Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 1 of 7 Case 2:11-cv-03535-CMR Document 29-1 Piled 05/07/12 Page 2 of 8 THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ROBERT CLAYTON, on behalf of himself and all others similarly situated, Plaintiff, : CIVIL ACTION NO. 1 l-cv-3535-cmr ORTHOVIETA, INC., et al., Defendants. ADOLPHINA VAN BAREL, individually and on behalf of all others similarly situated, and derivatively on behalf of ORTHO VITA, INC., Plaintiff, V. ANTHONY KOBLISH, et al., CIVIL ACTION NO. 11-3652-CMR Defendants. ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, CERTIFYING SETTLEMENT CLASS, PROVIDING FOR NOTICE TO THE SETTLEMENT CLASS AND SETTING DATE AND TIME FOR THE FINAL SETTLEMENT HEARING AND NOW, this 7th day of May, 2012, upon the application of all parties to the abovecaptioned civil actions (the "Actions") made pursuant to Federal Rule of Civil Procedure 23(e), for an order preliminarily approving the settlement of the Actions, in accordance with a Stipulation and Agreement of Compromise, Settlement and Release dated January 31, 2012 (the DM l\2997826. I
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 2 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 3 of 8 "Stipulation"), which sets forth the terms and conditions of a proposed settlement of the Actions and provides for dismissal of the Actions (and a related state court action), with prejudice, upon the terms and conditions contained in the Stipulation; and the Court having read and considered the Stipulation and the proposed Notice of Pendency of Class Actions, Proposed Class Action Determination, Proposed Settlement of Class Actions, Settlement hearing, and Right to Appear (the "Notice"), it is ORDERED that: 1. After a preliminary review, the settlement appears to be fair, reasonable, adequate, and in the best interests of the Settlement Class. The settlement: (a) resulted from extensive arm'slength negotiations; and (b) is sufficient to warrant (i) notice thereof as set forth below; and (ii) a full hearing on the settlement. Accordingly, the Stipulation is preliminarily APPROVED, subject to further consideration at the Settlement Hearing as described below; and, 2. For purposes of the Settlement only, the Court hereby certifies a non-opt-out class under Federal Rule of Civil Procedure 23(a), (b)(l), and (b)(2), consisting of: All record holders and beneficial owners of common stock of Orthovita, Inc. ("C)rthovita") at any time during the period beginning on and including May 16, 201.1, through and including June 28, 2011, and excluding R. Scott Barry, Morris Cheston Jr., Antony Koblish, Mary E. Paetzold, Paul G. Thomas, William E. Tidmore Jr., and Paul T. Touhey Jr., Orthovita, Inc., Stryker Corporation, Owl Acquisition Corporation, members of the immediate family of any Defendant, their subsidiary companies, affiliates, any entity in which a Defendant has or had a controlling interest, directors or officers of Defendant entities, and the legal representatives of any Defendant (the "Settlement Class"). Pursuant to the Stipulation, and for Settlement purposes only, the Court finds as to the Settlement Class that: (a) the Settlement Class is so numerous that joinder of all members is impracticable; (b) there are questions of law or fact common to the Settlement Class;
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 3 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 4 of 8 (c) the claims of the named plaintiffs are typical of the claims of the Settlement Class; and (d) the named plaintiffs and their counsel will fairly and adequately represent and protect the interests of all members of the Settlement Class. The Court further finds that: (a) prosecuting separate actions by individual class members would create a risk of inconsistent or varying adjudications that would establish incompatible standards of conduct for Defendants; or, such adjudications, as a practical matter, would be dispositive of the interests of other class members or would substantially impair or impede their ability to protect their interests; and, (b) Defendants have acted on grounds that apply generally to the class, so that injunctive or declaratory relief, if it were warranted, would be appropriate respecting the class as a whole. AND, IT IS FURTHER ORDERED THAT: 3. For the purpose of preliminary approval and all matters relating to the Settlement, until further order of the Court, Plaintiff Robert Clayton shall be the Representative of the Settlement Class and Juan E. Monteverde, Esquire, and Sandra G. Smith, Esquire, of the law firm of Faruqi & Faruqi, LLP, 101 Greenwood Avenue, Jenkintown, Pennsylvania, are appointed Lead Counsel authorized to act on behalf of the Settlement Class with respect to all acts required by, or which may be undertaken pursuant to, the Stipulation and such other acts as are reasonably necessary to consummate the proposed settlement set forth in the Stipulation; and,
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 4 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 5 of 8 4. A hearing (the "Final Settlement Hearing") shall be held before this Court on the 9th day of August, 2012, at 10:00 am., in the Courtroom of the Honorable Cynthia M. Rufe, at the United States District Court for the Eastern District of Pennsylvania, 601 Market Street, Philadelphia, Pennsylvania, to determine: 1) whether the proposed settlement of the Actions on the terms and conditions provided in the Stipulation should be approved by the Court as fair, reasonable, and adequate to the Settlement Class, 2) whether a Judgment as provided in the Stipulation should be entered by the Court: and 3) whether attorneys' fees or expenses should be awarded and, if so, in what amount; and, 5. The proposed Notice is APPROVED as to form and content; and, 6. Mailed notice to Settlement Class members meets the requirements of Federal Rule of Civil Procedure 23 and due process, is