IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION KB PARTNERS I, LP Individually and on Behalf of All Other Similarly Situated, Plaintiff, v. PAIN THERAPEUTICS, INC., REMI BARBIER, NADAV 11RIEDMANN, and PETER RODDY Defendants. CaseNo. A-ll-CV-1034-SS STIPULATED SETILEMENT AGREEMENT l!:Xt:CUTION COPY Case 1:11-cv-01034-SS Document 257 Filed 08/31/16 Page 1 of 26
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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
KB PARTNERS I, LP Individually and on Behalf of All Other Similarly Situated,
Plaintiff,
v.
PAIN THERAPEUTICS, INC., REMI BARBIER, NADA V 11RIEDMANN, and PETER RODDY
Defendants.
CaseNo. A-ll-CV-1034-SS
STIPULATED SETILEMENT AGREEMENT
l!:Xt:CUTION COPY
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This Stipulation of Settlement and attached exhibits (the "Settlement Agreement") dated
as of August 30, 2016, is made by and among the following Settling Parties: 011 the one hand,
Plaintiff KB Partners I, LP on behalf of itself; i111d on behalf of each of the Settlement Class
Members (ns defiued herein), by and through Plaintiff's Counsel; and on the other, Defendants
Pain TI1crapcutics, Inc. ("PTf'), Remi Barbier, Nadav Friedmann, and Peter Roddy (collectively
with PTT, "Defondants"), by a11d through their counsel. This Sett I ement Agreement is intended
by the Settling Parties to fully, forever and llnally, waive, resolve, discharge and settle the
Released Claims (as defined herein), upon and subject to the terms and conditions of this
Settlement Agreement.
1. DEFI'.llITIO.l\'S
Tn addition lo the foregoing defined terms, the following terms shall have the meanings as
set forth below:
J. I "Action" means the action filed in the United States District Court for the
Western Distrid. of Texas entitled KB Partners 1. Ll'. et al. v. l'ai11 .Therapeuti<~~. Inc., et al.,
Case No. A-11-CV -1034-SS, including all pleadings on file in that action.
1.2 "Authorized Claimant" means a Class Member who submits a timely and valid
Claim Form to the Claims Administrator or is otherwise authorized to receive benefil~ under this
Selllemcnt Agreement.
1.3 "Claims Administrator" means KCC LLC, who shall be subject to and comply
with this Settlement Agreement.
1.4 "Plaintifrs Counsel" means the law firm Pomerantz LLP.
l.5 ·'Class Period" means the period beginning December 27, 2010, through June 26,
2011, both dates inclusi vc.
l.6 "Court" means the TJnited States District Court for the \Vestem District ofTexas.
I. 7 "Effective Date" means the first date alter which all of the following events and
conditions have been met or have occurred:
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1. 7.1 The Selllemcnt Agreement is e.xecuted and delivered by/to all Parties,
approved by PTl' s Board of Direcrors, antl approved by the Coun:
1.7.i Entry of the FiMl Judgment aml Order Approving Setrlement ("Final
Judgment");
l .7.3 The Final Judgment becomes "Final." "Final" menus the occummce of
any of the following: (a) final arfinnBncc on an appeul of the Final Judgment, tho expiration of
lht: tim11 for a petition for review of the Final JLJdgmcnt and. if the petition is granted, final
affinnance of the Final Judgment following review pun>uanl lo that grant; (b) final ilismissil of
any appeal from the flnal lLldgment or the final dismissal of any proce<l<ling to review the Final
Judgment; or (c) iCno appeal is filed, the expiration or the time for the filing or noticing of any
appeal from the Court's Fin<Ll Judgment. lf the l'inal Judgment is set aside, matcriRlly modified,
vucated or reversed by the Court or by an appellate court, and is not fully reinstattld on further
appeal, then the Final Judgment docs not becume "Final" and the Effective DMe cannot 01:cur.
1. 7.4 Plaintiff and PTl shall have the option to elet:l ln waive lhc failure, il1
wbole or in part, of any of th.c conditions i;et forth in Subsections 1.7.1- 1.7.3. Tf PlainlilT or
Defendants elects to waive the failure, in whole or in part, of such oondicion, Plaintiff or
Defendants shall file a written notice or waiver "'i th the Court withio ten (10) days after they
become aware (Jfthe failure of such condition. If Plainti ff or Defendants waive the failure. in
wnolc or in part, of any eonditjon in Subsections 1.7.1- 1.7.3, then the Effective Date will occur
without sati~laction orthat condition.
Ui "Escrow Agent" means Huntington Bunk.
