FRANCIS M. GREGOREK (144785) RACHELE R. RICKERT...

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FRANCIS M. GREGOREK (144785) [email protected] BETSY C. MANIFOLD (182450) [email protected] RACHELE R. RICKERT (190634) [email protected] MARISA C. LIVESAY (223247) [email protected] WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 750 B Street, Suite 2770 San Diego, CA 92101 Telephone: 619/239-4599 Facsimile: 619/234-4599 Lead Counsel for the Class

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FILIP LAMBERT, JIGNESH PATEL and REILLY CHASE, on behalf of themselves and all others similarly situated, Plaintiffs,

v. BAKER TILLY HONG KONG LIMITED, ANDREW DAVID ROSS, and HELENA LAIHA KWOK, Defendants.

))))))))))))))))

Case No. CV 14-09959-CBM(MANx) STIPULATION AND AGREEMENT OF SETTLEMENT DATE: November 8, 2016 TIME: 10:00 a.m. CRTRM: 2 JUDGE: Hon. Consuelo B. Marshall

Case 2:14-cv-09959-CBM-MAN Document 81-3 Filed 10/11/16 of 96 Page ID #:1289

STIPULATION AND AGREEMENT OF SETTLEMENT

This Stipulation and Agreement of Settlement (the "Stipulation"), dated as of October 5,

2016, and submitted pursuant to Rule 23 of the Federal Rules of Civil Procedure and Rule 408 of

the Federal Rules of Evidence, is made and entered into by and between: (i) Lead Plaintiff Filip

Lambert, on behalf of himself and each of the Settlement Class Members (as defined in if 1.26),

by and through Lead Counsel (as defined in if 1.12); (ii) Defendant Baker Tilly Hong Kong, Ltd.

("BTHK"); and (iii) Defendant Andrew David Ross (collectively, the "Settling Defendants").

This is a global settlement and includes all parties to the Litigation (as defined in if 1.14)

resolving all claims against all Defendants (as defined in if 1.5). The Settling Parties (as defined

in , 1.27) intend this Stipulation to fully, finally, and forever resolve, discharge, and settle the

Released Claims and Released Defendants' Claims (as defined in , 1.21 and if 1.22,

respectively), subject to the terms and conditions stated herein.

I. THE LITIGATION

On December 31, 2014, a putative class action was filed in the United States District

Court for the Central District of California (the "Court"), asserting claims for alleged violation of

federal securities laws against Defendants BTHK, Ross, and Helena Kwok. On April 6, 2015,

the Court appointed Filip Lambert, an individual investor in China North East Petroleum

Holdings Limited ("CNEP"), as Lead Plaintiff. The Court further appointed Wolf Haldenstein

Adler Freeman & Herz LLP as Lead Counsel.

On October 13, 2015, Plaintiff filed a First Amended Complaint. On March 10, 2016,

Plaintiff filed the operative Second Amended Complaint ("Complaint"). The Complaint asserted

claims on behalf of purchasers of common stock of CNEP between September 3, 2010, and

March 14, 2012, for violations of the Exchange Act of 1934. In particular, the Complaint

asserted claims for violations of Sections lO(b) and 20(a) of the Securities Exchange Act of 1934

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(15 U.S.C. §§ 78j(b), 78t(a)), based on allegations that Defendants made material

misrepresentations in their report on the audit of CNEP' s 2009 year-end financial statements.

Defendants' audit report was included as part of CNEP's 2009 Form 10-K.

On March 24, 2016, Defendants filed motions to dismiss the Complaint. On May 23,

2016, the Court denied Defendants' motion.

Following the Court's ruling on the motion to dismiss, the Settling Parties attempted to

negotiate a resolution, which culminated in the Settling Parties reaching an agreement in

principle to settle the Litigation on August 8, 2016.

II. CLAIMS OF LEAD PLAINTIFF AND BENEFITS OF SETTLEMENT

Plaintiff and Lead Counsel believe that the claims asserted in the Litigation have merit.

However, Plaintiff and Lead Counsel recognize and acknowledge the expense and length of

continued proceedings necessary to prosecute the Litigation against Defendants through

discovery and trial. Plaintiff and Lead Counsel also have taken into account the uncertain

outcome and the risk of any litigation, especially in complex actions such as the Litigation, as

well as the risks posed by the difficulties and delays inherent in such litigation. Plaintiff and

Lead Counsel also are aware of the defenses to the alleged securities law violations asserted in

the Litigation, as well as the difficulties in obtaining discovery from witnesses in Hong Kong

who do not speak English. Plaintiff and Lead Counsel believe that the Settlement set forth in this

Stipulation confers substantial benefits upon the Settlement Class in light of the circumstances

present here. Based on their evaluation, Plaintiff and Lead Counsel have determined that the

Settlement set forth in this Stipulation is in the best interests of Plaintiff and the Settlement

Class.

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III. SETTLING DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY

The Settling Defendants have denied and continue to deny that they violated the federal

securities laws or any other laws. The Settling Defendants have denied and continue to deny,

specifically, each and all of the claims and contentions alleged in the Litigation, along with all

charges of wrongdoing or liability against them arising out of or relating to any of the conduct,

statements, acts, or omissions alleged, or that could have been alleged, in the Litigation. The

Settling Defendants also have denied and continue to deny, among other things, the allegations

that any of the Settling Defendants made any material misstatements or omissions; that any

Settlement Class Member has suffered damages; that the prices of CNEP shares were artificially·

inflated by reason of any alleged misrepresentations, omissions, or otherwise; that any

Settlement Class Member was harmed by the conduct alleged in the Litigation; or that the

Settling Defendants knew or were reckless with respect to the alleged misconduct. In addition,

the Settling Defendants maintain that they have meritorious defenses to all claims alleged in the

Litigation.

Nonetheless, taking into account the uncertainty, risks, and costs inherent in any

litigation, especially in complex cases such as the Litigation, the Settling Defendants have

concluded that further conduct of the Litigation could be protracted and distracting. The Settling

Defendants have, therefore, determined that it is desirable and beneficial to them that the

Litigation be settled in the manner and upon the terms and conditions set forth in this Stipulation.

As set forth below, this Stipulation shall in no event be construed as or deemed to be evidence of

an admission or concession by the Settling Defendants with respect to any claim of any fault or

liability or wrongdoing or damage whatsoever.

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IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among

Plaintiff (for himself and the Settlement Class Members) and the Settling Defendants, by and

through their respective counsel of record, that, subject to the approval of the Court, in

consideration of the benefits flowing to the Settling Parties from the Settlement set forth herein,

the Litigation and the Released Claims and Released Defendants' Claims shall be finally and

fully compromised, settled, and released, and the Litigation shall be dismissed with prejudice, as

to all Defendants, upon and subject to the terms and conditions of the Stipulation, as follows.

1. Definitions

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

1.1 "Authorized Claimant" means any Settlement Class Member who submits a

timely and valid Proof of Claim and Release form and whose claim for recovery has been

allowed pursuant to the terms of the Stipulation.

1.2 "Claims Administrator" means Strategic Claims Services.

1.3 "Class Period" or "Settlement Class Period" means the period of September 3,

2010, through March 14, 2012, inclusive.

1.4 "Court" means the United States District Court for the Central District of

California.

1.5 "Defendants" means current or former defendants BTHK, Andrew David Ross,

and Helena Kwok.

1.6 "Effective Date" means the first date by which all of the events and conditions

specified in ~ 8.1 of the Stipulation have been met and have occurred.

1. 7 "Escrow Agent" means Lead Counsel.

1.8 "Final" means, with respect to any judgment or order entered by the Court,

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including but not limited to the Final Judgment (in the form of Exhibit B attached hereto), that

such judgment or order represents a final and binding determination of all issues within its scope

and is not subject to further review on appeal or othe.rwise. A judgment or order becomes "final"

when the last of the following shall occur: (a) the expiration of the time to file a motion to alter

or amend the Final Judgment under Federal Rule of Civil Procedure 59(e) has passed without

any such motion having been filed; (b) the expiration of the time in which to appeal the Final

Judgment has passed without any appeal having been taken; and ( c) if a motion to alter or amend

is filed or if an appeal is taken, the determination of that motion or appeal in such a manner as to

permit the consummation of the Settlement, in accordance with the terms and conditions of this

Stipulation. For purposes of this paragraph, an "appeal" shall include any petition for a writ of

certiorari or other writ that may be filed in connection with approval or disapproval of this

Settlement, but shall not include any appeal which concerns only the issue of attorneys' fees and

expenses or any Plan of Distribution of the Settlement Fund.

1.9 "Final Judgment" or "Judgment" means the judgment and order of dismissal with

prejudice to be rendered by the Court upon approval of the Settlement, substantially in the form

attached hereto as Exhibit B.

1.10 "Final Approval Hearing" means the final hearing to be held by the Court to

determine whether the proposed Settlement should be approved as fair, reasonable and adequate;

whether an order approving the Settlement should be entered thereon; whether the Plan of

Allocation of the Settlement Fund should be approved; and whether and in what amounts to

award attorneys' fees and expenses to Lead Counsel and reimbursement to Lead Plaintiff.

1.11 "Gross Settlement Fund" means the Settlement Amount plus all interest earned

thereon.

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1.12 "Lead Counsel" means WolfHaldenstein Adler Freeman and Herz LLP.

1.13 "Lead Plaintiff' means Filip Lambert.

1.14 "Litigation" means the lawsuit styled Kachun Wong v. Baker Tilly Hong Kong,

Ltd., Case No. 14-cv-9959-CBM, in the United States District Court for the Central District of

California.

1.15 "Net Settlement Fund" means the portion of the Gross Settlement Fund that shall

be distributed to Authorized Claimants as allowed by the Stipulation, the Plan of Distribution, or

the Court, after provision for the amounts set forth in~ 6.4 of this Settlement Agreement.

1.16 "Notice and Administration Account" means the interest-bearing account that

may be established from the Gross Settlement Fund and maintained by the Claims Administrator.

The Notice and Administration Account may be drawn upon by the Claims Administrator for

Notice and Administration Expenses without prior approval of the Court.

1.17 "Notice and Administration Expenses" means the following expenses incurred in

connection with the settlement administration, including: the cost of publishing the Summary

Notice in accordance with ~6.3, hereto; the cost of identifying claimants to whom notice should

be given; the cost of establishing and maintaining a website and toll-free number to assist

potential claimants; printing and mailing of the Notice, as directed by the Court; and the cost of

processing proofs of claim and distributing the Net Settlement Fund to Settlement Class

Members who timely submit a valid Proof of Claim and Release. Notice and Administration

Expenses expressly excludes the cost of notice to be given by defendants to government officials

pursuant to 28 U.S.C. §1715(b) of the Class Action Fairness Act of2005 ("CAFA").

1.18 "Person" means an individual, corporation, partnership, limited partnership,

limited liability corporation, association, joint stock company, estate, legal representative, trust,

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trustee, unincorporated association, government or any political subdivision or agency thereof,

and any other type of business, political or legal entity, and his, her or its spouses, heirs,

predecessors, successors, representatives, or assignees.

1.19 "Plan of Distribution" or "Plan of Allocation" means a plan or formula of

allocation of the Net Settlement Fund, to be approved by the Court, which plan or formula shall

govern the manner by which the Net Settlement Fund shall be distributed to Authorized

Claimants. Any Plan of Distribution is not part of this Stipulation and neither the Defendants nor

their Related Persons shall have any responsibility or liability with respect thereto.

1.20 "Related Persons" means

(a) with respect to Plaintiffs: Lead Plaintiff, each and all of the Plaintiffs, and each

and all of their respective present and former parents, subsidiaries, divisions, joint

ventures, and affiliates, and each of their respective present and former

employees, members, general and limited partners and their partnerships,

principals, officers, directors, attorneys, advisors, accountants, auditors, financial

advisors, commercial bank lenders, insurers, underwriters, investment bankers,

representatives, and insurers; and the predecessors, successors, spouses, estates,

heirs, executors, trusts, trustees, administrators, agents, fiduciaries, consultants,

representatives and assigns of each of them, in their capacity as such; and any

trust of which any Person described in this subparagraph is the settlor or which is

for the benefit of any Person described in this subparagraph and/or member(s) of

his or her family; and any entity in which any Person described in this

subparagraph has a controlling interest; and

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(b) with respect to Defendants: each and all of the Defendants, and each and all of

their respective present and former parents, subsidiaries, divisions, joint ventures,

and affiliates, and each of their respective present and former employees,

members, general and limited partners and their partnerships, principals, officers,

directors, attorneys, advisors, accountants, auditors, financial advisors,

commercial bank lenders, msurers, underwriters, investment bankers,

representatives, and insurers; and the predecessors, successors, spouses, estates,

heirs, executors, trusts, trustees, administrators, agents, fiduciaries, consultants,

representatives and assigns of each of them, in their capacity as such; and any

trust of which any Person described in this subparagraph is the settlor or which is

for the benefit of any Person described in this subparagraph and/or member(s) of

his or her family; and any entity in which any Person described in this

subparagraph has a controlling interest.

1.21 "Released Claims" means any and all claims, demands, losses, rights, causes of

action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature

whatsoever, whether known or Unknown (as defined in ~ 1.28), contingent or absolute,

suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in

the Litigation or in any court, tribunal, forum or proceeding (including, but not limited to, any

claims arising under federal, state or foreign law, common law, statute, rule or regulation relating

to alleged fraud, breach of any duty, negligence, violations of the federal securities laws, or

otherwise), whether individual or class, arising from or relating to the purchase, acquisition, sale,

or holding, during the Class Period, of any common stock of CNEP, and the acts, facts,

statements, or omissions that were or could have been alleged by Plaintiffs in the Litigation, as

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against any and/or all Defendants and any and/or all of their Related Persons. "Released Claims"

excludes any claims to enforce the Settlement.

1.22 "Released Defendants' Claims" means any and all claims, demands, losses, rights,

causes of action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature

whatsoever, whether known or Unknown (as defined in ~ 1.28), contingent or absolute,

suspected or unsuspected, disclosed or undisclosed, that have been or could have been asserted in

the Litigation or in any court, tribunal, forum or proceeding, by any of the Settling Defendants,

or their successors, assigns, executors, administrators, representatives, attorneys, agents,

affiliates, and partners, and any Persons they represent or any of them, whether brought directly

or indirectly against the Lead Plaintiff, Settlement Class Members, their attorneys, and/or any of

their Related Persons, which arise out of or relate in any way to the institution, prosecution, or

Settlement of the Litigation. "Released Defendants' Claims" excludes any claims to enforce the

Settlement.

1.23 "Released Persons" means

(a) with respect to Plaintiffs ("Plaintiffs' Released Persons"): each and all of

Plaintiffs and each and all of their Related Persons; and

(b) with respect to Defendants ("Defendants' Released Persons"): each and all of

Defendants and each and all of their Related Persons.

1.24 "Settlement" means the settlement effected by the Stipulation.

1.25 "Settlement Amount" means Nine Hundred Twenty-Five Thousand Dollars

($925,000) in cash that will be paid pursuant to~ 3.1 of this Stipulation.

1.26 "Settlement Class" or "Settlement Class Members" means all Persons who

purchased or otherwise acquired common stock of CNEP between September 3, 2010, and

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March 14, 2012, inclusive. Excluded from the Settlement Class are: (a) any putative members of

the Settlement Class who submit valid and timely requests for exclusion from the Settlement

Class in accordance with the requirements set forth in the Mailed Notice and Rule 23 of the

Federal Rules of Civil Procedure; and (b) Defendants, members of the immediate family of any

such Defendant, any parent or subsidiary of any such Defendant, any person, firm, trust,

corporation, officer, director, or other individual or entity in which any Defendant has or had a

controlling interest during the Class Period, the partners, officers and directors of any Defendant

during the Class Period, and legal representatives, agents, executors, heirs, successors, or assigns

of any such excluded Person. The Defendants or any entity in which any of the Defendants has

or had a controlling interest (for purposes of this paragraph, together a "Defendant-Controlled

Entity") are excluded from the Settlement Class only to the extent that such Defendant

Controlled Entity itself purchased a proprietary (i.e., for its own account) interest in CNEP. To

the extent that a Defendant-Controlled Entity purchased any CNEP shares in a fiduciary capacity

or otherwise on behalf of any third-party client, account, fund, trust, or employee benefit plan

that otherwise falls within the Settlement Class, neither such Defendant-Controlled Entity nor the

third-party client, account, fund, trust, or employee benefit plan shall be excluded from the

Settlement Class with respect to such fiduciary purchases.

