreement, the Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, th e
Simpson Thacher Escrow Agreement, the Winnick Securities Escrow Agreement and th e
Winnick ERISA Escrow Agreement .
2. Without further action by anyone, and subject to Section
JX.A.4 below , on and after the date on which all of the payments required by Sections
U.C.l .a, II .C.I .b, II .C.4 and II .C.S have been made into the Cash Settlement Securitie s
Subaccount, all Securities Settling Defendants' Counsel and any or all Securities Settlin g
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Defendants, Simpson Thacher and Separate Releasee Counsel on behalf of themselves,
their heirs, executors, administrators, predecessors, successors, affiliates (as defined in 17
C.F.R. Part 210 .1-02.b), assigns, any person or entity claiming by or through any of the
Securities Settling Defendants and any person or entity representing any or all Securities
Settling Defendants, for good and sufficient consideration, the receipt and adequacy of
which are hereby acknowledged, shall be deemed to have, and by operation of law and of
the Final Judgment shall have, fully, finally, and forever released, relinquished, settled,
and discharged (1) Securities Lead Counsel and any or all Securities Lead Plaintiffs and
Securities Plaintiffs from any and all Claims and/or Unknown Claims that relate in any
way to any or all acts directly or indirectly relating to the prosecution, defense or
settlement of the Securities Action, the ERISA Actions or to this Settlement Agreement .
(ii) the Securities Insurers' Escrow Agent, the Securities Reinsurers' Trust Agent, the
ERISA Escrow Agent, the Simpson Thacher Escrow Agent, the Winnick Securities
Escrow Agent and the Winnick ERISA Escrow Agent from all claims, damages and
liabilities as to anything done or omitted by such agent in performing its duties under,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the
Winnick Securities Escrow Agreement and the Winnick ERISA Escrow Agreement
except such claims that are based upon the Securities Insurers' Escrow Agent's, the
Securities Reinsuers' Escrow Agent's, the ERISA Escrow Agent's, the Simpson _
Thacher's Escrow Agent's, the Winnick Securities Escrow Agent's and/or the Winnick
ERISA Escrow Agent's (as the case may be) bad faith, gross negligence, willfu l
132
misconduct or breach of, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thacher
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERISA
Escrow Agreement and (iii) the Insurers from all claims, damages and liabilities as to
anything done or omitted by the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers ' Trust Agent and the ERISA Escrow Agent in performing duties under ,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed and the ERISA Escrow Agreement.
3 . Without further action by anyone, and subject to Sectio n
IX.A .4 below, on and after the date on which all of the payments required by Section s
II .C.1 .a, II.C.Lb, H.C.4 and II .CS have been made into the Cash Settlement Securities
Subaccount, Securities Lead Counsel, Executive Committee Members, and any or al l
Securities Lead Plaintiffs or Securities Plaintiffs, on behalf of themselves, their heirs ,
executors, administrators , predecessors, successors, affiliates (as defined in 17 C.F.R .
Part 210 .1-02.b), assigns, any person or entity claiming by or through any of them an d
any person or entity representing any or all Securities Lead Plaintiffs and/or Securitie s
Plaintiffs, for good and sufficient consideration, the receipt and adequacy of which ar e
hereby acknowledged, shall be deemed to have, and by operation of law and of the Fina l
Judgment shall have, fully, finally, and forever released, relinquished, settled, an d
discharged (i) Settling Defendants' Counsel, Separate Releasee Counsel and any or all
Releasees from any and all Claims and/or Unknown Claims that relate in any way to any
or all acts directly or indirectly relating to the prosecution, defense or settlement of th e
133
Securities Action, the ERISA Actions or to this Settlement Agreement, (ii) the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escro w
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent from all claims, damages and liabilities as to anythin g
done or omitted by the such agent in performing its duties under, respectively, the
Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust Deed, th e
ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the Winnick
Securities Escrow Agreement and the Winnick ERISA Escrow Agreement except such
claims that are based upon the Securities Insurers' Escrow Agent's, the Securitie s
Reinsuers' Escrow Agent's, the ERISA Escrow Agent's, the Simpson Thacher Escro w
Agent's, the Winnick Securities Escrow Agent's and/or the Winnick ERISA Escro w
Agent's (as the case may be) bad faith, gross negligence, willful misconduct or breach of,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, th e
Winnick Securities Escrow Agent and the Winnick ERISA Escrow Agreement an d
(iii) the Insurers from all claims, damages and liabilities as to anything done or omitted
by the Securities Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent and the
ERISA Escrow Agent in performing duties under, respectively, the Securities Insurers '
Escrow Agreement, the Securities Reinsurers' Trust Deed and the ERISA Escro w
Agreement .
134
4. Notwithstanding Sections IX .A.1,1X.A .2 and IX.A.3 above ,
nothing in the Final Judgment shall bar any action or claim by the Securities Settlin g
Parties to enforce the terms of this Settlement Agreement or the Final Judgment .
5 . Notwithstanding Sections IX.A.1, IX.A.2 and IX.A.3 above ,
nothing in this Settlement Agreement or the Final Judgment shall release, interfere with
or bar the prosecution of, any claims brought by plaintiff in the action captioned
JPMorgan Chase Bank, et al. v. Winnick, et al., currently pending in the court as Case
No. 03 Civ. 8535 (GEL).
6 . With respect to any and all Released Claims, the Securities Settlin g
Parties stipulate and agree that, by the terms of the Final Judgment, each Securities Class
Member shall have and be deemed to have waived and relinquished, to the fullest extent
permitted by law, any and all provisions, rights and benefits conferred by Section 1542 of
the California Civil Code or any federal, state, or foreign law, rule, regulation or common
law doctrine that is similar, comparable, equivalent, or identical to, or which has the
effect of, Section 1542 of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does no t
know or suspect to exist in his favor at the time of executing the release ,
which if known by him must have materially affected his settlement with
the debtor.
Notwithstanding the provisions of Section 1542 and any similar provisions, rights an d
benefits conferred by any law, rule, regulation or common law doctrine of California or
in any federal, state or foreign jurisdiction, Securities Class Members understand an d
135
agree that , subject to Section IX.A.4 above, the Securities Release is intended to include
all Released Claims Securities Class Members have or may have, including Released
Claims that are Unknown Claims. Securities Class Members hereby stipulate and agree
that they shall have and be deemed to have, on or after the date on which all of the
payments required by Sections II .C.l .a, B.C.I .b, II .C.4 and l .C.5 have been made into
the Cash Settlement Securities Subaccount , fully, finally and forever settled and release d
any and all Released Claims whether or not they are Unknown Claims .
7. With respect to the releases provided in Sections IX.A.2 and
IX.A.3, each individual and entity providing such release stipulates and agrees that, by
the terms of the Final Judgment, each such individual and entity shall have and be
deemed to have waived and relinquished, to the fullest extent permitted by law, any and
all provisions, rights and benefits conferred by Section 1542 of the California Civil Code
or any federal, state, or foreign law, rule, regulation or common law doctrine that is
similar, comparable, equivalent, or identical to, or which has the effect of, Section 1542
of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does no t
know or suspect to exist in his favor at the time of executing the release ,
which if known by him must have materially affected his-settlement with
the debtor.
Notwithstanding the provisions of Section 1542 and any similar provisions, rights-an d
benefits conferred by any law, rule, regulation or common law doctrine of California o r
in any federal, state or foreign jurisdiction, each individual and entity providing a releas e
136
in either Section CA .2 or Section IX .A .3 above understands and agrees that the
Securities Release is intended to include all Claims and/or Unknown Claims that be, sh e
or it has or may have that relate in any way to any or a ll acts directly or indirectly relating
to the prosecution , defense or settlement of the Securities Action or to this Settlement
Agreement , including such Claims that are Unknown Claims . Each such individual and
entity hereby stipulates and agrees that he, she or it shall have and be deemed to have, on
or after the date on which all of the payments required by Sections II .C.l .a , II.C.I .b,
u.C .4 and II .C.5 have been made into the Cash Settlement Securities Subaccount , fully ,
finally and forever settled and released any and all Claims that relate in any way to any o r
all acts directly or indirectly relating to the prosecution, defense or settlement of th e
Securities Action, the ERISA Actions or to this Settlement Agreement whether or no t
they are Unknown Claims .
8 . The releases and waivers contained in this Section IX_A were
separately bargained for and are essential elements of this Settlement Agreement .
B. ERISA Release and Waive r
1 . Without further action by anyone, and subject to Sectio n
IX.B .4 below, on and after the date on which all of the payments required by Section s
II .C .2 .a and II.C.3 have been made into the Cash Settlement ERISA Subaccount, any and
all ERISA Class Members (including those who are parties to any other litigation ,
arbitration or other proceedings, or have any Claim against any of the Releasees that is ,
or relates in any way to, any Released Claim that is pending on the Final Settlemen t
Date), on behalf of themselves, their heirs, executors, administrators, beneficiaries ,
137
predecessors, successors, affiliates (as defined in 17 C .F.R. Part 210 .1-02.b), assigns, any
person or entity claiming by or through any of the ERISA Class Members and any person
or entity representing any or all ERISA Class Members, for good and sufficien t
consideration, the receipt and adequacy of which are hereby acknowledged, shall be
deemed to have, and by operation of law and of the Final Judgment shall have, fully,
finally, and forever released, relinquished, settled, and discharged :
a . all Released Claims against each and every one of th e
Releasees, including such Released Claims as already have been, could have been or
could be asserted in any pending litigation, arbitration, or other proceeding, or other
Claims ;
b. all claims, damages and liabilities as to ERISA Plaintiffs '
Counsel or any or all ERISA Plaintiffs, Settling Defendants' Counsel or Releasees that
relate in any way to any or all acts, omissions, nondisclosures, facts, matters,
transactions, occurrences or oral or written statements or representations in connection
with or directly or indirectly relating to the prosecution, defense or settlement of the
ERISA Actions or to this Settlement Agreement, and any and all claims for attorneys'
fees, costs or disbursements incurred by ERISA Plaintiffs Counsel or other counsel
representing ERISA Plaintiffs or the ERISA Class Members in the ERISA Actions, or
any of them, in connection with or related in any manner to the ERISA Actions, the
Securities Action, the settlement of the ERISA Actions and/or the Securities Action, or
the administration of the ERISA Actions, the Securities Action and/or the settlement of
such Actions except to the extent otherwise specified in this Settlement Agreement ; and
138
c. all claims, damages and liabilities as to the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escrow
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent for anything done or omitted by the such agent i n
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers ' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's the Winnick Securities Escrow Agent's and/or th e
Winnick ERISA Securities Escrow Agent's (as the case may be) bad faith, gros s
negligence, willful misconduct or breach of, respectively, the Securities Insurers' Escrow
Agreement, the Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, th e
Simpson Thacher Escrow Agreement, the Winnick Securities Escrow Agreement and th e
Winnick ERISA Escrow Agreement .
2. Without further action by anyone, and subject to Sectio n
IX.B.4 below, on and after the date on which all of the payments required by Section s
II.C.2 .a and II .C3 have been made into the Cash Settlement ERISA Subaccount, all
ERISA Settling Defendants' Counsel and any or all ERISA Settling Defendants on behalf
of themselves, their heirs, executors, administrators, predecessors, successors, affiliate s
(as defined in 17 C .F.R. Part 210 .1-02.b), assigns, any person or entity claiming by o r
through any of the ERISA Settling Defendants and any person or entity representing an y
139
or all ERISA Settling Defendants, for good and sufficient consideration, the receipt an d
adequacy of which are hereby acknowledged, shall be deemed to have, and by operation
of law and of the Final Judgment shall have, fully, finally, and forever released,
relinquished, settled, and discharged (i) ERISA Plaintiffs' Counsel and any or all ERIS A
Plaintiffs from any and all Claims and/or Unknown Claims that relate in any way to any
or all acts directly or indirectly relating to the prosecution, defense or settlement of the
ERISA Actions, the Securities Action or to this Settlement Agreement, (it) the Securities
Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent, the ERISA Escrow
Agent, the Simpson Thacher Escrow Agent, the Winnick Securities Escrow Agent and
the Winnick ERISA Escrow Agent from all claims, damages and liabilities as to anythin g
done or omitted by the such agent in performing its duties under, respectively, th e
Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trust Deed, th e
ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, the Winnick
Securities Escrow Agreement and the Winnick ERISA Escrow Agreement, except such
claims that are based upon the Securities Insurers' Escrow Agent's, the Securitie s
Reinsuers' Escrow Agent's, the ERZSA Escrow Agent's, the Simpson Thacher Escrow
Agent's, the Winnick Securities Escrow Agent's and/or the Winnick ERISA Escro w
Agent's (as the case may be) bad faith, gross negligence, willful misconduct or breach of,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed, the ERISA Escrow Agreement, the Simpson Thacher Escrow Agreement, th e
Winnick Securities Escrow Agreement and the Winnick ERISA Escrow Agreement an d
(zip) the Insurers from all claims, damages and liabilities as to anything done or omitte d
140
by the Securities Insurers ' Escrow Agent, the Securities Reinsurers ' Trust Agent and th e
ERISA Escrow Agent in performing duties under, respectively, the Securities Insurers '
Escrow Agreement, the Securities Reinsurers' Trust Deed and the ERISA Escro w
Agreement .
3. Without further action by anyone , and subject to Section
IX.B.4 below, on and after the date on which all of the payments required by Section s
H.C.2.a and II .C.3 have been made into the Cash Settlement ERISA Subaccount, ERIS A
Plaintiffs' Counsel and any or all ERISA Plaintiffs, on behalf of themselves, their heirs,
executors, administrators, predecessors, successors, affiliates (as defined in 17 C .F.R .
Part 210.1-02.b), assigns, any person or entity claiming by or through any of them and
any person or entity representing any or all ERISA Plaintiffs, for good and sufficient
consideration, the receipt and adequacy of which are hereby acknowledged, shall be
deemed to have, and by operation of law and of the Final Judgment shall have, fully ,
finally, and forever released, relinquished, settled, and discharged (i) ERISA Settling
Defendants' Counsel and any or all Releasees from any and all Claims and/or Unknow n
Claims that relate in any way to any or all acts directly or indirectly relating to th e
prosecution , defense or settlement of the ERISA Actions, the Securities Action or to this
Settlement Agreement, (ii) the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers' Trust Agent, the ERISA Escrow Agent, the Simpson Thacher Escrow Agent ,
the Winnick Securities Escrow Agent and the Winnick ERISA Escrow Agent from al l
claims, damages and liabilities as to anything done or omitted by the such agent in
performing its duties under, respectively, the Securities Insurers' Escrow Agreement, the
141
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement, except such claims that are based upon the Securities Insurers '
Escrow Agent's, the Securities Reinsuers ' Escrow Agent's, the ERISA Escrow Agent's ,
the Simpson Thacher Escrow Agent's, the Winnick Securities Escrow Agent's and/or the
Winnick ERISA Escrow Agent's (as the case may be) bad faith, gross negligence, willfu l
misconduct or breach of, respectively, the Securities Insurers' Escrow Agreement, th e
Securities Reinsurers' Trust Deed, the ERISA Escrow Agreement, the Simpson Thache r
Escrow Agreement, the Winnick Securities Escrow Agreement and the Winnick ERIS A
Escrow Agreement and (iii) the Insurers from all claims, damages and liabilities as t o
anything done or omitted by the Securities Insurers' Escrow Agent, the Securitie s
Reinsurers' Trust Agent and the ERISA Escrow Agent in performing duties under ,
respectively, the Securities Insurers' Escrow Agreement, the Securities Reinsurers' Trus t
Deed and the ERISA Escrow Agreement .
4. Notwithstanding Sections IX.B.1, IX . B.2 and IX.B3 above,
nothing in the Final Judgment shall bar any action or claim by the ERISA Settling Parties
to enforce the terms of this Settlement Agreement or the Final Judgment.
With respect to any and all Released Claims, the ERISA Settling
Parties stipulate and agree that, by the terms of the Final Judgment, each ERISA Clas s
Member shall have and be deemed to have waived and relinquished, to the fullest exten t
permitted by law, any and all provisions , rights and benefits conferred by Section 1542 of
the Californi a Civil Code or any federal , state, or foreign law, rule, regulation or common
142
law doctrine that is similar, comparable, equivalent, or identical to, or which has th e
effect of, Section 1542 of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release ,
which if known by him must have materially affected his settlement wit h
the debtor .
Notwithstanding the provisions of Section 1542 and any similar provisions, rights and
benefits conferred by any law, rule, regulation or common law doctrine of California or
in any federal, state or foreign jurisdiction, ERISA Class Members understand and agree
that, subject to Section lX .B .4 above, the ERISA Release is intended to include all
Released Claims ERISA Class Members have or may have, including Released Claims
that are Unknown Claims . ERISA Class Members hereby stipulate and agree that the y
shall have and be deemed to have, on or after the date on which all of the payments
required by Sections II .C.2.a and II .C.3 have been made into the Cash Settlement ERISA
Subaccount, fully, finally and forever settled and released any and all Released Claims
whether or not they are Unknown Claims .
6. With respect to the releases provided in Sections pX .B.2 and
IX.B.3, each individual and entity providing such release stipulates and agrees that, by
the terms of the Final Judgment, each such individual and entity shall have and be
deemed to have waived and relinquished, to . the fullest extent permitted by law, any and
all provisions, rights and benefits conferred by Section 1542 of the California Civil Code
or any federal, state, or foreign law, rule, regulation or common law doctrine that i s
143
similar, comparable, equivalent, or identical to, or which has the effect of, Section 1542
of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release ,
which if known by him must have materially affected his settlement wit h
the debtor .
Notwithstanding the provisions of Section 1542 and any similar provisions, rights an d
benefits conferred by any law, rule, regulation or common law doctrine of California o r
in any federal, state or foreign jurisdiction, each individual and entity providing a release
in either Section IX .B.2 or Section ]X.B3 above understands and agrees that the ERIS A
Release is intended to include all Claims and/or Unknown Claims that he, she or it has or
may have that relate in any way to any or all acts directly or indirectly relating to the
prosecution, defense or settlement of the ERISA Actions or to this Settlement Agreement,
including such Claims that are Unknown Claims . Each such individual and entity hereby
stipulates and agrees that he, she or it shall have and be deemed to have, on or after the
date on which all of the payments required by Sections H.C.2.a and II .C.3 have bee n
made into the Cash Settlement ERISA Subaccount, fully, finally and forever settled an d
released any and all Claims that relate in any way to any or all acts directly or indirectly
relating to the prosecution, defense or settlement of the ERISA Actions, the Securitie s
Action or to this Settlement Agreement whether or not they are Unknown Claims .
7_ The releases and waivers contained in this Section IX.B were
separately bargained for and are essential elements of this Settlement Agreement .
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C. Order of Dismissa l
1 . The Settling Parties will seek and obtain from the Court a Fina l
Judgment and an Order Approving Settlement as further described in Section X II below.
The Final Judgment and Order Approving Settlement shall, among other things, (i)
approve this Settlement Agreement as fair, reasonable and adequate, (ii) dismiss the
Actions with prejudice and on the merits, (iii) enter the Bar Orders, and (iv) incorporate
the Securities Release and the ERISA Release .
X. ATTORNEYS' FEES AND EXPENSE S
A. Securities Attorneys' Fees and Expense s
1 . Securities Lead Counsel will make a Securities Attorneys' Fee s
and Expenses Application at the time of the Fairness Hearing, which application shall
seek an award of attorneys' fees not in excess of thirty eight million four hundred
thousand dollars ($38,400,000) (approximately 16% of the Securities Cash Settlement
Amount) as well as reimbursement of expenses not to exceed two million nine hundred
thousand dollars ($2,900,000) . Releasees shall take no position with respect to Securities
Lead Counsel's Securities Attorneys' Fees and Expenses Application or cause any third
party to take any position with respect to Securities Lead Counsel's Securities Attorneys'
Fees and Expenses Application, and Securities Lead Counsel may represent that
Releasees do not oppose a Securities Attorneys' Fees and Expenses Applicatio n
consistent with this Section X .A.1 . The apportionment and distribution among securities _
plaintiffs' counsel of Securities Attorneys Fees & Expenses shall be within the sole
discretion of Securities Lead Counsel .
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2. Subject to Sections X .A.3, X.A_4 and X .A.5 below, the Securities
Attorneys' Fees and Expenses Award shall be paid to Securities Lead Counsel within five
(5) business days after the later of the Approval Date or such other date that the Court
issues the order setting out the Securities Attorneys' Fees and Expenses Award .
3. If this Settlement Agreement is properly and timely terminated i n
accordance with the terms of this Settlement Agreement, then Securities Lead Counsel
shall within five (5) business days following such termination return to the Securities
Insurers or to Pender Securities Reinsurers, to be allocated among them pursuant to the
terms of the escrow agreement and trust deed applicable to, respectively, the Securities
Insurers' Insurance Escrow Account and the Securities Reinsurers' Insurance Trust
Account, the Securities Attorneys' Fees and Expenses Award with interest at the Interest
Rate, such interest being calculated beginning as of the day the Securities Attorneys' Fees
and Expenses Award was paid pursuant to Section II .B .I above and ending as the day the
Securities Attorneys' Fees and Expenses Award is returned to the Securities Insurers or
Pender Securities Reinsurers pursuant to this Section X .A.3 .
4. If, after entry of the Final Judgment and Order Approving
Settlement, the Securities Attorneys' Fees and Expenses Award is reduced, then
Securities Lead Counsel shall within five (5) business days pay to the Securities Insurers'
Insurance Escrow Account or the Securities Reinsurers' Insurance Trust Account, as the
case may be, the difference between the Securities Attorneys' Fees and Expenses Award
and the reduced amount, plus interest on such difference at the Interest Rate, such interest
being calculated beginning as of the day the Securities Attorneys' Fees and Expense s
146
Award was paid pursuant to Section H .B .labove and ending as of the day the difference
between the Securities Attorneys' Fees and Expenses Award and the reduced amount is
paid to the Securities Insurers' Insurance Escrow Account and/or the Securitie s
Reinsurers' Insurance Trust Account pursuant to this Section X.A.4 ; provided that, if an y
portion of the Securities Attorneys' Fees and Expenses Award is paid in GBP and ,
pursuant to this Section X .A.3, Securities Lead Counsel is required to return such monie s
to the Securities Insurers or Pender Securities Reinsurers, Securities Lead Counsel shall
be required to return such monies, plus interest at the Interest Rate, in GBP in the same
amount as paid to Securities Lead Counsel .
5 . Securities Lead Counsel's obligation to return any of the Securitie s
Attorneys ' Fees and Expenses Award, as described in Sections X.A.3 and X.A.4 above,
shall be evidenced by a promisso ry note , which shall be executed on behalf of the firm,
and individually by the members of the executive committee, of Grant & Eisenhofer,
P.A. In addition, as a condition of receiving the Securities Attorneys' Fees and Expense s
Award, Grant & Eisenhofer, P .A., on behalf of itself and each of its partners and/o r
shareholders, agrees that the law firm and its partners and/or shareholders are subject t o
the jurisdiction of the Court for the purpose of enforcing this Section X.A.5 : provided
that if any Executive Committee Member or any other law firm receives any portion o f
the Securities Attorneys' Fees and Expenses Award from Securities Lead Counsel prior
to Final Settlement Date, such Executive Comnditee Member or law firm shall, prior to
the receipt of any such fees or expenses , provide Securities Lead Counsel with a
promissory note and/or a letter of credit respecting such payment (at Securities Lead
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Counsel's sole discretion), which promissory note and/or letter of credit shall be executed
on behalf of the firm receiving the payment to the satisfaction of Securities Lead
Counsel ; provided further that Securities Lead Counsel shall remain liable with respect to
the entire amount of Securities Attorneys' Fees and Expenses consistent with the terms of
this Section X . Without limitation, Grant & Eisenbofer, P .A . and each of its partners
and/or shareholders agree that the Court may, upon application of Securities Settling
Defendants, on notice to Grant & Eisenhofer, P .A ., summarily issue orders, including,
but not limited to, judgments and attachment orders, and may make appropriate findings
of or sanctions for contempt, against them or any of them (if applicable) should Grant &
Eisenhofer, P.A. fail timely to repay any amounts pursuant to this Section X .A.S .
6. No Releasee shall be liable or obligated to pay any fees, expenses ,
costs or disbursements to, or incur any expense on behalf of, any person or entity
(including, without limitation, Securities Lead Plaintiffs and/or Securities Plaintiffs),
directly or indirectly, in connection with the Securities Action, the ERISA Actions or this
Settlement Agreement, except as expressly provided for in this Settlement Agreement .
B. ERISA Attorneys' Fees and Expense s
1 . ERISA 401(k) Lead Counsel will make an ERISA 401(k )
Attorneys' Fees and Expenses Application at the time of the Fairness Hearing, which
application shall seek an award of attorneys' fees not in excess of twenty percent (20%)
of the ERISA 401(k) Settlement Amount and reimbursement of, expenses . Releasees
shall take no position with respect to ERISA 401(k) Lead Counsel's ERISA 401(k)
Attorneys' Fees and Expenses Application or cause any third party to take any positio n
148
with respect to ERISA 401(k) Lead Counsel's Attorneys' Fees and Expenses Application,
and ERISA 401(k) Lead Counsel may represent that Releasees do not oppose an ERISA
401(k) Attorneys' Fees and Expenses Application consistent with this Section X .B.I. _
2. ERISA Sironetti Lead Counsel will make an ERISA Simonetti
Attorneys' Fees and Expenses Application at the time of the Fairness Hearing, which
application shall seek an award of attorneys' fees not in excess of twenty percent (20%)
of the ERISA Simonetti Settlement Amount and reimbursement of expenses . Releasee s
shall take no position with respect to ERISA Siinonetti Lead Counsel's ERISA Attorneys'
Fees and Expenses Application or cause any third party to take any position with respect
to ERISA Sirnonetti Lead Counsel's Attorneys' Fees and Expenses Application, and
ERISA Simonetti Counsel may represent that Releasees do not oppose an ERISA
Simonetti Attorneys' Fees and Expenses Application consistent with this Section X .B.2 .
3. Subject to Sections X .A.4, X.A.S and X .A.6 below, the ERIS A
Attorneys' Fees and Expenses Awards shall be paid to ERISA Consolidated Lead
Counsel within five (5) business days after the later of the Approval Date or such other
date that the Court issues the order setting out the ERISA Attorneys' Fees and Expenses
Awards ; provided that ERISA Consolidated Lead Counsel shall hold the Attorneys' Fees
and Expenses Awards in trust for all other ERISA Plaintiffs' Counsel that are entitled to
receive any portion of such awards following the Final Settlement Date .
4 . If this Settlement Agreement is properly and timely terminated in
accordance with the terms of this Settlement Agreement, then ERISA Consolidated Lead
Counsel shall within five (5) business days following such termination return to th e
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ERISA Insurer and Pender, to be allocated among them pursuant to the terms of the
escrow agreement applicable to the ERISA Insurance Escrow Account, the ERISA
Attorneys' Fees and Expenses Awards with interest at the Interest Rate, such interest to
be calculated beginning as of the day the ERISA Attorneys' Fees and Expenses Awards
were paid pursuant to Section II .B .2 above and ending as of the day the ERISA
Attorneys' Fees and Expenses Award are returned to the ERISA Insurer and Pender
pursuant to this Section XIU .B .4 ; provided that, if any portion of the ERISA Attorneys'
Fees and Expenses Award is paid in GBP and, pursuant to this Section X.B.4, Securities
Lead Counsel is required to return such monies to the ERISA Insurer or Pander, ERISA
Consolidated Lead Counsel shall be required to return such monies, plus interest at the
Interest Rate, in GBP in the same amount as paid to ERISA Consolidated Lead Counsel .
5. If, after entry of the Final Judgment and Order Approving
Settlement, the ERISA 441(k) Attorneys' Fees and Expenses Award and/or the ERISA
Sirnonetti Attorneys' Fees and Expenses Award are reduced, then ERISA Consolidated
Lead Counsel shall within five (5) business days pay to the ERISA Insurance Escrow
Account the difference between the ER.ISA Attorneys' Fees and Expenses Awards and
the reduced amount of the ERISA 401(k) Attorneys' Fees and Expenses Award and/or
the ERISA Sitnonetti Attorneys' Fees and Expenses Award (as the case may be), plus
interest on such difference at the Interest Rate, such interest to be calculated beginning as
of the day the ERISA Attorney's Fees and Expenses Awards were paid pursuant to
Section 11 .13-2 above and ending as of the day the difference between the ERISA 401(k)
Attorneys' Fees and Expenses Award and/or the ERISA Simonetti Attorneys' Fees and
150
Expenses Award (as the case may be) and the reduced amount is paid to the ERISA
Insurance Escrow Account pursuant to this Section X .B .S .
6 . ERISA Consolidated Lead Counsel's obligation to return any of
the ERISA Attorneys' Fees and Expenses Award, as described in Sections X .B_4 and
X.B.5 above, shall be evidenced by a promissory note, which shall be executed on behalf
of the firm, and individually by the members of the executive committee, of Keller
Rohrback, LLP. In addition, as a condition of receiving the ERISA Attorneys' Fees an d
Expenses Award, Keller Rohrback, LLP, on behalf of itself and each of its partners
and/or shareholders, agree that the law firm and its partners and/or shareholders are
subject to the jurisdiction of the Court for the purpose of enforcing this Section X .B .6 .
Without limitation, Keller Rohrback, LLP and each of its partners and/or shareholders
agrees that the Court may, upon application of ERISA Settling Defendants, on notice to
Keller Rohrback, LLP, summarily issue orders, including, but not limited to, judgments
and attachment orders, and may make appropriate findings of or sanctions for contempt,
against them or any of them (if applicable) should Keller Rohrback, LLP fail timely to
repay any amounts pursuant to this Section X .B.6 .
C. No Releasee shall be liable or obligated to pay any fees, expenses, costs or
disbursements to, or incur any expense on behalf of, any person or entity (including,
without limitation, ERISA Plaintiffs), directly or indirectly, in connection with the
ERISA Actions, the-Securities Action or this Settlement Agreement, except as expressly
provided for in this Settlement Agreement .
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XI. PRELIMINARY APPROVAL HEARING AND HEARING ORDER
A. Unless otherwise agreed to by the Settling Parties, within thirty (30) days
after the Execution Date, the Settling Parties shall submit this Settlement Agreement t o
the Court and apply for a Hearing Order that contains provisions addressing each of the
following issues ; provided that any modification to the language set out in Section XI .A.6
below must be approved by the Insurers, such approval to be evidenced in writing by th e
Insurers :
1 . providing for the certification of an opt-out Securities Class
pursuant to Federal Rule of Civil Procedure 23(b)(3) for settlement purposes only;
2. providing for the certification of a non-opt-out ERISA
Consolidated Class pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) fo r
settlement purposes only ;
3. providing for the certification of a non-opt-out ERISA Pusloskie
Class pursuant to Federal Rule of Civil Procedure 23(b)(1) anchor (2) for settlemen t
purposes only ;
4. providing for the certification of a non-opt-out ERISA Simonetti
Class pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement
purposes only ;
5. finding, subject to completion of the discovery contemplated by
Section III above and Securities Lead Counsel's, Securities Lead Plaintiffs', Securities
Plaintiffs', ERISA Plaintiffs' Counsel's and ERISA Plaintiffs' continued belief as a resul t
of that discovery that the settlement is fair, reasonable and adequate, that the settlemen t
152
contemplated by this Settlement Agreement is sufficient to warrant sending notice thereof
to the Class;
6, preliminarily providing that, to the extent they pay and distribute
the insurance proceeds of the Executive Liability Insurance Policies, the Fiduciary
Liability Insurance Policy and the Pender Policy in accordance with the terms of this
Settlement Agreement, (i) the Insurers will not be acting inconsistently with either their
obligations to act in good faith or their respective obligations and duties under the
Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and the
Pender Policy, (ii) the Insurers will be fully, adequately and finally discharging all of
their respective obligations under such policies with respect to all insureds under the
policies (all of which insureds will receive substantial benefits as Releasees under the
terms of this Settlement Agreement) as to all past, present and future claims and issues
that have been or could have been asserted in these Actions or in any other action, lawsuit
or proceeding, including, but not limited to, any claims and issues that are based upon,
arise out of or relate to the Actions, or the transactions and occurrences referred to in the
Complaints and (iii) none of the Insurers will be acting in bad faith in connection with
such payments with respect to any insured under any such policies ;
7 . scheduling the Fairness Hearing to be held on such date as the
Court may direct, to consider the fairness, reasonableness and adequacy of the settlement
contemplated by this Settlement Agreement and whether it should be approved by the
Court;
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8. approving Securities Lead Counsel and ERISA Consolidated Lead
Counsel's retention of The Garden City Group, Inc . as the Administrator;
9. approving the proposed Notice and Summary Notice and the notice
methodology described in this Settlement Agreement ;
10. directing that, if Securities Lead Counsel, Securities Lea d
Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs' Counsel and ER1SA Plaintiffs continu e
to believe at the completion of the discovery contemplated by Section III above that the
settlement is fair, reasonable and adequate, Securities Lead Plaintiffs and ERIS A
Plaintiffs shall :
a. cause the Notice substantially in the form as described i n
Section IV.A.4 to be mailed to each Class Member and, in cases of any pendin g
litigation, arbitration or other proceeding, or any other Claims, against any Releasee
relating to any of the Released Claims, also to all legal counsel known by Securities Lead
Counsel, ERISA Plaintiffs' Counsel or Settling Defendants' Lead Counsel to represent a
Class Member by first-class mail, postage prepaid, to his, her or its last known address no
later than forty-five (45) days before the Fairness Hearing;
b. cause the Summary Notice to be published as described in
this Settlement Agreement no later than forty-five (45) days before the Fairness Hearing ;
and
c . cause Securities Lead Counsel, ERISA Plaintiffs' Counsel
and the Administrator to publish the Notice on their respective websites no later than
forty-five (45) days before the Fairness Hearing ;
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11 . determining that the notice to be provided to Class Members ,
including the Notice, the Summary Notice and the methodology employed to disseminate
both, (i) is the best practicable notice, (ii) is reasonably calculated, under the
circumstances, to apprise Class Members of the pendency of the Actions, of the effect o f
this Settlement Agreement, including the Securities Release and the ERISA Release, o f
their right to object to the proposed settlement, and of the right of Securities Clas s
Members to exclude themselves from the Securities Class, (iii) is reasonable and
constitutes due, adequate and sufficient notice to all persons and entities entitled to
receive notice and ( iv) meets all applicable requirements of the Federal Rules of Civil
Procedure, the United States Constitution (including the Due Process Clause), th e
PSLRA, the Rules of the Cou rt and any other applicable law ;
12, directing the creation of the toll-free telephone number ;
13. requiring each potential Securities Class Member who wishes t o
exclude himself, herself or itself from the Securities Class to submit a valid and timel y
written request for exclusion, postmarked or delivered no later than ten (10) days befor e
the Fairness Hearing or as the Court may otherwise direct, to the Clerk of the Court at th e
address provided in the Notice ;
14_ prelim inarily enjoining (i) all ERISA Class Members (and thei r
heirs, executors and administrators, predecessors, successors, affiliates (as defined in 1 7
C .F.R. Part 210 .1.02.b) and assigns) and (ii) all Securities Class Members who have no t
validly and timely excluded themselves from the Class (and their heirs, executors an d
administrators, predecessors, successors, affiliates (as defined in 17 C.F.R. Part 210 .1-
1 55
02.b) and assigns) from filing, commencing, prosecuting, intervening in, participating in
as class members or otherwise, or receiving any benefits or other relief from, any other
lawsuit, arbitration or adr iinistrative, regulatory or other proceeding or order in any
jurisdiction, based on or relating in any way to (i) the claims and causes of action, or the
facts and circumstances relating thereto, in the Actions and/or (ii) the Released Claims ;
provided however, that notwithstanding anything in this Section X1. 14, this Section X1. 14
of the Hearing Order does not enjoin (i) any Class Member from pursuing, or receiving
any benefits or other relief from, a proof of claim or request for payment of an
administrative expense filed against Global Crossing Ltd ., Asia Global Crossing Ltd .,
Pacific Crossing Ltd . and/or any of their subsidiaries or affiliates (as defined in 17 C .F.R .
Part 21 0 .1-O2.b, including, but not limited to, Asia Global Crossing Development
Company), on or before the applicable bar date, or any amendments to such proofs of
claim or request for payment of an administrative expense (other than any of the proofs
of claim filed on behalf of Class Members or any of them by Securities Lead Plaintiffs or
ERISA Plaintiffs) in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (as
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd., Asia Global Crossing Ltd.
or Pacific Crossing Ltd . (including, but not limited to, the bankruptcy proceeding of Asia
Global Crossing Development Company), which . Claim shall be able to be pursue d
156
consistent with the Final rulings of the relevant bankruptcy court or relevant reviewin g
court, (ii) any Claim asserted by a Class Member against any person or entity appointed
by either the Global Crossing Bankruptcy Court, the Asia Global Crossing Bankruptc y
Court, the Pacific Crossing Bankruptcy Court, or any other bankruptcy court in a
proceeding involving an affiliate (as defined in 17 C .F.R. Part 210 .1--02.b) or subsidiary
of any of Global Crossing Ltd ., Asia Global Crossing Ltd . or Pacific Crossing Ltd ., o r
against Pacific Crossing Ltd . or any of its subsidiaries or affiliates (as defined in 1 7
C .F.R. Part 210 .1-02.b) acting as a debtor in possession or their lender where such Clai m
arises out of, or relates to, any Claim by such person or entity or Pacific Crossing Ltd . or
any of its subsidiaries or affiliates (as defined in 17 C.F.R. Part 210 .1-02) acting as a
debtor in possession or their lenders against a Class Member or (iii) any claim for wage s
(including severance) asserted against Global Crossing Ltd ., Asia Global Crossing Ltd . ,
Pacific Crossing Ltd. and/or any of their subsidiaries or affiliates (as defined in 17 C .F.R,
Part 210 .1-02.b, including, but not limited to, Asia Global Crossing Developmen t
Company) in a proof of claim or request for payment of an administrative expens e
submitted by a Class Member on or before the applicable bar date, or any amendments to
such proof of claim or request for payment of an administrative expense (other than any
of the proofs of claim filed on behalf of Class Members or any of them by Securities
Lead Plaintiffs or ERISA Plaintiffs) in the Global Crossing Bankruptcy Proceedings, the
Asia Global Crossing Bankruptcy Proceedings, the Pacific Crossing Bankruptc y
Proceeding and/or any bankruptcy proceeding relating to any subsidiary or affiliate (a s
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing Ltd .
157
or Pacific Crossing Ltd. (including, but not limited to, the bankruptcy proceeding of Asia
Global Crossing Development Company) with respect to which Claim, a Class Member
shall be able to pursue the Claim consistent with the Final rulings of the relevant
bankruptcy court or relevant reviewing court, (iv) any claims brought by plaintiff in the
action captioned JPMorgan Chase Bank, et al. v. Winnick, et al., currently pending in the
Court as Case No. 03 Civ . 8538 (GEL) or (v) any claim (including, but not limited to, a
claim for insurance coverage) concerning any insurance or indemnity policy other than
the Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and/or
the Pender Policy ;
15 . preliminarily enjoining all persons and entities from filing,
commencing or prosecuting any other lawsuit as a class action (including by seeking to
amend a pending complaint to include class allegations or by seeking class certification
in a pending action in any jurisdiction) on behalf of any Class Members, including
Securities Class Members who have not timely excluded themselves from the Securities
Class, if such other lawsuit is based on or relates in any way to the claims and causes of
action, or the facts and circumstances relating thereto, in the Actions and/or the Released
Claims ;
1 6 . ruling that (i) all Securities Class Members who do not submi t
valid and timely written requests for exclusion from the Securities Class (and their heirs,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C.F.R.