the best notice practicable under the circumstances, and shall constitute due and sufficient notice to all persons entitled thereto. Orthovita, or its successor(s) in interest, shall make reasonable efforts to identify all members of the Settlement Class and shall cause the Notice to be mailed, by First-Class mail, postage prepaid, to all persons identified as being entitled to receive the Notice, which mailing shall be completed no later than May 29, 2012; and, 7. At least seven calendar days before the date of the Final Settlement Hearing (by August 2, 2012), Orthovita's counsel shall serve upon Lead Counsel and file with the Court a suitable affidavit or declaration of such mailing; and, 8. Pending the Final Settlement Hearing, the Actions are to remain stayed and plaintiffs and their counsel, and each of them, and all Settlement Class members, and any of their respective representatives, trustees, successors, heirs, and assigns with actual notice of this Order, are barred and enjoined from asserting, commencing, prosecuting, continuing,
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 5 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 6 of 8 assisting, instigating, or in any way participating in the commencement or prosecution of any action, whether directly, representatively, derivatively, or in any other capacity, asserting any claims that are, or relate in any way to, the Released Claims (as defined in the Stipulation) against any Defendant or any other person in favor of whom releases are given in the Stipulation; and, 9. All papers in support of the settlement and any application by counsel for an award attorneys' fees or expenses, together with all supporting documents, shall be filed and served on all parties no later than July 12, 2012, and all papers in response to any such papers or application shall be filed and served no later than three weeks after the initial paper or application to which it responds was served and filed. 10. No later than three days prior to the date Set for the Final Settlement Hearing (by August 6, 2012), Orthovita, or its successor(s) in interest, shall file a Certificate of Service showing that notice of this proposed class action settlement was served on the appropriate government officials in accordance with 28 U.S.C. 1715; and, 11. Any member of the Settlement Class may enter an appearance in the Action, at his, her or its own expense, either individually or through counsel of his, her or its choosing who is a member of the bar of this Court or is admitted in accordance with the Local Civil Rules of this Court, in which case such counsel must file and serve an Entry of Appearance; and, 12. Any member of the Settlement Class, either individually or through counsel, may appear at the Final Settlement Hearing and show cause why the proposed settlement of the Actions should or should not be approved as fair, reasonable, and adequate, or why a judgment should or should not be entered thereon, or why attorneys' fees or expenses should or should not be awarded to plaintiffs or Lead Counsel; provided, however, that no Settlement Class 5
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 6 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 7 of 8 Member shall be heard unless that person has, on or before fourteen calendar days prior to the date of the Final Settlement Hearing (by July 26, 2012), filed with the Clerk of the United States District Court for the Eastern District of Pennsylvania, and served (by hand or express courier) on those attorneys specified in the Notice the following: (i) a written notice of objection that includes the Settlement Class Member's name, address and telephone number, along with a representation as to whether they intend to appear at the Settlement Hearing; (ii) competent evidence that he, she or it is in fact a member of the Settlement Class; and (iii) a summary statement of the objections and the grounds therefor or other reasons why the Settlement Class Member intends to appear and be heard, as well as all documents or writings that he, she, or it desires the Court to consider at the Final Settlement Hearing. Any person who does not make his, her, or its objection in the manner provided in this Order shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness or adequacy of the proposed settlement as set forth in the Stipulation or to any award of attorneys' fees or expenses, unless otherwise excused by the Court; and, 13. None of the terms or provisions of the Stipulation, or any of the negotiations or proceedings connected with it, or any provision or finding contained in this Order shall be construed as an admission or concession by Defendants of the truth of any of the allegations in the Actions, or of any liability, fault, or wrongdoing of any kind, nor shall the Stipulation or any negotiations or conduct connected to it be admissible in evidence or be used for any purpose in any subsequent proceedings in the Actions or any other action or proceeding, except that any Released Person may file the Stipulation and/or the Judgment in any action that may be brought against them in order to support any defense or counterclaim; and
Case 2:11-cv-03535-CMR Document 30 Filed 05/07/12 Page 7 of 7 Case 2:11-cv-03535-CMR Document 29-1 Filed 05/07/12 Page 8 of 8 14. The Court may adjourn, postpone or continue the date of the Final Settlement Hearing for any reason without notice to the members of the Settlement Class. The Court may approve the settlement, with such modifications as may be agreed to by the parties, if appropriate, without further notice to the Settlement Class; and, 15. The Court retains jurisdiction to consider all further matters arising out of or connected with the proposed settlement, including to enforce the releases provided in the Stipulation and to enforce the terms of the injunction contained in this Order. DATED: IT IS SO ORDERED 4ynthia M. "Rufe, U.S.D