Case No. 2:12-CV GHK(MRW) STIPULATION OF SETTLEMENT. Hon. George H. King STIPULATION OF SETTLEMENT CASE NO. 2:12-CV GHK (MRW)

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1 1 1 1 BURSOR & FISHER, P.A. Scott A. Bursor (State Bar No. 00) L. Timothy Fisher (State Bar No. ) Annick M. Persinger (State Bar No. ) 0 North California Boulevard, Suite 0 Walnut Creek, CA Telephone: () scott@bursor.com ltfisher@bursor.com apersinger@bursor.com Co-Lead Class Counsel NORTON ROSE FULBRIGHT US LLP Jeffrey Margulies, State Bar No. 0 Spencer Persson, State Bar No. 0 Stephanie Stroup, State Bar No. 01 Jade Jurdi, State Bar No.01 South Flower Street Forty-First Floor Los Angeles, CA 001 Telephone: () -0 jeff.margulies@nortonrosefulbright.com spencer.persson@nortonrosefulbright.com stephanie.stroup@nortonrosefulbright.com jade.jurdi@nortonrosefulbright.com Attorneys for Defendants [Additional counsel on signature page] UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ENZO FORCELLATI and LISA ROEMMICH, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs, v. HYLAND S, INC., STANDARD HOMEOPATHIC LABORATORIES, INC., and STANDARD HOMEOPATHIC COMPANY, Defendants. Case No. :1-CV-0 GHK(MRW) Hon. George H. King CASE NO. :1-CV-0 GHK (MRW)

2 TABLE OF CONTENTS PAGE(S) RECITALS... 1 I. DEFINITIONS... II. CERTIFICATION OF THE SETTLEMENT CLASS... 1 III. SETTLEMENT CONSIDERATION... IV. CLASS COUNSEL S FEE AND EXPENSE AWARD AND CLASS REPRESENTATIVES INCENTIVE AWARDS... V. NOTICE TO THE CLASS AND ADMINISTRATION OF SETTLEMENT... VI. CLASS SETTLEMENT PROCEDURES... VII. RELEASES... VIII. SUBMISSION OF THE SETTLEMENT TO THE COURT... IX. MISCELLANEOUS PROVISIONS STIPULATION OF SETTELEMNT CASE NO. :1-CV-0 GHK (MRW) i

3 1 1 1 This Stipulation of Settlement is made by and among Enzo Forcellati, and Lisa Roemmich, (the Class Representatives ), on behalf of themselves and the Settlement Class (defined below), on the one hand, and Hyland s, Inc., Standard Homeopathic Laboratories Inc., and Standard Homeopathic Company ( Defendants or Hyland s ), on the other. I. RECITALS A. On March, 1, Plaintiff Enzo Forcellati commenced a proposed class action against Defendants Hyland s Inc., and Standard Homeopathic Company entitled Forcellati v. Hyland s Inc. et al. (United States District Court, Central District of California, Case No. 1-cv--GHK) (the Forcellati Action ). Plaintiff Forcellati asserted claims on behalf of himself and a proposed nationwide class of purchasers of (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey Kids, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, and (v) Nighttime Cold n Cough Kids for violation of the Magnuson-Moss Warranty Act, U.S.C. 01, et seq., unjust enrichment, breach of express warranty, breach of implied warranty, violation of the New Jersey Consumer Fraud Act, N.J.S.A. :-1, et seq., violation of the Consumer Legal Remedies Act ( CLRA ), California Civil Code 0, et seq., violation of the False Advertising Law ( FAL ), California Business & Professions Code 00 et seq., and violation of the Unfair Competition Law ( UCL ), California Business & Professions Code 0 et seq. Plaintiff Forcellati alleged that Hyland s made false and misleading statements about its Children s Cold and Flu Products, such as that the Children s Cold and Flu Products were Safe & Effective for treating cold and flu symptoms and that they were 0% Natural. Plaintiff Forcellati further alleged that, in fact, the Children s Cold and Flu Products are no better than a placebo because the homeopathic ingredients in the Products are ultra-diluted. CASE NO. :1-CV-0 GHK (MRW) 1

