SETTLEMENT AGREEMENT made as of May 30, LEONARD OLSEN, PAUL DENNIS, LINDA OLSEN, PAT PIERCY and BETH MACKENZIE (the Plaintiffs )

Transcription

1 SETTLEMENT AGREEMENT made as of May 30, 2005 BETWEEN: LEONARD OLSEN, PAUL DENNIS, LINDA OLSEN, PAT PIERCY and BETH MACKENZIE (the Plaintiffs ) AND: BEHR PROCESS CORPORATION and BEHR PROCESS CANADA LTD. (the Defendants ) respecting proceedings brought under the Class Proceedings Act, R.S.B.C. 1996, c. 50 and the Class Proceedings Act, 1992, S.O. 1992, c. 6

2 - i - TABLE OF CONTENTS SECTION I RECITALS... 1 SECTION II DEFINITIONS... 2 SECTION III REQUIRED EVENTS AND COOPERATION SECTION IV PAYMENT OF SETTLEMENT AMOUNT SECTION V NOTICE TO CLASS SECTION VI CLAIMS PROCESS SECTION VII OPT OUT RIGHTS SECTION VIII RELEASES AND JURISDICTION OF THE COURTS SECTION IX PROTECTION FROM THIRD PARTY CLAIMS SECTION X CLASS COUNSEL FEES SECTION XI SETTLEMENT APPROVAL ORDERS (FINAL ORDERS) SECTION XII PUBLICITY SECTION XIII NO ADMISSIONS; NO USE SECTION XIV DISCOVERY DOCUMENTS SECTION XV MASCO GUARANTEE SECTION XVI MISCELLANEOUS PROVISIONS SECTION XVII TERMINATION OF AGREEMENT SECTION XVIII REPRESENTATIONS AND WARRANTIES... 23

3 Subject to Court approval as provided herein, the Parties hereby stipulate and agree that, in consideration of the promises and covenants set forth in this Agreement and upon the entry by each of the Courts of a Final Order approving the Settlement and directing the implementation of the terms and conditions of the Settlement as set forth in this Agreement, the Actions shall be settled and compromised upon the terms and conditions contained herein: SECTION I RECITALS 1.1 WHEREAS: A. The Actions have been commenced against the Defendants in British Columbia and Ontario under each province s respective class proceedings legislation, alleging among other things that the Defendants designed, produced, manufactured, marketed, promoted and sold to persons in Canada certain allegedly defective products; B. The Defendants have denied and continue to deny the Plaintiffs claims in the Actions and other similar actions and have denied any wrongdoing or liability to the Plaintiffs of any kind, and have raised numerous affirmative defences; C. The B.C. Action has been certified as a class proceeding, however the Defendants have appealed that order in proceedings in the British Columbia Court of Appeal under Court of Appeal File No. CA Vancouver Registry, and the B.C. Plaintiffs have cross-appealed; D. Based upon extensive analysis of the facts and the law applicable to Plaintiffs claims, and taking into account the extensive burdens and expense of litigation, including the risks and uncertainties associated with protracted trials and appeals, as well as the fair, costeffective and assured method of resolving the Plaintiffs claims and the claims of the Settlement Class, the Plaintiffs, with the benefit of advice from Class Counsel, and Class Counsel have concluded that this Agreement provides benefits to the Settlement Class and is fair, reasonable, adequate and in the best interests of the Settlement Class; E. The Defendants similarly have concluded that this Agreement is desirable in order to avoid the time, risks and expense of defending protracted litigation, including the Actions, and to resolve finally and completely the pending and potential claims of the Plaintiffs and the Settlement Class; F. The Plaintiffs and the Defendants intend by this Agreement to resolve, terminate and finally conclude any and all Settled Claims under the terms of this Agreement, and further intend that the Released Persons shall receive complete releases and final peace from all such Settled Claims on behalf of the Plaintiffs and the Settlement Class; and G. The Parties agree that all Settlement Class Members shall have the right to be excluded ( opt out ) from the Settlement as provided in this Agreement; NOW, THEREFORE, for value received, the Parties stipulate and agree, subject to Court approval, that any and all Settled Claims shall be finally settled and resolved on the terms and conditions set forth in this Agreement:

4 - 2 - SECTION II DEFINITIONS 2.1 As used in this Agreement, including the Recitals and Schedules hereto, in addition to any definitions elsewhere in this Agreement, the following terms shall have the meanings set forth below: (a) Actions means the B.C. Action and the Ontario Action, collectively, and Action means either one of them, as the context requires; (b) Agreement or Settlement Agreement means this Agreement, including all schedules attached hereto, and one term is the synonym of the other; (c) Award means the Merchandise Rebates issued or cash amounts paid by the Behr Claims Administrator or Independent Claims Administrator to, or apportioned among, Eligible Claimants pursuant to the Claims Process set forth in Section VI of this Agreement; (d) B.C. means the province of British Columbia, and in this Agreement both terms may be used; (e) B.C. Action means the action brought against the Defendants by the B.C. Plaintiffs under the Class Proceedings Act, R.S.B.C. 1996, c. 50 and filed in the Vancouver Registry of the Supreme Court of British Columbia under Action No. S006106; (f) B.C. Appeal means the appeal referred to in Recital C; (g) (h) B.C. Court means the Supreme Court of British Columbia; B.C. Plaintiffs means Leonard Olsen, Linda Dennis and Paul Dennis; (i) Behr means the defendant Behr Process Corporation and the defendant Behr Process Canada Ltd., collectively; (j) Behr Claims Administrator means the Person selected and appointed by Behr and approved by the Courts, as set forth in Section XI, to manage and direct the processing and payment of Small Wood Surface Claims and Merchandise Rebate Claims, which person shall initially be Jeffrey Dodd; (k) Behr Product means those products manufactured by Behr Process Corporation and distributed in Canada by Behr Process Canada Ltd. under the names Super Liquid Raw-Hide and Natural Seal Plus ; (l) Behr Product Applicators means builders, contractors and any other Persons, other than Defendants, who applied Behr Product to Settlement Class Members structures;