1.27 "Settling Parties" means Plaintiffs and the Settling Defendants.

1.28 "Unknown Claims" means any Released Claims which Plaintiffs or any

Settlement Class Members do not know or suspect to exist -- as well as Released Defendants'

claims that Defendants do not know or suspect to exist -- in his, her, or its respective favor at the

time of the release, regardless of whether such Released Claim or Released Defendants' Claim, if

known by him, her, or it, might have affected his, her, or its settlement with and release of the

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claim, or might have affected his, her, or its decision not to object to this Settlement. With

respect to any and all Unknown Claims, the Settling Parties stipulate and agree that, upon the

Effective Date, they shall expressly waive, and each of the Settlement Class Members shall be

deemed to have waived (by operation of the Final Judgment), to the fullest extent permitted by

law the provisions, rights, and benefits of 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.

The Settling Parties shall expressly waive, and each of the Settlement Class Members shall be

deemed to have waived (by operation of the Final Judgment), 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, which is similar, comparable, or equivalent to California Civil Code § 1542. The

Settling Parties and Settlement Class Members may hereafter discover facts in addition to or

different from those which he, she, or it now knows or believes to be true with respect to the

subject matter of the Released Claims and Released Defendants' Claims, but they shall

expressly, and each Settlement Class Member, upon the Effective Date, shall be deemed to have,

and by operation of the Final Judgment shall have, fully, finally, and. forever settled and released

any and all Released Claims and Released Defendants' Claims, known or unknown, suspected or

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

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

existence in the future, including, but not limited to, conduct that is negligent, 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. The Settling Parties acknowledge, and the

Settlement Class Members shall be deemed by operation of the Final Judgment to have

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acknowledged, that the foregoing waiver was separately bargained for and a key element of the

Settlement of which this release is a part.

2. CAF A Notice

2.1 Lead Plaintiff and the Settlement Class shall have no responsibility, financial or

otherwise, for the Settling Defendants' provision of CAF A notice in accordance with their

obligations pursuant to 28 U.S.C. § 1715. Subsequent to the provision of such notice, the

Settling Defendants shall provide Lead Plaintiff with proof of service thereof.

3. Payment and Handling of the Settlement Fund

3.1 The Settling Defendants shall pay the sum of Nine Hundred Twenty-Five

Thousand Dollars ($925,000.00) into an interest-bearing escrow account selected and maintained

by the Escrow Agent on behalf of Lead Plaintiff and the Settlement Class no later than thirty (30)

business days following the Court's execution of an order preliminarily approving the

Settlement, substantially in the form attached hereto as Exhibit A. Except for the obligation as

set forth in this paragraph to fund the Settlement Fund by making timely payment of the

Settlement Amount, Defendants shall have no other payment obligations pursuant to this

Stipulation and the Settlement. If the Settlement Fund is not fully and timely funded as provided

in this paragraph, Plaintiffs' sole and exclusive remedy is to terminate the Settlement Agreement

on 5 business days' notice to counsel for the Settling Defendants and, if so, Plaintiffs and

Defendants would return to their respective positions as of the date that the Settling Parties

executed this Stipulation. Lead Plaintiff acknowledges that the $925,000 is to be paid exclusively

by the Settling Defendants' insurance carrier for the benefit of the Settlement Class.

3.2 The Escrow Agent shall invest the Gross Settlement Fund deposited into the

escrow account, pursuant to ~ 3 .1 hereof, in instruments backed by the full faith and credit of the

United States Government or fully insured by the United States Government or an agency

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thereof and shall reinvest the proceeds of these instruments as they mature in similar instruments

at their then-current market rates. All risks related to the investment of the Settlement Fund in

accordance with the guidelines set forth in this paragraph shall be borne by the Settlement Fund.

3.3 The Gross Settlement Fund, net of any taxes on the income thereof, shall be used

to pay: (i) taxes and tax expenses, (ii) Notice and Administration Expenses, (iii) attorneys' fees

and expenses, (iv) reimbursement awards to Lead Plaintiffs, if any; and (v) Authorized

Claimants. The Net Settlement Fund shall be distributed to the Authorized Claimants as set forth

in the Plan of Allocation.

3.4 The Escrow Agent shall not disburse the Gross Settlement Fund or the Net

Settlement Fund except: (a) as provided in the Stipulation, (b) by an order of the Court, or (c)

with the prior written agreement of counsel for the Settling Defendants and Lead Counsel.

3.5 Subject to further order(s) and/or directions as may be made by the Court, or as

provided in the Stipulation, the Escrow Agent is authorized to execute such transactions as are

prescribed herein in a manner consistent with the terms of the Stipulation. The Defendants'

Released Persons shall have no responsibility for, interest in, or liability whatsoever with respect

to the actions of the Escrow Agent, or any transaction executed by the Escrow Agent.

3.6 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.

3.7 The Escrow Agent, without further approval of Settling Defendants or the Court,

may pay up to $100,000.00 from the Gross Settlement Fund to the Claims Administrator to pay

costs and expenses reasonably and actually incurred in connection with providing notice to the

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Settlement Class (as set forth in iii! 6.2 and 6.3 hereof), locating Settlement Class Members,

assisting with the filing of claims (including the establishment of a website and toll-free phone

line), administering and distributing the Net Settlement Fund to Authorized Claimants,

processing Proof of Claim and Release forms and paying escrow fees and costs (collectively,

"Class Notice and Administration Costs"), if any.

3.8 The Settling Parties and the Escrow Agent shall treat the Settlement Fund as

being at all times a "Qualified Settlement Fund" within the meaning of U.S. Treas. Reg.

§ 1.468B-1 on and after the date of the Court order preliminarily approving this Stipulation of

Settlement. All provisions of this Stipulation shall be interpreted in a manner that is consistent

with the Settlement Fund being a "Qualified Settlement Fund" within the meaning of Treas. Reg.

§ 1.468B-l. In addition, the Escrow Agent and, if necessary, the Settling Defendants, shall

timely make such elections as necessary or advisable to carry out the provisions of this

paragraph, including the "relation-back election" (as defined in Treas. Reg. § l.468B-l) back to

the earliest permitted date. Such elections shall be made in compliance with the procedures and

requirements contained in such regulations. It shall be the responsibility of the Escrow Agent to

timely and properly prepare and deliver the necessary documentation for signature by all

necessary parties, and thereafter to cause the appropriate filing to occur. In connection with these

procedures, it is understood and agreed that:

(a) For the purpose of§ 468B of the Internal Revenue Code of 1986, as amended,

and the regulations promulgated thereunder, the "administrator" shall be the Claims

Administrator. The Claims Administrator shall timely and properly file all informational

and other tax returns required by the Internal Revenue Code and the regulations

promulgated thereunder with respect to the Gross Settlement Fund (including, without

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limitation, the returns described in Treas. Reg. § 1.468B-2(k)). Such returns (as well as

the election described in this if 3.8) shall be consistent with this 1 3.8 and in all events

shall reflect that all Taxes (including any estimated Taxes, interest, or penalties) on the

income earned by the Gross Settlement Fund shall be paid out of the Gross Settlement

Fund as provided in this ii 3.8;

(b) All (i) Taxes (including any estimated Taxes, interest, or penalties) arising

with respect to the income earned by the Gross Settlement Fund, including any Taxes or

tax detriments that may be imposed upon the Defendants' Released Persons or their

counsel with respect to any income earned by the Gross Settlement Fund for any period

during which the Gross Settlement Fund does not qualify as a "Qualified Settlement

Fund" for federal or state income tax purposes ("Taxes"), and (ii) expenses and costs

incurred in connection with the operation and implementation of this 1 3.8 (including,

without limitation, expenses of tax attorneys and/or accountants and mailing and

distribution costs and expenses relating to filing (or failing to file) the returns described in

this ii 3.8) ("Tax Expenses"), shall be paid out of the Gross Settlement Fund; in all events

the Defendants' Released Persons anµ their counsel shall have no liability or

responsibility for the Taxes or the Tax Expenses. The Gross Settlement Fund shall

indemnify and hold each of Defendants' Released Persons and their counsel harmless for

Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any

such indemnification). Further, Taxes and Tax Expenses shall be treated as, and

considered to be, a cost of administration of the Settlement Fund and shall be timely paid

by the Claims Administrator out of the Settlement Fund without prior order from the

Court and the Claims Administrator shall be obligated (notwithstanding anything herein

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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 and Tax Expenses (as well as any amounts that may be required to be withheld

under Treas. Reg. § 1.468B-2(1)(2)); neither Defendants' Released Persons nor their

counsel are responsible nor shall they have any liability therefor. The Settling Parties

hereto agree to cooperate with the Claims Administrator, each other, and their tax

attorneys and accountants to the extent reasonably necessary to carry out the provisions

of this iJ 3.8; and

( c) In the event this Stipulation is canceled or terminated, the Settling

Defendants shall be responsible for the payment of all taxes (including interest and/or

penalties), if any, on their portion of said income.

4. Preliminary Approval Order and Final Approval Hearing

4.1 Promptly after execution of the Stipulation, the Settling Parties shall submit the

Stipulation together with its exhibits (the "Exhibits") to the Court and shall apply for entry of an

order (the "Preliminary Approval Order"), in the form of Exhibit A attached hereto, requesting,

among other things, the preliminary approval of the Settlement set forth in the Stipulation,

certification of the Settlement Class (for settlement purposes only), and approval for the mailing

of a postcard settlement notice advising Class Members of the availability of the full settlement

notice (the "Notice") and publication of a summary notice (the "Summary Notice"), in the forms

of Exhibits A-1, A-2 and A-3 attached hereto. The Notice shall include the general terms of the

Settlement set forth in the Stipulation, the proposed Plan of Distribution, the general terms of any

Fee and Expense Application by Lead Counsel, the general terms of any request for

reimbursement by Lead Plaintiffs, the procedure by which Persons who would otherwise be

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members of the Settlement Class may request to be excluded from the Settlement Class, the date,

time and place of the Final Approval Hearing, the procedure by which Settlement Class

Members may object to any of the matters to be determined at the Final Approval Hearing, the

right of Settlement Class Members to appear at the Final Approval Hearing, and a proof of claim,

in substantially the form attached as Exhibit A-4 hereto (the "Proof of Claim and Release").

4.2 The Settling Parties shall request that after notice is given to the Settlement Class,

by mailing and by publication in accordance with the terms of this Stipulation, the Court hold a

final settlement approval hearing (the "Final Approval Hearing").

4.3 At the Final Approval Hearing, the Settling Parties shall jointly request entry of a

Judgment in the form attached hereto as Exhibit B:

(a) finally approving the Settlement as fair, reasonable, and adequate, within

the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its

consummation pursuant to its terms;

(b) directing that the Litigation be dismissed without costs and with prejudice,

and releasing the Released Claims and the Released Defendants' Claims;

(c) permanently barring, extinguishing, discharging, rendering unenforceable,

and enjoining the institution and prosecution, by Lead Plaintiffs and the Settlement Class

Members, on the one hand and Defendants, on the other hand, of any other action against

the Released Persons in any court asserting any Released Claims or any Released

Defendants' Claims, respectively;

(d) reserving jurisdiction over the Litigation, including all future proceedings

concerning the administration, consummation, and enforcement of this Stipulation;

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(e) finding that the Complaint in the Litigation was filed on a good faith basis

in accordance with the Private Securities Litigation Reform Act of 1995 (the "PSLRA")

and Rule 11 of the Federal Rules of Civil Procedure;

(f) finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure,

that there is no just reason for delaying and directing entry of a final judgment; and

(g) containing such other and further provisions consistent with the terms of

this Stipulation to which the Settling Parties expressly consent in writing.

4.4 At or after the Final Approval Hearing, Lead Counsel also shall request that the

Court approve the proposed Plan of Distribution, the Fee and Expense Application by Lead

Counsel, and any request for an award for time and expenses expended by Lead Plaintiffs.

5. Releases

5.1 Upon the Effective Date, with the exception of claims to enforce the Settlement,

Plaintiffs and each of the Settlement Class Members who have not validly opted out of the

Settlement Class shall be deemed to have, and by operation of the Final Judgment shall have,

fully, finally, and forever released, relinquished, and discharged against the Defendants'

Released Persons (whether or not such Settlement Class Members execute and deliver the Proof

of Claim and Release forms) any and all Released Claims (including, without limitation,

Unknown Claims), as well as any claims arising out of, relating to, or in connection with, the

defense, settlement, or resolution of the Litigation or the Released Claims.


Plaintiffs and each of the Settlement Class Members who have not validly opted out of the

Settlement Class, and their respective predecessors, successors, agents, representatives,

attorneys, and affiliates, and the respective heirs, executors, administrators, successors, and

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assigns of each of them, directly or indirectly, individually, derivatively, representatively, or in

any other capacity, shall be permanently barred and enjoined from the assertion, institution,

maintenance, prosecution, or enforcement against any of Defendants' Released Persons, in any

state or federal court or arbitral forum, or in the court of any foreign jurisdiction, of any and all

Released Claims (including, without limitation, Unknown Claims), as well as any claims arising

out of, relating to, or in connection with, the defense, settlement, or resolution of the Litigation

or the Released Claims.

5.3 The Proof of Claim and Release to be executed by Settlement Class Members

shall release all Released Claims against the Defendants' Released Persons.


Defendants and each of the Defendants' Released Persons shall be deemed to have, and by

operation of the Final Judgment shall have, fully, finally, and forever released, relinquished, and

discharged Plaintiffs, each and all of the Settlement Class Members, Lead Counsel, and

Plaintiffs' Released Persons from all Released Defendants' claims (including, without limitation,

Unknown Claims) arising out of, relating to, or in connection with, the institution, prosecution,

assertion, settlement, or resolution of the Litigation or the Released Claims.


Defendants and each of the Defendants' Released Persons, and their respective predecessors,

successors, agents, representatives, attorneys, and affiliates, and the respective heirs, executors,

administrators, successors, and assigns of each of them, directly or indirectly, individually,

derivatively, representatively, or in any other capacity, shall be permanently barred and enjoined

from the assertion, institution, maintenance, prosecution, or enforcement against any Lead

Plaintiff, Settlement Class Member, Lead Counsel, and each of Plaintiffs' Released Persons, in

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any state or federal court or arbitral forum, or in the court of any foreign jurisdiction, of any and

all Released Defendants' Claims (including, without limitation, Unknown Claims), as well as

any claims arising out of, relating to, or in connection with, the defense, settlement, or resolution

of the Litigation or the Released Claims.

6. Administration and Calculation of Claims, Final Awards, and Supervision and Distribution of the Settlement Fund

6.1 The Claims Administrator, subject to such supervision and direction of the Court,

shall provide notice of the Settlement to the Settlement Class, administer and calculate the claims

submitted by Settlement Class Members, and oversee distribution of the Net Settlement Fund to

Authorized Claimants. Subject to further order(s) and/or directions as may be made by the Court,

or as provided in the Stipulation, the Claims Administrator is authorized to execute such

transactions as are prescribed herein in a manner consistent with the terms of the Stipulation.

The Defendants' Released Persons shall have no responsibility for, interest in, or liability

whatsoever with respect to the actions of the Claims Administrator, or any transaction executed

by the Claims Administrator.

6.2 The Claims Administrator will use all commercially reasonable means to notify

Class Members of the Settlement. The cost of providing such notice shall be paid out of the

Settlement Fund.

6.3 In accordance with the schedule set forth in the Preliminary Approval Order, the

Claims Administrator will cause to be mailed to all Persons who purchased or otherwise acquired

CNEP shares during the Class Period, inclusive, as identified through the process set forth in ~

6.2, the postcard Notice, substantially in the form of Exhibit A-1 attached hereto, which advises

Class Members of the Notice and Proof of Claim and Release, substantially in the form of

Exhibit A-3 and A-4 attached hereto.