4 1 1 1 B. On April, 1, Defendants filed a motion to dismiss. On April 0, 1, Plaintiff Forcellati opposed. On June 1, 1, the Court dismissed Plaintiff s unjust enrichment claim but denied the remaining portions of Defendants motion. C. On June, 1, Hyland s answered Plaintiff Forcellati s Complaint, denying liability. D. On July, 1, Hyland s removed an action entitled Roemmich v. Hyland s Inc. et al. from the Superior Court of California, County of Los Angeles to the United States District Court, Central District of California (Case No. 1-cv-) (the Roemmich Action ). E. On October, 1, the Court ordered that the Forcellati and Roemmich actions be consolidated. The Court further ordered that the parties were to meet and confer to determine the appropriate lead counsel. F. On October 0, 1, the Class Representatives and Hyland s participated in a full-day in-person mediation with Robert A. Meyer of Loeb & Loeb LLP. G. On October 1, 1, the parties reported that Bursor & Fisher, P.A. and Faruqi & Faruqi, LLP would serve as co-lead counsel in the consolidated cases. H. On November, 1, the Court ordered that the Forcellati and Roemmich Actions be consolidated, and appointed Bursor & Fisher, P.A. and Faruqi & Faruqi LLP as co-lead counsel in the Forcellati and Roemmich Actions (hereafter the Consolidated Action or the Action ). I. On December, 1, Plaintiff Enzo Forcellati, and Lisa Roemmich, filed a Consolidated Amended Class Action Complaint that added Lisa Roemmich as a Plaintiff to the Action. In addition to the claims in Plaintiff Forcellati s Complaint, the Consolidated Amended Class Action Complaint also asserted claims for Violation of the Missouri Merchandising Practices Act, Mo. Ann. Stat. 0.0, et seq. CASE NO. :1-CV-0 GHK (MRW)

5 1 1 1 J. On January, 1, Hyland s filed a motion to dismiss Plaintiffs prayer for punitive damages in the Consolidated Amended Class Action Complaint. Plaintiffs opposed. On February 1, 1, the Court denied Hyland s motion. K. On May, 1, the Parties participated in a second full-day in-person mediation with Robert A. Meyer of Loeb & Loeb LLP. L. On September, 1, Plaintiffs filed a motion for class certification. On October, 1, Hyland s opposed Plaintiffs motion. Pursuant to the Court s December, 1 order, on February, 1, the Parties submitted supplemental briefing on the issue of whether the proposed class was ascertainable. M. On April, 1, the Court certified the following Rule (b)() class for monetary relief with respect to Plaintiffs claims for violation of Magnuson-Moss Act, U.S.C. 01, et seq., breach of express warranty, breach of implied warranty, violation of the CLRA, violation of the FAL, and violation of the UCL: (a) (b) A nationwide class of all persons in the United States who purchased the following Hyland s products on or after March, 0: (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey Kids, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, and (v) Nighttime Cold n Cough Kids; A -state class of all persons in the United States except for those in California who purchased Hyland s Complete Flu Care Kids on or after March, 0. The Court appointed the law firms of Bursor & Fisher, P.A., and Faruqi & Faruqi, LLP as class counsel. The Court appointed Plaintiffs Enzo Forcellati and Lisa Roemmich as Class Representatives. The Court denied Plaintiffs request to certify a Rule (b)() class for injunctive relief, and denied certification of Plaintiffs proposed New Jersey and Missouri subclasses. CASE NO. :1-CV-0 GHK (MRW)

6 1 1 1 N. On April, 1, Hyland s filed a petition for permission to appeal pursuant to Fed. R. Civ. P. (f). On May, 1, Plaintiffs filed an answer in opposition to Hyland s petition. On July, 1, the United States Court of Appeals for the Ninth Circuit denied Hyland s Fed. R. Civ. P. (f) petition. O. On August, 1, the Court issued an Order Re Form and Dissemination of Notice to the Class. P. On September, 1, the claims administrator Kurtzman Carson Consultants ( KCC ) sent notice to class members by and U.S. Mail. Q. On September, 1, Hyland s filed a motion for summary judgment. Plaintiffs opposed in a joint brief on that same date. On January 1,, the Court denied Hyland s motion for summary judgment. R. On March,, the Parties participated in full-day in-person settlement conference with the Hon. Jay C. Gandhi, United States Magistrate Judge. S. On October,, the Parties participated in a second full-day inperson settlement conference with the Hon. Jay C. Gandhi, United States Magistrate Judge. T. On October,, Hyland s filed an ex parte application to continue the trial, originally set for October,, based on the fact that Plaintiffs presented a new case theory in their trial brief and Motions in Limine. U. On October,, the Court vacated all trial dates to consider Hyland s request for judicial estoppel, to consider the parties Motions in Limine and to evaluate Defendants objections to deposition exhibits to be used at trial. V. On February,, the Court held that Plaintiffs were judicially estopped from changing their theory of the case. W. On January 1,, Plaintiffs Marie Kaatz and Abigail Gagliardi commenced an action entitled Kaatz v. Hyland s Inc. et al. (United States District Court, Southern District of New York, Case No. :-cv-00-vb) (the Kaatz CASE NO. :1-CV-0 GHK (MRW)

