Ubhi v. Leverton — Entry #5: PROPOSED STIPULATION AND ORDER

IN THE UNITED STATES DISTRICT COURT
                FOR THE SOUTHERN DISTRICT OF NEW YORK


MAGHAR UBHI, Derivatively on Behalf of
Nominal Defendant HUT 8 CORP.,
                                             Case No. 1:24-cv-02995-JHR
                   Plaintiff,

      v.

JAIME LEVERTON, SHENIF VISRAM, BILL
TAI, MIKE HO, ASHER GENOOT, ALEXIA
HEFTI, JOE FLINN, MAYO A. SHATTUCK,
III, STANLEY O’NEAL, AMY WILKINSON,
and RICK RICKERTSEN,

                   Defendants,

      and

HUT 8 CORP.,

                   Nominal Defendant.

ANDREW JOSEPH, Derivatively on Behalf of
HUT 8 CORP.,
                                             Case No. 1:24-cv-03081-JHR
                   Plaintiff,

      v.

JAIME LEVERTON, SHENIF VISRAM,
JOSEPH FLINN, ASHER GENOOT, ALEXIA
HEFTI, MICHAEL HO, STANLEY O’NEAL,
RICK RICKERTSEN, MAYO A. SHATTUCK,
III, BILL TAI, and AMY WILKINSON,

                   Defendants,

      and

HUT 8 CORP.,

                   Nominal Defendant.


                                         1


             JOINT STIPULATION AND [PROPOSED] ORDER REGARDING
               CONSOLIDATION AND STAY OF DERIVATIVE ACTIONS

        WHEREAS, on April 19, 2024, Plaintiff Maghar Ubhi (“Ubhi”) filed a Verified

Shareholder Derivative Complaint in this Court captioned Ubhi v. Leverton, et al., Case No. 1:24-

cv-02995 on behalf of Hut 8 Corp. (“Hut 8” or the “Company”) against Jaime Leverton, Shenif

Visram, Joseph Flinn, Asher Genoot, Alexia Hefti, Michael Ho, Stanley O’Neal, Rick Rickertsen,

Mayo A. Shattuck, III, Bill Tai, and Amy Wilkinson (the “Individual Defendants” and, together

with Hut 8, “Defendants”) for violations of the Securities Exchange Act of 1934 (the “Exchange

Act”), breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and

waste of corporate assets (the “Ubhi Action”);

        WHEREAS, on April 22, 2024, Plaintiff Andrew Joseph (“Joseph”) filed a Verified

Shareholder Derivative Complaint in this Court captioned Joseph v. Leverton, et al., Case No.

1:24-cv-03081 on behalf of Hut 8 against substantially the same set of Individual Defendants as

named in the Ubhi Action based on substantially similar facts and circumstances (the “Joseph

Action”);

        WHEREAS, Plaintiffs Ubhi and Joseph (collectively, “Plaintiffs”) agree that the Ubhi

Action and the Joseph Action (the “Derivative Actions”) contain nearly identical factual and legal

contentions, and that the administration of justice would be best served by consolidation of the

Derivative Actions, appointing Co-Lead Counsel, and staying the consolidated Derivative Actions

as set forth herein;

        WHEREAS, pending in this Court is a putative securities class action captioned In re Hut

8 Corp. Securities Litigation (formerly Mayiras v. Hut 8 Corp. et al.), No. 1:24-cv- 00904-VM

(the “Securities Litigation);


                                                 2


        WHEREAS, Hut 8, Leverton, and Visram, named defendants in the Derivative Actions,

are also named as defendants in the Securities Litigation (the “Securities Litigation Defendants”);

        WHEREAS, the Securities Litigation Defendants anticipate filing a motion to dismiss the

Securities Litigation;

        WHEREAS, in order to ensure economy of time and effort for the Court, for counsel, and

for litigants, Plaintiffs and Defendants have agreed that, in light of the apparent overlap between

the facts alleged in the Derivative Actions and the Securities Litigation, and in light of the fact that

the outcome of the anticipated motion to dismiss in the Securities Litigation may inform the

proceedings in the Derivative Actions, that the Derivative Actions should be temporarily stayed

on the terms set forth below unless and until either (1) the Securities Litigation is dismissed, with

prejudice, and all appeals related thereto have been exhausted; (2) the motion to dismiss the

Securities Litigation is denied; or (3) either of the Parties to this Stipulation gives a ten (10) day

notice that they no longer consent to the voluntary stay of the Derivative Actions.