1.9 "Notice" means the notice provided for in Section 5 and subslllntilllly in the form
atrachcd hereto as Exhibit 1.
I. I 0 "Person" means a purchaser of common stock of Pain Thernpeulics, Inc. during
the Class Perio<L
1.11 .. Preliminary Approval Order" means the order to be entered by the Court,
prelimilJari ly approving the Scrtlcment Agreement, certifying the Settlement Clu~s for settlement
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purposes only, approving the ~otice of Proposed Settlement, approving !he Summary Notice,
and st:tling the Settlement Hearing, as providoo for in Seel.ion 5.
l. 12 "Settlt:rot:ot Agreemoot" means this Stipulation of SeUlemcnt, inch1ding all
(J.llaehed exhibits.
1.13 "Settlement Class" means all purchiisers of common stock of Pain 'J'hernpeutics,
Inc. during the Class Period.
1.13. I Excluded from the Settlement Class arc the Defendants, officers and
directors of Pain Therapeutics, Inc., members of their immediate families, heirs, successors or
a.'liigns, and any entity in which Oefeodan~ have or had a controlling interest
l.14 "Settlemenl Class Member" rue11ns a Person who lits within the definition llfthe
Sclllcmcnl Class and who has not validly nnd timely requested exclusion from the Settlement
Chiss, as provided in Section 8.
1.15 "Settlement Hearing" means the hearing to detennine whether this Settlement
Agreement should be finally approved by the Court, as provided for in Secti(ln 5.
1.16 "Settling Parties" means the Defendiml~ and the Plaintiff on behalf of itself and
each oftbe Settlement Class Members.
1.17 "Summary )Jotice,. means the ,,.,,;ucn notice provided for in Section 5 and
substMrially in the form aUached hereto as exhibit 2.
1.18 " Upfront Payment." moons non-refundable and non-creditable one-time cash
payments due:< and delivered to PT! by a third-party immedialely at such time as PT! execute~ a
licensing arrangement to commerciali:1.e Rcmoxy:E. For clarity, Upfront Payment specifically
excludllS u.ny cash amounts due or delivered to PTT which may require the performance (l f
activities by any party (other than receiviug rcgulatol)' approval of Remoxy from the Food end
Drug Administration), the passage of time, un l!hligation of rcpaj<ment, recurring payments, cost
reimbursements, or any paymenL~ due and delivered to PTI more than 30 days after the effective
date of a licensing arrangement to commercialize Rcmoxy@.
1. 19 The word "or" means andior.
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1.20 The plural includes the:: singular and vice-versa.
2. LlTIGA TlOJli BACKGROUND
2.J Origil)l!l Complaint. On December 2, 201 1, Charles Southey, on behalf of
himself and a putative class of"all other persons similarly situated," tilt:d this Action in the
l:nitcd States District C<1urt for the Western District ofTexa~ naming as defendants Pain
Therapeutics, Inc., Rcini Barbier, Nada~· Fncdmann. Grant L. Schoenhard, and Peter S. Roddy,
and alleging the following claims for relief: (1) violation of Section LO(b) tif the Exchange Act
and Rule lOb-5 as well as (2) violation of Section 20(a) of the Exchange Act. (Dkt. No. 1.)
2.2 Motion to Dismiss Original Ctimplaint. On April 9, 2012, tl1e Court appointed J(jj
Partners I, LP as Lead Plaintiff. (Dkt ~o. 36). On April 19, 2012, Defendants moved to ili~mi.!>S
tbe Original Complaint for failure to ~iate a claim. (Dkt. '.'los. 39-42.) Aller Plaintiff K13
Partners I, LP filed the First Amended Complaint (Dkt. No. 48), Defendant~' m~>iion was
dismissed as moot (Dkt. ::--lo. 50).
2.3 First Amcndc~ Complaint. On June 8, 2012, Plaintiff KB Partners 1. LP filed the
First Amended Complaint. (Dkt. No. 48.) ln addition to including additional allegations, the
Fir~t Amended Complaint replaced Charles Southey with the appointed Lead Plaintiff, KB
Partners I. LP. (Id.)
2.4 .Y!Qtism to Dismiss the First Am.ended Complaint. 011 July 5, 2012, Defendants
moved to dismiss the First Amended Complaint for failure to state a daim. (Dkt. l\os. 51-52.
54 55.) '!be Court granted De fendants' Motion 10 Dismiss lhc First Amended Complain! on
September 26, 2012. (Dkt. l\"o. 68.)