7 1 1 1 Action ), as a proposed class action, asserting claims for violation of New York General Business Law and 0, the consumer protection statutes of all fifty states, and the Magnuson-Moss Warranty Act, U.S.C. 01, et seq., as well as breach of express warranty, breach of implied warranty of fitness for a particular purpose, negligent misrepresentations, and unjust enrichment. The Kaatz Action asserted claims with respect to Hyland s (i) Baby Teething Gel; (ii) Baby Cough Syrup, (iii) Baby Gas Drops, (iv) Baby Infant Earache Drops, and (v) Baby Nighttime Tiny Cold Syrup. Like Plaintiffs Forcellati and Roemmich, the Plaintiffs in the Kaatz Action allege that Defendants Products are not effective for relieving symptoms and are not 0% natural. Also like the Plaintiffs in the Consolidated Action, the Plaintiffs in the Kaatz Action allege that the Products do not provide any benefits beyond that of a placebo. X. On June,, the Court ordered the Parties in the Consolidated Action to participate in a settlement conference with the Hon. Jay C. Gandhi, United States Magistrate Judge. Y. On July,, the Parties in the Consolidated Action participated in a third full-day in-person settlement conference with the Hon. Jay C. Gandhi, United States Magistrate Judge. Z. On July,, the District Court for the Southern District of New York denied Defendants motion to dismiss the Complaint in the Kaatz Action, but limited the New York Plaintiffs claims under New York General Business Law and 0, breach of implied warranty of fitness for a particular purpose, negligent misrepresentations, and unjust enrichment to a putative class of New York purchasers. AA. On July,, the Parties in the Consolidated Action reached a settlement in the Consolidated Action. CASE NO. :1-CV-0 GHK (MRW)

8 1 1 1 BB. On July,, Defendants filed an answer to the Complaint in the Kaatz Action, denying liability. CC. Following execution of this Stipulation of Settlement, with Defendants agreement and Court approval, Plaintiffs will file a Second Amended Complaint that brings claims for violation of the Magnuson-Moss Act. U.S.C. 01, et seq., breach of express warranty, breach of implied warranty, violation of the Consumer Legal Remedies Act ( CLRA ), California Civil Code 0, et seq., violation of the False Advertising Law ( FAL ), California Business & Professions Code 00 et seq., and violation of the Unfair Competition Law ( UCL ), California Business & Professions Code 0 et seq. on behalf of: All persons in the United States who purchased the following Hyland s products on or after March, 0: (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, (v) Nighttime Cold n Cough Kids, (vi) Complete Flu Care Kids, (vii) Baby Teething Gel, (viii) Baby Cough Syrup, (ix) Baby Gas Drops, (x) Baby Infant Earache Drops, and (xi) Baby Nighttime Tiny Cold Syrup. DD. The Class Representatives allege in this Consolidated Action, inter alia, that Hyland s deceived customers by representing that products for children and babies are effective at treating illness when, in fact, the ultra-diluted ingredients have no pharmacological effect beyond that of a placebo. EE. Hyland s denies the material allegations made in the Consolidated Action, and denies any and all liability with respect to all facts and claims alleged therein, and further denies that any of the Settlement Class Members (defined below) or anyone has suffered any harm or damage or is entitled to any monetary or relief whatsoever in connection with the Consolidated Action. FF. Class Counsel conducted an examination and investigation of the facts and law relating to the matters in this Consolidated Action, including, but not limited CASE NO. :1-CV-0 GHK (MRW)

