Special Situations Fund III QP, L.P. v. Marrone Bio Innovations, Inc.

          Lead Counsel Lowenstein Sandler LLP Attn: Steven M. Hecht, Esq.

          Counsel for the Settling Defendants Morrison & Foerster LLP Attn: Judson E. Lobdell, Esq., Jordan Eth, Esq., and Anne K. Davis, Esq., Brownstein Hyatt Farber Schreck LLP Attn: John V. McDermott, Esq.

          ORDER PRELIMINARILY APPROVING PROPOSED SETTLEMENT AND PROVIDING FOR NOTICE

          MORRISON C. ENGLAND JR. UNITED STATES DISTRICT JUDGE

         WHEREAS, a securities class action is pending in this Court entitled Special Situations Fund III QP, L.P. v. Marrone Bio Innovations, Inc., et al, Master No. 14-cv-2571 (the "Action");

         WHEREAS, (a) Lead Plaintiffs Special Situations Fund III QP, L.P. and Special Situations Cayman Fund, L.P., ("Lead Plaintiffs" or "The Funds"), and additional named Plaintiff David M. Fineman ("Fineman" and, together with Lead Plaintiffs, "Plaintiffs"), on behalf of themselves and the other members of the Settlement Class, and (b) Defendants Marrone Bio Innovations, Inc. ("MBI"), Pamela G. Marrone, James B. Boyd, Donald J. Glidewell, Hector Absi, Elin Miller, Tim Fogarty, Richard Rominger, Shaugn Stanley, Ranjeet Bhatia, Lawrence Hough, Joseph Hudson, Sean Schickedanz, Pamela Contag, and Les Lyman (collectively, the "Individual Defendants, " with MBI, the "Settling Defendants, " and together with Plaintiffs, the "Settling Parties"), have determined to settle claims asserted in the Action with prejudice on the terms and conditions set forth in the Stipulation and Agreement of Settlement dated June 16, 2016 (the "Stipulation), subject to the approval of the Court (the "Settlement");

         WHEREAS, Plaintiffs have made an application, pursuant to Rule 23 of the Federal Rules of Civil Procedure, for an order preliminarily approving the Settlement in accordance with the Stipulation, certifying the Settlement Class for purposes of the Settlement only, and allowing notice to Settlement Class Members as more fully described herein;

         WHEREAS, the Court has read and considered: (a) Plaintiffs' motion for preliminary approval of the Settlement, and the papers filed and arguments made in connection therewith; and (b) the Stipulation and the exhibits attached thereto; and

         WHEREAS, unless otherwise defined herein, all capitalized words contained herein shall have the same meanings as they have in the Stipulation;

         NOW THEREFORE, IT IS HEREBY ORDERED:

         1. Class Certification for Settlement Purposes - Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure, the Court certifies, solely for purposes of effectuating the proposed Settlement, a Settlement Class consisting of all persons and entities who or which (i) purchased or otherwise acquired MBI securities directly in or traceable to the Company's August 1, 2013 initial public offering pursuant to MBFs Form S-l Registration Statement, dated July 1, 2013, and its Prospectus, dated August 1, 2013, and were damaged thereby; (ii) purchased or otherwise acquired MBI securities directly in or traceable to the Company's secondary offering pursuant to MBFs Form S-l Registration Statement, dated May 16, 2014, and its Prospectus dated June 5, 2014, and were damaged thereby; and (iii) purchased or otherwise acquired MBI securities on the open market between August 1, 2013 and November 10, 2015, inclusive, and were damaged thereby. Excluded from the Settlement Class are the Settling Defendants; Immediate Family of each of the Individual Defendants; the Officers and/or directors of MBI during the Settlement Class Period; any firm, trust, corporation, or other entity in which any MBI Defendant has or had a controlling interest; and any persons or entities that exclude themselves by submitting a request for exclusion that is accepted by the Court as valid.

         2. Class Findings - Solely for purposes of the proposed Settlement of this Action, the Court finds that each element required for certification of the Settlement Class pursuant to Rule 23 of the Federal Rules of Civil Procedure has been met: (a) the members of the Settlement Class are so numerous that their joinder in the Action would be impracticable; (b) there are questions of law and fact common to the Settlement Class which predominate over any individual questions; (c) the claims of Plaintiffs in the Action are typical of the claims of the Settlement Class; (d) Plaintiffs and Lead Counsel have fairly and adequately represented and protected the interests of the Settlement Class and will continue to do so; and (e) a class action is superior to other available methods for the fair and efficient adjudication of the Action.

         3. Fhe Court hereby finds and concludes that pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for the purposes of the Settlement only, Lead Plaintiffs are adequate class representatives and certifies Lead Plaintiffs as the Class Representatives for the Settlement Class. Fhe Court also appoints Lead Counsel as Class Counsel for the Settlement Class, pursuant to Rule 23(g) of the Federal Rules of Civil Procedure.

         4. Preliminary Approval of the Settlement - The Court hereby preliminarily approves the Settlement, as embodied in the Stipulation, as being fair, reasonable and adequate to the Settlement Class, subject to further consideration at the Settlement Hearing to be conducted as described below.

         5. Settlement Hearing - The Court will hold a settlement hearing (the "Settlement Hearing") on September 22, 2016 at 2:00 p.m. in Courtroom 7 of the Robert T. Matsui United States Court House, 501 I Street, Sacramento, CA 95814, for the following purposes: (a) to determine whether the proposed Settlement on the terms and conditions provided for in the Stipulation is fair, reasonable and adequate to the Settlement Class, and should be approved by the Court; (b) to determine whether a Judgment substantially in the form attached as Exhibit B to the Stipulation should be entered dismissing the Action with prejudice against Defendants; (c) to determine whether the proposed Plan of Allocation for the proceeds of the Settlement is fair and reasonable and should be approved; (d) to determine whether the motion by Lead Counsel for an award of attorneys' fees and reimbursement of Litigation Expenses should be approved; and (e) to ...