2.5 Secpnt! Amended Complaint. On October 15, 2012, Plaintiff KB Partners I, LP
tiled the Second Amended Complaint. (Dkt. No. 70.) In addition including additional
allegations, the Second Amended Complaint removed Grant L. Schoenliard 8.iS a defendant. (id.)
2.6 ~orion to Dismiss lhe Second Amended Ccmplaml On October 29, 2012,
Uefendants moved to dLmtlss the Second Amended Complaint for foil uni lo state a claim. (Dkt
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Kos. 71 to 71-2.) The Court denied Defendants' Motion to Dismiss the Second Amended
Complaint on l\ovember 20, 2012. (DkL No. 75.)
2.7 Motion for Class Ccrtificotjon. On January 22, 2013, Plaintiff KB Partners 1, LP
mov.cd for class certification (Dk!. !l3). The Court grunted Plaintill's motion on June 4, 2013.
(Pkt. No. 112).
2.8 Motion fbr Summary Judgmc111. Ou March 26, 20 I 5, Defendants moved for
summary judgment. (Dkt. ~o. 158.) The Court denied Defendants' motion (Dkl. l\o. 176), and
set the mauer for trial on July 7, 20l5 (IJkt. :-lo. 178).
2.9 Third Amended Comnlaml. Oo July?, 2015, the Coun iS!lued nn order vacating
ull "previous interlocutory orders·• except the order granting "Plaintiff's motion for class
certification:• (Pkt. Ko. 222.) The July 7, 2015 Order abo directed Plaintiff to "prepare and tile
a third amended complaint." (Id.) Pursuam to the July 7, 2015 Order, PluinLiff filed the Third
Amended Complaint on July 27, 2015, incorporating additional allegations. (Dkt. '.'!~> . 229.)
2.10 .\fotion to Dismiss the Third Amended Complaint. On August 10, 2015,
Oefendants moved to dismiss the Third Amended Complaint for failure to slate a claim. (Dkt.
Nos. 23 1 to231-3.) The Court denied Defendants' Molion lo Dismiss the·111uu Amended
Comp13int on December l, 2015. (Dkl. l\o. 250.)
3. RENEFlTS OF THE Sli:rrLt:MJ:NT
3. I Diliuence of Plaintifrs Counsel . .i:'lnintiff is represented by experienced coimsel
who have oonductcd discovery, botb fonnal and infom1al, as well as investigatim1 prior to and
thJ'Oughout the prosecution of the Action. The discovery and investigation included, but were
not limiled to: (i) review of thousfm<ls of pages of internal PT! documents; (ii) depositions of
current and fomn:r PT! employees, employees of Pfiz«, rnc., and employees of Jobns(m &
Johnson; (iii) analysis of several gi!fJbytes of confidential PTI databast: productions; (iv) review
of documeot~ produced by Ptizcr, Jnc. and Jvhnwn & Johnson; (v) review of writt1m responses
to discovery requests, including Reque..~ts for Admissions, served on Defendants through the
diswvery process; (vi) review of PTl's public materials and other publicly available documents;
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(vii) interviews with fonner PTT and Pfizer, Inc. employees; (viii) consultation with experts; and
(ix) re~earch of the applicable law with respect to the claims asserted in the complaints and the
potential defenses thereto.
3.2 Benefits ro Settlement Class. Plaintiffs Ctiun.~el have an11lyzed the benetiL~ lo he
obtained under the tenn~ of the proposed St:Ulemcnt and have considered the costs. risks, and
delays associated with the ctmlinucd prosecution ofthe Aclion and possible appeals, as well as
the defenses u.sserted by the Defendants. Plaintiffs Counsel believe lhat, in consideration of all
o f the circumstances 1Uld a ller prolonged, seriou~. and contentious arms-length negotiations in
mediation with the Defendants, the proposed SettlemeJJt is fair, reasonable, adequate and in lh.e
best interests of the SeUlemcnt Class. In making these statements, Plaintiff's Counsel are not
making any admission of fa~-t or Jaw in regard to liability, fault allocation, or damages w-ith
respect to the Action.
3.3 Benefits lo Defendant~. Defendants have concluded that it is in their best interests
thut the Action be settled on the terms embodied in the Seltlemcnl Agreement. Defendants
reached that conclusion after: (I) analy.t.ing 1hc faerual and legal issues in the Action and
considering the uncertuinty o f' litigation; (2) determining lhat further conduct of Uie Action
through trial and any possible appeals would be protracted and expensive; and (3) considering
the benefits of pennillins PT! to conduct its business unhampered by the distractions of
continued litigation .