9 1 1 1 to, engaging in discovery, review and analysis of Hyland s documents and data, as well as Hyland s testing of the Settlement Class Products. Class Counsel also evaluated the merits of the Parties contentions and evaluated this Settlement, as it affects all Parties, including the Settlement Class Members. The Class Representatives and Class Counsel, after taking into account the foregoing, along with the risks and costs of further litigation, including pretrial and trial, represent that they are satisfied that the terms and conditions of this Stipulation of Settlement are fair, reasonable, and adequate, and that the Settlement Agreement set forth herein is in the best interest of the Settlement Class Members. GG. Hyland s, while continuing to deny all allegations of wrongdoing and disclaiming all liability with respect to all claims, considers it desirable to resolve the Consolidated Action on the terms stated herein to avoid further expense, inconvenience and burden and, therefore, has determined that this Settlement on the terms set forth herein is in Hyland s best interests. HH. Substantial settlement negotiations have taken place between the Parties, including five full day mediation sessions, the first two with Robert A. Meyer of Loeb & Loeb LLP, and the final three with the Hon. Jay C. Gandhi, United States Magistrate Judge. In consideration of the covenants and agreements set forth herein, and of the releases and dismissals of claims as described below, and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged by each of the Parties, the Class Representatives, on behalf of themselves and the Settlement Class Members, and Hyland s agree to the Settlement described herein, subject to Court approval, under the following terms and conditions: I. DEFINITIONS CASE NO. :1-CV-0 GHK (MRW)

10 As used in this Stipulation of Settlement, the following capitalized terms have the meanings specified below. Unless otherwise indicated, defined terms include the plural as well as the singular. 1. Action or Consolidated Action shall mean the class action lawsuit entitled Forcellati et al. v. Hyland s, Inc. et al., Case No. :1-CV-0 GHK(MRW) pending in the United States Central District of California, which encompasses the higher-numbered action Roemmich v. Hyland s Inc. et al., Case No. 1-CV-. 1. Claim Deadline means 1 days after the Notice Date, by which Settlement Class Members must submit a claim to obtain the Class Benefit described in III of this Stipulation of Settlement. 1. Claim Form means the form substantially in the form attached hereto as Exhibit A to be submitted by Class Members seeking to recover the Class Benefit described in this Stipulation of Settlement in Section III. The format of the Claim Form may be modified by the Court in the Preliminary Approval Order, substantially in the form attached hereto as Exhibit B, or to meet the requirements of the Settlement Administrator 1. Claimant means a Class Member who submits a claim for cash as described in Section III of this Settlement Agreement. 1. Class Benefit has the meaning set forth in Section III below. 1. Class Counsel means Bursor & Fisher, P.A., Vozzolo LLC, and Faruqi & Faruqi, LLP. 1. Class Notice means the Court-approved Notice of Class Action Settlement, which includes the Long Form Notice, the Short Form Notice, and the Publication Notice. 1. Class Representatives means Enzo Forcellati, and Lisa Roemmich. CASE NO. :1-CV-0 GHK (MRW)

11 Court means the United States District Court, Central District of California. 1. Defendants Counsel, or Defense Counsel means the law firm of Norton Rose Fulbright US LLP. 1.1 Fairness Hearing means the hearing that is to take place after entry of the Preliminary Approval Order, the Notice Date, and the Claim Deadline for purposes of: (a) determining the fairness, adequacy, and reasonableness of the Settlement Agreement; and (b) ruling upon an application by Class Counsel for a Fee and Expense Award and Plaintiffs Incentive Awards. The Parties shall request that the Court schedule the Fairness Hearing for a date that is in compliance with the provisions of U.S.C. (d). 1.1 Fee and Expense Award means the amount awarded to Class Counsel by the Court for attorneys fees, costs, and expenses. 1.1 Final Settlement Approval Date means the date that is 0 days after service of notice of entry of the Settlement Approval Order and Final Judgment on the Parties and all objectors to the Settlement Agreement, if any, without any appeal being taken, or if an appeal or request for review has been taken, the date on which the Settlement Approval Order and Final Judgment has been affirmed by the court of last resort to which an appeal or request for review has been taken and such affirmance is no longer subject to further appeal or review, or the date of denial of review after exhaustion of all appellate remedies. 1. Incentive Award(s) means any award sought by application to and approved by the Court that is payable to the Class Representatives. 1. Long Form Notice means the notice (substantially in the form attached hereto as Exhibit C) to be sent by to all class members for whom addresses are identified, and to be sent via regular mail to all class members CASE NO. :1-CV-0 GHK (MRW)