Part 210.1-02.b) and assigns) and (ii) all ERISA Class Members (and their heirs ,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
158
Part 210.1-02_b) and assigns) will be bound by all proceedings, orders and judgment s
relating to this Settlement Agreement, even if such Class Members have previousl y
initiated or subsequently initiate litigation, arbitration or other proceedings, or have any
other Claim against any or all of the Release-es relating to any of the Released Claims ;
17. requiring each Class Member who wishes to object to the fairness ,
reasonableness or adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to
any term(s) of this Settlement Agreement, or to the proposed Securities Attorneys' Fees
and Expenses Award, the proposed ERISA 401(k) Attorneys' Fees and Expenses Award s
and/or the proposed ERISA Simonetti Attorneys' Fees and Expenses Award both to effect
service on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel and to file with the Court by no later than ten (10) days before
the Fairness Hearing, or as the Court may otherwise direct, a statement of his, her or it s
objection and whether the Class Member is a Securities Class Member, an ERISA Clas s
Member or both, as well as to which part of this Settlement Agreement (that relating t o
the Securities Action, the ERISA Actions or the Actions) the Class Member objects an d
the specific reason(s), if any, for each objection, including any legal support the Clas s
Member wishes to bring to the Court's attention and any evidence the Class Membe r
wishes to introduce in support of such objection, or be forever barred from objecting ;
18 , requiring any attorney hired by a Class Member, at the Clas s
Member's expense, for the purpose of objecting to the fairness, reasonableness o r
adequacy of this Settlement Agreement, to the Plan(s) of Allocation, to any term(s) o f
this Settlement Agreement, or to the proposed Securities Attorneys' Fees and Expense s
159
Award, the proposed ERISA 401(k) Attorneys' Fees and Expenses Awards and/or the
proposed ERISA Shnonetti Attorneys' Fees and Expenses Award, both to effect service
on Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel and to file with the Court a notice of appearance by no later than ten (10) days
before the Fairness Hearing, or as the Court otherwise may direct ;
19. requiring any Class Member who files and serves a writte n
objection and who intends to make an appearance at the Fairness Hearing, either in
person or through counsel hired at the Class Member's expense, both to effect service on
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel and to file with the Court a notice of intention to appear at the Fairness Hearing
by no later than ten (10) days before the Fairness Hearing, or as the Court otherwise may
direct ;
20. directing Securities Lead Counsel, ERISA 401(k) Lead Counsel or
their designated agents to assign a post-office box or boxes to be used for receiving
requests for exclusion and any other communications, and providing that, other than the
Court or the Clerk of the Court, only Settling Defendants' Lead Counsel, Securities Lead
Counsel, ERISA 401(k) Lead Counsel and their designated agents shall have access to
such post-office box or boxes ;
21 . directing Settling Defendants' Counsel, Separate Releasee
Counsel, Securities Lead Counsel and ERISA Plaintiffs' Counsel, and any other counsel
for Securities Plaintiffs, ERISA Plaintiffs or the Class, promptly to furnish each othe r
160
with copies of any and all objections or written requests for exclusion that come into thei r
possession ;
22. providing a means for Securities Class Members filing objection s
to obtain access, at their own expense, at Settling Defendants' Lead Counsel's office in
New York, New York, to the discovery materials in the Securities Action, provided that
such individuals or their counsel shall not be given access to these materials unless and
until they enter into the Securities Stipulation of Confidentiality, as described above i n
Section VIED ;
23. providing a means for ERISA Class Members filing objections t o
obtain access, at their own expense, at Settling Defendants' Lead Counsel's office in
Washington, D.C., to the discovery materials in the ERISA Actions, provided that such
individuals or their counsel shall not be given access to these materials unless and until
they enter into the ERISA Stipulation of Confidentiality, as described above in Sectio n
VIILE; and
24, containing any additional provisions that might be necessary to
implement and administer the terms of this Settlement Agreement .
B. A proposed Hearing Order shall be drafted by Securities Lead Counsel ,
ERISA 401(k) Lead Counsel, Securities Settling Defendants' Lead Counsel, ERISA
Settling Defendants' Lead Counsel and Separate Releasee Counsel, and shall be
submitted to the Court for its approval at the time the Settling Parties submit this
Settlement Agreement to the Court pursuant to this Section XI .
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XII. FINAL APPROVAL, AND FINAL JUDGMENT AND ORDERAPPROVING SETTLEMENT
A. After the Fairness Hearing, and upon the Court's approval of this
Settlement Agreement, the Settling Parties shall seek and obtain from the Court a Fina l
Judgment and an Order Approving Settlement , which shall, among other things :
I . find that the Court has personal jurisdiction over all Clas s
Members and that the Court has subject matter jurisdiction to approve the terms of the
settlement that is set out in this Settlement Agreement, including its exhibits, and
including all documents submitted to the Court in connection with the implementation of
this Settlement Agreement ;
2, approve the settlement embodied in this Settlement Agreement as
fair, reasonable and adequate, consistent and in compliance with all applicable
requirements of the Federal Rules of Civil Procedure, the United States Constitution
(including the Due Process Clause), the PSLRA, the Rules of the Court and any other
applicable law, and in the best interests of each of the Settling Parties and the Clas s
Members ;
3 . find that, with respect to (a) the settlement of the ERISA Action s
(i) ERISA Plaintiffs are asserting , among other things, claims on behalf of the ERIS A
Plans, (ii) the settlement of the ERISA Actions arises from a genuine controvers y
between the ERISA Plaintiffs and the ERISA Settling Defendants, is not the result o f
collusion and was not procured by fraud or misrepresentation, (iii) the settlement was
negotiated by counsel appointed by the Court in each of the ERISA Actions and suc h
162
counsel have acted in the best interest of ERISA Plaintiffs, ERISA Class Members and
the ERISA Plans in negotiating this Settlement Agreement vigorously and at arm's
length, (iv) ERISA Plaintiffs' Counsel have no relationship to, or interest in, any of the
Settling ERISA Defendants that might affect their judgment as counsel for ERISA
Plaintiffs or ERISA Class Members ; (v) the interests of ERISA Plaintiffs are identical to
the interests of the ERZSA Plans and ERISA Class Members, (vi) the ERISA Plans do no t
have any additional or independent claims that arise out of the Claims made in the
ERISA Actions above and beyond those asserted by ERISA Plaintiffs on behalf of
ERESA Class Members and the ERISA Plans' participation in the settlement is not less
favorable than that of ERISA Plaintiffs and ERISA Class Members, (vii) the settlement is
not part of an agreement, arrangement or understanding designed to benefit a party in
interest, but rather is designed to benefit the ERISA Plans and ERISA Class Members
(who are all participants in the ERISA Plans), and (viii) accordingly, the negotiation and
consummation of the Settlement Agreement by ERISA Plaintiffs on behalf of the ERISA
Plans and ERISA Class Members satisfy the conditions of the class exemption published
by the Department of Labor at 68 Fed . Reg. 75632 (Dec. 31, 2003), and, in any event, do
not constitute "prohibited transactions" as defined by ERISA §§ 406(a)-(b), 29 U.S .C _
§§ 1106(a)-(b) and (b) the settlement of the Securities Action, (i) Securities Lead
Plaintiffs are asserting, among other things, claims on behalf of the ERISA Plans as
Securities Class Members, (ii) the settlement of the Securities Action arises from a
genuine controversy between the Securities Class Members and the Securities Settling
Defendants, is not the result of collusion and was not procured by fraud or
163
misrepresentation, (iii) the settlement was negotiated by counsel appointed by the Court
in the Securities Action and such counsel have acted in the best interest of Securities
Lead Plaintiffs, Securities Class Members and the ERISA Plans in negotiating this
Settlement Agreement vigorously and at arm's length, (iv) Securities Lead Counsel has
no relationship to, or interest in, any of the Settling ERISA Defendants that might affect
their judgment as counsel for Securities Lead Plaintiffs or Securities Class Members ,
(v) the interests of Securities Lead Plaintiffs are identical to the interests of the ERIS A
Plans as they relate to the ERISA Plans' securities claims, (vi) the ERISA Plans do not
have any additional or independent claims that arise out of the Claims made in the
Securities Action above and beyond those asserted by Securities Lead Plaintiffs on behalf
of Securities Class Members and the ERISA Plans' participation in the settlement is not
less favorable than that of Securities Lead Plaintiffs and Securities Class Members,
(vii) the settlement is not part of an agreement, arrangement or understanding designed to
benefit a party in interest, but rather is designed to benefit the ERISA Plans, an d
(viii) accordingly, the negotiation and consummation of the Settlement Agreement by
Securities Lead Plaintiffs on behalf of the ERISA Plans and Securities Class Members
satisfy the conditions of the class exemption published by the Department of Labor at 68
Fed. Reg. 75632 (Dec . 31, 2003), and, in any event, do not constitute "prohibited
transactions" as defined by ERISA §§ 406(a)-(b), 29 U .S.C. §§ 1106(a)-(b) ;
4, direct the Settling Parties and their counsel to implement and
consummate this Settlement Agreement according to its terms and provisions an d
164
approve the documents submitted to the Court in connection with implementation of this
Settlement Agreement ;
S_ declare that
a_ the Court has jurisdiction over the Executive Liability
Policies, the Fiduciary Liability Insurance Policy and the Pender Policy and the proceeds
thereof and
b. to the extent they pay and distribute the insurance proceed s
of the Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and
the Pender Policy in accordance with the terms of this Settlement Agreement, (i) the
Insurers will not be acting inconsistently with either their obligations to act in good faith
or their respective obligations and duties under the Executive Liability Insurance Policies,
the Fiduciary Liability Insurance Policy and the Pender Policy, (ii) the Insurers will be
fully, adequately and finally discharging all of their respective obligations under such
policies with respect to all insureds under the policies (all of which insureds will receive
substantial benefits as Releasees under the terms of this Settlement Agreement) as to all
past, present and future claims and issues that have been or could have been asserted in
these Actions or in any other action, lawsuit or proceeding, including, but not limited to,
any claims and issues that are based upon, arise out of or relate to the Actions, or the
transactions and occurrences referred to in the Complaints and (iii) none of the Insurers
will be acting in bad faith in connection with such payments with respect to any insured
under any such policies ;
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6. declare this Settlement Agreement, as to all claims that have or
could have been raised in the Securities Action, including Released Claims, to be binding
on Securities Lead Plaintiffs, Securities Plaintiffs and all other Securities Class Members,
as well as all of their heirs, executors and administrators, predecessors, successors,
affiliates (as defined in 17 C .F.R. Part 210 .1-02.b) and assigns ;
7. declare this Settlement Agreement, as to all claims that have o r
could have been raised in the ERISA Actions, including Released Claims,to be binding
on ER1SA Plaintiffs and all other ERISA Class Members, as well as all of their heirs,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
Part 210.1-02.b) and assigns ;
8 . finally certify the Securities Class as an opt-out class pursuant to
Federal Rule of Civil Procedure 23(b)(3) for settlement purposes ;
9 . finally certify the ERISA Consolidated Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
10 , finally certify the ERISA Pusloskie Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
11 . finally certify the ERISA Sirnonetti Class as a non-opt out class
pursuant to Federal Rule of Civil Procedure 23(b)(1) and/or (2) for settlement purposes ;
12_ find that the Notice, the Summary Notice and the notic e
methodology implemented pursuant to .this Settlement Agreement (i) constituted the best
practicable notice, (ii) constituted notice that was reasonably calculated, under the
circumstances, to apprise Class Members of the pendency of the Actions, of the effect o f
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this Settlement Agreement, including the Securities Release and the ERISA Release, of
their right to object to the. proposed settlement, of the right of Securities Class Members
to exclude themselves from the Securities Class, and of the right of Class Members to
appear at the Fairness Hearing, (iii) were reasonable and constituted due, adequate and
sufficient notice to all persons or entities entitled to receive notice and (iv) met all
applicable requirements of the Federal Rules of Civil Procedure, the United States
Constitution (including the Due Process Clause), the PSLRA, the Rules of the Court and
any other applicable law ;
13. find that Securities Lead Counsel and Securities Lead Plaintiffs
adequately represented the Securities Class for purposes of entering into and
implementing the settlement ;
14. find that ERISA Consolidated Lead Counsel and ERISA
Consolidated Plaintiffs adequately represented the ERISA Consolidated Class for
purposes of entering into and implementing the settlement ;
15 . find that ERISA Pusloskie Lead Counsel and ERISA Pusloskie
Plaintiffs adequately represented the ERISA Pusloskie Class for purposes of entering into
and implementing the settlement ;
16. find that ERISA Simonetti Lead Counsel and ERISA Simonetti
Plaintiffs adequately represented the ERISA Simonetti Class for purposes of entering into
and implementing the settlement;
17 . declare any and all tolling agreements executed in connection with
any of the Actions to be null and void ab initio, and of no effect whatsoever;
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18. enter a Securities Contribution Bar Order submitted to the Court as
follows: In accordance with 15 U.S .C. § 78u-4(f)(7)(A), any and all claims for
contribution arising out of any Released Claim, including, but not limited to, any claim
that is based upon, arises out of or relates to the Securities Action, or the transactions and
occurrences referred to in the Securities Complaint (a) by any person or entity against a
Securities Settling Defendant and (b) by any Securities Settling Defendant against any
person or entity other than as set out in 15 U .S .C. § 78u-4(f)(7)(A)(ii) are hereby
permanently barred, extinguished, discharged, satisfied, and unenforceable . Accordingly,
without limitation to any of the above, (a) any person or entity, including, withou t
limitation, each and every Securities Non-Settling Defendant, is hereby permanently
enjoined from commencing, prosecuting, or asserting against any of the Securities
Settling Defendants any such claim for contribution, and (b) each and every Securities
Settling Defendant is hereby permanently enjoined from commencing, prosecuting, or
asserting against any person or entity, including, without limitation, any Securities Non-
Settling Defendant, any such claim for contribution . In accordance with 15 U .S .C. § 78u-
4(f)(7)(B), any final verdict or judgment that may be obtained by or on behalf of the
Securities Class or a Securities Class Member against a Securities Non-Settling
Defendant shall be reduced by the greater of (i) an amount that corresponds to the
percentage of responsibility of the Settling Defendants for the loss to the Securities Class
or a Securities Class Member or (ii) the amount paid by or on behalf of the Settling
Defendants to the Securities Class in connection with this Settlement Agreement .
However, (x) nothing in this Securities Contribution Bar Order shall prevent a Settling
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Defendant from seeking to enforce any agreement with the Insurers to pay the Cash
Settlement Payment and (y) notwithstanding anything stated in this Contribution Bar
Order or in this Settlement Agreement, in the event that any person or entity (for
purposes of this proviso, a "petitioner") commences against any of the Releasees any
action asserting a claim that is based upon, arises out of, or relates to any Released Claim,
including, but not limited to, any claim that is based upon, arises out of or relates to the
Actions, or the transactions and occurrences referred to in the Complaints and such claim
is not barred pursuant to this Section XII .A.18 or is otherwise not barred by the Securities
Contribution Bar Order, neither the Securities Contribution Bar Order nor this Settlemen t
Agreement shall bar claims by that Releasee against (i) such petitioner ; (ii) any person or
entity who is or was controlled by, controlling or under common control with the
petitioner, whose assets or estate are or were controlled, represented or administered by
the petitioner, or as to whose claims the petitioner has succeeded ; and (iii) any person or
entity that participated with any of the preceding persons or entities described in item s
(i) and (ii) of this proviso in connection with the conduct, transactions or occurrences that
are the subject of the claim brought against the Releasee(s), or any person or entity that
was involved in the issues and damages alleged by the petitioner ; provided further that
nothing in the Securities Contribution Bar Order shall prevent a Releasee from pursuing a
proof of claim or request for payment of an administrative expense, or an amendment as
to either (other than any of the proofs of claim filed on behalf of Class Members or any of
them by Securities Lead Plaintiffs or ERISA Plaintiffs), as to Global Crossing Ltd ., Asia
Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or affiliate s
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(as defined in 17 C .F.R. Part 210 .1-02.b), which proof of claim or request for payment o f
an administrative expense was filed by or on behalf of the Releasee on or before th e
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Globa l
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, an y
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, th e
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptc y
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (a s
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing Ltd .
or Pacific Crossing Ltd ., which claim a Releasee shall be able to pursue consistent with
the Final rulings of the relevant bankruptcy court or relevant reviewing court ;
19. enter a Complete Bar Order submitted to the Court as follows :
a. Any and all persons and entities are permanently barred,
enjoined and restrained from commencing, prosecuting or asserting any claim against an y
Releasee arising under state, federal or common law, however styled, whether fo r
indemnification or contribution or otherwise denominated, including, without limitation ,
claims for breach of contract and for misrepresentation, where the claim is based upon ,
arises out of, or relates to any Released Claim, including, but not limited to, any claim
that is based upon, arises out of or relates to the Actions, or the transactions and
occurrences referred to in the Complaints, whether such claims are legal or equitable ,
known or unknown, foreseen or unforeseen, matured or unmatured, accrued or
unaccrued, including, without limitation, any claim in which a person or entity seeks to
recover from any of the Releasees (i) any amounts such person or entity may becom e
170
liable to pay to any of the Class Members and/or (ii) any costs, expenses, or attorneys '
fees from defending any claim by any of the Class Members . All such claims are hereby
extinguished, discharged, satisfied and unenforceable, subject to a hearing to be held b y
the Court, if necessary . The provisions of this Section XR.A_19_a are intended to
preclude any liability of any of the Releasees to any person or entity for indemnification ,
contribution , or otherwise on any claim based upon , arising out of, or relating to any
Released Claim, including, but not limited to, any claim that is based upon, arises out of
or relates to the Actions, or the transactions and occurrences referred to in th e
Complaints ; provided that, with respect to any judgment against any person or entity on
behalf of the Class or a Class Member based upon, arising out of, or relating to any
Released Claim, including, but not limited to, any claim that is based upon, arises out of
or relates to the Actions, or the transactions and occurrences referred to in the
Complaints, that person or entity shall be entitled to a credit of the greater of (1) a n
amount that corresponds to the percentage of responsibility of the Settling Defendants fo r
the loss to the Class or a Class Member or (ii) the amount of the Securities Cas h
Settlement Amount (if the judgment is on behalf of the Securities Class or a Securitie s
Class Member) or the amount of the ERISA Cash Settlement Amount (if the judgment i s
on behalf of the ER.ISA Class of an ERISA Class Member) ; provided further that nothin g
in this Complete Bar Order shall prevent a putative Securities Class Member who validl y
requests exclusion from the Securities Class pursuant to Section VII above from pursuin g
any claim other than a claim barred by the Securities Contribution Bar Order against an y
Releasee where such claim is based upon, arises out of, or relates to any Released Claim,
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including, but not limited to, any claim that is based upon, arises out of or relates to the
Actions, or the transactions and occurrences referred to in the Complaints- If any
provision of this Section Xl .A.19.a is subsequently held to be unenforceable, such
provision shall be substituted with such other provision as may be necessary to afford all
of the Releasees the fullest protection permitted by law from any claim that arises out of,
or relates to any Released Claim, including, but not limited to, any claim that is based
upon, arises out of or relates to the Actions, or the transactions and occurrences referred
to in the Complaints ;
b. Each and every Releasee is permanently barred, enjoined
and restrained from commencing, prosecuting or asserting any claim against any person
or entity (including any other Releasee) arising under state, federal, or common law,
however styled, whether for indemnification or contribution, or otherwise denominated,
including, without limitation, claims for breach of contract and for misrepresentation,
where the claim is based upon, arises out of, or relates to any Released Claim, including,
but not limited to, any claim that is based upon, arises out of or relates to the Actions, or
the transactions and occurrences referred to in the Complaints, whether such claims are
legal or equitable, known or unknown, foreseen or unforeseen, matured or unrnatured,
accrued or unaccrued, including, without limitation, any claim in which any Releasee
seeks to recover from any person or entity, including another Releasee, (i) any amounts
any such Releasee has or may become liable to pay to any of the Class Members and/or
(ii) any costs, expenses, or attorneys' fees from defending any claim by any of the Class
Members . All such claims are hereby extinguished, discharged, satisfied, an d
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unenforceable . However, notwithstanding anything stated in this Complete Bar Order o r
in this Settlement Agreement, in the event that any person or entity (for purposes of thi s
proviso, a "petitioner") commences against any of the Releasees any action asserting a
claim that is based upon, arises out of, or relates to any Released Claim, including, bu t
not limited to, any claim that is based upon, arises out of or relates to the Actions, or th e
transactions and occurrences referred to in the Complaints and such claim is not barre d
by a court pursuant to Sections XII .A_ 18 and Xu.A.19.a above or is otherwise not barred
by the Complete Bar Order, neither the Complete Bar Order nor this Settlement
Agreement shall bar claims by that Releasee against (i) such petitioner ; (ii) any person or
entity who is or was controlled by, controlling or under common control with the
petitioner, whose assets or estate are or were controlled, represented or administered by
the petitioner, or as to whose claims the petitioner has succeeded ; and (iii) any person or
entity that participated with any of the preceding persons or entities described in items (i)
and (ii) of this proviso in connection with the conduct, transactions or occurrences that
are the subject of the claim brought against the Releasee(s), or any person or entity that
was involved in the issues and damages alleged by the petitioner ; provided further that
this Settlement Agreement and the Complete Bar Order shall not bar or enjoin (i) the
individuals designated as the Estate Representative in their capacities as members of the
Estate Representative and as Liquidating Trustees (as each of these capitalized terms is
defined in the Joint Plan of Reorganization dated October 28, 2002 and confirmed on
December 22, 2002, as amended, in the Global Crossing Bankruptcy Proceeding) (for
purposes of this proviso , the "Estate Representative ") from bringing any and all claims,
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including, without limitation, Released Claims, against any Releasee(s), Settling
Defendant(s) or Non-Settling Defendant(s) (or any other individual or entity), including,
without limitation, any current or former officer, director or employee of Globa l
Crossing, and nothing in this Complete Bar Order or Settlement Agreement shall limit the
right or ability of the Estate Representative to seek all relief and damages available to it at
law or equity, (ii) any entity appointed by the Asia Global Crossing Bankruptcy Court
from pursuing claims (if any) on behalf of Asia Global Crossing Ltd . against any current
or former officer, director or employee of Asia Global Crossing Ltd. or (iii) any entity
appointed by the Pacific Crossing Bankruptcy Court from pursuing claims (if any) on
behalf of Pacific Crossing Ltd . against any current or former officer, director or employee
of Pacific Crossing Ltd . ; provided that, subject to the March 19, 2004 Stipulation of
Settlement in the case styled JPMorgan Chase Bank v . Winnick, Case No. 03-Civ . 8535
(GEL) (S .D.N.Y.), nothing in this Settlement Agreement or the Complete Bar shall bar or
enjoin the plaintiff in that case from prosecuting such case against the individuals and
entities named in the October 27, 2003 complaint filed in such case ; provided further that
nothing in the Complete Bar Order shall prevent a Bar Officer who is adjudged jointly
and severally liable for damages in either (x) any action or proceeding brought by an
entity appointed by the Global Crossing Bankruptcy Court against any Bar Officer or (y)
the action brought by the plaintiff pending in the Court under the caption JPMorgan
Chase Bank v. Winnick, et at., Case No . 03 Civ . 8535 (GEL) (for purposes of this
proviso, such action in (x) and (y) is a "covered action," such entity in (x) and plaintiff in
(y) is a "plaintiff' and each such Bar Officer is a "claimant"), from seeking, pursuant to
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applicable law, equity or contract existing as of the filing date of the Securities Complaint
and after a contested, adverse adjudication on the merits becomes final (for purposes of
this proviso, "final" means the time at which a Bar Officer is obligated to fund a
judgment or verdict, such obligation to fund not being subject to any stay), to recover
contribution from any other Bar Officer who is a defendant in the covered action in
which the adjudication has occurred and who either (a) is found to be liable in a judgment
in such covered action that becomes final, (b) settles with the plaintiff in such covered
action, (c) is a Bar Officer on whom the plaintiff fails to serve the operative complaint or
(d) is dismissed from such covered action (any such defendant in (a), (b), (c) or (d), a
"covered person," it being the case that a "covered person" does not include a Bar Officer
who prevails on the merits based upon a judge or jury determination against the plaintiff
in such covered action), unless, as to each of (b), (c) or (d), such covered person attest s
under oath by affidavit that he neither formally nor informally provided material
cooperation to the plaintiff in the continued prosecution of the covered action against an y
other Bar Officer (it being the case that the mere providing of testimony under oath eithe r
in a deposition or at trial, or responding to third-party discovery requests, shall not alone
be regarded as "material cooperation"), except that any covered person's total liability for
damages by way of contribution to any and all claimants under this proviso shall b e
capped (in the aggregate as to all claimants) at the lesser of (i) the percentage of
responsibility of such covered person, measured as a percentage of the total fault of all
persons who caused or contributed to the loss incurred by the plaintiff and considerin g
among other things the nature of the conduct of such person found to have caused o r
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contributed to the loss incurred by the plaintiff, and the nature and extent of the causal
relationship between the conduct of such person and such loss or (ii) ten percent (10%) of
such covered person's net worth, excluding his or her personal residences ; provided
further that nothing in the preceding proviso creates or is intended to create any new right
to seek contribution or any other new remedy, whether by contract or otherwise ; provided
further that nothing in the Complete Bar Order shall prevent a Settling Defendant from
seeking to enforce any agreement with the Insurers to pay the Cash Settlement Payment ;
provided further that nothing in the Complete Bar Order shall prevent any person
(including, without limitation, a Releasee or a Class Member) (i) from pursuing a proof
of claim or request for payment of an administrative expense, or an amendment as to
either (other than any of the proofs of claim filed on behalf of Class Members or any of
them by Securities Lead Plaintiffs or ERISA Plaintiffs), as to Global Crossing Ltd ., Asia
Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or affiliates
(as defined in 17 C .F.R. Part 210 .1-02.b), which proof of claim or request for payment of
an administrative expense was filed by or on behalf of the Releasee on or before the
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding, the Pacific Crossing Bankruptcy
Proceeding, and/or any bankruptcy proceeding relating to any subsidiary or affiliate (as
defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing Ltd ., Asia Global Crossing, Ltd .
or Pacific Crossing Ltd ., which claim a Releasee shall be able to pursue consistent wit h
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the Final rulings of the relevant bankruptcy court or relevant reviewing court, or (ii)
pursuing a claim for wages (including severance) in connection with a proof of claim or
request for payment of an administrative expense, or an amendment as to either (other
than any of the proofs of claim filed on behalf of Class Members or any of them by
Securities Lead Plaintiffs or ERISA Plaintiffs) as to Global Crossing Ltd ., Asia Global
Crossing Ltd., Pacific Crossing Ltd . and/or any of their subsidiaries or affiliates (a s
defined in 17 C.F.R. Pa rt 210 . 1 -02 .b), which proof of claim or request for payment of an
adminis trative expense (a) was filed by or on behalf of such person on or before the
applicable bar date in the Global Crossing Bankruptcy Proceeding, the Asia Global
Crossing Bankruptcy Proceeding , the Pacific Crossing Bankruptcy Proceeding, any
bankruptcy proceeding arising out of the Global Crossing Bankruptcy Proceeding, the
Asia Global Crossing Bankruptcy Proceeding , the Pacific Crossing Bankruptcy
Proceeding , and/or any bankruptcy proceeding relating to any subsidiary or affi liate (as
defined in 17 C.F.R. Pa rt 210 .1-02 .b) of Global Crossing Ltd ., Asia Global Crossing, Ltd.
or Pacific Crossing Ltd . (including , without limitation , Asia Global Crossing
Development Co .) and (b) is pursued consistent with the Final rulings on the relevant
rulings of the relevant bankruptcy court or relevant reviewing cou rt ; provided further,
that nothing in the Complete Bar Order or in this Settlement Agreement or in any
documents executed in connection therewith shall release , interfere with , limit or bar the
assertion by any Releasee of any claim (including, but not limited to , a claim for
insurance coverage) concerning any insurance or indemnity po licy other than the
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Executive Liability Insurance Policies, the Fiduciary Liability Insurance Policy and/or the
Pender Policy ;
c. If, notwithstanding the Bar Orders, a person or entit y
obtains a judgment against any of the Releasees on any claim that is based upon, arises
out of, or relates to any Released Claim, including, but not limited to, any claim that is
based upon, arises out of or relates to the Actions, or the transactions and occurrences
referred to in the Complaints, or on any other claim, however denominated, to recover,
directly or indirectly from such Releasee, (i) any amounts that the person or entity obtains
in the judgment against the Releasee might become liable to pay to any of the Class
Members or (ii) any costs, expenses, or attorneys' fees that such person or entity might
incur in defending any claim against him, her or it by any of the Class Members, the
Class and the Class Members agree that they will reduce or credit any judgment or
settlement (up to the amount of such judgment or settlement) that they might obtain
against that person or entity by an amount equal to the amount of that person's or entity's
judgment against the Releasee, which amount shall be credited to the Releasee ;
d. If a final judgment is entered in favor of a class certified in
any of the Actions against any person or entity before the adjudication of such person's
or entity's claims against any Releasee, any funds collected on account of such judgment
shall not be distributed to the class that has obtained the judgment, but shall be held in
trust pending final adjudication of such claim, and such funds shall be used as a credit
against any judgment rendered in favor of the person or entity against the Releasee as
provided in Section XII .A.19.c above ;
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e. Securities Lead Plaintiffs, ERISA Plaintiffs and/or any
class that has been certified in any of the Actions will use their best efforts in settling any
claim with any person or entity to obtain from such person or entity a release of any and
all claims based upon, arising out of or relating to the Actions or any of the Released
Claims that the person or entity may have against any of the Releasees ;
20. dismiss the Actions (including all individual claims and Class
claims presented thereby) on the merits and with prejudice as of the Final Settlement
Date, without fees or costs to any Settling Party except as provided in this Settlement
Agreement ;
21 . incorporate the Securities Release and the ERISA Release set forth
above in Section IX.A and Section IX.B, make the Securities Release and the ERISA
Release effective as of Final Settlement Date, and forever discharge all of the Releasees
from any and all claims or liabilities arising from or related to the Released Claims;
22. permanently bar and enjoin (i) all Class Members (and their heirs ,
executors and administrators, predecessors, successors, affiliates (as defined in 17 C .F.R.
Part 210.1-02.b) and assigns) from filing, commencing, prosecuting, intervening in,
participating in (as class members or otherwise), or receiving any benefits or other relief
from, any other lawsuit, arbitration or other proceeding or order in any jurisdiction that is
based upon, arises out of or relates to any Released Claims, including, but not limited to,
any claim that is based upon, arises out of or relates to the Actions or the transactions and
occurrences referred to in the Complaints and (ii) all persons or entities from organizing
any Class Members for purposes of pursuing as a purported class action (including b y
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seeking to amend a pending complaint to include class allegations, or by seeking class
certification in a pending action) any lawsuit that is based upon, arises out of or relates to
any Released Claims, including, but not limited to, any claim that is based upon, arises
out of or relates to the Actions or the transactions and occurrences referred to in th e
Complaints ; provided however, that notwithstanding anything in this Section XII .A.22,
this Section XII .A.22 does not enjoin any Class Member from filing, commencing,
prosecuting, participating in, or receiving any benefits or other relief from (i) a proof of
claim or request for payment of an administrative expense filed against Global Crossing
Ltd., Asia Global Crossing Ltd ., Pacific Crossing Ltd. and/or any of their subsidiaries or
affiliates (as defined in 17 C .F.R. Part 210-1-02-b, including, but not limited to, the
bankruptcy proceeding of Asia Global Crossing Development Company), on or before
the applicable bar date, or any amendment to such proof of claim or request for payment
of an administrative expense (other than any of the proofs of claim filed on behalf of
Class Members or any of them by Securities Lead Plaintiffs or ERISA Plaintiffs) in the
Global Crossing Bankruptcy Proceeding, the Asia Global Crossing Bankruptcy
Proceeding, the Pacific Crossing Bankruptcy Proceeding, any bankruptcy proceeding
arising out of the Global Crossing Bankruptcy Proceeding, the Asia Global Crossing
Bankruptcy Proceeding, the Pacific Crossing Bankruptcy Proceeding, and/or any
bankruptcy proceeding relating to any subsidiary or affiliate (as defined in 17 C .F.R. Part
210J-02.b) of Global Crossing Ltd ., Asia Global Crossing, Ltd . or Pacific Crossing Ltd.
(including, but not limited to, the bankruptcy proceeding of Asia Global Crossing
Development Company), which Claim shall be able to be pursued consistent with th e
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Final rulings of the relevant bankruptcy court or relevant reviewing court, (ii) any Claim
asserted by a Class Member against any person or entity appointed by either the Globa l
Crossing Bankruptcy Court, the Asia Global Crossing Bankruptcy Court, the Pacifi c
Crossing Bankruptcy Court, or any other bankruptcy court in a proceeding involving a n
affiliate (as defined in 17 C .F.R. Part 210 .1-02.b) or subsidiary of any of the thre e
preceding entities, or against Pacific Crossing Ltd . or any of its subsidiaries or affiliate s
(as defined in 17 C .F.R. Part 210 .1-02 .b) acting as a debtor in possession where suc h
Claim arises out of, or relates to, any Claim by such person or entity against a Clas s
Member, (iii) any claim for wages (including severance) asserted against Global Crossin g
Ltd., Asia Global Crossing Ltd., Pacific Crossing Ltd, and/or any of their subsidiaries or
affiliates (as defined in 17 C .F.R. Part 210 .1-02.b, including, but not limited to, Asi a
Global Crossing Development Company) in a proof of claim or request for payment of an
administrative expense submitted by a Class Member on or before the applicable bar
date, or any amendments to such proof of claim or request for payment of an
administrative expense (other than any of the proofs of claim filed on behalf of Class
Members or any of them by Securities Lead Plaintiffs or ERISA Plaintiffs) in the Globa l
Crossing Bankruptcy Proceedings, the Asia Global Crossing Bankruptcy Proceedings, th e
Pacific Crossing Bankruptcy Proceeding and/or any bankruptcy proceeding relating t o
any subsidiary or affiliate (as defined in 17 C .F.R. Part 210 .1-02.b) of Global Crossing
Ltd., Asia Global Crossing Ltd. or Pacific Crossing Ltd . (including, but not limited to, the
bankruptcy proceeding of Asia Global Crossing Development Company) with respect t o
which Claim, a Class Member shall be able to pursue the Claim consistent with the Final
181
rulings of the relevant bankruptcy court or relevant reviewing court or (iv) any clai m
(including, but not limited to, a claim for insurance coverage) concerning any insuranc e
or indemnity policy other than the Executive Liability Insurance Policies, the Fiduciar y
Liability Insurance Policy and/or the Pender Policy ;
23 , authorize the Settling Parties with the written approval of the
Insurers, without further approval from the Court, to agree to and adopt such
amendments, modifications and expansions of this Settlement Agreement and all exhibits
attached to this Settlement Agreement as (i) are not materially inconsistent with the Final
Judgment and Order Approving Settlement and (ii) do not materially limit the rights o f
Class Members under this Settlement Agreement ; provided that any modification in th e
Plan(s) of Allocation that involves an amount equal to or less than ten percent (10%) of
the total distribution amount involved in the Plan(s) of Allocation shall be deemed to b e
materially consistent with the Final Judgment and Order Approving Settlement and shal l
be deemed not to materially limit the rights of Class Members under this Settlemen t
Agreement;
24. direct the Settling Parties to prepare proposed findings of fact an d
conclusions of law in support of the Court 's Final Judgment and Order Approvin g
Settlement;
25 . expressly determine that there is no just reason to delay the Final
Judgment respecting this Settlement Agreement and expressly direct that the Fina l
Judgment regarding this Settlement Agreement be entered as to less than all parties an d
all claims in the Securities Action pursuant to Federal Rule of Civil Procedure 54(b) ;
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26. without affecting the extent to which the Final Judgment and Order
Approving Settlement are final for purposes of any appeal, retain jurisdiction as to all
matters relating to the administration, consummation, enforcement and interpretation of
this Settlement Agreement, the Final Judgment and the Order Approving Settlement ,
including, without limitation, enforcement of the Bar Orders, and for any other
reasonably necessary purpose ; provided however, that, with respect to Pender, such
retention of jurisdiction shall be limited solely to subject matter jurisdiction over the
payments made or caused to be made by Pender to the extent necessary to enforce the
payment provisions found at Sections ILA-D of this Settlement Agreement ; and
27 , incorporate any other provisions that the Court deems necessary
and just .
B . A proposed Final Judgment and Order Approving Settlement shall be
drafted by Securities Lead Counsel, ERISA Plaintiffs Counsel, Securities Settling
Defendants' Lead Counsel, ERISA Settling Defendants' Lead Counsel and Separate
Releasee Counsel as soon as practicable after the Execution Date and shall be approved
by all Securities Settling Defendants' Separate Counsel and all ERISA Settling
Defendants' Separate Counsel . A copy of the proposed Final Judgment and the proposed
Order Approving Settlement shall be submitted to the Court at least 10 days prior to the
Fairness Hearing.
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XHL MODIFICATION OR TERMINATION OF THISSETTLEMENT AGREEMENT
A. The terms and provisions of this Settlement Agreement may be amended ,
modified or expanded by agreement of the Settling Parties and the Insurers with approva l
of the Court ; provided however, that, after entry of the Final Judgment and Orde r
Approving Settlement, the Settling Parties may by written agreement effect an y
amendments, modifications or expansions of this Settlement Agreement and it s
implementing documents (including all exhibits to this Settlement Agreement) withou t
notice to or approval by the Court if such changes are not materially inconsistent with the
Court's Final Judgment and Order Approving Settlement and do not materially limit th e
rights of Class Members under this Settlement Agreement ; provided further that a
decision by Securities Lead Plaintiffs and/or ERISA Plaintiffs to modify the Plan(s) o f
Allocation in connection with an objection raised by a Class Member or a settlement with
a person or entity that requested exclusion from the Securities Class shall not be deemed
to be a change that materially limits the rights of Class Members under this Settlement
Agreement to the extent such modification involves an amount equal to or less than ten
percent (10%) of the total distribution amount involved in the Plan(s) of Allocation that is
subject to such modification .
B . Subject to Sections XM.C, XM.D and XH1.F below, this Settlemen t
Agreement will terminate at the sole option and discretion of Settling Defendants' Lea d
Counsel (on behalf of all Settling Defendants other than Winnick and Simpson Thacher),
Winnick (on his own behalf), Simpson Thacher (on its own behalf, as specifically limited
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by Section XIH .F below), Securities Lead Counsel (on behalf of Securities Lead
Plaintiffs) or ERISA 401(k) Lead Counsel (on behalf of ERISA Plaintiffs) if (i) th e
Court, or any appellate court(s), rejects, modifies or denies approval of any portion of this
Settlement Agreement or the proposed settlement that the terminating Settling Party
reasonably and in good faith determines is material, including, without limitation, the
terms of relief, the Bar Orders, the findings of the Court, the provisions relating to notice,
the definition of the Securities Class, the ERISA Consolidated Class, the ERISA
Pusloskie Class and/or the ERISA Simonetti Class, and/or the terms of the Securitie s
Release or the ERISA Release, (ia) the Court, or any appellate court(s), does not enter or
completely aff=, or alters or expands, any portion of the Hearing Order, the Final
Judgment or the Order Approving Settlement, or any of the Court's findings of fact or
conclusions of law as proposed by Settling Defendants' Lead Counsel, Separate Releasee
Counsel, Securities Lead Counsel and ERISA 401 (k) Lead Counsel, including the Bar
Orders, that the terminating Settling Party reasonably and in good faith believes is
material or (iii) all necessary approvals (if any) by the Global Crossing Bankruptcy
Court, the Asia Global Crossing Bankruptcy Court and/or the Pacific Crossing
Bankruptcy Court are not obtained by the Final Settlement Date ; provided that any
decision to terminate the Settlement Agreement pursuant to this Section XIMB shall be
subject to review by the Court as to whether the decision was reasonable and made in
good faith . The terminating Settling Party must exercise the option to withdraw from and
terminate this Settlement Agreement, as provided in this Section XIII.B, no later than ten
(10) days after receiving actual notice of the event prompting the termination.
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C. Notwithstanding the preceding Section XIII .B, neither Securities Lead
Plaintiffs, Securities Lead Counsel, ERISA Plaintiffs nor ERISA Plaintiffs' Counsel ma y
terminate this Settlement Agreement on the basis of the Securities Attorneys' Fees and
Expenses Award and/or the ERISA Attorneys' Fees and Expenses Awards ordered, or a s
modified, by the Court or any appellate cou rt(s) .
D. Notwithstanding any other terms or provisions of this Settlemen t
Agreement, this Settlement Agreement shall terminate if :
1 . the Discharge Order that is entered by the Court or that is affirme d
by any appellate court contains language that is different than the language set out in
Section XII .A.5 .b above unless the language of the Discharge Order that is entered by the
Court or that is affirmed by any appellate court is acceptable to the Insurers whose policy
proceeds have not been exhausted at the time the Discharge Order is entered, such
acceptance to be evidenced in writing o r
2. the Court does not specifically exercise jurisdiction over th e
Policies and the proceeds thereof and, on or prior to the Final Settlement Date, one o r
both of the Asia Global Crossing Bankruptcy Court or the Global Crossing Bankruptcy
Court has not entered a order that has become Final to the same effect as the Discharge
Order unless the Insurers whose policy proceeds have not been exhausted as of the Fina l
Settlement Date waive such requirement, such waiver to be evidenced in writing .