5 - 3 - (m) Branch MacMaster means the law firm of Branch MacMaster, which is located at Suite 1210, 777 Hornby Street, Vancouver, B.C., V6Z 1S4, who are included as Class Counsel; (n) Business Day means any day except a Saturday, Sunday or other day on which commercial banks in British Columbia are authorized by law to close; (o) Claim Deadline means the date that is ten (10) months after the Final Order Date; (p) Claim Form means a form substantially in accordance with either Schedule A or Schedule B, as the nature of the claim requires, as referred to in Section VI of this Agreement, and filed with one of the Claims Administrators during the Claims Period and on or before the Claim Deadline; (q) Claimant means a Settlement Class Member who timely submits a Claim Form; (r) Claims Administration Account means the interest-bearing account established at, and held by, Royal Bank of Canada, 30 Duke Street W., Kitchener, Ontario, N2H 3W5, in accordance with the terms of Section IV of this Agreement; (s) Claims Period means the period commencing upon the Final Order Date and ending on the Claim Deadline, provided, however, that the Claims Period for Recent Behr Product Applicators shall end (i) in the case of Settlement Class Members who purchased and applied or caused to be applied any Behr Product sold under the name Super Liquid Raw-Hide, either thirty-six (36) months from the date of application or the Claim Deadline, whichever is later; and (ii) in the case of Settlement Class Members who purchased and applied or caused to be applied any Behr Product sold under the name Natural Seal Plus, either twenty-four (24) months from the date of application or the Claim Deadline, whichever is later; (t) Claims Process means the procedures for obtaining an Award set forth in Section VI of this Agreement; (u) Class Counsel means Mr. Joseph M. Prodor and Branch MacMaster; (v) Class Counsel Fees means the fees, disbursements, costs, taxes and any other charges, whether past, present or future, of Class Counsel; (w) Class Notice means the First Notice and the Second Notice, referred to in Section V of this Agreement, substantially in the form of Schedules D and E, respectively; (x) Courts means the B.C. Court and the Ontario Court, and Court means either one of them, as the context requires; (y) (z) Defendants means Behr Process Corporation and Behr Process Canada Ltd; Defendants Counsel means McCarthy Tétrault LLP;

6 - 4 - (aa) Eligible Claimant means a Settlement Class Member who timely submits a Claim Form within the Claims Period that is properly completed, supported and executed in accordance with the directions in the Claim Form, and who satisfies all requirements for receiving an Award under this Agreement; (bb) Excluded Persons means (i) the Defendants, any entity in which either of the Defendants has a controlling interest or which has a controlling interest in either Defendant, and the Defendants legal representatives, assigns and successors; and (ii) any Person who resolved a lawsuit by payment, release, or final adjudication with the Defendants regarding Behr Product; (cc) Fairness Hearings means the hearings to be conducted by the Courts in connection with the applications for the Final Orders, to consider and determine the fairness, adequacy and reasonableness of this Agreement and the proposed Settlement of the Actions, to finally approve the Settlement, and to consider Class Counsel's application for an award of Class Counsel Fees; (dd) Final Orders means the final orders pronounced by the Courts at the conclusion of the Fairness Hearing, such orders to be substantially in the form of Schedule K1 (in the case of the B.C. Action) and Schedule K2 (in the case of the Ontario Action) hereto, approving this Agreement without material alterations as fair, adequate and reasonable; confirming the certification of the Settlement Class; and making such other findings and determinations as the Court deems necessary and appropriate to effectuate the terms of this Agreement; (ee) Final Order Date means the date on which Final Orders have been pronounced by both the B.C. Court and the Ontario Court and shall not occur without Final Orders being pronounced by both Courts; (ff) First Notice means the form of notice, approved by the Courts at the First Notice Approval Hearings, substantially in the form of Schedule D; (gg) First Notice Approval Hearings means the hearings at which the Courts are asked to approve the First Notice, the Notice Plan and, among other matters, set a date for the Fairness Hearings; (hh) First Notice Approval Orders means the orders pronounced by the Courts approving the First Notice, the Notice Plan and setting a date for the Fairness Hearings, such orders to be substantially in the form of Schedule J1 (in the case of the B.C. Action) and Schedule J2 (in the case of the Ontario Action); (ii) First Notice Date means the date upon which the First Notice is published to the Settlement Class in accordance with Section V of this Agreement; (jj) Hold Back means the amount agreed upon by the Parties no later than fifteen (15) Business Days after expiration of the time by which Recent Behr Product Applicators must have registered with the Independent Claims Administrator and approved by the Independent Claims Adjudicator, or, in the event the Parties are unable to agree,

