7 stipulation of settlement 06/17/2016

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UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION

Case No: 12-Civ-14333-MARTINEZ-LYNCH

In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/

STIPULATION OF SETTLEMENT

Subject to the approval of the Court, the Settlement contained herein is made and entered

into by and between the following Settling Parties to the Action: Lead Plaintiffs on behalf of

themselves and the Settlement Class, by and through their counsel of record in the Action; and

Defendants, by and through their counsel of record in the Action. The Settlement is intended to

fully, finally and forever resolve, discharge and settle the Action and the Released Claims

(including Unknown Claims, as defined below) upon and subject to the terms and conditions set

forth herein. All terms with initial capitalization shall have the meanings ascribed to them in

Section 1 (“Definitions”) below.

NOW THEREFORE, it is hereby STIPULATED AND AGREED by and among Lead

Plaintiffs (for themselves and the Settlement Class Members) and Defendants, by and through

their respective attorneys of record, being fully authorized to enter into this Stipulation, as

follows:

1. Definitions

As used in this Stipulation, the following terms shall have the meanings specified below.

In the event of any inconsistency between any definition set forth below and any definition set

Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 of 88

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forth in this document or in any other document related to the Settlement set forth in this

Stipulation, the definition set forth below shall control.

1.1 “Action” means the above-captioned consolidated class action.

1.2 “Authorized Claimant” means any Settlement Class Member who has submitted a

timely and valid Claim to the Claims Administrator (in accordance with the requirements

established by the Court), whose claim for recovery has been approved for payment from the Net

Settlement Fund pursuant to the terms of this Stipulation, and who is entitled to a distribution

from the Net Settlement Fund pursuant to the Plan of Allocation or any order of the Court.

1.3 “Bounty Gain” means Bounty Gain Enterprises, Inc.

1.4 “Claim” means a completed and executed Claim Form that has been submitted to

the Claims Administrator in accordance with the instructions on the Claim Form.

1.5 “Claim Form” means the Proof of Claim and Release Form (substantially in the

form attached hereto as Exhibit A-2) that a putative Settlement Class Member must complete and

timely submit to the Claims Administrator if that Settlement Class Member seeks to be eligible

to share in a distribution of the Net Settlement Fund.

1.6 “Claimant” means a Person who has submitted a Claim to the Claims

Administrator seeking to be eligible to share in the proceeds of the Net Settlement Fund.

1.7 “Claims Administrator” means KCC Class Action Services LLC, or other claims

administrator selected by Lead Counsel, subject to Court approval, to provide all notices approved

by the Court to potential Settlement Class Members and to administer the Settlement.

1.8 “Complaint” or “Consolidated Complaint” means the Consolidated Amended

Class Action Complaint [DE 57], filed in this Action on July 31, 2013.

1.9 “Court” means the United States District Court for the Southern District of Florida.


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1.10 “Creditors’ Committee” means the Official Committee of Unsecured Creditors of

Digital Domain Media Group and its Subsidiaries.

1.11 “D&O Policies” means National Union Fire Insurance Company of Pittsburgh, Pa

policy number 01-357-01-17, AXIS Insurance Company policy number MLN764111/01/2011,

Allied World National Assurance Company policy number 0307-1280, Hudson Insurance

Company policy number HN-0303-3192, and ACE - Illinois Union Insurance Company policy

number DOX G24592546 001.

1.12 “DD CA Directors and Officers” means Rafael Fogel, Mark Miller, Cliff Plumer,

John Sculley, and Carl Stork.

1.13 “DDMG” means D2 Software, Inc., DDH Land Holdings, LLC, DDH Land

Holdings II, LLC, DD Estate, DDI Estate, DDInt Estate, DDMG Estate, DDPI Estate, DDPVC

Estate, DDSG Estate, DDT Estate, DDMI Estate, Tradition Studios, Inc., Tembo Productions,

Inc., and Digital Domain Media Group, Inc.

1.14 “DDMG Directors and Officers” means John C. Textor, Jonathan F. Teaford, John

M. Nichols, Kevin C. Ambler, Jeffrey W. Lunsford, Keith L. Cummings, Kaleil Isaza Tuzman,

John W. Kluge, Jr., and Edwin C. Lunsford, III.

1.15 “Defendant” means John C. Textor, Jonathan F. Teaford, John M. Nichols, the

Underwriters, or SingerLewak.

1.16 “Defendants” collectively refers to John C. Textor, Jonathan F. Teaford, John M.

Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP.

1.17 “Defendants’ Counsel” means Holland & Knight, Carlton Fields, P.A., Akerman

LLP, Stroock & Stroock & Lavan LLP, and Cole, Scott & Kissane, P.A.


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1.18 “Distribution Order” means an order entered by the Court authorizing and

directing that the Net Settlement Fund be distributed, in whole or in part, to Authorized Claimants.

1.19 “Effective Date” means the first date by which all of the events and conditions

specified in ¶11.1 herein have been met and have occurred, at which time the Settlement described

in this Stipulation shall become effective.

1.20 “Escrow Agent” means Computershare Trust Company, N.A.

1.21 “Falcon” means Falcon Mezzanine Partners II, L.P.

1.22 “FDIC” means the United States Government Federal Deposit Insurance

Corporation.

1.23 “Final” means, with respect to any order of court, including, without limitation,

the Judgment, that such order represents a final and binding determination of all issues within its

scope and is not subject to further review on appeal or otherwise. Without limitation, an order

becomes “Final” when: (i) no appeal has been filed and the prescribed time for commencing any

appeal has expired; or (ii) an appeal has been filed and either (a) the appeal has been dismissed

and the prescribed time, if any, for commencing any further appeal has expired, or (b) the order

has been affirmed in all material respects and the prescribed time, if any, for commencing any

further appeal has expired. For purposes of this definition of “Final,” an “appeal” includes any

motion to alter or amend under Rules 52(b) or 59(e) of the Federal Rule of Civil Procedure, any

appeal as of right, discretionary appeal, interlocutory appeal, petition for writ of certiorari or

other proceeding involving writs of certiorari or mandamus, and any other proceedings of like

kind. Any appeal or other proceeding pertaining solely to an order or the part of an order adopting

or approving a Plan of Allocation or solely to any order or the part of an order issued with respect


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to an application for attorneys’ fees and expenses pursuant to ¶¶ 7.1 through 7.3 herein shall not

in any way delay or preclude the Judgment from becoming Final.

1.24 “Final Approval Hearing” means the hearing set by the Court under Rule 23(e) of

the Federal Rules of Civil Procedure to consider final approval of the Settlement.

1.25 “Florida DEO” means the State of Florida, Department of Economic Opportunity.

1.26 “Foreign Investors” means Iroquois Master Fund Ltd., Kingsbrook Opportunities

Master Fund, Ltd., Flag Holding LLC, Oman International Development and Investment

Company SOAG, Mountain Partners AG, and Technology Transfer AG formerly known as

Mountain Technologies AG.

1.27 “Individual Defendants” means John C. Textor, Jonathan F. Teaford, John M.

Nichols.

1.28 “Insurers” means National Union Fire Insurance Company of Pittsburgh, Pa,

AXIS Insurance Company, Allied World National Assurance Company, Hudson Insurance

Company, and Illinois Union Insurance Company.

1.29 “Judgment” means the Final Judgment and Order of Dismissal with Prejudice to

be entered by the Court, substantially in the form attached hereto as Exhibit B.

1.30 “Lead Counsel” means the law firms of Berman DeValerio, Wolf Popper LLP,

and Levi & Korsinsky LLP.

1.31 “Lead Plaintiffs” means Patricof Family Limited Partnership, Edward Nussblatt,

and Robert Dziedzic.

1.32 “Litigation Expenses” means the reasonable costs and expenses incurred by Lead

Counsel in connection with commencing and prosecuting the Action, for which Lead Counsel

intend to apply to the Court for reimbursement from the Settlement Fund.


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1.33 “Net Settlement Fund” means the Settlement Fund less: (i) any Taxes; (ii) any

Notice and Administration Costs; (iii) any Litigation Expenses awarded by the Court; (iv) any

attorneys’ fees awarded by the Court; and (v) other costs, expenses or amounts as may be

approved by the Court, as set forth in paragraph 5.2 hereunder.

1.34 “Notice” means the Notice of Pendency of Class Action and Proposed Settlement,

Final Approval Hearing, and Motion for Attorneys’ Fees and Reimbursement of Litigation

Expenses (substantially in the form attached hereto as Exhibit A-1), which is to be sent to the

Settlement Class Members.

1.35 “Notice and Administration Costs” means the costs, fees and expenses that are

incurred by the Claims Administrator in connection with (i) providing notice to the Settlement

Class and (ii) administering the Claims process, including the taxes and expenses related thereto

as set forth in paragraph 6.2 hereunder.

1.36 “PBC” means Palm Beach Capital, Inc.; PBC GP III, LLC, PBC Digital Holdings,

LLC, PBC Digital Holdings II, LLC, PBC DDH Warrants, LLC, and PBC MGPDEF DDH, LLC,

Nathan Ward, Shaun McGruder, Michael Schmickle, and James Harpel.

1.37 “Person” means an individual, corporation, limited liability company, professional

corporation, partnership, domestic partnership, limited partnership, limited liability partnership,

marital community, association, joint stock company, joint venture, joint venturer, estate, legal

representative, trust or trustee, unincorporated association, government or any political

subdivision or agency thereof, or any other business or legal entity.

1.38 “Plan of Allocation,” as further defined in the Notice, means the proposed plan of

allocation of the Net Settlement Fund set forth in the Notice, or such other plan of allocation as


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the Court shall approve, whereby the Net Settlement Fund shall be distributed to Authorized

Claimants.

1.39 “Preliminary Approval Order” means the order (substantially in the form attached

hereto as Exhibit A) to be entered by the Court preliminarily approving the Settlement and

directing that Notice be provided to the Settlement Class.

1.40 “PSL” means the City of Port St. Lucie.

1.41 “Released Claims” means all and every manner of direct and derivative actions,

causes of action, claims, counterclaims, cross-claims, third-party claims, suits, proceedings,

damages, punitive damages, costs, expenses and attorneys’ fees, demands and liabilities

whatsoever of every kind and nature, whether known or unknown, suspected or unsuspected,

accrued or unaccrued, in law, equity or otherwise, which Lead Plaintiffs or any other Member of

the Settlement Class (1) asserted in the Securities Class Action; (2) could have or might have

asserted in the Securities Class Action and/or in any other litigation, action or forum that arises

out of, are based upon or are related in any way, directly or indirectly, in whole or in part, to (A)

the allegations, transactions, facts, matters, occurrences, representations or omissions involved,

set forth or referred to in the Securities Class Action, and/or (B) any purchase, sale or acquisition

of, or decision to hold DDMG common stock; and/or (3) ever had or now have or may have that

arise out of, are connected with, or are related the DDMG Bankruptcy, the D&O Policies, or

negotiating and agreeing to this Agreement and the settlement payments and releases described

herein based in whole or in part on any event, occurrence, cause or thing, of any type whatsoever,

arising, existing, or occurring at any time from the beginning of the world through the date this

Agreement is entered into, but, specifically excluding: (a) any proofs of claim relating to DDMG


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that have been filed by any member of the Securities Class in the Bankruptcy Court as of the date

this Agreement is entered into; and (b) any claims relating to the enforcement of the Settlement.

1.42 “Released Persons” means DDMG, the DDMG Directors and Officers, the DD

CA Directors and Officers, the Underwriters, SingerLewak, SL Insurers, Falcon, the Florida

DEO, the Senior Lenders, the Creditors Committee, PSL, the Foreign Investors, Bounty Gain,

PBC, every “Insured” (as the term is defined in the D&O Policies), and the Insurers, and their

spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys, accountants,

auditors, representatives, principals, officers, directors, employees, contractors, partners, owners,

subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns, including all

subsidiaries’, affiliates’, predecessors-in-interest’s, successors-in-interest’s, and assigns’ past or

present spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys,

accountants, auditors, representatives, principals, officers, directors, employees, contractors,

partners, owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and

assigns, and each is a “Released Party.”

1.43 “Released Persons’ Claims” means all claims and causes of action of every nature

and description, whether known or unknown, whether arising under federal, state, common or

foreign law, that arise out of or relate in any way to the institution, prosecution or settlement of

the Released Claims against the Released Persons, except for claims relating to the enforcement

of the Settlement.

1.44 “Senior Lenders” means Hudson Bay Master Fund Ltd., Empery Asset Master

Ltd., Hartz Capital Investments, LLC, Parsoon Special Situation Ltd., Tenor Opportunity Master

Fund, Ltd., Tenor Special Situations Fund, L.P., and Aria Opportunity Fund, Ltd.


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1.45 “Settlement” means this Stipulation of Settlement and the settlement contained

herein.

1.46 “Settlement Class” means all persons and entities who purchased the common stock

of Digital Domain Media Group, Inc. in an initial public offering completed on November 21,

2011 and/or on the public market during the Settlement Class Period and who were damaged

thereby. Excluded from the Class are Defendants, Released Persons, the officers and directors of

DDMG, at all relevant times, members of their immediate families and their legal representatives,

heirs, successors or assigns, any entity in which defendants have or had a controlling interest,

employees of the DDMG, and any DDMG employee stock purchase or retirement plan. Also

excluded from the Settlement Class are the Senior Lending Releasing Parties, the DDMG

Releasing Parties, the PBC Releasing Parties and any persons who otherwise satisfy the above

requirements for membership in the Settlement Class, but who exclude themselves by submitting

a valid request for exclusion in accordance with the requirements set forth in the Notice.

1.47 “Settlement Class Member” or “Member of the Settlement Class” means a Person

who falls within the definition of the Settlement Class.

1.48 “Settlement Class Period” means the period between November 18, 2011 through

September 6, 2012, inclusive.

1.49 “Settlement Fund” means the sum of five million five hundred thousand United

States dollars ($5,500,000) in cash, which Defendants shall cause their directors’ and officers’

insurers to deposit into the Settlement Fund Account in two payments as described in ¶4.1.

1.50 “Settlement Fund Account” means an interest-bearing account maintained by and

at the Escrow Agent.


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1.51 “Settling Parties” means, collectively, (i) Defendants and (ii) Lead Plaintiffs on

behalf of themselves and the Settlement Class Members.

1.52 “SingerLewak” means SingerLewak LLP.

1.53 “SL Insurers” means SingerLewak’s professional liability insurance subscribed to

by various insurance companies, including but not necessarily limited to: Crum & Forster

Specialty Insurance Company, Aspen Specialty Insurance Company, Catlin Specialty Insurance

Company, Lexington Insurance Company, AIG Claims, Inc., Interstate Fire & Casualty

Company, Gotham Insurance Company, and Ironshore Specialty Insurance Company.

1.54 “Stipulation” means this Stipulation of Settlement.

1.55 “Summary Notice” means the Summary Notice (substantially in the form attached

hereto as Exhibit A-3) to be published as set forth in the Preliminary Approval Order.

1.56 “Supplemental Agreement” means the Supplemental Agreement between Lead

Plaintiffs and Defendants as set forth in paragraph 12.2 hereunder.

1.57 “Taxes” means: (i) all federal, state and/or local taxes of any kind (including

estimated taxes, interest or penalties) on any income earned by the Settlement Fund; and (ii) the

reasonable expenses and costs incurred by Lead Counsel in connection with determining the

amount of, and paying, any taxes owed by the Settlement Fund (including, without limitation,

reasonable expenses of tax attorneys and accountants).

1.58 “Underwriters” means Roth Capital Partners, LLC, Morgan Joseph TriArtisan,

LLC, and Maxim Group LLC.

1.59 “Unknown Claims” means, collectively, any and all Released Claims that the Lead

Plaintiffs or any other Settlement Class Member does not know or suspect to exist in his, her or

its favor at the time of the release of the Released Persons, and any Released Persons’ Claims that


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any Defendant does not know or suspect to exist in his, her or its favor at the time of the release

of the Released Persons which, if known by him, her or it, might have affected his, her or its

decision to enter into this Settlement with and release of the Released Persons (or Lead Plaintiffs,

their counsel or other Settlement Class Members, as appropriate), or might have affected his, her

or its decision not to object to this Settlement or not exclude himself, herself or itself from the

Settlement Class. Unknown Claims include, without limitation, those Released Claims in which

some or all of the facts composing the claim may be unsuspected, undisclosed, concealed or

hidden. With respect to any and all Released Claims and Released Persons’ Claims, the Settling

Parties stipulate and agree that, upon the Effective Date, Lead Plaintiffs and Defendants shall

expressly waive and relinquish, and each Settlement Class Member and Released Person shall be

deemed to have and by operation of law and of the Judgment shall have expressly waived and

relinquished, to the fullest extent permitted by law, any and all provisions, rights and benefits

conferred by California Civil Code § 1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Lead Plaintiffs and Defendants shall further expressly waive and relinquish, and each

Settlement Class Member and each Released Person shall be deemed to have and by operation of

law and of the Judgment shall have expressly waived and relinquished, to the fullest extent

permitted by law, any and all provisions, rights and benefits conferred by any law of any state or

territory of the United States, or principle of common law or of international or foreign law, that

is similar, comparable or equivalent in effect to California Civil Code § 1542. It is understood

that Lead Plaintiffs and the other Settlement Class Members, or any of them, may hereafter


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discover facts in addition to or different from those that he, she or it now knows or believes to be

true with respect to the subject matter of the Released Claims (including Unknown Claims), but

Lead Plaintiffs shall expressly fully, finally and forever discharge, settle and release, and each

Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation of

law and of the Judgment shall have, expressly fully, finally and forever discharged, settled and

released any and all Released Claims against the Released Persons, known or unknown, suspected

or unsuspected, contingent or non-contingent, whether or not concealed or hidden, that now exist

or heretofore have existed, upon any theory of law or equity now existing or coming into existence

in the future, including, but not limited to, conduct that is negligent, grossly negligent, reckless,

deliberately reckless or intentional, with or without malice, or a breach of any duty, law or rule,

without regard to the subsequent discovery or existence of such different or additional facts. Lead

Plaintiffs and Defendants acknowledge, and the Settlement Class Members by operation of law

and of the Judgment shall be deemed to have acknowledged, that the foregoing waiver of Released

Claims that are Unknown Claims, including the provisions, rights and benefits of §1542 of the

California Civil Code (and the inclusion of “Unknown Claims” in the definition of Released

Claims and Released Persons’ Claims) was separately bargained for and is a material element of

the Settlement.