E. Without limiting any other rights under this Settlement Agreement and
subject to Section XIII.F below, by no later than two (2) days before the Fairnes s
Hearing, Settling Defendants' Lead Counsel (on behalf of all Settling Defendants other
186
than Winnick and Simpson Thacher), Winnick (on his own behalf) or Simpson Thacker
(on its own behalf, as limited by Section XIH.F below) may unilaterally withdraw from
and terminate this Settlement Agreement if requests for exclusion are received from
potential Securities Class Members whose claims, in the aggregate, as calculated
pursuant to the Securities Plan of Allocation, would have exceeded an amount equal to or
larger than two and two-tenths percent (2 .2%) of the Cash Settlement Amount had they
not requested exclusion from the Securities Class, calculated using the information
provided by such potential Securities Class Members in their requests for exclusion
pursuant to Section VII above ; provided however, that, for those potential Securities
Class Members who fail to provide the information required by the request for exclusion,
the Securities Settling Parties will substitute an estimate of the amount such potential
Securities Class Members would have received under the Securities Plan of Allocation
from an expert to be agreed to by Securities Settling Defendants' Lead Counsel, Separate
Releasee Counsel and Securities Lead Counsel or, failing such agreement, to be
appointed by the Court ; provided farther that any Settling Defendant or Simpson Thacher
may seek review by the Court of any decision to terminate the Settlement Agreement
pursuant to this Section XIII .E, such review to determine whether the decision to
terminate was reasonable and made in good faith .
F. Any decision by Simpson Thacher to terminate this Settlement Agreement
shall only be with respect to Simpson Thacher's participation in this Settlement
Agreement and shall have no effect whatsoever on the other Settling Parties'
consummation and implementation of this Settlement Agreement ; provided that, if
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Simpson Thacher terminates its participation in this Settlement Agreement, but the
Settlement Agreement is not otherwise terminated, the remaining Settling Parties shal l
amend this Settlement Agreement to provide that Simpson Thacher is not a Release e
under this Settlement Agreement, to remove any provisions regarding payments to b e
made by Simpson Thacker and to remove any contingencies based upon Simpso n
Thacher's payment under this Settlement Agreement .
G. If an option to withdraw from and terminate this Settlement Agreement
arises under Sections III .E, XIII .B or XIT1 .E, (a) neither Settling Defendants, Simpso n
Thacher, ERISA Plaintiffs nor Securities Lead Plaintiffs will be required for any reaso n
or under any circumstance to exercise that option, and (ii) any exercise of that optio n
shall be made in good faith.
H. If this Settlement Agreement is terminated pursuant to the terms hereof,
then:
1 . this Settlement Agreement shall be null and void and shall have no
force or effect, and no party to this Settlement Agreement shall be bound by any of it s
terms, except for the terms set out in this Section XI .H ;
2 . this Settlement Agreement, all of its provisions, and all
negotiations, statements and proceedings relating to it .shall be without prejudice to the
rights of Settling Defendants, Simpson Thacher, Securities Lead Plaintiffs, Securitie s
Plaintiffs, ERISA Plaintiffs or any other Class Member, all of whom shall be restored t o
their respective positions existing immediately before the execution of this Settlemen t
Agreement, except with respect to (i) the payment of Notice and Administrative
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Expenses, which payment is described in Section LE. Lyyyyy above and (it) the paymen t
of any Defense Costs (whether as Securities Pre-Execution Defense Costs, ERISA Pre-
Execution Defense Costs or Covered Claim Costs) made to an Insured Releasee (or the
Insured Releasee's counsel), which payment shall be retained by such Insured Release e
and/or the Insured Releasee's counsel ;
3. Releasees and their current and former predecessors, successors ,
heirs, affiliates (as defined in 17 C.F.R. Part 210 .1-02.b), agents , attorneys ,
representatives or assigns expressly and affirmatively reserve all defenses, arguments an d
motions as to all claims that have been or might later be asserted in the Actions, includin g
(without limitation) any argument that the Actions may not be litigated as a class action ;
4. Securities Lead Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs
and their current and former predecessors, successors, heirs, affiliates (as defined in 1 7
C.F.R. Part 210.I-02.b), agents, attorneys, representatives or assigns expressly and
affirmatively reserve all motions as to, and arguments in support of, all claims that have
been or might later be asserted in the Actions, including (without limitation) any
argument concerning class certification ;
5. neither this Settlement Agreement, nor the fact of its having bee n
made, shall be admissible or entered into evidence for any purpose whatsoever ;
6 . to the extent any monies are deposited in the Cash Settlemen t
Account, Securities Lead Plaintiffs and ERISA Plaintiffs shall promptly distribute (o r
cause to be distributed) such monies as follows :
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a. Securities Lead Plaintiffs and ERISA Plaintiffs shall retur n
(or cause to be returned) to the Insurers and Pender's Securities Reinsurers (to b e
allocated among them pursuant to the terms of the escrow agreements applicable to th e
Securities Insurers' Insurance Escrow Account, the Securities Reinsurers' Insuranc e
Trust Account and the ERISA Insurance Escrow Account) any monies remaining in th e
Cash Settlement Account ( including any interest ) less ( :) the Winnick ERISA Paymen t
(as well as any interest attributable to it), (ix) the Winnick Securities Payment (as well a s
any interest attributable to it) and (iii) any Notice and Administrative Expenses incurred
but not yet paid ; provided that any monies not returned to an Insurer shall reduce tha t
Insurer's respective policy limits ;
b. Securities Lead Plaintiffs and ERISA Plaintiffs shall return
(i) the Winnick ERISA Payment plus any interest that has accrued with respect to th e
Winnick ERISA Payment to the Winnick ERISA Escrow Account, (ii) the Winnic k
Securities Payment plus any interest that has accrued with respect to the Winnic k
Securities Payment to Winnick and (iii) the Simpson Thacher Payment plus any interes t
that has accrued with respect to the Simpson Thacher Payment to Simpson Thacher ;
7 . to the extent any monies are deposited in (i) the Securitie s
Insurers' Insurance Escrow Account, (ii) the Securities Reinsurers' Insurance Trus t
Account and/or (iii) the ERISA Insurance Escrow Account, such monies shall be release d
and returned to, respectively, (i) the Securities Insurers, (ii) Pender's Securitie s
Reinsurers and (iii) the ERISA Insurer and Pender pursuant to the terms set out in each of
the escrow agreements;
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8 . to the extent any monies are deposited in the (i) Winnick ERISA
Escrow Account, ( ii) the Winnick Securities Escrow Account or ( iii) the Simpso n
Thacher Escrow Account, such monies shall be distributed pursuant to the terms set ou t
in each of the escrow agreements ;
9_ Securities Lead Plaintiffs may retain all Confidential Disclosur e
Material (as that term is defined in the Securities Confidentiality Agreement) that the y
obtained pursuant to the Securities Confidentiality Agreement, which Confidential
Disclosure Material shall remain subject to the terms of the Securities Confidentiality
Agreement; provided that paragraph 10 of the Securities Confidentiality Agreement is
hereby amended to allow Securities Lead Plaintiffs to use all Confidential Disclosur e
Material in connection with the prosecution of the Securities Action ; provided however,
that Securities Lead Plaintiffs shall not be able to use any Confidential Disclosure
Material in connection with responding to or opposing a motion to dismiss made by any
Settling Defendant or Releasee in the Securities Action ;
10. ERISA Consolidated Plaintiffs may retain all Confidentia l
Disclosure Material (as that term is defined in the ERISA Confidentiality Agreement )
that they obtained pursuant to the ERISA Confidentiality Agreement, which Confidentia l
Disclosure Material shall remain subject to the terms of the ERISA Confidentialit y
Agreement ; provided that paragraph 10 of the ERISA Confidentiality Agreement i s
hereby amended to allow ERISA Plaintiffs to use all Confidential Disclosure Material i n
connection with the prosecution of the Securities Action ; provided however, that ERISA
Plaintiffs shall not be able to use any Confidential Disclosure Material in connection with
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responding or opposing a motion to dismiss made by any Settling Defendant or Release e
in any of the ERISA Actions ;
11, nothing in this Settlement Agreement shall create any obligatio n
on the part of any Settling Party to pay any other Settling Party 's fees or expenses ; an d
12. Settling Defendants and any Releasee added as a defendant shal l
have forty-five (45) days to respond to the Securities Complaint .
I . If this Settlement Agreement is terminated only with respect to Simpson
Thacher's participation, then :
1 . this Settlement Agreement shall be null and void with respect t o
Simpson Thacher and its rights and obligations under this Settlement Agreement
(including, without limitation, its obligations to make any payments under this Settlement
Agreement or its right to obtain any release from Securities Settling Class Members) and
shall have no force or effect as to Simpson Thacher, and neither Simpson Thacher nor
Securities Class Members shall be bound by any of the terms of this Settlement
Agreement as such terms relate to Simpson Thacher's participation in this Settlemen t
Agreement, except for the terms set out in this Section XIILI ;
2_ this Settlement Agreement, all of its provisions, and al l
negotiations, statements and proceedings relating to it shall be without prejudice to th e
rights of Simpson Thacher, on the one hand, and Securities Lead Plaintiffs, Securitie s
Plaintiffs or any other Securities Class Member as such rights relate to Simpson Thacher ,
on the other hand, all of whom shall be restored to their respective positions existin g
immediately before the execution of this Settlement Agreement ;
192
3 . Simpson Thacher expressly and affirmatively reserves all defenses ,
arguments and motions as to all claims that have been or might later be asserted in th e
Actions, including (without limitation) any argument that the Actions may not b e
litigated as a class action ;
4. Securities Lead Plaintiffs and Securities Plaintiffs and their curren t
and former predecessors, successors, heirs, affiliates (as defined in 17 C .F.R. Part 210 .1-
02.b), agents, attorneys, representatives or assigns expressly and affirmatively reserve all
motions as to, and arguments in support of, all claims as to Simpson Thacker that have
been or might later be asserted in the Actions, including (without limitation) any
argument concerning class certification ;
5. neither this Settlement Agreement, nor the fact of its having bee n
made, shall be admissible or entered into evidence for any purpose whatsoever wit h
respect to any claims between Simpson Thacher, on the one hand, and Securities Lea d
Plaintiffs, Securities Plaintiffs and/or Securities Class Members, on the other hand ;
to the extent any portion of the Simpson Thacher Payment i s
deposited in the Cash Settlement Account, Securities Lead Plaintiffs shall promptl y
distribute (or cause to be distributed) such monies to Simpson Thacher :
7_ to the extent the Simpson Thacher Payment or any portion thereo f
is deposited in the Simpson Thacher Escrow Account, Simpson Thacher may instruct th e
Simpson Thacher Escrow Agent to promptly pay, and the Simpson Thacher Escro w
Agent shall promptly pay, the Simpson Thacher Payment to Simpson Thacker ; and
193
8. nothing in this Settlement Agreement shall create any obligation
on the part of Simpson Thacher to pay Securities Lead Plaintiffs', Securities Plaintiffs' or
Securities Class Members' fees or expenses, or on the part of Securities Lead Plaintiffs ,
Securities Plaintiffs or Securities Class Members to pay Simpson Thacher's fees o r
expenses .
XN. GENERAL MATTERS AND RESERVATION S
A. This Settlement Agreement shall not be implemented , and will have n o
force and effect, and no payments shall be made by the Insurers, unless prior to the date
the Settling Parties submit this Settlement Agreement to the Court and apply for a
Hearing Order, the Insurers have given their approval to the Settlement Agreement and t o
the proposed Hearing Order, such approval to be evidenced by execution of a writte n
release agreement in a form acceptable to the Settling Defendants and the Insurers, an d
the Insurers have each agreed to provide, in combination, indemnity and/or coverage fo r
the full amount of the Cash Settlement Amount less the Winnick ERISA Amount, th e
Winnick Securities Amount and the Simpson Thacher Amount. Such approval shall be a
condition precedent to this Settlement Agreement .
B. Subject to Section XIlI .F above, the obligation, although not the ability, o f
the Settling Parties to implement all of the terms of this Settlement Agreement is and wil l
be contingent upon each of the following and any of the Settling Parties may terminate43
this Settlement Agreement if the conditions set forth below are not fully satisfied :
funding of each of the Securities Insurers' Insurance Escro w
Account, the Securities Reinsurers ' Insurance Trust Account, the ERISA Insurance
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Escrow Account, the Winnick Securities Escrow Account and the Simpson Thacher
Escrow Account as required by, respectively, Sections MA . Lb-c, u.A.1 .d, II .A.2.b-c,
II.A.3 and II .A.4 above, and the absence of any lien, garnishment , attachment or pledge
of any funds in the accounts identified in this subsection ;
2. subject to Section XM.C above, payment of the Securitie s
Attorneys' Fees and Expenses Award and the ERISA Attorneys' Fees and Expenses
Award as required by, respectively, Sections II.B .I and 11.13 -2 above ;
3. payment of the Securities Insurers' Insurance Payment, th e
Securities Reinsurers' Insurance Payment, the ERISA Insurance Payment, the Winnic k
ERISA Payment , the Winnick Securities Payment and the Simpson Thacher Payment
consistent with, respectively, Sections lI .C.1 .a, II.C_l .b, a .C.2.a, II .C.3, MCA and II.C. 5
above ;
4. obtaining any necessary approvals (if any) from the Globa l
Crossing Bankruptcy Court and/or the Asia Global Crossing Bankruptcy Court ; provided
that such contingency shall be deemed to be waived if not exercised by the fifth (5th) day
before the Fairness Hearing ;
5 . obtaining a resolution of the pending United States Department o f
Labor inquiry; provided that such resolution must be acceptable to the Settling
Defendants ; providedfurther that such contingency sha ll be deemed to be waived if not
exercised by the fifth (5th) day before the Fairness Hearing ; provided further that a
Settling Defendant may seek review by the Court of any decision to invoke th e
195
contingency set out in this Section XIV .B . 5, such review to determine whether the
decision to invoke this contingency was reasonable and made in good faith ;
6. establishment of ERISA-qualified accounts within an Employe e
Benefit Plan for ERISA 401(k) Class Members into which monies distributed pursuant t o
the ERISA 401(k) Plan of Allocation shall be deposited ; and
7. any other conditions stated in this Settlement Agreement .
C. Except as provided in this Section XIV .C, or as may otherwise be required
by law, the Settling Parties and their counsel agree to keep the contents of this Settlemen t
Agreement and all related negotiations confidential until the Execution Date and, with
respect to any initial press release announcing the settlement described in this Settlemen t
Agreement, to attempt in good faith to coordinate the timing of such press release(s) ;
provided however, that this Section XIV.C shall not prevent earlier disclosure of suc h
information by Settling Defendants' Counsel, Separate Releasee Counsel, Securities Lea d
Counsel or ERISA 401(k) Lead Counsel to any person or entity (such as other Securities
Plaintiffs or ERISA Plaintiffs, Executive Committee Members, the ER .ISA Lead Counsel
Committee, experts, courts, regulatory entities and/or Administrators) to whom the
Settling Parties agree disclosure must be made to effectuate the terms and conditions of
this Settlement Agreement ; provided facrther that Settling Defendants and Simpson
Thacher shall be able to make, without prior notification to, or review or approval by ,
Securities Lead Counsel or ERISA Plaintiffs' Counsel, any and all disclosures regarding
this Settlement Agreement that they believe may be required or appropriate to th e
Insurers, the Securities and Exchange Commission, the United States Department o f
196
Labor, the Department of the Treasury, the Internal Revenue Service and/or any other
regulatory body (including, without limitation, any Committee of the United States
Congress), the Global Crossing Bankruptcy Court, the Asia Global Crossing Bankruptc y
Court, the Pacific Crossing Bankruptcy Court, the Global Crossing United States
Bankruptcy Trustee, the Asia Global Crossing United States Bankruptcy Trustee, the
Pacific Crossing United States Bankruptcy Trustee, the Global Crossing Creditors
Committee, the Asia Global Crossing Creditors Committee, the Pacific Crossing
Creditors Committee, the Global Crossing Bankers Committee, the Asia Global Crossin g
Bankers Committee, the Pacific Crossing Bankers Committee, the Company's curren t
independent auditors, accountants, attorneys, financial institutions or lenders whe n
disclosure to such individuals or entities is required in the normal course of a Settlin g
Defendant's business, and the persons and entities who might become securities holder s
in Global Crossing Ltd. at the time Global Crossing Ltd .'s plan of reorganization in th e
Global Crossing Bankruptcy Proceeding becomes effective, as required in connectio n
with a judicial or regulatory proceeding or as required by any other obligations to whic h
they may be or become subject ; provided however, that any and all such disclosures shall
be balanced , fair and accurate ; provided fisrther that Securities Lead Counsel , ERISA
Plaintiffs' Counsel, Settling Defendants ' Lead Counsel, Simpson Thacher, Separat e
Releasee Counsel and Winnick shall also be able to speak with media representative s
regarding the terns of this Settlement Agreement prior to the Execution Date, but only t o
the extent they obtain an agreement from such media representatives not to publish an y
information regarding this Settlement Agreement until on or after the Execution Date.
197
D. Subject to Section II.J .2 above, Securities Lead Plaintiffs and Securities
Lead Counsel agree that the terms and provisions of the Securities Confidentiality
Agreement shall continue to be in effect regarding the Settlement Disclosure Material (as
that term is defined in the Securities Confidentiality Agreement) .
E. ERISA Plaintiffs and ERISA Plaintiffs' Counsel agree that the terms and
provisions of the ERISA Confidentiality Agreement shall continue to be in effect
regarding the Settlement Disclosure Material (as that term is defined in the ERISA
Confidentiality Agreement) .
F. Jay W. Eisenhofer represents that be is authorized to enter into this
Settlement Agreement on behalf of Securities Lead Plaintiffs, and, as authorized by the
Court's December 13, 2002 order, on behalf of Securities Plaintiffs and Securities Class
Members, and any other attorneys, including, but not limited to, Executive Committe e
Members, who have represented or who now represent Securities Lead Plaintiffs,
Securities Plaintiffs or Securities Class Members in the Securities Action with respect to
the claims in the Securities Action and/or the Released Claims ; provided that Mr .
Eisenhofer undertakes to obtain from each of the Securities Plaintiffs, either individually
or through a duly authorized representative, a representation and certification that he, she
or it (i) has been kept apprised of the progress of the Securities Action and the settlement
negotiations among the Settling Parties, and has either read this Settlement Agreement,
including the exhibits attached to this Settlement Agreement, or has received a
description of it from Securities Lead Counsel or an Executive Committee Member, and
has agreed to its terms ; (ii) has consulted with Securities Lead Counsel or an Executiv e
198
Committee Member about the Securities Action and this Settlement Agreement ; and
(iii) will remain in and not request exclusion from the Securities Class .
G. Lynn Lincoln Sarko represents that he is authorized to enter into thi s
Settlement Agreement on behalf of the ERISA Consolidated Plaintiffs and, as authorize d
by the Court 's December 13, 2002 order , on behalf of ERISA Consol idated Class
Members, and any other attorneys, including, but not limited to, members of the ERIS A
Lead Counsel Committee, who have represented or who now represent ERISA
Consolidated Plaintiffs and ERISA Consolidated Class Members in the ERIS A
Consolidated Action with respect to the claims in the ERISA Consolidated Action and/o r
the Released Claims .
H. Thomas J. Hart represents that he is authorized to enter into thi s
Settlement Agreement on behalf of the ERISA Pusloskie Plaintiffs and any other
attorneys who have represented or who now represent the ERISA Pusloskie Plaintiffs in
the ERISA Pusloskie Action with respect to the claims in the ERISA Pusloskie Action
and/or the Released Claims .
1 . Matthew J . Fusco represents that he is authorized to enter into this
Settlement Agreement on behalf of the ERISA Simonetti Plaintiffs and any othe r
attorneys who have represented or who now represent the ERISA Simonetti Plaintiffs i n
the ERISA Simonetti Action with respect to the claims in the ERISA Sirnonetti Action
and/or the Released Claims .
J . Each of Securities Lead Plaintiffs, through a duly authorize d
representative, represents and certifies that it (i) has agreed to serve as a representative o f
199
the Securities Class proposed to be certified herein ; ( ii) is willing, able and ready to
perform all of the duties and obligations as a representative of the Securities Class,
including, but not limited to, being available for, and involved in, discovery and fact
finding ; (iii) has read the pleadings in the Securities Action, or has had the contents of
such pleadings described to it ; (iv) has been kept apprised of the progress of the
Securities Action and the settlement negotiations among the Settling Parties, and has
either read this Settlement Agreement, including the exhibits attached to this Settlement
Agreement, or has received a description of it from Securities Lead Counsel, and has
agreed to its terms ; (v) has consulted with Securities Lead Counsel about the Securities
Action, this Settlement Agreement and the obligations of a representative of the
Securities Class ; (vi) has authorized Securities Lead Counsel to execute this Settlemen t
Agreement on its behalf ; and (vii) will remain in and not request exclusion from the
Securities Class and will serve as a representative of the Securities Class until the terms
of this Settlement Agreement are effectuated, this Settlement Agreement is terminated in
accordance with its terms, or the Court at any time determines that such Securities Lead
Plaintiff cannot represent the Securities Class .
K. Each ERISA Consolidated Plaintiff, either individually or through a duly
authorized representative, represents and certifies that he or she (i) has read the pleadings
in the ERISA Consolidated Action, or has had the contents of such pleadings described to
him or her ; (ii) has been kept apprised of the progress of the ERISA Consolidated Action
and the settlement negotiations among the Settling Parties, and has either read thi s
Settlement Agreement, including the exhibits attached to this Settlement Agreement, o r
200
has received a description of it from ERISA Consolidated Counsel or a member of
ERISA Lead Counsel Committee, and has agreed to its terms ; (iii) has consulted with
ERISA Consolidated Lead Counsel or a member of ERISA Lead Counsel Committee
about the ERISA Consolidated Action and this Settlement Agreement ; (iv) has authorized
ERISA Consolidated Lead Counsel to execute this Settlement Agreement on his or her
behalf ; and (v) if also a Securities Class Member, will remain in and not request
exclusion from the Securities Class either on behalf of himself or herself, or on behalf of
any ERISA Plan.
L_ Each ERISA Pusloskie Plaintiff, either individually or through a dul y
authorized representative, represents and certifies that he or she (i) has read the pleadings
in the ERISA Pusloskie Action, or has had the contents of such pleadings described to
him or her; (ia) has been kept apprised of the progress of the ERISA Pusloskie Action and
the settlement negotiations among the Settling Parties, and has either read this Settlement
Agreement, including the exhibits attached to this Settlement Agreement, or has received
a description of it from ERISA Pusloskie Lead Counsel, and has agreed to its terms ;
(iii) has consulted with ERISA Pusloskie Lead Counsel about the ERISA Pusloskie
Action and this Settlement Agreement ; (iv) has authorized ERISA Pusloskie Lead
Counsel to execute this Settlement Agreement on his or her behalf ; and (v) if also a
Securities Class Member, will remain in and not request exclusion from the Securities
Class either on behalf of himself or herself, or on behalf of any ERISA Plan .
M . Each ERISA Sirnonetti Plaintiff, either individually or through a duly
authorized representative, represents and certifies that he or she (i) has read the pleading s
201
in the ERISA Sirnonetti Action, or has had the contents of such pleadings described to
him or her; (ii) has been kept apprised of the progress of the ERISA Simonetti Action and
the settlement negotiations among the Settling Parties, and has either read this Settlement
Agreement, including the exhibits attached to this Settlement Agreement, or has received
a description of it from ERISA Simonetri Lead Counsel, and has agreed to its terms ;
(iii) has consulted with ERISA Sinionetti Lead Counsel about the ERISA Sirnonetti
Action and this Settlement Agreement ; (iv) has authorized ERISA Simonetti Lead
Counsel to execute this Settlement Agreement on his or her behalf, and (v) if also a
Securities Class Member, will remain in and not request exclusion from the Securities
Class either on behalf of himself or herself, or on behalf of any ERISA Plan.
N. Ralph C . Ferrara represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Dan J . Cohrs, Joseph P. Clayton, Robert Annunziata,
Thomas J . Casey, David A. Walsh, S . Wallace Dawson, Jr., John A. Scarpati, John M .
Finlayson, Geoffrey J .W. Kent, Eric Hippeau, Douglas H . McCorkindale, William E .
Conway, Jr ., K. Eugene Shutler, Joseph P . Perrone, Anthony Christie, William B_ Carter,
Mark L . Attanasio, John L. Comparin, Linda Woodruff, Kenneth P . Schirmuhly, William
S. Cohen, Steven J . Green and any other attorneys who have represented or who now
represent any of these individuals or entities in the Actions or any of the putative class
actions that have been consolidated into the Actions _
0. D. Ward Kallstrom represents that he is authorized to enter into this
Settlement Agreement in connection with the ERISA Actions on behalf of Gary Winnick,
Joseph P_ Clayton, Thomas J . Casey, Geoffrey J .W. Kent, Joseph P. Perrone, Mark L.
202
Attanasio, John L . Comparin, Linda Woodruff, Kenneth P . Schirmuhly, William S .
Cohen and Lodwrick M. Cook, and any other attorneys who have represented or who
now represent any of these individuals or entities in the ERISA Actions or any of the
putative class actions that have been consolidated into the ERISA Actions .
P. Terry N_ Christensen represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Gary Winnick, Lodwrick M . Cook, Pacific Capital
Group, Inc ., GKW Unified Holdings LLP and the Winnick Family Foundation and any
other attorneys who have represented or who now represent these individuals or entities
in the Actions or any of the putative class actions that have been consolidated into the
Actions .
Q. Robert B. Fiske, Jr. represents that he is authorized to enter into this
Settlement Agreement on behalf of Simpson Thacher, including, without limitation, D .
Rhett Brandon, and any other attorneys who have represented or who now represent
Simpson Thacher and D. Rhett Brandon in connection with this matter .
R. Jeanne Irving represents that she is authorized to enter into this Settlement
Agreement on behalf of John M. Scanlon and any other attorneys who have represented
or who now represent Mr . Scanlon in the Actions or any of the putative class actions that
have been consolidated into the Actions .
S . Robert E. Gooding, Jr. represents that he is authorized to enter into this
Settlement Agreement on behalf of Abbott L . Brown and any other attorneys who have
represented or who now represent Mr. Brown in the Actions or any of the putative class
actions that have been consolidated into the Actions .
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T. David Siegel represents that he is authorized to enter into this Settlemen t
Agreement on behalf of David L. Lee and Barry Porter, and any other attorneys who hav e
represented or who now represent Mr. Lee or Mr. Porter in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
U. Aaron Rubinstein represents that he is authorized to enter into this
Settlement Agreement on behalf of Hillel Weinberger and any other attorneys who hav e
represented or who now represent Mr. Weinberger in the Actions or any of the putative
class actions that have been consolidated into the Actions .
V. T. Mark McLaughlin represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Jay Bloom, Dean Kehler, Jay Irvine, Bruce Raben
and William Phoenix, and any other attorneys who have represented or who now
represent these individuals in the Actions or any of the putative class actions that have
been consolidated into the Actions .
W. Edward M. Spiro represents that he is authorized to enter into thi s
Settlement Agreement on behalf of James C . Gorton and any other attorneys who hav e
represented or who now represent Mr. Gorton in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
X . Philip S. Khinda represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Leo J . Hindery, Jr. and any other attorneys who hav e
represented or who now represent Mr. Hindery in the Actions or any of the putative class
actions that have been consolidated into the Actions _
204
Y. Kirsten Spira represents that she is authorized to enter into this Settlemen t
Agreement on behalf of Stefan C . Riesenfeld and any other attorneys who have
represented or now represent Mr. Riesenfeld in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
Z. J. Allen Maines represents that he is authorized to enter into thi s
Settlement Agreement on behalf of James F. McDonald and any other attorneys wh o
have represented or who now represent Mr . McDonald in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
AA. Richard A. Schirtzer represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Maria Elena Lagomasino and any other attorneys wh o
have represented or who now represent Ms . Lagornasino in the Actions or any of th e
putative class actions that have been consolidated into the Actions .
BB . James W. Ducayet represents that he is authorized to enter into thi s
Settlement Agreement on behalf of Thomas U . Koll and Pieter Knook and any othe r
attorneys who have represented or who now represent these individuals in the Actions o r
any of the putative class actions that have been consolidated into the Actions .
CC. Benito Romano represents that he is authorized to enter into thi s
Settlement Agreement on behalf of John J . Legere and any other attorneys who hav e
represented or who now represent Mr. Legere in the Actions or any of the putative clas s
actions that have been consolidated into the Actions .
DD. Joel Feuer represents that he is authorized to enter into this Settlemen t
Agreement on behalf of Walter Beran and any other attorneys who have represented o r
205
who now represent Mr_ Beran in the Actions or any of the putative class actions that have
been consolidated into the Actions .
EE. This Settlement Agreement sets forth the entire agreement among the
Settling Parties with respect to its subject matter and may not be altered or modifie d
except by a written instrument executed by Securities Lead Counsel, ERISA Plaintiffs '
Counsel, Securities Settling Defendants' Lead Counsel, ERISA Settling Defendants '
Lead Counsel, Securities Settling Defendants' Separate Counsel, ERISA Settlin g
Defendants' Separate Counsel and Separate Releasee Counsel . The Settling Parties
expressly acknowledge that there are no agreements, arrangements or understanding s
other than those expressed or referred to in this Settlement Agreement among or betwee n
them. In entering into this Settlement Agreement, no Settling Party has relied upon an y
representation or warranty not set forth expressly herein .
FF. This Settlement Agreement and any ancillary agreements shall b e
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions ; provided however, that any agreements between and among
the Settling Defendants, on the one hand, and the Insurers, on the other, shall be governed
by the choice of law provisions set forth in any such agreements .
GG. Any action arising under or to enforce this Settlement Agreement shall be
commenced and maintained only in this Court .
HH. Whenever this Settlement Agreement requires or contemplates that a
Settling Party shall or may give notice to the other, notice shall be provided by facsimil e
and/or next-day (excluding Saturday and Sunday) express delivery service as follows an d
206
shall be deemed effective upon such facsimile transmission, or delivery, to the facsimil e
number or address, as the case may be, below :
1 . If to Settling Defendants, then to :
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N.W.Suite 1100EWashington, D.C. 20004Telephone: (202) 383-8000Facsimile: (202) 383-8118
Provided that within three (3) business days of receipt of such notice, Securities Settlin g
Defendants' Lead Counsel shall transmit such notice to all other Settling Defendants '
Counsel .
2. If to Simpson Thacher, then to
Robert B. Fiske, Jr., Esq.James P. Rouhandeh, Esq .Davis Polk & Wardwell450 Lexington Avenu eNew York, New York 10017Telephone: (212) 450-4000Facsimile: (212) 450-3800
3. If to Securities Lead Plaintiffs, then to :
Jay W. Eisenhofer, Esq .Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A .1201 North Market Street
Suite 2100Wilmington, DE 19801Telephone: (302) 622-7000Facsi le: (302) 622-7100
4_ If to ERISA Plaintiffs' Counsel, then to :
207
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq .Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone: (206) 623-1900Facsimile: (206) 623-3384
Christmas Day and any other day appointed as a federal or New York state holiday .
JJ . The Settling Parties reserve the right, subject to the Court's approval, to
make any reasonable extensions of time that might be necessary to carry out any of th e
provisions of this Settlement Agreement .
KK. All Settling Parties agree that this Settlement Agreement was drafted b y
counsel for the Settling Parties at arm's length, and that no parol or other evidence may
be offered to explain , construe, contradict or clarify its terms , the intent of the Settling
Parties or their counsel, or the circumstances under which this Settlement Agreement wa s
made or executed. Nor shall there be any presumption for or against any Settling Part y
that drafted all or any portion of this Settlement Agreement .
LL. This Settlement Agreement, offer of this Settlement Agreement an d
compliance with this Settlement Agreement shall not constitute or be construed as an
admission by any of the Releasees of any wrongdoing or liability . This Settlemen t
Agreement is to be construed solely as a reflection of the Settling Parties' desire to
facilitate a resolution of the Claims in the Complaints and of the Released Claims . The
Settling Parties agree that no party was or is a "prevailing party" in this case . In no event
shall this Settlement Agreement, any of its provisions, or any negotiations, statements o r
court proceedings relating to its provisions in any way be construed as, offered as ,
received as, used as or deemed to be evidence of any kind in the Actions, any othe r
209
action, or any judicial, administrative, regulatory or other proceeding, except a
proceeding to enforce this Settlement Agreement . Without limiting the foregoing, neithe r
this Settlement Agreement nor any related negotiations, statements or court proceedings
shall be construed as, offered as, received as, used as or deemed to be evidence or an
admission or concession of any liability or wrongdoing whatsoever on the part of any
person or entity, including, but not limited to, Settling Defendants, or as a waiver by
Settling Defendants of any applicable defense or as a waiver by Securities Lead
Plaintiffs, Securities Plaintiffs, ERISA Plaintiffs or the Class of any claims, causes o f
action or remedies .
MM. No opinion or advice concerning the tax consequences of the proposed
settlement to individual Class Members is being given or will be given by Settlin g
Defendants' Counsel, Separate Releasee Counsel, Securities Lead Counsel and/or ERISA
Plaintiffs' Counsel; nor is any representation or warranty in this regard made by virtue of
this Settlement Agreement. The Notice will direct Class Members to consult their ow n
tax advisors regarding the tax consequences of the proposed settlement and any ta x
reporting obligations they may have with respect thereto . Each Class Member's tax
obligations, and the determination thereof, are the sole responsibility of the Clas s
Member, and it is understood that the tax consequences may vary depending on th e
particular circumstances of each individual Class Member .
NN. The Settling Parties, their successors and assigns , and their attorney s
undertake to implement the terms of this Settlement Agreement in good faith and to us e
210
good faith in resolving any disputes that may arise in the implementation of the terms of
this Settlement Agreement.
00. The Settling Parties, their successors and assigns , and their attorneys agree
to cooperate fully with one another in seeking Court approval of this Settlemen t
Agreement and to use all reasonable efforts to effect the prompt consummation of thi s
Settlement Agreement and the proposed settlement .
PP. This Settlement Agreement may be signed in counterparts, each of whic h
shall constitute a duplicate original . Execution by facsimile shall be fully and legall y
binding on a Settling Party .
QQ. All Releasees who are not Settling Parties are intended third-party
beneficiaries who are entitled as of the date on which all of the payments required b y
Sections a.C.l .a, H.C. Lb, II.C .2.a, II.C.3, u.C.4, II .C.5 and 1J.C.6 above have been made
to enforce the terms of the Securities Release and the ERISA Release set forth in Section s
IX.A and IX.B above .
RR. All Insured Releasees who are not Settling Parties are intended third-part y
beneficiaries who are entitled to enforce the terms of Section II .D above and Exhibit B.
Agreed to as of this 19th day of March 2004.