        WHEREFORE, the Parties, through their undersigned counsel, hereby agree, stipulate, and

respectfully request that the Court enter an order as follows:

        1.      Defendants hereby accept service of the complaints in the Derivative Actions to the

extent that service has not yet been perfected on any Defendants.

        2.      The above-captioned actions are hereby consolidated for all purposes into Case No.

1:24-cv-02995 (the “Consolidated Action”).

        3.      All documents previously filed to date in any of the Derivative Actions shall be

deemed part of the record in the Consolidated Action.

        4.      The Consolidated Action shall bear the following caption:


                                                   3


                             IN THE UNITED STATES DISTRICT COURT
                           FOR THE SOUTHERN DISTRICT OF NEW YORK

 IN RE HUT 8, CORP. STOCKHOLDER
 DERIVATIVE LITIGATION                                  CONSOLIDATED
                                                        Case No. 1:24-cv-02995


       5.      Lifshitz Law PLLC (“Lifshitz Law”) and Portnoy Law are appointed Co-Lead

Counsel in the Consolidated Action.

       6.      Plaintiffs believe that their counsel, Lifshitz Law and Portnoy Law, are qualified to

advocate for Plaintiffs. See Lifshitz Law firm resume (attached hereto as Exhibit A) and Portnoy

Law firm resume (attached hereto as Exhibit B). Counsel for Hut 8 and the Individual Defendants

take no position on the qualifications or appointment of Co-Lead Counsel for Plaintiffs.

       7.      Co-Lead Counsel shall represent and set policy for Plaintiffs in the prosecution of

the Consolidated Action, determine and present to the Court and opposing parties the position of

Plaintiffs on all matters arising during pretrial negotiations, delegate and monitor the work

performed by Plaintiffs’ attorneys to ensure that there is no duplication of effort or unnecessary

expense, coordinate on behalf of Plaintiffs the initiation and conduct of discovery proceedings,

have the authority to negotiate matters with Defendants’ counsel, and perform such other duties as

may be incidental to the proper coordination of Plaintiffs’ pretrial activities or authorized by

further order of the Court. Defendants’ counsel may rely on all agreements made with Co-Lead

Counsel, or other duly authorized representative of Co-Lead Counsel, and such agreements shall

be binding on all Plaintiffs.

       8.      This Order shall apply to this Consolidated Action and any future filed actions in

this Court relating to the subject matter of this case. When a case that properly belongs as part of

the Consolidated Action is hereafter filed in this Court, the Court requests the assistance of counsel


                                                  4


in calling to the attention of the Court the filing of any case which might properly be consolidated

as part of the Consolidated Action, and counsel are to assist in assuring that counsel in subsequent

actions receive notice of this Order. All derivative actions related to the Consolidated Action that

are subsequently filed in or transferred to this Court shall be consolidated into the Consolidated

Action. This Order shall apply to every such action, absent an order of the Court, and unless

otherwise ordered, the terms of all orders, rulings, and decisions in the Consolidated Action shall

apply to all such later stockholder derivative actions that are filed in this Court. If a party wishes

to object to such consolidation, or to any other provisions of this Stipulation, that party must file

an application for relief from this Order within ten (10) days after the date on which a copy of this

Order is mailed, electronically or otherwise, to that party’s counsel.

          9.    The Consolidated Action shall be stayed upon the Court’s endorsement of this

Stipulation as an Order of the Court.

          10.   Upon occurrence of any of (1) the dismissal of the Securities Litigation, with

prejudice, by the court, and exhaustion of all appeals related thereto; or (2) the denial of any motion

to dismiss the Securities Litigation in whole or in part; or (3) either of the Parties to this Stipulation

has given a ten (10) day notice that they no longer consent to the voluntary stay of the Consolidated

Action, then the Parties shall notify the Court within fifteen (15) days after the occurrence of any

of the events above.

          11.   Defendants shall promptly notify Plaintiffs upon becoming aware of any derivative

actions or threatened derivative actions, including, but not limited to, Section 220 demands or

litigation demands that appear in Defendants’ good faith judgment to be related to the Consolidated

Action.