2. Certification of Settlement Class

2.1 The Settling Parties agree that certification of a class, for settlement purposes only,

is appropriate in the Action. For purposes of this Stipulation and Settlement only, the Settling

Parties stipulate to: (i) the certification, for settlement purposes only, of a Settlement Class (as

defined in ¶1.32 herein), pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure;


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(ii) the appointment of Lead Plaintiffs as the class representatives for the Settlement Class; and

(iii) the appointment of Lead Counsel as counsel to the Settlement Class.

2.2 The certification of the Settlement Class shall be binding only with respect to the

Settlement of the Action and only if the Judgment contemplated by this Stipulation becomes Final

and the Effective Date occurs. Nothing in this Stipulation shall serve in any fashion, either directly

or indirectly, as evidence of or support for certification of a class other than for settlement purposes,

and the Settling Parties intend that the provisions herein concerning certification of the Settlement

Class shall have no effect whatsoever in the event the Settlement does not become Final.

Defendants expressly reserve the right to contest class certification in the event the Settlement is

terminated or the Effective Date does not occur for any other reason.

3. Releases and Bar Order

3.1 The obligations incurred pursuant to this Stipulation shall be in full and final

disposition of the Action and any and all Released Claims (including Unknown Claims) as against

any and all Released Persons.

3.2 Upon the Effective Date, Lead Plaintiffs and each of the other Settlement Class

Members, for themselves and on behalf of each of their past or present heirs, executors,

beneficiaries, administrators, attorneys, representatives, principals, officers, directors, partners,

owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns,

including all subsidiaries’, affiliates’, predecessors-in-interest’s, successors-in-interest’s, and

assigns’ past or present heirs, executors, beneficiaries, administrators, agents, trustees, attorneys,

representatives, principals, officers, directors, partners, owners, subsidiaries, affiliates,

predecessors-in-interest, successors-in-interest, and assigns and any other Person claiming (now

or in the future) through or on behalf of any of them directly or indirectly, regardless of whether


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such Lead Plaintiffs or Settlement Class Member ever seeks or obtains by any means (including,

without limitation, by submitting a Claim to the Claims Administrator) any distribution from the

Net Settlement Fund, shall have, and by operation of law and of the Judgment shall be deemed to

have, fully, finally and forever released, relinquished, waived, discharged and dismissed each and

all of the Released Claims (including Unknown Claims) against each and all of the Released

Persons, and shall have covenanted not to sue any Released Person with respect to any Released

Claim except to enforce the releases and other terms and conditions contained in this Stipulation

or the Judgment entered pursuant thereto. The foregoing provision shall not apply to any Person

who independently would be a member of the Settlement Class and timely excludes himself,

herself or itself. By entering into this Stipulation, Lead Plaintiffs represent and warrant that they

have not assigned, hypothecated, conveyed, transferred or otherwise granted or given any interest

in the Released Claims, or any of them, to any other Person. The Settling Parties acknowledge,

and the Settlement Class Members shall be deemed by operation of law and of the Judgment to

have acknowledged, that the foregoing waiver of Unknown Claims and of the provisions, rights

and benefits of §1542 of the California Civil Code was separately bargained for and is a material

element of the Settlement of which the release in this paragraph is a part.

3.3 Upon the Effective Date, Lead Plaintiffs and each of the other Settlement Class

Members, and any other Person acting through or on behalf of Lead Plaintiffs or any Settlement

Class member (including, without limitation, each of their past or present heirs, executors,

beneficiaries, administrators, attorneys, representatives, principals, officers, directors, partners,

owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns,

including all subsidiaries’, affiliates’, predecessors-in-interest’s, successors-in-interest’s, and

assigns’ past or present heirs, executors, beneficiaries, administrators, agents, trustees, attorneys,


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representatives, principals, officers, directors, partners, owners, subsidiaries, affiliates,

predecessors-in-interest, successors-in-interest, and assigns and any other Person claiming (now

or in the future) through or on behalf of any of them directly or indirectly), now or in the future,

shall be forever permanently barred, enjoined and restrained from commencing, instituting,

asserting, maintaining, enforcing, prosecuting or otherwise pursuing, either directly or in any other

capacity, any of the Released Claims (including any Unknown Claims) against any Released

Person in the Action or in any other action or any proceeding, in any state, federal or foreign court

of law or equity, arbitration tribunal, administrative forum or other forum of any kind.

3.4 The Claim Form to be executed by Claimants shall release all Released Claims

(including Unknown Claims) against all Released Persons and shall be substantially in the form

attached hereto as Exhibit A-2.

3.5 Upon the Effective Date, Defendants, for themselves and on behalf of each of their

respective spouses, heirs, executors, beneficiaries, administrators, successors, assigns and any

other Person claiming (now or in the future) through or on behalf of any of them directly or

indirectly, shall be deemed to have, and by operation of law and of the Judgment shall have, fully,

finally and forever released, relinquished, waived, discharged and dismissed each and all of the

Released Persons’ Claims against Lead Plaintiffs in the Action, and their attorneys, and all other

Settlement Class Members, the members of each Settlement Class Member’s immediate family,

any entity in which any member of any Settlement Class Member’s immediate family has or had

a controlling interest (directly or indirectly), any estate or trust of which any Settlement Class

Member is the settlor or which is for the benefit of any Settlement Class Member and/or members

of his or her family.


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3.6 The Lead Plaintiffs and Defendants agree to the entry of the following bar order:

All other persons, including but not limited to any other person or entity named as a defendant or

third-party defendant in any pending or future action in which claims being released by the

Securities Class, including, but not limited to claims that were or could have been asserted in the

Action, are hereby barred, enjoined, and restrained from commencing, prosecuting, or asserting

any claim for contribution or indemnity (whether contractual or otherwise) relating to the

Released Claims (including Unknown Claims) against DDMG, DDMG’s current and former

directors and officers, the DDMG Directors and Officers, the DD CA Directors and Officers, the

Underwriters, SingerLewak, SL Insurers, Falcon, the Florida DEO, the Senior Lenders, the

Creditors Committee, PSL, the Foreign Investors, Bounty Gain, PBC, and the Insurers, and each

of their past or present agents, trustees, attorneys, representatives, principals, officers, directors,

employees, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns;

provided, however, that nothing herein shall in any way restrict or impair the rights of any Settling

Party to enforce the terms of the Stipulation and Settlement.

4. The Settlement Consideration

4.1 Within (30) days of the Bankruptcy Court Approval Order becoming final and non-

appealable, Lead Plaintiffs shall file with the Court a motion seeking preliminary approval of the

terms of the settlement of the Action and asking the Court to enter a Preliminary Approval Order.

As full consideration for the Settlement, Defendants shall cause the deposit of $5,500,000 to be

deposited into the Settlement Fund Account in two payments. The first payment to be paid to the

trust account designated by counsel for the Lead Counsel, totaling $250,000.00, shall be used

exclusively for the payment of costs associated with providing notice of and administrating the

Settlement and shall be disbursed from the Carlton Fields, P.A. Trust Account within 10 business


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days of Preliminary Approval; however, in the event Preliminary Approval occurs less than 15

days after the Bankruptcy Court Approval Order becomes final and non-appealable, the first

payment, totaling $250,000.00 shall be paid within 20 business days of Preliminary Approval. The

second payment to be paid to the trust account designated by counsel for Lead Counsel, totaling

$5,250,000.00, shall be disbursed from the Carlton Fields, P.A. Trust Account within 5 business

days of an order by the district court presiding over the Action, finally approving the terms of the

settlement of the Action, becoming final and non-appealable. Lead Counsel shall provide to

Defendants any necessary tax forms or other information requested to facilitate the payment, no

more than ten (10) calendar days after the execution of this Stipulation.

4.2 Other than the obligation of Defendants to request their directors’ and officers’

insurers to deposit $5,500,000 into the Carlton Fields, P.A. Trust Account, under no circumstances

will any Released Person have any obligation to make any payment pursuant to this Settlement set

forth herein, and no Released Person shall have any responsibility for, or liability whatsoever with

respect to, the Settlement Fund, the Net Settlement Fund, the Settlement Fund Account, the Escrow

Agent, the Escrow Agent’s actions, any transaction executed or approved by the Escrow Agent,

the maintenance, administration, investment or distribution of the Settlement Fund or the Net

Settlement Fund, the establishment or administration of the Plan of Allocation, the determination,

administration or calculation of claims, the payment or withholding of Taxes, the administration

of the Settlement, or any losses incurred in connection with such matters. The Released Persons

shall have no further or other liability or obligations to Lead Plaintiffs, Lead Counsel or any

Settlement Class Member with respect to the Released Claims, except as expressly stated in this

Stipulation. Notwithstanding anything herein to the contrary, the Escrow Agent shall be obligated

to withhold from distribution to Authorized Claimants all funds necessary to pay all Notice and


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Administration Costs and all other fees, costs and expenses associated with administration of the

Settlement and the Settlement Fund; neither Defendants nor their counsel nor any other Released

Person is responsible therefor, nor shall they have any liability whatsoever with respect thereto.

The Settlement Fund shall indemnify and hold all Released Persons harmless for any costs of

administration of the Settlement and the Settlement Fund of any kind whatsoever (including,

without limitation, costs associated with any such indemnification).

4.3 The interest earned on the Settlement Fund pursuant to ¶5.4 below shall be for the

benefit of the Settlement Class if the Settlement becomes Final. If the Settlement does not become

Final and the Settlement is terminated, the interest earned on the Settlement Fund shall be returned

to Defendants’ directors’ and officers’ insurers and ¶12.3 below shall govern.

4.4 This is not a claims-made settlement; there will be no reversion. Upon the

occurrence of the Effective Date (as set forth in ¶11.1 herein), Defendants shall not have any right

to the return of the Settlement Fund or any portion thereof irrespective of the number of Claims

filed, the collective amount of losses of Authorized Claimants, the percentage of recovery of losses

or the amounts to be paid to Authorized Claimants from the Net Settlement Fund. If any portion

of the Net Settlement Fund remains following distribution pursuant to the Plan of Allocation and

is of such an amount that in the discretion of Lead Counsel it is not cost effective or efficient to

redistribute the amount to the Settlement Class, then such remaining funds, after payment of any

further Notice and Administration Costs and Taxes, shall be donated to a non-profit charitable

organization unaffiliated with Defendants, Lead Plaintiffs or Lead Counsel, selected by Lead

Plaintiffs and subject to Court approval.


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5. Administration and Use of Settlement Fund

5.1 The Escrow Agent shall administer the Settlement Fund subject to the jurisdiction

of the Court. The Escrow Agent shall not disburse the Settlement Fund except (i) as provided in

this Stipulation, (ii) as provided in the Plan of Allocation, (iii) by an order of the Court, or (iv) with

the written agreement of Defendants’ Counsel.

5.2 The Settlement Fund shall be used to pay: (i) Taxes; (ii) Notice and Administration

Costs pursuant to ¶5.5 herein and as otherwise approved by the Court; (iii) attorneys’ fees awarded

by the Court; (iv) Litigation Expenses awarded by the Court; (v) all other fees, costs and expenses

incurred by or on behalf of the Settlement Class associated with the Settlement; and (vi) any other

costs, expenses or amounts as may be approved by the Court. The balance remaining in the

Settlement Fund shall be distributed to Authorized Claimants as provided in a Plan of Allocation

proposed by Lead Plaintiffs subject to Court approval.

5.3 Except as provided herein or pursuant to orders of the Court, the Net Settlement

Fund shall remain in the Settlement Fund Account prior to the Effective Date. All funds held by

the Escrow Agent shall be deemed to be in the custody of the Court and shall remain subject to the

jurisdiction of the Court until such time as the funds shall be distributed or returned pursuant to

the terms of this Stipulation and/or further order of the Court.

5.4 The Escrow Agent shall invest any funds in excess of U.S. $250,000 in United

States Treasury Bills having maturities of 180 days or less, or money market mutual funds

composed of investments secured by the full faith and credit of the United States Government, or

an account fully insured by the FDIC, and shall collect and reinvest the proceeds of these

instruments as they mature in similar instruments at their then-current market rates. Any funds


20

held in escrow in an amount of less than U.S. $250,000 may be held in an interest-bearing account

insured by the FDIC or money market mutual funds composed of investments secured by the full

faith and credit of the United States Government or fully insured by the United States Government.

All risks related to the investment of the Settlement Fund shall be borne by the Settlement Fund

and not by any of the Released Persons.

5.5 Before the Effective Date, Lead Counsel may use up to $250,000.00 of the

Settlement Fund to pay Notice and Administration Costs reasonably, necessarily and actually

incurred, without further approval of Defendants or order of the Court. Such costs and expenses

shall include, without limitation, the actual costs of publication, printing and mailing the Notice

and Claim Form, reimbursements to nominee owners for forwarding the Notice and Claim Form

to their beneficial owners, the administrative expenses actually incurred and fees reasonably

charged by the Claims Administrator in connection with searching for Settlement Class Members

and providing notice and processing the submitted Claims, and the reasonable fees, if any, of the

Escrow Agent. In the event that Lead Counsel seek more than $250,000.00 before the Effective

Date to pay such costs, Lead Counsel shall submit a written request to Defendants’ Counsel seeking

to utilize additional monies from the Settlement Fund for the purpose of providing notice and

administering the Settlement. Defendants will provide approval and funding for expenditure of

reasonable additional amounts where need is substantiated. If Defendants object to such additional

costs, the Settling Parties shall immediately attempt to mediate and then arbitrate such disputes

with Bruce Greer, or such other person as the Settling Parties agree. Before the Effective Date,

Defendants’ Counsel, upon request made to the Escrow Agent, shall receive copies of all records

of the Settlement Fund Account, including all records of disbursements, deposits and statements

of accounts. In the event that the Settlement is terminated pursuant to the terms of this Stipulation,


21

all Notice and Administration Costs properly paid or incurred, including any related fees (and fees

of any tax attorneys and/or accountants), shall not be returned or repaid to Defendants or their

insurance carriers.

6. Taxes

6.1 The Settling Parties agree that the Settlement Fund is intended to be a Qualified

Settlement Fund within the meaning of Treasury Regulation § 1.468B-1 and that Lead Counsel, as

administrator of the Settlement Fund within the meaning of Treasury Regulation § 1.468B-2(k)(3),

shall be solely responsible for filing or causing to be filed all informational and other tax returns

as may be necessary or appropriate (including, without limitation, the returns described in Treasury

Regulation § 1.468B-2(k)) for the Settlement Fund. Such returns shall be consistent with this

paragraph and in all events shall reflect that all taxes on the income earned on the Settlement Fund

shall be paid out of the Settlement Fund as provided by ¶6.2 below. Lead Counsel shall also be

solely responsible for causing payment to be made from the Settlement Fund of any Taxes owed

with respect to the Settlement Fund. Upon written request, Defendants will provide promptly to

Lead Counsel the statement described in Treasury Regulation § 1.468B-3(e). Lead Counsel, as

administrator of the Settlement Fund within the meaning of Treasury Regulation § 1.468B-2(k)(3),

shall timely make such elections as are necessary or advisable to carry out this paragraph,

including, as necessary, making a “relation back election,” as described in Treasury Regulation §

1.468B-1(j), to cause the Qualified Settlement Fund to come into existence at the earliest allowable

date, and shall take or cause to be taken all actions as may be necessary or appropriate in connection

therewith. It shall be the responsibility of Lead Counsel to prepare and deliver timely and properly

the necessary documentation for signature by all necessary parties, and thereafter to cause the

appropriate filings to occur.


22

6.2 All Taxes shall be paid out of the Settlement Fund, and shall be timely paid by the

Escrow Agent pursuant to the terms herein, and without prior Order of the Court. Any tax returns

prepared for the Settlement Fund (as well as the election set forth therein) shall be consistent with

the previous paragraph and in all events shall reflect that all Taxes (including any interest or

penalties) on the income earned by the Settlement Fund shall be paid out of the Settlement Fund

as provided herein. Further, Taxes and all related expenses shall be treated as, and considered to

be, a cost of administration of the Settlement Fund, and the Escrow Agent shall be obligated

(notwithstanding anything herein to the contrary) to withhold from distribution to Authorized

Claimants any funds necessary to pay such amounts, including the establishment of adequate

reserves for any Taxes (as well as any amounts that may be required to be withheld under Treas.

Reg. §1.468B-2(1)(2)); neither Defendants nor their counsel nor any other Released Person is

responsible therefor, nor shall they have any liability whatsoever with respect thereto, nor shall

they be liable for any reporting requirements that may relate thereto.

6.3 In all events neither Defendants nor their counsel, nor any other Released Person,

shall have any responsibility for or liability whatsoever with respect to the Taxes or the filing of

any tax returns or other documents with the Internal Revenue Service or any state or local taxing

authority in connection with the Settlement Fund. The Settlement Fund shall indemnify and hold

all Released Persons harmless for any Taxes and related expenses on the Settlement Fund after

deposit into the Settlement Fund Account of any kind whatsoever (including, without limitation,

taxes payable by reason of any such indemnification). Defendants shall notify the Escrow Agent

promptly if Defendants receive any notice of any claim for Taxes relating to the Settlement Fund.


23

7. Attorneys’ Fees and Litigation Expenses

7.1 Lead Counsel may apply to the Court for a collective award of attorneys’ fees to

Lead Counsel. Lead Counsel also will apply to the Court for reimbursement of Litigation

Expenses.

7.2 Any attorneys’ fees and Litigation Expenses that are awarded by the Court shall be

paid to Lead Counsel from the Settlement Fund Account within five (5) calendar days after the

later of (i) the date they are awarded by the Court, or (ii) the date the Court grants final approval

of the Settlement, or (iii) the date all remaining settlement proceeds are deposited into the

Settlement Fund Account.

7.3 Lead Counsel may make, and Defendants agree not to oppose, an application for

service awards, in amounts not to exceed $5,000 each, for the Lead Plaintiffs to compensate them

for their efforts and commitment on behalf of the Class. Neither Lead Counsel’s application for,

nor any Lead Plaintiff’s entitlement to, a service award shall be conditioned in any way upon the

Plaintiff’s support for the terms of the settlement of the Action. In the event the Court declines to

approve, in whole or in part, the payment of service awards in the amounts requested, the

remaining provisions of the Stipulation relating to the settlement of the Action shall remain in full

force and effect. The amounts awarded by the Court in service awards shall be paid from the

Settlement Fund.

7.4 An award of attorneys’ fees and/or Litigation Expenses is not a necessary term of

this Stipulation and is not a condition of this Stipulation. Lead Plaintiffs and Lead Counsel may

not cancel or terminate the Stipulation or the Settlement based on this Court’s or any appellate

court’s ruling with respect to attorneys’ fees and/or Litigation Expenses.