211
Jay W Ei enhofer` Grant & Eisenhofer, P .A ,1201 North Market Street, Suite 2100Wilmington, DE 1980 1
ON 13EHALF OF SECURITIES LEADPLADIT'IFFS, SECURTTI S PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback L .LP1701 Third Avenue, Suite 3200Seat tle, Washington 951 01.3052
ON BEHALF OP THE ERJSACONSOLIDATED PLAINTIFFS ANDTHE ERJSA CONSOLIDATED CLASS
Ralph C, FerraraDebcvoise & Plimpton LLP555 13th St ecr, N.W., Suite 1100EWashington, D.C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S . WALLACEDAWSON, JR., JOHN A. SCARPATE,JOHN M. FINLAYSON, GEOFFREYJ.W . KENT . MUC HIPPEAU, DOUGLASH. McCORK1NDALB, WILLIAM E .CONWAY, 3R, K . EUGENE SHIJTLER,JOSEPH P. PERRONE, ANTHONYCHRIS-IM, WILLIAM B . CARTER,MARK L. ATrANASIO, JOHN LCOMPARIN, LINDA WOODRUFF,KENNETH P . SCHJ1 MUHLY,WILT. AM S . COMPN AND STEVEN 7 .GREEN
D. Ward Knllstro mSonnenschein Nath & Rosenthal LLP685 Market Street, 6th Floo rSan Francisco, California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P . CLAYTON, THOMAS J.CASEY, GEOFFREY J.W. KENT,JOSEPH P. PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF. KENNETH P.SCR RMUBLY, WILLIAM S . COHENAND LODWRICK M . COOK
Jay W . EisenhoferGrant & Eisenhofer, P .A .1201 North Market Street, Suite 2100Wilmington, DE 1980 1
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-305 2
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
ON BEHALF OF DAN J. COHRS,JOSEPH P . CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S. WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M. FINLAYSON, GEOFFREYJ.W. KENT, ERIC HIPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E.CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P. PERRONE, ANTHONYCHRISTIE, WILLIAM B. CARTER,MARK L . ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J .GREEN
D. Ward KalistromSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco, California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J.W. KENT,JOSEPH P . PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF, KENNETH P .SCHIRMUHLY, WILLIAM S . COHENAND LODWRICK M . COOK
Debevoise & Plimpton LL P555 13th Street, N .W., Suite 1100EWashington, D.C. 20004
Jay W. EisenhoferGrant & Eisenhofer, P.A.1201 North Market Street, Suite 2100Wilmington, DE 19801
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
55
incoln Sarko
eller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-305 2
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
Ralph C. FerraraDebevoise & Plimpton LLP555 13th Street, N.W., Suite 1100EWashington, D .C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J. CASEY,DAVID A . WALSH, S. WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M. FINLAYSON, GEOFFREYJ.W. KENT, ERIC HJPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E .CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P. PERRONE, ANTHONYCHRISTIE, WILLIAM B . CARTER,MARK L. ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J.GREEN
D. Ward KallstromSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco, California 9410 5
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J .W. KENT,JOSEPH P. PERRONE, MARKATTANASIO, JOHN L. COMPARJN,LINDA WOODRUFF, KENNETH P .SCHIRMUHLY, WILLIAM S . COHENAND LODWRICK M. COOK
Jay W . EisenhoferGrant & Eisenhofer, P .A .1201 North Market Street, Suite 2100Wilmington, DE 19801
ON BEHALF OF SECURITIES LEADPLAINTIFFS, SECURITIES PLAINTIFFSAND THE SECURITIES CLAS S
Lynn Lincoln SarkoKeller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-3052
ON BEHALF OF THE ERISACONSOLIDATED PLAINTIFFS ANDTHE ERISA CONSOLIDATED CLASS
Ralph C. FerraraDebevoise & Plimpton LLP555 13th Street, N.W., Suite 1100EWashington , D.C. 20004
ON BEHALF OF DAN J . COHRS,JOSEPH P. CLAYTON, ROBERTANNUNZIATA, THOMAS J . CASEY,DAVID A. WALSH, S . WALLACEDAWSON, JR., JOHN A. SCARPATI,JOHN M . FINLAYSON, GEOFFREYJ.W. KENT, ERIC HIPPEAU, DOUGLASH. McCORKINDALE, WILLIAM E .CONWAY, JR., K. EUGENE SHUTLER,JOSEPH P . PERRONE, ANTHONYCHRISTIE, WILLIAM B. CARTER,MARK L . ATTANASIO, JOHN L .COMPARIN, LINDA WOODRUFF,KENNETH P . SCHIRMUHLY,WILLIAM S . COHEN AND STEVEN J.GREEN
D. Ward Kalistro mSonnenschein Nath & Rosenthal LLP685 Market Street, 6th FloorSan Francisco , California 94105
ON BEHALF OF GARY WINNICK,JOSEPH P. CLAYTON, THOMAS J .CASEY, GEOFFREY J .W. KENT,JOSEPH P . PERRONE, MARKATTANASIO, JOHN L. COMPARIN,LINDA WOODRUFF, KENNETH P.SCH]RMUHLY, WILLIAM S. COHENAND LODWRICK M . COOK
/'Thomas J . HSlevin & Hart, P .C.1625 Massachusetts Avenue, N .W.Suite 450Washington, D .C. 2003 6
ON BEHALF OF THE ERISAP USLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLAS S
Matthew J . FuscoChamberlain , D'Amanda,
Oppenheimer & Greenfield1600 Crosssroads BuildingTwo State S treetRochester, New York 14614
ON BEHALF OF THE ERISASIMONE?TIPLAINTIFFS AND THEERISA SIMONET77 CLASS
Terry N. ChristensenChristensen, Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard, 19th FloorLos Angeles, California 90067
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
Jeanne IrvingHennigan, Bennett & Dorman601 South Figueroa Street, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLON
Robert E . Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
Thomas J. Hart erry N_ ChristensenSlevin & Hart, P .C. Christensen, Miller, Fink, Jacobs, Glaser,1625 Massachusetts Avenue, N.W. Well and Shapiro LLPSuite 450 10259 Constellation Boulevard, 19th FloorWashington, D.C. 20036 Los Angeles, California 9005 7
ON BEHALF OF THE ERISA ON BEHALF OF GARY WINNJCK ANDPUSLOSKFE PLAINTIFFS AND TILE LODWRICK M_ COOKERJSA PUSLOSKIE CLASS
Matthew J. Fusco Jeanne IrvingChamberlain, D'Arzanda, Hennigan, Bennett & DormanOppenheimer & Greenfield 601 South Figueroa Street, Suite 3300
1600 Crossroads Building Los Angeles, California 9001 7Two State StreetRochester, New York 14614 ON BEHALF OF JOHN M . SCANLON
ON BEHALF OF THE ERISASIMON= PLAINTIFFS AND THEERISA SIMONE7TI CLASS
Robert E. Gooding, Jr_Howrey Simon Arnold & White, LLP2020 Main Street, Suite 100 0Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
Thomas J . HartSlevin & Hart, P .C .1625 Massachusetts Avenue, N_W .Suite 450Washington, D .C. 20036
ON BEHALF OF THE ERISAPUSLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
M tthew 3_ FuscoChamberlain, D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State Stree tRochester, New York 14614
ON BEHALF OF THE ERISASIMONEfl7 PLAINTIFFS AND THEERISA SIMONE7 CLASS
Terry N . ChristensenChristensen, Miller, Fink, Jacobs, Glaser,Well and Shapiro LLP10259 Constellation Boulevard, 19th FloorLos Angeles, California 9GO67
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
Jeanne Irvin gHennigan , Bennett & Dorman601 South Figueroa Street, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLON
Robert E. Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
ON BEHALF OF THE ERIS AP USLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
Matthew J . FuscoChamberlain, D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State Stree tRochester, New York 14614
ON BEHALF OF THE ERISASIMONE2TI PLAINTIFFS AND THEERISA SIMONE7TI CLASS
Terry N . ChristensenChristensen , Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard , 19th FloorLos Angeles, California 9006 7
ON BEHALF OF GARY WINNICK ANDLODWRICK M. COOK
eanne IrvingHannigan , Bennett & Dorman601 South Figueroa S treet, Suite 3300Los Angeles, California 90017
ON BEHALF OF JOHN M . SCANLO N
Robert E . Gooding, Jr.Howrey Simon Arnold & White, LLP2020 Main Street, Suite 1000Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
Thomas J . HartSlevin & Hart, P .C .1625 Massachusetts Avenue, N .W .Suite 450Washington, D .C. 20036
ON BEHALF OF THE ERISAPUSLOSKIE PLAINTIFFS AND THEERISA PUSLOSKIE CLASS
Matthew J . FuscoChamberlain , D'Amanda,
Oppenheimer & Greenfield1600 Crossroads BuildingTwo State StreetRochester, New York 14614
ON BEHALF OF THE ERISASIMONETTI PLAINTIFFS AND THE .ERISA SIMONETTI CLASS
Terry N. Christense nChristensen , Miller, Fink, Jacobs, Glaser,Weil and Shapiro LLP10259 Constellation Boulevard , 19th FloorLos Angeles , California 9006 7
ON BEHALF OF,GARY WINNICK ANDLODWRICK M. COOK
Jeanne IrvingHennigan, Bennett & Dorma n601 South Figueroa Street, Suite 3300Los Angeles, California 9001 7
ON BEHALF OF JOHN M . SCANLON
Robert E. Gooding, Jr.Howrey Simon Amol & te, LLP2020 Main Street, Suite 10 0Irving, California 9261 4
ON BEHALF OF ABBOTT L. BROWN
1800 Avenue of thePt~ rsLos Angeles, Califo a 90067
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park Avenu eNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughli nMayer, Brown, Rowe & Maw LLP190 South LaSalle StreetChicago, Illinois 6060 3
ON BEHALF OF JAY BLOOM, DEANKEELER, JAY LEV INE, BRUCERABEN AND WILLIAM PHOENI X
Edward M. SpiroMorvillo, Abramowitz, Grand, Jason &Silberberg, P .C .565 Fifth Avenu eNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
David SiegelIrell & Manella LLP1800 Avenue of the StarsLos Angeles, California 9006 7
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park AvenueNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughli nMayer, Brown, Rowe & Maw LLP190 South LaSalle StreetChicago, Illinois 6060 3
ON BEHALF OF JAY BLOOM, DEANKEHLER, JAY LEVINE, BRUCERABEN AND WILLIAM PHOENIX
Edward M. SpiroMorvillo, Abramowitz, Grand, Jason &Silberberg, P .C .565 Fifth AvenueNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
David SiegelIrell & Manella LLP1500 Avenue of the StarsLos Angeles , California 9006 7
ON BEHALF OF DAVID L LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scholer LLP425 Park Avenu eNew York, New York. 10022
ON BEHALF OF HI .LEL
Mayer, Brown, Rowe & Maw190 South LaSalle StreetChicago, Illinois 60603
ON BEHALF OF JAY BLOOM, DEANKEHLER, JAY LEV I NE, BRUCERABEN AND WILLIAM PHOENIX
Edward M. SpiroMorviilo, Abramowitz , Grand , Jason &Silberberg, P_C.565 Fifth AvenueNew York, New York 10017
ON BEHALF OF JAMES C. GORTON
f1AR BED 2004 119 :10 FR TO 12 0238381 19-*** 1 o P, e2
David SiegelIrell & Manella LLP1800 Avenue of the S tarsLos Angeles, California 9006 7
ON BEHALF OF DAVID L. LEE ANDBARRY PORTER
Aaron RubinsteinKaye Scloler LLP425 Park Avenu eNew York, New York 10022
ON BEHALF OF HILLELWEINBERGER
T. Mark McLaughlinMayer, Brown , Rowe & Maw LLP1 90 South LaSa lle StreetChicago, Illinois 60603
ON BEHALF OF S'A'Y BLOOM, DEANKEH.I ER, JAY LEVINE, BRUCERABEN AND WILLIAM PHOENIX
~=b m -~'zEdward M. SpiroMorvillo, Abramowitz, Grand, Iason &Silberberg, P .C .565 Fifth AvenueNew York, New York 1001 7
ON BEHALF OF JAMES C. GORTON
:€ : :I : TOTAL PAGE . 03 :r :, :
Mar-A-04 O1 :16pm From-%FNY2l-2i flowpartOdpw• com T-066 P .C06/666 F-01 4
4obert Fisk , r.Dk & ardw450 Lexington AvenueNew York, New York 1001 7
ON BEHALF OF SZ PSON 'i',F ACHER
Philip S. AdaRopes & Gray LLP70012th Street, N.W.Suite 90DWashington , U.C. 20005
Terry N . ChristensenChristensen, Miller, Fink, Jacobs, Glaser .Well and Shapiro LL P10259 Constellation Boulevard, 19th FloorLos Angeles, California 90067
ON BEHALF OF PACIFIC CAPITALGROUP, INC, GKW UNIFIEDHOLDINGS LLC AND THE WIN-NICKFAMILY FOUNDATION
EXHIBIT A'
PART I
Na me of "endin Casc or _ ''
of.Th reatenotei tial ClaimDesGtaptio n edJFStyle of Pending Case
Beightol v. UBS PaineWebber, et al. Case No. 03 Civ . 1] 86 (GEL) (S .D.N.Y . )
Claims arising out of any investigation oraction brought by the Asia Global Crossin g'Bankruptcy Trustee, Litigation Trustee ,Liquidation Trustee or any other entityappointed in connection with the Asia Globa lCrossing Bankruptcy Proceedin g
Claims arising out of any investigation o raction brought by the Global Crossing Ltd .Bankruptcy Trustee, Litigation Trustee ,Liquidation Trustee, Estate Representative o rany other entity appointed in connection wit hthe Global Crossing Bankruptcy Proceeding . .Claims arising out of any investigation o raction brought by Pacific Crossing Ltd . and/orany of its subsidiaries or by the Pacifi cCrossing Ltd. Bankruptcy Trustee, LitigationTrustee, Liquidation Trustee or any otherentity appointed in connection with thePacific Crossing Bankruptcy Proceeding
Claims arising out of the Department o fJustice's investigation of Global Crossingand/or current and former directors an dofficers
All capitalized terms in this Exhibit A shall have the same meaning as ascribed tothem in the accompanying Stipulation of Settlement, except that, for purposes ofthis Exhibit A and for that purpose only, the term "Global Crossing" means each
and all of Global Crossing Ltd . and any or all of its parents, predecessors,affiliates (as defined in 17 C.F.R. Part 210 .1-02.b), divisions and subsidiaries .
Naime of Pending Case orStyle of Penditt" f age s
Desu-iptiotn of Thr6atenMX-oteiltial' Clai m
Claims arising out of the facts andcircumstances described in the August 4 ,
2003 letter from Hennigan Bennett & Dormanto insurance carriers
Claims arising out of the facts an dcircumstances described in the August 15 ,2003 letter from Hennigan Bennett & Dorma n
to insurance carriers
Claims arising out of the facts an dcircumstances described in the August 18 ,2003 letter from Fried Frank Harris Shriver &
Jacobson to R. Ferrara and 1 . Eisenhofe r
Claims arising out of the facts andcircumstances described in the March 31 ,2003 letter from Gary Swinhart to PenderInsurance Ltd .
Claims arising out of the facts andcircumstances described in the November 12 ,
2003 letter from Golenbock Eiseman Assor
Bell & Peskoe to Hennigan Bennett &Dorma n
Claims arising out of the facts an dcircumstances described in the September 25 ,2003 letter from Colin Jones to insurancecarriers to the extent the Executive Liabilit yInsurance Policies, the Fiduciary LiabilityInsurance Policy and/or the Pender Polic yprovide coverage with respect to any suchclaims
Claims arising out of the facts an dcircumstances described in the September 25 ,2003 letter from McNamara, Spira & Smith t oinsurance carriers to the extent the ExecutiveLiability Insurance Policies, the FiduciaryLiability Insurance Policy and/or the Pende rPolicy provide coverage with respect to an ysuch claims
2
Naive of Pending C' se or _Style of Pertdina C ace s
Description of '1 hreatencd/Potential Claim . -
Claims arising out of the facts an dcircumstances described in the September 26,2003 letter from Bruce Comer to insuranc ecarriers to the extent the Executive LiabilityInsurance Policies, the Fiduciary LiabilityInsurance Policy and/or the Pender Polic yprovide coverage with respect to any suchclaims
Claims arising out of the facts andcircumstances described in the September 26,2003 letter from Hennigan, Bennett &Dorman LLP to insurance carriers (whic hsupplements a September 25, 2003 letter fro mHennigan, Bennett & Dorman LLP) to theextent the Executive Liability InsurancePolicies, the Fiduciary Liability InsurancePolicy and/or the Pender Policy providecoverage with respect to any such claim s
Claims arising out of the facts an dcircumstances described in the September 26,2003 letter from John McShane to insuranc ecarriers
Claims arising out of the July 16, 2003demand letter from Kronish Lieb Weiner &Hellman LLP on behalf of Pacific Crossin gLtd . eta.] .
Claims arising out of the March 24, 200 3demand letters from Kronish Lieb Weiner &Hellman LLP, on behalf of Pacifi cCrossing Ltd .
Claims arising out of the March 25, 200 3demand letter from O'Melveny & Myers LL Pon behalf of lenders to Pacific Crossing Ltd .
3
Name ofPendir g Cash; it -
~eSer tiori o€,ThreatenedlPotential laimStyle of Pen ing ['a eti
Claims arising out of subpoenas ducas tecu missued to Global Crossing and/or current an dformer directors and officers in connectionwith the New York Attorney General' sinvestigation of securities analyst s
Claims arising out of the Securities an dExchange Commission proceeding In reGlobal Crossing Ltd., LA-2563
Claims arising out of the Securities an dExchange Commission proceeding In reQwest Communications International, Inc. ,D-02455-A
Claims arising out of the United StatesCongressional investigations of GlobalCrossing and/or current and former directorsand officers
Clark v. UBS PaineWebber, et at. Case No. 03 Civ. 1187 (GEL) (S .D.N.Y)
Garcia v. Winnick, et al. Case No . 02 Civ. 8890 (GEL) (S .D.N.Y. )
Global Crossing Estate Representative, foritself and as the Liquidating Trustee of theGlobal Crossing Liquidating Trust v.
Case No . 02-40188 (REG) (Bankr. S .D.N.Y. )
Winnick, et al.
Goldman Sachs & Co ., et al. v . Cohrs, et al. Case No. 04 Civ . 00588 (GEL) (S .D.N.Y.)
Hesselman v. ArthurAndersen, L .L.P., et al . Case No . 02 Civ . 10199 (GEL) (S .D.N.Y . )
In re Initial Public Offering SecuritiesLitigation (originally Pludo v. Global Case No . 21 MC 92 (SAS) (S .D.N.Y. )Crossing Ltd., Case No. 01 CIV 7023 (SAS))
JPMorgan Chase Bank v. Cook Case No. 03 CV 2690 (GEL) (S .D.N.Y . )
JPMorgan Chase Bank v. Winnick, et al. Case No. 03-Civ . 8535 (GEL) (S .D.N.Y . )
Kalimi v. Pacific Capital Group, et al. Case No. 03 Civ . 893 (GEL) (S .D.N.Y . )
Nachom v. Citigroup Inc ., et al. Case No. 03 Civ . 4521 (GEL) (S .D.N.Y . )
4
' ame of Pendi g Case ofe4 Peadinr _ sesSO
Descrz Ptwoii of I hr€ tenecl/Potentfal l : ann
Olofson v. Winnick, el al. Case No. 03 Civ . 1185 (GEL) (S .D.N.Y.)
PCL Japan, Ltd v . Asia Netcom Corporation Case No. 02-12086 (Bankr . D . Del .) and Case No. 03-Limited, ei al_ 500 (D. Del . )
Reeves-Collins v. Winnick, et al. Case No . 03 Civ. 1189 (GEL) (S .D.N.Y.)
Thompson v . Winnick, et al. Case No . 02 Civ. 8503 (GEL) (S .D.N.Y.)
Tucker v . Pacific Capital Group, Inc., et al. Case No. 03 Civ . 705 (GEL) (S .D.N.Y .)
PART 2
5
TERMS AND CONDITIONS FOR REIMBURSEMEN TFOR COVERED CLAIM COSTS FROM CLAIM RESERVE ACCOUNT '
A . Subject to and specifically conditioned upon the agreement of the Insure d
Releasees or final ruling of the Court pursuant to Section II .D.7 of the Settlemen t
Agreement, any Insured Releasee may (as set out in Sections II .D_5 and I .D_6 of the
Settlement Agreement) seek reimbursement from the Claim Reserve Account fo r
Covered Claim Costs . Acknowledging that the proceeds in the Claim Reserve Accoun t
are finite, each Insured Releasee agrees to minimize, to the extent possible, his, her or it s
Covered Claim Costs for which it seeks such reimbursement .
B. All determinations whether Covered Claim Costs shall be reimbursed t o
an Insured Releasee under Sections H .D.5 and II .D.6 of the Settlement Agreement shal l
be subject to any agreement of the Insured Releasees or final ruling pursuant to Sectio n
II .D.7 of the Settlement Agreement and to the terms and conditions of this Exhibit B ;
provided that if there are any inconsistencies between the agreement of the Insure d
Releasees reached, or final ruling entered, pursuant to Section II .D.7 (on the one hand )
and the terms and conditions of this Exhibit B (on the other hand), the agreement of th e
Insured Releasees or final ruling that results from Section II.D.7 shall take precedence
over the terms and conditions of this Exhibit B .
I . All capitalized terms in this Exhibit B shall have the same meaning as ascribed tothem in the accompanying Stipulation of Settlement .
C. A ll requests for reimbursement shall be submitted to the person(s )
identified by Securities Lead Counsel and ERISA 401(k) Lead Counsel to receive suc h
requests (the "Reimbursement Administrator") . For an Insured Releasee to b e
reimbursed, requests must be submitted to the Reimbursement Administrator by no late r
than the end of the month following the month in which Covered Claim Costs wer e
incurred .
D. In seeking reimbursement for Covered Claim Costs, the Insured Release e
(or his, her or its attorney) shall provide the Reimbursement Administrator with a written
description of the reasons for which the reimbursement is sought, which requirement, t o
the extent the requested reimbursement is for an Insured Releasee's attorneys' fees o r
expenses, shall be satisfied by such attorney submitting a summary invoice for the
amount sought ; provided that the information required to be provided pursuant to this
Section D of Exhibit B shall be subject to the final proviso in Section I .E . Lbb of the
Settlement Agreement regarding privileged and protected information .
E. Determinations whether an Insured Releasee is entitled to reimbursemen t
pursuant to any request made pursuant to the Settlement Agreement and this Exhibit B
shall be subject to the following:
1 . To the extent the Claim giving rise to the request for
reimbursement is not a Claim that is identified on Exhibit A to the Settlement Agreement,
costs with respect to which reimbursement are sought will only be reimbursed to the
extent that the Reimbursement Administrator determines in good faith that such Claim is
a Covered Claim and that the Releasee is an Insured Releasee .
2
2. Each reimbursement sought by an Insured Releasee for Covere d
Claim Costs shall be subject to and conditioned upon (i) the existence of a balance in the
Claim Reserve Account, at the time that reimbursement would be made, that is sufficien t
to make such reimbursement and (ii ) the allocation and administration of the proceeds i n
the Claim Reserve Account among Insured Releasees pursuant to Section II .D.7 of the
Settlement Agreement, the terms of which allocation and administration shall be provided
to the Reimbursement Administrator by Securities Settling Defendants' Lead Counsel .
3 . To the extent the Covered Claim Costs for which reimbursement i s
sought are settlement amounts Insured Releasee(s) intends to pay to a plaintiff or other
claimant with respect to a Covered Claim ("Settlement Costs"), the Reimbursement
Administrator shall notify Securities Lead Counsel and ERISA 401(k) Lead Counsel and
such counsel shall, pursuant to Section I .E .1 .bb of the Settlement Agreement, determin e
whether such Settlement Costs shall be reimbursed in accordance with the following :
a. In seeking reimbursement for such Settlement Costs, th e
requirement in Section C above of this Exhibit B that the Insured Releasee(s) hav e
incurred the costs prior to seeking reimbursement shall be satisfied by the Insure d
Releasee(s) having agreed to pay such Settlement Costs contingent on being reimburse d
for such costs from the Claim Reserve Account .
b. To the extent Securities Lead Counsel and ERISA 401(k )
Lead Counsel determine that the entirety of the amount of such Settlement Costs shall b e
reimbursed, Securities Lead Counsel and ERISA 401(k) Lead Counsel shall, subject t o
Section E.2 above of this Exhibit B, instruct the Reimbursement Administrator t o
3
reimburse the Insured Releasee(s) for such Settlement Costs or to pay such Settlement
Costs, on behalf of the Insured Releasee(s), directly to the person or entity with which the
Insured Releasee(s) has entered into a contingent settlement .
c. To the extent Securities Lead Counsel and ERISA 401(k )
Lead Counsel reasonably believe upon their initial review that such Settlement Costs (or
some portion of them) should not be reimbursed, Securities Lead Counsel, ERISA 401 (k)
Lead Counsel, the Insured Releasee(s) requesting such reimbursement and Securities
Settling Defendants' Lead Counsel shall meet to discuss the reimbursement request and
to attempt to reach an agreement regarding whether and to what extent the requested
Settlement Costs shall be reimbursed ; provided that, after such meeting, Securities Lead
Counsel and ERISA 401(k) Lead shall in good faith determine whether to reimburse such
Settlement Costs (or some portion of them), and, after making such determination ,
(i) shall communicate their determination to the Insured Releasee(s) and (ii) shall, if there
is no dispute between Securities Lead Counsel, ERISA 401(.k) Lead Counsel and the
Insured Releasee(s) regarding the reimbursement, take whatever steps are necessary to
implement such determination, including payment of such Settlement Costs pursuant to
Section E.3 .b above of this Exhibit B .
4. To the extent the Covered Claim Costs for which reimbursement is
sought involve reimbursement for Covered Claim Costs other than Settlement Costs
("Non-Settlement Costs"), the Reimbursement Administrator shall determine whether the
Non-Settlement Costs shall be reimbursed in accordance with the following :
4
a. To the extent the Reimbursement Administrator finds the
amount of such Non-Settlement Costs for which reimbursement is sought to b e
reasonable, the Reimbursement Administrator shall reimburse the Insured Releasee for
such Non-Settlement Costs subject to Section E .2 above of this Exhibit B; provided that
in determining the reasonableness of any invoice received, the Reimbursemen t
Administrator shall consult with Securities Lead Counsel and ERISA 401(k) Lead
Counsel (0 regarding any invoice for Covered Claim Costs in excess of two hundred fifty
thousand dollars ($250,000) or (ii) if an Insured Releasee (or Insured Releasees
represented by the same counsel ) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
b . To the extent the Reimbursement Administrator reasonabl y
believes upon his or her initial review that all or some of such Non-Settlement Costs fo r
which reimbursement is sought are unreasonable, the Reimbursement Administrator, the
Insured Releasee seeking such reimbursement and Securities Settling Defendants' Lead
Counsel shall meet to discuss the reimbursement request and to attempt to reach an
agreement regarding whether and to what extent the requested Non-Settlement Costs
shall be reimbursed; provided that, after such meeting, the Reimbursement Administrator
shall in good faith determine whether to reimburse such Non-Settlement Costs (or some
portion of them) and, after making such determination, (i) shall communicate his or her
determination to the Insured Releasee and (ii) shall, if there is no dispute between the
Reimbursement Administrator and the Ensured Releasee regarding the reimbursement ,
5
take whatever steps are necessary to implement such determination, including payment o f
such Non-Settlement Costs pursuant to Section E .4.a above of this Exhibit B .
F. Any good faith disputes regarding (i) whether a Claim is a Covered Claim ,
(ii) whether a Releasee is an Insured Release and/or (iii) whether and to what extent
Covered Claim Costs are to be reimbursed pursuant to the Settlement Agreement and/or
this Exhibit B, including without limitation any determinations made pursuant to Sections
E. 1, E .3 .c and E.4.b, shall be resolved pursuant to the Dispute Procedure ; provided
further that the Reimbursement Administrator shall provide an accounting of all Covered
Claim Costs paid out of the Claim Reserve Account on a monthly basis to the following :
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant to
Section I.E.1 .ff of the Settlement Agreement) ; Securities Lead Counsel, ERISA 401(k)
Lead Counsel, Settling Defendants' Lead Counsel and all Insured Releasees' counsel to
whom reimbursements for Covered Claim Costs have been made .
G. Determinations regarding reimbursements for Covered Claim Costs shal l
be made as set out in this Exhibit B within twenty (20) calendar days following th e
Reimbursement Administrator's receipt of the request for reimbursement .
H. The Reimbursement Administrator shall endeavor to pay reimbursemen t
for Covered Claim Costs within ten (10) calendar days following a determination to
reimburse such costs as set out in this Exhibit B ; provided that if a dispute exists
regarding the payment of a portion of Non-Settlement Costs, that portion (if any) of Non-
Settlement Costs as to which there is no dispute shall be paid pursuant to Section E .4.a
above of this Exhibit B .
6
Neither Securities Lead Counsel, ERISA 401(k) Lead Counsel, Securitie s
Settling Defendants' Lead Counsel, the Reimbursement Administrator, any Insurer nor
any Releasee shall have any liability whatsoever with respect to any actions taken,
including any determinations made or views provided, pursuant to this Exhibit B or
Section I .E . 1 .bb of the Settlement Agreement .
7
EXHIBIT C
NEWSPAPERS IN WHICHSUMMARY NOTICE WILL BE PUBLISHE D
The New York Times (National Edition)
The Wall Street Journal (National Edition)
USA Today (National Edition )
The Rochester Democrat and Chronicle
Minneapolis Star Tribune
Des Moines Register
Newark Star Ledger
Los Angeles Times
Washington Post
Chicago Tribune
Houston Chronicle
Seattle Times
Arizona Republic
Atlanta Constitution
Detroit Free Press
Rocky Mountain News
Miami HeraldlEl Nuevo Herald
San Francisco Chronicle
Exhibit D
SECURITIES INSURERS' ESCROW AGREEMEN T
This SECURITIES INSURERS' ESCROW AGREEMENT is entered into as o f
March 19, 2004 by and among Chubb Atlantic Indemnity Ltd_ and Pender Insuranc e
Limited, Grant & Eiserhofer, P .A ., as Securities Lead Counsel, and Wachovia Bank ,
National Association, as escrow agent.
WHEREAS, over 50 putative class actions alleging securities law violations hav e
been filed against certain of Global Crossing Ltd.'s current and former officers, director s
and employees, and five putative class actions alleging securities law violations hav e
been filed against certain of Asia Global Crossing Ltd.'s current and former officers ,
directors and employees ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pre trial proceedings; and
WHEREAS, the Court consolidated these actions into the Securities Action ; and
WHEREAS, Chubb Atlantic and Pender have issued one or more insuranc e
policies providing coverage and indemnity for the current and former officers, directors
and employees of Global Crossing Ltd . and Asia Global Crossing Ltd ., which policies
provide coverage and indemnity in connection with losses and costs incurred with respec t
to, among other things, the Securities Action and which policies have not been exhauste d
as of the date of this Securities Insurers' Escrow Agreement ; and
WHEREAS, Securities Lead Plaintiffs, Securities Plaintiffs and Securities
Settling Defendants have agreed t _a settlement of the Securities Action, subject to th e
completion of additional factual investigation and analysis by Securities Lead Counsel t o
evaluate further the fairness, reasonableness and adequacy of the proposed settlement;
and
WHEREAS, the terms and conditions of the settlement are contained in a Marc h
19, 2004 Stipulation of Settlement (and accompanying exhibits) (the "Settlemen t
Agreement"), a copy of which has been provided to the Securities Insurers' Escro w
Agent; and
WHEREAS, in connection with the settlement of the Securities Action, th e
Securities Insurers, including Chubb Atlantic, have agreed to pay the balance of their
Policy Limits under their Policies and Pender has agreed to pay or cause to be paid th e
Pender Securities Coverage in consideration for releases from .certain Insured Releasee s
pursuant to a March 1 9, 2004 Release and Settlement Agreement ; and
WHEREAS, pursuant to the terms of such Release and Settlement Agreement and
the Settlement Agreement, Chubb Atlantic and Pender are required to deposit suc h
insurance proceeds into an escrow account within five (5) business days following th e
Court's preliminary approval of the Settlement Agreement ; and
WHEREAS, a portion of the Pender Securities Coverage will be deposited b y
certain of the Pender Securities Reinsurers into the Securities Reinsurers' Insurance Trus t
Account .
2
NOW, THEREFORE, the Securities Insurer Part ies , Securities Lead Counsel and
the Securities Insurers ' Escrow Agent agree as follows:
1 . Definitions and Interpretations
a. As used in this Securities Insurers ' Escrow Agreement,
capitalized terms either ( i) have the same meaning as ascribed to them in the Settlement
Agreement or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday,
Sunday or a "legal holiday," as that term is defined in Section XIV.II of the Settlemen t
Agreement.
(2) "Chubb Atlantic" means Chubb Atlantic Indemnity
Ltd., which issued Policy No. (02) 3310-04-96 with a Policy Limit of $10,000,000 (the
"Chubb Atlantic Policy") .
(3) "Chubb Atlantic Policy Closing Balance" means the
balance (if any) of unexhausted Policy proceeds remaining as of the Final Payment Date
in the Chubb Atlantic Subaccount .
(4) "Chubb Atlantic Policy Opening Balance" means
the balance of unexhausted Policy proceeds in the Chubb Atlantic Policy as of the
Deposit Date (less any portion of the Securities Initial Payment to be paid out of such
Policy) .
(5) "Chubb Atlantic Subaccount" means the Securities
Subaccount into which the Chubb Atlantic Policy Opening Balance is deposited .
3
(6) "Chubb Reinsurance Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Chubb Reinsurance Subaccount.
(7) "Chubb Reinsurance Opening Balance" means five
million GBP (£5,000,000) (less any portion of the Securities Initial Payment to be paid
out of this amount) .
(8) "Chubb Reinsurance Subaccount" means the
Securities Subaccount into which the Chubb Reinsurance Opening Balance is deposited .
(9) "CNA Reinsurance Level One Closing Balance"
means the balance (if any) of unexhausted policy proceeds remaining as of the Final
Payment Date in the CNA Reinsurance Level One Subaccount .
(10) "CNA Reinsurance Level One Opening Balance"
means nine hundred thousand eighty GBP (£900,080) (less any portion of the Securities
Initial Payment to be paid out of this amount) .
(11) "CNA Reinsurance Level One Subaccount" means
the Securities Subaccount into which the CNA Reinsurance Level One Opening Balance
is deposited-
(12) "CNA Reinsurance Level Two Closing Balance"
means the balance (if any) of unexhausted policy proceeds remaining as of the Final
Payment Date in the CNA Reinsurance Level Two Subaccount .
4
(13) "CNA Reinsurance Level Two Opening Balance "
means two million four hundred ninety-nine thousand nine hundred GBP (E2,499,900 )
(less any portion of the Securities Initial Payment to be paid out of this amount) .
(14) "CNA Reinsurance Level Two Subaccount" means
the Securities Subaccount into which the CNA Reinsurance Level Two Opening Balanc e
is deposited .
(15) "Deposit Date" means the date on which each of
Chubb Atlantic and Pender deposits (or, in the case of Pender, Pender causes to be
deposited by certain of its reinsurers) the unexhausted proceeds of their respectiv e
Policies into the Securities Insurers' Insurance Escrow Account pursuant to Section 3 .b
below; provided that the Deposit Date for each insurer or reinsurer, as the case may be ,
shall be that date on which that entity deposits such proceeds into the Securities Insurers '
Insurance Escrow Account.
(16) "Dispute Procedure" means the procedure by which
disputes arising in connection with this Securities Insurers' Escrow Agreement (a s
specifically set forth in various provisions of the Settlement Agreement and thi s
Securities Insurers' Escrow Agreement) shall be resolved, which procedure shall requir e
the disputing parties to submit such dispute to the Court with a request that the Court
refer the dispute to Magistrate Judge Michael Dolinger, who shall mediate a resolutio n
among the disputing parties, provided that, if the parties are unable to resolve the disput e
through mediation, Magistrate Judge Dolinger shall resolve the dispute and such
resolution shall be final and binding (without any right of appeal or review) on al l
5
relevant parties, including, without limitation, Securities Lead Counsel, Securities Lead
Plaintiffs, ERISA Plaintiffs' Counsel, ERISA Plaintiffs and any other individual or entity
(including counsel for such individual or entity) involved in the dispute ; provided further
that if Magistrate Judge Dolinger is no longer a magistrate judge of the United States
District Court for the Southern District of New York at the time any dispute is submitted
to the Court, the parties shall request that the Court refer the dispute to another magistrate
judge of the United States District Court for the Southern District of New York, who
shall conduct the mediation or, if necessary, resolve the dispute as set out above ;
provided further that, with respect to all disputes submitted to the Court other than a
dispute submitted pursuant to Section II .D.7 of the Settlement Agreement, any part y
submitting a dispute to the Court shall provide notice of such submission and copies of
all papers submitted to the Court and/or Magistrate Judge Dolinger (or any successor
magistrate judge) to the following: Securities Lead Counsel, ERISA Plaintiffs' Counsel,
Settling Defendants' Lead Counsel, the Insurers and any other party directly involved in
the dispute; provided however, that, if the dispute involves the payment of Covered
Claim Costs and an Insured Releasee submits materials or information to the Court
and/or Magistrate Judge Dolinger (or any successor magistrate judge) in connection with
the dispute that is protected by the attorney client privilege or attorney work product
doctrine, (i) the Insured Releasee's submission of such materials or information shall not
be deemed a waiver of the privilege or work product protection applicable to such
materials or information and (ii) the Insured Releasee shall not be required to provide
such materials or information to Securities Lead Counsel, ERISA Plaintiffs' Counsel ,
6
Settling Defendants' Lead Counsel, the Insurers or any other party directly involved in
the dispute, but shall provide such materials and/or information to the Court and/or
Magistrate Judge Dolinger (or any successor magistrate judge) for in camera review;
provided further that any participation by Pender or Chubb Atlantic in the Dispute
Procedure with respect to any dispute arising under this Securities Insurers' Escrow
Agreement or the Settlement Agreement shall be subject to the Mediation Order and shal l
not override or supersede Section ILE of the Settlement Agreement or Section 5 . e below ;
provided further that with respect to a dispute submitted to the Court pursuant to Section
II .D.7 of the Settlement Agreement, the pa rty submitting the dispute to the Court shal l
provide notice of such submission to all Settling Defendants' Counsel, and any party
submitting any papers to the Court and/or Magistrate Judge Dolinger (or any successor
magistrate judge) in connection with such dispute shall provide copies of such papers to
all Settling Defendants' Counsel .
(17) "Final Payment Date" means the date on which al l
proceeds from the Securities Insurers' Insurance Escrow Account are paid out pursuant to
Section 41. below .
(18) "Level One Reinsurers' Closing Balance" has th e
meaning set forth in the Securities Reinsurers ' Trust Deed .
(19) "Level Two Reinsurers' Closing Balance" has the
meaning set forth in the Securities Reinsurers' Trust Deed .
7
(20) "Mediation Order" means the Proposed Scheduling
Order for Mediation entered in the Actions on April 28, 2003 by Judge Lynch an d
Magistrate Judge Dolinger .
(21) "Pender Closing Balance" means the balance (if
any) of unexhausted policy proceeds remaining as of the Final Payment Date in the
Securities Subaccount into which the Pender Opening Balance was deposited .
(22) "Fender Holdback Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Pender Holdback Subaccount .
(23) "Fender Holdback Opening Balance" means two
million GPB (£2,000,000) (less any portion of the Securities Initial Payment to be pai d
out of such Policy) .
(24) "Pender Holdback Sub account" means the
Securities Subaccount into which the Pender Holdback Balance is deposited .
(25) "Pender Opening Balance" means five million GBP
(£5,000,000 ) (less any portion of the Securities Initial Payment to be paid out of th e
Fender Securities Payment) .
(26) "Pender Subaccount" means the Securitie s
Subaccount into which the Fender Opening Balance is deposited .
(27) "Policy" or "Policies" means (either individually or
collectively, as the context requires) the Chubb Atlantic Policy and the Fender Securitie s
Coverage .
8
(28) "Policy Limit" means (1) with respect to the Chub b
Atlantic Policy, the unexhausted portion of the limit of liability provided by such Policies
with respect to the Securities Action and (ii) with respect to the Pender Policy, the Pende r
Securities Coverage .
(29) "Reinsurers' Level Once Subaccount" has th e
meaning set forth in the Securities Reinsurers' Trust Deed.
(30) "Reinsurers' Level Two Subaccount" has the
meaning set forth in the Securities Reinsurers' Trust Deed.
(31) "Remaining Securities Insurer Parties" means, in
connection with any provision of this Securities Insurers' Escrow Agreement, each
insurer with respect to which Securities Escrow Funds in the Securities Subaccoun t
established pursuant to Section 3.a below for such insurer have not been exhausted as o f
the date on which the relevant provision is triggered .
(32) "Royal Reinsurance Closing Balance" means the
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the Royal Reinsurance Subaccount .
(33) "Royal Reinsurance Opening Balance" means one
million two hundred forty nine thousand nine hundred fifty GBP (£ 1,249,950) (less any
portion of the Securities Initial Payment to be paid out of this amount) .
(34) "Royal Reinsurance Subaccount " means the
Securities Subaccount into which the Royal Reinsurance Opening Balance is deposited .
9
(35) "Securities Account" means the Securities Insurers'
Insurance Escrow Account established pursuant to Section 3 .a below .
(36) "Securities Subaccount" means any of th e
subaccounts established pursuant to Section 3 .a below .
(37) "Securities Escrow Funds" has the meaning
ascribed to it in Section 3 .c below .
(38) "Securities Insurers' Escrow Agent" means
Wachovia Bank, National Association.
(39) "Securities Insurers' Escrow Agreement" means
this Securities Insurers' Escrow Agreement .
(40) "Securities Insurer Parties" means Chubb Atlantic
and Pender.
(41) "Securities Lead Counsel " means the law firm of
1X.B2 and IX .B .3 of the Settlement Agreement, Securities Lead Counsel, Securities
Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA Plaintiffs, Settling Defendants,
Settling Defendants Counsel and Securities Class Members shall release the Securities
Insurers' Escrow Agent with respect to all claims, damages and liabilities for anything
done or omitted by the Securities Insurers' Escrow Agent in performing its duties under
this Securities Insurers' Escrow Agreement, except such claims that are based upon the
Securities Insurers' Escrow Agent's bad faith, gross negligence, willful misconduct o r
breach of this Securities Insurers' Escrow Agreement .
k_ The Secu ri ties Insurers ' Escrow Agent shall not be liable
for special, indirect or consequential loss or damage (including lost profits), even if th e
Securities Insurers' Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action .
1. The Securities Insurers ' Escrow Agent is acting under thi s
Securities Insurers' Escrow Agreement as a stakeholder only and is an independent
contractor with respect to each party . No provision of this Securities Insurers' Escro w
Agreement is intended to create any principal, joint venture, partnership o r
41
debtor/creditor relationship between or among the Securities Insurers' Escrow Agent an d
any of the parties . The parties hereto, for themselves and anyone claiming under, by or
through them with respect to this Securities Insurers' Insurance Escrow Account, release
the Securities Insurers' Escrow Agent from any claim of self-dealing or conflict o f
interest which could be asserted to the extent any settling party is an affiliate of th e
Settling Insurers' Escrow Agent .
8. General Matters
a. This Securities Insurers' Escrow Agreement shall be
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions . All disputes arising under this Securities Insurers' Escrow
Agreement shall be resolved through the Dispute Procedure.
b . This Securities Insurers' Escrow Agreement is binding on
and shall inure to the benefit of the parties' heirs, executors, administrators, legal
representatives, successors and permitted assigns
c. This Securities Insurers' Escrow Agreement may be
executed in one or more counterparts which, taken together, constitute one and the sarn .e
instrument. Execution by facsimile shall be fully and legally binding on a party .
d. No amendment or discharge of this Securities Insurers'
Escrow Agreement, or waiver under it, shall be valid or binding unless set forth in
writing and duly signed by the party against whom enforcement of the amendment,
discharge or waiver is sought and by the Securities Insurers' Escrow Agent . Any such
waiver shall waive only the specific matter described in the writing and shall not impair
42
the rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Securities Insurers'
Escrow Agreement, nor the failure by a party, on one or more occasions, to enforce a
provision of this Securities Insurers' Escrow Agreement, or to exercise a right or
privilege under this Securities Insurers' Escrow Agreement, shall constitute a waiver of
any other breach of a similar nature, or a waiver of any of such provisions, rights o r
privileges under this Secu rities Insurers ' Escrow Agreement .
e . The invalidity or unenforceability of any provision of thi s
Securities Insurers' Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this Securities Insurers' Escrow Agreement in that
jurisdiction or the validity or enforceability of this Securities Insurers' Escrow
Agreement (including that provision) in any other jurisdiction . If any restriction or
provision of this Securities Insurers' Escrow Agreement is held unreasonable, unlawful
or unenforceable in any respect, such restriction or provision shall be interpreted, revised
or applied in a manner that makes it lawful and enforceable to the fullest extent possible
under law .
f. Notices, requests, demands and other communication s
under this Securities Insurers' Escrow Agreement shall be in writing and shall be deemed
to have been given (unless otherwise specifically provided for in this Securities Insurers'
Escrow Agreement) if delivered by hand, delivered by a nationally recognized overnight
courier for next-day delivery, mailed (registered or certified mail, postage prepaid) or
telecopied (which telecopy is confirmed by a transmission receipt)-
43
If to Chubb Atlantic, then to
Jonathan Constine, Esq .Hogan & Hartson L .L.P_555 13th Street, N .W .Washington, D .C. 20004Telephone: (212) 637-5870Facsimile: (212) 637-5910
If to Pender, then to
Francis Kean, Esq.Barlow Lyde & GilbertBeaufort Hous e15 St. Botolph StreetLondon, EC3A 7NJTelephone : 01 1-44-20-7643-8586Facsimile: 011-44-20-7071-911 0
If to the Securities Insurers ' Escrow Agent, then to
Wachovia Bank, N .A .
Attn: Howard Parker123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone (215-670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then t o
The Honorable Michael DolingerUnited States Magistrate JudgeDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 1 0007-1312
Telephone: (212) 805-0204
Facsimile : (212) 805-7928
44
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq .Sidney S . Liebesman, Esq.
GRANT & EXSENHO? R, P.A.as Securities Lead Counsel
Jay W. ElsenhoferGrant & Pasenbofer, F.A.1201 North Market Stet, Suite 2100 {Wilmirtgti n, DE 19801
50
[
•
TOTAL P .02
. . . ~'.` i s _'. -~; -
~f'
PENDER INSURANCE LIMITED
By:Francis KeanBarlow Lyde & GilbertBeaufortHouse15 St. Botolph StreetLondon, EC3A 7NJ
WACHOVIA BANK, NATIONALASSOCIATIONas Escrow Agen t
By:Howard ParkerVice Presiden t
GRANT &EISENHOFER, P.A.as Securities Lead Counsel .