.KOW, THEREFORE, IT IS HEREBY AG~·ED by and between the parti~ through
lheir respective counsel, that the Action and the Reltru.~ed Claims (as d efined hert:in) be finally
and fully settled, compromised and rdeased, and the Action shall be dismissed on the merits
with prejudice, on the terms ~et forth herein, <i5 between Plaintiff and the Selllemenl Class
Members on Ute one hand, and DefendanL~ on the other.
and/or representatives (collectively, the "Releasing Parties") from all claims, demHnds, rights,
liabilities. suits, or causes of' aclinn, known or unknown, a.5 of the Effective Date that (I) were or
c.iuld h:ivc been asserted in the complain ls liled in this Action. or (2) are based upon. arise out
of. or reasonably relate to: (i) the purellase or snie or offer of sale during the Class Period of any
PTI common stock trading on the NASDAQ Stock Market undec the ticker symbol "PTIE''; (ii)
any allegations that any statements made by Oefondants during the Class Period were false,
misleading, contained material omissions, or were otherwise fraudulent nr inaccurate; and (iii)
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any of the facts, sch ... -mcs, transactions, events, matters. occurrences, acts, disclosures,
statements, misrepr~ent.alions, omissions, or fai lures to act that have been ~>r could have been
alleged or asserted in the Action (collectively, the "Released Claims"); provided, however, that
the Released Claims do nol include claims arising out of federal, state, or local government
~talues, rules, regulations or ordinances over whicb a federal, state, or local govemment agency
or similar authoiity retains sole jw·isdil .. -tion and foT which there is no private right of action
accruing to the Settlement Class Members. either collt!<:tivcly or individually.
7.2 The Released Claims include any unknown claims that reasonably could have
arisen out of the same facL~ alleged in the A<.1ion that the Settlement Class Members do not know
or suspect to exist in their favor al lhe lime of the release, which, if known by them, might have
affected their settlement with, and release 01: the Released Parties or might have affected their
docision not to object. to thi~ Settlement. With re~pect to the Released Claims only, the
Settlement Class Members stipulate and agree that, upon the Effective Date, the Settlement Cln..~s
Members shall be deemed ro have, and by oper.ition of the Final Judgment shall have, expressly
waived and rclinquisbe<~ to the fullest extent pel1Tlitted by law, the provisions, righL' and
benefits ofSeclion 1542 of the California Civil Code, or any other !;imilar provision under
federal or state law, which provides:
A GENERAL RJ.!L.CASF. DOES !\OT J.!Xf'END TO CLAJyfS WllJCJ I THF. CREDITOR DOES NOT KNOW OR SUSPECT TO EXTST TN HIS OR llliR FAVOR AT THE TIME OF EXECUTING THE RELliASE, WHICH IF KJ\OWN BY HIM OR HER MUST HA VE YtATERIALLY AfFF.CTF.D HTS OR HER SET l'LEtvlf.;-.rf WITH THE DEBTOR.
7.3 The Settlement Cla~s Members may hereafter discover facts in addition to or
different from tho~e they now know or believe lo be trnc with respect to the subject matter of the
Relea.~ed Claims, but upon the Effective Date, shall be deemed to have, and by opemtion of the
Final Judgment shall have, fully, finally, and forever settled and released any and all of the
Released Claims, whether known or unknown, su:;pecled or unsuspected, contingent or non
contingent, which now exist, or heretofoTc have existed, upon any thoory of law or equity now
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existing or corning into existence in the future, for damages, injunctive relief, rescission,
disgorgement, or restitution or any other right, remedy, or relief of every nature and description
whatsoever, whether based on federal, state, local, statutory or common law or any other law,
rnle, or rei.rulation, including the Jaw of any jurisdiction outside the United States, that were
brought or could have been brought in the complaints in this Action without regard to the
subsequent discovery or existence of such different or additional facts.
7.4 Co1,tinuing Jurisdi(,1.ion. Exe<-'Pt for the enforcement of the Final .Judgment
entered pursuant to this Settlement Agreement, the Releasing Parties shall be barred from
prosecuting any proceeding against any of the Released Parties with respect lo any Released
Claim. The Court shall rctainjurisdicti(ln to enforce the Final Judgment, releases, amt bar~ to
suits contemplated hy this Settlement Agreement. It is fo1iher agreed that the Settlement
Agreement and the Final Judgment may be pleaded as a complete defense to any prnceedi11g
subject to this Soction.