24

7.5 No attorneys’ fees awarded by the Court shall be distributed by Lead Counsel to

any other law firm until after the Effective Date. Lead Counsel shall have the sole authority to

allocate the Court-awarded attorneys’ fees and Litigation Expenses amongst Lead Counsel after

the Effective Date in a manner which Lead Counsel, in good faith, believe reflects the contributions

of such counsel to the prosecution and settlement of the Action. The Released Persons shall have

no responsibility for, and no liability whatsoever with respect to, any payment of any type or nature

whatsoever, including attorneys’ fees and/or Litigation Expenses, to Lead Plaintiffs or Lead

Counsel, or the allocation among Lead Counsel, and/or any other person or entity who may assert

some claim thereto, of any award of attorneys’ fees or Litigation Expenses that the Court may

make in the Action.

8. Claims Administration

8.1 The Claims Administrator shall administer the process of soliciting, receiving,

reviewing and approving or denying claims. The Claims Administrator shall discharge its duties

under Lead Counsel’s supervision and subject to the jurisdiction of the Court. Lead Counsel shall

be responsible for supervising the administration of the Settlement and disbursement of the Net

Settlement Fund. Except as otherwise expressly provided herein, no Released Person shall have

any involvement in, responsibility for or liability or obligation whatsoever with respect to the

selection of the Claims Administrator, the Plan of Allocation, the administration of the Settlement,

the management, disposition, investment, distribution, allocation or disbursement of the

Settlement Fund or the Net Settlement Fund, the determination, administration, calculation or

payment of claims, the payment or withholding of Taxes, any nonperformance of the Claims

Administrator or any losses incurred in connection with any such matters. No Person shall have

any claim against the Released Persons or Defendants’ Counsel arising from or relating to any of


25

the foregoing, and Lead Plaintiffs, Lead Counsel and each other Settlement Class Member hereby

fully, finally and forever releases, relinquishes and discharges the Released Persons and

Defendants’ Counsel from any and all such liability. No Defendant shall be permitted to review,

contest or object to any Claim or any decision of the Claims Administrator or Lead Counsel with

respect to accepting or rejecting any Claim for payment by a Settlement Class Member or

Claimant.

8.2 Lead Counsel shall cause the Claims Administrator to mail the Notice and Claim

Form to those Settlement Class Members who may be identified through reasonable effort,

including through the cooperation of DDMG and/or its agents. Lead Counsel will cause to be

published the Summary Notice pursuant to the terms of the Preliminary Approval Order or

whatever other form or manner might be ordered by the Court. For the purpose of identifying and

providing notice to the Settlement Class, within five (5) business days of the date of entry of the

Preliminary Approval Order, DDMG shall provide or cause to be provided to the Claims

Administrator its common stock holder lists (consisting of common stock holder names and

addresses during the Settlement Class Period), in electronic form.

8.3 The Claims Administrator shall receive Claims and administer them according to

the Plan of Allocation, as proposed by Lead Plaintiffs and approved by the Court, or according to

such other plan of allocation as the Court approves. The proposed Plan of Allocation is set forth

in the Notice attached hereto as Exhibit A-1.

8.4 No funds from the Net Settlement Fund shall be distributed to Authorized

Claimants until after the Effective Date. The allocation of the Net Settlement Fund among

Authorized Claimants is a matter separate and apart from the proposed Settlement between

Defendants and Lead Plaintiffs, and any decision by the Court concerning the Plan of Allocation,


26

or such other plan of allocation as the Court approves, shall not affect the validity or finality of the

proposed Settlement. The Plan of Allocation proposed in the Notice is not a necessary term of this

Stipulation, and it is not a condition of this Stipulation that any particular plan of allocation be

approved by the Court. Lead Plaintiffs and Lead Counsel may not cancel or terminate the

Stipulation or the Settlement based on this Court’s or any appellate court’s ruling with respect to

the Plan of Allocation or any plan of allocation in this Action. In the event of any modification or

rejection of the terms of any Plan of Allocation or the Stipulation with respect to attorneys’ fees or

Litigation Expenses, the Released Persons shall be entitled to all benefits of the Settlement and the

Released Persons shall not, under any circumstances, be called upon to contribute additional funds

to the Settlement Fund.

8.5 All Persons who fall within the definition of Settlement Class Member (and do not

exclude themselves by submitting a valid request for exclusion in accordance with the

requirements set forth in the Notice) shall be subject to and bound by the provisions of this

Stipulation, the releases contained herein and the Judgment with respect to all Released Claims

(including Unknown Claims), and will be permanently barred and enjoined from bringing any

action against any and all Released Persons concerning any and all of the Released Claims

(including Unknown Claims) as set forth in ¶3.3 herein regardless of whether such Persons seek

or obtain by any means, including, without limitation, by submitting a Claim or any similar

documentation, any distribution from the Settlement Fund or the Net Settlement Fund.

8.6 All Claims must be submitted by the date set by the Court in the Preliminary

Approval Order and specified in the Notice, unless such deadline is extended by Order of the

Court. Any Settlement Class Member who fails to submit a Claim by such date, or who timely

submits a Claim that is rejected, shall be forever barred from receiving any distribution from the


27

Net Settlement Fund or payment pursuant to this Stipulation (unless, by Order of the Court, late-

submitted Claims are accepted), but shall in all other respects be subject to and bound by all of the

terms and provisions of this Stipulation and the Settlement, including the terms of the Judgment

and the releases provided for in the Judgment and herein, and will be permanently barred and

enjoined from bringing any action, claim or other proceeding of any kind against any Released

Person concerning any Released Claim (including any Unknown Claim) as set forth in ¶3.3 herein.

A Claim shall be deemed to be submitted when posted, if received with a postmark indicated on

the envelope and if mailed by first-class mail or other delivery service and addressed in accordance

with the instructions thereon.

8.7 Each Claimant shall be deemed to have submitted to the jurisdiction of the Court

with respect to the Claimant’s Claim, including, but not limited to, the releases provided for herein

and in the Judgment, and the Claim will be subject to investigation and discovery under the Federal

Rules of Civil Procedure, provided that such investigation and discovery shall be limited to that

Claimant’s status as a Settlement Class Member and the validity and amount of the Claimant’s

Claim. No discovery shall be allowed on the merits of this Action or this Settlement in connection

with the processing of Claims.

8.8 Lead Counsel will apply to the Court, with reasonable advance notice to

Defendants, for a Distribution Order: (i) approving the Claims Administrator’s administrative

determinations concerning the acceptance and rejection of the Claims submitted; (ii) approving

payment of any outstanding administration fees and expenses associated with the administration

of the Settlement from the Settlement Fund Account; and (iii) if the Effective Date has occurred,

directing payment of the Net Settlement Fund to Authorized Claimants from the Settlement Fund

Account.


28

8.9 Payment pursuant to the Distribution Order shall be final and conclusive against

any and all Settlement Class Members. All Settlement Class Members whose Claims are not

approved by the Court shall be barred from participating in distributions from the Net Settlement

Fund, but otherwise shall be subject to and bound by all of the terms of this Stipulation and the

Settlement, including the terms of the Judgment to be entered in this Action and the releases

provided for in the Judgment and herein, and will be permanently barred and enjoined from

bringing any action, claim or other proceeding of any kind against any Released Person concerning

any Released Claim (including any Unknown Claim) as set forth in ¶3.3 herein.

8.10 All proceedings with respect to the administration, processing and determination of

Claims and the determination of all controversies relating thereto, including disputed questions of

law and fact with respect to the validity of Claims, shall be subject to the jurisdiction of the Court.

9. Requests for Exclusion

9.1 Putative Settlement Class Members requesting exclusion from the Settlement Class

shall be requested to provide the following information to the Claims Administrator in the manner

described in the Notice: (i) name; (ii) address; (iii) telephone number; (iv) number of shares of

DDMG’s common stock purchased or otherwise acquired during the Settlement Class Period; (v)

the date of each such purchase or acquisition and the price or other consideration paid; (vi) the

date of each sale or other disposal of any share of the DDMG’s common stock during the

Settlement Class Period and the price or other consideration received; (vii) the number of shares

of the DDMG’s common stock held immediately before the commencement of the Settlement

Class Period, and (viii) a statement that the person or entity wishes to be excluded from the

Settlement Class. Any request for exclusion must also be signed by the person or entity requesting

exclusion.


29

9.2 All Persons who submit valid and timely requests for exclusion in the manner set

forth in the Notice shall have no rights under the Stipulation, shall not share in the distribution of

the Net Settlement Fund, and shall not be bound by the Stipulation or any final judgment. Unless

otherwise ordered by the Court, any Settlement Class Member who does not submit a timely

written request for exclusion as provided by this section shall be bound by the terms of this

Stipulation including, without limitation, all of the releases provided for herein. The deadline for

submitting requests for exclusion shall be set by the Court, but shall be no later than seventy (70)

calendar days after the mailing and publication of the Notice. Exclusion requests may not be

submitted by e-mail, unless otherwise ordered by the Court.

9.3 Copies of all requests for exclusion received by Lead Counsel, together with copies

of all written revocations of requests for exclusion, and all Settlement Class objections shall be

delivered to Defendants’ Counsel within three (3) business days of receipt by Lead Counsel but,

with respect to timely requests for exclusion and objections, in no event later than seventeen (17)

calendar days before the Final Approval Hearing.

10. Terms of the Judgment

10.1 If the Settlement contemplated by this Stipulation is approved by the Court, Lead

Counsel and Defendants’ Counsel shall request that the Court enter a Judgment, substantially in

the form attached hereto as Exhibit B.

11. The Effective Date

11.1. The Effective Date of this Stipulation shall be conditioned on the occurrence of all

of the following events:

(i) this Stipulation, and such other documents as may be required to obtain final Court

approval of this Stipulation in a form satisfactory to the Settling Parties, have been duly executed;


30

(ii) the Court has entered the Preliminary Approval Order, substantially in the form

attached hereto as Exhibit A;

(iii) the Court has approved the Settlement substantially as described herein, following

notice to the Settlement Class and a hearing, as prescribed by Rule 23 of the Federal Rules of

Civil Procedure;

(iv) the Court has entered the Judgment, substantially in the form attached hereto as

Exhibit B;

(v) the Judgment has become Final (as defined in ¶1.16 herein); and

(vi) no Settling Party has given notice of its election to terminate this Stipulation and

the Settlement pursuant to ¶12.1 or ¶12.2 herein, and the time for doing so has expired.

11.2 Upon the occurrence of all of the events referenced in ¶11.1 herein, any and all

remaining interest or right of Defendants in or to the Settlement Fund shall be absolutely and

forever extinguished. Without limiting the foregoing, each Defendant shall have, in his or its sole

and absolute discretion, the option to terminate the Settlement in its entirety in the event that the

Judgment, upon becoming Final, does not provide for the dismissal with prejudice of the Action

against him or it.

12. Waiver or Termination

12.1 No Settling Party shall have any obligation whatsoever to proceed under any terms

other than substantially in the form provided and agreed to herein. If the Court: (a) enters an order

expressly declining to enter the Preliminary Approval Order in any material respect without

reasonable leave to amend; (b) refuses to approve this Stipulation or any material part of it without

reasonable leave to amend; (c) declines to enter the Judgment in any material respect or enters

judgment in a form materially different from Exhibit B attached hereto; and/or (d) enters the


31

Judgment and appellate review is sought and, on review, the Judgment is vacated, modified or

reversed in any material respect, representing a Final decision on the matter, Defendants and Lead

Plaintiffs each shall have the right to terminate the Settlement and this Stipulation within thirty

(30) days from the date of receipt of such ruling by providing written notice to the other of an

election to do so. However, any decision with respect to an application for attorneys’ fees or

Litigation Expenses, or with respect to any Plan of Allocation, shall not be considered material to

the Settlement and shall not be grounds for termination. The time to appeal from approval of the

Settlement shall commence upon the Court’s entry of the Judgment regardless of whether a Plan

of Allocation has been submitted to the Court or has been approved.

12.2 If, as specified in a separate Supplemental Agreement between Lead Plaintiffs and

Defendants, the number of shares of DDMG common stock purchased or acquired during the

Settlement Class Period by Persons who would otherwise be Settlement Class Members, but who,

in accordance with the provisions of the Notice, timely and validly request exclusion from the

Settlement Class, exceeds the threshold(s) specified in the Supplemental Agreement, Defendants

shall have, in their sole and absolute discretion, the option to terminate this Stipulation on behalf

of all Defendants in accordance with the procedures set forth in the Supplemental Agreement. For

purposes of the Supplemental Agreement, any Request for Exclusion that results in the exclusion

of the Settlement Class Member from the Settlement Class, by order of the Court or otherwise,

shall be treated as timely and valid. The Supplemental Agreement is confidential and shall not be

filed with the Court, but may be examined in camera, if so requested by the Court (unless otherwise

required by court rule, or unless and until a dispute as between the Lead Plaintiffs and Defendants

concerning its interpretation or application arises). If the Court requires that the Supplemental

Agreement be filed, the Settling Parties shall jointly petition the Court to file it under seal.


32

12.3 Except as otherwise provided herein or ordered by the Court, in the event the

Settlement is terminated, then:

(i) the Settling Parties shall be deemed to have reverted to their respective status in

this Action as of September 22, 2015, with all of their respective claims and defenses preserved as

they existed on that date, and the Settling Parties shall be required to present jointly an amended

schedule to the Court;

(ii) except as otherwise expressly provided in this Stipulation, the terms of this

Stipulation shall be null and void and shall have no further force or effect, and neither the existence

nor the terms of this Stipulation (nor any negotiations preceding this Stipulation nor any acts

performed pursuant to, or in furtherance of, this Stipulation) shall be used in this Action or in any

other proceeding for any purpose (other than to enforce the terms remaining in effect, if any);

(iii) within five (5) business days after written notification of termination is provided

pursuant to ¶12.1 or ¶12.2, the Settlement Fund, less any Taxes paid or that have accrued and will

be payable at some later date with respect to such income, and less reasonable Notice and

Administration Costs already incurred that either have been actually and properly paid or are due

and owing pursuant to ¶5.5 herein, shall be returned to Defendants’ directors’ and officers’ insurers,

and any award of attorneys’ fees and/or Litigation Expenses will be returned as provided for in

¶7.3 herein. If said amount or any portion thereof is not returned within such thirty (30) day period,

then interest shall accrue thereon at the same rate as earned by the Settlement Fund until the date

that said amount is returned;

(iv) at the request of Defendants’ Counsel, the Escrow Agent or its designee shall apply

for any tax refund owed on the Settlement Fund and return the proceeds to Defendants’ directors’


33

and officers’ insurers, after deduction of any fees or expenses reasonably and actually incurred in

connection with such application(s) for refund, pursuant to written direction from Defendants; and

(v) any judgment or order entered by the Court in accordance with the terms of this

Stipulation shall be treated as vacated, nunc pro tunc.

13. No Admission of Wrongdoing

13.1 The Settlement compromises claims that are contested and shall not be deemed an

admission by any Settling Party as to the merits of any claim or defense. Lead Plaintiffs

acknowledge that Defendants have denied and continue to deny each and all claims of alleged

wrongdoing.

13.2 Except as set forth in ¶13.2(ii) herein, whether or not the Settlement is approved by

the Court, and whether or not the Settlement is consummated, the fact and terms of this Stipulation

(including exhibits) and all negotiations, discussions, drafts and proceedings in connection with

the Settlement, and any act performed or document signed in connection with the Settlement:

(i) shall not be offered, received or admitted against any of the Released Persons as

evidence of, or construed or used as, or deemed to be evidence of any presumption, concession or

admission by any of the Released Persons (a) of the truth of any fact, (b) of the validity of any

Released Claim or any claim that was asserted in the Consolidated Complaint or the Complaint,

or that could have been or might have been asserted against any of the Released Persons in this

Action or in any litigation in this or any other court, administrative agency, arbitration forum or

other tribunal, (c) of any liability, negligence, gross negligence, recklessness, deliberate

recklessness, fault or other wrongdoing of any kind of any Released Person to any other Person,

(d) of any liability, fault, misrepresentation or omission with respect to any statement or written


34

document approved or made by any of the Released Persons, or (e) of any infirmity in the defenses

that have been or could have been asserted in this Action;

(ii) shall not be offered, received or admitted against any of the Released Persons, or

against Lead Plaintiffs, Lead Counsel or any other Settlement Class Member(s), as evidence of a

presumption, concession or admission with respect to any liability, negligence, fault or wrongdoing

of any kind, or in any way referred to for any other reason or purpose as against any of the Released

Persons, in any other civil, criminal or administrative action or proceeding in any court,

administrative agency or other tribunal (including, without limitation, any formal or informal

investigation or inquiry by the Securities and Exchange Commission or any other state or federal

governmental or regulatory agency), other than such proceedings as may be necessary to enforce

the terms of the Settlement or effectuate the provisions of this Stipulation; provided, however, that

if this Stipulation is approved by the Court, any Person may (i) refer to this Stipulation and the

Settlement as necessary to secure the liability protections granted them hereunder, and/or (ii) file

this Stipulation and/or the Judgment in any action for any purpose, including, without limitation,

in order to support a defense or counterclaim based on principles of res judicata, collateral

estoppel, release and discharge, good faith settlement, judgment bar or reduction or any other

theory of claim preclusion or issue preclusion or similar defense or counterclaim;

(iii) shall not be construed against any of the Released Persons, Lead Plaintiffs, Lead

Counsel or any other Settlement Class Member(s) as an admission, concession or presumption that

the consideration to be given hereunder represents the amount that could be or would have been

recovered after trial; and

(iv) shall not be construed against Lead Plaintiffs, Lead Counsel or any other Settlement

Class Member(s) as an admission, concession or presumption that any of their claims are without


35

merit or that damages recoverable under the Complaint would not have exceeded the amount of

the Settlement Fund.

14. Miscellaneous Provisions

14.1 All of the following exhibits attached hereto are material and integral parts of this

Stipulation and are hereby incorporated by reference as though fully set forth herein: proposed

Preliminary Approval Order, Notice, Claim Form, Summary Notice, and proposed Judgment.

14.2 The Settling Parties intend this Settlement to be a final and complete resolution of

all Released Claims by Lead Plaintiffs and all Settlement Class Members against all Released

Persons. Except as otherwise provided herein, each Settling Party shall bear its own costs.