7 - 5 - determined by the Independent Claims Adjudicator, that shall be deducted from the Settlement Amount and available exclusively to pay Awards, if any, to Recent Behr Product Applicators pursuant to the Claims Process; (kk) Independent Claims Adjudicator means David Whitelaw or such other person agreed to by the Parties and approved by the Court, who shall hear and resolve any disputes that may arise with regard to the issuance of Awards to individual Settlement Class Members, pursuant to the administrative procedures set forth in Schedule M, and subject to the oversight of the Court; (ll) Independent Claims Administrator means the Person, agreed to by the Parties and approved by the Court, to manage and direct the processing and payment of Large Wood Surface Claims as set forth in Section VI of this Agreement, subject to the oversight of the Independent Claims Adjudicator and pursuant to administrative procedures agreed upon by the Parties, which person shall be Crawford Class Action Services; (mm) Inspector(s) means the Persons hired and selected by the Independent Claims Administrator and approved by the Court, and trained under the direction of Class Counsel and Defendants Counsel to evaluate Large Wood Surface Claims submitted pursuant to the terms of this Agreement, which Person shall initially be Crawford Adjusters Canada; (nn) Large Wood Surface Claimants means Claimants who applied Behr Product to more than 300 square feet of Exterior Wood Surface as defined in Schedule F; (oo) Large Wood Surface Claims means claims submitted by Large Wood Surface Claimants; (pp) Masco means Masco Corporation, a Delaware corporation; (qq) Masco Guarantee means the financial guarantee by Masco of Behr s payment obligations called for in this Agreement pursuant to Section XV, substantially in the form attached hereto as Schedule G; (rr) Merchandise Rebate Claimants means Claimants who elect to receive a rebate as set forth in Schedule F; (ss) Merchandise Rebate Claims means claims submitted by Merchandise Rebate Claimants; (tt) Notice Account means the interest-bearing account designated in writing by Class Counsel at Royal Bank of Canada, 30 Duke Street W., Kitchener, Ontario, N2H 3W5 and identified in Section IV of this Agreement; (uu) Notice Plan means the plan for the dissemination of Class Notice, substantially in accordance with Schedule H, as approved by the Court;

8 - 6 - (vv) Ontario Action means the action brought against the Defendants by Pat Piercy and Beth MacKenzie under the Class Proceedings Act, 1992, S.O. 1992, c. 6 and filed in the Ontario Superior Court of Justice at Toronto under Court File No. 01-CV CP; (ww) Ontario Court means the Ontario Superior Court of Justice; (xx) Ontario Plaintiffs means Pat Piercy and Beth MacKenzie; (yy) Opt Out Period means the period commencing on the Final Order Date and ending ninety (90) days thereafter; (zz) Other Pending Actions means the following actions: (i) Harper and Harper v. Behr Process Corporation and Behr Process Canada Ltd., filed in the Vancouver Registry of the Supreme Court of British Columbia, under Action No. S006661; and (ii) any other proceedings raising similar claims against the Defendants concerning Behr Product that may be commenced prior to the later of (a) the expiration of 120 days from the Final Order Date and (b) in the event an appeal is taken from one or both Final Orders, final affirmation of the Final Orders on appeal or remand, or final dismissal or denial of all such appeals and requests for discretionary review, excluding those proceedings brought by a Settlement Class Member who has opted out of the Settlement; (aaa) Parties means the Plaintiffs and the Defendants; (bbb) Person means an individual, marital community, corporation, partnership, limited partnership, limited liability company, association, joint stock company, estate, legal representative, trust, unincorporated organization, and any other type of legal entity, and their respective heirs, predecessors, successors, representatives and assigns; (ccc) Plaintiffs means the B.C. Plaintiffs and the Ontario Plaintiffs, collectively; (ddd) Plan of Distribution means the Small Wood Claims Protocol, the Large Wood Claims Protocol, and the Merchandise Rebate Protocol, all as set out in Schedule F hereto, as approved by the Court, for allocating to Eligible Claimants funds or Merchandise Rebates made available by the Settlement; (eee) Recent Behr Product Applicators means (i) Settlement Class Members who purchased and applied any Behr Product sold under the name Super Liquid Raw-Hide within thirty (30) months prior to the First Notice Date; and (ii) Settlement Class Members who purchased and applied any Behr Product sold under the name Natural Seal Plus within twelve (12) months prior to the First Notice Date; provided, however, that such Settlement Class Members have registered with the Independent Claims Administrator on or before the Claim Deadline, using the Registration Form; (fff) Registration Form means a form substantially in accordance with Schedule I; (ggg) Released Persons has the meaning given to it in Section VIII; (hhh) Releasing Persons has the meaning given to it in Section VIII;

9 - 7 - (iii) Request for Exclusion means a properly completed and executed written request, substantially in the form of Schedule C, to be excluded from and opt out of the Settlement Class, setting forth the Settlement Class Member s name, address, and address of the exterior wood surface upon which Behr Product was applied. To be valid, such a Request for Exclusion must be signed and witnessed by a competent adult, filed with Branch MacMaster, and postmarked on or before the last day of the Opt Out Period, or, if without a timely and legible postmark, received by Branch MacMaster before 5:00 p.m. Pacific time on the last day of the Opt Out Period; (jjj) Second Notice means the form of notice approved by the Courts at the Fairness Hearings and substantially in the form of Schedule E; (kkk) Settled Claims means any claim, liability, right, demand, suit, matter, obligation, damage, loss or cost, action or cause of action of every nature and description, in law or in equity, that the Releasing Person has, had or may have, including assigned claims, whether known or unknown, accrued or which may thereafter accrue, asserted or unasserted, latent or patent, that is, has been, could reasonably have been or in the future might reasonably be asserted by the Releasing Person either in one of the Actions or in any other action or proceeding in the Courts or any other court or forum, regardless of legal theory, and regardless of the type or amount of relief or damages claimed, against any of the Released Persons arising from or in any way related to the purchase and application of Behr Product to exterior wood surfaces in Canada during the time period commencing on January 1, Without limiting the generality of the foregoing, Settled Claims shall include, with regard to the foregoing subject matter: (i) (ii) (iii) (iv) (v) (vi) any claims for breach or violation of any federal or provincial statute, case law, common law, other law, regulation or ordinance; any claims for breach of any duty imposed by law, by contract, or otherwise; any claims based on negligence, reliance, breach of express or implied warranty, conspiracy, deceptive or unconscionable acts or practices, breach of statutory duty, consumer fraud, negligent misrepresentation/omission, reckless misrepresentation/omission or intentional misrepresentation/omission; any claims arising from or in any way related to the design, manufacture, production, sale, promotion, or distribution of Behr Product, and/or any alleged defects in Behr Product, or any part thereof; any claims for emotional distress or mental anguish associated with any of the above; and any claims for penalties, punitive damages or exemplary damages; Notwithstanding the foregoing, Settled Claims shall not include claims for personal injury or wrongful death, and shall not include claims against Behr Product Applicators