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6.4 The Settlement Fund shall be applied as follows:

(a) to pay all the costs and expenses reasonably and actually incurred in

connection with providing notice, locating Settlement Class Members, soliciting

Settlement Class Member claims, assisting with the filing of claims, paying escrow fees

and costs, if any, processing Proof of Claim and Release Forms, and distributing the Net

Settlement Fund to Authorized Claimants;

(b) to pay all Taxes and Tax Expenses as described in if 3.8 hereof;

(c) to pay Plaintiffs' Counsel's attorneys' fees and expenses (the "Fee and

Expense Award") and Plaintiffs' fees, if and to the extent allowed by the Court;

( d) to distribute the Net Settlement Fund to Authorized Claimants as allowed

by the Stipulation, the Plan of Distribution, or the Court.

6.5 Upon the Effective Date and thereafter, and in accordance with the terms of the

Stipulation, the Plan of Distribution, or such further approval and further order(s) of the Court as

may be necessary or as circumstances may require, the Net Settlement Fund shall be distributed

to Authorized Claimants, subject to and in accordance with the following.

6.6 Each Person claiming to be an Authorized Claimant shall be required to submit to

the Claims Administrator a completed Proof of Claim and Release, substantially in the form of

Exhibit A-3 attached hereto, by first class mail, postage prepaid, postmarked no later than ninety

(90) calendar days after entry of the Preliminary Approval Order by the Court to the Post Office

Box address listed in the Notice, or such other time as may be set by the Court (the "Bar Date"),

signed under penalty of perjury and supported by such documents as are specified in the Proof of

Claim and Release and as are reasonably available to such Person.

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6.7 Except as otherwise ordered by the Court, all Settlement Class Members who fail

to submit a Proof of Claim and Release by the Bar Date, or such other period as may be ordered

by the Court, or otherwise allowed, or who file a Proof of Claim and Release that is rejected,

shall be forever barred from receiving any payments pursuant to the Stipulation and the

Settlement set forth herein, but will in all other respects be subject to and bound by the

provisions of the Stipulation, the releases contained herein, and the Final Judgment.

Notwithstanding the foregoing, Lead Counsel may, in their discretion, accept for processing late

submitted claims so long as the distribution of the Net Settlement Fund to Authorized Claimants

is not materially delayed.

6.8 Subject to the approval of and further order(s) of the Court, the Claims

Administrator shall distribute the Net Settlement Fund to Authorized Claimants as provided

herein and in the manner set forth in the Notice (which shall include the Plan of Distribution) or

as otherwise ordered by the Court.

6.9 The Settling Defendants shall not have a reversionary interest in the Net

Settlement Fund. If, for any reason, there is a balance remaining in the Net Settlement Fund after

six (6) months from the date of the initial distribution of the Net Settlement Fund, the Claims

Administrator shall, if feasible, distribute such balance among Authorized Claimants who cashed

the checks sent to them in the initial distribution in an equitable and economical fashion. These

redistributions shall be repeated until the balance remaining in the Net Settlement Fund is no

longer cost efficient and such remaining balance shall then be donated to a secular § 501(c)(3)

organization designated by the Court, in consultation with counsel for the Settling Parties.

6.10 The Released Persons shall have no responsibility for, interest in, or liability

whatsoever with respect to the distribution of the Net Settlement Fund, the Plan of Distribution,

22


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

or any losses incurred in connection therewith.

6.11 The Settling Defendants shall take no position with respect to the Plan of

Distribution or any other such plan as may be approved by the Court.

6.12 It is understood and agreed by the Settling Parties that any proposed Plan of

Distribution of the Net Settlement Fund including, but not limited to, any adjustments to an

Authorized Claimant's claim set forth therein, is not a part of the Stipulation and is to be

considered by the Court separately from the Court's consideration of the fairness,

reasonableness, and adequacy of the Settlement set forth in the Stipulation, and any order or

proceeding relating to the Plan of Distribution shall not operate to terminate or cancel the

Stipulation or affect the finality of the Court's Final Judgment approving the Stipulation and the

Settlement set forth therein, or any other orders entered pursuant to the Stipulation. Settlement

Class Members and the Settling Defendants shall be bound by the terms of this Stipulation,

irrespective of whether the Court disapproves or modifies the Plan of Distribution.

6.13 No Person shall have any claim against Lead Plaintiffs, Lead Counsel, Plaintiffs'

Released Persons or their counsel, or the Claims Administrator, based on distributions made

substantially in accordance with the Settlement, the Stipulation, and the Plan of Distribution, or

otherwise as further ordered by the Court. No Person shall have any claim against the

Defendants, Defendants' Released Persons, or their counsel arising from or relating to the

management of, distributions from, or the disposition of the Settlement Fund or the Net

Settlement Fund.

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7. Lead Counsel's Attorneys' Fees and Expenses

7.1 Lead Counsel may submit an application or applications (the "Fee and Expense

Application") for distributions from the Settlement Fund for (a) an award of attorneys' fees to be

paid out of the Settlement Fund, plus (b) expenses incurred in connection with prosecuting the

Litigation (including, but not limited to, the fees and expenses of expert consultants), plus (c)

interest on both amounts at the same rate and for the same periods as earned by the Settlement

Fund (until paid) as may be awarded by the Court. Lead Plaintiffs may submit requests for

reimbursement for representing the Settlement Class. Lead Counsel reserves the right to make an

additional application should circumstances so warrant. Neither Lead Counsel nor any

Settlement Class Member shall be entitled to terminate the Stipulation if the Court disapproves

of or modifies the terms of this Stipulation with respect to attorneys' fees or expenses or the

distribution of the Net Settlement Fund.

7 .2 The attorneys' fees and expenses, as awarded by the Court, shall be paid to Lead

Counsel from the Gross Settlement Fund, as ordered, immediately after the Court executes an

order awarding such fees and expenses. This provision shall apply notwithstanding timely

objections to, potential for appeal from, or collateral attack on the Settlement. Lead Counsel shall

thereafter allocate the attorneys' fees amongst other Plaintiffs' Counsel in a manner that Lead

Counsel in good faith believes reflects the contributions of such counsel to the prosecution and

settlement of the Litigation. Any such awards shall be paid solely from the Gross Settlement

Fund. In the event that the judgment or the order awarding such fees and expenses paid to Lead

Counsel pursuant to ~ 7 .1 is reversed or modified, or if the Settlement is cancelled or terminated

for any reason, then Lead Counsel and other Plaintiffs' Counsel shall, in an amount consistent

with such reversal or modification, refund such fees or expenses to the Settlement Fund, plus

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interest thereon at the same rate as earned on the Settlement Fund, within twenty (20) business

days from receiving notice from counsel for the Settling Defendants or from a court of

competent jurisdiction.

7.3 The procedure for and the allowance or disallowance by the Court of the Fee and

Expense Application, to be paid out of the Gross Settlement Fund, are not part of the Settlement

set forth in the Stipulation, and any order or proceeding relating to the Fee and Expense

Application, or any appeal from any order relating thereto or reversal or modification thereof,

shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Final

Judgment approving the Stipulation and the Settlement of the Litigation.

7.4 The Defendants, Defendants' Released Persons, and their counsel shall have no

responsibility for any payment of attorneys' fees and expenses to Lead Counsel or any

Settlement Class Member's counsel over and above payment of the Settlement Fund pursuant to

~ 3.1.

7 .5 Defendants and their Released Persons shall have no responsibility for the

allocation among Plaintiffs' Counsel or any Settlement Class Member's counsel, and/or any

other Person who may assert some claim thereto, of any Fee and Expense Award that the Court

may make in the Litigation.

8. Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination

events:

8.1 The Effective Date shall be conditioned on the occurrence of all of the following

(a) execution of the Stipulation and such other documents as may be required

to obtain final Court approval of the Stipulation in a form satisfactory to the Settling

Parties;

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(b) deposit of the Settlement Amount into the Settlement Fund with the

Claims Administrator;

( c) entry of the Court of a Preliminary Approval Order, as required by , 4.1

hereof, which, inter alia, certifies a Settlement Class;

( d) Settling Defendants have not exercised their option to terminate the

Stipulation pursuant to, 8.3 hereof;

( e) following notice to the Settlement Class and a hearing, as prescribed by

Rule 23 of the Federal Rules of Civil Procedure, the entry by the Court of the Final

Judgment that, among other things, dismisses with prejudice the claims asserted in the

Litigation as set forth above; and

(f) finality of the Final Judgment as set forth in ii 1.8 hereof.

8.2 Upon the occurrence of all of the events referenced in ii 8.1 hereof, any and all

remaining interest or right of the Settling Defendants in or to the Net Settlement Fund, if any,

shall be absolutely and forever extinguished. If the conditions specified in , 8.1 ( c) or ii 8.1 ( e)

hereof are not met, or if the condition in , 8.1 (f) is not met and there is no possibility that the

condition in, 8.1 (f) can be met, then the Stipulation shall be canceled and terminated subject to

ii 8.4 hereof unless Lead Counsel and counsel for the Settling Defendants mutually agree in

writing to proceed with the Settlement.

8.3 If, prior to the Final Approval Hearing, Persons who otherwise would be

Settlement Class Members have timely requested exclusion from the Settlement Class in

accordance with the provisions of the Preliminary Approval Order and the Notice given pursuant

thereto, and the number of shares of CNEP common stock held by such Persons exceed three (3)

percent of the total amount of shares of CNEP common stock that were issued and outstanding as

26


of the last day of the Class Period, the Settling Defendants shall have, in their sole and absolute

discretion, the option to terminate this Stipulation and Settlement in accordance with the

procedures set forth in the Supplemental Agreement. Lead Counsel shall provide counsel for the

Settling Defendants with copies of any Requests for Exclusion no later than sixteen (16) days

prior to the Final Approval Hearing. The Settling Defendants may terminate the Stipulation and

Settlement by serving written notice of termination on the Court and Lead Counsel by electronic

mail on or before seven (7) days prior to the Final Approval Hearing. Lead Counsel may attempt

to cause retraction of any Request for Exclusion by a Member of the Settlement Class. If the

Settling Defendants have exercised the option to terminate the Stipulation and if Lead Counsel,

on or before the date of the Final Approval Hearing, unless otherwise agreed between the

Settling Parties, succeeds in causing the retraction of sufficient Requests for Exclusion such that

the remaining Requests for Exclusion do not equal or exceed the threshold specified in the

Supplemental Agreement, then the Defendants' notice of termination of the Stipulation shall not

be effective.

8.4 Unless otherwise ordered by the Court, in the event that the Effective Date does

not occur or the Stipulation is terminated, cancelled, or fails to become effective for any reason,

including, without limitation, in the event the Final Judgment is reversed or vacated following

any appeal taken therefrom, or the Stipulation is successfully collaterally attacked, then:

(a) within five (5) business days after written notification of such event is sent

by counsel for the Settling Defendants or Lead Counsel to the Claims Administrator, the

Settlement Fund (including accrued interest), less expenses actually incurred or due and

owing for Class Notice and Administration Costs, Taxes, or Tax Expenses pursuant to

27


,, 3.7 and 3.8 hereof, shall be refunded pursuant to written instructions from counsel for

the Settling Defendants;

(b) at the request of counsel for the Settling Defendants, the Claims

Administrator or its designee shall apply for any tax refund owed on the Gross Settlement

Fund and pay the proceeds, after deduction of any expenses incurred in connection with

such application(s) for refund, at the written direction of counsel for the Settling

Defendants;

( c) the Settling Parties shall be restored to their respective positions in the

Litigation as of date of the execution of this Stipulation;

( d) the terms and provisions of the Stipulation, with the exception of~, 1.1-

1.28, 3.6-3.8, the last sentence of 7.2, this, 8.4, and,, 9.4 and 9.5, below, shall have no

further force and effect with respect to the Settling Parties and shall not be used in this

Litigation or in any other proceeding for any purpose; and

( e) any Final Judgment or order entered by the Court in accordance with the

terms of the Stipulation shall be treated as vacated, nunc pro tune, and the Settling Parties

shall be deemed to return to their status as of the date of execution of this Stipulation.

8.5 No order of the Court or modification or reversal on appeal of any order of the

Court concerning the Plan of Distribution or the amount of any attorneys' fees, expenses, and

interest awarded by the Court to Lead Counsel or Plaintiffs shall constitute grounds for

cancellation or termination of the Stipulation.

8.6 If the Court does not enter the Judgment in the form attached as Exhibit B hereto,

or if the Court enters the Judgment and appellate review is sought and, on such review, the entry

of the Judgment is finally vacated, modified, or reversed, then this Stipulation and the Settlement

28


incorporated therein shall be cancelled and terminated, unless all parties who are adversely

affected thereby, in their sole discretion within thirty (30) days from the date of the mailing of

such ruling to such parties, provide written notice to all other parties hereto of their intent to

proceed with the Settlement under the terms of the Judgment as modified by the Court or on

appeal. Such notice may be provided on behalf of Lead Plaintiffs and the Settlement Class

Members by Plaintiffs' Lead Counsel. No Settling Party shall have any obligation whatsoever to

proceed under any terms other than substantially in the form provided and agreed to herein;

provided, however, that no order of the Court concerning any Fee and Expense Application or

Plan of Distribution, or any modification or reversal on appeal of such order, shall constitute

grounds for cancellation or termination of this Stipulation by any Settling Party. Without

limiting the foregoing, each of the Settling Defendants shall have, in his, her, 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

Litigation against him, her, or it. The Settling Defendants may not, however, terminate the

Stipulation or the Settlement based upon their failure, or the failure of any of their Related or

Released Persons, to timely make the payment of the Settlement Amount, or any portion thereof,

as set forth in if 3.1.

8.7 In the event this Stipulation shall be terminated as set forth in iii! 8.1, 8.2 or 8.3,

above, within two weeks, the Settling Parties will jointly request a scheduling conference with

the Court. Until any such conference occurs and new dates are scheduled, all members of the

Settlement Class shall be barred and enjoined from prosecuting any of the Released Claims

against any of Defendants or their Released Persons and the Defendants and their Released

29


Persons shall be barred and enjoined from prosecuting any of the Released Defendants' Claims

against Lead Plaintiffs, the Settlement Class, Lead Counsel, and Plaintiffs' Released Persons.

9. Miscellaneous Provisions

9.1 The Settling Parties (a) acknowledge that it is their intent to consummate this

Stipulation; and (b) agree to cooperate to the extent reasonably necessary to effectuate and

implement all terms and conditions of the Stipulation and to exercise their best efforts to

accomplish the foregoing terms and conditions of the Stipulation expeditiously.

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

all disputes between them with respect to the Litigation. The Settlement shall not be deemed an

admission by any of the Defendants or Defendants' Released Person as to the merits of any claim

or defense, or an admission by any of the Lead Plaintiffs or Plaintiffs' Released Persons as to the

infirmity of any claim or the merits of any affirmative defenses thereto.

9.3 The Settling Parties and their counsel agree that they shall not assert or allege in

any action, proceeding, or claim that any party hereto or any of the Released Persons violated

Rule 11 of the Federal Rules of Civil Procedure, and the Final Judgment shall contain a finding

that all Settling Parties, Defendants, and their respective counsel complied with the requirements

of Rule 11 with respect to the institution, prosecution, defense, and resolution of the Litigation.

The Settling Parties agree that the amount paid to the Settlement Fund and the other terms of the

Settlement were negotiated in good faith by the Settling Parties and reflect a settlement that was

reached voluntarily after consultation with competent legal counsel. The Settling Parties reserve

their right to rebut, in a manner that such party determines to be appropriate, any contention

made in any public forum regarding the Litigation, including that the Litigation was brought or

defended in bad faith or without a reasonable basis.

30


9.4 Neither the Stipulation nor the Settlement contained herein, 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 Claim, or of any wrongdoing or liability of the Defendants or their Released Persons;

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 any of the Defendants or their Released Persons; or ( c) is or may be deemed to be or

may be used as an admission or evidence that any claims asserted by Plaintiffs were not valid or

that the amount recoverable was not greater than the Settlement Amount, in any civil, criminal,

or administrative proceeding in any court, administrative agency, or other tribunal. Neither this

Stipulation nor the Settlement, nor any act performed or document executed pursuant to or in

furtherance of this Stipulation or the Settlement shall be admissible in any proceeding for any

purpose, except to enforce the terms of the Settlement.

9.5 All agreements made during the course of the Litigation relating to the

confidentiality of information shall survive this Stipulation.

9.6 The Stipulation may be amended or modified only by a written instrument signed

by or on behalf of all Settling Parties or their respective successors-in-interest.