14.3 Lead Plaintiffs and Defendants, and their respective attorneys, agree not to assert

in any forum that this Action was brought by Lead Plaintiffs or Lead Counsel, or defended by

Defendants or Defendants’ Counsel, in bad faith or without a reasonable basis. For the purpose of

the Court’s findings and conclusions pursuant to Section 21D(c)(1) of the Exchange Act, as

amended by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(c), and

Section 27 of the Securities Act, as amended by the Private Securities Litigation Reform Act of

1995, 15 U.S.C. §77z-1(c), Lead Plaintiffs and Defendants shall assert no claims of any violation

of Rule 11 of the Federal Rules of Civil Procedure relating to the prosecution, defense or settlement

of this Action. The Settling Parties agree that the amount paid and the other terms of this

Settlement were negotiated at arm’s length and in good faith, including in connection with a

mediation conducted by a professional mediator, and reflect a settlement that was reached

voluntarily after consultation with experienced legal counsel.

14.4 This Stipulation, including the exhibits attached to this Stipulation and the

Supplemental Agreement referred to in ¶12.2 herein, may not be modified or amended, nor may


36

any of its provisions be waived, except by a writing signed by or on behalf of all Settling Parties

hereto or their successors-in-interest. Any condition in this Stipulation may be waived by the party

entitled to enforce the condition in a writing signed by that party or its counsel. The waiver by any

party of any breach of this Stipulation by any other party shall not be deemed a waiver of the

breach by any other party, or a waiver of any other prior or subsequent breach of this Stipulation

by that party or any other party. Without further order of the Court, the Settling Parties may agree

to reasonable extensions of time to carry out any of the provisions of this Stipulation.

14.5 The headings herein are used for the purpose of convenience only and are not meant

to have any legal effect upon the construction or interpretation of any part of this Stipulation.

14.6 The administration and consummation of this Settlement as embodied in this

Stipulation shall be under the authority of the Court, and the Court shall retain jurisdiction for the

purpose of, inter alia, entering orders providing for the implementation and enforcement of the

terms of this Stipulation, including, without limitation, the releases provided for herein, and any

awards of attorneys’ fees and Litigation Expenses to Lead Counsel.

14.7 The Settling Parties submit to the jurisdiction of the Court for purposes of

implementing and enforcing the Settlement embodied in the Stipulation.

14.8 This Stipulation, its attached exhibits and the Supplemental Agreement constitute

the entire agreement among the Settling Parties concerning this Settlement, and no representations,

warranties or inducements have been made by or to any Settling Party concerning this Stipulation,

its attached exhibits or the Supplemental Agreement other than those contained and memorialized

in such documents. This Stipulation and the Supplemental Agreement supersede any and all prior

statements, representations, promises or other agreements, written or oral, with respect to the

subject matter of this Stipulation and the Supplemental Agreement.


37

14.9 It is understood by the Settling Parties that, except for the matters expressly

represented herein, the facts or law with respect to which this Stipulation is entered into may turn

out to be other than or different from the facts and law now known to each Settling Party or

believed by such party to be true; each party therefore expressly assumes the risk of the facts or

law turning out to be so different, and agrees that this Stipulation shall be in all respects effective

and not subject to termination by reason of any such different facts or law.

14.10 This Stipulation may be executed in one or more original, e-mailed and/or faxed

counterparts. All executed counterparts and each of them shall be deemed to be one and the same

instrument. Counsel for each of the Settling Parties will maintain their own respective original

signature pages. No Settling Party shall raise the use of email to deliver or transmit a signature as

a defense to the formation or enforceability of this Stipulation, and each Settling Party forever

waives any such defense. A complete set of executed counterparts shall be filed with the Court.

14.11 This Stipulation shall be binding upon, and inure to the benefit of, the heirs,

successors and assigns of the Settling Parties and the Released Persons, including any corporation

or other entity into or with which any Settling Party or Released Person merges, consolidates or

reorganizes.

14.12 Pending approval of the Court of the Stipulation and its attached exhibits, all

proceedings in the Action shall be stayed.

14.13 All agreements made and orders entered during the course of the Action relating to

the confidentiality of information shall survive this Stipulation.

14.14 The construction, interpretation, operation, effect and validity of this Stipulation,

the exhibits attached hereto and the Supplemental Agreement, and all documents necessary to

effectuate them, shall be governed by the laws of the State of Florida without regard to conflicts


38

of laws, except to the extent that federal law requires that federal law govern. The rights and

obligations of the Settling Parties with respect to this Stipulation shall be construed and enforced

in accordance with, and governed by, the internal, substantive laws of the State of Florida without

giving effect to that State’s choice-of-law principles.

14.15 This Stipulation shall not be construed more strictly against one Settling Party than

another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel

for one of the Settling Parties, it being recognized that it is the result of arm’s-length negotiations

among the Settling Parties and all Settling Parties have contributed substantially and materially to

the preparation of this Stipulation.

14.16 All counsel and any other Person executing this Stipulation and any of the exhibits

attached hereto, or the Supplemental Agreement or any related Settlement documents, warrant and

represent that they have the full authority to do so and that they have the authority to take

appropriate action required or permitted to be taken pursuant to the Stipulation to effectuate its

terms.

14.17 Lead Counsel and Defendants’ Counsel agree to cooperate fully in seeking Court

approval of the Preliminary Approval Order and the Settlement, and to use reasonable efforts to

promptly agree upon and execute all such other documentation as may be reasonably required to

obtain final approval by the Court of the Settlement. Lead Counsel and Defendants’ Counsel agree

to cooperate to the extent reasonably necessary to effectuate, implement and accomplish all of the

terms and conditions of this Stipulation.

14.18 If any party is required to give notice to the other parties under this Stipulation,

such notice shall be in writing and shall be deemed to have been duly given upon receipt by hand


June 17


delivery, electronic mail, facsimile transmission. Notice shall be provided to the counsel indicated

on the signature block below.

IN WITNESS WHEREOF, the Settling Parties hereto have caused this Stipulation to be

executed by their duly authorized attorneys, dated ,2016.

BERMAN DEVALERIO

Patrick T. Egan, Esq. Admitted Pro Hac Vice Email: [email protected] Berman DeValerio One Liberty Square Boston, MA 02109 Telephone: (617) 542-8300 Facsimile: (617) 542-1194

Jay W. Eng, Esq. Fla. Bar No. 146676 Email: [email protected] 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, FL 33410 Telephone: (561) 835-9400 Facsimile: (561) 835-0322

WOLF POPPER LLP

Marian P. Rosner, Es Email: mrosnerlfpper.com Patricia I. Avery, Email: [email protected] Admitted Pro Hac Vice Joshua W. Ruthizer, Esq. Fla. Bar No. 92528 Email: [email protected] 845 Third Avenue New York, NY 10022 Telephone: (212) 759-4600 Facsimile: (212) 486-2093

39


LEVI & KORSINSKY LLP

Nicholas I. Porritt, Esq. Admitted Pro Hac Vice Email: [email protected] 1101 30th Street, NW, Suite 115 Washington, DC 20007 Telephone: (202) 524-4290 Facsimile: (202) 333-2121

Lead Counsel for Court-Appointed Lead Plaintiffs

AKERMAN LLP

Brian Miller, Esq. Email: [email protected] Three Brickell City Centre 98 Southeast Seventh Street, Suite 1100 Miami, FL 33131 Telephone: (305) 374-5600 Facsimile: (305) 374-5095

Counsel for Defendant John M. Nichols

HOLLAND & KNIGHT

L Tracy A/lNichols, Esq. Email: [email protected] 701 Brickell Avenue, Suite 3000 Miami, FL 33131 Telephone: (305) 374-8500 Facsimile: (305) 789-7799

Counsel for Defendant John Textor

40


mailto:[email protected]



Email: sbrodi~carltonfields.comMiami Tower100 S.E. Second Street, Suite 4200Miami, FL 33131-2113Telephone: (305) 530-0050Facsimile: (305) 530-0055

Counsel for De, fendant Jonathan Teaford

STROOCK & STROOCK& LAVAN LLP

John R. Loftus, Esq.Admitted Pro Hac ViceEmail: [email protected] B. Strickland, Esq.Email: [email protected] Pro Hac Vice2029 Century Park EastLos Angeles, CA 90067Telephone: (310) 556-5954Facsimile: (310) 407-6454

Brian C. Frontino, Esq.Email: [email protected] S. Everman, Esq.Email: [email protected] & Stroock & Lavan LLP200 South Biscayne Blvd. Suite 3100Miami, FL 33131-5323Tel: (305) 358-9900Fax: (305) 789-9302

Counsel for Maxim Group LLC and DefendantsRoth Capital Partners, LLC and Morgan JosephTriArtisan, LLC

41


EXHIBIT A TO STIPULATION OF SETTLEMENT

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

FORT PIERCE DIVISION

Case No: 12-Civ-14333-MARTINEZ-LYNCH In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/

ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE

WHEREAS a consolidated class action is currently pending before the Court entitled In

re Digital Domain Media Group, Inc. Securities Litigation, No. 12-Civ-14333-MARTINEZ-

LYNCH (the “Action”);

WHEREAS, the Court has received the Lead Plaintiffs’ Unopposed Motion for

Preliminary Approval of Proposed Class Action Settlement (the “Preliminary Approval Motion”)

and the Stipulation of Settlement, dated June __, 2016 (the “Stipulation”), that was entered into

by Lead Plaintiffs Patricof Family Limited Partnership, Edward Nussblat, and Robert Dziedzic

and Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners,

LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP (collectively “Defendants”),

and the Court has reviewed the Stipulation and its attached Exhibits;

WHEREAS, Lead Plaintiffs having made the Preliminary Approval Motion, pursuant to

Federal Rules of Civil Procedure 23(e), for an order preliminarily approving the settlement of

this Action, in accordance with the Stipulation which, together with the exhibits annexed thereto,

sets forth the terms and conditions for a proposed Settlement of the Action and for dismissal of

the Action with prejudice upon the terms and conditions set forth therein; and


2

WHEREAS, all defined terms contained herein shall have the same meanings as set forth

in the Stipulation;

NOW, THEREFORE, IT IS HEREBY ORDERED:

1. For purposes of this Settlement only, the Court will certify a Settlement Class

defined as all persons and entities who purchased the common stock of Digital Domain Media

Group, Inc. in an initial public offering completed on November 21, 2011 and/or on the public

market during the Settlement Class Period and who were damaged thereby. Excluded from the

Class are Defendants, Released Persons, the officers and directors of the Company, at all relevant

times, members of their immediate families and their legal representatives, heirs, successors or

assigns, any entity in which defendants have or had a controlling interest, employees of the

Company, and any Company employee stock purchase or retirement plan. Also excluded from

the Settlement Class are any persons who otherwise satisfy the above requirements for

membership in the Settlement Class, but who exclude themselves by submitting a valid request

for exclusion in accordance with the requirements set forth in the Notice.

2. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court hereby

appoints Lead Plaintiffs Patricof Family Limited Partnership, Edward Nusblatt, and Robert

Dziedzic as “Class Representatives.”

3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Lead Counsel,

Berman DeValerio, Wolf Popper LLP, and Levi & Korsinsky LLP are appointed as “Class

Counsel” and are authorized to act on behalf of the Class Representative and other Settlement

Class Members, with respect to all acts or consents required by or that may be given pursuant to

the Stipulation, including all acts that are reasonably necessary to consummate the Settlement.

4. The Court finds that certification of the Settlement Class for settlement purposes

only is appropriate because:

(a) The Settlement Class is so numerous that joinder of all members is

impracticable, satisfying the requirements of Rule 23(a)(1);


3

(b) There are questions of law or fact common to the Settlement Class,

satisfying the requirement of Rule 23(a)(2);

(c) The claims of the Lead Plaintiffs are typical of the claims of the Settlement

Class, satisfying the requirement of Rule 23(a)(3);

(d) The representative party will fairly and adequately protect the interests of

the Settlement Class, satisfying the requirement of Rule 23(a)(4); and

(e) Questions of law and fact common to the Settlement Class Members

predominate over questions affecting only individual members and a class action is superior to

other methods available for the fair and efficient adjudication of the controversy, satisfying the

requirements of Rule 23(b)(3).

The findings in Paragraph 4 are for purposes of this Settlement only, and shall have no

force or effect for any other purpose or if the Settlement does not become effective. The Court

does hereby preliminarily approve the Stipulation and the Settlement set forth therein, subject to

further consideration at the Final Approval Hearing described below.

5. A hearing (the “Final Approval Hearing”) shall be held before this Court on

__________, 2016, at __________ __.m., at the Wilkie D. Ferguson, Jr. United States

Courthouse, 400 North Miami Avenue, Room 10-1, Miami, FL 33128, to determine whether the

proposed Settlement of the Action on the terms and conditions provided for in the Stipulation is

fair, just, reasonable and adequate to the Settlement Class and should be approved by the Court;

whether a Judgment as provided in the Stipulation should be entered herein; whether the

proposed Plan of Allocation should be approved; and to determine the amount of fees and

expenses that should be awarded to Lead Counsel. The Court may adjourn the Final Approval

Hearing without further notice to Settlement Class Members.

6. The Court approves, as to form and content, the Notice of Pendency of Class

Action and Proposed Settlement, Final Approval Hearing, and Motion for Attorneys’ Fees and

Reimbursement of Litigation Expenses (the “Notice”); the Proof of Claim and Release form (the

“Claim Form”); and Summary Notice for publication annexed as Exhibits A-1, A-2 and A-3


4

hereto and finds that the mailing and distribution of the Notice and publishing of the Summary

Notice substantially in the manner and form set forth in ¶7 of this Order meet the requirements

of Federal Rules of Civil Procedure 23, 15 U.S.C. § 77z-1(a)(7), 15 U.S.C. § 78u-4(a)(7) and

due process, and is the best notice practicable under the circumstances and shall constitute due

and sufficient notice to all Persons entitled thereto.

7. The firm of KCC Class Action Services LLC (“Claims Administrator”) is hereby

appointed to supervise and administer the notice procedure as well as the processing of claims

as more fully set forth below:

(a) Not later than thirty (30) days after entry of this order (the “Notice Date”),

the Claims Administrator shall cause a copy of the Notice and the Claim Form, substantially in

the forms annexed as Exhibits A-1 and A-2 hereto, to be mailed by first-class mail to all

Settlement Class Members who can be identified with reasonable effort;

(b) No later than the Notice Date, the Summary Notice, substantially in the

form annexed as Exhibits A-3 hereto, shall be published once in Investor’s Business Daily and

once on Business Wire; and

(c) At least ten (10) calendar days prior to the Final Approval Hearing, Lead

Counsel shall cause to be served on Defendants’ Counsel and filed with the Court proof, by

affidavit or declaration, of such mailing and publishing.

8. Defendants shall complete service on the appropriate federal and state

government officials of all notices required under the Class Action Fairness Act, 28 U.S.C.

§1715, no later than ten days from the date of this order.

9. Nominees who purchased DDMG common stock for the beneficial ownership of

Settlement Class Members during the Settlement Class Period shall send the Notice and the

Claim Form to all beneficial owners of such DDMG common stock within ten (10) days after

receipt thereof, or send a list of the names and addresses of such beneficial owners to the Claims

Administrator within ten (10) days of receipt thereof, in which event the Claims Administrator

shall promptly mail the Notice and Claim Form to such beneficial owners. Such holders of record


5

shall be reimbursed from the Settlement Fund, upon receipt by the Claims Administrator of

proper documentation, for the reasonable expense of providing notice to beneficial owners who

are Settlement Class Members out of the Settlement Fund, which expenses would not have been

incurred except for the sending of such Notice, subject to further order of this Court with respect

to any dispute concerning such compensation.

10. All Settlement Class Members who do not exclude themselves by the deadline set

forth below shall be bound by all determinations and judgments in the Action concerning the

Settlement, whether favorable or unfavorable to the Settlement Class.

11. All Settlement Class Members who wish to participate in the Settlement shall

complete and submit Claim Forms in accordance with the instructions contained therein to obtain

a payment. Unless the Court orders otherwise, all Claim Forms must be postmarked no later

than thirty (30) days after the Settlement Hearing Date. Any Settlement Class Member who does

not submit a Claim Form within the time provided for shall be barred from sharing in the

distribution of the proceeds of the Settlement Fund, unless otherwise ordered by the Court.

Notwithstanding the foregoing, Lead Counsel shall have discretion to accept late-submitted

claims for processing by the Claims Administrator so long as the distribution of the Settlement

Fund is not materially delayed thereby.

12. Any Settlement Class Member may enter an appearance in the Action, at their

own expense, individually or through counsel of their own choice, in which case such counsel

must file with the Clerk of the Court a notice of such appearance. If they do not enter an

appearance, they will be represented by Lead Counsel.

13. Any Person falling within the definition of the Settlement Class may, upon

request, be excluded from the Settlement Class. Any such Person must submit to the Claims

Administrator a request for exclusion (“Request for Exclusion”), signed by such Person and post-

marked no later than seventy (70) days from the Notice Date. A Request for Exclusion must:

(a) state the name, address, and telephone number of the Person requesting exclusion; (b) identify

each of the Person’s purchases or other acquisitions of DDMG common stock made during the


6

Settlement Class Period, including the dates of each purchase or acquisition, the number of shares

purchased or otherwise acquired, and the price or consideration paid per share for each such

purchase or acquisition; (c) identify each of the Person’s sales or other disposals of DDMG

common stock made during the Settlement Class Period, including the dates of each sale or

disposal, the number of shares sold or disposed, and the price or consideration received per share

for each such sale or disposal; (d) state the number of shares of DDMG common stock held

immediately before the commencement of the Settlement Class Period; and (e) state that the

Person wishes to be excluded from the Settlement Class. All Persons who submit valid and

timely Requests for Exclusion in the manner set forth in this paragraph shall have no rights under

the Stipulation, shall not share in the distribution of the Net Settlement Fund, and shall not be

bound by the Stipulation or the Judgment entered in the Action.

14. Any Settlement Class Member may appear and show cause, if he, she or it has

any reasons why the proposed Settlement of the Action should or should not be approved as fair,

reasonable and adequate, why a judgment should or should not be entered thereon, why the Plan

of Allocation should or should not be approved, or why attorneys’ fees and expenses should or

should not be awarded to Lead Counsel. Settlement Class Members may not ask the Court to

order a larger settlement or otherwise modify the settlement; the Court may only approve or deny

the settlement. No Settlement Class Member or any other Person shall be heard or entitled to

contest such matters, unless that Settlement Class Member has sent by first-class mail written

objections and copies of any papers and briefs to the Class Action Clerk of the United States

District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States

Courthouse, 400 North Miami Avenue, Miami, FL 33128, or by filing them in person at any

location of the United States District Court for the Southern District of Florida, so that they are

received or postmarked no later than seventy (70) days from the Notice Date. Any objection

must: (a) clearly identify the case name and number, In re Digital Domain Media Group, Inc.