10 - 8 - (i) based solely on negligent or reckless application of Behr Product to Settlement Class Members structures or arising under contract; and (ii) wholly unrelated to (a) the formulation, manufacture, distribution or sale of Behr Product, (b) the written or oral instructions or representations provided by Behr about Behr Product, or (c) the decision to select Behr Product for application to Settlement Class Members structures. (lll) Settlement means the settlement described in this Agreement. (mmm)settlement Amount means an amount not to exceed $2.7 million exclusive of Class Counsel Fees, but including (i) the total cash Awards paid to Eligible Claimants pursuant to the Claims Process; (ii) the total costs of Notice to the Settlement Class, which shall not exceed $200,000.00; (iii) the total cost of supplemental payments of $1, to each of the named Plaintiffs (spouses to be treated as one named Plaintiff) as compensation for their time and effort expended in the prosecution of the Actions; (iv) the total costs of the Independent Claims Administrator and costs related thereto, exclusive of any of Behr s internal costs for the Behr Claims Administrator and Behr s internal administration costs, provided that if (but only if) the total costs of the Independent Claims Administrator and costs related thereto exceed $250,000, Behr agrees to increase the Settlement Amount by up to a maximum of $30,000 to pay such costs; (v) the total costs of the Independent Claims Adjudicator and costs related thereto; and (vi) the Face Value of Merchandise Rebates issued to Eligible Claimants, up to a maximum of $190,000.00; (nnn) Settlement Class means: (i) (ii) (iii) with respect to the B.C. Action, a class comprised of all Persons resident in British Columbia who (1) purchased Behr Product and applied said Product, or caused it to be applied, to an exterior wood surface within British Columbia at any time between January 1, 1991 and the Final Order Date, or (2) have a legal or beneficial interest in an exterior wood surface within Canada to which Behr Product was applied at any time between January 1, 1991 and the Final Order Date, and including each of the B.C. Plaintiffs; with respect to the Ontario Action, a class comprised of all Persons, excluding Persons resident in B.C., who either (1) purchased Behr Product and applied said Product, or caused it to be applied, to an exterior wood surface within Canada at any time between January 1, 1991 and the Final Order Date, or (2) have a legal or beneficial interest in an exterior wood surface within Canada to which Behr Product was applied at any time between January 1, 1991 and the Final Order Date, and including each of the Ontario Plaintiffs; and with respect to both Actions, excluding the Excluded Persons; (ooo) Settlement Class Member means a member of the Settlement Class;

11 - 9 - (ppp) Settlement Date means the date by which all of the following have occurred: (i) the entry of Final Orders, without material modification, with the Courts; and (ii) either (a) the expiration of all allowable periods for appeal or discretionary appellate review of the Final Orders without an appeal or request for discretionary appellate review having been filed in respect of either of them, or (b) in the event an appeal is taken from one or both Final Orders, final affirmation of the Final Orders on appeal or remand, or final dismissal or denial of all such appeals and requests for discretionary review; and (iii) resolution of all of the Other Pending Actions in a manner acceptable to the Defendants; (qqq) Settlement Fund means the interest-bearing account established at, and held by, Royal Bank of Canada, 30 Duke Street W., Kitchener, Ontario, N2H 3W5, from which Awards in cash are paid by the Behr Claims Administrator or the Independent Claims Administrator, as the case may be, to Qualified Claimants in accordance with this Agreement; (rrr) Small Wood Surface Claimants means Claimants who applied Behr Product to 300 square feet or less of Exterior Wood Surface as defined in Schedule F; (sss) Small Wood Surface Claims means claims submitted by Small Wood Surface Claimants; (ttt) Solemn Declaration means a declaration as to the truth of a statement made in, or in relation to, a Claim Form, which declaration the maker conscientiously knows to be true based on the maker s personal knowledge, and which is made with the understanding that: (1) the presiding Court has enjoined against making statements in, or in relation to, a Claim Form which the maker knows to be false, and therefore, if the maker submits a Claim Form knowing that it contains a false statement of fact, or makes a statement in relation to a Claim Form that the maker knows to be false, the maker may be subject to the presiding Court's power to punish for contempt of court; and (2) if the maker submits a Claim Form knowing that it contains a false statement of fact, or makes a statement in relation to a Claim Form that the maker knows to be false, the maker may be subject to prosecution for fraud under sections 380(1) and 381 of the Criminal Code of Canada; (uuu) Stipulated Undertaking for Repayment of Class Counsel Fees means the agreement set forth in Schedule L as referenced in Section IV; (vvv) U.S. Actions means the following actions: Behr Wood Sealant Cases, Superior Court of California, County of San Joaquin, Judicial Council Co-ordination Proceeding Nos and 4138; Mitchell, et al., v. Behr Process Corporation, et al., Multnomah County, Oregon Circuit Court Case No ; Stoner, et al. v. Behr Process Corporation, et al., Nassau County, New York Supreme Court Index No /00; Stipic, et al. v. Behr Process Corporation, et al., Grays Harbor County, Washington Superior Court, No ; Price, et al. v. Behr Process Corporation, et al., Alaska Superior Court, First Judicial District at Juneau, Case No. 1JU Ci; Banks, et al. v. Behr Process Corporation, et al., Mobile County, Alabama Circuit Court Civil Action No. CV ; Caliper, et al. v. Masco Corporation, et al., St. Clair County, Illinois Circuit Court Case No. 01-L-232; Vasil, et al. v. Behr Process Corporation, et al., San