12 1 1 1 for whom the Parties do not have a valid address but do have a mailing address. 1. MSRP means Hyland s average suggested retail price for the Settlement Class Products during the Settlement Class Period as follows: (i) Cold n Cough Kids (ii) Cough Syrup with 0% Natural Honey (iii) Sniffles n Sneezes Kids (iv) Cold Relief Strips Kids with Zinc (v) Nighttime Cold n Cough Kids (vi) Complete Flu Care Kids (vii) Baby Teething Gel (viii) Baby Cough Syrup (ix) Baby Gas Drops (x) Baby Infant Earache Drops (ix) Baby Nighttime Tiny Cold Syrup 1. Notice Date means 0 days following the Preliminary Approval Order. 1. Notice of Missing or Inaccurate Information means the notice sent by the Claims Administrator to a Claimant who has submitted a Claim Form with inaccurate, disqualifying, incomplete, or missing information that is required for the Claimant to be considered eligible for the Class Benefit. 1. Objection Deadline means the date, to be set by the Court, by which Settlement Class Members must file objections, if any, to the Settlement Agreement in accordance with Section VI of this Stipulation of Settlement. The Parties shall request that the Court set an Objection Deadline 1 days after the Notice Date. CASE NO. :1-CV-0 GHK (MRW)

13 Opt-Out Date means the date, to be set by the Court, by which a Request for Exclusion must be sent to the Settlement Administrator for a Class Member to be excluded from the Settlement Class. The Parties shall request that the Court set an Opt-Out Date 1 days after the Notice Date. 1. Parties means Enzo Forcellati, Lisa Roemmich on the one hand, and Hyland s, Inc., Standard Homeopathic Laboratories Inc., and Standard Homeopathic Company on the other. 1. Preliminary Approval means that the Court has entered an order preliminarily approving the terms and conditions of this Stipulation of Settlement, including the manner of providing and content of Class Notice to Settlement Class Members. 1. Preliminary Approval Date means the date on which the Court enters the Preliminary Approval Order. 1. Preliminary Approval Order means the Court s order, substantially in the form attached hereto as Exhibit B, preliminarily approving the Settlement Agreement set forth in this Stipulation of Settlement and approving the Settlement Notice Plan. 1. Proof of Purchase means receipts, packaging of Settlement Class Products, bottles or other containers of Settlement Class Products, or other documentation from a third-party commercial source reasonably establishing the purchase during the Settlement Class Period of one or more of the Settlement Class Products claimed to have been purchased by the Settlement Class Member. 1. Publication Notice means publication of the Short Form Notice in the National Edition of USA Today once a week for four consecutive weeks, and a Facebook campaign targeting people who have expressed an interest in or like pages related to Hyland s, homeopathy, homeopathic medicine, and wellness as well CASE NO. :1-CV-0 GHK (MRW)

14 1 1 1 as those people who have expressed an interest in or like pages related to parenting. 1. Released Claims means the claims released by the Settlement Class Members, as described in Section VII below, who do not submit a valid Request for Exclusion. 1. Released Persons means Hyland s Inc., Standard Homeopathic Laboratories Inc., and Standard Homeopathic Company; all of their past and present respective parents, subsidiaries, divisions, affiliates, persons and entities directly or indirectly under its or their control in the past or in the present; all of their respective assignors, predecessors, successors, and assigns; and all past or present partners, shareholders, managers, members, directors, officers, employees, agents, attorneys, insurers, accountants, and representatives of any and all of the foregoing. 1.0 Request for Exclusion means the written communication that must be sent to the Settlement Administrator and postmarked on or before the Opt-Out Date by a Settlement Class Member who wishes to be excluded from the Settlement Class. 1.1 Settlement Administrator means KCC Class Action Services, LLC (or KCC ) and its successors and assigns. 1. Settlement Agreement means the agreement set forth by the terms of this Stipulation of Settlement. 1. Settlement Approval Order and Final Judgment means an order and judgment issued and entered by the Court, substantially in the form as that attached hereto and made a part hereof as Exhibit D, approving this Settlement Agreement as binding upon the Parties and the Settlement Class Members, entering final judgment, and setting the Fee and Expense Award, to Class Counsel by the Court. The Settlement Approval Order and Final Judgment shall constitute a judgment within the meaning and for purposes of Rule of the Federal Rules of Civil Procedure. The Parties jointly shall request the Court to enter the proposed Settlement Approval CASE NO. :1-CV-0 GHK (MRW) 1