Securities Litigation, No. 12-Civ-14333-MARTINEZ-LYNCH; (b) include the full name,

address, and phone number of the objecting Settlement Class Member; (c) include a list of all of


7

the Settlement Class Member’s Settlement Class Period transactions in DDMG common stock;

(d) include a written statement of all grounds for the objection; (e) copies of any legal support

for the objection and any papers, briefs, or other documents upon which the objection is based,

which you wish to bring to the Court’s attention in support of your objection; and (f) be signed

by the objector or his or her counsel. A copy of the objector’s entire filing must also be served

on Jay Eng, Esq., Berman DeValerio, Garden Pointe, 3507 Kyoto Gardens Drive, Suite 200,

Palm Beach Gardens, Florida 33410, Co-Lead Counsel for Plaintiffs, and Steven J. Brodie, Esq.,

Carlton Fields, 100 S.E. Second Street, Suite 4200, Miami Florida, 33131, Co-Lead Counsel for

Defendants. If the objector wishes to appear in person at the Final Approval Hearing, the objector

must submit to the Court with his or her objection a Notice of Intention to Appear. If the objector

intends to appear at the Final Approval Hearing through counsel, the objection must also state

the identity of all attorneys who will appear at the Final Approval Hearing and the objector’s

counsel must submit a Notice of Intention to Appear with the objection. Any Settlement Class

Member who does not make his, her or its objection in the manner provided 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, to the Plan of

Allocation, or to the award of attorneys’ fees and reimbursement of litigation expenses to Lead

Counsel, unless otherwise ordered by the Court.

15. Copies of all requests for exclusion and all Settlement Class Member objections

received by Lead Counsel shall be delivered to Defendants’ Counsel within three (3) business

days of receipt by Lead Counsel.

16. All funds held by the Escrow Agent shall be deemed and considered to be in

custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such

time as such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the

Court.

17. Lead Counsel shall be entitled to withdraw up to $250,000 (two hundred fifty

thousand dollars) from the Settlement Fund pursuant to paragraph 5.5 of the Stipulation to pay


8

reasonable expenses of notice and administration of the settlement upon the execution of this

Order, subject to the provisions of the Stipulation and any order of the Court.

18. All papers in support of the Settlement, the Plan of Allocation, and any motion

by Lead Counsel for attorneys’ fees or reimbursement of expenses shall be filed and served.

19. Defendants and their counsel shall have no responsibility for the Plan of

Allocation or any motion for attorneys’ fees or reimbursement of expenses submitted by Lead

Counsel, and such matters will be considered separately from the fairness, reasonableness and

adequacy of the Settlement.

20. At or after the Final Approval Hearing, the Court shall determine whether the

Plan of Allocation proposed by Lead Counsel and any motion for attorneys’ fees or

reimbursement of expenses shall be approved.

21. All reasonable expenses incurred in identifying and notifying Settlement Class

Members, as well as administering the Settlement Fund, shall be paid as set forth in the

Stipulation. In the event the Settlement is not approved by the Court, or otherwise fails to become

effective, neither the Lead Plaintiffs nor Co-Lead Counsel (nor the Claims Administrator nor any

other person) shall have any obligation to repay any amounts incurred or properly disbursed

pursuant to ¶¶5.5 or 6.2 of the Stipulation.

22. Neither the Stipulation, nor any of its terms or provisions, nor any of the

negotiations or proceedings connected with it, shall be construed as an admission or concession

by Defendants of the truth of any of the allegations in the Action, or of any liability, fault, or

wrongdoing of any kind.

23. Neither the Stipulation, nor any of its terms or provisions, nor any of the

negotiations or proceedings connected with it, shall be construed as an admission or concession

by Lead Plaintiff of any liability, fault, or wrongdoing of any kind.

24. Pending final determination of whether the Settlement should be approved, Lead

Plaintiffs, all Settlement Class Members, and anyone who acts or purports to act on their behalf,


9

shall not institute, commence or prosecute any action which asserts Released Claims against any

Released Person.

25. Pending final determination of whether the Settlement should be approved, all

proceedings in the Action are stayed pending further order of the Court.

26. The Court reserves the right to adjourn the date of the Final Approval Hearing

without further notice to the Settlement Class Members, and retains jurisdiction to consider all

further motions arising out of or connected with the proposed Settlement. The Court may

approve the Settlement, with such modifications as may be agreed to by the Settling Parties, if

appropriate, without further notice to the Settlement Class.

IT IS SO ORDERED.

Dated: ___________________, 2016

JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE


NOTICE OF SETTLEMENT MASTER FILE NO. 4:13-CV-05486-YGR

EXHIBIT A-1 TO STIPULATION OF SETTLEMENT




NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT, FINAL APPROVAL HEARING, AND MOTION FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES

If you purchased or otherwise acquired shares of Digital Domain Media Group, Inc. (“DDMG” or the “Company”) common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive (the “Settlement Class”), then you could receive a payment from the proposed settlement of the above-captioned securities class action.

A federal court authorized this notice. This is not a solicitation from a lawyer.

The Proposed Settlement: This Notice contains summary information with respect to the proposed settlement. The terms and conditions of the proposed settlement (the “Settlement”) are set forth in the Stipulation of Settlement (the “Stipulation”), dated June 10, 2016 between and among the following parties in the Action (defined below): (i) Patricof Family Limited Partnership, Edward Nusblatt, and Robert Dziedzic (collectively, “Lead Plaintiffs”), and (ii) defendants John C. Textor, Jonathan F. Teaford, John M. Nichols (collectively “DDMG Defendants”), Roth Capital Partners, LLC, Morgan Joseph TriArtisan, LLC (collectively (“Underwriter Defendants”), and SingerLewak LLP, by and through their undersigned counsel. The DDMG Defendants together with the Underwriter Defendants and SingerLewak LLP are collectively referred to as the “Defendants”, and with Lead Plaintiffs, each a “Party”, are collectively referred to as the “Parties”. Stipulation are available at www.DDMGSecuritiesLitigation.com or from Lead Counsel at the addresses provided below. Additional information concerning this Litigation and the Settlement is also available by contacting Lead Counsel. Securities, Class and Class Period: The Settlement class (the “Class” or “Settlement Class”) is comprised of all Persons who purchased or otherwise acquired shares of DDMG common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive. Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP, Released Persons (defined below), the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, any entity in which defendants have or had a controlling interest, employees of the Company, and any Company employee stock purchase or retirement plan. Also excluded from the Settlement Class are those Persons who timely and validly file a request for exclusion from the Settlement Class as explained below. Settlement Payment: $5,500,000 in cash (the “Settlement Payment”). The “Settlement Fund” refers to the Settlement Payment plus any and all interest earned thereon. The Lawsuit: As discussed further, the Settlement resolves a lawsuit concerning allegations that certain investors who purchased or otherwise acquired DDMG shares during the Settlement Class Period and were damaged as a result of Defendants’ alleged dissemination of materially false and misleading statements and omissions regarding (i) DDMG’s financial conditions, (ii) the Company’s failure to disclose a loan agreement by which Textor borrowed $10 million to


NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -2-

purchase 1,176,471 shares of DDMG common stock in DDMG’s IPO, and (iii) the Company’s failure to disclose certain information required by 17 C.F.R. §229.401. Attorneys’ Fees and Expenses: Lead Counsel has litigated this Action on a contingent basis and has conducted this litigation and advanced the expenses of litigation with the expectation that if it were successful in recovering money for the Class, it would receive fees and be reimbursed for its expenses from the settlement fund, as is customary in this type of litigation. Plaintiffs’ Counsel will apply to the Court for an award of attorneys’ fees not to exceed $1,800,000 or thirty-three percent (33%) of the Settlement Fund plus interest, and for reimbursement of out-of-pocket expenses not to exceed $[XXXXXX], plus interest (the “Fee Application”) incurred in connection with the prosecution of the case. Lead Counsel may make an application for service awards, in amounts not to exceed $5,000 each, for the Lead Plaintiffs to compensate them for their efforts and commitment on behalf of the Class. The Court may award Plaintiffs’ Counsel attorneys’ fees consisting of less than thirty-three percent (33%) of the Settlement Fund, in which case the difference will remain with the Settlement Fund. Plaintiffs’ Counsel have expended considerable time and effort in the prosecution of the case on a contingent-fee basis, and have advanced the expenses of the Litigation, in the expectation that if they were successful in obtaining a recovery for the Settlement Class, they would be paid from such recovery. In this type of litigation, counsel are typically awarded a percentage of the common fund recovery as their attorneys’ fees. Lead Counsel’s Fee Application will be filed with the Court on or before DATE. Deadlines:

To Submit a Proof of Claim: DATE To Submit a Request for Exclusion: DATE To File and Serve an Objection: DATE Court Settlement Hearing:

DATE

More Information: Contact Information for Co-Lead Counsel for Lead Plaintiffs and the Class: .

Jay W. Eng, Esq. BERMAN DEVALERIO

3507 Kyoto Gardens Drive, Suite 200

Palm Beach Gardens, FL 33410 (561) 835-9400

Joshua W. Ruthizer, Esq. WOLF POPPER LLP

845 Third Avenue New York, NY 10022

(212) 759-4600

Nicholas I, Porritt, Esq. LEVI & KORSINSKY LLP

1101 30th Street NW Washington, DC 20007

(202) 524-4290

Additional information about the Settlement can be found at: www.DDMGSecuritiesLitigation.com. Your legal rights are affected whether you act or do not act. Please read this notice carefully.

Statement of Recovery

Your individual recovery from the Settlement Fund will depend on numerous factors. Lead Counsel estimates that approximately 8.9 million shares of DDMG common stock were purchased or otherwise acquired and potentially damaged during the Class Period. Based on this, the average recovery per share of DDMG securities under the Settlement will be approximately $0.62 per share before the deduction of attorneys’ fees, costs, and expenses, as approved by the Court. The actual recovery per share will depend on: (1) the number of claims filed; (2) when members of the Class purchased and/or acquired their shares during the Class Period; (3) whether members of the Class either sold their shares during the Class Period or held their shares past the end of the Class Period; (4) administrative costs, including the costs of notice, for the Action, and (5) the amount awarded by the Court for attorneys’ fees and expenses. As noted above, Lead Counsel will submit a Fee Application, seeking an award of attorneys’ fees not to exceed $1,800,000 or thirty-three percent (33%) of the Settlement Fund plus interest, and for reimbursement of out-of-pocket expenses not to exceed $[XXXXXX], plus interest. These payments, if approved, will come out of the $5.5 million Settlement Fund, and are estimated to be an average of [$#.##] per damaged share purchased in the Settlement Class Period.



Lead Plaintiffs and Defendants do not agree on the average amount of damages per share that would be recoverable if the Lead Plaintiffs were to have prevailed on each claim alleged. The issues on which the parties disagree include: (1) the extent to which the various matters that Lead Plaintiffs allege were materially false or misleading influenced (if at all) the trading price of DDMG’s common stock at various times during the Settlement Class Period; (2) the extent to which the various allegedly adverse material facts were omitted influenced (if at all) the trading price of DDMG’s common stock at various times during the Settlement Class Period; (3) whether the statements made or facts allegedly omitted were material, false, misleading or otherwise actionable under the securities laws; (4) whether any of the Defendants acted with the wrongful intent alleged by Lead Plaintiffs; and (5) whether, even if liability could be proven, total damages would be more than $0 per damaged share. DDMG and the Individual Defendants deny all liability and believe they would win the case at trial. The Circumstances of the Settlement For the Settlement Class, the principal reason for the Settlement is the benefit to be provided to the Settlement Class. This benefit must be compared to the risk that no recovery might be achieved after a contested trial and likely appeals, possibly years into the future. For the settling Defendants, who deny all allegations of wrongdoing or liability whatsoever, the principal reason for the Settlement is to eliminate the expense, risks and uncertain outcome of the litigation. The Settlement therefore enables the Class to recover a substantial amount without incurring any additional risk or costs.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

SUBMIT A CLAIM FORM POSTMARKED NO LATER THAN DATE

The only way to get a payment if you have a Recognized Claim.

EXCLUDE YOURSELF BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION POSTMARKED BY NO LATER THAN DATE

Get no payment. This is the only option that allows you to ever be part of any other lawsuit against DDMG and the other Released Persons about the Released Claims.

OBJECT BY SUBMITTING A WRITTEN OBJECTION POSTMARKED NO LATER THAN DATE

Write to the Court about why you do not like the Settlement. You may, but are not required to, appear at the Final Approval Hearing.

GO TO A HEARING You may ask to speak in Court about the fairness of the Settlement.

DO NOTHING Get no payment. Give up rights.

These rights and options – and the deadlines to exercise them – are explained in this notice. The Court in charge must still decide whether to approve the Settlement. Payments will be made to Settlement Class

Members who submit timely and valid Proofs of Claim if the Court approves the Settlement and after any appeals are resolved. Please be patient.



WHAT THIS NOTICE CONTAINS

Table of Contents

Page BASIC INFORMATION ................................................................................................................................

1. Why did I get this notice package? .......................................................................... 2. What is this lawsuit about? ...................................................................................... 3. Why is this a class action? ....................................................................................... 4. Why is there a settlement? ....................................................................................... 5. How do I know if I am part of the Settlement? ........................................................ 6. Are there exceptions to being included? .................................................................. 7. What if I am still not sure if I am included? ............................................................ 8. What does the Settlement provide? .......................................................................... 9. How much will my payment be? ............................................................................. 10. How can I get a payment? ........................................................................................ 11. When would I get my payment? .............................................................................. 12. What am I giving up to get a payment or stay in the Settlement Class? .................. 13. How do I get out of the proposed Settlement? ......................................................... 14. If I do not exclude myself, can I sue DDMG and the other Released Persons for the same

thing later? ............................................................................................................... 15. If I exclude myself, can I get money from the proposed Settlement? ...................... 16. Do I have a lawyer in this case? ............................................................................... 17. How will the lawyers be paid? ................................................................................. 18. How do I tell the Court that I do not like the proposed Settlement? ........................ 19. What is the difference between objecting and excluding? ....................................... 20. When and where will the Court decide whether to approve the proposed Settlement? 21. Do I have to come to the hearing? ........................................................................... 22. May I speak at the hearing? ..................................................................................... 23. What happens if I do nothing at all? ........................................................................ 24. Are there more details about the proposed Settlement? ........................................... 25. How do I get more information? ..............................................................................

BASIC INFORMATION

1. Why did I get this notice package?

You or someone in your family may have purchased or otherwise acquired shares of DDMG common stock between November 18, 2011 and September 6, 2012, inclusive. The Court directed that this Notice be sent to potential Settlement Class Members because they have a right to know about a proposed settlement of a class action lawsuit, and about all of their options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement and any appeals are resolved, an administrator appointed by the Court will make the payments that the Settlement allows. This package explains the Litigation, the Settlement, Settlement Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.

2. What is this lawsuit about?

This lawsuit consolidates three class actions filed in the United States District Court for the Southern District of Florida against John C. Textor (“Textor”), Jonathan F. Teaford (“Teaford”), and John M. Nichols (“Nichols”) alleging violations



of the federal securities laws. On March 12, 2013, the Court consolidated those three actions under the caption In re Digital Domain Media Group, Inc. Securities Litigation, and appointed the Patricof Family Limited Partnership, Edward Nusblatt, and Robert Dziedzic to serve as Lead Plaintiffs, and Levi & Korsinsky, Wolf Popper, and Berman DeValerio as Co-Lead Counsel. On July 31, 2013, the Class Action Plaintiffs filed the Consolidated Amended Class Action Complaint (the “Complaint”). The Complaint alleges claims under the Securities Act, the Exchange Act, and United States Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated under the Exchange Act, 17 C.F.R. §240.10b-5. The Securities Act Claims are brought against Textor, Teaford, SingerLewak LLP (the Auditor Defendant), and Roth Capital Partners, LLC, and Morgan Joseph TriArtisan, LLC (the Underwriter Defendants. The Exchange Act claims are brought against Textor, Teaford, and Nichols. The Complaint alleges that Textor and Teaford are liable for untrue statements of material fact and omissions in the registration statement, six amendments thereto, and a prospectus (collectively, the “Offering Documents”) that the Company issued in connection with its initial public offering (“IPO”) completed on November 18, 2011. Specifically the Complaint alleges misstatements or omissions in the Offering Documents regarding (i) DDMG’s financial conditions, (ii) the Company’s failure to disclose a loan agreement by which Textor borrowed $10 million to purchase 1,176,471 shares of DDMG common stock in DDMG’s IPO, and (iii) the Company’s failure to disclose certain information required by 17 C.F.R. §229.401. When this information became public, the Complaint alleges that the share price fell and shareholders were damaged. The lawsuit seeks money damages against Defendants for alleged violations of the federal securities laws. Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Plaintiffs in the Litigation. Defendants continue to assert that they did not violate Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 or Sections 10 and 20(a) of the Securities Exchange Act of 1934, that they did not engage in any conduct that could give rise to any liability to Lead Plaintiffs or the Settlement Class, that they did not make any of the claimed misstatements or omissions, that none of the claimed misstatements of omissions caused damages to Plaintiffs or the Settlement Class, and that none of the claimed misstatements or omissions were material.

3. Why is this a class action?

In a class action, one or more people called Class Representatives sue on behalf of people who have similar claims. All persons with similar claims are Settlement Class Members, who together constitute the class. Bringing a case, such as this one, as a class action allows the collective adjudication of many similar claims that might be economically too small to bring in individual actions. One court resolves the issues for all class members, except for those who exclude themselves from the class. Judge Jose E. Martinez of the Southern District of Florida is overseeing this class action.