9.7 The Stipulation and the Exhibits attached hereto (which are a material and integral

part of the Settling Parties' agreement), together with the Supplemental Agreement referred to in

~ 8.3, constitute the entire agreement between the Plaintiffs and the Settling Defendants and no

representations, warranties, or inducements have been made by and between Plaintiffs and the

Settling Defendants concerning the Stipulation or its Exhibits other than the representations,

warranties, and covenants contained and memorialized in such documents. Except as otherwise

31


provided herein (or, as between Defendants, in any separate agreements between them), each

Settling Party shall bear its own costs.

9.8 Lead Counsel, on behalf of the Settlement Class, is expressly authorized by Lead

Plaintiff to take all appropriate action required or permitted to be taken by the Settlement Class

pursuant to the Stipulation to effectuate its terms and also is expressly authorized to enter into

any modifications or amendments to the Stipulation on behalf of the Settlement Class which it

deems appropriate.

9.9 Plaintiffs and Lead Counsel represent and warrant that none of the Lead

Plaintiff's claims or causes of action referred to in this Litigation or this Stipulation has been

assigned, encumbered, or in any manner transferred in whole or in part.

9.10 Each counsel or other Person executing the Stipulation, any of its Exhibits, or any

documents prepared in furtherance of the Stipulation on behalf of any Settling Party hereby

warrants that such Person has the full authority to do so.

9 .11 The Stipulation may be executed in one or more counterparts. All executed

counterparts and each of them shall be deemed to be one and the same instrument. A complete

set of executed counterparts shall be filed with the Court.

9.12 The Stipulation shall be binding upon, and inure to the benefit of, the heirs,

successors, and assigns of the Settling Parties hereto.

9 .13 The Court shall retain jurisdiction with respect to implementation and

enforcement of the terms of the Stipulation, and all Settling Parties hereto submit to the

jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in

· the Stipulation.

32


9 .14 With the exception of implementation of the settlement process, pursuant to

which the Settling Parties will seek the Preliminary Approval Order and, after notice and

hearing, the Final Judgment, the Litigation will remain stayed.

9.15 Defendants and their Released Persons may file the Stipulation and/or the Final

Judgment in any 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 other theory of claim preclusion or issue preclusion

or similar defense or counterclaim.

9 .16 This Stipulation and the Exhibits hereto shall be considered to have been

negotiated, executed, and delivered, and to be wholly performed, in the State of California, and

the rights and obligations of the parties to the Stipulation shall be construed and enforced in

accordance with, and governed by, the internal, substantive laws of the State of California

without giving effect to that State's choice-of-law principles.

IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed,

by their duly authorized attorneys, and dated as of October 5, 2016 .

33

. Guiney ison Ave.

Ne ork, NY 10016 (2 2) 545-4600 (212) 686-1060 (Facsimile) [email protected]

WOLF HALDENSTEIN ADLER FREEMAN AND HERZ LLP Francis M. Gregorek Betsy C. Manifold


34

Rachele R. Rickert Marisa C. Livesay 750 B Street, Suite 2770 San Diego, CA 92101 (619) 239-4599 (619) 234-4599 (Facsimile) [email protected]

Attorneys for Plaintiffs

Bruce W. Day Mary H. Tolbert Tara A. LaClair Braniff Building 324 N. Robinson Ave., Suite 100 Oklahoma City, OK 73102 ( 405) 235-7700 (405) 239-6651 (Facsimile) harry. [email protected]

-and-

Martin Pitha Lillis Pitha LLP 2 Park Plaza, Suite 480 Irvine, CA 92614 (949) 209-9020 (949) 759-1845 (Facsimile) [email protected]

Attorneys for Defendants Baker Tilly Hong Kong, Ltd., and Andrew David Ross


EXHIBIT A

EXHIBIT A Page 35


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))))))))))))))))

Case No. CV 14-09959-CBM(MANx) EXHIBIT A – [PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT OF CLASS ACTION CRTRM: 2 JUDGE: Hon. Consuelo B. Marshall

EXHIBIT A Page 36


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WHEREAS, the parties to this Litigation – including (i) Lead Plaintiff Filip

Lambert, on behalf of himself and each of the Class Members (as defined in ¶ 1.4 of

the Stipulation and Settlement), by and through Lead Counsel (as defined in ¶ 1.11 of

the Stipulation and Settlement); (ii) defendants Baker Tilly Kong Kong Limited

(“BTHK”), and Andrew David Ross (“Ross”) (collectively referred to as “Settling

Defendants”), have entered into a settlement of the claims asserted in the Litigation;

WHEREAS, that settlement was entered into through a Stipulation and

Agreement of Settlement, dated as of October 5, 2016 (the “Stipulation and

Settlement”), which is subject to review under Rule 23 of the Federal Rules of Civil

Procedure, and which, together with the exhibits thereto, sets forth the terms and

conditions for the proposed settlement of the claims alleged in the Second Amended

Complaint filed in the Litigation on the merits and with prejudice; and

WHEREAS, this Court having read and considered the Stipulation and

Settlement, the proposed Notice, the proposed Summary Notice, the proposed Proof

of Claim and Release, and the proposed Final Judgment, and finding that substantial

and sufficient grounds exist for entering this Order:

NOW, THEREFORE, IT IS HEREBY ORDERED, this ____ day of

__________, 2016, that:

1. All capitalized terms used herein shall have the same meaning as in the

Stipulation and Settlement.

2. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil

Procedure and for the purposes of the Settlement only, the Litigation is hereby

preliminarily certified as a class action on behalf of all Persons who purchased or

otherwise acquired common stock of China North East Petroleum Holdings Limited

(“CNEP”) between September 3, 2010, and March 14, 2012, inclusive; provided that

excluded from the Class are (a) Persons who submit valid and timely requests for

exclusion from the Class; and (b) Settling Defendants, members of the immediate

family of any such Settling Defendant, any person, firm, trust, corporation, officer,

EXHIBIT A Page 37


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director, or other individual or entity in which any Settling Defendant has or had a

controlling interest during the Class Period, the officers and directors of any Settling

Defendant during the Class Period, and legal representatives, agents, executors, heirs,

successors, or assigns of any such excluded Person. The Settling Defendants or any

entity in which any of the Settling Defendants has or had a controlling interest (for

purposes of this paragraph, together a “Defendant-Controlled Entity”) are excluded

from the Class only to the extent that such Defendant-Controlled Entity itself

purchased a proprietary (i.e., for its own account) interest in CNEP. To the extent

that a Defendant-Controlled Entity purchased any common stock of CNEP in a

fiduciary capacity or otherwise on behalf of any third-party client, account, fund,

trust, or employee benefit plan that otherwise falls within the Class, neither such

Defendant-Controlled Entity nor the third-party client, account, fund, trust, or

employee benefit plan shall be excluded from the Class with respect to such

purchase.

3. This Court finds, preliminarily and for purposes of Settlement only, that

the prerequisites for a class action under Rules 23(a) and (b)(3) of the Federal Rules

of Civil Procedure have been satisfied in that: (a) the number of Class Members is so

numerous that joinder of all members of the Class is impracticable; (b) there are

questions of law and fact common to the Class; (c) the claims of the Lead Plaintiff

are typical of the claims of the Class they seek to represent; (d) the Lead Plaintiff will

fairly and adequately represent the interests of the Class; (e) the questions of law and

fact common to the Class predominate over any questions affecting only individual

members of the Class; and (f) a class action is superior to other available methods for

the fair and efficient adjudication of the controversy.

4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure,

preliminarily and for the purposes of Settlement only, Lead Plaintiff is certified as

the class representative on behalf of the Class and the Lead Counsel previously

EXHIBIT A Page 38


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selected by Lead Plaintiff and appointed by the Court is hereby appointed as Lead

Counsel for the Class.

5. A hearing (the “Settlement Hearing”) pursuant to Federal Rule of Civil

Procedure 23(e) is hereby scheduled to be held before this Court on _________ at

_____ .m. for the following purposes:

(a) to finally determine whether the Litigation satisfies the applicable

prerequisites for class action treatment under Federal Rules of Civil

Procedure 23(a) and (b);

(b) to determine whether the Settlement is fair, reasonable, and adequate,

and should be approved by this Court;

(c) to determine whether the Final Judgment as provided under the

Stipulation and Settlement should be entered, dismissing the claims in

the Complaint as to Settling Defendants, on the merits and with

prejudice, and to determine whether the release by the Class of the

Released Parties, as set forth in the Stipulation and Settlement, should

be ordered;

(d) to determine whether the proposed Plan of Distribution for the proceeds

of the Settlement is fair and reasonable and should be approved by this

Court;

(e) to consider the application of Lead Counsel for an award of attorneys'

fees and expenses and potentially for awards to Lead Plaintiffs; and

(f) to rule upon such other matters as the Court may deem appropriate.

6. The Court reserves the right to approve the Settlement with or without

modification and with or without further notice of any kind. The Court further

reserves the right to enter its Final Judgment approving the Stipulation and

Settlement and dismissing the claims in the Second Amended Complaint as to the

Settling Defendants, on the merits and with prejudice, regardless of whether it has

EXHIBIT A Page 39


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approved the Plan of Distribution or awarded attorneys' fees and expenses or awards

to Lead Counsel and Lead Plaintiffs.

7. The Court approves the form, substance and requirements of: (a) the

postcard notice, (b) the Summary Notice, (c) the Notice and (d) the Proof of Claim

and Release, which are attached hereto as Exhibits A-1, A-2, A-3 and A-4,

respectively.

8. Lead Counsel has the authority to enter into the Stipulation and

Settlement on behalf of the Class and is authorized to act on behalf of the members

of the Class with respect to all acts or consents required by or that may be given

pursuant to the Settlement of Stipulation or such other acts that are reasonably

necessary to consummate the Settlement.

9. The Escrow Agent is authorized to disburse up to $100,000 from the

Settlement Fund prior to the Effective Date to pay the costs and expenses reasonably

and actually incurred in connection with providing notice to the Class, locating Class

Members, assisting with the filing of claims, administering and distributing the

Settlement Fund to Authorized Claimants, processing Proof of Claim and Release

forms, and paying escrow fees and costs. Any costs or expenses expended for notice

or claims administration in excess of the amount set forth in this paragraph shall be

paid from the Settlement Fund, subject to approval of the Court.

10. The Claims Administrator shall use all commercially reasonable efforts

to identify and notify members of the Settlement Class.

11. Within fourteen (14) days of receipt of a copy of this Order, the

identified holders of common stock in CNEP, and in turn any and all securities firms

or clearinghouses holding transfer, ownership interest, or similar records for CNEP,

are hereby ordered to provide, in a usable electronic format, the last known names

and addresses of all Persons who purchased or otherwise acquired common stock of

CNEP during the Class Period, to the Claims Administrator. The Claims

EXHIBIT A Page 40


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Administrator is authorized to pay all reasonable and necessary costs of obtaining

such information.

12. Within thirty (30) days of entry of this Order, the Claims Administrator

shall:

(a) cause to be mailed, to all Persons who purchased or otherwise acquired

common stock of CNEP during the Class Period, the postcard notice

advising Class Members of the availability of the Notice and a Proof of

Claim and Release. The Claims Administrator shall also make

reasonable efforts to give notice to nominee owners such as brokerage

firms and other persons or entities who purchased common stock of

CNEP during the Class Period. Such nominee purchasers are hereby

directed to forward copies of the Notice and Proof of Claim and Release

to their beneficial owners or to provide the Claims Administrator with

lists of the names and addresses of the beneficial owners. Promptly

upon receipt of any such information from nominee purchasers, the

Claims Administrator shall cause the postcard notice to be mailed to

such beneficial owners. Additional copies of the Notice and Proof of

Claim and Release shall be made available to any record holder

requesting same for the purpose of distribution to beneficial owners.

(b) cause the Notice and Proof of Claim and Release to be posted on the

Claims Administrator’s website.

-and-

(c) cause the Summary Notice to be published via the internet newswire

publication GlobeNewswire.

13. The Claims Administrator is authorized to pay all reasonable and

necessary costs of providing notice as set forth in ¶ 12 hereof. Further, the Claims

Administrator is authorized to reimburse record holders for all reasonable expenses

incurred in distributing copies of the Notice and Proof of Claim and Release to

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beneficial owners, upon receipt by the Claims Administrator of proper

documentation.

14. At or before the Settlement Hearing, Lead Counsel shall file with this

Court, and serve upon counsel for the Settling Defendants, an affidavit(s) describing

the Claims Administrator’s efforts to provide notice to Class Members and

compliance with the specific requirements set forth above. Further, Lead Counsel

shall file with this Court, and serve upon counsel for the Settling Defendants, proof

of publication of the Summary Notice.

15. The form and method set forth herein of notifying the Class of the

Settlement and its terms and conditions meet the requirements of due process and

Rule 23 of the Federal Rules of Civil Procedure and Section 21D(a)(7) of the

Exchange Act, 15 U.S.C. 78u-4(a)(7), as amended by the Private Securities

Litigation Reform Act of 1995; constitutes the best notice practicable under the

circumstances; and shall constitute due and sufficient notice to all persons and

entities entitled thereto. Under no circumstances shall any Class Member be relieved

from the terms of the Settlement, including the releases provided for therein, based

upon the contention or proof that such Class Member failed to receive actual or

adequate notice.

16. In order to be entitled to participate in the Net Settlement Fund, as

defined in the Stipulation and Settlement, in the event the Settlement is effected in

accordance with all of the terms and conditions thereof, each Class Member shall

take the following action and be subject to the following conditions:

(a) A properly executed Proof of Claim and Release, substantially in the

form attached hereto as Exhibit A-4, shall be submitted, by first class

mail, postage prepaid, postmarked no later than ninety (90) calendar

days after entry of the Preliminary Approval Order by the Court to the

Post Office Box address listed in the Notice. Such deadline may be

further extended by Order of this Court. Each Proof of Claim and

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Release shall be deemed to have been submitted when postmarked (if

properly addressed and mailed by first-class mail) provided it is actually

received before the filing of a motion for an Order of the Court

approving distribution of the Net Settlement Fund. Any Proof of Claim

and Release submitted in any other manner shall be deemed to have

been submitted when it was actually received at the address designated

in the Notice.

(b) The Proof of Claim and Release submitted by the Class Member must:

(i) be fully and properly completed, without any material deletions or

modifications of any of the forms as provided to the Class Member; (ii)

state, for the Class Member, all purchases of common stock of CNEP

during the Class Period, including the number and price of the common

stock purchased and the date of each purchase, the number and price of

shares of common stock of CNEP sold during the Class Period and the

date of each sale; (iii) be accompanied by adequate documentation to

demonstrate the transaction(s) reported therein, in the form of broker

confirmation slips, broker account statements, an authorized statement

from the broker containing the transactional information found in a

broker confirmation slip, or such other documentation as is deemed

adequate by Lead Counsel or the Claims Administrator; (iv) be executed

under penalty of perjury; and (v) be accompanied, if the person

executing the Proof of Claim and Release is acting in a representative

capacity, by a certification of the executor’s current authority to act on

behalf of the Class Member.

(c) Once the Claims Administrator has considered a timely submitted Proof

of Claim, Lead Counsel, through the Claims Administrator, shall

determine, based upon the Plan of Distribution, whether such claim is

valid, deficient, or rejected. For each claim determined to be either

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deficient or rejected, the Claims Administrator shall send a deficiency

letter or rejection letter as appropriate, describing the basis on which the

claim was so determined.

-and-

(d) As part of the Proof of Claim, each Class Member shall submit to the

jurisdiction of the District Court with respect to the claim submitted.

17. Class Members shall be bound by all determinations and judgments in

the Litigation, whether or not they submit a valid and timely Proof of Claim and

Release and are thereby entitled to share in the proceeds of the Net Settlement Fund,

unless such Person(s) request exclusion from the Class in a timely and proper

manner, as hereinafter provided:

(a) A person eligible to be a Class Member, but who wishes to be excluded

from the Class, may request exclusion by mailing the request in written

form, by first class mail, postage prepaid, postmarked no later than

twenty-one (21) calendar days prior to the Settlement Hearing to the

Post Office Box address listed in the Notice;

(b) The request for exclusion shall clearly indicate the name and address of

the person seeking exclusion and that the sender specifically requests to

be excluded from the Class;

(c) The request for exclusion shall be executed, under penalty of perjury, by

the person requesting exclusion from the Class, and accompanied, if the

executor is acting in a representative capacity, by a certification of the

executor’s current authority to act on behalf of the person requesting

exclusion from the Class;

(d) The request for exclusion shall state, for the Class Member, all

purchases of common stock of CNEP during the Class Period, including

the number and price of the shares purchased and the date of each

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purchase, the number and price of shares sold during the Class Period

and the date of each sale; and

(e) It is also requested that such persons provide their telephone number or

other contact information.