8. EXCI .USION (OPTJNC,-01.JT) FROM THE SETTLEME~T CLASS
lU Any Person falling within the definition of the Settlement Class who does no!
wish to participate in the Settlement Fund described in Section 4 and be bound by the dismissals
and releases provided for in this Settlement Agrccmem, must request exclusion from t!Je
Settlement Class. A request for exclusion musl state: (I) the name, address, and telephone
number of the Person requesting exclusion, (2) the number of shares of PT! common stock
purchased and/or sold during the Chis~ Period, and (3) that the person wishes to be exc-lude<l
from the Settlement Class. TI1e exclusion request. mltst be sent hy mail or e-mail to the Claims
Administrator and postmarked or e-mailed on or before the date specified in the Preliminary
Order. The Claims Administrator shall deliver copies of any and all requests for exclusion to
Plaintiffs Counsel and the Defendants' counsel. The Claims Administrator shall make such
deliveries on a weekly basis and shall ensure thal lhe final such delivery is received by l'laintitl's
Counsel and the Defendanls' counsel at least thirty (30) days before lhe Settlement Hearing.
Plaintiff's Counsel shall file any and all such requests for exclusion with the Court al or before
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!he Seltkmcnt Hearing. All Persons who suhmil valid and timely requests for exclu.~on in the
manner set forth in this Secl!on shall have no rights under this Scctlcmcnt Agreement, und shall
not sbare in the distribution of the Senlemcnl Fund. All Persons fall ing within lhc definition of
the Setllemenl Class who do nor request exclu~ion in Lhc manner set forth in thi~ S~-tion shall be
Settlement ClHss Members <Jml shall be bound by this Settlement Agreement and the FiMI
Jutlgment. Any Person falling within the definition of the Settlement Class wht) timely requests
exclusiou ~ull, upon approval of the Court, be e1'clucktl from the class certified pursuant to Fed.
R. Civ. Proc. 23(b)(J).
9. A TIOR"'4 EYS' FE ES ANU DL'>BURSEMENT O F EXP1£NSt:.S
9.1 Apolication for Altomcvs· Fees nnd Expenses. P lainlifPs Counsel may apply to
the Court nt the Settlement llearing for an award of attorneys' fees and reimbursement of their
expenses and ct>sts from 1he SctElcment Fund iu an amount lo be determined by the Court a..~ a
percentage of the entire value of selllemcnt, including monetary an<l oLher relief (such as
corpcirate refom1s), as a common fund, in acconlancc with Fifth Circuit Court ~1f Appeals
prcce<1enr and the pertinent law. Defendants agree not to tipposc att application by Plaintiffs
Counsel for attorneys' fees consistent with fee awards pre,,,iously apprc"'ed by the Fifth Circuit
Court of Appeals. Plaintiff's Counsel nntidpatt1S requesting an award of attorneys' ftes and
Plaintiff' s Counsel will file a separate motion with the Court requesting an award of attorney
foe~. coNlll to be reimbursed, and any t:nhancemcnts from the Settlement F1mcl in an amount
consistent with Fifth Circuit precedent. Plaintiff and Plaintiff's Counsel agree that they will not
$eek lo collect any attorneys' fees, expen~es, or costs from any source other than the ScEtlcmcnt
Fund. To the ex.tent the Court may award fees to coun~el for any class member appeiuing before
the Court in connection with the approval or implementation of this Settlement Agreement, such
fees shull be pay-able solely from the Settlement Fund.
9.2 P!!vmem of Attorneys' Fees and Expenses Award The attorneys' foes, citpenses,
and cost~ approved by the Court to be distribu1ed to Plaintiffs Counsel shall be paid by I.he
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t::scrow Agent tu Plaintiffs Cow1scl from the Settlement Fund, within five (5) business days
aflcr entry of the Order approving the attorneys' fees and reimbursement of expen~s.
9.3 Named Plaintiff's Co,nipelJ~. The Court may award reasonable
reimbursement compensation to the named Plaintiff, Kil Partners I, J .P, for its service in the
case, which shall come from the Settlement Fund. Any st1ch Court-ordered compensntion ~hall
bo paid within (5) five business days after the Effective Date. The Released Parties shall have no
responsibility for, and no liability whatsoevi:r with respect to, any incentive comptm~atiQn to the
named Plaintiff, t:Xcep! as expressly provided in Subsection 4.1.
9.4 No Effect On Settlt:ment. Any orders or proceeding; relating to the application of
Plainti rf'~ Counsel for an award of attorneys' fi:es, costs, and expenses shall not operate t(J
terminate or cancel this Settlemenl /\g;ccmcnt, m1d shall have no dTect on chc tiuality of the
Final J\ld&mcnt to be entered pursuant tv Lh i~ Settlement Agreement.