4. Why is there a settlement?

The Court did not decide in favor of Lead Plaintiffs or Defendants. Instead, both sides agree to the Settlement. That way, they avoid the costs and risks of further litigation and trial. As explained above, Lead Plaintiffs and their attorneys think the Settlement is best for all members of the Class. Lead Plaintiffs believe that the proposed Settlement is fair, reasonable, adequate, and in the best interests of the Settlement Class. Throughout the litigation, Defendants raised a number of arguments and defenses (which they would continue to do through summary judgment and trial) including that none of the challenged misrepresentations were false or misleading when made, that Defendants did not act with the requisite fraudulent intent and that any losses suffered by Lead Plaintiffs and the Settlement Class Members were not caused by the misconduct alleged in the Complaint. Defendants would also likely argue that, even if Lead Plaintiffs could establish liability, they would have trouble showing what part of the stock-price decline is attributable to the alleged fraud rather than other company-specific bad news. While Lead Plaintiffs believe that these arguments lack merit, there is no guarantee that Defendants would not prevail on one or more of these arguments. In the absence of a Settlement, the Settling Parties would present factual and expert testimony on each of these issues, and there is considerable risk that the Court or jury would resolve these issues against Lead Plaintiffs and the Settlement Class. Lead Plaintiffs and Lead Counsel have also considered the benefits of a Settlement now, in light of the risks that the Settling Defendants or their insurers could not satisfy a judgment materially larger than the Settlement Amount, and of their evaluation of the reduced amount of insurance that may be available after trial. Lead Counsel have thoroughly investigated and litigated the case prior to and since filing it in 2012. Based upon their extensive investigation, their consultation with experts, and their evaluation of the claims asserted against the Defendants



and defenses that might be asserted, Lead Counsel believe that the Settlement is fair, reasonable, adequate and in the best interests of the Settlement Class. Digital Domain filed for bankruptcy on September 11, 2012. Lead Plaintiffs and Lead Counsel have considered the benefits of a settlement now, in light of the risks that the Settling Defendants or their insurers could not satisfy a judgment materially larger that the Settlement Amount, and of their evaluation of the reduced amount of insurance that may be available after trial. The Settlement provides an immediate and certain monetary recovery. By settling, Lead Plaintiffs and Defendants avoid the cost, uncertainty and delay of continued litigation. The parties engaged in extensive negotiations that led to the Settlement described in this Notice. Lead Counsel believe the Settlement is fair because there is no guarantee the Settlement Class would win on any of the claims and even if they did win, they might not be awarded any more money than the $5.5 million plus interest, as provided for in the Stipulation, that Defendants have agreed to in order to settle the Action. Defendants’ lawyers believe the Settlement is fair because even though Defendants deny Lead Plaintiff’s claims, Defendants avoid the cost of continued litigation and risk of losing at trial.

WHO IS IN THE SETTLEMENT To see if you will get money from this Settlement, you must be a Settlement Class Member.

5. How do I know if I am part of the Settlement?

The Court directed that, for the purposes of the proposed Settlement, everyone who fits this description is a Settlement Class Member: all Persons who purchased or otherwise acquired shares of DDMG common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive.

6. Are there exceptions to being included?

Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP, Released Persons (defined below), the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, any entity in which defendants have or had a controlling interest, employees of the Company, and any Company employee stock purchase or retirement plan. Also excluded from the Settlement Class are those Persons who timely and validly file a request for exclusion. If one of the mutual funds in which you are invested purchased or otherwise acquired DDMG common stock during the Settlement Class Period, that does not make you a Settlement Class Member. You are a Settlement Class Member only if you directly purchased or otherwise acquired DDMG common stock during the Settlement Class Period. Contact your broker to see if you purchased or otherwise acquired DDMG common stock during the Settlement Class Period. If you sold but did not purchase DDMG common stock during the Settlement Class Period, you are not a Settlement Class Member. You are a Settlement Class Member only if you purchased or otherwise acquired your shares during the Settlement Class Period.

7. What if I am still not sure if I am included?

If you are still not sure whether you are included, you can ask for free help. You can contact the Claims Administrator by writing to KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417 for more information; or, you can fill out and return the Proof of Claim form described in Question 10 on page 7 to see if you qualify.

THE SETTLEMENT BENEFITS — WHAT YOU GET

8. What does the Settlement provide?



Defendants have agreed to create a $5.5 million fund to be distributed, after the payment of claims administration and notice costs and Plaintiffs’ Counsel’s attorneys’ fees and expenses as awarded by the Court, to all Settlement Class Members who send in a valid and timely Proof of Claim form. In return, the Parties will agree to dismiss the Action and Lead Plaintiffs and all Settlement Class Members who do not opt out agree to release, relinquish and discharge all Released Claims against the Defendants and their respective Related Persons, whether or not these Settlement Class Members execute and deliver the Proof of Claim and Release.

9. How much will my payment be?

The Settling Defendants have agreed to pay $5,500,000 in cash for the benefit of the Settlement Class. At this time, it is not possible to make any determination as to how much individual members of the Settlement Class may receive from the Settlement. Lead Plaintiffs have proposed a plan for allocating the Net Settlement Funds to Settlement Class Members (the “Plan of Allocation”). The objective of the Plan of Allocation will be to equitably distribute funds to Settlement Class Members who submit timely and valid Proof of Claim Forms. The Plan of Allocation reflects Lead Plaintiffs’ damages expert’s analysis, which has included a review of publicly available information regarding DDMG and statistical analyses of the price movement of DDMG common stock and the price performance of relevant market and industry indices during the Settlement Class Period, as well as the statutory provision for recovery under a claim for violation of Section 11 of the Securities Act. The Plan of Allocation is the proposed plan submitted by Lead Plaintiffs and Co-Lead Counsel for the Court’s approval. The Court may approve this plan as proposed or it may modify it without further notice to the Settlement Class. The Court has reserved jurisdiction to allow, disallow or adjust on equitable grounds the claim of any Settlement Class Member. Each Settlement Class Member will be deemed to have submitted to the jurisdiction of the U.S. District Court for the Southern District of Florida with respect to his, her, or its Proof of Claim. Persons that exclude themselves from the Settlement Class will not be eligible to receive a distribution from the Settlement Fund and should not submit Proof of Claim Forms. If approved by the Court, the plan of allocation set forth below (the “Plan of Allocation”) will determine how the net proceeds of the Settlement will be distributed to Settlement Class Members who submit timely and valid Claim Forms.

PLAN OF ALLOCATION

General Provisions To the extent the Settlement is approved by the Court, and upon the satisfaction of the other conditions to the Settlement, the Net Settlement Funds will be distributed to Settlement Class Members who submit valid claims that are accepted by the Court (“Authorized Claimants”) in accordance with the provisions of this proposed Plan of Allocation, or such other plan of allocation as the Court may approve. Approval of the Settlement is independent from approval of a plan of allocation. Payments pursuant to the Plan of Allocation will be conclusive against Authorized Claimants. No person will have any claim against Lead Plaintiffs, Co-Lead Counsel, the Settling Defendants, the Released Parties and their counsel, or the Claims Administrator or other agent designated by Co-Lead Counsel arising from the distribution made substantially in accordance with the Stipulation of Settlement, the Plan of Allocation, or further orders of the Court. Lead Plaintiffs, Co-Lead Counsel, the Settling Defendants, the Released Parties and their counsel will have no responsibility or liability whatsoever for the investment or distribution of the Settlement Fund, the Plan of Allocation or the determination, administration, calculation or payment of any Proof of Claim Form, nor nonperformance of the Claims Administrator, the payment or withholding of Taxes of Tax Expenses owed by the Settlement Fund or any losses incurred in connection therewith. Settling Defendants are not entitled to get back any portion of the Settlement Fund once the Court’s Order approving the Settlement becomes final. Settling Defendants shall not have any liability, obligation, or responsibility for the



administration of the Settlement or disbursement of the Net Settlement Funds or the Plan of Allocation or such other plan of allocation as may be approved by the Court. Only Authorized Claimants will be eligible to share in the distribution of the Net Settlement Funds, as further described below. Each person and entity wishing to participate in the distribution must timely submit a valid Proof of Claim form establishing membership in the Settlement Class, and including all required documentation, postmarked no later than [DATE] to the address set forth in the Claim Form. Unless the Court otherwise orders, any Settlement Class Member who fails to submit a Claim Form postmarked no later than [DATE] shall be forever barred from receiving payments pursuant to the Settlement, but will in all other respects remain a member of the Settlement Class in which he, she or it is a member and be subject to the provisions of the Stipulation, including the terms of any Judgements entered and releases given. Each Claim Form must provide all of the information requested therein and provide sufficient supporting documentation as set forth therein. The Plan of Allocation generally measures the amount of loss that a Settlement Class Member can claim for purposes of making pro rata allocations of the cash in the Net Settlement Fund to Authorized Claimants. The Plan of Allocation is not a formal damages analysis. The calculations made pursuant the Plan of Allocation are not intended to be estimates of, nor indicative of, the amounts that Settlement Class members might have been able to recover after a trial. Nor are the calculations pursuant to the Plan of Allocation intended to be estimates of the amounts that will be paid to Authorized Claimants pursuant to the Settlement. The computations under the Plan of Allocation are only a method to weigh the claims of Authorized Claimants against one another for the purposes of making allocations of the Net Settlement Funds. In this Action, there are claims asserted under both the Securities Act and the Exchange Act. All Settlement Class Members have claims under the Exchange Act. However, not all Settlement Class Members have claims under the Securities Act and not all Defendants were alleged to have violated both acts, e.g., there are no allegations that any of the Underwriter Defendants violated the Exchange Act. The Plan of Allocation properly recognizes these facts and the requirements imposed by law as to who is eligible to recover from each Defendant. Accordingly, the proceeds of the Settlement will be distributed to Authorized Claimants based on the claims they have and, to that end, the proceeds are divided into two separate funds:

a. Fund 1: Representing 87% of the Settlement Fund (net of attorneys’ fees, expenses, and administration costs), this fund applies to claims asserted under the Exchange Act. As a result, all Authorized Claimants, to the extent they have Recognized Loss Amounts under the formula set forth below, will be eligible to receive a pro rata distribution from Fund 1, subject to their satisfying the other conditions for receiving a distribution.

b. Fund 2: Representing 13% of the Settlement Fund (net of attorneys’ fees, expenses, and administration costs) Fund 2 applies to claims asserted only under the Securities Act and shall be paid to Authorized Claimants who purchased shares in or traceable to DDMG’s November 18, 2011 offering, based on their Recognized Loss Amounts under the formula set forth below, and subject to their satisfying the other conditions for receiving a distribution..

Calculation of Recognized Loss Amounts and Recognized Claims

For each Settlement Class Period purchase of DDMG common stock that is properly documented, a “Recognized Loss Amount” will be calculated for that security according to the formulas described below. Such “Recognized Loss Amounts” will be aggregated across all purchases relevant for each Fund to determine the “Fund Recognized Claim” that each Authorized Claimant has against each Fund.



The calculations of the Recognized Loss Amounts reflect Lead Plaintiffs’ allegations that the price of DDMG’s common stock was artificially inflated during the Settlement Class Period due to Defendants’ alleged misrepresentations and/or omissions. Lead Plaintiffs’ damages expert has estimated the artificial inflation in the DDMG Securities during the Settlement Class Period. Under this analysis, each Recognized Loss Amounts will be based on the difference between the price of DDMG common stock prior to and after the corrective disclosures and/or drops on September 4, 2012, September, 5, 2012, and September 7, 2012. The following table demonstrates how a Recognized Loss Amount is calculated:

Date Shares Sold

Dat

e S

hare

s P

urch

ased

Prior to Sept. 4, 2012

Sept. 4, 2012 through Sept. 5, 2012

Sept. 6, 2012 through Sept. 7, 2012

After Sept. 7, 2012

Prior to Sept. 4, 2012

$0/share $0.66/share $1.09/share $1.47/share

Sept. 4, 2012 to Sept. 5, 2012

N/A $0/share $0.43/share $0.81/share

Sept. 5, 2012 to Sept. 7, 2012

N/A N/A $0/share $0.38/share

After Sept. 7, 2012

N/A N/A N/A $0/share

Depending upon when an Authorized Claimant purchased and sold shares of DDMG common stock, the Recognized Loss Amount will be equal to the amount of shares held on the date of a corrective disclosure multiplied by the decline in DDMG’s common stock price caused by the corrective disclosure.

An Authorized Claimant’s “Distribution Amount” shall be the sum of its pro rata share of each Fund. The pro rata share in each Fund shall be calculated by dividing the Authorized Claimant’s Recognized Loss Amount by the total of Recognized Loss Amounts for all Authorized Claimants entitled to a distribution from that Fund. If the Authorized Claimant’s Distribution Amount is calculated to be less than $10.00, it will not be included in the calculation and it will not be distributed. If an Authorized Claimant has more than one purchase/acquisition or sale of DDMG common stock during the Settlement Period, all purchases/acquisitions and sales shall be matched on a First-In-First-Out (“FIFO”) basis. Purchases or acquisitions and sales of DDMG common stock are deemed to have occurred on the “trade” date as opposed to the “settlement” date. To the extent that any amount of the Settlement Fund remains after the Claims Administrator has caused distributions to be made to all Authorized Claimants, whether by reason of uncashed distributions or otherwise, then, after the Claims Administrator has made reasonable and diligent efforts to have Authorized Claimants cash their distributions, any balance remaining in the Settlement Fund one (1) year after the initial distribution of such funds shall be redistributed to Authorized Claimants who have cashed their initial distributions, after payment of any unpaid costs or fees incurred in administering the Settlement Fund for such redistribution if Co-Lead Counsel, in consultation with the Claims Administrator, determines that additional redistributions, after deduction of any additional fees and expenses that would be incurred with respect to such redistribution, would be cost-effective. Additional redistributions to Authorized Claimants who have cashed their prior distribution checks may occur thereafter if Co-Lead Counsel, in consultation with the Claims Administrator, determines that additional redistributions, after the deduction of any additional fees and expenses that would be incurred with respect to such redistributions, would be cost effective. At such time as it is determined that the redistribution of funds remaining in the Settlement Fund is not cost-effective, the remaining balance in the Settlement Fund shall be contributed to non-sectarian, not-for-profit 501(c)(3) organization(s), to be recommended by Co-Lead Counsel and approved by the Court.

10. How can I get a payment?



To qualify for a payment, you must send in a Proof of Claim form. A Proof of Claim form accompanies this Notice. You may also download a Proof of Claim form from the Claims Administrator’s website, www.DDMGSecuritiesLitigation.com. Read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail it postmarked no later than [insert date]. Any Class member who fails to submit a Proof of Claim by such date shall be forever barred from receiving any distribution from the Settlement Fund (unless by order of the Court the deadline to submit a Proof of Claim is extended or such Class member’s Proof of Claim is accepted), but otherwise shall be bound by all of the terms of the Stipulation and the Settlement, including the releases in the Stipulation, and will be permanently barred and enjoined from bringing any action against any and all Defendants and released persons concerning any and all of Lead Plaintiffs’ Released Claims.

11. When would I get my payment?

The Court will hold a hearing on [insert date], to decide whether to approve the Settlement. If the Court approves the Settlement, one or more appeals may follow. It is always uncertain how any such appeal will be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.

12. What am I giving up to get a payment or stay in the Settlement Class?

Unless you exclude yourself, you will remain a member of the Settlement Class, and that means that, upon the “Effective Date,” you will release all “Released Claims” (as defined below) against the “Released Persons” (as defined below). The “Effective Date” will occur when an Order entered by the Court approving the Settlement becomes final and not subject to appeal and when all conditions of the Stipulation have been met. “Released Claims” means all and every manner of direct and derivative actions, causes of action, claims, counterclaims, cross-claims, third-party claims, suits, proceedings, damages, punitive damages, costs, expenses and attorneys’ fees, demands and liabilities whatsoever of every kind and nature, whether known or unknown, suspected or unsuspected, accrued or unaccrued, in law, equity or otherwise, which Lead Plaintiffs or any other Member of the Settlement Class (i) asserted in the Action; (ii) could have or might have asserted in the Action and/or in any other litigation, action or forum that arise out of, are based upon or are related in any way, directly or indirectly, in whole or in part, to (a) both: (1) the allegations, transactions, facts, matters, occurrences, representations or omissions involved, set forth or referred to in the Action, and (2) any purchase, sale or acquisition of, or decision to hold DDMG common stock during the Settlement Class Period; and/or (b) Defendants’ defense or settlement of the Action and/or Defendants’ defense or settlement of the Released Claims. Notwithstanding the foregoing, “Released Claims” does not include claims relating to the enforcement of the Settlement. “Released Persons” means DDMG, the DDMG Directors and Officers, the DD CA Directors and Officers, the Underwriter Defendants (including Maxim Group LLC), SingerLewak, SL Insurers, Falcon, the Florida DEO, the Senior Lenders, the Creditors Committee, PSL, the Foreign Investors, Bounty Gain, PBC, every “Insured” (as the term is defined in the D&O Policies), and the Insurers, and their spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys, accountants, auditors, representatives, principals, officers, directors, employees, contractors, partners, owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns, including all subsidiaries’, affiliates’, predecessors-in-interest’s, successors-in-interest’s, and assigns’ past or present spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys, accountants, auditors, representatives, principals, officers, directors, employees, contractors, partners, owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns, and each is a “Released Party.” If you remain a member of the Settlement Class, all of the Court’s orders will apply to you and legally bind you.

EXCLUDING YOURSELF FROM THE SETTLEMENT

If you do not want a payment from this Settlement, but you want to keep any right you may have to sue or continue to sue Defendants on your own about the Released Claims, then you must take steps to exclude yourself—or as it is sometimes



referred to, you must “opt out” of the Settlement Class.

13. How do I exclude myself from the proposed Settlement?

To exclude yourself from the Settlement Class, you must send a letter by mail stating that you “request exclusion from the Settlement Class in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla.).” Your letter must state the date(s), price(s) and number(s) of shares of all your purchases, acquisitions and sales of DDMG shares during the Settlement Class Period. In addition, be sure to include your name, address, daytime telephone number and your signature. You must mail your exclusion request postmarked no later than DATE to the Claims Administrator at: Digital Domain Media Group, Inc. Securities Litigation EXCLUSIONS, c/o KCC Class Action Services LLC, 3301 Kerner Boulevard, San Rafael, CA 94901. You cannot exclude yourself by telephone, by fax or by e-mail. If you ask to be excluded, you will not get any settlement payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue DDMG and the other Released Persons about the Released Claims in the future.

14. If I do not exclude myself, can I sue DDMG, Defendants or the other Released Persons later for the Released Claims?

No. Unless you exclude yourself, you give up any rights to sue DDMG and the other Released Persons, or to enforce any existing judgments against any of the Released Persons, for any and all Released Claims. If you have a pending lawsuit against DDMG or the other Released Persons, speak to your lawyer in that case immediately, to determine if you have to exclude yourself from this Settlement Class to continue your own lawsuit. Remember, the exclusion deadline is DATE.

15. If I exclude myself, can I get money from the proposed Settlement?

No. If you exclude yourself, do not send in a Proof of Claim form to ask for any money. But, you may exercise any right you may have to sue, continue to sue, or be part of a different lawsuit against Defendants and the other Released Persons.