The request for exclusion shall not be effective unless the potential Class Member

provides the required information set forth in this ¶ 17, and is made within the time

stated above, or the exclusion is otherwise accepted by the Court.

18. Class Members requesting exclusion from the Class shall not be entitled

to receive any payment out of the Net Settlement Fund as described in the Stipulation

and Settlement and Notice.

19. The Court will consider objections by a Class Member to the

Settlement, the Plan of Distribution, the potential request by Lead Counsel for an

award of attorneys’ fees and expenses, and the potential request by Lead Plaintiff for

an award of fees, only if the Class Member has timely submitted a complete,

executed Proof of Claim and Release, including all documentation required by ¶

12(b) of this Order. Objections, by Class Members or any other authorized person or

governmental entities, shall be submitted in accordance with the following

procedures:

(a) Objections must be stated in writing, in a clear, concise, and legible

manner;

(b) Objections must be filed, along with any exhibits or briefs, with the

Clerk of the Court, U.S. District Court, Central District of California,

312 North Spring Street Los Angeles, CA 90012-4701, no later than

twenty-one (21) calendar days prior to the Settlement Hearing;

(c) Objections must include a statement by the objector that he, she, or it

intends to appear at the Settlement Hearing;

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(d) Objections must identify any witnesses the objector intends to call to

testify at the Settlement Hearing, and any exhibits the objector intends

to introduce into evidence at the Settlement Hearing; and

(e) Objections must include a signed statement that the documents filed

with the Clerk of Court were served, on or before the date of filing, by

first class mail, postage prepaid, on each of the following:

WOLF HALDENSTEIN ADLER FREEMAN

AND HERZ LLP

Matthew M. Guiney

270 Madison Ave.

New York, NY 10016

Lead Counsel

-and-

CROWE & DUNLEVY, P.C.

Harry A. Woods, Jr.

20 North Broadway Avenue, Suite 1800

Oklahoma City, OK 73102-8273

Attorneys for BTHK and Andrew Ross

Class Members who do not object to the Settlement, the Plan of Distribution, the

potential request by Lead Counsel for an award of attorneys’ fees and expenses, or

the potential request by Lead Plaintiff for an award of fees, or who merely wish to

submit comments as opposed to objections to the same, do not need to appear at the

Settlement Hearing.

20. Any objector, whether a Class Member or any other authorized person

or governmental entity, who does not object in the manner prescribed above shall be

deemed to have waived all such objections and shall forever be foreclosed from

EXHIBIT A Page 46


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making any objection to the fairness, adequacy, or reasonableness of the Settlement,

the Plan of Distribution, the potential request by Lead Counsel for an award of

attorneys’ fees and expenses, or the potential request by Lead Plaintiff for an award

of fees.

21. The Court reserves the right to continue or adjourn the Settlement

Hearing without any further notice other than an announcement prior to or at the

Settlement Hearing, and to approve the Settlement without further notice to the

Class.

22. All papers in support of the Settlement, the Plan of Distribution, the

potential request by Lead Counsel for an award of attorneys’ fees and expenses, or

the potential request by Lead Plaintiff for an award of fees shall be filed and served

45 calendar days before the Settlement Hearing. Any reply papers in further support

of the Settlement shall be filed and served 7 calendar days before the Settlement

Hearing.

23. Pending final determination of whether the Settlement should be

approved, all Class Members, and each of them, and anyone who acts or purports to

act on their behalf shall not institute, commence, or prosecute any action which

asserts Released Claims against any of the Released Parties.

24. In the event that the Settlement shall not be consummated pursuant to its

terms, the Stipulation and Settlement, except as otherwise provided therein, including

any amendment(s) thereto, and this Order, shall be null and void, of no further force

or effect, and without prejudice to any party, and may not be introduced as evidence

or referred to in any action or proceedings by any person or entity, and each party

shall be restored to his, her, or its respective position as it existed before the

execution of the Stipulation and Settlement.

///

///

///

EXHIBIT A Page 47


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25. The District Court retains exclusive jurisdiction over the action to

consider all further matters arising out of, or connected with, the Settlement.

Dated: _____________, 2016

________________________________ Hon. Consuelo B. Marshall UNITED STATES DISTRICT JUDGE

CHINANEPETROLEUM: 23385

EXHIBIT A Page 48


EXHIBIT A-1

EXHIBIT A-1 Page 49


PRESORTED

FIRST-CLASS

MAIL U.S.

POSTAGE PAID

Court-Ordered Legal Notice

Forwarding Service Requested

Important Notice authorized by the

United States District Court

for the Central District of California

This Notice may affect your legal rights.

Please read it carefully.

You may be entitled to a payment.

Baker Tilly Hong Kong Ltd. Settlement

c/o Strategic Claims Services

600 N. Jackson Street., Suite 3

Media, PA 19063

[NAME 1]

[NAME 2]

[NAME 3]

[ADDRESS 1]

[ADDRESS 2]

EXHIBIT A-1 Page 50


Kachun Wong v. Baker Tilly Hong Kong, Ltd., Case No. 14-cv-9959-CBM THIS CARD ONLY PROVIDES LIMITED INFORMATION ABOUT THE SETTLEMENT. PLEASE VISIT

WWW.STRATEGICCLAIMS.NET FOR MORE INFORMATION.

There has been a proposed Settlement of claims brought against Defendant Baker Tilly Hong Kong, Ltd. (“BTHK”) and Defendant Andrew David Ross (collectively, the “Settling Defendants”). This proposed Settlement would resolve the lawsuit in which Plaintiffs allege that the Defendants violated federal securities laws by issuing untrue or materially misleading information that artificially inflated the price of common stock of China North East Petroleum Holdings (“CNEP”). The Defendants deny any wrongdoing. The Settling Parties disagree on both liability and damages. You are receiving this Notice because you or someone in your family may have purchased or acquired CNEP common stock between September 3, 2010, and March 14, 2012, inclusive (the “Settlement Class Period”). If the Settlement is approved, it will provide $925,000 in cash to pay those who purchased or otherwise acquired the common stock of CNEP during the Settlement Class Period and were allegedly damaged thereby. Your recovery will depend on the number of valid claim forms submitted, the number of shares of common stock of CNEP you purchased or acquired during the relevant period, and the timing and prices of your purchases and sales. The estimated average recovery per outstanding share of CNEP common stock is approximately $0.03 per share before deduction of Court-approved fees and expenses and costs of notice and claims administration. As a Settlement Class Member, you will be bound by the release of claims against the Defendants and their Related Persons. The terms of the releases are explained in the Stipulation and Agreement of Settlement, which is located at the Claims Administrator’s website, www.strategicclaims.net. To be considered for recovery, you must submit a Proof of Claim. A copy of the Proof of Claim can be found on the website. PROOFS OF

CLAIM ARE DUE BY ________ __, __16, AND MUST BE SUBMITTED TO THE CLAIMS ADMINISTRATOR AT BAKER TILLY HONG

KONG LIMITED SETTLEMENT, C/O STRATEGIC CLAIMS SERVICES, 600 N. JACKSON STREET, SUITE 3, MEDIA, PA 19063. If you do not want to be legally bound by the Settlement and want to retain the right to sue the defendants on your own regarding the legal claims in this case, you must request exclusion by ______ __, __16. Should you exclude yourself from the Settlement Class, you will not be eligible for recovery under the Settlement. If you do not like any part of the Settlement and would like to state the reasons why you think the Court should not approve it, you must file an objection by ________ __, __16. The detailed Notice located at www.strategicclaims.net contains instructions on requesting exclusion or filing an objection. If you do nothing, all of your claims against the Settling Defendants will be released, but you

will not receive any money from this Settlement. The Court will hold a hearing in this case on ________ __, __16 at _____ _.m. to consider whether the Settlement is fair, reasonable, and adequate; to hear objections; and to consider Lead Counsel’s request for attorneys’ fees up to 30% and expenses. You may attend the hearing and ask to be heard by the Court, but you do not have to. For more information, contact the Claims Administrator at (866) 274-4004 or visit the website, www.strategicclaims.net.

EXHIBIT A-1 Page 51


EXHIBIT A-2

EXHIBIT A-2 Page 52


UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

FILIP LAMBERT, JIGNESH PATEL,and REILLY CHASE, Individually and on Behalf Of All Others Similarly Situated,

Plaintiffs,

v. BAKER TILLY HONG KONG LIMITED, ANDREW DAVID ROSS, and HELENA LAIHA KWOK,

Defendants.

Case No. 2:14-cv-09959-CBM-MANx EXHIBIT A-2

SUMMARY NOTICE

EXHIBIT A-2 Page 53


TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED SHARES OF COMMON STOCK OF CHINA NORTH EAST PETROLEUM HOLDINGS LIMITED (“CNEP”) BETWEEN SEPTEMBER 3, 2010, AND MARCH 14, 2012, INCLUSIVE.

YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District

Court for the Central District of California, that a hearing will be held on _________, 2017, at

__:__ __.m., before the Honorable Consuelo B. Marshall, at the United States Courthouse,

Courtroom #2, Second Floor, 312 North Spring Street, Los Angeles, CA 90012, for the purpose

of determining: (1) whether the proposed Settlement of the claims in the Litigation for the sum of

$925,000.00 in cash should be approved by the Court as fair, reasonable, and adequate to

Members of the Settlement Class; (2) whether to certify the Settlement Class; (3) whether,

thereafter, this Litigation should be dismissed with prejudice pursuant to the terms and

conditions set forth in the Stipulation and Agreement of Settlement dated October 5, 2016; (4)

whether the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is fair,

reasonable, and adequate and therefore should be approved; and (5) whether the application of

Lead Counsel for the payment of attorneys’ fees and expenses incurred in connection with this

Litigation, as well as Lead Plaintiff reimbursement, should be approved. If you purchased or

acquired common stock of China North East Petroleum Holdings Limited (“CNEP”) between

September 3, 2010, and March 14, 2012, inclusive, your rights may be affected by this

Settlement. If you have not received a detailed Notice of Proposed Settlement of Class Action,

Motion for Attorneys’ Fees and Expenses, and Settlement Fairness Hearing (the “Notice”) and a

copy of the Proof of Claim and Release, you may obtain copies by writing to Baker Tilly Hong

Kong Limited Settlement, c/o Strategic Claims Services, 600 N. Jackson Street, Suite 3, Media,

PA 19063, Tel: (866) 274-4004, Fax: (610) 565-7985, or you can download a copy at

www.strategicclaims.net. If you are a Settlement Class Member, in order to share in the

EXHIBIT A-2 Page 54


distribution of the Net Settlement Fund, you must submit a Proof of Claim and Release

postmarked no later than _______, 2016, establishing that you are entitled to recovery.

PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE

REGARDING THIS NOTICE. If you have any questions about the Settlement, you may

contact Lead Counsel at the address listed below:

Matthew M. Guiney Wolf Haldenstein Adler Freeman and Herz LLP 270 Madison Ave. New York, NY 10016

or go to the following website: www.strategicclaims.net

DATED:

EXHIBIT A-2 Page 55


EXHIBIT A-3

EXHIBIT A-3 Page 56


1

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

FILIP LAMBERT, JIGNESH PATEL,and REILLY CHASE, Individually and on Behalf Of All Others Similarly Situated,

Plaintiffs,

v. BAKER TILLY HONG KONG LIMITED, ANDREW DAVID ROSS, and HELENA LAIHA KWOK,

Defendants.

Case No. 2:14-cv-09959-CBM-MANx EXHIBIT A-3

NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION, MOTION FOR ATTORNEY’S FEES AND EXPENSES, AND SETTLEMENT FAIRNESS HEARING

IF YOU PURCHASED OR ACQUIRED COMMON STOCK OF CHINA NORTH EAST PETROLEUM HOLDINGS LIMITED BETWEEN SEPTEMBER 3, 2010, AND MARCH 14, 2012, INCLUSIVE, YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTION SETTLEMENT.

A federal court authorized this Notice. This is not a solicitation from a lawyer.

Your legal rights are affected whether you act, or do not act.

Please read this Notice carefully.

Security and Time Period: Common stock of China North East Petroleum Holdings

Limited (“CNEP” or the “Company”) purchased or acquired between September 3, 2010, and

March 14, 2012, inclusive (the “Settlement Class Period”).

Settlement Fund: $925,000.00 in cash. Your recovery will depend on: the number of

shares of common stock you, and other Settlement Class Members who file claims, purchased

and sold during the Settlement Class Period; and the dates on, and prices at which, you, and the

other Settlement Class Members who file claims, purchased and sold those shares. The estimated

EXHIBIT A-3 Page 57


2

average recovery per outstanding share of CNEP common stock will be approximately $.03 per

share before deduction of Court-approved fees and expenses and costs of notice and claims

administration.

Reasons for Settlement: The case, which has been prosecuted since December 31, 2014,

alleges that investors paid too much for CNEP’s common stock due to material

misrepresentations made by Baker Tilly Hong Kong Limited (“BTHK”), Andrew David Ross

(collectively “the Settling Defendants”), and Helena Laiha Kwok in their report on the audit of

CNEP’s 2009 year-end financial statements. The Lead Plaintiff and Lead Counsel believe that

the Settlement provides the Settlement Class with a benefit now, instead of after years of further

uncertain litigation, including disposition of summary judgment motions, a contested trial and

likely appeals, with the possibility of no recovery at all. In this case, a further bar to recovery is

the fact that all witnesses are located in Hong Kong.

The Settling Defendants have denied and continue to deny each and all of the allegations

made and claims brought by Plaintiff, maintain that they have meritorious defenses, and contend

that many of the factual allegations are materially inaccurate. The Settling Defendants also have

denied and continue to deny, inter alia, the allegations that Plaintiff or the Settlement Class have

suffered damages, that the price of CNEP common stock was artificially inflated by reason of

alleged misrepresentations, non-disclosures, or otherwise, or that Plaintiff or the Settlement Class

was harmed by the conduct alleged in the operative complaint.

Nonetheless, the Settling Defendants have concluded that further conduct of the

Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully

and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.

The Settling Defendants also have taken into account the uncertainty and risks inherent in any

EXHIBIT A-3 Page 58


3

litigation, especially in complex cases like this Litigation. The Settlement shall in no event be

construed as, or deemed to be evidence of, an admission or concession by any of the Defendants

with respect to any claim of any fault or liability or wrongdoing or damage to the Settlement

Class Members in this Litigation or any admission by Lead Plaintiff and the Settlement Class

that they could not have recovered more than the Settlement Amount at trial.

If the Case Had Not Settled: The Settlement must be compared to the risk of no

recovery after contested dispositive motions, trial and likely appeals. A trial is a risky

proposition. The claims in the Litigation involve numerous complex legal and factual issues,

many of which would require expert testimony. The Settling Parties disagree on both liability

and damages and do not agree on the average amount of damages per share, if any, that would be

recoverable if Plaintiffs were to have prevailed on each claim alleged. Among the many key

issues about which Plaintiffs and the Settling Defendants do not agree are: (1) whether the

Defendants violated the securities laws or otherwise engaged in any wrongdoing; (2) whether the

misstatements, misrepresentations and omissions alleged by the Plaintiffs were material, false,

misleading or otherwise actionable under the securities laws; (3) the extent (if any) that the

alleged misrepresentations and omissions influenced the trading price of CNEP’s common stock

during the Settlement Class Period; and (4) the method for determining whether, and the extent

to which, purchasers of common stock of CNEP suffered injury and damages that could be

recovered at trial.

Attorneys’ Fees and Expenses: Lead Counsel have not received any payment for their

work or expenses incurred in investigating the facts, conducting this Litigation and negotiating

the Settlement on behalf of the Plaintiffs and the Settlement Class. Lead Counsel will ask the

Court for attorneys’ fees not to exceed thirty percent (30%) of the Settlement Fund and expenses

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not to exceed $20,000 to be paid from the Settlement Fund. Lead Counsel will also seek an

award to the Lead Plaintiff and other named plaintiffs for reimbursement of reasonable costs and

expenses (including lost wages) directly relating to their representation of the Class, collectively

not to exceed $5,000.