9.5 Released Parties Not Rcsponsjhle for Payment of Award. The Released Partie~
shall have no responsibility for, ancl no liability whatsoever with respect to, 8ny payment to
PlaintiO~s Counsel from the Settlement Fund Lhal may occur, except as expressly provided in
Subsection 4.1.
9.6 Rcleasec! Parties Not Responsible for Allocati~m of Award. Tho Released Parties
shal 1 have no responsibility for, !llld 110 liability what~vever with respect to, the allocativn among
Plaintiff's cowJSel, and any other Person who may asse1t some claim thereto, of any award of
utl~m1eys' fees, costs, or expenses thnt the Court may make.
10. TERJ\o1I~ATIO~ OF SETTLEM.E.Xr AGREEMF.KT
l 0. 1 Conditions Permitting Ttrminttlion. The Settlement may be terminated al the
option and in the sole dis<=!iot1 of the Settling Defendants in Lhe event that Class Members who,
durmg the Class Period, purchased or otherwise acquired PT! common stock timely and validly
reque~1 e;cclusivn !Tom the Class and t.he terminatiQn threshold, as such term is defined in a
separate agreement between Cuuu~el for Lhc Settling Defendants and Plain ti ff' s Counsel (the
"Supplemental Agreement") is met. The tvtal amount of PT! common stock purchu~ed by sllch
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Class Members shall be calculated using the infonnatiou provided by such CIU.S8 Members in
their rettuest!l for exclusion. The Supplemental Agret:menl shall not be filed with the Court
unless and until u dispute among the parties to the Supplemental Agreement concerning its
interpretation or application arises, in which c11,.qe those parties shall seek to tile it with the Court
under seal.
I 0.2 Proced11.r~ for Termination. In order to terminate this Settlement Agn:ement
pursuant tv Subsection 10. l, a party must serve a wTitten notice oftcnnination on the Court <md
on opposing counsel, by band delivery or by first class mail. Such written notice mu~t be
delivered or postmarked within ten (I 0) busine11s day!! after counsel for the party seeking
termination of the SetUement Agreement receives from the Claims Administrlltor the last weekly
delivery of copies of requests for exclusion a~ provided for in Section 10 or within ten ( IO)
busine~~ days aficr the Court grants any additfonul request for exclusion from the Settlement
Class for any reason.
I 0.3 Cons£g_uenees pf Teunin1J.tion. If the EITective Date does not occur (If if a pnrly
tcnninates this Settlement Agreement as provided iD this Section l 0, then this Settlement
Agreement sblllJ have no further force or effcci and the Settling Parties shull revert lo I.heir
r~-p;:ctive positions as of the date that the Settlemt:nt Agreement was executed by l'lnintiff and
Dcfeudnnts, as though this Settlement Agreement h~d never been e::xecuted. In that event, within
1e11 ( I 0) days after written notification of such evt,'lll is sent by Defendants' counsel or Plaintiff's
Counsel to the Escrow Agellt, the Settlcmc11t Fund (indu(ling any accrued interest), less
expenses and any costs which have:: been di~hursed pursuant to Subsections 4. 1, shall he refunded
by the F.5t.Tow Agent to Defendants' counsel. In such eve::nl, Defendants shall be entitled to any
mx refund owing to the Settlement Fund. Ac the request of Defendants, the F.c;crow t\gcnt or its
de;;ignee shall apply for any such rcfiiad and pay the pTOCeeds, after deduction of any foes or
expenses incurred in connection wilh such applie~tion(s) for a refund, to Defendant.~ .
l 0.4 Inadmissible for Purposes pf Ce::rti C ying a Litigatio11 Cl!).SJl. If the Settleme::nl
Agreement is lem1inated pu1'$llllnt to the provisions set forth in this Section I 0 or che effective
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Date does not occur for any rea~on, the parties will not offer this Settlement Agreement, any
agreement negotiated between the pmties in connection with or regarding the Settlement or the
Settlement Agreement, or any motion seeking approval of the Settlement or Settlement
Agrocrnent in cormection with a motion to cerlify a litigation class or in any other proceeding in
thfa Action.
11. OTllt:R PH.OVISIO:'.l!S OF THE SETTLEMEJ\T
11 .1 Public Communiciition~ .. The Settling P<1rties agree there will be no public
announcement. regiirding the Settlement until PT! has publicly disclosed it. Once disclosure is
made by PT!, the Settling Parties agree that, other than disclosures required by law, any public
comments from the parties regarding this resolution will not substantially deviate from words to
the effect that the parties have reached a mutually acceptable resolution by way of a me<liated
selllement that will avoid protracted and expensive litigation, and that both sides arc satisfied
with this resolution. Further, the Settling Parties shall agree upon tJie language and timing of any
such further press release, announcement, response to press inquiry, report to legal publkat.ions,
or any other puhlic statement, regarding the resolution of thi~ matter. This Section 11. l shall not
apply to any court-approved notice or any PTI regulatory filing.