THE LAWYERS REPRESENTING YOU

16. Do I have a lawyer in this case?

The Court appointed the law firms Levi & Korsinsky, Wolf Popper, and Berman DeValerio as Co-Lead Counsel to represent all class members. These lawyers are called Plaintiffs’ Counsel. You will not be separately charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

17. How will the lawyers be paid?

Plaintiffs’ Counsel are moving the Court to award attorneys’ fees and for reimbursement of their expenses of not to exceed $[AMOUNT] from the Settlement Fund, plus interest on such fees and expenses at the same rate as earned by the Settlement Fund. Plaintiffs’ Counsel, without further notice to the Settlement Class, may subsequently apply to the Court for fees and expenses incurred in connection with administering and distributing the Settlement proceeds to the members of the Settlement Class and any proceedings subsequent to the Final Approval Hearing. The attorneys’ fees and expenses requested will be the only payment to Lead Counsel for its efforts in achieving the Settlement and for their risk in undertaking this representation on a wholly contingent basis. To date, Lead Counsel has not been paid for its services for conducting this litigation on behalf of Lead Plaintiffs and the Class nor for its substantial out-of-pocket expenses. The fee requested will compensate Lead Counsel for its work in achieving the Settlement Fund. The Court may, however, award less than this amount. In that case, the difference will remain with the Settlement Fund. Lead Counsel may make an application for service awards, in amounts not to exceed $____ each, for the Lead Plaintiffs to compensate them for their efforts and commitment on behalf of the Class. The Court may, however, award less than this amount. In that case, the difference will remain with the Settlement Fund.



OBJECTING TO THE SETTLEMENT You can tell the Court that you do not agree with the Settlement or some part of it.

18. How do I tell the Court that I do not like the proposed Settlement?

If you are a Settlement Class Member, you can object to the Settlement or any of its terms, the proposed Plan of Allocation, or the application by Plaintiffs’ Counsel for an award of fees and reimbursement of expenses. You may write to the Court setting out your objections. You may give reasons why you think the Court should not approve any or all of the settlement terms or arrangements and submit any documentation you believe is appropriate. The Court will only consider your views if you file a proper objection within the deadline identified and according to the following procedures. To object, you must send a signed letter or other court submission stating that you object to the proposed Settlement in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla.). You must include your name, address, telephone number, and your signature, identify the date(s), price(s) and number(s) of shares of all purchases and sales of the DDMG shares you made during the Settlement Class Period, and state the reasons why you object to the Settlement. Your objection must be filed with the Court and served on all the following counsel so that it is actually received, not merely postmarked, on or before DATE:

COURT:

Clerk of the Court United States District Court for the Southern District of Florida,

Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue,

Miami, FL 33128

PLAINTIFFS’ CO-LEAD COUNSEL:

Jay W. Eng, Esq. BERMAN DEVALERIO

3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, FL 33410

(561) 835-9400

COUNSEL FOR THE DEFENDANTS:

Steven J. Brodie, Esq. CARLTON FIELDS

Miami Tower 100 S.E. Second Street, Suite 4200

Miami, FL 33131

You do not need to go to the Final Approval Hearing to have your written objection considered by the Court. At the Final Approval Hearing, any Settlement Class Member who has not previously submitted a request for exclusion from the Settlement Class and who has complied with the procedures set out in this Question 18 and in Questions 20 and 22 below for filing with the Court and providing to the counsel for the Settlement Class and settling Defendants a statement of an intention to appear at the Final Approval Hearing may also appear and be heard, to the extent allowed by the Court, to state any objection to the Settlement, the Plan of Allocation or Plaintiff’s Counsel’s motion for an award of attorneys’ fees and reimbursement of expenses. Any such objector may appear in person or arrange, at that objector’s expense, for a lawyer to represent the objector at the Final Approval Hearing. Any person or entity objecting to the Settlement shall submit to the Court’s jurisdiction and agrees that the Parties may depose the person or entity with regard to their objection. Unless the Court otherwise directs, no person or entity shall be



entitled to object to the approval of the Settlement, any judgment entered thereon, the adequacy of representation of the Class by Lead Plaintiffs and Lead Counsel, any award of attorneys’ fees and expenses, the allocation of the Settlement Fund, or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as described above. Failing to do so will forever bar such person or entity from raising such objection in the Action or any other proceeding. Any member of the Class who does not object to the Settlement or the attorneys’ fees and expenses request need not do anything.

19. What is the difference between objecting and excluding?

Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to object because the case no longer affects you.

THE COURT’S FINAL APPROVAL HEARING The Court will hold a hearing to decide whether to approve the proposed Settlement. You may attend and you may ask to speak, but you do not have to.

20. When and where will the Court decide whether to approve the proposed Settlement?

The Court will hold a Final Approval Hearing at [TIME] on [DATE], at the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. At the Final Approval Hearing, the Court also will consider the proposed Plan of Allocation for the proceeds of the Settlement and the application of Plaintiffs’ Counsel for attorneys’ fees and reimbursement of expenses. The Court will take into consideration any written objections filed in accordance with the instructions at Question 18. The Court also may listen to people who have properly indicated, within the deadline identified above, an intention to speak at the hearing; but decisions regarding the conduct of the hearing will be made by the Court. (Please refer to Question 22 for more information about speaking at the hearing.) The Court will also decide the amount of attorneys’ fees and expenses to award Plaintiffs’ Counsel. After the hearing, the Court will decide whether to approve the Settlement and to enter the Judgment dismissing the Litigation with prejudice. We do not know how long these decisions will take. You should be aware that the Court may change the date and time of the Final Approval Hearing. Thus, if you want to come to the hearing, you should check with Lead Counsel before coming to be sure that the date and/or time has not changed.

21. Do I have to come to the hearing?

No. Lead Counsel will answer questions the Court may have, but you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you filed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but attendance is not mandatory. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.

22. May I speak at the hearing?

If you object to the Settlement, you may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must include with your objection (see Question 18 above) a statement stating that it is your “Notice of Intention to Appear in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla).” Settlement Class Members who intend to object to the Settlement, the Plan of Allocation, or Plaintiffs’ Counsel’s application for an award of attorneys’ fees and reimbursement of expenses and desire to present evidence at the Final Approval Hearing must include in their written objections the identity of any witnesses they propose to call to testify and any exhibits they intend to offer into evidence at the Final Approval Hearing. You cannot speak at the hearing if you excluded yourself from the Settlement Class or if you have not provided written notice of your intention to speak at the Final Approval Hearing by the deadline identified, and in accordance with the procedures described in Question 18 above.

IF YOU DO NOTHING



23. What happens if I do nothing at all?

If you do nothing, you will get no money from this Settlement and, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit or be part of any other lawsuit against Defendants or the Released Persons about the claims being released in the Settlement. All members of the Class who do not submit valid and timely Proof of Claim forms shall be forever barred from receiving any payments from the Settlement, but will in all other respects be subject to and bound by the provisions of the Stipulation and any Order and Final Judgment entered.

GETTING MORE INFORMATION

24. Are there more details about the proposed Settlement?

This notice summarizes the proposed Settlement. More details are in a Stipulation of Settlement dated as of DATE (the “Stipulation”). You may obtain a copy of the Stipulation, the Proof of Claim form, and other information by visiting the website www.DDMGSecuritiesLitigation.com or by contacting the Claims Administrator by mail at KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417; by toll free phone at 855-730-8650. You may also contact any of Plaintiffs’ Lead Counsel at the addresses on Page ___, above..

25. How do I get more information?

For even more detailed information concerning the matters involved in this Action, reference is made to the pleadings, to the Stipulation, to the Orders entered by the Court and to the other papers filed in the Action, which may be inspected at the Office of the Clerk of the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128, during regular business hours.

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.

SPECIAL NOTICE TO NOMINEES If you hold DDMG common stock pursuant to a transaction that took place within the United States within the Class Period, as nominee for a beneficial owner, then you must either: (1) send a copy of this Notice by first-class mail to all such persons or entities: or (2) provide a list of the names and addresses of such persons or entities to the Claims Administrator at KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417. If you choose to mail this Notice and the Proof of Claim yourself, you may obtain from the Claims Administrator (without cost to you) as many additional copies of these documents as you will need to complete the mailing. Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement for or advancement of reasonable administrative costs actually incurred or expected to be incurred in connection with forwarding this Notice, and which would not have been incurred but for the obligation to forward this Notice, upon submission of appropriate documentation to the Claims Administrator. Dated: DATE BY ORDER OF THE COURT UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION


EXHIBIT A-2

TO STIPULATION OF SETTLEMENT





PROOF OF CLAIM AND RELEASE

DEADLINE FOR SUBMISSION DATE: _________________

IF YOU PURCHASED DIGITAL DOMAIN MEDIA GROUP, INC. (“DDMG” OR

THE “COMPANY”) COMMON STOCK IN DDMG’S INITIAL PUBLIC OFFERING ON

NOVEMBER 18, 2011 AND/OR ON THE PUBLIC MARKET BETWEEN NOVEMBER

18, 2011 AND SEPTEMBER 6, 2012, INCLUSIVE, YOU ARE A SETTLEMENT CLASS

MEMBER.

Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John

M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and

SingerLewak LLP, Released Persons (defined below), the officers and directors of the

Company, at all relevant times, members of their immediate families and their legal

representatives, heirs, successors or assigns, any entity in which defendants have or had a

controlling interest, employees of the Company, and any Company employee stock

purchase or retirement plan.

Also excluded from the Settlement Class are those Persons who timely and validly

request exclusion from the class pursuant to the Notice of Pendency and Proposed

Settlement of Class Action accompanying this Proof of Claim and Release.


Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH

2

GENERAL INSTRUCTIONS

A. To recover as a Member of the Settlement Class based on your claims in the action

entitled In re Digital Domain Media Group, Inc.,, Securities Litigation, Case No. 12-Civ-14333-

MARTINEZ-LYNCH (S.D. Fla.) (the “Action”), you must complete and, on page 10 hereof, sign

this Proof of Claim and Release. If you fail to file a properly addressed Proof of Claim and Release

(as set forth in paragraph C below), your claim may be rejected and you may be precluded from

any recovery from the Net Settlement Fund created in connection with the proposed settlement of

the Action.

B. Submission of this Proof of Claim and Release, however, does not assure that you

will share in the proceeds of settlement in the Action.

C. YOU MUST MAIL YOUR COMPLETED AND SIGNED PROOF OF CLAIM

AND RELEASE POSTMARKED ON OR BEFORE DATE, ADDRESSED TO THE CLAIMS

ADMINISTRATOR AS FOLLOWS:

Digital Domain Media Group, Inc. Securities Litigation c/o KCC Class Action Services LLC

P.O. Box 43417 Providence, RI 02940-3417

You will bear all risks of delay or non-delivery of your claim. If you are NOT a Member

of the Settlement Class (as defined in the “Notice of Pendency and Proposed Settlement of Class

Action”) DO NOT submit a Proof of Claim and Release form.

D. If you are a Member of the Class, you are bound by the terms of any judgment

entered in the litigation, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM AND

RELEASE.

II. CLAIMANT IDENTIFICATION INSTRUCTIONS

A. If you purchased DDMG common stock and held the certificate(s) in your name,

you are the beneficial owner as well as the record owner. If, however, the certificate(s) were



3

registered in the name of a third party, such as a nominee or brokerage firm, you are the beneficial

owner and the third party is the record owner.

B. Use Section IV of this form entitled “Claimant Identification” to identify each

owner of record (“nominee”), if different from the beneficial owner of DDMG common stock

which forms the basis of this claim.

C. THIS CLAIM MUST BE FILED BY THE ACTUAL BENEFICIAL OWNERS,

OR THE LEGAL REPRESENTATIVE OF SUCH OWNERS, OF THE DDMG COMMON

STOCK UPON WHICH THIS CLAIM IS BASED.

D. A separate claim must be filed for each type of account or ownership (i.e.,

individual account, IRA account, joint account, custodial account, etc.). Joint tenants or UGMA

custodians should file a single claim.

E. All joint owners must sign this claim. Executors, administrators, guardians,

conservators and trustees must complete and sign this claim on behalf of persons represented by

them. Documentation establishing their authority must accompany this claim and their titles or

capacities must be stated.

F. The Social Security or Taxpayer Identification number and telephone number of

the beneficial owner may be used in verifying the claim. Failure to provide the foregoing

information could delay verification of your claim or result in rejection of the claim.

III. TRANSACTION SCHEDULE INSTRUCTIONS

A. Use Section V of this form entitled “Schedule of Transactions in DDMG Common

Stock” to supply all required details of your transaction(s) in DDMG common stock. If you need

more space or additional schedules, attach separate sheets giving all of the required information in

substantially the same form. Sign and print or type your name and Social Security or Taxpayer

Identification number on each additional sheet.



4

B. List each transaction in the Settlement Class Period separately and in chronological

order, by trade date (not the “settlement” date), beginning with the earliest. You must accurately

provide the month, day and year of each transaction you list.

C. The date of covering a “short sale” is deemed to be the date of purchase of DDMG

common stock. The date of a “short sale” is deemed to be the date of sale of DDMG common

stock. Shares originally sold short will have a Recognized Claim of zero.

D. The price per share, paid or received, should be exclusive of all commissions, taxes,

fees and other charges.

E. Copies of broker confirmation slips or monthly statements of your

transactions in DDMG common stock must be attached to your claim. If such documents are

not in your possession, please obtain equivalent contemporaneous documents from your broker or

financial advisor. A complete list of acceptable supporting documentation can be found at the

Claims Administrator’s website: www.[insert web address].com. Failure to provide this

documentation could delay verification of your claim or result in rejection of your claim.

F. If your trading activity during the Settlement Class Period exceeds 50 transactions,

you must provide, in electronic file, all purchase and sale information required in the Schedule of

Transactions. For a copy of instructions and parameters concerning such a submission, contact

the Claims Administrator by toll-free phone at [phone number], or via the website at www.[insert

web address].com.



In re Digital Domain Media Group, Inc., Securities Litigation

PROOF OF CLAIM

Must be received by the Claims Administrator postmarked no later than DATE.

IV. CLAIMANT IDENTIFICATION Please Type or Print



5

Beneficial Owner’s Name (as it appears on your brokerage statement) Joint Beneficial Owner’s name (as it appears on your brokerage statement) Street Address City State Zip Code Foreign Province Foreign Country ______________________________ Social Security Number or OR Tax Payer Identification Number Taxpayer Identification Number Specify one of the following:

□ Individual/Sole Proprietor □ Joint Ownership □ Corporation □ UGMA Custodian

□ IRA

□ Partnership □ Pension Plan □ Estate □ Trust □ IRA □ Other:______________

________________________ _______________________________ Area Code & Telephone Number (day) Area Code & Telephone Number (evening) Record Owner’s Name and Address (if different from beneficial owner listed above)

V. SCHEDULE OF TRANSACTIONS IN DDMG COMMON STOCK

A. Separately list each and every purchase of DDMG common stock during the period November 18, 2011 through September 6, 2012, and provide the following information (must be documented):

Trade Date (list chronologically)

Number of Shares Purchased Price per Share



6

Month/Day/Year (excluding commissions, taxes and fees)

B. Separately list each and every sale of DDMG common stock during the period November 18, 2011 through September 6, 2012, and provide the following information (must be documented):

Trade Date (list chronologically)

Month/Day/Year Number of Shares Sold

Price per Share (excluding commissions,

taxes and fees)

C. State the total number of shares of DDMG common stock owned at the close of trading on September 6, 2012, long or short (if none, enter “0”; if other than zero, must be documented): _______

D. Please check applicable box:

[_] I certify that the submitting party is not an ERISA plan

[_] I/We certify that the submitting party is an ERISA plan and has complied with the applicable ERISA exemption

If you need additional space, attach the required information on separate, numbered sheets in the same format as above and print your name and Social Security or Taxpayer

Identification number at the top of each additional sheet.

YOU MUST READ THE RELEASE AND SIGN ON PAGE ________



7

VI. SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS

I/We submit this Proof of Claim and Release under the terms of the Stipulation of

Settlement described in the Notice. I/We also submit to the jurisdiction of the United States

District Court for the Southern District of Florida with respect to my/our claim as a Class Member

and for purposes of enforcing the release set forth herein. I/We further acknowledge that I/we

am/are bound by and subject to the terms of any judgment that may be entered in the Action. I

agree to furnish additional information to Lead Counsel to support this claim if required to do so.

I/we have not submitted any other claim covering the same purchases or sales of DDMG common

stock during the Settlement Class Period and know of no other person having done so on my/our

behalf.

VII. RELEASE

A. I/We hereby acknowledge full and complete satisfaction of, and do hereby fully,

finally and forever settle, release and discharge from the Released Claims (defined below) each

”Released Person” (as defined below).

B. “Released Claims” means all and every manner of direct and derivative actions,

causes of action, claims, counterclaims, cross-claims, third-party claims, suits, proceedings,

damages, punitive damages, costs, expenses and attorneys’ fees, demands and liabilities

whatsoever of every kind and nature, whether known or unknown, suspected or unsuspected,

accrued or unaccrued, in law, equity or otherwise, which Lead Plaintiffs or any other Member of

the Settlement Class (i) asserted in the Action; (ii) could have or might have asserted in the Action

and/or in any other litigation, action or forum that arise out of, are based upon or are related in any

way, directly or indirectly, in whole or in part, to (a) both: (1) the allegations, transactions, facts,

matters, occurrences, representations or omissions involved, set forth or referred to in the Action,

and (2) any purchase, sale or acquisition of, or decision to hold DDMG common stock during the

Settlement Class Period; and/or (b) Defendants’ defense or settlement of the Action and/or



8

Defendants’ defense or settlement of the Released Claims. Notwithstanding the foregoing,

“Released Claims” does not include claims relating to the enforcement of the Settlement.