If the above amounts are requested and approved by the Court, the average cost per share

of common stock of CNEP will be approximately $_____, making the estimated recovery per

share after fees and expenses approximately $_____.

Dismissal and Releases: If the proposed Settlement is approved, the Court will enter a

Final Judgment. The Final Judgment will dismiss the Released Claims with prejudice as to the

Released Persons, which include all Defendants in this action (including, but not limited to, their

parents, subsidiaries and affiliates, and all of their employees, directors and officers). The Final

Judgment will provide that all Settlement Class Members shall be deemed to have released and

forever discharged all Released Claims (to the extent Members of the Settlement Class have such

claims) against all Released Persons. The terms of the releases, including the meaning of the

term “Released Claims,” are set forth in the Proof of Claim and Release form that is enclosed. In

exchange for payment of the Settlement Amount and the receipt of releases from Lead Plaintiffs

and the Settlement Class, the Settlement also provides for releases by the Settling Defendants of

Lead Plaintiffs and Settlement Class members and their Released Persons (“Released

Defendants’ Claims”).

Deadlines:

Submit Claim: ________________, 2016

File Objection: _________________, 2016

Request Exclusion: _________________, 2016

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Court Hearing on Fairness of Settlement: _________________, 2017

More Information: www.strategicclaims.net

Claims Administrator:

Baker Tilly Hong Kong Limited Settlement c/o Strategic Claims Services 600 N. Jackson Street, Suite 3 Media, PA 19063 Tel: (866) 274-4004 Fax: (610) 565-7985

Lead Counsel:

WOLF HALDENSTEIN ADLER FREEMAN AND HERZ LLP Matthew M. Guiney 270 Madison Ave. New York, NY 10016 (212) 545-4600 (212) 686-1060 (Facsimile)

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:

SUBMIT A CLAIM The only way to receive a payment.

OBJECT You may object to the Court if you do not like this Settlement.

EXCLUDE Receive no payment. This is the only option that YOURSELF allows you to participate in another lawsuit against the

Defendants relating to the class claims being released in this case.

DO NOTHING Receive no payment.

You may submit a claim or object, or do both, or do nothing. However, if you timely

exclude yourself that is the only thing you can do: you may not object in writing, you may not

appear at the Court Hearing on Fairness of Settlement to state any objections, and you may not

submit a claim.

If you object and do not request exclusion, you will remain a member of the Settlement

Class, and if the Court approves the Settlement, you will be bound by the terms of the Settlement

in the same way as Settlement Class Members who do not object.

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Unless you timely request exclusion from the Settlement Class, or unless the Court

rejects the proposed Settlement, you are bound by the Stipulation of Settlement and its releases,

whether or not you submit a claim or object.

These rights and options — and the deadlines to exercise them — are explained in this

Notice.

The Court presiding over this case must decide whether to approve the Settlement.

Payments will be made only if the Court approves the Settlement and, if there are any appeals,

after appeals are resolved. Please be patient.

The Court has authorized this Notice, but no money will be paid to anyone until the Court

holds the Settlement Hearing on _______________, 2017. The Court has not decided the merits

of this case.

WHAT THIS NOTICE CONTAINS

BASIC INFORMATION

1. Why did I receive this notice package?

2. What is this lawsuit about?

3. Why is this a class action?

4. Why is there a settlement?

WHO IS IN THE SETTLEMENT CLASS

5. How do I know if I am part of the Settlement?

6. What are the exceptions to being included?

7. I’m still not sure if I’m included.

THE SETTLEMENT BENEFITS – WHAT YOU GET

8. What does the settlement provide?

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9. How much will my payment be?

HOW YOUOBTAIN A PAYMENT – SUBMITTING A CLAIM FORM

10. How will I obtain a payment?

11. When will I receive my payment?

12. What am I giving up to receive a payment?

EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS

13. How do I get out of the Settlement Class?

14. If I do not exclude myself, can I sue the Settling Defendants for the same thing later?

15. If I exclude myself, can I receive money from the Settlement?

THE LAWYERS REPRESENTING YOU

16. Do I have a lawyer in this case?

17. How will the lawyers be paid?

OBJECTING TO THE SETTLEMENT

18. How do I tell the Court that I do not like the Settlement?

THE COURT’S SETTLEMENT HEARING

19. When and where will the Court decide whether to approve the Settlement?

20. Do I have to come to the hearing?

21. May I speak at the hearing?

IF YOU DO NOTHING

22. What happens if I do nothing at all?

GETTING MORE INFORMATION

23. Are there more details about the settlement?

UNDERSTANDING YOUR PAYMENT

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SPECIAL NOTICE TO NOMINEES

BASIC INFORMATION

1. Why Did I Receive This Notice Package?

You or someone in your family may have purchased or acquired common stock of CNEP

between September 3, 2010, and March 14, 2012, inclusive.

This Notice was sent because you have a right to know about a proposed settlement of a

class action lawsuit, and about all of your options, before the Court decides whether to approve

the Settlement. If the Court approves the Settlement and after any objections or appeals are

resolved, the Claims Administrator appointed by the Court will make the payments to those

persons who timely submit claims in the manner described below.

This package explains the lawsuit, the Settlement, your legal rights, what benefits are

available, who is eligible for them, and how to get them.

The Court in charge of the case is the United States District Court for the Central District

of California, and the case is known as Kachun Wong v. Baker Tilly Hong Kong, Ltd., Case No.

14-cv-9959-CBM. Filip Lambert is called the Lead Plaintiff, and the Lead Plaintiff, together with

Jignesh Patel and Reilly Chase are collectively referred to as Plaintiffs. The company and

persons they have sued are collectively called the Settling Defendants. The Settling Parties

include Plaintiffs and the Settling Defendants.

2. What Is This Lawsuit About?

This Litigation alleges violations of the Federal Securities Laws (specifically, Sections

10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a)) against

Defendants.

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CNEP was a publicly traded Nevada corporation with its principal executive offices

located in the People’s Republic of China. Plaintiffs alleged that the price of CNEP’s common

stock was artificially inflated as a result of untrue or materially misleading statements concerning

the Defendants’ audit of CNEP’s 2009 year-end financial statements. Plaintiffs alleged that these

material misstatements were contained in the Defendants’ audit report, which was filed and

disseminated in connection with CNEP’s 2009 Form 10-K. Plaintiffs further contend that

investors suffered injury as a result of their purchase of common stock of CNEP at a price that

was artificially inflated by the Defendants’ misrepresentations, when the price declined as the

true facts were revealed at the end of the Settlement Class Period.

3. Why Is This A Class Action?

Class actions are generally used in lawsuits that affect a large number of individuals; in

effect, the class action operates to consolidate into a single action all of the claims of individuals

allegedly harmed by the same conduct or course of conduct, thus alleviating the need for

members of the class to file their own individual lawsuits to recover for the harm alleged. Once

the class is certified, a court is empowered to resolve all issues on behalf of members of the

class, except for those members of the class, if any, who specifically choose to exclude

themselves from the class.

As part of both the preliminary and final approval process, Plaintiffs ask the Court to

certify the Settlement Class for settlement purposes only. The proposed Settlement Class that

was preliminarily certified (for the purpose of providing this Notice to you and other proposed

Settlement Class Members), consists of all persons or entities who purchased or otherwise

acquired common stock of CNEP between September 3, 2010, and March 14, 2012, inclusive,

and were allegedly damaged thereby. All Settlement Class Period purchasers of common stock

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of CNEP are members of the Settlement Class, except those persons who timely file a request for

exclusion by 21 days prior to the Settlement Hearing, 2016. All persons who do not timely

exclude themselves from the Settlement Class will be bound by the proposed Settlement and its

accompanying release.

4. Why Is There a Settlement?

The Court did not decide in favor of the Plaintiffs or the Settling Defendants. Instead,

both sides agreed to a Settlement. This permits them to avoid the cost and uncertainty of a trial,

and permits eligible Settlement Class Members who submit valid claims to receive some

compensation now, rather than wait for the result of trial and possible appeals. The Plaintiffs and

their attorneys believe the Settlement is best for all Settlement Class Members. The Settling

Defendants have concluded that further defense of the Litigation would be protracted and

expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and

upon the terms and conditions set forth in the Stipulation. The Settling Defendants also have

taken into account the uncertainty and risks inherent in any litigation, especially in complex

cases such as the Litigation.

WHO IS IN THE SETTLEMENT CLASS

To see if you will receive money from this Settlement, you first have to determine if you

are a Settlement Class Member.

5. How Do I Know if I Am Part of the Settlement?

The Settlement Class includes all persons or entities who purchased or otherwise

acquired the common stock of CNEP between September 3, 2010, and March 14, 2012,

inclusive, and were allegedly damaged thereby.

6. What Are the Exceptions to Being Included?

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You are not a Settlement Class Member if you are a Defendant, members of the

immediate family of any such Defendant, any parent or subsidiary of any such Defendant, any

person, firm, trust, corporation, officer, director, or other individual or entity in which any

Defendant has or had a controlling interest during the Settlement Class Period, the partners,

officers and directors of any Defendant during the Settlement Class Period, and legal

representatives, agents, executors, heirs, successors, or assigns of any such excluded Person.

The Defendants or any entity in which any of the Defendants has or had a controlling

interest (together a “Defendant-Controlled Entity”) are excluded from the Settlement Class only

to the extent that such Defendant-Controlled Entity itself purchased a proprietary (i.e., for its

own account) interest in common stock of CNEP. To the extent that a Defendant-Controlled

Entity purchased any common stock of CNEP in a fiduciary capacity or otherwise on behalf of

any third-party client, account, fund, trust, or employee benefit plan that otherwise falls within

the Settlement Class, neither such Defendant-Controlled Entity nor the third-party client,

account, fund, trust, or employee benefit plan shall be excluded from the Settlement Class with

respect to such fiduciary purchases.

7. I’m 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 call

Strategic Claims Services at 1-866-274-4004 for more information. Or you can fill out and return

the claim form described in question 10, to see if you qualify.

THE SETTLEMENT BENEFITS — WHAT YOU GET

8. What Does the Settlement Provide?

The Settlement will result in a fund of $925,000.00 in cash. The balance of this fund after

payment of Court-approved attorneys’ fees and expenses, Lead Plaintiff’s expenses, if any, and

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the costs of claims administration, including the costs of printing and mailing this Notice and the

cost of publishing the newspaper notice (the “Net Settlement Fund”), will be divided among all

eligible Settlement Class Members who send in valid claim forms.

9. How Much Will My Payment Be?

Your share of the Net Settlement Fund will depend on the number of valid claim forms

that Settlement Class Members send in, the number of shares of common stock of CNEP you

purchased or acquired during the relevant period, and the timing of your purchases and sales.

You will not receive a payment, however, if your proportionate share of the Net Settlement Fund

is less than $10.00.

You can calculate your Recognized Loss in accordance with the formula shown below in

the Plan of Allocation. After all Settlement Class Members have sent in their Proof of Claim and

Release forms, the payment you receive will reflect your Recognized Loss in relation to the

Recognized Losses of all persons submitting Claim Forms. The Recognized Loss is not the

amount of the payment that you can expect, but is used to determine how the Net Settlement

Fund is allocated among all persons submitting claims.

HOW YOU OBTAIN A PAYMENT — SUBMITTING A CLAIM FORM

10. How Will I Obtain a Payment?

To qualify for payment, you must be an eligible Settlement Class Member, send in a

valid Proof of Claim and Release form, and properly document your claim as requested in the

Claim Form. A Proof of Claim and Release form is enclosed with this Notice. You may also get

a Proof of Claim and Release form on the Internet at www.strategicclaims.net. Read the

instructions carefully, fill out the Proof of Claim and Release form, include the documents the

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form asks for, sign it, and mail it to the Claims Administrator (see address above) such that it is

postmarked no later than _________, 2016.

11. When Will I Receive My Payment?

The Court will hold a hearing on _________, 2017, to decide whether to approve the

Settlement. If the Court approves the Settlement, there may be appeals. It is always uncertain

when these appeals will be resolved, and resolving them can take time, perhaps more than a year.

Even if no appeals are filed, it will take additional time for the Claims Administrator to process

all of the Proof of Claim and Release forms, determine the ultimate distribution amounts, and

apply for a Court Order for distribution.

12. What Am I Giving Up to Receive a Payment?

As a Settlement Class Member, you will be giving up certain rights that you currently

have if the Court approves the Settlement. Unless you timely exclude yourself from the

Settlement Class by no later than 21 days prior to the Settlement Hearing, you are a Member of

the Settlement Class and will be bound by the release of claims against the Defendants and their

Related Persons. That means that you cannot sue, continue to sue, or be part of any other lawsuit

against the Defendants about the Released Claims in this case. It also means that all of the

Court’s orders will apply to you and legally bind you and you will release your claims in this

case against the Defendants. The terms of the release are included in the claim form that is

enclosed. Note: If you object, but the Court approves the Settlement, you will be bound by the

terms of the Settlement in the same way as Members of the Settlement Class who do not object.

EXCLUDING YOURSELF FROM THE SETTLEMENT CLASS

If you do not want a payment from the class action Settlement, but you want to keep the

right to sue or continue to sue the Defendants on your own for the Released Claims in the class

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action then you must take steps to get out of the Settlement Class. This is called excluding

yourself or is sometimes referred to as “opting out” of the Settling Class.

13. How Do I Get Out of the Settlement Class?

To exclude yourself from the Settlement Class, you must send a letter by mail stating that

you want to be excluded from the class. You must include your name, address, telephone

number, your signature, information about the shares of CNEP common stock you purchased or

acquired between September 3, 2010, and March 14, 2012, inclusive (including date, price, and

amount), and information about shares of CNEP common stock you sold during this time period,

if any (including date, price, and amount). You must mail your exclusion request postmarked no

later than __________, 2016 to:

Baker Tilly Hong Kong Limited Settlement c/o Strategic Claims Services 600 N. Jackson Street, Suite 3 Media, PA 19063

You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded, you

are not eligible to receive any settlement payment, you cannot object to the Settlement, and you

will not be legally bound by the Settlement.

14. If I Do Not Exclude Myself, Can I Sue the Settling Defendants for the Same

Thing Later?

No. Unless you exclude yourself from the Settlement Class, you give up any right to sue

the Defendants or Defendants’ Related Persons for the Released Claims. If you have a pending

lawsuit against any of the Defendants, speak to your lawyer in that case immediately.

Remember, the exclusion deadline is 21 days prior to the Settlement Hearing, 2016.

15. If I Exclude Myself, Can I Receive Money from the Settlement?

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No. If you exclude yourself, do not send in a Claim Form.

THE LAWYERS REPRESENTING YOU

16. Do I Have a Lawyer in This Case?

The Court appointed the law firm of Wolf Haldenstein Adler Freeman and Herz LLP to

represent you and other Settlement Class Members. These lawyers are called Lead Counsel. You

will not be personally liable for the fees and expenses incurred by 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?

Lead Counsel will ask the Court for attorneys’ fees of up to thirty percent (30%) of the

Settlement Fund and for expenses up to $20,000 (including certain expenses incurred by a law

firm assisting Lead Counsel in the Litigation), which were advanced in connection with the

Litigation. Such sums as may be approved by the Court will be paid from the Settlement Fund.

Settlement Class Members are not personally liable for any such fees or expenses.

The attorneys’ fees and expenses requested will be the only payment to Lead Counsel for

their efforts in achieving this Settlement and for their risk in undertaking this representation on a

wholly contingent basis. Since the case began in 2014, Lead Counsel conducted an initial

investigation of the claims alleged, prepared an extensive amended complaint and second

amended complaint, filed briefs on numerous motions, prepared to conduct discovery in the

United States and Hong Kong, consulted experts regarding calculation of damages, and

negotiated an arms’-length settlement with the Settling Defendants. To date, Lead Counsel has

not been paid for their services in conducting this Litigation on behalf of the Plaintiffs and the

Settlement Class, nor for their expenses. Lead Counsel have expended to date more than ___

hours of attorney time in prosecuting the Settlement Class’s claims and will ask the Court for

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actual expenses not to exceed $_______ in prosecuting the Litigation. The fee requested will

compensate Lead Counsel for their work in achieving the Settlement Fund.

Lead Counsel shall file formal motions with the District Court, for approval of the

Settlement and the Plan of Allocation, and to request payment of attorneys’ fees and

reimbursement of expenses, not later than 45 days prior to the Settlement Hearing. The

attorneys’ fees motion will argue that Lead Counsel’s requested fees are well within the range of

fees awarded to class counsel under similar circumstances in other cases of this type. The Court

determines what counsel should receive from the Settlement Fund for fees and expenses, and

may award less than this amount.

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 Settlement?

If you are a Settlement Class Member, you can object to the Settlement if you do not like

any part of it, including the Plan of Allocation and the request for attorneys’ fees. You can state

the reasons why you think the Court should not approve it, and the Court will consider your

views. To object, you must send a letter saying that you object to the Settlement in Kachun Wong

v. Baker Tilly Hong Kong, Ltd., Case No. 14-cv-9959-CBM. Be sure to include your name,

address, telephone number, signature, and the number of shares of CNEP common stock you

purchased and/or acquired between September 3, 2010, and March 14, 2012, inclusive (including

date, price, and amount), and information about shares of CNEP common stock you sold during

this time period, if any (including date, price, and amount). You must also state the reasons you

object, whether you intend to appear at the Settlement Hearing, and identify any evidence you

intend to present at the Settlement Hearing. The motions in support of the Settlement and the

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request for attorneys’ fees will be filed no later than 45 days prior to the Settlement Hearing,

2016, and they will be available from Lead Counsel, the Claims Administrator, or the Court.

Their contact information is listed in Section 23, below. Any objection must be mailed or

delivered such that it is received by each of the following no later than 21 days prior to the

Settlement Hearing, 2016:

Court: Clerk of the Court United States District Court 312 North Spring Street Los Angeles, CA 90012-4701

Lead Counsel Designee: Matthew M. Guiney Wolf Haldenstein Adler Freeman and Herz LLP 270 Madison Ave. New York, NY 10016

Settling Defendants’ Counsel Designee: Harry A. Woods, Jr. Crowe & Dunlevy The Braniff Building 324 North Robinson, Suite 100 Oklahoma City, OK 73102

THE COURT’S SETTLEMENT HEARING

The Court will hold a hearing to decide whether to approve the Settlement. You may

attend and you may ask to speak, but you do not have to.

19. When and Where Will the Court Decide Whether to Approve the

Settlement?

The Court will hold a Settlement Hearing on _________, 2017, at __:__ __.m., before

The Honorable Consuelo B. Marshall, at the United States Courthouse, Courtroom #2, Second

Floor, 312 North Spring Street, Los Angeles, CA 90012-4701. At this hearing the Court will

consider whether both the Settlement and the Plan of Allocation are fair, reasonable, and

adequate. If there are objections, the Court will consider them. The Court will also consider how

much to pay to Lead Counsel as fees and expenses reimbursement and whether to reimburse the

Lead Plaintiffs for any of their expenses. The Court may decide these issues at the hearing or

take them under consideration for a later decision.

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20. Do I Have to Come to the Hearing?

No, unless you object to the proposed Settlement or any part of it, including the Plan of

Allocation and the request for attorneys’ fees. If you do not object, you do not need to attend, but

you are welcome to do so at your own expense. You may also pay your own lawyer to attend,

but it is not necessary. If you send an objection, you or your lawyer will be given an opportunity

to be heard regarding your objection. If you object, but do not appear at the Settlement Hearing,

either in person or through counsel, the Court may or may not consider your objection.

21. May I Speak at the Hearing?

You may ask the Court for permission to speak at the Settlement Hearing. To do so, you

must send a letter saying that it is your intention to appear in Kachun Wong v. Baker Tilly Hong

Kong, Ltd., Case No. 14-cv-9959-CBM. Be sure to include your name, address, telephone

number, your signature, the number of shares of CNEP common stock purchased,acquired,

and/or sold between September 3, 2010, and March 14, 2012, inclusive (include the date, price

and amount). Your notice of intention to appear must be received no later than 21 days prior to

the Settlement Hearing by the Clerk of the Court, Lead Counsel Designee and the Settling

Defendants’ Counsel Designee, at the three addresses listed in question 18.

IF YOU DO NOTHING

22. What Happens if I Do Nothing at All?

If you do nothing, all of your claims against the Settling Defendants will be released, but

you will not receive any money from this Settlement because it is necessary to submit a Proof of

Claim and Release form.

GETTING MORE INFORMATION

23. Are There More Details About the Settlement?

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This Notice summarizes the proposed Settlement. More details are in the Stipulation and

Agreement of Settlement dated as of October 5, 2016. You can obtain a copy of the Stipulation

and Agreement of Settlement or more information about the Settlement by contacting Lead

Counsel:

Matthew M. Guiney Wolf Haldenstein Adler Freeman and Herz LLP 270 Madison Ave., 11th Floor New York, NY 10016

or the Claims Administrator:


or by visiting www.strategicclaims.net

You can also obtain a copy from the Clerk’s office during regular business hours:

Clerk of the Court United States District Court 312 North Spring Street Los Angeles, CA 90012-4701

UNDERSTANDING YOUR PAYMENT

The Net Settlement Fund shall be distributed to Settlement Class Members who submit

acceptable Proofs of Claim (“Authorized Claimants”). The Claims Administrator shall

determine each Authorized Claimant’s share of the Net Settlement Fund based upon the

recognized loss formula (the “Recognized Loss”) described below. The Recognized Loss

formula is intended to equitably apportion the Net Settlement Fund among Settlement Class

Members. The Recognized Loss formula, which is also known as the Plan of Allocation, is not

an estimate of what a Settlement Class Member would have recovered after trial; nor is it the

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amount that the Authorized Claimant will be paid pursuant to the Settlement. This Plan of

Allocation is based on the following general principles applicable to Settlement Class Members

if the Litigation had gone to trial.

PROPOSED PLAN OF ALLOCATION OF THE NET SETTLEMENT FUND

The Plan of Allocation is a matter separate and apart from the proposed Settlement, and any decision by the Court concerning the Plan of Allocation shall not affect the validity or finality of the proposed Settlement. The Court may approve the Plan of Allocation with or without modifications agreed to among the parties, or another plan of allocation, without further notice to Class Members. Any orders regarding a modification of the Plan of Allocation will be posted to the Claims Administrator’s website, www.strategicclaims.net. The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the Net Settlement Fund based upon each Authorized Claimant’s Recognized Loss. Please Note: The Recognized Loss formula, set forth below, is not intended to be an estimate of the amount of what a Class Member might have been able to recover after a trial, nor is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Loss formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized Claimants. To the extent there are sufficient funds remaining in the Net Settlement Fund, each Authorized Claimant will receive an amount equal to the Authorized Claimant’s Recognized Loss. If, however, Net Settlement Fund is not sufficient to permit payment of the total Recognized Loss of each Authorized Claimant, then each Authorized Claimant shall be paid the percentage of the Net Settlement Fund that each Authorized Claimant’s Recognized Loss bears to the total Recognized Losses of all Authorized Claimants (i.e., “pro rata share”). Payment in this manner shall be deemed conclusive against all Authorized Claimants. No distribution will be made on a claim where the potential distribution amount is less than ten dollars ($10.00) in cash.

If any of the Net Settlement Fund remains by reason of uncashed checks, or otherwise, after the Claims Administrator has made reasonable and diligent efforts to have Authorized Claimants who are entitled to participate in the distribution of the Net Settlement Fund cash their distribution checks, then any balance remaining in the Net Settlement Fund six (6) months after the initial distribution of such funds shall be used: (i) first, to pay any amounts mistakenly omitted from the initial distribution to Authorized Claimants or to pay any late, but otherwise valid and fully documented claims received after the cut-off date used to make the initial distribution, provided that such distributions to any late post-distribution claimants meet all of the other criteria for inclusion in the initial distribution, including the $10.00 minimum check amount set forth in the Notice; (ii) second, to pay any additional Administrative Costs incurred in administering the Settlement; and (iii) finally, to make a second distribution to Authorized Claimants who cashed their checks from the initial distribution and who would receive at least $10.00 from such second distribution, after payment of the estimated costs or fees to be incurred in administering the Net Settlement Fund and in making this second distribution, if such second distribution is economically feasible. If six (6) months after such second distribution, if undertaken, or if such second distribution is not undertaken, and if any funds shall remain in the

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Net Settlement Fund after the Claims Administrator has made reasonable and diligent efforts to have Authorized Claimants who are entitled to participate in this Settlement cash their checks, then any funds remaining in the Net Settlement Fund shall be donated to a non-profit 501(c)(3) organization(s) selected by Plaintiff’s Lead Counsel.

THE BASIS FOR CALCULATING YOUR RECOGNIZED LOSS: Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement Fund based on his, her or its Recognized Loss as compared to the total Recognized Losses of all Authorized Claimants.

1) For shares of common stock purchased between September 3, 2010 and March 14, 2012, inclusive:

a. For shares retained at the end of trading on March 14, 2012, the Recognized Loss shall

be $3.11 per share. b. For shares sold between September 3, 2010 and March 14, 2012, inclusive, the Recognized Loss shall be zero. For purposes of calculating your Recognized Loss, the date of purchase, acquisition or sale is the “contract” or “trade” date and not the “settlement” or “payment” date. The receipt or grant by gift, inheritance or operation of law of CNEP common stock shall not be deemed a purchase, acquisition or sale of CNEP common stock for the calculation of an Authorized Claimant’s Recognized Loss. The covering purchase of a short sale is not an eligible purchase. Gifts and transfers are not eligible purchases. For purposes of calculating your Recognized Loss, all purchases, acquisitions and sales shall be matched on a First In First Out (“FIFO”) basis in chronological order. Therefore, on the Proof of Claim enclosed with this Notice, you must provide all of your purchases, acquisitions and sales of CNEP common stock during the time period from September 3, 2010 and March 14, 2012, inclusive. Payment pursuant to the Plan of Allocation approved by the Court shall be conclusive against all Authorized Claimants. No person shall have any claim against Defendants, Defendants’ counsel, Plaintiff, Plaintiff’s Counsel or the Claims Administrator or other agent designated by Plaintiff’s Counsel based on the distributions made substantially in accordance with the Stipulation and the Settlement contained therein, the Plan of Allocation, or further orders of the Court. Each claimant shall be deemed to have submitted to the jurisdiction of the Court with respect to the claimant’s Proof of Claim Form. All persons involved in the review, verification, calculation, tabulation, or any other aspect of the processing of the claims submitted in connection with the Settlement, or otherwise involved in the administration or taxation of the Settlement Fund or the Net Settlement Fund shall be released and discharged from any and all claims arising out of such involvement, and all Class Members, whether or not they are to receive payment from the Net Settlement Fund, will be barred from making any further claim

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against the Net Settlement Fund beyond the amount allocated to them as provided in any distribution orders entered by the Court.

Settlement Class Members who do not submit a timely request for exclusion and do not

submit an acceptable Proof of Claim by the deadline for submitting claims, will not share in the

recovery, but nevertheless will be bound by the Settlement and the Order and Final Judgment of

the Court dismissing this Litigation. Distributions will be made to Authorized Claimants after all

claims have been processed and after the Court has finally approved the Settlement.

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE

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SPECIAL NOTICE TO NOMINEES

The Court has ordered that if you held any shares of CNEP common stock purchased or

acquired between September 3, 2010, and March 14, 2012, inclusive, as nominee for a beneficial

owner, then, within fourteen (14) days after you receive this Notice, you must either: (1) forward

a copy of this Notice to all such Persons; or (2) provide a list of the names and addresses of such

Persons to the Claims Administrator, at the following address:


If you choose to mail the Notice and Proof of Claim and Release 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 administrative costs actually

incurred in connection with forwarding the Notice and which would not have been incurred but

for the obligation to forward the Notice, upon submission of appropriate documentation to the

Claims Administrator.

EXHIBIT A-3 Page 79


EXHIBIT A-4

EXHIBIT A-4 Page 80


STIPULATION EX A-4

PROOF OF CLAIM AND RELEASE Deadline for Submission: ________________ IF YOU PURCHASED THE COMMON STOCK OF CHINA NORTH EAST PETROLEUM HOLDINGS LIMITED (“CNEP”) BETWEEN SEPTEMBER 3, 2010 AND MARCH 14, 2012, INCLUSIVE (“CLASS PERIOD”), YOU MAY BE A “CLASS MEMBER” AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT PROCEEDS. YOU MUST COMPLETE AND SUBMIT THIS FORM IN ORDER TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS. YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND RELEASE (“PROOF OF CLAIM”) AND MAIL IT BY FIRST CLASS MAIL, POSTMARKED NO LATER THAN __________ TO STRATEGIC CLAIM SERVICES, THE CLAIMS ADMINISTRATOR, AT THE FOLLOWING ADDRESS:

Baker Tilly Hong Kong Limited Settlement c/o Strategic Claims Services

P.O. Box 230 600 N. Jackson Street, Suite 3

Media, PA 19063 Tel: 866-274-4004 Fax: 610-565-7985

[email protected] YOUR FAILURE TO SUBMIT YOUR POSTMARKED CLAIM BY ____________ WILL SUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOUR RECEIVING ANY MONEY IN CONNECTION WITH THE SETTLEMENT OF THIS ACTION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM ONLY TO THE CLAIMS ADMINISTRATOR.

CLAIMANT’S STATEMENT

1. I (we) purchased common stock in China North East Petroleum Holdings Limited (“CNEP”) and was (were) damaged thereby. (Do not submit this Proof of Claim if you did not purchase CNEP common stock during the designated Class Period).

2. By submitting this Proof of Claim, I (we) state that I (we) believe in good faith that I am (we are) a Class Member as defined above and in the Notice of Proposed Settlement of Class Action, Motion for Attorney’s Fees and Expenses, and Settlement Fairness Hearing (the “Notice”), or am (are) acting for such person(s); that I am (we are) not a Defendant in the Actions or anyone excluded from the Class; that I (we) have read and understand the Notice; that I (we) believe that I am (we are) entitled to receive a share of the Net Settlement Fund, as defined in the Notice; that I (we) elect to participate in the proposed Settlement described

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in the Notice; and that I (we) have not filed a request for exclusion. (If you are acting in a representative capacity on behalf of a Class Member [e.g., as an executor, administrator, trustee, or other representative], you must submit evidence of your current authority to act on behalf of that Class Member. Such evidence would include, for example, letters testamentary, letters of administration, or a copy of the trust documents.)

3. I (we) consent to the jurisdiction of the Court with respect to all questions concerning the validity of this Proof of Claim. I (we) understand and agree that my (our) claim may be subject to investigation and discovery under the Federal Rules of Civil Procedure, provided that such investigation and discovery shall be limited to my (our) status as a Class Member(s) and the validity and amount of my (our) claim. No discovery shall be allowed on the merits of the Litigation or Settlement in connection with processing of the Proof of Claim.

4. I (we) have set forth where requested below all relevant information with respect to each purchase of CNEP common stock during the period from September 3, 2010 to March 14, 2012, inclusive, and each sale, if any, of such securities. I (we) agree to furnish additional information to the Claims Administrator to support this claim if requested to do so.

5. I (we) have enclosed photocopies of the stockbroker’s confirmation slips, stockbroker’s statements, or other documents evidencing each purchase, sale or retention of CNEP common stock listed below in support of my (our) claim. (IF ANY SUCH DOCUMENTS ARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY OR EQUIVALENT DOCUMENTS FROM YOUR BROKER BECAUSE THESE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.)

6. I (we) understand that the information contained in this Proof of Claim is subject to such verification as the Claims Administrator may request or as the Court may direct, and I (we) agree to cooperate in any such verification. (The information requested herein is designed to provide the minimum amount of information necessary to process most simple claims. The Claims Administrator may request additional information as required to efficiently and reliably calculate your recognized claim. In some cases, the Claims Administrator may condition acceptance of the claim based upon the production of additional information, including, where applicable, information concerning transactions in any derivatives securities such as options.)