12 Mateo County, California Superior Court Case No ; Herum, et al. v. Behr Process Corporation, et al., San Joaquin County, California Superior Court Case No. CV011195; Nelson, et al. v. Behr Process Corporation, et al., Alameda County, California Superior Court Case No ; Ramirez, et al. v. Behr Process Corporation, et al., San Joaquin County, California Superior Court Case No. CV011525; Love, et al. v. Behr Process Corporation, et al., San Mateo County, California Superior Court Case No ; Huff v. Behr Process Corporation, et al., San Mateo County, California Superior Court Case No ; Connelly, et al. v. Behr Process Corporation, et al., San Joaquin County, California Superior Court Case No. CV011536; Lopez, et al. v. Behr Process Corporation, et al., Solano County, California Superior Court Case No. FCS015218; Zmay, et al. v. Behr Process Corporation, et al., San Mateo County, California Superior Court Case No ; and Lamson, et al. v. Behr Process Corporation, et al., San Mateo County, California Superior Court Case No ; (www) Value of Merchandise Rebates means $25, $50 or $125, as the case may be, as determined pursuant to the provisions of Schedule F. SECTION III REQUIRED EVENTS AND COOPERATION 3.1 Promptly after execution of this Agreement, or, by agreement between the Parties, prior to the execution of this Agreement, the Plaintiffs and Class Counsel shall make application to each of the Courts, requesting approval of the First Notice in the terms of the First Notice Approval Orders, including orders: (a) (b) approving the form and contents of the First Notice and the Notice Plan; approving a schedule for the delivery of objectors materials; and (c) scheduling the Fairness Hearings to review comments or objections regarding this Agreement and the Settlement; to consider whether this Agreement and the Settlement are fair, reasonable and in the best interests of the Class and, if so found, to pronounce the Final Orders; and to consider the application by Class Counsel in respect of Class Counsel Fees. 3.2 Plaintiffs and Defendants shall cooperate, assist and undertake all reasonable steps in order to accomplish these required events on the schedule set by the Court. 3.3 Despite any other term of this Agreement, the Defendants may, in their sole and unfettered discretion, elect to terminate this Agreement in accordance with Section XVII if: (a) either Court fails or refuses to approve this Agreement and the Settlement, or any part thereof; or (b) the number of Settlement Class Members who timely file a written Request for Exclusion pursuant to Section VII of this Agreement exceeds 75, or if Settlement Class Members claiming ownership of 100 or more structures timely file a written Request for Exclusion pursuant to Section VII of the Agreement; or

13 (c) Other Pending Actions are not resolved, within 120 days of the Final Order Date, in a manner acceptable to the Defendants. 3.4 In the event this Agreement is disapproved, reversed, vacated, or terminated by either or both of the Courts or any appellate court, the Agreement shall have no effect on the rights of the Parties to (i) take action in support of or in opposition to class certification in either of the Actions or the B.C. Appeal or any Other Pending Actions should the Agreement not be approved or implemented for any reason; or (ii) pursue appellate review of any order certifying, or refusing to certify, a class in either of the Actions or any Other Pending Actions; or (iii) prosecute or defend either of the Actions, or any Other Pending Actions, as set forth in Section XVII, below. SECTION IV PAYMENT OF SETTLEMENT AMOUNT 4.1 Behr shall pay the Settlement Amount in accordance with the terms of this Agreement, provided, however, that Behr shall issue rebates to all Merchandise Rebate Claimants without regard to the total Value of Merchandise Rebates so issued, provided, however, that the first $190, of Merchandise Rebates shall be paid and deducted from the Settlement Amount. 4.2 Behr shall have no obligation to make any payment, or incur any financial obligation, in excess of the Settlement Amount with the exception of (i) Behr s obligation to pay Class Counsel Fees in accordance with Section X of this Agreement; (ii) Behr s obligation to issue rebates to Merchandise Rebate Claimants, irrespective of the aggregate Value of Merchandise Rebates issued, provided that only the first $190, of Merchandise Rebates issued shall be paid and deducted from the Settlement Amount; and (iii) Behr s obligation to pay up to a maximum of $30, on account of the total costs of the Independent Claims Administrator and costs related thereto, if but only if such costs exceed $250, Within three (3) Business Days of the date on which this Agreement is signed by all Parties, (i) Class Counsel shall notify the Defendants counsel in writing of the wire transfer instructions and account information for the Notice Account; and (ii) Behr shall within three (3) Business Days after the later of the date of approval by both of the Courts of the First Notice and the date on which this Agreement is signed by all Parties, deposit into the Notice Account sufficient funds to commence distribution and publication of the First Notice, provided that the amount deposited will be based on a good faith estimate by Class Counsel of the amount required for the distribution and publication of the First Notice. Thereafter, upon reasonable request by Class Counsel, further amounts shall be deposited into the Notice Account as needed for the distribution and publication of the First Notice, up to a maximum of $100, Behr shall within three (3) Business Days after the Final Order Date deposit into the Notice Account sufficient funds to commence distribution and publication of the Second Notice, provided that the amount deposited will be based on a good faith estimate by Class Counsel of the amount required for the distribution and publication of the Second Notice. Thereafter, upon reasonable request by Class Counsel, further amounts shall be deposited into the Notice Account as needed for the distribution and publication of the Second Notice, up to a maximum of $100,

14 In no event shall Behr s obligation to pay for the distribution and publication of Class Notice (including the matters described in paragraph 4.7 below) exceed $100, in respect of the First Notice and $100, in respect of the Second Notice, or $200, in total. 4.6 The Notice Account will continue to operate until the distribution and publication of Class Notice is completed. Within three (3) Business Days of the Settlement Date, any unexpended funds, exclusive of outstanding obligations, if any, in the Notice Account shall be wire transferred to the Claims Administration Account. 4.7 Within three (3) Business Days of the date on which this Agreement is signed by all Parties, Behr shall deposit into the Notice Account $10,000 to fund the establishment of facilities whereby Settlement Class Members can register for receipt of a Claims Forms package after the Final Order Date, and the development by the Independent Claims Administrator of a website, post office box and telephone answering system dedicated to the Settlement. 4.8 If this Agreement is disapproved, reversed, vacated or terminated, all funds then remaining in the Notice Account, exclusive of outstanding obligations, if any, shall promptly be returned to Behr. 4.9 Within three (3) Business Days after the Final Order Date, Behr shall pay Class Counsel Fees, in the amount approved by the Court, into an account designated by Class Counsel for such purpose In the event that (a) this Agreement is terminated or (b) one or both of the Final Orders is reversed on appeal, in whole or in part, then, in accordance with the terms of the Stipulated Undertaking for Repayment of Class Counsel Fees, the full amount of the compensation paid by Behr to Class Counsel as Class Counsel Fees shall be refunded to Behr within five (5) Business Days after termination, or pronouncement of the order or orders reversing one or both of the Final Orders, in whole or in part, becomes final, as the case may be. In the event either of the Final Orders is not reversed on appeal, in whole or in part, but the Class Counsel Fees awarded by the Court are vacated or modified on appeal, the compensation to Class Counsel in the amount vacated or modified shall be returned to Behr within five (5) Business Days after the order vacating or modifying the award of Class Counsel Fees becomes final. Nothing in this paragraph shall be interpreted as requiring Class Counsel to return to Behr any amounts paid by Behr into the Notice Account to fund Class Notice Within three (3) Business Days after the Settlement Date, Behr shall deposit $100,000 in cash into the Claims Administration Account, which sum shall be replenished by Behr with further deposits of $50,000 as and when the balance falls below $10,000 in cash. If, after (i) the processing of all Claims Forms; (ii) the resolution of all disputes that may arise between the Parties with regard to the Agreement or the Claims Process; (iii) the payment of all Awards; and (iv) the payment of all costs of the Independent Claims Administrator and the Independent Claims Adjudicator, cash remains in the Claims Administration Account, such cash shall be paid to Behr.

15 The Claims Administration Account shall be established and maintained by the Independent Claims Administrator under the continuing jurisdiction and supervision of the Courts and shall earn interest, which shall become part of the Claims Administration Account and which interest shall not be applied as a credit against the Settlement Amount Behr shall deposit an amount into the Settlement Fund as required to make the payment described in paragraph 11.1(d) herein, and thereafter Behr shall deposit amounts into the Settlement Fund as and when Awards in cash are required to be paid to Qualified Claimants. If, after the payment of all Awards, cash remains in the Settlement Fund, such cash shall be paid to Behr. SECTION V NOTICE TO CLASS 5.1 Upon the Courts approving the First Notice, and as the Courts may direct, Class Counsel shall cause the First Notice, substantially in the form of Schedule D, to be provided to Settlement Class Members in accordance with the Notice Plan. The First Notice shall be published within ten (10) days of all of the parties executing a copy of this Agreement or the Courts approval of the First Notice, whichever is the later. 5.2 The Settlement Class shall be notified of final approval of the Settlement and this Agreement by the Second Notice, substantially in the form of Schedule E, which Class Counsel shall cause to be published to the Settlement Class Members in accordance with the Notice Plan. The Second Notice shall be published no later than 30 days after the Final Order Date. SECTION VI CLAIMS PROCESS 6.1 Eligible Claimants may obtain an Award under this Agreement solely in accordance with this Section, being Section VI. The Claims Process shall be implemented upon the occurrence of the Settlement Date. 6.2 A Claimant shall be deemed an Eligible Claimant and entitled to an Award if (i) the Claimant is a Settlement Class Member; (ii) the Claimant completes and submits a Claim Form, in the form attached hereto as Schedules A and B, that is postmarked not later than the Claim Deadline or if there is no legible postmark received by the Independent Claims Administrator not later than 11:59 p.m. Eastern time on the Claim Deadline; and (iii) the Claimant qualifies under the terms of Schedule F. There shall be only one Eligible Claimant per household and only one Eligible Claimant per property. 6.3 If an Eligible Claimant has previously received a payment from Behr s Technical Services Department in connection with the use of Behr Product on the same property for which a claim is made under this Agreement, the amount of the earlier payment will offset dollar for dollar any additional cash payment, unless mildew growth appeared after new application of Behr Product subsequent to that for which the Eligible Claimant received payment from Behr s Technical Services Department. 6.4 Any Claimant whose wood surface was fully remediated at Behr s expense prior to the Final Order Date shall not be entitled to receive any cash payment or Merchandise Rebate

16 unless mildew growth appeared after new application of Behr Product subsequent to that for which the Eligible Claimant received payment from Behr s Technical Services Department. 6.5 Settlement Class Members who do not timely submit a Claim Form shall not be considered Eligible Claimants. The Behr Claims Administrator and the Independent Claims Administrator shall reject any Claim Form that is not clearly post-marked on or before the Claim Deadline, or if there is no legible postmarked, that is not received by the Independent Claims Administrator prior to 11:59 p.m. Eastern time on the Claim Deadline. Nothing in this Section shall be construed to prevent either Claims Administrator, in its sole discretion, from permitting a Settlement Class Member to remedy deficiencies in such Settlement Class Member s Claim Form or related documentation, provided, however, that such Claimant initially submitted a timely Claim Form during the Claims Period. In the event that the Claims Administrator notifies a Settlement Class Member of deficiencies in such Settlement Class Member s Claim Form or related documentation, all such deficiencies must be remedied within three (3) months of the date such notice is sent to the Settlement Class Member. Failure to remedy all of the indicated deficiencies in the Claim Form or related documentation within three (3) months of the date a deficiency notice is first sent to the Settlement Class Member shall result in the rejection of the claim. 6.6 Merchandise Rebates shall be issued to Eligible Claimants as soon as practicable after the receipt and processing of a Claim Form requesting issuance of same, provided, however, that the Settlement Date has occurred. 6.7 No claims, other than for Merchandise Rebates, shall be paid until the end of the Claims Period. If the processing and payment of claims, including claims submitted by Settlement Class Members who were provided additional time in which to remedy deficiencies in the Claim Form or related documentation in accordance with Paragraph 6.5 of this Agreement, would exceed the Settlement Amount after deducting (i) all other amounts to be credited against the Settlement Amount in accordance with this Agreement and (ii) the amount of the Hold Back, then cash payments to Eligible Claimants shall be reduced pro rata so the Settlement Amount is not exceeded. 6.8 Claims for Merchandise Rebates and Small Wood Surface Claims shall be processed by the Behr Claims Administrator. All of Behr s internal costs for administration of the Merchandise Rebates and Small Wood Surface Claims shall be borne and paid by Behr without deduction from the Settlement Fund. The Behr Claims Administrator shall report periodically to Class Counsel regarding his activities and progress. Such reports shall address, at a minimum, the number of Small Wood Surface Claims and Merchandise Rebate claims received and the status of such claims (i.e., number processed, number in process, number rejected and for each claim that is rejected the reason for the rejection); and, for claims that have been processed, the type, number, and amount of Awards issued. 6.9 Large Wood Surface Claims shall be processed by the Independent Claims Administrator. The Independent Claims Administrator shall report periodically to the Parties regarding its activities and progress. Such periodic reports shall address, at a minimum, the number of Large Wood Surface Claims received, the status of such claims (i.e., number processed, number in process, number rejected, number sent for inspection, number for which

17 inspection results were received), and, for claims that have been processed and for which information is readily available, the number and amount of cash payment Awards issued, and the number of claims that have been denied and the basis for such denial Each Claims Administrator shall administer the relief provided by this Agreement by resolving claims in a rational, responsible, cost-effective and timely manner. Each Claims Administrator shall maintain reasonably detailed records of its activities under this Agreement, including all Claim Forms, denials, and all disbursements to Eligible Claimants, until one (1) year after all claims are finally resolved and/or paid. Such records shall be made available upon request for inspection by any Party Disputed issues shall be presented to and resolved by the Independent Claims Adjudicator, in accordance with the procedures set out in Schedule M. Any party shall have the right to seek an order from the Court replacing any Claims Administrator, or the Independent Claims Adjudicator for good cause shown, provided, however, that if the Behr Claims Administrator is replaced, then the costs of such replacement administrator shall be borne by Behr and not credited against the Settlement Amount The Independent Claims Adjudicator shall resolve disputes between the Parties relating to this Agreement and the Claims Process in accordance with the procedures set out in Schedule M, provided that any Party may, in accordance with the provisions of Schedule M, appeal a decision of the Independent Claims Adjudicator to the Court, which shall retain continuing jurisdiction. SECTION VII OPT OUT RIGHTS 7.1 A Settlement Class Member may opt out of the Settlement Class at any time during the Opt Out Period in accordance with this Agreement. 7.2 In order to exercise the opt out right, the Settlement Class Member must return a written Request for Exclusion to Branch MacMaster during the Opt Out Period. 7.3 Except for those Settlement Class Members who have properly opted out in accordance with this Agreement, each and every Settlement Class Member will conclusively be deemed a Settlement Class Member for all purposes under this Agreement, and will be bound as of the expiration of the Opt Out Period by the Final Orders and by the Releases contained in Section VIII of this Agreement, whether or not the Settlement Class Member submits a Claim Form or receives an Award. Any Settlement Class Member who elects to opt out of the Settlement Class shall (i) not be bound by any orders or judgments entered in the Actions; (ii) not be entitled to relief under or be affected by this Agreement; (iii) not gain any rights by virtue of this Agreement; and (iv) not be entitled to object to any aspect of this Agreement. 7.4 Nothing in this Agreement shall constitute or be deemed to constitute a waiver by either of the Defendants of defences based on statutes of limitations or repose, laches, prescription period or any other limitation or prescription defence. Without limiting the generality of the foregoing, nothing in this Agreement shall constitute or be deemed to constitute a waiver of such defences in respect of any Settlement Class Member who opts out of the Settlement Class in accordance with the provisions of this Section VII.

18 A Settlement Class Member who timely files a written Request for Exclusion with Branch MacMaster may subsequently withdraw the Request for Exclusion by filing with Branch MacMaster written notification of such withdrawal. Such written notification of withdrawal of the Request for Exclusion must be postmarked on or before fourteen (14) Business Days prior to the end of the Opt Out Period. 7.6 Class Counsel shall provide Defendants Counsel with copies of all completed Requests for Exclusion on a weekly basis during the Opt Out Period. SECTION VIII RELEASES AND JURISDICTION OF THE COURTS 8.1 As of the Settlement Date, each Settlement Class Member, and any Person acting on his/her/its behalf or claiming by or through him/her/it as his/her/its spouse, heir, associate, coowner, attorney, agent, administrator, devisee, predecessor, successor, parent, subsidiary, affiliate, representative of any kind, shareholder, partner, director, employee, owner of any kind, custodian, executor, trustee, administrator, subrogee, assignee, insurer or reinsurer, who does not timely submit a Request for Exclusion (defined collectively as the Releasing Persons ), whether or not he/she/it submits a Claim Form or otherwise receives an Award, will be deemed by this Agreement to have, and by operation of the Final Orders shall have individually, completely and unconditionally released, forever discharged and acquitted Behr, Masco, and its and their predecessors, successors, parents, subsidiaries, affiliates and assigns, together with its and their past, present and future officers, directors, employees, shareholders, representatives, partners, attorneys, insurers, reinsurers, subrogees, and assigns, and all Persons who sold or distributed Behr Product to any Releasing Person (defined collectively as the Released Persons ), from any and all of the Settled Claims. 8.2 As of the Settlement Date, the Releasing Persons and anyone claiming through or on behalf of any of them will be forever barred and enjoined from commencing, instituting or prosecuting any action, litigation, investigation or other proceeding in any court of law or equity, arbitration, tribunal, proceeding, governmental forum, administrative forum or any other forum, directly, representatively or derivatively, asserting against any of the Released Persons any claims that relate to or constitute any of the Settled Claims. 8.3 Each Releasing Person expressly understands and acknowledges that it is possible that unknown losses or claims exist or that present losses may have been underestimated in amount or severity. The Releasing Persons explicitly took that into account in entering into this Agreement, and a portion of the consideration and the mutual covenants contained herein, having been bargained for between the Releasing Persons and the Released Persons with the knowledge of the possibility of such unknown claims, were given in exchange for a full accord, satisfaction, and discharge of all such claims. 8.4 As of the Settlement Date, the Defendants release each Settlement Class Member who has not timely opted out of the Settlement Class from all claims by the Defendants against such Settlement Class Member relating to Behr Product and existing as of the Settlement Date. 8.5 The Parties agree that the Courts shall retain exclusive and continuing jurisdiction over the Actions, Parties, Settlement Class Members, the Claims Administrators and the

19 Independent Claims Adjudicator to interpret and enforce the terms, conditions and obligations under this Agreement. SECTION IX PROTECTION FROM THIRD PARTY CLAIMS 9.1 It is the intent of this Agreement that no Settlement Class Member shall recover, directly or indirectly, any sums from either of the Defendants for Settled Claims other than those sums received under this Agreement and that the Defendants shall make no payments to any third party for any amounts arising out of a Settled Claim brought by a Settlement Class Member against such third party, except to the extent that Settlement Class Members timely and properly opted out of the Settlement Class as provided by this Agreement. It is the further intent of this Agreement that Settlement Class Members agree to reduce any judgments against third parties to the extent necessary, under applicable law, to relieve the Defendants of liability for contribution or indemnification to any such third party with respect to Settled Claims. 9.2 All Settlement Class Members waive any claim they may have that any Defendant is jointly and severally liable with any third party with respect to any Settled Claim. 9.3 The Parties shall seek an order from the Courts that all claims for contribution and/or indemnification against the Defendants, however denominated (including claims for equitable contribution or partial indemnity), whether arising under the laws of British Columbia or Ontario or any other province or jurisdiction, that are based on or arise from Settled Claims are barred, extinguished, discharged, satisfied and otherwise unenforceable. 9.4 Nothing in this Agreement is intended to adversely affect any third party's right, if any, to set-off or judgment reduction under the Negligence Act, R.S.B.C. 1996, c. 333, or other similar statutes in other provinces or territories or other applicable law. Such third parties will be entitled, at a minimum, to whatever set-off or judgment reduction is afforded them by operation of applicable law. 9.5 In circumstances where claims for contribution or indemnification against a settling Defendant may survive a settlement unless the settlement agreement provides set-off or judgment reduction rights that go beyond those that would otherwise exist by operation of applicable law, the Parties intend that in those circumstances third parties shall be entitled to the additional set-off or judgment reduction necessary under applicable law to extinguish such third parties' claims, if any, for contribution or indemnification against the Defendants arising from Settled Claims only. In the event that any claim that a third party would have for contribution or indemnification against either of the Defendants in the absence of this Agreement with respect to a Settled Claim would not be extinguished under applicable law by the set-off or judgment reduction to which the third party would be entitled by operation of law, any Settlement Class Member who recovers a judgment against any third party with respect to a Settled Claim for which Defendants would be liable by a claim for contribution or indemnification but for the provisions of this Agreement, shall reduce his or her judgment against the third party by the amount, percentage, or share of such judgment necessary, under applicable law, to relieve the Defendants of any liability for contribution or indemnification.