C. “Released Persons” means (1) DDMG; (2) John C. Textor, Jonathan F. Teaford,

John M. Nichols, Kevin C. Ambler, Jeffrey W. Lunsford, Keith L. Cummings, Kaleil Isaza

Tuzman, John W. Kluge, Jr., and Edwin C. Lunsford, III (collectively, the “DDMG Directors and

Officers”); (3) Rafael Fogel, Mark Miller, Cliff Plumer, John Sculley, and Carl Stork (collectively,

the “DD CA Directors and Officers”); (4) SingerLewak LLP, (5) Crum & Forster Specialty

Insurance Company, Aspen Specialty Insurance Company, Catlin Specialty Insurance Company,

Lexington Insurance Company, AIG Claims, Inc., Interstate Fire & Casualty Company, Gotham

Insurance Company, Ironshore Specialty Insurance Company (collectively, the “SL Insurers”); (6)

Falcon Mezzanine Partners II, L.P.; (7) the State of Florida, Department of Economic Opportunity

(“Florida DEO”); (8) Hudson Bay Master Fund Ltd., Empery Asset Master Ltd., Hartz Capital

Investments, LLC, Parsoon Special Situation Ltd., Tenor Opportunity Master Fund, Ltd., Tenor

Special Situations Fund, L.P., and Aria Opportunity Fund, Ltd. (collectively, the “Senior

Lenders”); (9) the Official Committee of Unsecured Creditors of Digital Domain Media Group

and its Subsidiaries (collectively, the “Creditors Committee”); (10) the City of Port St. Lucie

(“PSL”); (11) Roth Capital Partners, LLC, Morgan Joseph TriArtisan LLC, and Maxim Group

LLC (collectively, the “Underwriters”); (12) Iroquois Master Fund Ltd., Kingsbrook Opportunities

Master Fund, Ltd., Flag Holding LLC, Oman International Development and Investment Company

SOAG, Mountain Partners AG, and Technology Transfer AG (collectively, the “Foreign

Investors”); (13) Bounty Gain Enterprises, Inc. (“Bounty Gain”); (14) Palm Beach Capital, Inc.;

PBC GP III, LLC, PBC Digital Holdings, LLC, PBC Digital Holdings II, LLC, PBC DDH

Warrants, LLC, and PBC MGPDEF DDH, LLC (collectively, the “PBC Entities”) and Nathan

Ward, Shaun McGruder, Michael Schmickle, and James Harpel (together with the PBC Entities,

collectively “PBC”); (15) every prospective “Insured” (as the term is defined in the D&O Policies);

(16) and the Insurers, and each of their past or present agents, trustees, attorneys, representatives,



9

principals, officers, directors, employees, subsidiaries, affiliates, predecessors-in-interest,

successors-in-interest, and assigns.

D. This release shall be of no force or effect unless and until the Court approves the

Stipulation of Settlement and the Stipulation becomes effective on the Effective Date (as defined

in the Stipulation).

E. I/We hereby warrant and represent that I/we have not assigned or transferred or

purported to assign or transfer, voluntarily or involuntarily, any matter released pursuant to this

release or any other part or portion thereof.

F. I/We hereby warrant and represent that I/we have included information about all of

my/our transactions in DDMG common stock which occurred during the Settlement Class Period.

VIII. CERTIFICATION UNDER THE PENALTY OF PERJURY, I/WE CERTIFY THAT:

A. The number shown on this form is my correct Social Security or Taxpayer

Identification number.

B. I/We certify that I am/we are NOT subject to backup withholding under the

provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code.

NOTE: If you have been notified by the Internal Revenue Service that you are subject to

backup withholding, you must cross out the word “NOT” in the sentence above.

C. I/We declare under penalty of perjury under the laws of the United States of

America that the foregoing information supplied by the undersigned and any supporting

documents attached hereto are true, correct and complete to the best of my/our knowledge,

information and belief, and that this Proof of Claim and Release was executed this _______ day

of _______________ , in ____________________, __________________________

(Month/Year) (City) (State/Country) ___________________________________________ Signature of Claimant

_______________________________________



10

(Print your name here) _______________________________________ Signature of Joint Claimant, if any

_______________________________________ (Print your name here)

_______________________________________ Signature of person signing on behalf of Claimant

_______________________________________ (Print your name here)

_______________________________________ Capacity of person signing on behalf of Claimant, if other than an individual, (e.g., Executor, President, Custodian, etc.)

ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR YOUR PATIENCE.

Reminder Checklist: 1. Remember to sign the above release and declaration. 2. Remember to attach only copies of acceptable supporting documentation, a

complete list of which can be found on the Claims Administrator’s website: www.DDMGSecuritiesLitigation.com.

3. Do not send originals of securities certificates. 4. Keep copies of the completed claim form and documentation for your own records. 5. If you desire an acknowledgment of receipt of your claim form, please send it

Certified Mail, Return Receipt Requested, or its equivalent. You will bear all risks of delay or non-delivery of your claim.

6. If your address changes in the future, or if these documents were sent to an old or

incorrect address, please send us written notification of your new address. 7. If you have any questions or concerns regarding your claim, please contact the

Claims Administrator at: KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417.


QUESTIONS? VISIT www.DDMGSecuritiesLitigation.com OR CALL 855-730-8650 TOLL FREE. PAGE 1 OF 2

EXHIBIT A-3

TO STIPULATION OF SETTLEMENT





SUMMARY NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT, FINAL APPROVAL HEARING, AND MOTION FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES

TO: ALL PERSONS AND ENTITIES WHO PURCHASED THE COMMON STOCK OF DIGITAL DOMAIN MEDIA GROUP, INC. IN AN INITIAL PUBLIC OFFERING ON NOVEMBER 18, 2011 AND/OR ON THE PUBLIC MARKET DURING THE PERIOD NOVEMBER 18, 2011 TO SEPTEMBER 6, 2012 AND WHO WERE DAMAGED THEREBY (THE “SETTLEMENT CLASS”).

PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS MAY BE AFFECTED BY THE PROPOSED SETTLEMENT OF A CLASS ACTION LAWSUIT PENDING IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA (THE “COURT”).

PLEASE DO NOT CONTACT THE COURT, OR ANY DEFENDANT, OR THEIR COUNSEL, REGARDING THIS NOTICE.

ALL QUESTIONS ABOUT THIS NOTICE, THE PROPOSED SETTLEMENT, OR YOUR ELIGIBILITY TO PARTICIPATE IN THE PROPOSED SETTLEMENT SHOULD BE DIRECTED TO LEAD COUNSEL OR THE CLAIMS ADMINISTRATOR, WHOSE CONTACT INFORMATION IS PROVIDED BELOW. YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the Settlement Class in the above-captioned litigation (the “Action”) has been preliminarily certified for the purposes of the proposed Settlement only.

YOU ARE ALSO NOTIFIED that Patricof Family Limited Partnership, Edward Nussblat, and Robert Dziedzic (“Lead Plaintiff”), on behalf of himself and the proposed Settlement Class, and the Defendants have reached a proposed settlement of the Action for $5,500,000 in cash (the “Settlement Amount”), that, if approved, will resolve all claims in the Action (the “Settlement”).

A hearing (the “Final Approval Hearing”) will be held before the Honorable Jose E. Martinez, United States District Judge for the United States District Court for the Southern District of Florida, in the Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128 at ___ on ____, to, among other things, determine whether: (i) the proposed Settlement should be approved by the Court as fair, reasonable and adequate; (ii) the Action should be dismissed with prejudice against the Defendants, as set forth in the Stipulation of Settlement (“Stipulation”), dated May 27, 2016; (iii) the proposed Plan of Allocation for distribution of the Settlement Fund, and any interest earned thereon, less Taxes, Notice and Administration Costs, Litigation Expenses awarded by the Court, attorneys’ fees awarded by the Court and any other costs, expenses or amounts as may be approved by the Court; (the “Net Settlement Fund”), should be approved as fair and reasonable; and (iv) the application of Lead Counsel for an award of attorneys’ fees and reimbursement of litigation expenses should be approved.1 The Court may change the date of the hearing without providing another notice. You do NOT need to attend the Final Approval Hearing in order to receive a distribution from the Net Settlement Fund.

IF YOU ARE A MEMBER OF THE SETTLEMENT CLASS, YOUR RIGHTS MAY BE AFFECTED BY THE PROPOSED SETTLEMENT AND YOU MAY BE ENTITLED TO SHARE IN THE NET SETTLEMENT FUND. If you have not yet received (i) the printed Notice of Pendency of Class Action and Proposed Settlement, Final Approval Hearing, and Motion for Attorneys’ Fees and Reimbursement of Litigation Expenses (“Notice”) or (ii) the Proof of Claim and Release form (“Claim Form”), you can obtain a copy of those documents on the website www.DDMGSecuritiesLitigation.com or by contacting the Claims Administrator:

1 The Notice and the Stipulation, available for download at www.DDMGSecuritiesLitigation.com, contain additional information concerning the Settlement and the definitions, and further explanation, of many of the defined terms used in this Notice (which are indicated by initial capital letters).


QUESTIONS? VISITwww.DDMGSecuritiesLitigation.com OR CALL 855-730-8650 TOLL FREE. PAGE 2 OF 2

In re Digital Domain Media Group, Inc. Claims Administrator c/o KCC Class Action Services LLC P.O. Box 43417 Providence, RI 02940-3417

Please refer to the website for more detailed information and to review the Settlement documents. Inquiries other than requests for information about the status of a claim may also be made to Lead Counsel:

BERMAN DEVALERIO Jay W. Eng, Esq.Gardens Pointe 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, Florida 33410Telephone: (561) 835-9400

WOLF POPPER LLP Joshua W. Ruthizer, Esq. 845 Third Avenue New York, NY 10022 Telephone: (212) 759-4600

LEVI & KORSINSKY LLP Nicholas I. Porritt, Esq. 1101 30th Street, NW, Suite 115 Washington, DC 20007 Telephone: : (###) ___-___

If you are a potential Settlement Class Member, to be eligible to share in the distribution of the Net Settlement Fund, you must timely submit a valid Claim Form, which can be found on the website listed above, postmarked no later than [ ]. If you are a potential Settlement Class Member and do not submit a valid Claim Form, you will not be eligible to share in the distribution of the Net Settlement Fund, but you will nevertheless be bound by any judgments or orders entered by the Court in the Action.

If you are a potential Settlement Class Member, but wish to exclude yourself from the Settlement Class, you must submit a written request for exclusion in accordance with the instructions set forth in the Notice, which can also be found on the website, postmarked no later than [ ]. If you are a potential Settlement Class member and do not timely exclude yourself from the Settlement Class, you will be bound by any judgments or orders entered by the Court in the Action.

Any objections to the proposed Settlement, Plan of Allocation, or Lead Counsel’s application for attorneys’ fees and reimbursement of expenses must be submitted to the Court in accordance with the instructions set forth in the Notice, postmarked no later than [ ], and filed with the Court no later than [ ].

DATED: ________________ THE HONORABLE JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE


1

EXHIBIT B TO STIPULATION OF SETTLEMENT





FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE

This matter came before the Court for hearing pursuant to the Order Preliminarily

Approving Settlement and Providing for Notice (“Order”) dated _______________, on the motion

for final approval of the Settlement set forth in the Stipulation of Settlement, dated as of May 27,

2016 (“Stipulation”). Due and adequate notice having been given to the Settlement Class as

required in said Order, and the Court having considered all papers filed and proceedings had herein

and otherwise being fully informed in the premises and good cause appearing therefore, IT IS

HEREBY ORDERED, ADJUDGED AND DECREED that:

1. This Final Judgment and Order incorporates by reference the definitions in the

Stipulation, and all terms used herein shall have the same meanings as set forth in the Stipulation,

unless otherwise set forth herein.

2. This Court has jurisdiction over the subject matter of the Action and over all parties

to the Action, including all Settlement Class Members.

3. “Settlement Class” shall mean all persons and entities who purchased the common

stock of Digital Domain Media Group, Inc. in an initial public offering completed on November

18, 2011 and/or on the public market during the Settlement Class Period (from November 18, 2011


2

to September 6, 2012, inclusive) and who were damaged thereby. Excluded from the Class are

Defendants, Released Persons, the officers and directors of the Company, at all relevant times,

members of their immediate families and their legal representatives, heirs, successors or assigns,

any entity in which defendants have or had a controlling interest, employees of the Company, and

any Company employee stock purchase or retirement plan. Those persons or entities eligible for

membership in the Settlement Class who timely submitted valid requests for exclusion from the

Settlement Class are identified on Exhibit 1. Those persons or entities are not bound by this Final

Judgment and Order.

4. Pursuant to Federal Rules of Civil Procedure 23, this Court hereby approves the

Settlement set forth in the Stipulation and finds that said Settlement is, in all respects, fair, just,

reasonable and adequate to the Settlement Class. The Court finds that certification of the

Settlement Class for settlement purposes only is appropriate because:

(a) The Settlement Class is so numerous that joinder of all members is

impracticable, satisfying the requirements of Rule 23(a)(1);

(b) There are questions of law or fact common to the Settlement Class,

satisfying the requirement of Rule 23(a)(2);

(c) The claims of the Lead Plaintiffs are typical of the claims of the Settlement

Class, satisfying the requirement of Rule 23(a)(3);

(d) The representative parties will fairly and adequately protect the interests of

the Settlement Class, satisfying the requirement of Rule 23(a)(4); and

(e) Questions of law and fact common to the members of the Settlement Class

predominate over questions affecting only individual members and a class action is superior to


3

other methods available for the fair and efficient adjudication of the controversy, satisfying the

requirements of Rule 23(b)(3).

The findings in this Paragraph 4 are for purposes of this Settlement only, and shall have no

force or effect for any other purpose or if this Final Judgment and Order does not become final.

5. The Court hereby approves the Settlement set forth in the Stipulation and finds that:

(a) said Stipulation is, in all respects, fair, reasonable and adequate and in the

best interest of the Settlement Class;

(b) there was no collusion in connection with the Stipulation;

(c) the Stipulation was the product of informed, arm’s-length negotiations

among competent, able counsel; and

(d) the record is sufficiently developed and complete to have enabled the Lead

Plaintiff and Defendants to have adequately evaluated and considered their positions.

6. Accordingly, the Court authorizes and directs implementation of all the terms and

provisions of the Stipulation, as well as the terms and provisions hereof. The Court hereby

dismisses the Complaint, the Action, and all Released Claims and the Released Persons’ Claims,

without costs as to any Settling Party, except as and to the extent provided in the Stipulation, any

separate order on attorneys’ fees or reimbursement of litigation expenses, and herein.

7. The Court finds that the Stipulation and Settlement are fair, reasonable and

adequate as to each of the Settling Parties, and that the Stipulation and Settlement are hereby finally

approved in all respects, and the Settling Parties are hereby directed to perform its terms.

8. Upon the Effective Date hereof, the Lead Plaintiffs shall, and each of the Settlement

Class Members shall be deemed to have, and by operation of the Judgment shall have, fully, finally,

and forever released, relinquished and discharged all Released Claims against the Released


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Persons, whether or not such Settlement Class Member executes and delivers the Proof of Claim

and Release, as well as any claims arising out of, relating to, or in connection with, the defense,

settlement, or resolution of the Action or the Released Claims against the Released Persons,

Plaintiffs and/or Plaintiffs' Counsel, except for claims relating to the enforcement of the

Settlement.

9. All Settlement Class Members are hereby forever barred and enjoined from

prosecuting any of the Released Claims against any of the Released Persons.

10. Upon the Effective Date hereof, Defendants and the Released Persons shall be

deemed to have, and by operation of this Judgment shall have, fully, finally, and forever released,

relinquished and discharged all Released Persons’ Claims against each and all of the Settlement

Class Members, Lead Plaintiff and Lead Counsel.

11. The Notice of Pendency of Class Action and Proposed Settlement, Final Approval

Hearing, and Motion for Attorneys’ Fees and Reimbursement of Litigation Expenses and the

published Summary Notice given to the Settlement Class was the best notice practicable under the

circumstances, including the individual notice to all Settlement Class Members who could be

identified through reasonable effort. Said notice provided the best notice practicable under the

circumstances of these proceedings and of the matters set forth therein, including the proposed

Settlement set forth in the Stipulation, to all Persons entitled to such notice, and said notice fully

satisfied the requirements of Federal Rules of Civil Procedure 23 and the requirements of due

process as well as the requirements of the Private Securities Litigation Reform Act. In addition,

the requirements of the Class Action Fairness Act, 28 U.S.C. §1715, have been satisfied.


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12. Any Plan of Allocation submitted by Lead Counsel or any order entered regarding

any attorneys’ fee and reimbursement of expense application shall in no way disturb or affect the

Judgment and shall be considered separate from this Final Judgment and Order.

13. Neither the Stipulation nor the Settlement contained therein, nor any act performed

or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or

may be deemed to be or may be used as an admission of, or evidence of, the validity of any

Released Claims, or of any wrongdoing or liability of the Defendants, any Released Person or and

Settlement Class Member or (b) is or may be deemed to be or may be used as an admission of, or

evidence of, any fault or omission of the Defendants, any of the Released Persons or any Settlement

Class Member in any civil, criminal or administrative proceeding in any court, administrative

agency or other tribunal. Defendants, Released Persons and/or Settlement Class Members may

file the Stipulation and/or the Judgment from this action in any other action that may be brought

against them in order to support a defense or counterclaim based on principles of res judicata,

collateral estoppel, release, good faith settlement, judgment bar or reduction or any theory of claim

preclusion or issue preclusion or similar defense or counterclaim.

14. Without affecting the finality of this Final Judgment and Order in any way, this

Court hereby retains continuing jurisdiction over: (a) implementation of this Settlement and any

award or distribution of the Settlement Fund, including interest earned thereon; (b) disposition of

the Settlement Fund; (c) hearing and determining applications for attorneys’ fees, interest and

reimbursement of litigation expenses in the Action; and (d) all parties hereto for the purpose of

construing, enforcing and administering the Stipulation.


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15. The Court finds that, during the course of the Action, the Settling Parties and their

respective counsel at all times complied with the requirements of Rule 11 of the Federal Rules of

Civil Procedure.

16. In the event that the Settlement does not become effective in accordance with the

terms of the Stipulation, or the Effective Date does not occur, or in the event that the Settlement

Fund, or any portion thereof, is returned to Defendants, then this Final Judgment and Order shall

be rendered null and void to the extent provided by and in accordance with the Stipulation and

shall be vacated and, in such event, all orders entered and releases delivered in connection herewith

shall be null and void to the extent provided by and in accordance with the Stipulation.

17. Upon the occurrence of the Effective Date, Defendants shall not have any right to

the return of the Settlement Fund or any portion thereof irrespective of the number of Claims filed,

the collective amount of losses of Authorized Claimants, the percentage of recovery of losses or

the amounts to be paid to Authorized Claimants from the Net Settlement Fund. If any portion of

the Net Settlement Fund remains following distribution pursuant to the Plan of Allocation and is

of such an amount that in the discretion of Lead Counsel it is not cost effective or efficient to

redistribute the amount to the Settlement Class, then such remaining funds, after payment of any

further Notice and Administration Costs and Taxes, shall be donated to a non-profit charitable

organization unaffiliated with Defendants, Lead Plaintiffs or Lead Counsel, selected by Lead

Plaintiffs and subject to Court approval.

18. Without further order of the Court, the Settling Parties may agree to reasonable

extensions of time to carry out any of the provisions of the Stipulation.


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19. There is no reason for delay in the entry of this Final Judgment and Order of

Dismissal with Prejudice and immediate entry by the Clerk of the Court is expressly directed

pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.

IT IS SO ORDERED.

Dated: ___________________, 2016

JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE
