GRANTED

EFiled: May 05 2015 01:53PM EDT

Transaction ID 57183594
Case No. 9542-ML

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SOUTHPAW CREDIT OPPORTUNITY

MASTER FUND LP,
Plaintiff,
C.A. No. 9542-ML

v.
ADVANCED
TECHNOLOGIES, INC.,

BATTERY

Defendant.

ORDER AND CONFIDENTIALITY AGREEMENT

GOVERNING PRODUCTION OF DOCUMENTS
WHEREAS, by letter dated March 7, 2014, Southpaw Credit
Opportunity Master Fund, L.P. (the "Stockholder") made a demand pursuant to 8
Del. C. 220 (the "Demand") to inspect certain documents of Advanced Battery
Technologies, Inc. (the "Company");
WHEREAS, on April 15, 2014, the Stockholder commenced an
action styled Southpaw Credit Opportunity Master Fund LP v. Advanced Battery
Technologies Inc., C.A. No. 9542-ML (the Complaint) in the Delaware Court
of Chancery;
WHEREAS, in the Complaint, the Stockholder sought to compel
inspection pursuant to 8 Del. C. 220 of certain books and records of the
Company;

WHEREAS, on February 26, 2015, the Court issued its Final Report
(the Final Report);
WHEREAS, on March 16, 2015, Chancellor Bouchard issued an
order confirming the Final Report;
WHEREAS, the Final Report, among other things, ordered that the
Company disclose certain books and records to the Stockholder;
WHEREAS, the Stockholder appointed the law firm of Elliott
Greenleaf (collectively "Stockholder's Counsel"), as its attorney for purposes
of receiving the books and records;
WHEREAS, the Final Report requires the Stockholder and Company
to enter into a confidentiality agreement to protect any non-public, confidential,
proprietary or commercially sensitive information of the Company or its
subsidiaries; and
IT IS HEREBY ORDERED this 4th day of May, 2015, as follows:
1.

Pursuant to the Final Report, within ten (10) business days

following entry of this Stipulated Order, the Company shall produce, subject to the
conditions referred to below, to Stockholder's Counsel copies of the Companys
annual financial information for 2011-2014 and quarterly financial information for
all four quarters of 2014 for the following categories of books and records: (a)
revenue; (b) income before tax; (c) net income; (d) earnings per share; (e) cash and

cash equivalents; (f) total assets; (g) current asset figures; (h) current liability
figures; and (i) stockholder equity (collectively, the Required Information)
2.
Counsel

The Required Information shall be produced to Stockholders

electronically

at

the

following

electronic

mail

address:

jms@elliottgreenleaf.com, fax, or any other reasonable means agreed by both

parties.
3.

The Company shall designate, in English, which of the

Required Information it believes, in good faith, is entitled to confidential

treatment (the Confidential Information). Such Confidential Information must
be designated by year or quarter and by category of information.
4.

If any of the Required Information is designated as

Confidential Information, the Stockholder shall have five (5) business days to
challenge, in writing, the designation of any such information the Stockholder
believes, in good faith, should not be entitled to confidential treatment (the
Challenged Information).
5.

Following written notice that the Stockholder has challenged

the designation of any Required Information as being Confidential Information,

the Company shall have three (3) business days to either: (a) remove the
confidential designation; or (b) in writing affirm that it still maintains that such
information should remain confidential. The Companys failure to affirmatively
maintain, in the time specified above, that such information should remain

confidential shall result in a waiver of such a claim of confidentiality.

6.

If, as set forth in Section 5(b) above, the Company continues

to maintain that any of the Challenged information should still be subject to

confidential treatment, the Stockholder may bring the dispute before the Court for
resolution.
7.

The Company expressly reserves the right to withhold

documents it believes, in good faith, are protected from disclosure by the attorneyclient privilege, the work product privilege or any other applicable privilege or
doctrine. To the extent the Company withholds any such Required Information on
such a basis (collectively, the Withheld Documents), within five (5) business
days from the date of entry of this Stipulated Order, for each Withheld Document,
the Company shall provide to Stockholders Counsel written notice: (a) listing the
year or quarter and the category of information; and (b) specifying privilege or
doctrine asserted for withholding the information. The Stockholder shall have five
(5) business days from receipt of such written notice to challenge the designation
of any of the Withheld Documents. Following such a challenge, the Company
shall have three (3) business days to either: (a) produce the Withheld Document; or
(b) affirm in writing that it still maintains that such Withheld Document should not
be produced due to an applicable privilege or other doctrine. The Companys
failure to affirmatively maintain, in the time frame specified above, that such
information should not be produced due to an applicable privilege or doctrine shall

result in a waiver of such a claim of privilege or other basis for withholding such
information. If, as set forth in this Section 7 above, the Company continues to
maintain that any of the Withheld Documents should still be protected from
disclosure by the attorney-client privilege, the work product privilege or any other
applicable privilege or doctrine, the Stockholder may bring the dispute before the
Court for resolution.
8.

Stockholder's Counsel and each of its Advisors (defined in

Section 9 below) hereby covenant and agree that the Confidential Information shall
be used only for the purposes stated in the Demand and approved by the Final
Report.
9.

Subject to the provisions of this Agreement, Stockholder's

Counsel may provide Confidential Information to Stockholder or to an advisor,

once Stockholder's Counsel has received from Stockholder or such advisor and
provided to the Company a duly executed Undertaking in the form attached hereto
as Exhibit A. For purposes of this Agreement, "Advisor" shall mean only the
Stockholder's affiliates, associates, employees, agents, investment advisors
(including proxy solicitors), legal and financial advisors, and any consultants or
experts retained by Stockholder or Stockholder's Counsel for purposes of fulfilling
the purpose stated in the demand for the inspection.
10.

Unless otherwise ordered by the Court or agreed upon by the

parties, Stockholder's Counsel and each Advisor will keep the Confidential

Information confidential and shall not disclose, publish, communicate or transmit

any of the Confidential Information to any person, either directly or indirectly.
Stockholder's Counsel and each Advisor will not maintain or store the Confidential
Information in such a way that creates an unreasonable risk of deliberate or
inadvertent disclosure of the Confidential Information to others. Stockholder's
Counsel and each Advisor shall not make any written, electronic, or other copy of
all or any part of the Confidential Information, except for notes for personal use
("Personal Notes"). Stockholder's Counsel may use the Confidential Information to
enforce Stockholder's legal rights in a court of competent jurisdiction as a
stockholder of the Company under applicable laws and regulations.

If

Stockholder's Counsel determines to commence such a lawsuit using Confidential

Information, it agrees that it will request permission of the court to file its
complaint and any other documents containing Confidential Information under
seal. If such permission is denied, Stockholder's Counsel commencing such a
lawsuit shall provide 10 days' written notice to the Company prior to the filing of
any such complaint or other such documents. By filing its complaint or other such
documents under seal, the Stockholder does not waive its right to challenge the
designation of any documents or information as confidential.
11.

Stockholder's Counsel and each Advisor will destroy or return

to the Company all Personal Notes and all Confidential Information in its original

format upon completing the purpose described in the Demand and in no event later
than (i) six months after the final termination of any legal proceedings relating to
the Demand or the enforcement of the Stockholder's rights as a stockholder of the
Company (referred to in paragraph 6 above) or (ii) the date on which Stockholder's
Counsel informs the Company in writing that they do not intend to pursue the
Demand any further. Stockholder's counsel agrees that if they decide that they do
not intend to pursue the Demand any further, they will promptly so inform the
Company. When the Confidential Information and Personal Notes are returned or
destroyed, Stockholder's Counsel and each Advisor will also deliver a sworn
statement that they have complied with this Agreement in all respects.
12.

If Stockholder's Counsel or any Advisor is required (orally or

in writing, by interrogatory, subpoena, or any similar process relating to any legal

proceeding, investigation, hearing or otherwise) to disclose any Confidential
Information, Stockholder's Counsel and all Advisors shall (a) provide the Company
with prompt written notice upon such receipt of such process, so that the Company
may seek a protective order or other appropriate remedy and/or waive compliance
with this Agreement; and (b) cooperate with the Company in pursuing any such
course of action. In the event that a protective order or other remedy is not
obtained, or if the Company waives compliance with the provisions of this
Agreement, Stockholder's Counsel and the Advisor shall furnish only such

Confidential Information as they are advised is legally required and shall exercise
commercially reasonable efforts to obtain assurances that confidential treatment
will be accorded to any Confidential Information which is compelled to be
disclosed.
13.

All notices and other communications under this Agreement

shall be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person or by, electronic mail, with a copy by Federal
Express or registered or certified mail, postage pre-paid, return receipt requested,
as follows:
If to the Company:

If to the Stockholder:

Advanced Battery Technologies, Inc.

c/o Corporation Service Company
2711 Centerville Rd # 400
Wilmington, Delaware 19801

Southpaw Credit Opportunity

Master Fund, LP
c/o Jonathan M. Stemerman
Elliott Greenleaf

Email: abatob@gmail.com

1105 N. Market Street, Suite 1700

Wilmington, Delaware 19801
Email: jms@elliottgreenleaf.com

14.

This Agreement may be executed by the signatories hereto in

separate counterparts, each of which when so executed and delivered shall be an

original, but all such counterparts shall together constitute one and the same
instrument.
15.

This Agreement may be modified or waived only by a separate

writing executed by Stockholder's Counsel and the Company that expressly so

modifies or waives this Agreement. Failure or delay in exercising any right, power
or privilege hereunder shall not operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise of any right, power or privilege.
16.

Stockholder's Counsel and all Advisors expressly agree and

consent to personal jurisdiction and venue in any action brought to enforce this
Agreement in the Court of Chancery of the State of Delaware. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware, without regard to its conflict of laws principles.
17.

Stockholder's Counsel agrees that the Company would not

have an adequate remedy at law in the event that this Agreement is breached
by Stockholder's Counsel and agrees that the Company will be entitled to
specific performance, and/or injunctive relief enforceable in the Court, with
respect to the terms hereof, in addition to any other remedy to which the
Company may be entitled at law or in equity.
18.

The Company's decision to enter into this Agreement shall

not operate or be interpreted as an admission, either explicit or implicit, that

the protections set forth in this Agreement are adequate to protect the
Confidential Information, nor shall it prejudice the Company's right to
supplement this Agreement, by agreement or Court order, to establish additional

safeguards to protect its information.

19.

If any action is initiated to enforce the confidentiality

provisions of this Agreement, the prevailing party shall be entitled to

reimbursement of all reasonable costs and expenses, including reasonable
attorney fees, incurred by it in connection therewith.
20.

This Agreement constitutes the only agreement between

each of the Stockholder's Counsel and the Company with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written.

Abigail M. LeGrow, Master in Chancery

10

Exhibit A
UNDERTAKING
I, ________________________hereby certify: (i)

my

understanding that Confidential Information is being provided to me pursuant

to the terms and restrictions of a confidentiality agreement entered into between
_____________________ and __________________________, dated as of
_______________,

201_

(the

"Confidentiality

Agreement"

or

Agreement") and (ii) that I have read the Confidentiality Agreement.

the
I

understand the terms of the Confidentiality Agreement and I agree to be fully

bound by the Confidentiality Agreement.
I hereby (i) agree and consent to submit to the personal jurisdiction,
forum and venue in any action brought in any court, federal or state, within the
State of Delaware in connection with any matter arising to enforce any
provision of the Confidentiality Agreement, (ii) agree that I will not attempt to
deny or defeat personal jurisdiction, forum or venue by motion or other request
for leave from any such court, (iii) agree that I will not bring any action
relating to this Confidentiality Agreement in any court other than a court located
in the State of Delaware, and (iv) agree to service of process for purposes of
proceedings to enforce the Confidentiality Agreement in the manner provided
for notice upon _______________________ in Section 9 of the Agreement.
I understand that any violation of the terms of this Confidentiality

11

Agreement may be punishable by such relief as deemed appropriate by the Court.

Dated:

Signature: ____________________

12

Court: DE Court of Chancery Civil Action

Judge: Abigail LeGrow
File & Serve
Transaction ID: 57176107
Current Date: May 05, 2015
Case Number: 9542-ML
Case Name: Southpaw Credit Opportunity Master Fund LP vs Advanced Battery Technologies Inc

/s/ Judge LeGrow, Abigail