By: yjpJ . EisenhoferGrant & Eisenhofer, P.A.1201 North Maxket Street, Suite 210(}Wilmington, DE 1980 1
SO
Exhibit E
SECURITIES REINSURERS' TRUST DEE D
This Trust Deed is made this 19`h day of March 2004 between the law firm of Grant &
Eisenhofer, P .A., (hereinafter "Securities Lead Counsel"), for and on behalf of Securitie s
Lead Plaintiffs, and Wilson, Elser, Moskowitz, Edelman & Dicker LLP (hereinafter
"WEMED") for and on behalf of Pender Securities Reinsurers, and Wachovia Bank,
National Association ("Wachovia Bank") . Securities Lead Counsel, Securities Lead
Plaintiffs, WEMED, Pender Securities Reinsurers, and Wachovia Bank shall be referred
to collectively herein as "the Parties ." Securities Lead Counsel and WEMED shall be
referred to collectively herein as "the Trustees ." Wachovia Bank shall be referred to as
"Securities Reinsurers' Trust Agent . "
The Parties refer to and repeat the recitals set forth in the March 19, 2004 Stipulation of
Settlement (hereinafter referred to as "the Settlement Agreement") in the lawsuit
captioned In Re Global Crossing Ltd. Securities Litigation, filed in the United States
District Court for the Southern District of New York, Case No . 02 Civ. 910 (the
"Securities Action"), a copy of which has been provided to the Securities Reinsurers '
Trust Agent .
In consideration of the mutual promises, covenants and conditions contained in this Trus t
Deed, and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties agree as follows :
Definitions and Interpretations
1 . As used in this Securities Reinsurers' Trust Deed, capitalized terms either (i) have
the same meaning as ascribed to them in the Settlement Agreement or (it) have
the following meanings :
208994.1
a. "Business day" means a day other than a Saturday, Sunday or a "legal
holiday," as that term is defined in Section XIV .II of the Settlemen t
Agreement-
b. "Deposit Date" means the date on which the Level One Reinsurers '
Opening Balance and the Level Two Reinsurers' Opening Balance are
deposited into, respectively, the Reinsurers' Level One Subaccount and
the Reinsurers' Level Two Subaccount .
c. "Final Payment Date" means the date on which all proceeds from the
Securities Reinsurers' Insurance Trust Account are paid out pursuant t o
Sections 15 or 16 below.
d. "Interest Rate" means interest calculated on a simple interest basis based
upon the Federal Funds rate; provided further that the rate shall be
established based upon the Federal Funds effective rate on the first (1st )
day of each month, as published in The Wall Street Journal under the
description of "Money Rates ."
C . "Level One Reinsurers' Closing Balance" means the balance (if any) of
the Level One Reinsurers' Opening Balance remaining as of the Final
Payment Date in the Reinsurers' Level One Subaccount .
f. "Level One Reinsurers' Opening Balance" means the amount of thirty-
eight million one hundred eighty-three thousand six hundred ninety-five
and 33/100 Pounds Sterling (£38,1$3,695 .33) (less any portion of the
Securities Initial Payment to be paid out of this amount) .
g . "Level Two Reinsurers' Closing Balance" means the balance (if any) of
Level Two Reinsurers' Opening Balance remaining as of the Final
Payment Date in the Reinsurers' Level Two Subaccount .
2
20B994.1
h. "Level Two Reinsurers' Opening Balance" means the amount of forty-five
million one hundred sixty-six thousand three hundred seventy-four and
67/100 Pounds Sterling (f45,166,374.67) (less any portion of the
Securities Initial Payment to be paid out of this amount) .
i . "fender Securities Reinsurers" means those entities that have reinsured a
portion of the fender Securities Coverage and that will pay the fender
Securities Reinsurers' Payment ; provided however, that fender shall be
responsible for any portion of the Fender Securities Reinsurers' Payment
that the fender Securities Reinsurers do not pay pursuant to the terms of
this Settlement Agreement.
"Pender Securities Reinsurers' Payment" means eighty-three million three
hundred fifty thousand seventy GBP (£83,350,070) to be paid pursuant to
Section H.A.Ld of the Settlement Agreement.
k. "Reinsurers' Level One Subaccount" means the subaccount established
pursuant to Section 3 below, into which the Level One Reinsurers'
Opening Balance shall be deposited on the Deposit Date .
1 . "Reinsurers' Level Two Subaccount" means the subaccount established
pursuant to Section 3 below, into which the Level Two Reinsurers'
Opening Balance shall be deposited on the Deposit Date .
M. "Securities Insurers' Escrow Agreement" means the escrow agreement
pursuant to which the Securities Insurers' Insurance Escrow Account shall
be established, a copy of which will be provided to the Securities
Reinsurers' Trust Agent .
3
208994 .1
D . "Securities Insurers' Escrow Agent" means the escrow agent for the
Securities Insurers' Insurance Escrow Account, which agent shall be the
same entity as the Securities Reinsurers' Trust Agent .
o. "Securities Reinsurers' Insurance Trust Account" means the Securities
Reinsurers' Insurance Trust Account established pursuant to Section 3
below.
p. "Securities Reinsurers' Trust Deed" means this Securities Reinsurers'
Trust Deed.
q. "Securities Reinsurers' Trust Agent" means Wachovia Bank .
r. "Securities Reinsurers' Subaccount" means either of the subaccounts
established pursuant to Section 3 below.
s. A reference to a party means a party to this Trust Deed _
t. Unless stated otherwise, a reference to a Section means a Section of this
Trust Deed.
U . The plural shall include the singular and vice versa .
V . A reference to "including" shall be deemed to be followed by "without
limitation."
w . Section headings in this Securities Reinsurers' Trust Deed are for
convenience only and shall not be construed as part of this Securities
Reinsurers' Trust Deed .
4
208994 .1
Appointment of Securities Reinsurers ' Trust Agent
2. Securities Lead Counsel and WEMED hereby appoint Wachovia Bank to act as
the Securities Reinsurers' Trust Agent and Wachovia Bank hereby accepts this
appointment and agrees to act as Securities Reinsurers' Trust Agent pursuant to
the terms and conditions set out in this Securities Reinsurers' Trust Deed .
Establishment of Securities Account and Subaccounts
3 . Upon execution of this Securities Reinsurers' Trust Deed, the Securities
Reinsurers' Trust Agent shall establish the Securities Reinsurers' Insurance Trust
Account as an interest-bearing account created and maintained at all times, unless
otherwise agreed by the Parties, at Wachovia Bank, National Association, London
Branch, 3 Bishopsgate, London EC2N 3AB England, consisting of the following
two (2) subaccounts: Reinsurers' Level One Subaccount and Reinsurers' Level
Two Subaccount (the "Subaccounts"). The accounts shall be held in the names of
Securities Lead Counsel and WEMED, as trustees, in accordance with the terms
of this Securities Reinsurers' Trust Deed . The Securities Reinsurers' Trust Agent
shall promptly verify to WEMED and Securities Lead Counsel the establishment
of the Securities Reinsurers' Insurance Trust Account and the Subaccounts, and
provide to them all relevant account information. Securities Lead Counsel shall
verify the establishment of the Securities Reinsurers' Insurance Trust Account
and the Subaccounts to ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel .
4. The Trustees shall hold the balance of the Securities Reinsurers ' Insurance Trust
Account (including all interest as per Section 15 of this Trust Deed) from time to
time on trust for the Securities Plaintiffs and the Securities Lead Plaintiffs for the
purposes of, and in accordance with the terms of, the Settlement Agreement .
5
208994.1
5 . The Trustees will jointly give instructions with respect to the Securitie s
Reinsurers ' Insurance Trust Account .
6 . Each of the Trustees shall designate at least two members or officers to sign the
bank mandate for the Securities Reinsurers' Insurance Trust Account . No funds
may be withdrawn from the Securities Reinsurers' Insurance Trust Account
without the signatures of one authorized signatory from each of the Trustees .
7. Within five [5] business days following the Preliminary Approval Date, the
Pender Securities Reinsurers and each of them shall severally pay or cause to be
paid to the Securities Reinsurers' Trust Agent, by wire transfer of immediately
available funds, the Level One Reinsurers' Opening Balance and the Level Two
Reinsurers' Opening Balance. The payment obligation as to each Pender
Securities Reinsurer is several and no Pender Securities Reinsurer shall be liable
for the obligation of another Pender Securities Reinsurer.
8. Upon receipt of the monies described in Section 7 above, the Securities
Reinsurers' Trust Agent shall deposit the Level One Reinsurers' Opening Balance
and the Level Two Reinsurers' Opening Balance into, respectively, . the
Reinsurers' Level One Subaccount and the Reinsurers' Level Two Subaccount, as
set forth in Schedule A to this Securities Reinsurers' Trust Deed . The Securities
Reinsurers' Trust Agent shall acknowledge to WEMED and Securities Lead
Counsel the receipt of such cash (the "Reinsurers' Trust Funds") and deposit of it
into the appropriate Subaccounts. Securities Lead Counsel shall promptly notify
ERISA 401(k) Lead Counsel and Settling Defendants' Lead Counsel of such
acknowledgement . All such Reinsurers' Trust Funds shall be held in Pound s
Sterling .
9. The interest paid on the Securities Reinsurers ' Insurance Trust Account and each
of the Subaccounts shall be no less than the Interest Rate.
6
208994 .1
10, Each of the Trustees and the Securities Insurers' Escrow Agent shall promptly
receive a copy of the monthly statements for the Securities Reinsurers' Insurance
Trust Account from, the Securities Reinsurers' Trust Agent .
11 . Neither the Securities Lead Plaintiffs nor the Fender Securities Reinsurers shal l
grant any charge, lien, security or other encumbrance over the Securities
Reinsurers' Insurance Trust Account. No term of this Agreement is enforceabl e
under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement .
Payments of Reinsurers' Trust Fund s
12. Payments from the Securities Reinsurers' Subaccounts shall be made i n
accordance with the terms of the Settlement Agreement, unless otherwise set forth
herein, and the Trustees shall authorize the Securities Reinsurers' Trust Agent t o
make such payments.
13. Upon receipt of notice from the Securities Insurers' Escrow Agent that payments
are due to be made from the Reinsurers' Trust Funds pursuant to Section 12
above, the Trustees shall, pursuant to Sections 6 and 12 above, provide the
appropriate signatures authorizing the Securities Reinsurers' Trust Agent to make
such payments only as set forth in Section 4 of the Securities Insurers' Escrow
Agreement (attached hereto as Exhibit 1) .
14. All bank charges relating to the Securities Reinsurers ' Insurance Trust Account,
any taxes on the interest income earned in the Securities Reinsurers' Trus t
Account, and the expenses and costs incurred in connection with the taxation o f
the Securities Reinsurers' Insurance Trust Account (including, without limitation,
expenses of tax accountants) (collectively, the "Trust Expenses") shall be paid
solely from the interest accrued up to the Interest Rate from the Securities
Reinsurers' Insurance Trust Account . To the extent that the interest accrued at the
7
208994 .1
Interest Rate is insufficient to pay the Trust Expenses, the Trust Expenses i n
excess of the interest accrued at the Interest Rate shall be Notice and
Administrative Expenses and shall be paid consistent with the Settlement
Agreement, unless all layers of available insurance proceeds below the Pender
Securities Reinsurers have been exhausted in which case the Trust Expenses in
excess of the interest accrued at the Interest Rate shall be the joint and several
responsibility of the Securities Lead Plaintiffs and the Securities Plaintiffs .
15 . Within forty-five [451 days following the Final Settlement Date, the Trustees shal l
authorize the Securities Reinsurers' Trust Agent to pay and the Securities
Reinsurers' Trust Agent shall so pay, in accordance with the Settlement
Agreement and as set forth in Section 4 of the Securities Insurers' Escrow
Agreement, the Level One Reinsurers' Closing Balance and the Level Two
Reinsurers' Closing Balance into the Cash Settlement Securities Subaccount, plus
interest calculated on each such balance less any Trust Expenses, which interest is
to be calculated (i) at the Interest Rate for the period starting on the fifth (5th)
business day after the Preliminary Approval Date until and including the
Approval Date and (ii) at the market rate provided by the Securities Reinsurers'
Insurance Trust Account for the period starting the day following the Approval
Date until the date of the wire transfer of such funds pursuant to this Section 15 .
If there are any remaining monies in any Securities Reinsurers' Subaccount after
the payment into the Cash Settlement Securities Subaccount required by this
Section 1 5 has been made, such monies shall be returned to WEMED for
distribution to the Pender Securities Reinsurers . Immediately thereafter, the
Securities Reinsurers' Insurance Trust Account will be closed, the Trust Deed
terminated, and neither WEMED nor the Pender Securities Reinsurers shall have
any interest in the funds held in the Cash Settlement Securities Subaccount .
8
205994 .1
16, In the event of a Final refusal of an Order Approving Settlement and/or a Final
refusal to enter Final Judgment or in the event that the Final Settlement Date ha s
not occurred before January 1, 2008, the funds held upon the Securities
Reinsurers' Insurance Trust Account, less any taxes and bank charges relating t o
the Securities Reinsurers ' Insurance Trust Account, shall be returned to th e
Pender Securities Reinsurers, the Securities Reinsurers' Insurance Trust Accoun t
will be closed and the Trust Deed terminated, unless the parties agree to extend
the date referenced in this Section 16, subject always to Section 17 of this Trust
Deed .
17. The perpetuity period for the purposes of this Trust Deed shall be 80 years from
the date of this Trust Deed .
18. The Parties agree that this Trust Deed shall be construed in accordance with, and
all disputes relating to this Trust Deed hereunder shall be governed by, the Laws
of England & Wales without regard to choice of law rules . The Parties agree to
submit any dispute relating to this Trust Deed to the exclusive jurisdiction of the
High Court of England & Wales . The Parties shall meet and confer prior to
submitting any dispute relating to this Trust Deed to a court . In the event of a
claim being issued in relation to this Trust Deed, the Pender Securities Reinsurers
and each of them hereby irrevocably appoint Wilson, Elser, Moskowitz, Edelman
& Dicker of 65 Fenchurch Street, London, EC3M 4BE as their agent for service
of any claim form, and Securities Lead Plaintiffs, Securities Plaintiffs and each of
them hereby irrevocably appoint Norose Notices Limited (AA53637) at the
address of its registered office (currently located at Kempson House, Camomile
Street, London, EC3A 7AN) as their agent for the purposes of service of an y
claim form .
9
208994 .1
Provisions Regarding the Securities Reinsurers' Trust Agen t
19. The Securities Reinsurers' Trust Agent has no duties or responsibilities excep t
those expressly provided in this Trust Deed . The Securities Reinsurers' Trust
Agent has no liability under this Securities Reinsurers' Trust Deed except for it s
own bad faith, gross negligence, or willful misconduct . It may rely on any notice,
instruction, certificate, statement, request, consent, confirmation, agreement or
other instrument which it reasonably believes to be genuine and to have bee n
signed or presented by a proper person or persons .
20. The Securities . Reinsurers' Trust Agent has no duties with respect to any
agreement or agreements with respect to the Reinsurers' Trust Funds other than as
provided in this Securities Reinsurers' Trust Deed. The Securities Reinsurers'
Trust Agent has no interest in the Reinsurers' Trust Funds except as provided in
this Securities Reinsurers' Trust Deed. This Section 20 shall survive
notwithstanding the termination of this Securities Reinsurers' Trust Deed or the
Securities Reinsurers' Trust Agent's resignation or removal .
21 . The Securities Reinsurers' Trust Agent shall keep proper books of record an d
account, and make full and correct entries of the receipts and disbursements in th e
Securities Reinsurers' Insurance Trust Account and Securities Reinsurers '
Subaccounts .
22. The Securities Reinsurers' Trust Agent may resign as Securities Reinsurers' Trust
Agent by giving sixty (60) days notice by registered or certified mail to the
Securities Lead Counsel and WEMED, which notice the Securities Lead Counsel
shall provide to ERISA 401(k) Lead Counsel and Settling Defendants' Lead
Counsel . Subject to Section 24 below, such resignation shall take effect at the end
of such sixty (60) days or on the Securities Reinsurers' Trust Agent's earlie r
1 0
208994.1
receipt of an instrument of acceptance executed by a successor securitie s
reinsurers' trust agent .
23. WEMED and Securities Lead Counsel may jointly remove the Securities
Reinsurers' Trust Agent by a notice signed by each and delivered by registered or
certified mail to the Securities Reinsurers' Trust Agent. Such removal shall b e
effective on the date set forth in such notice .
24. Notwithstanding anything in Sections 22 and 23, the resignation or removal of the
Securities Reinsurers' Trust Agent shall not be effective unless and until
WEMED and Securities Lead Counsel jointly appoint a successor securities
reinsurers' trust agent . If no instrument of acceptance signed by a successor
securities reinsurers' trust agent has been delivered to the Securities Reinsurers'
Trust Agent within sixty (60) days after it delivers its notice of resignation or by
the effective date of its removal, the resigning or removed Securities Reinsurers'
Trust Agent may petition the Court for appointment of a successor securities
reinsurers' trust agent. The Securities Reinsurers' Trust Agent's resignation or
removal shall not discharge any liability or obligations of the Securities
Reinsurers' Trust Agent arising before the effective date of its resignation or
removal .
25 . WEMED and Securities Lead Counsel shall jointly appoint a successor securities
reinsurers' trust agent to fill any vacancy resulting from (i) the Securities
Reinsurers' Trust Agent being dissolved or otherwise becoming incapable of
acting, (ii) the Securities Reinsurers' Trust Agent being taken over by a
government official, agency, department or board or (iii) the Securities
Reinsurers' Trust Agent's position becoming vacant for any other reason .
26. WEMED and Securities Lead Counsel shall cause any successor securities
reinsurers ' trust agent appointed pursuant to this Securities Reinsurers' Trust
1 1
206994 .1
Deed to execute, acknowledge and deliver to the Securities Reinsurers' Trust
Agent, and to WEMED and Securities Lead Counsel, an instrument in writing
accepting its appointment, at which point the Securities Reinsurers' Trust Agent
shall deliver to its successor, as directed in writing by WEMED and Securitie s
Lead Counsel, all property and moneys it holds under this Securities Reinsurers'
Trust Deed, and the books of records and account, and any other information ,
required by the successor securities reinsurers' trust agent to perform it s
obligations under this trust deed among WEMED, Securities Lead Counsel and
such successor securities reinsurers' trust agent .
27. Pursuant to Sections IX. .A.I .c, IX.A.2, IX.A.3, IX.B.I .c, IX.B.2 and IX .B.3 of the
Settlement Agreement, Securities Lead Counsel ; Securities Lead Plaintiffs,
Securities Plaintiffs, Executive Committee Members, ER .ISA 401(k) Lead
Counsel, ERISA Plaintiffs, Settling Defendants, Settling Defendants Counsel and
Securities Class Members shall release the Securities Reinsurers' Trust Agent
with respect to all claims, damages and liabilities for anything done or omitted by
the Securities Reinsurers' Trust Agent in performing its duties under this
Securities Reinsurers' Trust Deed, except such claims that are based upon the
Securities Reinsurers' Trust Agent's bad faith, gross negligence, or willful
misconduct .
28_ The Securities Reinsurers' Trust Agent is acting under this Securities Reinsurers '
Trust Deed as a stakeholder only and is an independent contractor with respect to
each party . No provision of this Securities Reinsurers' Trust Deed is intended to
create any principal, joint venture, partnership or debtor/creditor relationship
between or among the Securities Reinsurers' Trust Agent and any of the parties .
The Parties hereto and anyone claiming under, by or through them hereby release
the Securities Reinsurers' Trust Agent from any claim in the nature of self dealin g
12
208994 .1
or conflict of interest that could be raised in the event any affiliate of Securities
Reinsurers' Trust Agent is_ a settling claimant in the underlying litigation .
General Matters
29 . This Securities Reinsurers' Trust Deed is binding on and shall inure to the benefit
of the Parties' heirs, executors, administrators, legal representatives, successor s
and permitted assigns .
30. This Securities Reinsurers' Trust Deed may be executed in one or more
counterparts which, taken together, constitute one and the same instrument .
Execution by facsimile shall be fully and legally binding on a party .
31 . No amendment or discharge of this Securities Reinsurers' Trust Deed, or waiver
under it, shall be valid or binding unless set forth in writing and duly signed by
the party against whom enforcement of the amendment, discharge or waiver is
sought and by the Securities Reinsurers' Trust Agent . Any such waiver shall
waive only the specific matter described in the writing and shall not impair the
rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Securities
Reinsurers' Trust Deed, nor the failure by a party, on one or more occasions, to
enforce a provision of this Securities Reinsurers' Trust Deed, or to exercise a right
or privilege under this Securities Reinsurers' Trust Deed, shall constitute a waiver
of any other breach of a similar nature, or a waiver of any of such provisions,
rights or privileges under this Securities Reinsurers' Trust Deed .
32. The invalidity or unenforceability of any provision of this Securities Reinsurers'
Trust Deed in any jurisdiction shall not affect the validity or enforceability of the
rest of this Securities Reinsurers' Trust Deed in that jurisdiction or the validity or
enforceability of this Securities Reinsurers' Trust Deed (including that provision)
in any other jurisdiction . If any restriction or provision of this Securitie s
13
208994 .1
Reinsurers' Trust Deed is held unreasonable, unlawful or unenforceable in an y
respect, such restriction or provision shall be interpreted, revised or applied in a
manner that makes it lawful and enforceable to the fullest extent possible under
law .
33. Subject to Section 17 of this Trust Deed , notices , requests, demands and othe r
communications under this Securities Reinsurers' Trust Deed shall be in writing
and shall be deemed to have been given (unless otherwise specifically provided
for in this Securities Reinsurers' Trust Deed) if delivered by hand, delivered by a
nationally recognized overnight courier for next-day delivery, mailed (registered
or certified mail, postage prepaid) or telecopied (which telecopy is confirmed by a
transmission receipt) :
If to WEMED, then to
Raymond J . Jast, Esq .James K. Thurston, Esq _Wilson, Elser, Moskowitz, Edelman & Dicker LLP120 North LaSalle Street26th FloorChicago, Illinois 60602-2412Telephone : (312) 704-0550Facsimile : (312) 704-1522
If to the Securities Reinsurers' Trust Agent, then t o
Wachovia Bank , National AssociationAttn : Howard Parker123 S_ Broad StreetPA 4944Philadelphia , PA 19109Telephone : (215) 670-4541Facsimile : (215) 670-473 3
14
208994 .1
If to the Securities Insurers' Escrow Agent then t o
Wachovia Bank, National AssociationAttn: Howard Parker123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone: (215) 670-4541Facsimile: (215) 670-4733
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq.Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A .1201 North Market StreetSuite 2100Wilmington, DE 19801Telephone: (302) 622-7000Facsimile : (302) 622-7100
If to ERISA 401(k) Lead Counsel, then to :
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq .
Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone: (206) 623-1900Facsimile: (206) 623-3384
Thomas J. Hart, Esq .Marc A . Tenebaum, Esq_Slevin & Hart, P .C .1625 Massachusetts Avenue, N.W .Suite 45 0Washington, D.C. 20036Telephone: (202) 797-8700Facsimile : (202) 234-823 1
1 5
208994.1
If to Settling Defendants Lead Counsel, then to :
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N .W .Suite I IODEWashington, D .C. 20004Telephone: (202) 383-8000Facsimile: (202) 383-811 8
Notices, requests, demands and communications shall be deemed to have been
given (i) on the date on which so hand-delivered (or, if not delivered before 5 :00
p.m. Eastern Time, on the next business day), (ii) on the next business day if
delivered by a nationally recognized overnight courier, (iii) on the third business
day after the date on which so mailed or (iv) on the date on which telecopied and
confirmed (or, if this does not occur before 5 :00 p .m. Eastern Time on a busines s
day, on the next business day) .
34. The Securities Reinsurers' Trust Agent represents and warrants that this Securities
Reinsurers' Trust Deed has been duly authorized, executed and delivered on its
behalf and constitutes its legal, valid and binding obligation .
35 . Securities Lead Counsel represents and warrants that it is authorized to execute
and deliver this Securities Reinsurers' Trust Deed on behalf of Securities Lea d
Plaintiffs and, as authorized by the Court's December 13, 2002 order, on behalf of
Securities Plaintiffs and Securities Class Members .
36. Raymond J. Jast represents that he is authorized to execute and deliver this
Securities Reinsurers' Trust Deed on behalf of the Pender Securities Reinsurers .
37. Each party shall take (or cause to be taken) such further actions to execute, deliver
and file (or cause to be executed, delivered or filed) such further documents an d
instruments, and to obtain such consents, as may be necessary or reasonable
16
208994.E
requested to effectuate fully the purposes, terms and conditions of this Securities
Reinsurers' Trust Deed .
38. The Securities Reinsurers' Trust Agent shall keep, and shall cause its agents to
keep, confidential the information it receives under this Securities Reinsurers '
Trust Deed, except for :
a. information that is or becomes publicly known other than as a result of a
breach of this Section 38 ;
b. information obtained by the Securities Reinsurers' Trust Agent from
sources other than a WEMED or Securities Lead Counsel and not subjec t
to a confidentiality obligation ;
c. information requested or required to be disclosed (1) by a statute, law, rule
or regulation, (ii) to any government agency or regulatory body having or
claiming authority to regulate or oversee the Securities Reinsurers' Trust
Agent's business, (iii) under any subpoena, civil investigative demand or
similar demand or request of a court, regulatory authority, arbitrator or
arbitration to which the Securities Reinsurers' Trust Agent or any affiliate,
or an officer, director, employer or shareholder of the Securities
Reinsurers' Trust Agent or such affiliate, is a party, or (iv) to any affiliate ,
independent or internal auditor, agent, employee or attorney of the
Securities Reinsurers' Trust Agent having a need to know the information,
provided that the Securities Reinsurers' Trust Agent advises the recipient
of the confidential nature of the information being disclosed ; or
d . any other disclosure authorized by the person submitting such information .
39. All time periods set forth herein sha ll be computed in calendar days unless
otherwise expressly provided . In computing any period of time prescribed o r
17
208994 .1
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the act, event, or default from which the designated period of time begins to run
shall not be included . The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED )
FOR AND ON BEHALF OF )
Wilson, Elser, Moskowitz, Edelman & Dicker LLP )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Grant & Eisenhofer, P .A. )
for themselves as Trustee and on behalf of )
the Securities Lead Plaintiffs and Securities Plaintiffs )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )
1 8
209984 .1
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the act, event, or default from which the designated period of time begins to run
shall not be included . The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED )
by 62
FOR AND ON BEHALF OF )
Wilson, Elser , Moskowitz, Edelman & Dicker LLP )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
E D S A DEED )
by t )iFO ON BEHALF OF )
Grant & Eisenhofer, PA-
for themselves as Trustee and on behalf of )
the Securities Lead Plaintiffs and Securities Plaintiffs
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )
1 8
208994 .1
83-1°-2004 17 :53 From -Wachovla Bank,NA +215 STO 4733 T-208 P . 002/002 F-52 0
allowed by this Securities Reinsurers' Trust Deed or by order of court, the day of
the not, event, or default from which the designated period of time begins to r Lm
shall not be included. The last day of the period so computed shall be included,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is
the filing of a paper in Court, a day on which weather or other conditions have
made the office of the Clerk of the Court inaccessible, in which event the period
shall run until the end of the next day that is not one of the aforementioned days .
EXECUTED AS A DEED
by
FOR AND ON BEHALF OF )
Wilson, Elser, Moskowitz, Edelman & Dicker LL? )
for themselves as Trustee and on behalf of )
the Pender Securities Reinsurers )
EXECUTED AS A DEED )
by )
FOR AND ON BEHALF OF )
Grant & Eisenhofer, P.A. )
for them selves as Trustee and on behalf of )
the securities Lead Plaintiffs and Securities Plaintiffs )
EXE nby
FOR AND ON BEHALF OT )
Wachovia Bank )
for themselves as Securities Reinsurers' )
Trust Agent )Howard Parker, VP
Wachovia Bangs, NA
i s209994.1
EXHIBIT I
EXHIBIT 1
4. Payments of Securities Escrow Fund s
a. Administration of Payments
(1) With respect to all payments to be made from the
Securities Account or from the Securities Reinsurers' Insurance Trust Account pursuan t
to this Section 4, the Securities Insurers' Escrow Agent shall make or, subject to
obtaining the required approval of the Trustees of the Securities Reinsurers' Insuranc e
Trust Account to make payments out of the Securities Reinsurers' Insurance Trus t
Account, cause the Securities Reinsurers' Trust Agent to make (as the case may be) suc h
payments as follows :
(a) The Securities Insurers' Escrow Agent shal l
make payments from the Chubb Atlantic Subaccount until the Securities Escrow Funds
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount have been
exhausted .
(b) When the Securities Escrow Funds
(including interest at the Interest Rate) in the Chubb Atlantic Subaccount are exhausted,
the Securities Insurers' Escrow Agent shall make payments from the Pender Subaccount
until the Securities Escrow Funds (including interest at the Interest Rate) in the Pender
Subaccount have been exhausted .
(c) When the Securities Escrow Funds
(including interest at the Interest Rate ) in the Pender Subaccount are exhausted, the
Securities Insurers' Escrow Agent shall make payments from the Chubb Reinsuranc e
Subaccount until the Securities Escrow Funds (including interest at the Interest Rate) i n
the Chubb Reinsurance Subaccount have been exhausted. Immediately upon exhaustio n
of the Securities Escrow Funds (including interest at the Interest Rate) in the Chub b
Reinsurance Subaccount, the Securities Insurers' Escrow Agent shall inform the Trustee s
of the Securities Reinsurers' Insurance Trust Account, the Securities Insurer Parties ,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lea d
Counsel that the Chubb Reinsurance Subaccount is exhausted .
(d) Following exhaustion of the Securitie s
Escrow Funds (including interest at the Interest Rate) in the Chubb Reinsurance
Subaccount , the Securities Insurers ' Escrow Agent shall make payments from the CNA
Reinsurance Level One Subaccount and the Pender Holdback Subaccount and seek th e
approval of the Trustees of the Securities Reinsurers' Insurance Trust Account to hav e
the Securities Reinsurers ' Trust Agent make payments from the Reinsurers ' Level One
Subaccount of the Securities Reinsurers' Insurance Trust Account in the followin g
proportions: 2 .2502%a from the CNA Reinsurance Level One Subaccount, 2 .2906% from
the Fender Holdback Subaccount and 95 .4592% from the Securities Reinsurers' Level
One Subaccount of the Securities Reinsurers' Insurance Trust Account . Payment shall be
made pursuant to this Section 4 .a(1)(d) until all Securities Escrow Funds (includin g
interest at the Interest Rate) in the CNA Reinsurance Level One Subaccount and th e
Reinsurers' Level One Subaccount of the Securities Reinsurers' Insurance Trust Accoun t
are exhausted .
(e) Following exhaustion of the Securitie s
Escrow Funds (including interest at the Interest Rate) in the CNA Reinsurance Level One
Subaccount and the Reinsurers' Level One Subaccount of the Securities Reinsurers'
Insurance Trust Account, the Securities Insurers' Escrow Agent shall make payments
from the CNA Reinsurance Level Two Subaccount, the Pender Holdback Subaccount,
the Royal Subaccount and seek the approval of the Trustees of the Securities Reinsurers'
Insurance Trust Account to have the Securities Reinsurers' Trust Agent make payments
from the Reinsurers' Level Two Subaccount of the Securities Reinsurers' Insurance Trust
Account in the following proportions : 4.9998% from the CNA Reinsurance Level Two
Subaccount, 2 .1676% from the Pender Holdback Subaccount, 2.4999% from the Royal
Subaccount and 903327%a from the Securities Reinsurers' Level Two Subaccount of the
Securities Reinsurers' Securities Trust Account . Payment shall be made pursuant to this
Section 4.a(I)(e) until all Securities Escrow Funds (including interest at the Interest Rate)
in each such subaccount are exhausted .
(2) During the period from Execution Date to the dat e
on which the Securities Insurers' Escrow Agent and the Securities Reinsurers' Trust
Agent make the payments required by Section 4 .f below, the Securities Insurers' Escrow
Agent shall keep an accounting (consistent with the Implementation Period Securities
Claim Reserve Amount, the Post-Implementation Period Securities Claim Reserve
Amount and the Securities Implementation Cap) of all payments of Covered Claim Costs
(specifically identifying all Covered Claim Costs that are Securities Implementation
Costs based on the representation of Insured Releasees' counsel submitting such costs )
3
whether such payments are made from ( i) the Executive Liability Insurance Policies or
the Fender Securities Coverage prior to the date on which the payments required b y
Section 3 .b above are made or (ii) the Securities Insurers Insurance Escrow Accoun t
and/or the Securities Reinsurers ' Insurance Trust Account.
(3) With respect to Covered Claim Costs, the Securitie s
Insurers' Escrow Agent shall pay (or seek the approval of the Trustees to have the
Securities Insurers' Trust Agent pay) such costs pursuant to invoices it receives directly
from Insured Releasees or their counsel, or that are forwarded to it from Securitie s
Insurer Parties .
(4) The Securities Insurers' Escrow Agentshall, , withi n
five (5) business days following the end of each calendar month in which the Securitie s
Insurers' Insurance Escrow Account and/or Securities Reinsurers' Insurance Trus t
Account are in existence, provide to the Securities Insurer Parties, Securities Lea d
Counsel, ERISA 401(k) Lead Counsel, Settling Defendants' Lead Counsel, U_S .
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant t o
Section I .E .1 .ff of the Settlement Agreement) and all Insured Releasees' counsel to
whom reimbursement for Covered Claim Costs has been made during the prior calenda r
month the following information respecting the Securities Insurers' Insurance Escrow
Account and the Securities Reinsurers' Insurance Trust Account : (i) an accounting of all
Securities Escrow Funds paid out of the Securities Insurers' Escrow Account and/or the
Securities Reinsurers' Insurance Trust Account during such calendar month, including an
accounting of all Covered Claim Costs paid from such accounts, ( ii) all fees and
4
expenses, including amounts paid to the Securities Insurers' Escrow Agent or Securities
Reinsurers' Trust Agent, charged to any subaccount of the Securities Insurers' Escro w
Account or Securities Reinsurers' Insurance Trust Account during such calendar month ,
(iii) the interest earned on each subaccount of the Securities Insurers' Escrow Account o r
Securities Reinsurers' Insurance Trust Account during such calendar month ; (iv) the
balance remaining in each subaccount of the Securities Insurers' Escrow Account o r
Securities Reinsurers' Insurance Trust Account as of the date of the accounting and (v) a
calculation of the balance of the Implementation Period Securities Claim Reserve
Amount and of the Post-Implementation Period Securities Claim Reserve Amount, and
the aggregate amount of Securities Implementation Costs paid subject of the Securitie s
Implementation Cap .
(5) The Securities Insurers' Escrow Agent shall
calculate the Securities Claim Reserve Amount Balance (if any) pursuant to Section
II .D.5.a of the Settlement Agreement and, if a balance exists, shall, no later than the
forty-fifth (45th) day after the Final Settlement Date advise the Remaining Securities
Insurer Parties, Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of the amount of the Securities Claim Reserve Amoun t
Balance.
b. Securities Pre-Execution Costs
(1) The Securities Insurer Parties shall provide to the
Securities Insurers' Escrow Agent copies of all invoices for Securities Pre-Execution
Costs received from an Insured Releasee (or his or her counsel) that they have as of the
Execution Date or that they receive within thirty (30) days following the Execution Date ,
which invoices are unpaid as of the date on which the the payments required by Sectio n
3.b above are required . Within forty-five (45) days following the Execution Date, the
Securities Insurers ' Escrow Agent shall pay (or seek the approval of the Trustees to have
the Securities Insurers' Trust Agent pay) to each submitting Insured Releasee (or his or
her counsel) all Securities Pre-Execution Costs with respect to which the Securitie s
Insurers ' Escrow Agent has received an invoice .
c. Securities Implementation Costs
(1) Each Remaining Securities Insurer Party shall ,
promptly upon receipt, provide to the Securities Insurers' Escrow Agent all invoices fo r
Covered Claim Costs that are marked as Securities Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .c(2), the Securities Insurers' Escrow Agent shal l
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants '
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollars
($250,000) ; provided that notice as set out in this Section 4 .c(2) shall be provided if an
Insured Releasee (or Insured Releasees represented by the same counsel other tha n
Settling Defendants' Lead Counsel) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
6
(3) The Securities Insurers' Escrow Agent shall pay (or
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) al l
Securities Implementation Costs to the submitting Insured Releasee (or his or her
counsel) as follows :
(a) all payments shall be subject to (i) the
Securities Implementation Cap and (ii) the aggregate of the Implementation Perio d
Securities Claim Reserve Amount and the Post-Implementation Period Securities Clai m
Reserve Amount; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4 .c(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoic e
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify th e
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolve d
through the Dispute Procedure ; provided further that the Securities Insurers ' . Escrow
Agent shall refrain from paying such invoice (or portion of such invoice) until the disput e
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion an invoice within seven (7) business days after
notice pursuant to Section 4c(2) above has been provided, such invoice shall be deemed
approved in its entirety .
7
(4) Subject to Section 4 .c(3) above, within thirty (30)
business days following receipt of an invoice for Covered Claim Costs that is marked a s
Securities Implementation Costs, the Securities Insurers ' Escrow Agent shall (i) pay al l
Defense Costs identified in the invoice, (ii) inform the Insured Releasee of the Securities
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) inform
the Insured Releasee of Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel's
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4 .c(2) above : provided that, if any portion of an invoice is not
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of the
Trustees to have the Securities Insurers' Trust Agent pay) that portion of the invoice
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .c(2)
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to this
Section 4.c(4)-
d. Other Covered Claim Costs
(1) Each Remaining Securities Insurer Party shall ,
promptly upon receipt, provide to the Securities Insurers' Escrow Agent all invoices fo r
Covered Claim Costs other than Securities Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .d(2), the Securities Insurers' Escrow Agent shall
provide notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling
Defendants' Lead Counsel of any invoice from anyone other than Settling Defendants'
Lead Counsel for Covered Claim Costs in excess of two hundred fifty thousand dollar s
8
($250,000) and any invoice from Settling Defendants' Lead Counsel for Covered Clai m
Costs other than Implementation Costs in excess of two hundred fifty thousand dollars
($250,000) ; provided that notice as set out in this Section 4 .d(2) shall be provided if (i) an
Insured Releasee (or Insured Releasees represented by the same counsel other than
Settling Defendants' Lead Counsel) submits more than one invoice for Covered Claim
Costs in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) or (ii) Settling Defendants' Lead Counsel
submits more than one invoice for Covered Claim Costs other than Implementation Cost s
in any thirty (30) day period and such invoices in the aggregate are in excess of two
hundred fifty thousand dollars ($250,000) .
(3) The Securities Insurers' Escrow Agent shall pay (or
seek the approval of the Trustees to have the Securities Insurers' Trust Agent pay) al l
such Covered Claim Costs to the submitting Insured Releasee (or his or her counsel) a s
. .. follows:
(a) all payments shall be subject to (i) th e
aggregate of the Implementation Period Securities Claim Reserve Amount and the Post-
Implementation Period Securities Claim Reserve Amount and (ii) any agreement agreed
to by Insured Releasees or final ruling pursuant to Section I1 .D.7 of the Settlement
Agreement; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4.d(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
9
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of 'such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counse l
shall, within five (5) business days following receipt of notice, of the invoice, notify th e
Securities Insurers' Escrow Agent of their disapproval and such dispute shall be resolve d
through the Dispute Procedure; provided further that the Securities Insurers' Escrow
Agent shall refrain from paying such invoice (or portion of such invoice) until the dispute
is resolved ; provided further that if Securities Lead Counsel and/or ERISA 401(k) Lead
Counsel fail to disapprove all or a portion of an invoice within seven (7) business day s
after notice pursuant to Section 4d(2) above has been provided, such invoice shall b e
deemed approved in its entirety .
(4) Subject to Section 4 .d(3), within thirty (30) business
days following receipt of an invoice for Covered Claim Costs other than Securitie s
Implementation Costs, the Securities Insurers' Escrow Agent shall (i) pay all Defens e
Costs identified in the invoice, (ii) inform the Insured Releasee of the Securitie s
Insurers' Escrow Agent's decision not to pay all or a portion of an invoice or (iii) infor m
the Insured Releasee of Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel' s
disapproval of all or a portion of an invoice for which notice was provided to them
pursuant to Section 4.d(2) above : provided that, if any portion of an invoice is no t
approved, the Securities Insurers' Escrow Agent shall pay (or seek the approval of th e
Trustees to have the Securities Insurers ' Trust Agent pay) that portion of the invoice
approved by the Securities Insurers' Escrow Agent and (if required by Section 4 .d(2)
10
above) by Securities Lead Counsel and ERISA 401(k) Lead Counsel pursuant to thi s
Section 4.d(4) .
e. Securities Attorneys' Fees and Expenses Award
(1) Within two (2) business days following the
Approval Date, Securities Lead Counsel shall inform the Securities Insurers' Escro w
Agent of the occurrence of that date and provide the Securities Insurers' Escrow Agen t
with a copy of the Court order setting out the Securities Attorneys' Fees and Expense s
Award.
(2) Subject to the terms (including without limitation
the repayment provisions ) set out in Section X.A of the Settlement Agreement , within
five (5) business days following the Approval Date, or such other date as the Court issue s
an order setting out the Securities Attorneys' Fees and Expenses Award, the Securitie s
Insurers' Escrow Agent shall pay to Securities Lead Counsel the Securities Attorneys '
Fees and Expenses Award; provided that to the extent any portion of the Securitie s
Attorneys' Fees and Expenses Award are required pursuant to Section 4_a above to b e
made from the . Securities Reinsurers' Insurance Trust Account , the Securities Insurers '
Escrow Agent shall seek the approval of the Trustees of the Securities Reinsurers '
Insurance Trust Account to have the Securities Reinsurers' Trust Agent pay such portio n
of the Securities Attorneys' Fees and Expenses from the Securities Reinsurers ' Insurance
Trust Account.
11
f. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Fina l
Settlement Date, Securities Lead Counsel shall inform the Securities Insurers' Escro w
Agent of the occurrence of that date, with copies of such notice provided to the
Remaining Securities Insurer Parties, ERISA 401(k) Lead Counsel and Settlin g
Defendants' Lead Counsel .
(2) The Securities Insurers' Escrow Agent, within
forty-five (45) days following the Final Settlement Date, shall pay (or seek the approva l
of the Trustees to have the Securities Insurers' Trust Agent pay) to insured Releasees an y
Covered Claire. Costs for which invoices have been received as of the thirtieth (30th) da y
following the Final Settlement Date ; provided that any invoices that are received after th e
thirtieth (30th) day following Final Settlement Date shall be returned to the submittin g
Insured Releasee .
(3) Subject to making the payments required by Sectio n
4_f(2) above and making the calculation required by Section 4 .a(5) above, within forty-
five (45) days following the Final Settlement Date, the Securities Insurers ' Escrow Agent
shall pay into the Cash Settlement Securities Subaccount by wire transfer of immediatel y
available funds, the Chubb Atlantic Policy Closing Balance, the Pender Closing Balance ,
the Chubb Reinsurance Closing Balance, the CNA Reinsurance Level One Closing
Balance, the CNA Reinsurance Level Two Closing Balance, the Pender Holdbac k
Closing Balance and the Royal Reinsurance Closing Balance, plus interest calculated o n
each such balance, which interest is to be calculated (i) at the Interest Rate for the perio d
12
starting on the fifth (5th) business day after the Preliminary Approval Date until an d
including the Approval Date and (ii) at the market rate provided by the Securities Insurers
Escrow Account for the period starting the day following the Approval Date until the date
of the wire transfer of such funds pursuant to this Section 4.f(3) .
(4) The Secu ri ties Insurers ' Escrow Agent shall see k
the approval of the Trustees of the Securities Reinsurers Insurance Trust Account to hav e
the Securities Reinsurers' Trust Agent pay (by wire transfer of immediately availabl e
fund), within forty-five (45) days following the Final Settlement Date, into the Cash
Settlement Securities Subaccount the Level One Reinsurers' Closing Balance and th e
Level Two Reinsurers ' Closing Balance in the Securities Reinsurers ' Insurance Trus t
Account plus interest on such proceeds calculated (t) at the Interest Rate for the perio d
starting on the fifth (5th) business day after the Preliminary Approval Date until and
including the Approval Date and (ii) at the market rate provided by the Securitie s
Reinsurers' Insurance Trust Account for the period starting the day following th e
Approval Date until the date of the wire transfer of such funds pursuant to this Sectio n
4.f(4) .
(5) If there are any remaining monies in any Securities
Subaccount after the payments required by Section 4 .f(3) above have been made and
after all applicable fees and expenses incurred in connection with the administration o f
the Securities Insurers' Escrow Account have been paid, such monies shall be returned to
the Securities Insurer Party on whose behalf the Securities Subaccount had bee n
established and maintained pursuant to Section 3.a above .
13
g. Fees and Expenses
(1) The Securities Insurers' Escrow Agent shall be pai d
fees in the amounts provided in Exhibit A . The Securities Insurers ' Escrow Agent shal l
also be reimbursed for reasonable expenses incurred in connection with this Securitie s
Insurers' Escrow Agreement, including with respect to the payment of any taxes due o n
any monies in the Securities Account .
(2) Subject to Section 4 .g .(5) below, invoices for fee s
and expenses shall be submitted by the Securities Insurers' Escrow Agent to th e
Remaining Securities Insurer Parties and Securities Lead Counsel on a timely basis, an d
in no event later than the month following the month in which the fees and expenses were
incurred .
(3) Upon their receipt of an invoice for fees and
expenses pursuant to Section 4 .g(2) above, each of the Remaining Securities Insurer
Parties and Securities Lead Counsel shall, within ten (10) days from the date of the
invoice, advise the Securities Insurers' Escrow Agent whether they approve all or a
portion of the fees and expenses ; provided further that if Remaining Securities Insurer
Parties and Securities Lead Counsel fail to disapprove all or a portion an invoice within
fourteen (14) business days after having been provided with same, such invoice shall b e
deemed approved in its entirety .
(4) Upon being notified of approval of an invoice (o r
upon the passage of fourteen days time as provided above) for fees and expenses both b y
all of the Remaining Securities Insurer Parties and by Securities Lead Counsel, th e
14
Securities Insurers' Escrow Agent is authorized to pay to itself such fees and expenses (o r
the approved portion of such fees and expenses) out of the appropriate Securitie s
Subaccount pursuant to the terms of Section 4.a(1) above .
(5) Upon being notified of disapproval of an invoice (or. ... .... . .. .. .
any portion of an invoice) for fees and expenses either by any of the Remainin g
Securities Insurer Parties or by Securities Lead Counsel, the Securities Insurers' Escrow
Agent ( i) is authorized to pay to itself any portion (if any) of the fees and expenses that
the all of the Remaining Securities Insurer Parties and Securities Lead Counsel have
approved and (i i ) may, in its discretion, submit any dispute with respect to th e
disapproved fees and expenses to the Court pursuant to Section 5 .a below ; provided
however, notwithstanding Section 4 .f, with respect to any dispute in connection with
disapproved fees and expenses relating to the final invoice submitted pursuant to Section
4.g(6), the part ies agree that such dispute must be resolved before the Securities Insurers'
Escrow Agent makes the payment into the Cash Settlement Account pursuant to Section
4_f.
(6) Within twenty (20) business days following the
Final Settlement Date, the Securities Insurers' Escrow Agent shall submit its final invoic e
for fees and expenses to the Remaining Securities Insurer Party and to Securities Lea d
Counsel . Such final invoice shall include all accrued fees and expenses and al l
anticipated fees and expenses until the termination of this Securities Insurers' Escrow
Agreement, including any fees and expenses expected to be incurred with respect to th e
payments to be made pursuant to Section 41.
15
h. Termination of Settlement Agreement
(1) If the Settlement Agreement is terminated pursuan t
to the terms of the Settlement Agreement, the Remaining Securities Insurer Parties shall
promptly notify the Securities Insurers' Escrow Agent of such termination, whic h
notification shall include a signed certification from Settling Defendants' Lead Counse l
that the Settlement Agreement has been terminated, which certification shall not b e
unreasonably withheld ; provided that if the Remaining Securities Insurer Parties giv e
notice of termination of settlement, but a signed certification from the Settling
Defendants' Lead Counsel is not provided, then no further monies shall be paid and th e
Securities Insurers' Escrow Agent shall take all appropriate steps to hold the monies safe
pursuant to Section 5 .c below while the dispute as to this issue is resolved pursuant to th e
Dispute Procedure .
(2) Within five (5 ) business days following receipt o f
notification of the termination of the Settlement Agreement pursuant to Section 4 .h(l )
above, the Securities Insurers' Escrow Agent shall submit its final invoice to th e
Remaining Securities Insurer Parties for fees and expenses . Such final invoice shal l
include all accrued fees and expenses and all anticipated fees and expenses expected to b e
incurred with respect to the payments to be made pursuant to this Section 4 .h . As to such
final invoice, each of the Remaining Securities Insurer Parties shall, within ten (10) day s
from the date of the invoice, advise the Securities Insurers' Escrow Agent whether i t
approves all or a portion of the fees and expenses .
16
(3) To the extent that, following termination of th e
Settlement Agreement, the Securities Insurers' Escrow Agent receives, pursuant t o
Section I .E.1 .yyyyy of the Settlement Agreement , any reimbursement with respect to the
Securities Initial Payment, the Securities Insurers Escrow Agent shall deposit (or cause t o
be deposited) such reimbursement in that Securities Subaccount and/or into that
subaccount of the Securities Reinsurers' Insurance Trust Account from which any
payments required by this Securities Insurers' Escrow Agreement are then currentl y
being paid pursuant to Section 4 .a(l) above, such deposits to be in the same proportion s
as set out in Section 4 .a(l)(e) or Section 4 .a(l)(f), as the case may be, of this Securities
Insurers' Escrow Agreement if payments are then currently being paid to such sections ;
provided that if such deposit of the reimbursement would cause such Securitie s
Subaccount or such subaccount of the Securities Reinsurers' Insurance Trust Account t o
have insurance proceeds in excess of the amount deposited into such subaccount at it s
inception plus interest accrued, the Securities Insurers Escrow Agent shall deposit (o r
cause to be deposited) that portion of such reimbursement that would be in excess of such
insurance proceeds into the Securities Subaccount and/or the subaccount of the Securities
Reinsurers' Insurance Trust Account from which payments had been made prior to th e
time that payments began to be made from the Securities Subaccount and/or sub account
the Securities Reinsurers' Insurance Trust Account then currently making payments .
(4) Within twenty (20) business days following receip t
of notification of the termination of the Settlement Agreement pursuant to Section 4 .h(2)
above, the Securities Insurers' Escrow Agent shall, subject to Section 4 .h(5) below, pay
17
to the Remaining Securities Insurer Parties, after subtracting (i) any approved outstandin g
fees and expenses incurred pursuant to Section 4 .g above, (ii) any disputed disapproved
fees or expenses with respect to which the Securities Insurers' Escrow Agent ha s
submitted such dispute to the Court pursuant to Section 5 .a below and (iii) any payment
required by Section I.E.I .yyyyy of the Settlement Agreement, the following amounts :
(a) to Chubb Atlantic, all monies (if any)
remaining in the Chubb Atlantic Subaccount ;
(b) to Pender, all monies (if any) remaining i n
the Pender Subaccount, the Chubb Reinsurance Subaccount , the CNA Reinsurance Level
One Subaccount , the CNA Reinsurer Level Two Subaccount , and the Pender Holdback
Subaccount ;
(c) as directed by Pender, the amount of an y
monies (if any) remaining in the Royal Reinsurance Subaccount shall be paid to th e
reinsurer that paid the Royal Reinsurance Opening Balance into the Royal Reinsurance
Subaccount .
(d) With respect to any disputed disapprove d
fees and expenses subtracted from the Securities Insurers' Insurance Escrow Accoun t
pursuant to Section 4_h(4)(ii) above, the Securities Insurers' Escrow Agent shall continu e
to hold the amount of such disapproved fees and expenses in trust until the disput e
regarding such fees and expenses is resolved pursuant to Section 5 below- Upo n
resolution of the dispute, the Securities Insurers' Escrow Agent shall promptly give effec t
to the resolution reached regarding such fees and expenses .
18
(5) The Remaining Securities Insurer Parties may, i n
their discretion, provide the Securities Insurers ' Escrow Agent with instructions fo r
distributing the amounts set out in Section 4 .h .(4) above in a manner different from that
set out in Section 4.h(4) . If the Remaining Securities Insurer Pa rt ies intend to provid e
such instructions, they must notify the Securities Insurers' Escrow Agent of thei r
intention to do so within five (5) business days following the Securities Insurers' Escro w
Agent' s receipt of notification of the termination of the Settlement Agreement . If the
Securities Insurers' Escrow Agent receives such instructions from the Remainin g
Securities Insurer Parties, the Securities Insurers' Escrow Agent shall continue to hold al l
Securities Escrow Funds that would otherwise have been distributed pursuant to Section
4.h.(4) in trust until such time as the Securities Insurers ' Escrow Agent receives written
instructions from the Remaining Securities Insurer Parties- Upon receipt of suc h
instructions , which instructions shall be endorsed by all Remaining Securities Insure r
Parties, the Securities Insurers' Escrow Agent shall promptly pay out the proceed s
described in Section 4.h(4) above pursuant to the instructions received from th e
Remaining Securities Insurer Parties pursuant to this Section 4 .h(4) .
19
Exhibit F
ERISA ESCROW AGREEMENT
This ERISA ESCROW AGREEMENT is entered into as of March 19, 2004 b y
and among Federal Insurance Company and Pender Insurance Limited, Keller Rohrback ,
LLP and Slevin & Hart, P_C ., as ERISA 401(k) Lead Counsel, and Wachovia Bank ,
National Association, as escrow agent .
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd .'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have an interest in certain
ERISA Plans ; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of these
actions before the Honorable Gerard E . Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated 15 of the putative class actions allegin g
ERISA violations into the ERISA Consolidated Action, leaving two of the putative clas s
actions that also allege ERISA violations unconsolidated; and
WHEREAS, Federal and Pender have issued one or more insurance policie s
providing coverage and indemnity for the current and former officers, directors an d
employees of Global Crossing Ltd . and Asia Global Crossing Ltd ., which policies
Settling Defendants contend provide coverage and indemnity in connection with losses
and costs incurred with respect to, among other things, the ERISA Actions and whic h
policies have not been exhausted as of the date of this ERISA Escrow Agreement ; and
WHEREAS, ERISA Plaintiffs and ERISA Settling Defendants have agreed to a
settlement of the ERISA Actions, subject to the completion of additional factual
investigation and analysis by ERISA Plaintiffs' Counsel to evaluate further the fairness ,
reasonableness and adequacy of the proposed settlement ; an d
WHEREAS, the terms and conditions of the settlement are contained in a Marc h
19, 2004 Stipulation of Settlement (and accompanying exhibits) (the "Settlemen t
Agreement"), a copy of which has been provided to the ERISA Escrow Agent ; and
WHEREAS, in connection with the settlement of the ERISA Actions, Federal ha s
agreed to pay the balance of its Policy Limit under its Policy and Pender has agreed to
pay the Pender Supplemental Amount in consideration for releases from certain Insured
Releasees pursuant to a March 19, 2004 Release and Settlement Agreement ; and
WHEREAS, pursuant to the terms of such Release and Settlement Agreement an d
the Settlement Agreement, Federal and Pender are required to deposit such insuranc e
proceeds into an escrow account within five (5) business days following the Court' s
preliminary approval of the Settlement Agreement .
NOW, THEREFORE, the ERISA Insurer Pa rties , ERISA Plaintiffs'401(k) Lea d
Counsel and the ERISA Escrow Agent agree as follows:
2
1 . Definitions and Interpretations
a. As used in this ERISA Escrow Agreement, capitalized
terms either (i) have the same meaning as ascribed to them in the Settlement Agreemen t
or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday,
Sunday or a "legal holiday ," as that term is defined in Section XN.II of the Settlemen t
Agreement-
(2) "Deposit Date" means the date on which Federal
deposits the Federal Policy Opening Balance into the ERISA Insurance Escrow Account
and Pender deposits the Pender Supplemental Amount pursuant to Section 3 .b below;
provided that the Deposit Date for Federal and Pender shall be that date on which tha t
entity deposits such proceeds into the ERISA Insurance Escrow Account .
(3) "Dispute Procedure" means the procedure by which
disputes arising in connection with this ERISA Escrow Agreement (as specifically set
forth in various provisions of the Settlement Agreement and this ERISA Escrow
Agreement) shall be resolved, which procedure shall require the disputing parties to
submit such dispute to the Court with a request that the Court refer the dispute to
Magistrate Judge Michael Dolinger, who shall mediate a resolution among the disputing
parties, provided that, if the parties are unable to resolve the dispute through mediation,
Magistrate Judge Dolinger shall resolve the dispute and such resolution shall be final and
binding (without any right of appeal or review) on all relevant parties, including, without
limitation, Securities Lead Counsel, Securities Lead Plaintiffs, ERISA Plaintiffs '
3
Counsel, ERISA Plaintiffs and any other individual or entity (including counsel for such
individual or entity) involved in the dispute ; provided f urther that if Magistrate Judge
Dolinger is no longer a magistrate judge of the United States District Court for the
Southern District of New York at the time any dispute is submitted to the Court, the
parties shall request that the Court refer the dispute to another magistrate judge of the
United States District Court for the Southern District of New York, who shall conduct th e
mediation or, if necessary, resolve the dispute as set out above ; provided further that,
with respect to all disputes submitted to the Court other than a dispute submitted pursuant
to Section II .D .7 of the Settlement Agreement, any party submitting a dispute to the
Court shall provide notice of such submission and copies of all papers submitted to the
Court and/or Magistrate Judge Dolinger (or any successor magistrate judge) to the
following: Securities Lead Counsel, ERISA Plaintiffs' Counsel, Settling Defendants'
Lead Counsel, the Insurers and any other party directly involved in the dispute ; provided
however, that, if the dispute involves the payment of Covered Claim Costs and an Insured
Releasee submits materials or information to the Court and/or Magistrate Judge Dolinger
(or any successor magistrate judge) in connection with the dispute that is protected by the
attorney client privilege or attorney work product doctrine, (i) the Insured Releasee's
submission of such materials or information shall not be deemed a waiver of the privilege
or work product protection applicable to such materials or information and (ii) the
Insured Releasee shall not be required to provide such materials or information to
Securities Lead Counsel, ERISA Plaintiffs' Counsel, Settling Defendants' Lead Counsel,
the Insurers or any other party directly involved in the dispute, but shall provide suc h
4
materials and/or information to the Court and/or Magistrate Judge Dolinger (or any
successor magistrate judge) for in camera review; provided further that any participation
by Pender in the Dispute Procedure with respect to any dispute arising under this ERISA
Escrow or the Settlement Agreement shall be subject to the Mediation Order and shall not
override or supersede Section R.E of the Settlement Agreement or Section 5 .e below;
provided further that with respect to a dispute submitted to the Court pursuant to Section
H.D.7 of the Settlement Agreement, the party submitting the dispute to the Court shall
provide notice of such submission to all Settling Defendants' Counsel, and any part y
submitting any papers to the Court and/or Magistrate Judge Dolinger (or any successo r
magistrate judge) in connection with such dispute shall provide copies of such papers to
all Settling Defendants' Counsel .
(4) "ERISA Account" means the ERISA Insuranc e
Escrow Account established pursuant to Section 3 .a below.
(5) "ERISA Escrow Agent" means Wachovia Bank,
National Association .
(6) "ERISA Escrow Agreement" means this ERISA
Escrow Agreement.
(7) "ERISA Escrow Funds" has the meaning ascribe d
to it in Section 3 .c below.
(8) "ERISA 401(k) Lead Counsel" means the law firms
of Keller Rohrback, LLP and Slevin & Hart, P .C.
(9) "ERISA Insurer Parties" means Federal and Pender .
5
(10) "ERISA Subaccount" means any of the subaccounts
established pursuant to Section 3 .a below .
(11) "Federal" means Federal Insurance Company,
which issued Policy No . Policy 8151-95-14C with a Policy Limit of $25,000,000 (the
"Federal Policy")-
(12) "Federal Policy Closing Balance" means the
balance (if any) of unexhausted Policy proceeds remaining as of the Final Payment Date
in the Federal Subaccount .
(13) "Federal Policy Opening Balance" means the
balance of unexhausted Policy proceeds in the Federal Policy as of the Deposit Date (less
any portion of the ERISA Initial Payment to be paid out of such Policy) .
(14) "Federal Subaccount" means the ERISA
Subaccount into which the Federal Policy Opening Balance is deposited .
(15) "Final Payment Date" means the date on which al l
proceeds from the ERISA Insurance Escrow Account are paid out pursuant to Section 4.f.
below .
(16) "Mediation Order" means the Proposed Scheduling
Order for Mediation entered in the Actions on April 28, 2003 by Judge Lynch and
Magistrate Judge Dolinger .
(17) "Pender ERISA Closing Balance" means th e
balance (if any) of unexhausted policy proceeds remaining as of the Final Payment Date
in the ERISA Subaccount into which the Pender Opening Balance was deposited.
6
(18) 'Tender ERISA Opening Balance" means eighteen
GBP (£18,000,000) (less any portion of the ERISA Initial Payment to be paid out of the
Fender Supplemental Amount) .
(19) 'Tender ERISA Subaccount" means the ERISA
Subaccount into which the Pender ERISA Opening Balance is deposited-
(20) "Policy" or "Policies" means (either individually or
collectively, as the context requires) the Federal Policy and the Pender Supplemental
Amount .
(21) "Policy Limit" means (i) with respect to the Federal
Policy, the unexhausted portion of the limit of liability provided by such Policy with
respect to the ERISA Actions and (ii) with respect to the Pender Policy, the fender
Supplemental Amount .
(22) "Remaining ERISA Insurer Parties" means, in
connection with any provision of this ERISA Escrow Agreement, each insurer with
respect to which ERISA Escrow Funds in the ERISA Subaccount established pursuant to
Section 3 .a below for such insurer have not been exhausted as of the date on which the
relevant provision is triggered .
b. A reference to a party means a party to this Agreement-
c. Unless stated otherwise, a reference to a Section means a
Section of this Agreement .
d. The plural shall include the singular and vice versa.
7
e. A reference to "including" shall be deemed to be followe d
by "without limitation ."
f. Section headings in this ERISA Escrow Agreement are fo r
convenience only and shall not be construed as part of this ERISA Escrow Agreement .
2 . Appointment of ERISA Escrow Agent
a. The ERISA Insurer Parties and ERISA 401(k) Lead
Counsel hereby appoint Wachovia Bank, National Association to act as the ERISA
Escrow Agent and Wachovia Bank, National Association hereby accepts thi s
appointment and agrees to act as ERISA Escrow Agent pursuant to the terms an d
conditions set out in this ERISA Escrow Agreement .
3_ Establishment of ERISA Account and Subaccounts
a. Upon execution of this ERISA Escrow Agreement, the
ERISA Escrow Agent shall establish the ERISA Escrow Insurance Account as a n
interest-bearing account consisting of the following two (2) subaccounts : the Federal
Subaccount and the Pender ERISA Subaccount . The ERISA Escrow Agent shall
promptly verify to the ERISA Insurer Parties, ERISA 401(k) Lead Counsel, Securities
Lead Counsel and Settling Defendants' Lead Counsel the establishment of the ERIS A
Account and subaccounts, and provide to them all relevant account in .for nation .
b. Within five (5) business days following the Preliminar y
Approval Date,
(1) Federal shall pay to the ERISA Escrow Agent, by
wire transfer of immediately available funds, the Federal Policy Opening Balance ; and
8
(2) Pender shall pay (or cause to be paid) to the ERISA
Escrow Agent, by wire transfer of immediately available funds, the Pender ERISA
Opening Balance .
c . Upon receipt of the monies described in Section 3 .b above,
the ERISA Escrow Agent shall deposit the Federal Policy Opening Balance and the
Pender ERISA Opening Balance into, respectively, the Federal Subaccount and the
Pender ERISA Subaccount . The ERISA Escrow Agent shall acknowledge the receipt o f
such cash (the "ERISA Escrow Funds") and the deposit of it into the relevan t
subaccounts to the ERISA Insurer Parties, Securities Lead Counsel, ERISA 401(k) Lead
Counsel and Settling Defendants' Lead Counsel ; provided that to the extent the monies
received by the ERISA Escrow Agent are received in GBPs, the ERISA Escrow Agent
shall hold such monies in GBPs .
d. The ERISA Escrow Agent is instructed and authorized t o
hold the ERISA Escrow Funds in cash deposit accounts of the ERISA Insurance Escro w
Account that pay interest that is no less than the Interest Rate .
e. The ERISA Escrow Agent shall hold the ERISA Escrow
Funds on trust in the ERISA Subaccounts and shall not withdraw any proceeds from an
ERISA Subaccount except as provided in this ERISA Escrow Agreement . The ERISA
Escrow Funds (as such funds may be reduced by distributions required to be made under
this ERISA Escrow Agreement) shall be held only for the purposes set forth, and subject
to the terms and conditions in, this ERISA Escrow Agreement, and shall not be subject t o
any lien, attachment, trusteeship or any other judicial process . Unless specifically
9
provided in the Settlement Agreement or in this ERISA Escrow Agreement, no third
parties or their respective creditors (including third-party individuals or entities unrelated
to Global Crossing Ltd . that are insureds under the Pender Policy) shall have any right to ,
or claim respecting, the ERISA Escrow Funds.
f. The ERISA Escrow Agent shall make or cause to be made
all of the payments described in this ERISA Escrow Agreement .
4. Payments of ERISA Escrow Fund s
a. Administration of Payments
(1) With respect to all payments to be made from the
ERISA Account pursuant to this Section 4, the ERISA Escrow Agent shall make or cause
to made such payments as follows :
(a) The ERISA Escrow Agent shall mak e
payments from the Federal Subaccount until the ERISA Escrow Funds (including interes t
at the Interest Rate) in the Federal Subaccount have been exhausted .
(b) When the ERISA Escrow Funds (including
interest at the Interest Rate) in the Federal Subaccount are exhausted, the ERISA Escro w
Agent shall make payments from the Fender ERISA Subaccount until the ERISA Escrow
Funds (including interest at the Interest Rate ) in the Pender ERISA Subaccount have been
exhausted .
(2) During the period from Execution Date to the date
on which the ERISA Escrow Agent makes the payments required by Section 41 below,
the ERISA Escrow Agent shall keep an accounting (consistent with the Implementation
10
Period ERISA Claim Reserve Amount, the Post-Implementation Period ERISA Claim
Reserve Amount and the ERISA Implementation Cap) of all payments of Covered Claim
Costs (specifically identifying all Covered Claim Costs that are ERISA Implementation
Costs based on the representation of Insured Releasees' counsel submitting such costs)
whether such payments are made from (i) the Fiduciary Liability Insurance Policy or, if
that policy is exhausted, from the Pender Supplement Amount, prior to the date on which
the payments required by Section 3 .b above are made or (ii) the ERISA Insurance Escrow
Account.
(3) With respect to Covered Claims Costs, the ERISA
Escrow Agent shall pay such costs pursuant to invoices it receives directly from Insured
Releasees or their counsel, or that are forwarded to it from the ERISA Insurer Partie s
(4) The ERISA Escrow Agent shall, within five (5 )
business days following the end of each calendar month in which the ERISA Insurance
Escrow Account is in existence, provide to the ERISA Insurer Parties, Securities Lead
Counsel, ERISA 401(k) Lead Counsel, Settling Defendants' Lead Counsel, U .S .
Magistrate Judge Michael Dolinger (or any successor magistrate judge pursuant to
Section I .E.I .ff of the Settlement Agreement) and all Insured Releasees' counsel to
whom reimbursement for Covered Claim Costs has been made during the prior calendar
month the following information: (i) an accounting of all ERISA Escrow Funds paid out
of the ERZSA Insurance Escrow Account during such calendar month, including an
accounting of all Covered Claim Costs paid from such account, (ii) all fees and expenses,
including amounts paid to the ERISA Escrow Agent, charged to any subaccount of th e
11
ERISA Insurance Escrow Account during such calendar month, (iii) the interest earned
on each subaccount of the ERISA Escrow Insurance Account during such calendar
month, (iv) the balance remaining in each subaccount of the ERISA Insurance Escrow
Account as of the date of the accounting and (v) a calculation of the balance of the
Implementation Period ERISA Claim Reserve Amount and of the Post-Implementation
Period ERISA Claim Reserve Amount, and the aggregate of ERISA Implementatio n
Costs paid subject to the ERISA Implementation Cap ; provided that the Securitie s
Insurers' Escrow Agent shall also provide notice to all such individuals and entitie s
identified in this Section 4_a(4) when the Implementation Period ERISA Claim Reserv e
Amount has been exhausted .
(5) The ERISA Escrow Agent shall calculate the
ERISA Claim Reserve Amount Balance (if any) pursuant to Section II .D.5.b of the
Settlement Agreement and, if a balance exists, shall, no later than the forth-fifth (45th)
day after the Final Settlement Date advise the Remaining ERISA Insurer Parties,
Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants' Lea d
Counsel of the amount of the ERISA Claim Reserve Amount Balance .
b. ERISA Pre-Execution Costs
(1) The ERISA Insurer Parties shall provide to th e
ERISA Escrow Agent copies of all invoices for ERISA Pre-Execution Costs receive d
from an Insured Releasee (or his or her counsel) that they have as of the Execution Date
or that they receive within thirty (30) days following the Execution Date, which invoices
are unpaid as of the date on which the payments required by Section 3 .b above are
12
required . Within forty-five (45) days following the Execution Date, the ERISA Escro w
Agent shall pay to each submitting Insured Releasee (or his or her counsel) all ERIS A
Pre-Execution Costs with respect to which the ERISA Escrow Agent has received an
invoice .
C, ERISA Implementation Costs
( 1) Each Remaining ERISA Insurer Party shall ,
promptly upon receipt, provide to the ERISA Escrow Agent all invoices for Covere d
Claim Costs that are marked as ERISA Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .c(2), the ERISA Escrow Agent shall provide
notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel of any invoice from anyone other than Settling Defendants' Lead Counsel
for Covered Claim Costs in excess of two hundred fifty thousand dollars ($250,000) ;
provided that notice as set out in this Section 4 .c(2) shall be provided if an Insured
Releasee (or Insured Releasees represented by the same counsel other than Settling
Defendants' Lead Counsel) submits more than one invoice for Covered Claim Costs i n
any thirty (30) day period and such invoices in the aggregate are in excess of two hundred
fifty thousand dollars ($250,000) .
(3) The ERISA Escrow Agent shall pay all ERIS A
Implementation Costs to the submitting Insured Releasee (or his or her counsel) a s
follows:
13
(a) all payments shall be subject to (1) the
ERISA Implementation Cap and (ii) the aggregate of the Implementation Period ERISA
Claim Reserve Amount and the Post-Implementation Period ERISA Claim Reserv e
Amount ; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4 .c(2) above, Securities Lead Counsel's an d
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that i f
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counse l
shall, within five (5) business days following receipt of notice of the invoice, notify the
ERISA Escrow Agent of their disapproval and such dispute shall be resolved through th e
Dispute Procedure ; provided further that the ERISA Escrow Agent shall refrain fro m
paying such invoice (or portion of such invoice) until the dispute is resolved ; provided
further that if Securities Lead Counsel and/or ERISA 401 (k) Lead Counsel fail to
disapprove all or a portion of an invoice within seven (7) business days after notic e
pursuant to Section 4c(2) above has been provided, such invoice shall be deeme d
approved in its entirety .
(4) Subject to Section 4 .c(3) above, within thirty (30)
business days following receipt of an invoice for Covered Claim Costs that is marked as
ERISA Implementation Costs, the ERISA Escrow Agent shall (i) pay all Defense Costs
identified in the invoice, (ii) inform the Insured Releasee of the ER1SA's Escrow Agent' s
decision not to pay all or a portion of an invoice or (iii) inform the Insured Releasee o f
14
Securities Lead Counsel's and/or ERISA 401(k) Lead Counsel's disapproval of all or a
portion of an invoice for which notice was provided to them pursuant to Section 4 .c(2)
above : provided that, if any portion of an invoice is not approved, the ERISA Escrow
Agent shall pay that portion of the invoice approved by the ERISA Escrow Agent and (if
required by Section 4 .c(2) above) by Securities Lead Counsel and ERISA 401(k) Lead
Counsel pursuant to this Section 4 .c(4) .
d. Other Covered Claim Costs
(1) Each Remaining ERISA Insurer Party shall,
promptly upon receipt, provide to the ERISA Escrow Agent all invoices for Covered
Claim Costs other than ERISA Implementation Costs .
(2) Within five (5) days following receipt of a
triggering invoice under this Section 4 .d(2), the ERISA Escrow Agent shall provide
notice to Securities Lead Counsel, ERISA 401(k) Lead Counsel and Settling Defendants'
Lead Counsel of any invoice from anyone other than Settling Defendants' Lead Counsel
for Covered Claim Costs in excess of two hundred fifty thousand dollars ($250,000) and
any invoice from Settling Defendants' Lead Counsel for Covered Claim Costs other than
Implementation Costs in excess of two hundred fifty thousand dollars ($250,000) ;
provided that notice as set out in this Section 4 .d(2) shall be provided if (1) an Insured
Releasee (or Insured Releasees represented by the same counsel other than Settling
Defendants' Lead Counsel) submits more than one invoice for Covered Claim Costs in
any thirty (30) day period and such invoices in the aggregate are in excess of two hundred
fifty thousand dollars ($250,000) or (ii) Settling Defendants' Lead Counsel submits mor e
15
than one invoice for Covered Claim Costs other than Implementation Costs in any thirt y
(30) day period and such invoices in the aggregate are in excess of two hundred fifty
thousand dollars ($250,000) .
(3) The ERISA Escrow Agent shall pay all suc h
Covered Claim Costs to the submitting Insured Releasee- (or his or her counsel) a s
follows:
(a) all payments shall be subject to (i) the
aggregate of the Implementation Period ERISA Claim Reserve Amount and the Post-
Implementation Period ERISA Claim Reserve Amount and (ii) any agreement agreed to
by Insured Releasees or final ruling pursuant to Section II .D.7 of the Settlement
Agreement; and
(b) with respect to any invoice for which notice
has been provided pursuant to Section 4.d(2) above, Securities Lead Counsel's and
ERISA 401(k) Lead Counsel's approval of the payment of such invoice ; provided that if
Securities Lead Counsel and/or ERISA 401(k) Lead Counsel disapprove any such invoice
(or portion of such invoice), Securities Lead Counsel and/or ERISA 401(k) Lead Counsel
shall, within five (5) business days following receipt of notice of the invoice, notify the
ERISA Escrow Agent of their disapproval and such dispute shall be resolved through the
Dispute Procedure; provided further that the ERISA Escrow Agent shall refrain from
paying such invoice (or portion of such invoice) until the dispute is resolved; provided
frtrther that if Securities Lead Counsel and/or ERISA 401(k) Lead Counsel fail to
disapprove all or a portion of an invoice within seven (7) business days after notice
16
pursuant to Section 4d(2) above has been provided , such invoice shall be deemed
approved in its entirety .
(4) Subject to Section 4 .d (3), within thirty (30)
business days following receipt of an invoice for Covered Claim Costs other than ERISA
Implementation Costs, the ERISA Escrow Agent shall (i) pay all Defense Costs identified
in the invoice, (ii) inform the insured Releasee of the ERISA Escrow Agent's decisio n
not to pay all or a portion of an invoice or (iii) inform the Insured Releasee of Securities
Lead Counsel's and/or ERISA 401(k) Lead Counsel's disapproval of all or a portion of
an invoice for which notice was provided to them pursuant to Section 4.d(2) above:
provided that, if any portion of an invoice is not approved, the ERISA Escrow Agent
shall pay that portion of the invoice approved by the ERISA Escrow Agent and (if
required by Section 4.d(2) above) by Securities Lead Counsel and ERISA 401(k) Lead
Counsel pursuant to this Section 4.d(4) .
e. ERISA Attorneys' Fees and Expenses Awards
(1) Within two (2) business days following th e
Approval Date, ERISA 401(k) Lead Counsel shall inform the ERISA Escrow Agent of
the occurrence of that date and provide the ERISA Escrow Agent with a copy of the
Court order setting out the ERISA Attorneys' Fees and Expenses Awards .
(2) Subject to the terms (including without limitation
the repayment provisions) set out in Section X .A of the Settlement Agreement, within
five (5) business days following the Approval Date, or such other date as the Court issues
an order setting out the ERISA Attorneys' Fees and Expenses Awards, the ERIS A
17
Escrow Agent shall pay to ERISA Consolidated Lead Counsel the ERISA Attorneys '
Fees and Expenses Awards .
f. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Final
Settlement Date, ERISA 401(k) Lead Counsel shall inform the ERISA Escrow Agent of
the occurrence of that date, with copies of such notice provided to the Remaining ERIS A
Insurer Part ies , ERISA 401 (k) Lead Counsel and Settling Defendants' Lead Counsel .
(2) The ERISA Escrow Agent, within forty-five (45 )
days following the Final Settlement Date, shall pay to Insured Releasees any Covered
Claim Costs for which invoices have been received as of the thirtieth (30th) day
following the Final Settlement Date ; provided that any invoices that are received after th e
thirtieth (30th:) day following Final Settlement Date shall be returned to the submittin g
Insured Releasee .
(3) Subject to making the payments required by Section
4.f(2) above and making the calculation required by Section 4 .a(5) above, within forty-
five (45) days following the Final Settlement Date, the ERISA Escrow Agent shall pa y
into the Cash Settlement ERISA Subaccount by wire transfer of immediately availabl e
funds, the Federal Policy Closing Balance and the Pender ERISA Closing Balance, plu s
interest calculated on each such balance, which interest is to be calculated (i) at th e
Interest Rate for the period starting on the fifth (5th) business day after the Preliminar y
Approval Date until and including the Approval Date and (ii) at the market rate provided
by the ERISA Insurance Escrow Account for the period starting the day following the
18
Approval Date until the date of the wire transfer of such funds pursuant to this Section
4.f(3) .
(4) If there are any remaining monies in any ERISA
Subaccount after the payments required by Section 4_f(3) above have been made and afte r
all applicable fees and expenses incurred in connection with the administration of th e
ERISA Insurance Escrow Account have been paid, such monies shall be returned to th e
ERISA Insurer Party on whose behalf the ERISA Subaccount had been established an d
maintained pursuant to Section 3 .a above.
g. Fees and Expenses
(1) The ERISA Escrow Agent shall be paid fees in the
amounts provided in Exhibit A. The ERISA Escrow Agent shall also be reimbursed fo r
reasonable expenses incurred in connection with this ERISA Escrow Agreement,
including with respect to the payment of any taxes due on any monies in the ERIS A
Account.
(2) Subject to Section 4 .g.(5) below, invoices for fees
and expenses shall be submitted by the ERISA Escrow Agent to the Remaining ERIS A
Insurer Parties and ERISA 401(k) Lead Counsel on a timely basis, and in no event later
than the month following the month in which the fees and expenses were incurred .
(3) Upon their receipt of an invoice for fees an d
expenses pursuant to Section 4.g(2) above, each of the Remaining ERISA Insurer Partie s
and ERISA 401(k) Lead Counsel shall, within ten (10) days from the date of the invoice,
advise the ERISA Escrow Agent whether they approve all or a portion of the fees and
19
expenses ; provided further that if Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel fail to disapprove all or a portion an invoice within fourteen (14) busines s
days after having been provided with same, such invoice shall be deemed approved in it s
entirety .
(4) Upon being notified of approval of an invoice for
fees and expenses both by all of the Remaining ERISA Insurer Parties and by ERISA
401(k) Lead Counsel, the ERISA Escrow Agent is authorized to pay to itself such fees
and expenses (or the approved portion of such fees and expenses) out of the appropriat e
ERISA Subaccount pursuant to the terms of Section 4 .a(l) above.
(5) Upon being notified of disapproval of an invoice (o r
any portion of an invoice) for fees and expenses either by any of the Remaining ERISA
Insurer Parties or by ERISA 401(k) Lead Counsel, the ERISA Escrow Agent (i) is
authorized to pay to itself any portion (if any) of the fees and expenses that the all of the
Remaining ERISA Insurer Parties and ERISA 402(k) Lead Counsel have approved and
(ii) may, in its discretion, submit any dispute with respect to the disapproved fees and
expenses to the Court pursuant to Section S.a below ; provided however, notwithstanding
Section 4.f, with respect to any dispute in connection with disapproved fees and expense s
relating to the final invoice submitted pursuant to Section 4 .g(6), the parties agree tha t
such dispute must be resolved before the ERISA Escrow Agent makes the payment into
the Cash Settlement Account pursuant to Section 41.
(6) Within twenty (20) business days following the
Final Settlement Date, the ERISA Escrow Agent shall submit its final invoice for fee s
20
and expenses to the Remaining ERISA Insurer Party and to ERISA 401(Ik) Lead Counsel .
Such final invoice shall include all accrued fees and expenses and all anticipated fees an d
expenses until the termination of this ERISA Escrow Agreement, including any fees an d
expenses expected to be incurred with respect to the payments to be made pursuant t o
Section 41.
h. Termination of Settlement Agreement
(1) If the Settlement Agreement is terminated pursuan t
to the terms of the Settlement Agreement, the Remaining ERISA Insurer Parties shall
promptly notify the ERISA Escrow Agent of such termination, which notification shall
include a signed certification from Settling Defendants' Lead Counsel that the Settlement
Agreement has been terminated, which certification shall not be unreasonably withheld ;
provided that if the Remaining ERISA Insurer Parties give notice of termination o f
settlement, but a signed certification from the Settling Defendants' Lead Counsel is no t
provided, then no further monies sha ll be paid and the ERISA Escrow Agent shall take al l
appropriate steps to hold the monies safe pursuant to Section 5 .c below while the dispute
as to this issue is resolved pursuant to the Dispute Procedure .
(2) Within five (5) business days following receipt of
notification of the termination of the Settlement Agreement pursuant to Section 41(l )
above, the ERISA Escrow Agent shall submit its final invoice to the Remaining ERIS A
Insurer Parties for fees and expenses . Such final invoice shall include all accrued fee s
and expenses and all anticipated fees and expenses expected to be incurred with respec t
to the payments to be made pursuant to this Section 4_h_ As to such final invoice, each o f
21
the Remaining ERISA Insurer Parties shall, within ten (10) days from the date of th e
invoice, advise the ERISA Escrow Agent whether it approves all or a portion of the fee s
and expenses .
(3) To the extent that, following termination of the
Settlement Agreement, the ERISA Escrow Agent receives, pursuant to Sectio n
I.E.l .yyyyy of the Settlement Agreement , any reimbursement with respect to the ERIS A
Initial Payment , the ERISA Escrow Agent shall deposit (or cause to be deposited) suc h
reimbursement in that ERISA Subaccount from which any payments required by thi s
ERISA Escrow Agreement are then currently being paid pursuant to Section 4 .a(1 )
above; provided that if such deposit of the reimbursement would cause such ERIS A
Subaccount to have insurance proceeds in excess of the amount deposited into the
account at its inception, the ERISA Escrow Agent shall deposit (or cause to be deposited)
that portion of such reimbursement that would be in excess of such insurance proceed s
into the ERISA Subaccount from which payments had been made prior to the time tha t
payments began to be made from the ERISA Subaccount then currently makin g
payments .
(4) Within twenty (20) business days following receip t
of notification of the termination of the Settlement Agreement pursuant to Section 4.h(2)
above, the ERISA Escrow Agent shall, subject to Section 4.h(5) below, pay to the
Remaining ERISA Insurer Parties, after subtracting (i) any approved outstanding fees an d
expenses incurred pursuant to Section 4 .g above, (ii) any disputed disapproved fees or
expenses with respect to which the ERISA Escrow Agent has submitted such dispute t o
22
the Court pursuant to Section 5 .a below and (iii) any payment required by Section
LE.i.yyyyy of the Settlement Agreement, the following amounts :
(a) to Federal, all monies (if any) remaining in
the Federal Subaccount; and
(b) to Pender, all monies (if any) remaining in
the Pender ERISA Subaccount .
(c) With respect to any disputed disapproved
fees and expenses subtracted from the ERISA Insurance Escrow Account pursuant to
Section 4 .h(4)(ii) above, the ERISA Escrow Agent shall continue to hold the amount of
such disapproved fees and expenses in trust until the dispute regarding such fees and
expenses is resolved pursuant to Section 5 below. Upon resolution of the dispute, the
ERISA Escrow Agent shall promptly give effect to the resolution reached regarding suc h
fees and expenses .
(5) The Remaining ERISA Insurer Parties may, in their
discretion, provide the ERISA Escrow Agent with instructions for distributing the
amounts set out in Section 4 .h.(4) above in a manner different from that set out in Sectio n
4.h(4) . If the Remaining ERISA Insurer Parties intend to provide such instructions, they
must notify the ERISA Escrow Agent of their intention to do so within five (5) busines s
days following the ERISA Escrow Agent's receipt of notification of the termination of
the Settlement Agreement. If the ERISA Escrow Agent receives such instructions from
the Remaining ERISA Insurer Parties, the ERISA Escrow Agent shall continue to hold all
ERISA Escrow Funds that would otherwise have been distributed pursuant to Sectio n
23
4.h.(4) in trust until such time as the ERISA Escrow Agent receives written instructions
from the Remaining ERISA Insurer Parties . Upon receipt of such instructions, which
instructions shall be endorsed by all Remaining ERISA Insurer Parties, the ERISA
Escrow Agent shall promptly pay out the proceeds described in Section 41(4) above
pursuant to the instructions received from the Remaining ERISA Insurer Parties pursuan t
to this Section 4.h(4) .
5. Settlement of Disputes
a . If a dispute regarding a payment (or a failure to make a
payment) from an ERISA Subaccount pursuant to Section 4 arises, the ERISA Escrow
Agent shall immediately inform the following of the dispute : (i) the insurer from whose
ERISA Subaccount the relevant payment has been made (or would be made) under
Section 4.a(I) above, (ii) Securities Lead Counsel, (iii) ERISA 401(k) Lead Counsel,
(iv) Settling Defendants' Lead Counsel and (v) (if the dispute involves a payment under
Sections 4 .b, 4 .c or 4.d above) the Insured Releasee (or his or her counsel) who submitted
the invoice for payment ; provided that any participation by Pender in the Dispute
Procedure with respect to any dispute arising under this Securities Insurers' Escrow
Agreement shall be subject to the Mediation Order and shall not override or supersed e
Section ME of the Settlement Agreement .
(1) If the dispute does not involve fees and expenses t o
be paid to the ERISA Escrow Agent and if the notified individuals and entities are able to
resolve the dispute among themselves, they shall so inform the ERISA Escrow Agent ,
24
and the insurer involved in the dispute shall instruct the ERISA Escrow Agent to effec t
the resolution .
(2) If the notified individuals and entities are unable to
resolve the dispute among themselves, or if the dispute involves the disapproval of fee s
and expenses to be paid to the ERISA Escrow Agent, the dispute shall be resolved
pursuant to the Dispute Procedur e
(3) Prior to the resolution of any dispute described in
Section 5 .a above, the ERISA Escrow Agent is authorized and directed to retain in the
appropriate ERISA Subaccount, without liability to anyone, that portion of the ERISA
Escrow Funds that are the subject of the dispute .
(4) The ERISA Escrow Agent has no duty to institute
or defend any proceeding described in Section 5 .a, unless requested to do so by any party
and then only on receiving full indemnity, in character reasonably satisfactory to th e
ERISA Escrow Agent, against any claims, liabilities and expenses relating to such
proceedings .
b . The ERISA Insurers Parties and ERISA 401(k) Lead
Counsel shall promptly notify each other, Securities Lead Counsel and Settling
Defendants' Lead Counsel of any claim by one or more of them that the ERISA Escro w
Agent has breached any term or condition of this ERISA Escrow Agreement other than
with respect to a payment under Section 4 . Such claim shall be resolved pursuant to the
Dispute Procedure.
25
C, If the ERISA Escrow Agent is uncertain as to its duties or
rights under this ERISA Escrow Agreement, or receives instructions , claims or demands
from a party that, in its opinion, conflict with the terms of this ERISA Escro w
Agreement, it may refrain from taking action in connection with the ERISA Escrow
Funds or the funds in the ERISA Insurance Escrow Account with respect to which such
uncertainty or conflict exists, until it is able to obtain a resolution of the issue pursuant to
the Dispute Procedure. During the period in which the issue remains unresolved, the
ERISA Escrow Agent's sole obligation with respect to the ERISA Escrow Funds that are
the subject of the dispute shall be to keep safely such ERISA Escrow Funds and related
books and records it holds under this ERISA Escrow Agreement ; provided that with
respect to all other ERISA Escrow Funds as to which there is no dispute, the ERISA
Escrow Agent shall be bound by the terms and conditions of this ERISA Escrow
Agreement, including the payment terms and conditions set out in Section 4 above .
d. EACH OF THE PARTIES IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OU T
OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR IT S
BREACH, TERMINATION OR VALIDITY . EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT:
(1) NO REPRESENTATIVE, AGENT O R
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY O R
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT O F
LITIGATION SEEK TO ENFORCE THIS WAIVER ;
26
(2) EACH SUCH PARTY UNDERSTAND AND HA S
CONSIDERED THE IMPLICATIONS OF THIS WAIVER ;
(3) EACH SUCH PARTY MAKES THIS WAIVE R
VOLUNTARILY; AND
(4) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUA L
WAIVERS AND CERTIFICATION IN THIS SECTION .
e. The payments made by Pender pursuant to the terms of this
ERISA Escrow Agreement and the Settlement Agreement will be made pursuant to a
settlement resulting from the mediation contemplated by the Mediation Order. These
payments shall vest this Court or any other court with subject matter jurisdiction onl y
over the payments made or caused to be made by Fender to the extent necessary t o
implement and give effect to this ERISA Escrow Agreement and the Settlement
Agreement and shall not constitute a basis for nor give rise to personal jurisdiction over
Pender.
6. Termination ofERISA Escrow Agreemen t
a. This ERISA Escrow Agreement (i) may be terminated b y
ERISA 401(k) Lead Counsel if the Preliminary Approval Date does not occur within on e
(1) year after the date of this ERISA Insurance Escrow Account, (ii) shall terminate in the
event that the Final Settlement Date has not occurred before January 1, 2008, unless the
parties agree to extend the date referenced in this Section 6 .a(ii) and (iii) shall terminat e
27
on the distribution of all of the ERISA Escrow Funds by the ERISA Escrow Agen t
pursuant to this ERISA Escrow Agreement .
7. Provisions Regarding the ERISA Escrow Agen t
a. The ERISA Escrow Agent has no duties or responsibilitie s
except those expressly provided in this Agreement . The ERISA Escrow Agent has no
liability under this ERISA Escrow Agreement except for its own bad faith, gross
negligence, willful misconduct or breach of this ERISA Escrow Agreement . It may rely
on any notice, instruction, certificate, statement, request, consent, confirmation,
agreement or other instrument which it reasonably believes to be genuine and to hav e
been signed or presented by a proper person or persons .
b . The ERISA Escrow Agent has no duties with respect to an y
agreement or agreements with respect to the ERISA Escrow Funds other than as provided
in this ERISA Escrow Agreement. The ERSIA Escrow Agent has no interest in the
ERISA Escrow Funds except as provided in this ERISA Escrow Agreement . This
Section 7 .b shall survive notwithstanding the termination of this ERISA Escrow
Agreement or the ERISA Escrow Agent's resignation or removal .
c . The ERISA Escrow Agent shall keep proper books of
record and account, and make full and correct entries of the receipts and disbursements in
the ERISA Account and ERISA Subaccounts .
d. In addition to the accountings that the ERISA Escrow
Agent shall provide pursuant to Sections 4.a(2) and 4 .a(4), the ERISA Escrow Agent
shall provide to one or more of the Remaining ERISA Insurer Parties and/or ERIS A
28
401(k) Lead Counsel, on written request and without additional cost, a statement of
transaction details on completion of any transaction involving the ERISA Insuranc e
Escrow Account
e. The ERISA Escrow Agent may resign as escrow agent b y
giving sixty (60) days notice by registered or certified mail to the Remaining ERIS A
Insurer Parties and ERISA 401(k) Lead Counsel, which notice the Remaining ERIS A
Part ies and ERISA 401(k) Lead Counsel shall provide to Securities Lead Counsel an d
Settling Defendants' Lead Counsel . Subject to Section 7 .g below, such resignation shal l
take effect at the end of such sixty (60) days or on the ERISA Escrow Agent's earlier
receipt of an instrument of acceptable executed by a successor ERISA escrow agent .
f. The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel may jointly remove the ERISA Escrow Agent by a notice signed by each
Remaining ERISA Insurer Party and ERISA 401(k) Lead Counsel and delivered by
registered or certified mail to the ERISA Escrow Agent . Such removal shall be effective
on the date set forth in such notice .
g. Notwithstanding anything in Sections 7 .e and 7.f, the
resignation or removal of the ERISA Escrow Agent shall not be effective unless and unti l
the Remaining ERISA Parties and ERISA 401(k) Lead Counsel jointly appoint a
successor ERISA escrow agent- If no instrument of acceptance signed by a successo r
ERISA escrow agent has been delivered to the ERISA Escrow Agent within sixty (60)
days after it delivers its notice of resignation or by the effective date of its removal, the
resigning or removed ERISA Escrow Agent may, at the Remaining ERISA Insurer
29
Parties' and ERISA 401(k) Lead Counsel's expense (which expense shall be paid out of
the ERISA Escrow Funds, petition the Court for appointment of a successor ERIS A
escrow agent . The ERISA Escrow Agent's resignation or removal shall not discharg e
any liability or obligations of the ERISA Escrow Agent arising before the effective date
of its resignation or removal .
h_ The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel shall jointly appoint a successor ERISA escrow agent to fill any vacanc y
resulting from (i) the ERISA Escrow Agent being dissolved or otherwise becomin g
incapable of acting, (ii) the ERISA Escrow Agent being taken over by a government
official, agency, department or board or (iii) the ERISA Escrow Agent's position
becoming vacant for any other reason .
i . The Remaining ERISA Insurer Parties and ERISA 401(k)
Lead Counsel shall cause any successor ERISA escrow agent appointed pursuant to thi s
ERISA Escrow Agreement to execute, acknowledge and deliver to the ERISA Escro w
Agent, and to the ERISA Insurer Parties, Securities Lead Counsel , ERISA 401(k) Lea d
Counsel and Settling Defendants' Lead Counsel, an instrument in writing accepting it s
appointment, at which point :
(1) The ERISA Escrow Agent shall deliver to it s
successor, as directed in writing by the Remaining ERISA Insurer Parties and ERIS A
401(k) Lead Counsel, all property and moneys it holds under this ERISA Escro w
Agreement, and the books of records and account (including the accounting described i n
Sections 4.a(2) and 4.a(4) above), and any other information, required by the successo r
30
ERISA escrow agent to perform its obligations under this escrow agreement among the
Remaining ERISA Insurer Parties, ERISA 401(k) Lead Counsel and such successor
ERISA escrow agent .
j. Pursuant to Sections IX.A.I .c,1X.A.2, IX.A.3, IX.B .I .c ,
IX.B.2 and IX.B.3 of the Settlement Agreement , Securities Lead Counsel , Securities
Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA Plaintiffs, Settling Defendants ,
Settling Defendants Counsel and Securities Class Members shall release the ERIS A
Escrow Agent with respect to all claims, damages and liabilities for anything done o r
omitted by the ERISA Escrow Agent in performing its duties under this ERISA Escro w
Agreement, except such claims that are based upon the ERISA Escrow Agent's bad faith ,
gross negligence, willful misconduct or breach of this ERISA Escrow Agreement .
k. The ERISA Escrow Agent shall not be liable for special ,
indirect or consequential loss or damage (including lost profits), even if the ERISA
Escrow Agent has been advised of the likelihood of such loss or damage and regardles s
of the form of action .
1 . The ERISA Escrow Agent is acting under this ERIS A
Escrow Agreement as a stakeholder only and is an independent contractor with respect to
each party . No provision of this ERISA Escrow Agreement is intended to create any
principal, joint venture, partnership or debtorlcreditor relationship between or among the
ERISA Escrow Agent and any of the parties . The parties hereto, for themselves and
anyone claiming under, by or through them with respect to the ERISA Escrow Account ,
31
release the Escrow Agent from any claim of self-dealing or conflict of interest which
could be asserted to the extent any settling party is an affiliate of the Escrow Agent .
8. General Matters
a. This ERISA Escrow Agreement shall be governed by and
interpreted according to the laws of the State of New York, excluding its conflict of laws
provisions . All disputes arising under this ERISA Escrow Agreement shall be resolved
through the Dispute Procedure .
b. This ERISA Escrow Agreement is binding on and shall
inure to the benefit of the parties' heirs, executors, administrators, legal representatives,
successors and permitted assigns .
C . This ERISA Escrow Agreement may be executed in one o r
more counterparts which, taken together, constitute one and the same instrument .
Execution by facsimile shall be fully and legally binding on a party .
d_ No amendment or discharge of this ERISA Escro w
Agreement, or waiver under it, shall be valid or binding unless set forth in writing and
duly signed by the party against whom enforcement of the amendment, discharge or
waiver is sought and by the ERISA Escrow Agent . Any such waiver shall waive only the
specific matter described in the writing and shall not impair the rights of the party
granting the waiver in any other respect or at any other time . Neither the waiver by a
party of a breach of a provision of this ERISA Escrow Agreement, nor the failure by a
party, on one or more occasions, to enforce a provision of this ERISA Escrow
Agreement, or to exercise a right or privilege under this ERISA Escrow Agreement, shall
32
constitute a waiver of any other breach of a similar nature, or a waiver of any of such
provisions, rights or privileges under this ERISA Escrow Agreement .
e. The invalidity or unenforceability of any provision of thi s
ERISA Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this ERISA Escrow Agreement in that jurisdiction or the
validity or enforceability of this ERISA Escrow Agreement (including that provision) in
any other jurisdiction . If any restriction or provision of this ERISA Escrow Agreement i s
held- unreasonable, unlawful or unenforceable in any respect, such restriction or provisio n
shall be interpreted, revised or applied in a manner that makes it lawful and enforceable
to the fullest extent possible under law .
f. Notices, requests, demands and other communications
under this ERISA Escrow Agreement shall be in writing and shall be deemed to hav e
been given (unless otherwise specifically provided for in this ERISA Escrow Agreement)
if delivered by hand, delivered by a nationally recognized overnight courier for next-da y
delivery, mailed (registered or certified mail, postage prepaid) or telecopied (whic h
telecopy is confirmed by a transmission receipt) :
If to Federal, then to
Jonathan Constine, Esq .Hogan & Hanson L.L.P .555 13th Street, N.W.Washington, D .C. 20004Telephone: (212) 637-5870Facsimile: (212) 637-5910
33
If to Pender , then to
Francis Kean, Esq.Barlow Lyde & GilbertBeaufort House15 St . Botolph StreetLondon, EC3A 7NJTelephone: 011-44-20-7643-8586Facsimile : 011-44-20-7071-911 0
If to the ERISA Escrow Agent, then to
Wachovia Bank, N .A.Attn: Howard Parker123 S. Broad StreetPA 4944Philadelphia, PA 19109Telephone (215) 670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then to
The Honorable Michael DolingerUnited States Magistrate Judge
Daniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile: (212) 805-7928
34
If to Securities Lead Counsel, then to :
Jay W_ Eisenhofer, Esq .Sidney S . Liebesman, Esq .Grant & Eisenhofer, P.A.1201 North Market StreetSuite 2100Wilmington, Delaware 19801Telephone : (302) 622-7000
Facsimile: (302) 622-7100
If to ERISA 401(k) Lead Counsel, then to :
Lynn Lincoln Sarko, Esq .Gary A. Gotto, Esq.Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, WA 98101-3052Telephone : (206) 623-1900Facsimile: (206) 623-3384
Thomas J. Hart, Esq .Marc A. Tenebaum, Esq .
Slevin & Hart, P .C .1625 Massachusetts Avenue, N .W .
Ralph C. Ferrara, Esq .Ann M. Ashton, Esq .Debevoise & Plimpton LLP555 13th Street, N .W.Suite 1100EWashington, D.C. 20004Telephone : (202) 383-8000Facsimile: (202) 383-811 8
35
If to an Insured Releasee (or his or her counsel), then to the address identified in th e
invoice submitted by or on behalf of the Insured Releasee . Notices, requests, demand s
and communications shall be deemed to have been given (i) on the date on which s o
hand-delivered (or, if not delivered before 5 :00 p .m. Eastern Time, on the next busines s
day), (it) on the next business day if delivered by a nationally recognized overnigh t
courier, ( iii) on the third business day after the date on which so mailed or (iv) on the date
on which telecopied and confirmed (or, if this does not occur before 5 :00 p.m. Eastern
Time on a business day, on the next business day) .
g. The ERISA Escrow Agent represents and warrants that
(i) this ERISA Escrow Agreement has been duly authorized, executed and delivered o n
its behalf and constitutes its legal, valid and binding obligation and (ii) its execution ,
delivery and performance of this ERISA Escrow Agreement does not and will not violat e
any statute, law, rule or regulation .
h . ERISA 401(k) Lead Counsel represents and warrants that
(i) they are authorized to execute and deliver this ERISA Escrow Agreement on behalf o f
ERISA Plaintiffs and, as authorized by the Court's December 13, 2002 order, on behalf
of ERISA Class Members and (ii) its execution , delivery and performance of this ERISA
Escrow Agreement does not and will not violate any statute, law, rule or regulation .
i . Jonathan Constine represents that (i) he is authorized t o
execute and deliver this ERISA Escrow Agreement on behalf of Federal an d
(ii) Federal's execution, delivery and performance of this ERISA Escrow Agreemen t
does not and will not violate any statute, law, rule or regulation .
36
j . Francis Kean represents that (i) he is authorized to execute
and deliver this ERISA Escrow Agreement on behalf of Pender and (ii) Pender' s
execution, delivery and performance of this ERISA Agreement does not and will no t
violate any statute, law, rule or regulation .
k. Each party shall take (or cause to be taken) such further
actions to execute, deliver and file (or cause to be executed, delivered or filed) suc h
further documents and instruments, and to obtain such consents, as may be necessary or
reasonable requested to effectuate fully the purposes, terms and conditions of this ERISA
Escrow Agreement .
1 . Except as provided in this ERISA Escrow Agreement, no
parties shall assign, encumber or otherwise transfer any of its rights and obligations under
this ERISA Escrow Agreement to any person without the consent of the other parties .
Any such purported assignment, encumbrance or other transfer shall be void and
unenforceable.
M. The ERISA Escrow Agent shall keep, and shall cause its
agents to keep, confidential the information it receives under this ERISA Escro w
Agreement, except for:
(1) information that is or becomes publicly known
other than as a result of a breach of this Section 8 .m;
(2) information obtained by the ERISA Escrow Agent
from sources other than an ERISA Insurer Party, Securities Lead Counsel, ERISA 401(k)
37
Lead Counsel, Settling Defendants' Counsel or an Insured Releasee (or his or he r
counsel) and not subject to a confidentiality obligation ;
(3) information requested or required to be disclose d
(i) by a statute, law, rule or regulation, (ii) to any government agency or regulatory bod y
having or claiming authority to regulate or oversee the ERISA Escrow Agent's business ,
(iii) under any subpoena, civil investigative demand or similar demand or request of a
court, regulatory authority, arbitrator or arbitration to which the ERISA Escrow Agent o r
any affiliate, or an officer, director, employer or shareholder of the ERISA Escrow Agen t
or such affiliate, is a party, or (iv) to any affiliate, independent or internal auditor, agent ,
employee or attorney of the ERISA Escrow Agent having a need to know the
information , provided that the ERISA Escrow Agent advises the recipient of the
confidential nature of the information being disclosed ; or
(4) any other disclosure authorized by the perso n
submitting such information .
n_ All time periods set forth herein shall be computed i n
calendar days unless otherwise expressly provided . In computing any period of time
prescribed or allowed by this ERISA Escrow Agreement or by order of court, the day o f
the act, event, or default from which the designated period of time begins to run shall not
be included. The last day of the period so computed shall be included, unless it is a
Saturday, a Sunday or a legal holiday, or, when the act to be done is the filing of a paper
in Court, a day on which weather or other conditions have made the office of the Clerk of
38
the Cou rt inaccessible , in which event the period shall ran until the end of the next day
that is not one of the aforementioned days .
o . All Insured Releasees are intended third -party bene ficiaries
wi th respect to Sections 4.b, 4 .c and 4 . d above and shall be en titled to enforce the terms
of this ERISA Escrow Agreement with respect to such provisions .
Executed this 19th day of March 2004.
FEDERAL INSURANCE COMP
By4effJ- r.4 jA . C av~s
Title: Q vt-~S , Grp vl n . 1
FENDER INSURANCE LIMfIED
By.Name :Title:
WACHOVIA BANK, NATIONALASSOCIA'I'ONas Escrow Agen t
By:Howard ParkerVice President
39
19-MAR-2004 21 :42 FROM BLG TO 970719244
the Court inaccessible , in which dvent the period shall run until the end of the next day
that is not one of the aforementioned days .
a . AIliInsurcd Releasees are intended third party beneficiaries
with respect to Sections 4 .b, 4.c and 4.d above and shall be entitled to enforce the terms
of this ERIS A Escrow Agm--ment with respect to such provisions .
Executed this 19t day of Mach 2004.
FEDERAL INSURANCE COMPANY
By,
Name:Title :
FENDER INSURANCE 12MM
Name: lac . .T • W ~`C.~ c r;
Title :
WACHOVIA BANK, NATIONALASSOCIATIO Nas Escrow Agen t
By :Howard ParkerVice President
39
P.01
3 '
1 • ,
e{ . s,
1
MI-ER ROHRBACK, LLP and SLEVIN& HART, P.C .as ERISA 401 (k) Lead Counsel
By:N Lyr✓~v L. io
it e: J<e [tom ~witi,r~bv- c K.
By. '42-tC, IA.N
Title: kj:-. .4- 4 rf , P
40
3
Exhibit G
WINNICK SECURITIES ESCROW AGREEMEN T
This WIN-NICK SECURITIES ESCROW AGREEMENT ( the "Escrow
Agreement" or the "Agreement") is entered into as of March , 2004 by and among
Gary Winnick, on behalf of himself and his affiliates ("Winnick") ; Grant & Eisenhofer
P.A. as Securities Lead Counsel in the Securities Action ("G&E") and Wachovia Bank ,
National Association, as escrow agent ("Escrow Agent") . (Winnick, G&E and Escro w
Agent and their respective successors as defined below are sometimes hereinafte r
referred to as the "Party" or "Parties .")
RECITALS
WHEREAS, over 50 putative class actions alleging securities law violations have
been filed against certain of Global Crossing Ltd .'s current and former officers, director s
and employees, including Winnick, and five putative class actions alleging securities la w
violations have been filed against certain of Asia Global Crossing Ltd .'s current an d
former officers, directors and employees , including Winnick; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E. Lynch of the United States District Court for th e
Southern . District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated these actions into the Securities Action with
G&E approved as Securities Lead Counsel ; and
WHEREAS, Securities Lead Plaintiffs , Securities Plaintiffs and Securities
Settling Defendants have agreed to a settlement of the Securities Action, subject to th e
completion of additional factual investigation and analysis by Securities Lead Counsel to
evaluate further the fairness, reasonableness and adequacy of the proposed settlement ;
and
WHEREAS, the terms and conditions of the settlement are contained in a March
, 2004 Stipulation of Settlement (and accompanying exhibits), a copy of which ha s
been provided to the Escrow Agent (the "Settlement Agreement") (Capitalized term s
contained herein which are not defined herein have the same meaning as ascribed to the m
in the Settlement Agreement) ; and
WHEREAS, Winnick has agreed to pay $30 million ("Winn ick Securitie s
Amount") together with interest thereon at the rates set forth in this Agreement as part o f
the consideration for the settlement of the Securities Action ; and
WHEREAS, pursuant to the terms of the Se tt lement Agreement, Winnick i s
required to deposit the Winnick Securities Amount into an escrow account within five (5)
business days preceding the hearing at which the Court will make a final decision
pursuant to Federal Rule of Civil Procedure 23 as to the fairness, reasonableness and
adequacy of the Settlement Agreement (the "Fairness Hearing") ;
NOW, THEREFORE, Winnick, G&E and the Escrow Agent agree as follows :
AGREEMENT
The Escrow Agent
(a) Appointment. Escrow Agent is hereby appointed to act as escrow agent in
accordance with the terms hereof, and Escrow Agent hereby accepts such appointment .
Escrow Agent shall have all the rights, powers, duties and obligations provided herein .
The sole duties of the Escrow Agent shall be to comply with this Escrow Agreement and
any instructions given pursuant hereto .
(b) Qualifications . Escrow Agent shall at all times be a bank, savings and
loan association or trust company in good standing, organized and doing business under
the laws of the United States or a State of the United States, having combined capital an d
surplus of not less than one hundred million dollars ($100,000,000) and shall be
authorized under the laws governing its organization to exercise corporate trust powers
and shall be authorized under such laws to enter into and perform this Agreement . If
Escrow Agent at any time ceases to have the foregoing qualifications, Escrow Agent will
give notice of resignation to Winnick and G&E, and a qualified successor escrow agent
will be appointed in accordance with Section 7 herein .
(c) Termination. This Agreement and the Escrow Account established
pursuant to Section 2 shall terminate on the distribution of all of the Escrowed Funds (as
defined in this Agreement) by the Escrow Agent pursuant to this Escrow Agreement .
2 . Establishment and Administration of the Escrow Account
(a) Within five (5) business days preceding the Fairness Hearing ("Escro w
Deposit Date"), Winnick shall transfer to the Escrow Agent the Winnick Securities
Amount (in the form of cash and/or securities) for deposit into an account held by Escrow
Agent (the "Escrow Account") . Thereafter the Escrow Agent shall invest and reinvest
the Escrowed Funds at the direction of the following Party or Parties during the following
time periods :
(i) from the Escrow Deposit Date until the Approval Date (the "Pre-
Approval Period"), the Escrow Agent shall follow the written directions of
Winnick respecting where the Escrowed Funds are to be invested
consistent with the terms of the Settlement Agreement . Absent such
direction, Escrow Agent will invest the Escrowed Funds in a federal
government backed fund earning at least the Federal Funds Rate (as
published in the Wall Street Journal under the description of "Money
Rates") so long as such investment is consistent with the terms of the
Settlement Agreement. Within twenty days following the Approval Date ,
the Escrow Agent shall pay to Winnick investment proceeds earned on the
Winnick Securities Amount as of the Approval Date in excess of the
proceeds which would have been earned at the Federal Funds Rate (as
published in the Wall Street Journal under the description of "Money
Rates"), if any .
ii) from the Approval Date until payment into the Cash Settlement
Securities Subaccount which shall occur within 45 days following the
Final Settlement Date (the "Post-Approval Period"), the Escrow Agent
shall follow the written direction of G&E respecting where the Escrowed
Funds are to be invested consistent with the terms of the Settlement
Agreement. Absent such direction, Escrow Agent shall maintain the
Escrowed Funds as invested as of and on the Approval Date so long as
such investment is consistent with the terms of the Settlement Agreement .
The total Escrowed Funds to be paid into the Cash Settlement Securities
Subaccount within 45 days following the Final Settlement Date shall be referred to herein
as the "Final Securities Payment ." The term "Escrowed Funds" referred to in this
provision and elsewhere in this Agreement means the initial deposit of the Winnick
Securities Amount, and the interest earnings accruing thereon from the investment
thereof less the amount of payments made from the Escrow Account in accordance with
the terms of this Escrow Agreement.
(b) Interest and earnings on the Escrowed Funds in accordance with this Agreement
will be added to the Escrow Account and applied to the payment of Escrow Agent fees
and expenses in accordance with Section 3 . For federal and state income tax purposes,
the amount earned on, or with respect to any investment of amounts in the Escrow
Account will be reported as (i) income of Winnick during the Pre-Approval Period and
(ii) as income of the Securities Class during the Post-Approval Period . Escrow Agent is
directed to file all required reports and returns with the appropriate taxing authorities
reflecting that the income earned on the amounts held in the Escrow Account is the
income of the above-referenced Parties during the above-referenced Periods as referred to
in the preceding sentence . The Parties will provide Escrow Agent with such information
as may be necessary to enable Escrow Agent to make any tax filings in accordance with
this Agreement .
3 . Fees and Expenses
(a) The Escrow Agent shall be paid fees in the amounts provided in Exhibit
A. The Escrow Agent shall also be reimbursed for reasonable expenses incurred in
connection with this Escrow Agreement .
(b) Subject to Section 4(f) below, invoices for fees and expenses incurred b y
the Escrow Agent within the Pre-Approval Period shall be submitted by the Escrow
Agent to Winnick and G&E for approval, and invoices for fees and services incurred by
the Escrow Agent in the Post-Approval Period shall be submitted to G&E only for
approval. All such invoices shall be submitted on a timely basis and in no event later
than 30 days after the end of the month in which the fees and expenses were incurred .
(c) Upon receipt within the Pre-Approval Period of an invoice for fees and
expenses pursuant to Section 4(b) above, Winnick and G&E shall, within ten (10) days of
such receipt, advise the Escrow Agent whether they approve all or a portion of the fees
and expenses, and if Winnick and G&E, or either of them, fail to advise Escrow Agent
whether the invoices are approved or disapproved within fourteen (14) business days of
their having been submitted, they shall be deemed approved .
(d) Upon receipt of an invoice for fees and expenses incurred by the Escrow
Agent within the Post-Approval Period, G&E shall, within ten (10) days of such receipt,
advise the Escrow Agent whether he approves all or a portion of the fees and expenses
incurred , and if G&E shall fail to advise Escrow Agent whether the invoices ar e
approved or disapproved within fourteen (14) business days of their having been
submitted, they shall be deemed approved .
(e) Upon being notified of approval of an invoice for fees and expenses, o r
upon the passage of the fourteen day period described above without notice of approva l
or disapproval, the Escrow Agent shall deduct such fees and expenses (or the approve d
portion of such fees and expenses) from the Escrow Account pursuant to the terms o f
Section 4(a) above .
(f) Upon being notified of disapproval of an invoice (or any portion of an
invoice) for fees and expenses, the Escrow Agent may, at its discretion, submit th e
dispute to the Court pursuant to Section 6 below .
(g) Within twenty (20) days following the Final Settlement Date, the Escro w
Agent shall submit its final invoice for fees and expenses to G&E .
4 . Payments of Escrowed Funds
Within forty-five days following the Final Settlement Date, G&E shall instruct th e
Escrow Agent to pay, and the Escrow Agent shall pay into the Cash Settlement Securitie s
Subaccount, by wire transfer of immediately available funds, the Final Securitie s
Payment .
5 . Termination of Settlement Agreemen t
(a) If the Settlement Agreement is terminated pursuant to Section XIII of the
Settlement Agreement, Winnick and G&E shall promptly notify the Escrow Agent i n
writing of such termination. In the event that any dispute arises between Winnick an d
any other party to the Settlement Agreement (including G&E) concerning the terminatio n
of the Settlement Agreement and the return of the Escrowed Funds to Winnick base d
thereon pursuant to this Section, then such disputed issues(s) shall be promptly submitted
to the Court and resolved pursuant to the Dispute Procedure, as such term is defined in
the Settlement Agreement. (with copies of submissions under the Dispute Procedure to
go to Winnick, G&E and Settling Defendants' Lead Counsel) . During the period in
which such disputed issue(s) remain unresolved under the Dispute Procedure, the Escrow
Agent shall continue to follow the terms of this Escrow Agreement unless doing so would
impact the issue in dispute .
(b) Within five (5) business days of receiving notification of the termination
of the Settlement Agreement pursuant to Section 6(a) above, the Escrow Agent shall
promptly release and return to Winnick all Escrowed Funds, after subtracting any
outstanding fees and expenses incurred pursuant to Section 4 hereof .
6 . Se tt lement of Disputes
(a) If the Escrow Agent is uncertain as to its duties or rights under this Escrow
Agreement, or receives instructions, claims or demands from Winnick and G&E (during
the Pre-Approval Period) or G&E only (during the Post-Approval Period) that, in its
opinion, conflict with the terms of this Escrow Agreement, it may refrain from taking
action, until it is able to obtain a resolution of the issue . It shall obtain a resolution of
such issue by submitting the issue to the Court for resolution pursuant to the Dispute
Procedure (with copies of submissions under the Dispute Procedure to go to Winnick,
G&E and Settling Defendants' Lead Counsel) . During the period in which the issue
remains unresolved under the Dispute Procedure, the Escrow Agent shall continue to
follow the terms of this Agreement unless doing so would impact the issue(s) in dispute .
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF, RELATIN G
TO OR IN CONNECTION WITH THIS AGREEMENT, OR ITS BREACH,
TERMINATION OR VALIDITY . EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT :
(c) NO REPRESENTATIVE, AGENT OR ATTORNEY FOR ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION SEEK T O
ENFORCE THIS WAIVER ;
(d) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERE D
THE IMPLICATIONS OF THIS WAIVER;
(e) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY ; AND
(f) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THI S
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AN D
CERTIFICATION IN THIS SECTION .
7 . Provisions Regarding the-Escrow Agent
(a) The Escrow Agent has no duties or responsibilities except those expressl y
provided in this Escrow Agreement- The Escrow Agent has no liability under this
Escrow Agreement except for its own bad faith, gross negligence, or willful misconduct .
It may rely on any notice, instruction, certificate, statement, request, consent ,
confirmation, agreement or other instrument which it reasonably believes to be genuin e
and to have been signed or presented by a proper person or persons .
(b) The Escrow Agent has no duties with respect to any agreement or
agreements with respect to the Escrowed Funds other than as provided in this Escrow
Agreement . The Escrow Agent has no interest in the Escrowed Funds except as provided
in this Escrow Agreement . This Section 7(b) shall survive notwithstanding the
termination of this Escrow Agreement or the Escrow Agent's resignation or removal .
(c) The Escrow Agent shall keep proper books of record and account, and
make full and correct entries of the receipts and disbursements in the Escrow Account .
(d) The Escrow Agent may resign as escrow agent by giving sixty (60) days
notice by registered or certified mail to Winnick and G&E during the Pre-Approval
Period and to G&E only during the Post-Approval Period, which notice in each instance
shall also be provided to Securities Lead Counsel and Settling Defendants' Lead Counsel .
Subject to Section 7(g) below, such resignation shall take effect at the end of such sixty
(60) days or on the Escrow Agent's earlier receipt of an instrument of acceptable form
executed by a successor escrow agent .
(e) Winnick and G&E (during the Pre-Approval Period) or G&E alone
(during the Post-Approval Period) may remove the Escrow Agent by a signed notice
delivered by registered or certified mail to the Escrow Agent .
(f) Notwithstanding anything in Sections 7(e) and 7(f), the resignation o r
removal of the Escrow Agent shall not be effective unless and until Winnick and G&E
(during the Pre-Approval Period) or G&E alone (during the Post-Approval Period
appoints a successor escrow agent . In each instance, Winnick and G&E (during the Pre-
Approval Period) or G&E alone (during the Post-Approval Period) shall consult with,
and obtain the approval of, Settling Defendants' Lead Counsel prior to appointing a
successor escrow agent . If no instrument of acceptance signed by a successor escrow
agent has been delivered to the Escrow Agent within sixty (60) days after it delivers its
notice of resignation or it receives a notice of removal, the resigning or removed Escrow
Agent may petition the Court for appointment of a successor escrow agent . The Escrow
Agent's resignation or removal shall not discharge any liability or obligations of the
Escrow Agent arising before the effective date of its resignation or removal .
(g) Winnick and G&E (during the Pre-Approval Period) or G&E alone
(during the Post-Approval Period) shall (upon consultation with, and the approval of,
Settling Defendants' Lead Counsel) appoint a successor escrow agent to fill any vacancy
resulting from (i) the Escrow Agent being dissolved or otherwise becoming incapable of
acting, (ii) the bank or trust company acting as the Escrow Agent being taken over by a
government official, agency, department or board or (iii) the Escrow Agent's position
becoming vacant for any other reason .
(h) Every successor escrow agent appointed under this Escrow Agreement
shall execute, acknowledge and deliver to its predecessor, and also to Winnick and G&E
(during the Pre-Approval Period) or G&E alone (during the Post-Approval Period), an
instrument in writing accepting its appointment under this Escrow Agreement, at which
point :
(1) the successor escrow agent, without further act, shall become fully
vested with the rights, immunities and powers, and subject to the duties and obligation of
its predecessor Escrow Agent as if originally named in this Escrow Agreement ; and
(2) every predecessor escrow agent shall deliver to its successor, a s
directed in writing by Winnick and G&E (during the Pre-Approval Period), G&E alon e
(during the Post-Approval Period) or the successor escrow agent, all property, monies
and other assets it holds under this Escrow Agreement, and the books of records an d
account, and any other information, required properly to perform the escrow agent' s
obligations under this Escrow Agreement .
(i) Pursuant to Section - of the Settlement Agreement, Securities Lead
Counsel, Securities Lead Plaintiffs, Settling Defendants, Settling Defendants Counsel and
Securities Class Members (the "Settling Parties") release the Escrow Agent with respect
to all claims, damages and liabilities for anything done or omitted by the Escrow Agent i n
performing its duties under this Escrow Agreement, except such claims that are base d
upon the Escrow Agent's bad faith, gross negligence or willful misconduct .