7. Upon the occurrence of the Court’s approval of the Settlement, as detailed in the Notice, I (we) agree and acknowledge that my (our) signature(s) hereto shall effect and constitute a full and complete release, remise and discharge by me (us) and my (our) heirs, joint tenants, tenants in common, beneficiaries, executors, administrators, predecessors, successors, attorneys, insurers and assigns (or, if I am (we are) submitting this Proof of Claim on behalf of a corporation, a partnership, estate or one or more other persons, by it, him, her or them, and by its, his, her or their heirs, executors, administrators, predecessors, successors, and assigns) of each of the “Released Parties” of all “Released of Claims,” as defined in the Settlement Agreement.

8. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions may request, or may be requested, to submit information regarding their transactions in electronic files. All Claimants MUST submit a manually signed paper Proof of Claim form listing all their transactions whether or not they also submit electronic copies. If you wish to file your claim electronically, you must contact the Claims Administrator at 866-274-4004 or visit their website at www.strategicclaims.net to obtain the required file layout. No electronic files will be considered to have been properly submitted unless the

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Claims Administrator issues to the Claimant a written acknowledgment of receipt and acceptance of electronically submitted data.

I. CLAIMANT INFORMATION Name:

Address:

City: State: ZIP:

Foreign Provence: Foreign Country:

Day Phone: Evening Phone:

Email:

Social Security Number (for individuals):

OR Taxpayer Identification Number (for estates, trusts, corporations, etc.):

II. SCHEDULE OF TRANSACTIONS IN CNEP COMMON STOCK Beginning Holdings: A. State the total number of shares of CNEP common stock

owned at the close of trading on September 2, 2010, long or short (must be documented).

Purchases: B. Separately list each and every open market purchase of CNEP common stock during the

period from September 3, 2010 through March 14, 2012, inclusive, and provide the following information (must be documented):

Trade Date (List Chronologically)

(Month/Day/Year) Number of

Shares Purchased

Price per Share

Total Cost (Excluding Commissions,

Taxes, and Fees)

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Sales: C. Separately list each and every sale of CNEP common stock during the period from September 3, 2010 through March 14, 2012, inclusive, and provide the following information (must be documented):

Trade Date (List Chronologically)

(Month/Day/Year) Number of Shares Sold

Price per Share

Amount Received (Excluding

Commissions, Taxes, and Fees)

Ending Holdings: D. State the total number of shares of CNEP common

stock owned at the close of trading on March 14, 2012, long or short (must be documented).

If additional space is needed, attach separate, numbered sheets, giving all required information, substantially in the same format, and print your name and Social Security or Taxpayer Identification number at the top of each sheet. III. SUBSTITUTE FORM W-9 Request for Taxpayer Identification Number: Enter taxpayer identification number below for the Beneficial Owner(s). For most individuals, this is your Social Security Number. The Internal Revenue Service (“I.R.S.”) requires such taxpayer identification number. If you fail to provide this information, your claim may be rejected.

Social Security Number (for individuals)

or

Taxpayer Identification Number (for estates, trusts, corporations, etc.)

______________________________

_______________________________

IV. CERTIFICATION

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 because: (a) I am (We are) exempt from backup withholding, or (b) I (We) have not been notified by the I.R.S. that I am (we are) subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the I.R.S. has notified me (us) that I am (we are) no longer subject to backup withholding.

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NOTE: If you have been notified by the I.R.S. that you are subject to backup withholding, please strike out the language that you are not subject to backup withholding in the certification above. UNDER THE PENALTIES OF PERJURY UNDER THE LAWS OF THE UNITED STATES, I (WE) CERTIFY THAT ALL OF THE INFORMATION I (WE) PROVIDED ON THIS PROOF OF CLAIM AND RELEASE FORM IS TRUE, CORRECT AND COMPLETE. Signature of Claimant (If this claim is being made

on behalf of Joint Claimants, then each must sign): ________________________________________ (Signature) ________________________________________ (Signature) ________________________________________ (Capacity of person(s) signing, e.g. beneficial purchaser(s), executor, administrator, trustee, etc.)

Check here if proof of authority to file is enclosed. (See Item 2 under Claimant’s Statement)

Date: ____________________ THIS PROOF OF CLAIM MUST BE POSTMARKED NO LATER THAN ________ AND MUST BE MAILED TO:

Baker Tilly Hong Kong Limited Settlement c/o Strategic Claims Services

P.O. Box 230 600 N. Jackson Street, Suite 3

Media, PA 19063 Tel: 866-274-4004 Fax: 610-565-7985

[email protected] A Proof of Claim received by the Claims Administrator shall be deemed to have been submitted when posted, if mailed by _______ and if a postmark is indicated on the envelope and it is mailed first class and addressed in accordance with the above instructions. In all other cases, a Proof of Claim shall be deemed to have been submitted when actually received by the Claims Administrator.

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You should be aware that it will take a significant amount of time to process fully all of the Proofs of Claim and to administer the Settlement. This work will be completed as promptly as time permits, given the need to investigate and tabulate each Proof of Claim. Please notify the Claims Administrator of any change of address.

REMINDER CHECKLIST

o Please be sure to sign this Proof of Claim on page __. If this Proof of Claim is submitted on behalf of joint claimants, then both claimants must sign.

o Please remember to attach supporting documents. Do NOT send any stock certificates.

Keep copies of everything you submit.

o Do NOT use highlighter on the Proof of Claim or any supporting documents.

o If you move after submitting this Proof of Claim, please notify the Claims Administrator of the change in your address.

EXHIBIT A-4 Page 86


EXHIBIT B

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))))))))))))))))

Case No. CV 14-09959-CBM(MANx) EXHIBIT B – [PROPOSED] ORDER AND FINAL JUDGMENT CRTRM: 2 JUDGE: Hon. Consuelo B. Marshall

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On the ____ day of ____________, 2017, a hearing having been held

before this Court to determine: (1) whether the terms and conditions of the

Stipulation and Agreement of Settlement dated October 5, 2016 (the “Stipulation

and Settlement”), are fair, reasonable, and adequate for the settlement of all claims

asserted by the Class against defendants Baker Tilly Hong Kong Limited (“BTHK”),

and Andrew David Ross (collectively, the “Settling Defendants”), and Helena Laiha

Kwok; (2) whether judgment should be entered dismissing the claims in the Second

Amended Complaint against the Defendants, on the merits and with prejudice, in

favor of the Defendants and as against all persons or entities who are members of the

Class who have not requested exclusion therefrom; (3) whether to approve the

proposed Plan of Distribution (described in the Notice) as a fair and reasonable

method to allocate the settlement proceeds among members of the Class; and (4)

whether and in what amount to award fees and reimbursement of expenses to Lead

Counsel, and fees to Lead Plaintiff;

The Court having considered all matters submitted to it at the hearing and

otherwise; and

It appearing that notice of the Settlement Hearing, and the issues to be

considered therein, was provided to potential Class Members in the forms approved

in the Preliminary Order, including by mail to all reasonably identifiable potential

Class Members and otherwise by publication;

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED THAT:

1. This Court has jurisdiction over the subject matter of the Litigation,

Lead Plaintiffs, all Class Members, and the Settling Defendants.

2. All capitalized terms used herein shall have the same meaning as in the

Stipulation and Settlement.

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3. The Court finds that the prerequisites for a class action under Rule 23

(a) and (b)(3) of the Federal Rules of Civil Procedure have been satisfied, for

settlement purposes only, in that: (a) the number of Class Members is so numerous

that joinder of all members thereof is impracticable; (b) there are questions of law

and fact common to the Class; (c) the claims of the Lead Plaintiff are typical of the

claims of the Class he seeks to represent; (d) Lead Plaintiff fairly and adequately

represents the interests of the Class; (e) the questions of law and fact common to the

members of the Class predominate over any questions affecting only individual

members of the Class; and (f) a class action is superior to other available methods for

the fair and efficient adjudication of the controversy.

4. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil

Procedure and for purposes of the Settlement only, the Court hereby certifies the

following action as a class action on behalf of all Persons who purchased or

otherwise acquired common stock of China North East Petroleum Holdings Limited

(“CNEP”) between September 3, 2010, and March 14, 2012, 2011, inclusive;

provided that excluded from the Class are (a) Persons who submitted valid and

timely requests for exclusion from the Class; and (b) Settling Defendants, members

of the immediate family of any such Settling Defendant, any person, firm, trust,

corporation, officer, director, or other individual or entity in which any Settling

Defendant has or had a controlling interest during the Class Period, the officers and

directors of any Settling Defendant during the Class Period, and legal

representatives, agents, executors, heirs, successors, or assigns of any such excluded

Person. The Settling Defendants or any entity in which any of the Settling

Defendants has or had a controlling interest (for purposes of this paragraph, together

a “Defendant-Controlled Entity”) are excluded from the Class only to the extent that

such Defendant-Controlled Entity itself purchased a proprietary (i.e., for its own

account) interest in CNEP. To the extent that a Defendant-Controlled Entity

purchased any common stock of CNEP in a fiduciary capacity or otherwise on behalf

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of any third-party client, account, fund, trust, or employee benefit plan that otherwise

falls within the Class, neither such Defendant-Controlled Entity nor the third-party

client, account, fund, trust, or employee benefit plan shall be excluded from the Class

with respect to such purchase.

5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for

purposes of the Settlement only, Lead Plaintiff is certified as class representative and

the Lead Counsel previously selected by Lead Plaintiff and appointed by the Court is

hereby appointed as Lead Counsel for the Class.

6. The Stipulation and Settlement, which is incorporated and made a part

of this Order and Final Judgment, is approved as fair, reasonable, and adequate, and

in the best interests of the Class. Lead Plaintiffs and the Settling Defendants are

directed to consummate the Settlement in accordance with the terms and provisions

set forth in the Stipulation and Settlement.

7. The claims made in the Litigation as to the Settling Defendants are

hereby dismissed with prejudice and without costs.

8. Lead Plaintiff and each of the Class Members (including but not limited

to any Class Member who is a party to any other action, arbitration, or other

proceeding who is asserting claims related to the Released Claims against any of the

Settling Defendants or any of the Released Persons that are pending on the day this

Order and Judgment becomes Final) on behalf of themselves, their heirs, joint

tenants, tenants in common, beneficiaries, executors and administrators, successors,

attorneys, insurers and assigns, and any person they represent, hereby release and

forever discharge, and shall be deemed to have released, dismissed and forever

discharged, the Released Claims against each and all of the Released Persons, with

prejudice and on the merits, without costs to any party. Further, Lead Plaintiff and

all Class Members, on behalf of themselves, their current and former heirs,

executors, administrators, successors, attorneys, insurers and assigns, expressly

covenant not to assert any claim or action against any of the Settling Defendants, or

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any of their agents, insurers, or their re-insurers, derivatively on behalf of CNEP that

(a) arises out of or relates to any of the allegations, transactions, facts, matters,

events, acts, representations or omissions asserted, set forth, or referred to in the

Second Amended Complaint or otherwise alleged, asserted, or contended in the

Litigation; or (b) could have been alleged, asserted or contended in any forum by the

Class or any of the Class Members against any of the Released Persons which arises

out of, relates to, or is based upon the allegations, transactions, facts, matters, events,

acts, representations, or omissions asserted, set forth, or referred to in the Complaint,

and shall forever be enjoined from commencing, instituting, or prosecuting any such

claim. Lead Plaintiff and all Class Members, whether or not any such person submits

a Proof of Claim and Release, or otherwise shares in the Settlement Fund, on behalf

of themselves and each of their predecessors, successors, assigns, personal

representatives, heirs, and any other person who purports to claim through them, are

hereby deemed by this Settlement to have released and forever discharged the

Released Persons from any and all of the Released Claims.

9. Lead Plaintiff and all Class Members, and anyone claiming through or

on behalf of any of them, are forever barred and enjoined from commencing,

instituting, prosecuting, or continuing to prosecute any action or other proceeding in

any court of law or equity, arbitration tribunal, administrative forum, or other forum

of any kind, asserting against any of the Released Persons, and each of them, any of

the Released Claims.

10. In accordance with Section 21D-4(f)(7)(A) of the Private Securities

Litigation Reform Act of 1995, 15 U.S.C. see 78U-4(f)(7)(A), the Settling

Defendants are discharged and/or released from all claims for contribution that have

been or may be brought by or on behalf of any Persons relating to the Settlement of

the Released Claims. As of the Effective Date, any and all Persons are forever

barred and enjoined from commencing, instituting, prosecuting, or continuing to

prosecute any action or proceeding asserting any such claim for contribution.

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11. The Court finds that all parties and their counsel have complied with

each requirement of Rule 11 of the Federal Rules of Civil Procedure as to all

proceedings herein.

12. Neither this Final Judgment, nor the Stipulation and Settlement, nor any

of the negotiations, documents, or proceedings connected with them shall be:

(a) referred or used against the Released Persons or against the Class as

evidence of wrongdoing by anyone;

(b) construed against the Released Persons or the Class as an admission or

concession that the consideration to be given hereunder represents the

amount which could be or would have been recovered after trial; or

(c) construed as, or received in evidence as, an admission, concession or

presumption against the Class or any of them, that any of their claims

are without merit, or that damages recoverable under the Corrected

Amended Complaint would not have exceeded the Settlement Fund.

13. Exclusive jurisdiction is hereby retained over the Settling Parties, the

Released Persons, and the Class Members for all matters relating to the Litigation,

including the administration, interpretation, effectuation, and/or enforcement of the

Stipulation and Settlement and this Order and Final Judgment, and including any

application for fees and expenses incurred in connection with administering and

distributing the settlement proceeds to the Class Members.

14. Without further order of the Court, the parties may agree to reasonable

extensions of time to carry out any of the provisions of the Stipulation and

Settlement.

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15. There is no just reason for delay in the entry of this Order and Final

Judgment and immediate entry by the Clerk of the Court is directed pursuant to Rule

54(b) of the Federal Rules of Civil Procedure.

16. The finality of this Final Judgment shall not be affected, in any manner,

by rulings that the Court may make on the Lead Counsel’s application for an award

of attorneys’ fees and reimbursement of expenses and/or for awards to Lead Plaintiff.

17. The Court hereby finds that the proposed Plan of Distribution is a fair

and reasonable method to allocate the settlement proceeds among members of the

Class.

18. The Court hereby finds that the notice provided to the Class provided

the best notice practicable under the circumstances. Said notice provided due and

adequate notice of these proceedings and the matters set forth herein, including the

Settlement and Plan of Distribution, to all persons entitled to such notice, and said

notice fully satisfied the requirements of Rule 23 of the Federal Rules of Civil

Procedure and the requirements of due process. A full opportunity has been offered

to the Class Members to object to the proposed Settlement and to participate in the

hearing thereon. Thus, it is hereby determined that all members of the Class are

bound by this Final Judgment [except those persons set forth on Exhibit A].

19. Fee and Expense Award – Lead Counsel are hereby awarded the sum

of $________ [__% of the Settlement Fund] in attorneys’ fees and $ _______

[$_______] in reimbursement of costs and other expenses, together with a

proportionate share of any interest earned on the Settlement Fund, which amounts the

Court finds fair and reasonable. The Fee and Expense Award shall be paid to Lead

Counsel pursuant to the terms of the Stipulation.

20. Incentive Award - Lead Plaintiff and additional named plaintiffs are

awarded the following sums for their involvement and oversight of the Action on

behalf of the Class as follows: Lead Plaintiff Filip Lambert is awarded the sum of

$_____ [$_____], named plaintiff Reilly Chase is awarded the sum of $_____

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[$________], and named plaintiff Jignesh Patel is awarded the sum of $_____

[$_____]. The Incentive Awards shall be paid to Lead Plaintiffs from the Settlement

Fund pursuant to the terms of the Stipulation.

21. In the event that the Settlement does not become final and effective in

accordance with the terms and conditions set forth in the Stipulation and Settlement,

then this Final Judgment shall be rendered null and void and be vacated, and the

Settlement and all orders entered in connection therewith shall be rendered null and

void (except as provided in ¶¶ 1.1-1.24, 3.6-3.8, the last sentence of 7.2, 8.4, 8.5, 9.3

and 9.4 in the Stipulation and Settlement), and the parties shall be returned to their

respective positions as of July 1, 2016.

Dated: _____________, 2017

________________________________ Hon. Consuelo B. Marshall UNITED STATES DISTRICT JUDGE

CHINANEPETROLEUM: 23384

EXHIBIT B Page 95


FRANCIS M. GREGOREK (144785) RACHELE R. RICKERT...

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