                                                    5


        12.     The Parties agree that if the plaintiff in any related derivative action refuses to agree

to a stay under similar terms, Plaintiffs may lift the agreed stay upon ten (10) days’ notice in writing

to the undersigned Counsel for Defendants via email.

        13.     The Parties agree that during the pendency of this stay, Defendants shall inform

Plaintiffs promptly upon the scheduling of any mediation or settlement negotiation with the

plaintiffs in the Securities Litigation. In the event that Defendants are unable for any reason to

include Plaintiffs in the mediation with plaintiffs in the Securities Litigation, then Defendants

agree to mediate in good faith with Plaintiffs in the Consolidated Action at or about the same time.

The Parties further agree that Defendants shall inform Plaintiffs promptly upon the scheduling of

any mediation or settlement negotiation with any other derivative plaintiffs who have asserted

claims substantially similar to the claims asserted by Plaintiffs herein, and shall include Plaintiffs

in any such mediation or settlement negotiation and negotiate in good faith with Plaintiffs to

resolve Plaintiffs’ claims.

        14.     The Parties agree that notwithstanding this stay of this Consolidated Action,

Plaintiffs may file an amended complaint; however, Defendants need not answer or otherwise

respond to the Complaint or to any other complaint or amended complaint that is filed in or

consolidated with the above-captioned action during the pendency of this stay.

        15.     In the event that, during the pendency of the stay, Defendants agree to produce, or

any of them are ordered to produce by a court of competent jurisdiction, any documents in the

Securities Litigation or in any related derivative action, then copies of such documents shall be

provided to Counsel for Plaintiffs within ten (10) days of such production, subject to the execution

by Plaintiffs of a reasonable confidentiality agreement governing the use and disclosure of these

materials.


                                                   6


        16.     Upon occurrence of any of (1) exhaustion of all appeals related to the Securities

Litigation; or (2) either of the Parties to this Stipulation has given a ten (10) day notice that they

no longer consent to the voluntary stay of the Consolidated Action, then within seven (7) days of

the occurrence of any such event or the expiration of the 10-day notice period, counsel for the

parties shall meet and confer and jointly submit a proposed schedule for the filing of an amended

complaint, if any, and Defendants’ response thereto, and all associated briefing. Defendants are

not otherwise required to move, answer, or otherwise respond to any complaint.

        17.         In the event that Defendants agree to terms or conditions in connection with any

stipulation, agreement, or motion to stay a related derivative action that are more favorable to the

plaintiff(s) therein, those more favorable terms or conditions shall be deemed incorporated into

this stipulation.

        18.     Nothing herein shall be construed as a waiver of any party’s rights or positions in

law or in equity, or as a waiver of any defenses that any party would otherwise have, and the parties

reserve all such rights.

Dated: June 12, 2024


                                                       LIFSHITZ LAW PLLC
                                                       /s/ Joshua M. Lifshitz
                                                       Joshua M. Lifshitz
                                                       1190 Broadway
                                                       Hewlett, New York 11557
                                                       Telephone: (516) 493-9780
                                                       Facsimile: (516) 280-7376

                                                       Attorneys for Plaintiff Ubhi


                                                       PORTNOY LAW
                                                       /s/ Lesley F. Portnoy
                                                       Lesley F. Portnoy, Esq. (304851)
                                                       1100 Glendon Ave. 15th Floor

                                                   7


                                         Los Angeles, CA 90024
                                         Telephone: (310) 692-8883
                                         Email: lesley@portnoylaw.com

                                         Attorneys for Plaintiff Joseph

                                         GIBSON, DUNN & CRUTCHER LLP
                                         /s/ Mary Beth Maloney
                                         Mary Beth Maloney
                                         “Kate” Joo Hyun Lee
                                         200 Park Avenue
                                         New York, NY 10166
                                         (212) 351-2315
                                         mmaloney@gibsondunn.com
                                         klee@gibsondunn.com

                                         Attorneys for Defendants


APPROVED AND SO ORDERED this ____ day of ____________, 2024.


                                          __________________________
                                          Hon. Jennifer H. Rearden
                                          United States District Judge


                                     8