{j) The Escrow Agent shall not be liable for special, indirect or consequential
loss or damage (including lost profits), even if the Escrow Agent has been advised of th e
likelihood of such loss or damage and regardless of the form of action .
(k) The Escrow Agent is acting under this Escrow Agreement as a stakeholde r
only and is an independent contractor with respect to Winnick and G&E . No provision of
this Escrow Agreement is intended to create any principal, joint venture, partnership o r
debtor/creditor relationship between or among the Escrow Agent, Win nick and/or G&E .
The Parties hereto, for themselves and anyone claiming under, by or through them with
respect to the Escrow Account, release the Escrow Agent from any claim of self dealing
or conflict of interest that could be filed to the extent any Settling Party is an affiliate o f
the Escrow Agent.
(1) The Escrow Agent represents and warrants that (i) this Escrow Agreemen t
has been duly authorized, executed and delivered on its behalf and constitutes its legal ,
valid and binding obligation and (ii) its execution, delivery and performance of this
Escrow Agreement does not violate any statute, law, rule or regulation applicable to it .
8 . Successors to Winnick
In the event of the death or disability of Winnick, or during any temporary
inability of Winnick to act hereunder, all rights of Winnick under this Agreement,
including without limitation the right to approve expenses for disbursement hereunder
and to direct the payment or distribution of funds from the Escrow Account, shall pass to
and be fully exercisable by Winnick's wife, Karen Winnick, and, in the event or for such
period that she shall for any such reason be unable to exercise such rights, by the then-
serving successor trustee of the GKW Trust .
9 . General Matters
(a) This Escrow Agreement shall be governed by and interpreted according t o
the laws of the State of New York, including its conflict of laws provisions .
(b) This Escrow Agreement is binding on and shall inure to the benefit of th e
Parties' heirs, executors, administrators, legal representatives, successors and permitte d
assigns .
(c) This Escrow Agreement may be executed in one or more counterparts
which, taken together, constitute one and the same instrument . Execution by facsimile
shall be fully and legally binding on a Party .
(d) No amendment or discharge of this Escrow Agreement, or waiver under it,
shall be valid or binding unless set forth in writing and duly signed by Winnick, G&E
and the Escrow Agent .
(e) The invalidity or unenforceability of any provision of this Escrow
Agreement in any jurisdiction shall not affect the validity or enforceability of the rest o f
this Escrow Agreement in that jurisdiction or the validity or enforceability of this Escrow
Agreement (including that provision) in any other jurisdiction . If any restriction or
provision of this Escrow Agreement is held unreasonable, unlawful or unenforceable in
any respect, such restriction or provision shall be interpreted, revised or applied in a
manner that makes it lawful and enforceable to the fullest extent possible under law .
(f) Notices, requests, demands and other communications under this Escro w
Agreement shall be in writing and shall be deemed to have been given (unless otherwise
specifically provided for in this Escrow Agreement) if delivered by hand, delivered by a
nationally recognized overnight courier for next-day delivery, mailed (registered or
certified mail, postage prepaid) or telecopied (which telecopy is confirmed by a
transmission receipt) :
If to Winnick, then to
Gary Winnickc/o Pacific Capital Group1999 Avenue of the Stars, 39th FloorLos Angeles, California 90067Telephone :Facsimile :
With copies to
Gerry Ginsberg, Esq .c/o Pacific Capital Group1999 Avenue of the Stars, 39`' FloorLos Angeles, California 90067Telephone :Facsimile :
If to the Escrow Agent, then to
Wachovia Bank, N.A.Attn: Howard Parker123 S. Broad StreetPA 4944Philadelphia, PA 19109Telephone (215) 670-4541Facsimile (215) 670-473 3
If to Magistrate Judge Michael Dolinger, then to
The Honorable Michael DolingerUnited States Magistrate JudgeDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile: (212) 805-7928
If to G&E, then to :
Jay W. Eisenhofer, Esq .Grant & Eisenhofer, P .A.1201 North Market StreetSuite 210 0Wilmington, Delaware 1 9801Telephone: (302) 622-7000Facsimile : (302) 622-7100
If to Settling Defendants Lead Counsel, then to :
Ralph C. Ferrara, Esq.Debevoise & Plimpton LLP555 13th Street, N .W .Suite 1100EWashington, D .C . 20004Telephone : (202) 383-8000Facsimile: (202) 383-811 8
Notices, requests, demands and communications shall be deemed to have been given (i)
on the date on which so hand-delivered (or, if not delivered before 5 p.m. ET, on the next
business day), (ii) on the next business day if delivered by a nationally recognize d
overnight courier, (iii) on the third business day after the date on which so mailed or (iv)
on the date on which telecopied and confirmed (or, if this does not occur before 5 p .m .
ET on a business day, on the next business day) .
(g) Each Party shall take (or cause to be taken) such further actions to execute ,
deliver and file (or cause to be executed, delivered or filed) such further documents an d
instruments, and to obtain such consents, as may be necessary or reasonably requested to
effectuate fully the purposes, terms and conditions of this Escrow Agreement .
(h) Except as provided in this Escrow Agreement, no Parties shall assign ,
encumber or otherwise transfer any of its rights and obligations under this Escro w
Agreement to any person without the consent of the other Parties . Any such purporte d
assignment, encumbrance or other transfer shall be void and unenforceable .
(i) The Escrow Agent shall, and shall cause its agents , to keep confidentia l
the information it receives under this Escrow Agreement, except for :
(1) information that is or becomes publicly known other than as a
result of a breach of this Section 9(i) ;
(2) information obtained by the Escrow Agent from sources other tha n
Winnick and not subject to a confidentiality obligation ; or
(3) information requested to be disclosed (i) by a statute, law, rule o r
regulation, (ii) to any government agency or regulatory body having or claiming authorit y
to regulate or oversee the Escrow Agent's business, (iii) under any subpoena, civi l
investigative demand or similar demand or request of a court, regulatory authority ,
arbitrator or arbitration to which the Escrow Agent or any affiliate, or an officer, director,
employer or shareholder of the Escrow Agent or such affiliate, is a party, or (iv) to any
affiliate, independent or internal auditor, agent, employee or attorney of the Escro w
Agent having a need to know the information, provided that the Escrow Agent advise s
the recipient of the confidential nature of the information being disclosed .
() All time periods set forth herein shall be computed in calendar days unles s
otherwise expressly provided. In computing any period of time prescribed or allowed b y
this Agreement or by order of court, the day of the act, event, or default from which the
designated period of time begins to run shall not be included. The last day of the period
so computed shall be included, unless it is a Saturday, a Sunday or a legal holiday, or,
when the act to be done is the filing of a paper in Court, a day on which weather or other
conditions have made the office of the Clerk of the Court inaccessible, in which event th e
period shall run until the end of the next day that is not one of the aforementioned days .
As used in this Section, "legal holiday" includes New Year's Day, the observance of
Birthday of Martin Luther King, Jr_, Presidents' Day, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day and any
other day appointed as a federal or New York state holiday .
Executed this day of March _, 2004 .
Jay Eisenhofer, Esq .as Securities Lead Counsel
Gary Winnick
Wachovia Bank, N.A .as Escrow Agent
By-Name-Title :
Exhibit H
SIMPSON THACHER ESCROW AGREEMEN T
This SIMPSON THACHER ESCROW AGREEMENT is entered into as of
March , 2004 by and among Simpson Thacher, Grant & Eisenhofer, P .A., a s
Securities Lead Counsel, and Wachovia Bank, National Association ("Wachovia Bank") ,
as escrow agent .
WHEREAS, over 50 putative class actions alleging securities law violations hav e
been filed against certain of Global Crossing Ltd .'s current and former officers, director s
and employees, and five putative class actions alleging securities law violations have
been filed against certain of Asia Global Crossing Ltd .'s current and former officers ,
directors and employees; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E . Lynch of the United States District Court for the
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated these actions into the Securities Action; and
WHEREAS, 17 putative class actions were filed against certain of Global
Crossing Ltd.'s current and former officers, directors and employees and, as to some of
the cases, against the relevant ERISA Plan and against Global Crossing Ltd . alleging
ERISA violations on behalf of those who participated or have an interest in certai n
ERISA Plans; and
WHEREAS, the Judicial Panel on Multidistrict Litigation centralized all of thes e
actions before the Honorable Gerard E. Lynch of the United States District Court for th e
Southern District of New York for coordinated or consolidated pretrial proceedings ; and
WHEREAS, the Court consolidated 15 of the putative class actions alleging
ERISA violations into the ERISA Consolidated Action, leaving two of the putative clas s
actions that also allege ERISA violations unconsolidated ; and
WHEREAS, pursuant to the terms and conditions of a March - 2004 Settlement
Agreement, Simpson Thacher will be released from the Released Claims pursuant to th e
terms and conditions of such Settlement Agreement ;
WHEREAS, pursuant to the terms and conditions of such Settlement Agreement,
Simpson Thacher is required to deposit the Simpson Thacher Amount into an escro w
account within twenty five (25) business days following the Court's preliminary approva l
of the Settlement Agreement .
NOW, THEREFORE , Simpson Thacher , Securities Lead Counsel and the
Simpson Thacher Escrow Agent agree as follows :
1 . Definitions and Interpretation s
a. As used in this Simpson Thacher Escrow Agreement,
capitalized terms either (i) have the same meaning as ascribed to them in the Settlement
Agreement or (ii) have the following meanings :
(1) "business day" means a day other than a Saturday ,
Sunday or a "legal holiday ," as that term is defined in Section XIV.HH of the Settlemen t
Agreement-
b. A reference to a party means a party to this Agreement .
c . Unless stated otherwise, a reference to a Section means a
Section of this Agreement .
d. The plural shall include the singular and vice versa.
e. A reference to "including" shall be deemed to be followe d
by "without limitation . "
f. Section headings in this Simpson Thacher Escro w
Agreement are for convenience only and shall not be construed as part of this Simpso n
Thacher Escrow Agreement .
2. Appointment of Simpson Thacker Escrow Agent
a. Simpson Thacher and Securities Lead Counsel hereb y
appoint Wachovia Bank to act as the Simpson Thacher Escrow Agent and Wachovia
Bank hereby accepts this appointment and agrees to act as the Simpson Thacher Escro w
Agent pursuant to the terms and conditions set out in this Simpson Thacher Escro w
Agreement.
3 . Establishment of Simpson Thacher Escrow Accoun t
a. Within twenty-five (25) business days following th e
Preliminary Approval Date, Simpson Thacher shall pay to the Simpson Thacher Escro w
Agent, by wire transfer of immediately available funds, the Simpson Thacher Amount .
b_ The Simpson Thacher Escrow Agent, promptly after
receiving the cash described in Section 3 .a above, shall establish the Simpson Thache r
Escrow Account. The Simpson Thacher Escrow Agent shall promptly notify Securitie s
Lead Counsel and Simpson Thacher of the receipt of such cash and the establishment of
the Simpson Thacher Escrow Account .
c. The Simpson Thacher Escrow Agent is instructed an d
authorized to establish the Simpson Thacher Escrow Account as a cash deposit account
that pays interest at no less than the Interest Rate .
d. The Simpson Thacher Escrow Agent shall hold the contents
of the Simpson Thacher Escrow Account in trust in the Simpson Thacher Escrow
Account and shall not withdraw any contents from the Simpson Thacher Escrow Accoun t
or allow such contents to be withdrawn except as provided in this Simpson Thache r
Escrow Agreement. The contents of the Simpson Thacher Escrow Account shall be held
only for the purposes set forth, and subject to the terms and conditions in, this Simpso n
Thacher Escrow Agreement, and shall not be subject to any lien, attachment, trusteeshi p
or any other judicial process . Unless specifically provided in the Settlement Agreement
or in this Simpson Thacher Escrow Agreement, no third parties or their respectiv e
creditors (including third-party individuals or entities unrelated to Global Crossing Ltd . )
shall have any right to, or claim respecting, or interest in the contents of the Simpson
Thacher Escrow Account .
e. The Simpson Thacher Escrow Agent shall make or cause to
be made all of the payments described in this Simpson Thacher Escrow Agreement .
4. Payment of Simpson Thacher Amount Into Cash Settlemen t
Account
a. Payment into Cash Settlement Accoun t
(1) Within two (2) business days following the Fina l
Settlement Date, Securities Lead Counsel shall inform the Simpson Thacher Escrow
Agent of the occurrence of that date, with copies of such notice provided to Simpson
Thacher and Davis Polk & Wardwell .
(2) Within forty-five (45) days following the Fina l
Settlement Date, Simpson Thacher shall instruct the Simpson Thacher Escrow Agent to
pay and such Escrow Agent shall pay into the Cash Settlement Securities Subaccount b y
wire transfer of immediately available funds, the Simpson Thacher Payment .
b. Fees and Expenses
(1) The Simpson Thacher Escrow Agent shall be paid
fees in the amounts provided in Exhibit A . The Simpson Thacher Escrow Agent shal l
also be reimbursed for reasonable expenses incurred in connection with this Simpson
Thacher Escrow Agreement, including with respect to the payment of any taxes due on
any monies in the Securities Account .
(2) Subject to Section 4 .b.(5) below, invoices for fee s
and expenses shall be submitted by the Simpson Thacher Escrow Agent to Simpso n
Thacher and Securities Lead Counsel on a timely basis, and in no event later than th e
month following the month in. which the fees and expenses were incurred .
(3) Upon their receipt of an invoice for fees and
expenses pursuant to Section 4 .b(2) above, Simpson Thacher and Securities Lead
Counsel shall, within ten (10) days from the date of the invoice, advise the Simpso n
Thacher Escrow Agent whether they approve all or a portion of the fees and expenses .
(4) Upon being notified of approval of an invoice fo r
fees and expenses both by Simpson Thacher and by Securities Lead Counsel, th e
Simpson Thacher Escrow Agent is authorized to pay to itself such fees and expenses (or
the approved portion of such fees and expenses) out of the Simpson Thacher Escrow
Account .
(5) Upon being notified of disapproval of an invoice (o r
any portion of an invoice) for fees and expenses either by Simpson Thacher or by
Securities Lead Counsel, the Simpson Thacher Escrow Agent (i) is authorized to pay to
itself any portion (if any) of the fees and expenses that Simpson Thacher and Securities
Lead Counsel have approved and (ii) may, in its discretion, submit any dispute with
respect to the disapproved fees and expenses to the Court pursuant to Section 5 .a below;
provided however, notwithstanding Section 4 .a, with respect to any dispute in connection
with disapproved fees and expenses relating to the final invoice submitted pursuant to
Section 4.b(6), the parties agree that such dispute must be resolved before the Simpson
Thacher Escrow Agent makes the payment into the Cash Settlement Account pursuant to
Section 4 .a .
(6) Within twenty (20) business days following the
Final Settlement Date, the Simpson Thacher Escrow Agent shall submit its final invoice
for fees and expenses to Simpson Thacher and to Securities Lead Counsel . Such final
invoice shall include all accrued fees and expenses and all anticipated fees and expenses
until the termination of this Simpson Thacher Escrow Agreement, including any fees and
expenses expected to be incurred with respect to the payments to be made pursuant to
Section 4 .a .
C. Termination of Settlement Agreement
(1) If Simpson Thacher terminates the Settlemen t
Agreement pursuant to the terms thereof, Simpson Thacher may send a signed and
certified notification of such termination to the Simpson Thacher Escrow Agent,
instructing the Simpson Thacher Escrow Agent to pay all contents of the Simpson
Thacher Escrow Account to Simpson Thacher pursuant to this Section 4 .c .
Notwithstanding anything to the contrary in the Settlement Agreement or in this Simpson
Thacher Escrow Agreement, or in any other agreement of any kind, in the event that
Simpson Thacher sends such a notification of termination to the Simpson Thacher
Escrow Agent, (i) the Simpson Thacher Escrow Agent shall hold the contents of the
Simpson Thacher Escrow Account in trust solely for Simpson Thacher and such contents
shall not be subject to any lien, attachment, trusteeship or any other judicial process ; and
(ii) no entity or person (other than Simpson Thacher), including any party to this Simpson
Thacher Escrow Agreement or to the Settlement Agreement or any other entity or person ,
or any creditor of any of the foregoing, shall have any right to, or claim respecting, or
interest in the contents of the Simpson Thacher Escrow Account, and such contents shall
be held in trust for Simpson Thacher provided, however, that the Simpson Thacher
Escrow Agent may be entitled to deduct certain of its fees and expenses from such
contents to the extent provided by this Simpson Thacher Escrow Agreement .
(2) Within three (3) business days following receipt of
notification of the termination of the Settlement Agreement pursuant to Section 4 .c(l)
above, the Simpson Thacher Escrow Agent shall submit its final invoice to Simpson
Thacher for fees and expenses . Such final invoice shall include all accrued fees and
expenses and all anticipated fees and expenses expected to be incurred with respect to the
payments to be made pursuant to this Section 4 .c. As to such final invoice, Simpson
Thacher shall, within ten (10) days from the date of the invoice, advise the Simpson
Thacher Escrow Agent whether it approves all or a portion of the fees and expenses .
(3) Within five (5) business days following receipt o f
notification of the termination of the Settlement Agreement pursuant to Section 4 .c(1)
above, the Simpson Thacher Escrow Agent shall, subject to Section 4 .c(4) below, pay to
Simpson Thacher, after subtracting (i) any approved outstanding fees and expenses
incurred pursuant to Section 4.b above, and (ii) any disputed disapproved fees or
expenses with respect to which the Simpson Thacher Escrow Agent has submitted such
dispute to the Court pursuant to Section 5 .a below, all contents of the Simpson Thacher
Escrow Account by wire transfer of immediately available funds . Notwithstanding
Section 5 .c of this Simpson Thacher Escrow Agreement, the Simpson Thacher Escrow
Agent shall be entitled to and shall conclusively rely on any notification of termination of
the Settlement Agreement sent by Simpson Thacher pursuant to Section 4 .c(l) above, and
shall promptly pay the contents of the Simpson Thacher Escrow Account to Simpson
Thacher pursuant to this Section 4 .c(3) irrespective of any objection, instruction, claims
or demands from any person or party other than Simpson Thacher, and without liability
of any kind, unless expressly prohibited from doing so by a specific order of a court of
competent jurisdiction .
(4) With respect to any disputed disapproved fees and
expenses subtracted from the Simpson Thacher Escrow Account pursuant to Section
4.c(3)(ii) above, the Simpson Thacher Escrow Agent shall continue to hold the amount of
such disapproved fees and expenses in trust until the dispute regarding such fees and
expenses is resolved pursuant to Section 5 below. Upon resolution of the dispute, the
Simpson Thacher Escrow Agent shall promptly give effect to the resolution reached
regarding such fees and expenses .
5. Settlement of Disputes
a. In the event a dispute arises under this Simpson Thacher
Escrow Agreement, including any dispute that is to be resolved pursuant to the Dispute
Procedure, the part ies involved in the dispute shall immediately notify each of (i) the
Simpson Thacher Escrow Agent ; (ii) Simpson Thacher, (iii) Securities Lead Counsel, and
(iv) Davis Polk & Wardwell .
(1) If the dispute does not involve fees and expenses to
be paid to the Simpson Thacher Escrow Agent and if the notified individuals and entitie s
are able to resolve the dispute among themselves, they shall so inform the Simpso n
Thacher Escrow Agent, and Simpson Thacher shall instruct the Simpson Thacher Escro w
Agent to effect the resolution.
(2) If the notified individuals and entities are unable to
resolve the dispute among themselves, or if the dispute involves the disapproval of fee s
and expenses to be paid to the Simpson Thacher Escrow Agent, the dispute shall b e
resolved pursuant to the Dispute Procedure .
(3) Prior to the resolution of any dispute described i n
Section 5 .a(I) or (2) above, the Simpson Thacher Escrow Agent is authorized and
directed to retain in the Simpson Thacher Escrow Account, without liability to anyone ,
that portion of the Simpson Thacher Amount that is the subject of the dispute .
(4) The Simpson Thacher Escrow Agent has no duty t o
institute or defend any proceeding described in Section 5 .a, unless requested to do so by
Simpson Thacher or Securities Lead Counsel and then only on receiving an indemnity, in
character reasonably satisfactory to the Simpson Thacher Escrow Agent, against any
claims, liabilities and expenses relating to such proceedings from Simpson Thacher
and/or Securities Lead Counsel on behalf of Securities Lead Plaintiffs and/or Securitie s
Plaintiffs .
b. Simpson Thacher and Securities Lead Counsel shal l
promptly notify each other of any claim by one or more of them that the Simpson
Thacher Escrow Agent has breached any term or condition of this Simpson Thacher
Escrow Agreement . Such claim shall be resolved pursuant to the Dispute Procedure .
Except as to the duties or rights imposed by Section 4 .c of
this Simpson Thacher Escrow Agreement, if the Simpson Thacher Escrow Agent is
uncertain as to its duties or rights under this Simpson Thacher Escrow Agreement, or
receives instructions, claims or demands from a party that, in its opinion, conflict with the
terms of this Simpson Thacher Escrow Agreement, it may refrain from taking action in
connection with the Simpson Thacher Amount or the funds in the Simpson Thacher
Escrow Account with respect to which such uncertainty or conflict exists, until it is able
to obtain a resolution of the issue pursuant to the Dispute Procedure . During the period
in which the issue remains unresolved, the Simpson Thacher Escrow Agent's sole
obligation with respect to the portion of the Simpson Thacher Amount that is the subject
of the dispute shall be to keep safely such portion of the Simpson Thacher Amount and
related books and records it holds under this Simpson Thacher Escrow Agreement ;
provided that with respect to all other portions of the Simpson Thacher Amount as to
which there is no dispute, the Simpson Thacher Escrow Agent shall be bound by the
terms and conditions of this Simpson Thacher Escrow Agreement, including the payment
terms and conditions set out in Section 4 above .
d. EACH OF THE PARTIES IRREVOCABLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT
OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, OR ITS
BREACH, TERMINATION OR VALIDITY. EACH PARTY CERTIFIES AN D
ACKNOWLEDGES THAT :
(1) NO REPRESENTATIVE, AGENT OR
ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY O R
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION SEEK TO ENFORCE THIS WAIVER ;
(2) EACH SUCH PARTY UNDERSTANDS AN D
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER ;
(3) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY ; AND
(4) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATION IN THIS SECTION.
6. Termination of Simpson Thacher Escrow Agreement
a. This Simpson Thacher Escrow Agreement may b e
terminated by Simpson Thacher if (i) the Preliminary Approval Date does not occur
within six (6) months after the date of this Simpson Thacher Escrow Account ; or (ii) if
Simpson Thacher otherwise terminates the Settlement Agreement pursuant to the terns
thereof. This Simpson Thacher Escrow Agreement shall terminate on the distribution of
the contents of the Simpson Thacher Escrow Account by the Simpson Thacher Escro w
Agent pursuant to this Simpson Thacher Escrow Agreement .
7. Provisions Regarding the Simpson Thacher Escrow Agen t
a. The Simpson Thacher Escrow Agent has no duties o r
responsibilities except those expressly provided in this Agreemen t . The Simpson
Thacher Escrow Agent has no liability under this Simpson Thacher Escrow Agreement
except for its own bad faith, gross negligence, willful misconduct or breach of thi s
Simpson Thacher Escrow Agreement. It may rely on any notice, instruction, certificate ,
statement, request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a proper party .
b. The Simpson Thacher Escrow Agent has no duties with
respect to any agreement or agreements with respect to the Simpson Thacher Amount
other than as provided in this Simpson Thacher Escrow Agreement . The Simpson
Thacher Escrow Agent has no interest in the Simpson Thacher Amount except as
provided in this Simpson Thacher Escrow Agreement . This Section 7 .b shall survive
notwithstanding the termination of this Simpson Thacher Escrow Agreement or th e
Simpson Thacher Escrow Agent' s resignation or removal .
The Simpson Thacher Escrow Agent shall keep proper
books of record and account, and make full and correct entries of the receipts an d
disbursements in the Simpson Thacher Escrow Account. The Simpson Thacher Escrow
Agent shall provide to Simpson Thacher and/or Securities Lead Counsel, on writte n
request and without additional cost, a statement of transaction details on completion o f
any transaction involving the Simpson Thacher Escrow Account .
d. The Simpson Thacher Escrow Agent may resign as escrow
agent by giving sixty (60) days notice by registered or certified mail to Simpson Thacher
and Securities Lead Counsel . Subject to Section 7.g below, such resignation shall take
effect at the end of such sixty (60) days or on the Simpson Thacher Escrow Agent's
earlier receipt of an instrument of acceptance executed by a successor Simpson Thacher
Escrow Agent .
e. Simpson Thacker and Securities Lead Counsel may jointly
remove the Simpson Thacher Escrow Agent by a notice signed by Simpson Thacher and
Securities Lead Counsel and delivered by registered or certified mail to the Simpson
Thacher Escrow Agent. Such removal shall be effective on the date set forth in such
notice .
f. Notwithstanding anything in Sections 7 .e and 7 .f, the
resignation or removal of the Simpson Thacher Escrow Agent shall not be effective
unless and until Simpson Thacher and Securities Lead Counsel jointly appoint a
successor Simpson Thacher Escrow Agent acceptable to Simpson Thacher and Securities
Lead Counsel . If no instrument of acceptance signed by a successor Simpson Thacher
Escrow Agent has been delivered to the Simpson Thacher Escrow Agent within sixty
(60) days after it delivers its notice of resignation or by the effective date of its removal,
the resigning or removed Simpson Thacher Escrow Agent may, at Securities Lead
Counsel's expense, petition the Court for appointment of a successor Simpson Thacher
Escrow Agent. The Simpson Thacher Escrow Agent's resignation or removal shall not
discharge any liability or obligations of the Simpson Thacher Escrow Agent arising
before the effective date of its resignation or removal .
g. Simpson Thacher and Securities Lead Counsel shall jointl y
appoint a successor Simpson Thacher Escrow Agent acceptable to Simpson Thacher and
Securities Lead Counsel to fill any vacancy resulting from (i) the Simpson Thacher
Escrow Agent being dissolved or otherwise becoming incapable of acting, (ii) the
Simpson Thacher Escrow Agent being taken over by a government official, agency,
department or board or (iii) the Simpson Thacher Escrow Agent's position becoming
vacant for any other reason.
h. Simpson Thacher and Securities Lead Counsel shall cause
any successor Simpson Thacher Escrow Agent appointed pursuant to this Simpson
Thacher Escrow Agreement to execute, acknowledge, and deliver to the Simpson
Thacher Escrow Agent, and to Simpson Thacher, Securities Lead Counsel, ERISA 401(k)
Lead Counsel, and Davis Polk & Wardwell, an instrument in writing accepting its
appointment, at which point :
(1) The Simpson Thacher Escrow Agent shall deliver to
its successor, as directed in writing by Simpson Thacher and Securities Lead Counsel, all
property and moneys it holds under this Simpson Thacher Escrow Agreement, and the
books of records and account, and any other information, required by the successor
Simpson Thacher Escrow Agent to perform its obligations under this escrow agreement
among Simpson Thacher, Securities Lead Counsel and such successor Simpson Thacher
Escrow Agent.
i . Securities Lead Counsel, Securities Plaintiffs, Executiv e
Committee Members, Securities Lead Plaintiffs, ERISA 401(k) Lead Counsel, ERISA
Plaintiffs, Settling Defendants, Settling Defendants Counsel, Securities Class Members,
Simpson Thacher, and Davis Polk & Wardwell release the Simpson Thacher Escrow
Agent with respect to all claims, damages and liabilities for anything done or omitted by
the Simpson Thacher Escrow Agent in performing its duties under this Simpson Thacher
Escrow Agreement, except such claims that are based upon the Simpson Thacher Escrow
Agent's bad faith, gross negligence, willful misconduct or breach of this Simpso n
Thacher Escrow Agreement.
j . The Simpson Thacher Escrow Agent is acting under thi s
Simpson Thacher Escrow Agreement as a stakeholder only and is an independent
contractor with respect to each party . No provision of this Simpson Thacher Escrow
Agreement is intended to create any principal, joint venture, partnership or
debtor/creditor relationship between or among the Simpson Thacher Escrow Agent and
any of the parties. The Parties, for themselves and any person claiming under, by or
through them, release the Simpson Thacher Escrow Agent from any claim . in the nature
of self dealing or conflict of interest which may arise to the extent an affiliate of the
Simpson Thacher Escrow Agent is a party to the underlying litigation .
Genera l Matters
a. This Simpson Thacher Escrow Agreement shall b e
governed by and interpreted according to the laws of the State of New York, excluding its
conflict of laws provisions. All disputes arising under this Simpson Thacher Escrow
Agreement shall be resolved through the Dispute Procedure .
b. This Simpson Thacher Escrow Agreement is binding o n
and shall inure to the benefit of the parties' heirs, executors, administrators, legal
representatives, successors and permitted assigns .
c. This Simpson Thacher Escrow Agreement may be execute d
in one or more counterparts which, taken together, constitute one and the same
instrument . Execution by facsimile shall be fully and legally binding on a party .
d. No amendment or discharge of this Simpson Thacke r
Escrow Agreement, or waiver under it, shall be valid or binding unless set forth in
writing and duly signed by the party against whom enforcement of the amendment,
discharge or waiver is sought and by the Simpson Thacher Escrow Agent . Any such
waiver shall waive only the specific matter described in the writing and shall not impair
the rights of the party granting the waiver in any other respect or at any other time .
Neither the waiver by a party of a breach of a provision of this Simpson Thacher Escrow
Agreement, nor the failure by a party, on one or more occasions, to enforce a provision of
this Simpson Thacher Escrow Agreement, or to exercise a right or privilege under this
Simpson Thacher Escrow Agreement, shall constitute a waiver of any other breach of a
similar nature, or a waiver of any of such provisions, rights or privileges under this
Simpson Thacher Escrow Agreement .
The invalidity or unenforceability of any provision of thi s
Simpson Thacher Escrow Agreement in any jurisdiction shall not affect the validity or
enforceability of the rest of this Simpson Thacher Escrow Agreement in that jurisdiction
or the validity or enforceability of this Simpson Thacher Escrow Agreement (including
that provision) in any other jurisdiction. If any restriction or provision of this Simpson
Thacher Escrow Agreement is held unreasonable, unlawful or unenforceable in any
respect, such restriction or provision shall be interpreted, revised or applied in a manner
that makes it lawful and enforceable to the fullest extent possible under law .
f. Notices, requests, demands and other communications
under this Simpson Thacher Escrow Agreement shall be in writing and shall be deemed
to have been given (unless otherwise specifically provided for in this Simpson Thacher
Escrow Agreement) if delivered by hand, delivered by a nationally recognized overnight
courier for next-day delivery, mailed (registered or certified mail, postage prepaid) or
telecopied (which telecopy is confirmed by a transmission receipt) :
If to Magistrate Judge Michael Dolinger, then t o
The Honorable Michael DolingerUnited States Magistrate Judg eDaniel Patrick Moynihan United States Courthouse500 Pearl Street, Room 167 0New York, New York 10007-1312Telephone: (212) 805-0204Facsimile : (212) 805-792 8
If to Simpson Thacher , then to :
Peter Thomas, Esq .Simpson Thacher & Bartlett LLP425 Lexington AvenueNew York, New York 10017Telephone: (212) 455-2000Facsimile : (212) 455-250 2
If to Davis Polk & Wardwell, then to :
Robert B . Fiske, Jr., Esq.James P . Rouhandeh, Esq .Davis Polk & Wardwell450 Lexington Avenu eNew York, New York 10017Telephone: (212) 450-4000Facsimile: (212) 450-3800
If to Securities Lead Counsel, then to :
Jay W. Eisenhofer, Esq .Sidney S. Liebesman, Esq .Grant & Eisenhofer, P .A.1201 North Market StreetSuite 2100Wilmington, Delaware 19801Telephone : (302) 622-7000Facsimile : (302) 622-7100
If to ERISA 401(k) Lead Counsel , then to :
Lynn Lincoln Sarko, Esq .Gary A. Lotto, Esq .Keller Rohrback LLP1201 Third Avenue, Suite 3200Seattle, Washington 98101-3052Telephone : (206) 623-1900Facsimile : (206) 623-3384
Thomas J . Hart, Esq .Marc A. Tenebaum, Esq .Slevin & Hart, P .C.1625 Massachusetts Avenue, N .W .Suite 450Washington, D .C. 20036Telephone : (202) 797-8700Facsimile : (202) 234-823 1
If to Simpson Thacher Escrow Agent, then to :
Wachovia Bank, National AssociationAttn: Howard Parke r123 S . Broad StreetPA 4944Philadelphia, PA 19109Telephone : (215) 670-4541Facsimile : (215) 670-4733
Notices, requests, demands and communications shall be deemed to have been given (i )
on the date on which so hand-delivered (or, if not delivered before 5 :00 p.m. Eastern
Time on a business day, on the next business day), (ii) on the next business day if
delivered by a nationally recognized overnight courier, (iii) on the third business day afte r
the date on which so mailed or (iv) on the date on which telecopied and confirmed (or, i f
this does not occur before 5 :00 p.m. Eastern Time on a business day, on the next busines s
day) .
g. The Simpson Thacher Escrow Agent represents and
warrants that (i) this Simpson Thacher Escrow Agreement has been duly authorized ,
executed and delivered on its behalf and constitutes its legal, valid and binding obligatio n
and (ii) its execution, delivery and performance of this Simpson Thacher Escrow
Agreement does not and will not violate any statute, law, rule or regulation .
h. Securities Lead Counsel represents and warrants that (i) i t
is authorized to execute and deliver this Simpson Thacher Escrow Agreement on behal f
of Securities Lead Plaintiffs and, as authorized by the Court's December 13, 2002 order ,
on behalf of Securities Plaintiffs and Securities Class Members and (ii) its execution ,
delivery and performance of this Simpson Thacher Escrow Agreement does not and wil l
not violate any statute, law, rule or regulation .
i. James P. Rouhandeh represents that he is authorized to
enter into this Simpson Thacher Escrow Agreement on behalf of Simpson Thacher ,
including without limitation D . Rhett Brandon and any other attorneys who hav e
represented or who now represent Simpson Thacher and D . Rhett Brandon in connection
with this matter.
j. Each party shall take (or cause to be taken) such furthe r
actions to execute, deliver and file (or cause to be executed, delivered or filed) such
further documents and instruments, and to obtain such consents, as may be necessary or
reasonable requested to effectuate fully the purposes, terms and conditions of thi s
Simpson Thacher Escrow Agreement .
k. Except as provided in this Simpson Thacher Escro w
Agreement, no party shall assign, encumber or otherwise transfer any of its rights an d
obligations under this Simpson Thacher Escrow Agreement to any person without th e
consent of the other parties . Any such purported assignment, encumbrance or other
transfer shall be void and unenforceable .
The Simpson Thacher Escrow Agent shall keep, and shal l
cause its agents to keep, confidential the information it receives under this Simpson
Thacher Escrow Agreement, except for information requested or required to be disclose d
by a court order statute, law, rule or regulation, (i) to any government agency or
regulatory body having or claiming authority to regulate or oversee the Simpson Thacher
Escrow Agent's business, or (ii) under any subpoena, civil investigative demand or
similar demand or request of a court, regulatory authority, arbitrator or arbitration to
which the Simpson Thacher Escrow Agent or any affiliate, or an officer, director ,
employer or shareholder of the Simpson Thacher Escrow Agent or such affiliate, is a
party-
m. All time periods set forth herein shall be computed in
calendar days unless otherwise expressly provided . In computing any period of tim e
prescribed or allowed by this Simpson Thacher Escrow Agreement or by order of court ,
the day of the act, event, or default from which the designated period of time begins to
run shall not be included. The last day of the period so computed shall be included ,
unless it is a Saturday, a Sunday or a legal holiday, or, when the act to be done is the
filing of a paper in Court, a day on which weather or other conditions have made th e
office of the Clerk of the Court inaccessible, in which event the period shall run until th e
end of the next day that is not one of the aforementioned days .
Executed this day of March -, 2004 .
Wachovia Bank, National Association, asEscrow Agent
By:Name : Howard ParkerTitle: Vice Presiden t
GRANT & EISENHOFER, P .A .as Securities Lead Counsel
Name :Title :
By:
DAVIS POLK & WARDWELLon behalf of Simpson Thache r
By :Name:
Title-
CERTIFICATE OF SERVIC E
Sidney S. Liebesman hereby certifies that on the date listed below, copie s
of the foregoing document were served by the method listed below upon the followin g
counsel at the addresses listed below :
Via First Class Mail on Mach 22, 2004
DEBEVOISE & PL,IMPTONJonathan E . Richman
919 Third AvenueNew York, NY 10022
SIDLEY AUSTIN BROWN & WOOD, LLP
Daniel A. McLaughlin
787 Seventh AvenueNew York, NY 10019
PAUL, WEISS , R.I 'IUND, WHARTON& GARRISON LLP
Joyce S . HuangMartin LondonRichard RosenBrad S . KarpEric S . Goldstein1285 Avenue of the AmericasNew York, NY 10019-606 4
WILMRR, CUTLER & PICKERING
Peter K. Vigeland
3 99 Park AvenueNew York, NY 10022
DEB VOISE & PLIMPTONRalph C. Ferrara
Ann. M. Ashton555 13th Street N. W .Washington, DC 20004
SHEPPARD, M JLLIN, RICHTER &HAMPTON, LLPRobert S. GerberMartha Sottosanti12544High Bluff Drive, Suite 300San Diego, CA 92130-305 1
SIDLEY AUSTIN BROWN & WOOD, LLP
Charles W . Dougla s
David F . GrahamJames W. Ducayet, Esq.Bank One Plaza10 S . Dearborn StreetChicago, IL 60603
CURTIS MALLET-PRLVOST, COLT& MOSLE LL P
Peter FlemingEliot LauerJacques Seznmelzn anJonathan Harri s101 Park AvenueNew York, NY 10178
MAYER , BROWN, ROWE, & MAWRobert J. Ward
1675 BroadwayNew York, NY 1001 9
PAUL, HASTINGS, JANOFSKY& WALKER LLP
J. Allen Maines600 Peachtree Street, NE, Suite 2400Atlanta, GA 30308
Terry N. Christensen David SiegelSuite 1900 1800 Avenue of the Stars10250 Constellation Blvd . Los Angeles, CA 90067Los Angeles, CA 9006 7
HENNIGAN, BENNETT & DORMAN DAVIS, POLK & WARDWELL
Jeanne Irving Thomas P. Ogden601 South Figueroa Street, Suite 330 450 Lexington Avenu eLos Angeles, CA 90017 New York, NY 1001 7
ROPES & GRAY SHE, ARMAN & STERLIN G
Philip S. Khinda Kenneth M. KramerRobert Jones Richard SchwedOne Franklin Square, Suite 800 East Amy L. Newhardt
1301 K Street, N W 599 Lexington Ave .Washington, D .C. 20005 New York, NY 10022-6069
HOWRE-Y SIMON ARNOLD & WHITE , LLP SONNENSCHEIN NATH & ROSENTHALRobert E . Gooding, Jr. D. Ward Kalls trom
2020 Main Street, Suite 1000 685 Market Street, 6`h FloorIrvine, CA 92614 San Francisco , CA 9410 5
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON
Peter L . SimmonsHoward W. GoldsteinOne New York PlazaNew York, NY 10004
CLIFFORD CHANCE US LLP
George A. Schieren
Ignatius GrandeMet Life Building200 Park Ave .New York, NY 10165
MORVILLO, ABRAMOWITZ , GRAND, JASON
& SILBERBERG, P.C.
Edward M. SpiroLawrence Iason565 Fifth AvenueNew York, NY 10017
O'MELVENY & MYERS LLP
Jonathan Rosenberg
400 South Hope StreetLos Angeles, CA 90071-2899
0403l9150035 .DOC
SHEPPARD, MIJLLIN, RICHTER &HAMPTON, LLPJohn FornaciariJohn J . Vecchione11th Floor Eas t1300 I Street, NWWashington, D .C. 20005
Cl/fSi . Lie esman
0403191 50035.DOC
SCHEDULE A
Schedule A
SECURITIES REINSURERS' ESCROW ACCOUNT S
Wachovia Bank NA-London3 BishopsgateLondon EC2 N3AB, Englan d
Funds for the Securities Reinsurers' Escrow will be held at Wachovia Bank NA-Londonin British Pound Sterling in the Wachovia Global Custody Demand A/C -05270036 onbehalf of
Securities Reinsurers Level One Opening Balance Account number-I 556598660 andSecurities Reinsurers Level Two Opening Balance Account number-155659866 2
The current call rate for the Wachovia Bank London is 3 .00% subject to marketfluctuation