11 .2 Nondisparag~ment. The Sett! ing Parties and their counsel agree not to disparage
each other in any way, including, but not limited to, any accusations of wrongful or actionable
conduct by either pa11y and shull not otherwise suggest that tl1e settlement constitutes an
admission of any claim or defense alleged.
11.3 Stay of Proceedings. Upon the execution of this Settlement Agreement, all
discovery and other proceedings in the Action shall be stayed until forthcr order of the Court,
except for proceedings that may be necessary to implement the Settlement or comply with or
eITectuatc the terms of this Settlement Agreement.
11.4 Restoration to Status Quo lipon Termination. In the event this Settlement
Agreement is not approved by the Court in its present fonn, or the conditions required for the
Settlement Agreement lo he consummated do not occur, then the Settling Parties hereto shall be
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restored to their respective positions as of the date that the Settlement Agreement was executed
by Plaintiff and Defendants, the tenns and provisions of the Settlement Agreement shall have no
forther force and effect with respect to the Settling Parties, and to the extent permitted by luw,
the Settlement Agreement and associated exhibits shall not be used in any action or proceeding
for any purpose and any orders entered by the Court in accordance with the terms of the
Settlement Agreement ~hall he treated as vacated nunc pro tune.
I 1.5 Best .tffQrts and Cooperation. TI1c Settling Parties acknowledge that it is !heir
intent lo consummate this Settlement Agreement. Acconlingly, lhc Settling Parties agree to
cooperate to the extent necessary to effectuate and implement all tenns and c.ondi lions of the
Settlement Agreement and exercise their best efforts to establish the foregoing tem1s and
condition~ ofthe Selllemenl Agreement. The Settling Parties forther agree to cooperate in
effecting notice to members of the Selllemcnt Class and in securing the Court's appnwa\ of the
Settlement.
11 .6 Autho1ization of Counsel. The undersigned coun~el represent that they arc fully
authorized to execute and enter into tlie tenns and conditions of the Settlement Agree.ment <>O
behalf of their respective clients.
1 I. 7 .Entire Am:eement. This Settlement Agreement (along with the exhihi t~ I hereto)
constitutes the entire agreement among the Settling Parties and supersedes any prior agreements
or understandingi; bet.ween them. All tCJ111s of this Settlement Agreement are contractual and not
mere recitals and shall be construed as if dralled by all Settling Parties. The tenns of this
Settlement A greemenl are and shall be oinding upon and inure to lhe benefit of each of the
Settling Parties and Settlement Class Members, their agents, attorneys, employees, heirs,
successors, and assigns, and upon all other persons daiming any interest in the s11bject matter
hereto through any of the pruties hereto, inc111ding any Plaintiff or Settlement Class Member.
11 .8 Amendment. This Settlement Agreement may be amended or modified only by a
written instrument signed by or on behalf of all parties hereto or their successors in interest.
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Amendments and modifications may be made without notice to the Settlement Class, unless
notice is required by lhe Court.
l l.9 l;ixecutjon in Counteu1arts. This Settlement Agreement may be executed in
oow1terpart.~ or by facsimile, with each counterpart or facsimile signature having U1e same force
and effect as an original. All executed couruerparts and each of them shall be deemed to be the
one and the same instrument. Coumel for the parties to this Settlement Agreement shall
exch~nge among themselves original signed counterparl~ and a complete set of original executed
counterparts shall be filed witb the Court.
11 .10 J unsdiction. The Court shall have exclusive and continuing jurisdiction over the
implementation, interpretation, and execution of the Final Judgmenr and this Settlement
Agreement and all exhibits thereto, \•ith respect to nil parties hereto, including all Settlement
Class :Yfernbenc
11.11 Qoverning Luw. The 1ights and obligations of the parties to the Settlement
Agreement shall be construed and enforced in accordance with. and govemed hy, the laws of the
State ofTexas.
I L 12 Headings. The beading~ and !rubhcading:; to this Settlement Agreement have been
inserted for <:onvenie1ice only and are not to bi:: ccmsidered when constming the provision~ of this
Settlement Agreement.
11 .13 Scverabilitv. In the event any nne or more of the provision~ contained in this
Settlement Agreenu:nt ~hull for any reason be held to be invalid, illcgnl, or unenforceable in any
re.~pect, such invalidity, illegality, or unenforccability shall not affe<."t any other provision if the
Settling Parties all elect to proceed as if such invalid, illegal, or unenforceable provision ha<l
never been included in the Agreement.
f rilli lll:.M.b,,INDF.R OF TH IS PAO.I: INTb1' !JONA LL Y Bl.Al\KJ
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I
I
EXECUTION COPY
IN WITNESS WHEREOF, each of the Parties hereto has caused the Agreement to be
executed on its behalf by its duly authorized counsel of record, all as of the day set forth below.
Dated: August 30, 2016
B~t?;;tJJ POMERANTZ LLP Tamar A. Weinrib 600 Third Avenue, 20th Floor New York, New York 10016 Telephone: 212-661-1100 Facsimile: 212-661-8665
POMERANTZ LLP Patrick V. Dahlstrom 10 South LaSalle Street, Suite 3505 Chicago, IL 60603 Telephone: 312-377-1181 Facsimile: 312-377-1184
ABRAHAM, WATKINS, NICHOLS, SORREL, AGOSTO & FRIEND Sammy Ford IV Federal Bar Number: 950682 Texas Bar Number: 24061331 800 Commerce Street Houston, Texas 77002 Telephone: 713-222-7211 Facsimile: 713-225-0827
Attorneys for Plaintiff K.B. Partners I, L.P. and the Settlement Class
By:
BOIES, SCHILLER & FLEXNER LLP Joshua I. Schiller Matthew L. Schwartz Benjamin Margulis 575 Lexington Avenue New York, NY 10022 Tel: (212) 446-2300 Fax: (212) 446-2350 j [email protected][email protected][email protected]
BOIES, SCHILLER & FLEXNER LLP William S. Ohlemeyer New York Bar No. 3995651 333 Main Street Armonk, New York Tel: (914) 749-8440 Fax: (914) 749-8300 [email protected]
DYKEMA COX SMITH Mary Schaerdel Dietz State Bar No. 03741500 111 Congress Avenue, Suite 1800 Austin, Texas 78701 Tel: (512) 703-6300 Fax: (512) 703-6399
Attorneys for Defendants Pain Therapeutics, Inc., Remi Barbier, Nadav Friedmann, and Peter Roddy
Case 1:11-cv-01034-SS Document 257 Filed 08/31/16 Page 25 of 26
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IN WITNESS WHEREOF, each of the Panics hereto has caust::d the Agreement to be
execute<l on iL~ behalfby its duly authorized coWlsel of record, all as of the day set forth bek>w.
Dated: Aug11st 30, 2016
POMERANTZ LLP Tamar A. Weinno 600 Third Avenue, 20th Floor NewYork,NewYork 10016 Telephone: 212-661-1 100 Facsimile: 212-66 1-8665
PO~vfF.RANTZ LLP Patrick V. Dahlstrom I 0 South T .aSalle Street, Suite 3505 Chicago, JL 60603 Telephone: 3 12-377-11 81 Facsimile: 312-377-1184
ABRAJIA.\.1, WATKJKS, NICHOLS, SORREL, AGOSTO & FRlliND Sammy Ford IV Federal Bar Number: 950682 Texas Bar Number: 2406B31 800 Commerce Street lloustou, Texas 77002 Telephone: 713-222-7211 F11csimile: 713-225-0827
A11omeysfor i'lainrijfK.ll. Parmers l, L.P. and !he Setdl!ment Class
24
Bvi: h 4AIA4= Y ~/,/.fed - T . BOIES, SCHILLER & FT.F.X~R LLP Joshua T. Schiller Matthew L Schwar17. Benjamin Margulis 575 Lexington Avenue New York, ~y 10022 Tel: (212) 446-2300 Fax: (212) 446-2350 [email protected][email protected][email protected]
BOlliS, SCHIT,LER & FLEX~ER LLP William S. OWemeyer )few York Rar ~o. 3995651 333 Main Street AJTIJ-Onk, New York T cl: (9 l 4) 749-8440 Fax: (914) 749-8300 [email protected]
DYKEMA COX SMITH Mary Schaerdel Dietz State Bar No. 03741500 111 Congress Avenue, Suite 1800 Austin, Texas 78701 Tel: (51 2) 703-6300 f a'(: (512) 703-6399
Attorneys for Defcnd(lntS /'(1(11 Therape11Jics, lnc., Remi Barbier, Nadav Friedmann, and Peter Roddy
Case 1:11-cv-01034-SS Document 257 Filed 08/31/16 Page 26 of 26