15 1 1 1 Order and Final Judgment substantially in the form attached hereto and made a part hereof as Exhibit D. 1. Settlement Class Members, Class Members, Class, or Settlement Class means: All persons in the United States who purchased the following Hyland s products on or after March, 0: (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, (v) Nighttime Cold n Cough Kids, (vi) Complete Flu Care Kids, (vii) Baby Teething Gel, (viii) Baby Cough Syrup, (ix) Baby Gas Drops, (x) Baby Infant Earache Drops, and (xi) Baby Nighttime Tiny Cold Syrup. Excluded from the Class are: (a) Hyland s employees, officers and directors, (b) persons or entities who purchased the Products for the purpose of re-sale, (c) retailers or resellers of the Products, (d) governmental entities, (e) persons who timely and properly exclude themselves from the Class as provided herein, and (f) the Court, the Court s immediate family, and Court staff. 1. Settlement Class Period means the period of time from March, 0 through the Notice Date. 1. Settlement Class Products means: (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, (v) Nighttime Cold n Cough Kids, (vi) Complete Flu Care Kids, (vii) Baby Teething Gel, (viii) Baby Cough Syrup, (ix) Baby Gas Drops, (x) Baby Infant Earache Drops, and (xi) Baby Nighttime Tiny Cold Syrup. 1. Settlement Notice and Other Administrative Costs means all costs and expenses actually incurred by the Settlement Administrator in the publication and sending of Class Notice, establishment of the Settlement Website, and the processing, handling, reviewing, and paying of claims made by Claimants. CASE NO. :1-CV-0 GHK (MRW) 1

16 Settlement Notice Plan means the Settlement Administrator s plan to disseminate Class Notice to Settlement Class Members, as described in Section V below. 1. Settlement Website means a website operated and maintained by the Settlement Administrator solely for purposes of making available to the Settlement Class Members the Class Notice, documents, information, and online claims submission process referenced in Sections V and VI, below. 1.0 Short Form Notice means the notice, subject to Court approval that is substantially in the form attached hereto as Exhibit E, that will be published in the national edition of USA Today once a week for four consecutive weeks. 1.1 Stipulation of Settlement means this document and its exhibits, attached hereto and incorporated herein, including all subsequent amendments agreed to in writing by the Parties and any exhibits to such amendments. II. CERTIFICATION OF THE SETTLEMENT CLASS.1 The Parties agree, for settlement purposes only, that the Settlement Class shall be certified and proceed as a class action under Federal Rule of Civil Procedure (b)(), with a class consisting of all Settlement Class Members, and with Plaintiffs Forcellati and Roemmich as Class Representatives and with Class Counsel as counsel for the Settlement Class Members.. Any certification of a conditional, preliminary or final Settlement Class, pursuant to the terms of this Stipulation of Settlement, shall not be construed as an admission on the part of Hyland s that the Settlement Class is appropriate for class treatment under the Federal Rules of Civil Procedure or any similar state or federal class action statute or rule.. In the event that the Court does not preliminarily or finally approve the Settlement Agreement, nothing herein shall be construed to alter the Court s April, 1 certification of the following Rule (b)() classes: (a) A nationwide class of CASE NO. :1-CV-0 GHK (MRW) 1

17 1 1 1 all persons in the United States who purchased the following Hyland s products on or after March, 0: (i) Cold n Cough Kids, (ii) Cough Syrup with 0% Natural Honey Kids, (iii) Sniffles n Sneezes Kids, (iv) Cold Relief Strips Kids with Zinc, and (v) Nighttime Cold n Cough Kids; (b) A -state class of all persons in the United States except for those in California who purchased Hyland s Complete Flu Care Kids on or after March, 0. III. SETTLEMENT CONSIDERATION.1 Class Benefits. In full, complete, and final settlement and satisfaction of the Consolidated Action and all Released Claims, and subject to all of the terms, conditions, and provisions of this Stipulation of Settlement, Hyland s agrees to provide the following consideration to Settlement Class Members: (a) To each Settlement Class Member who follows the procedures set forth in Section VI of this Stipulation of Settlement and submits a valid Claim Form, Hyland s will pay a full refund of the MSRP or the actual purchase price, as follows: (i) Without Proof of Purchase. Claims for a full refund of the MSRP for up to two () unit purchases of Settlement Class Products will be paid without requiring proof of purchase. (ii) With Proof of Purchase. Claims for a full refund for three () or more unit purchases of Settlement Class Products will be paid with proof of purchase to avoid fraudulent claims. Settlement Class Members who submit proof of purchase that reveals the actual price paid for a Settlement Class Product will receive a refund of the actual price paid. If proof of purchase does not reveal the actual price paid for a Settlement Class Product, the Settlement Class Member will be receive a refund of the MSRP for each Settlement Class Product.. Injunctive Relief. Hyland s will include a money back guarantee on its website. CASE NO. :1-CV-0 GHK (MRW)

18 Costs of Class Notice. Hyland s will pay the costs of the Settlement Administrator.. Fee and Expense Award. Hyland s will pay a Fee and Expense Award and Incentive Awards as described in Section IV. IV. CLASS COUNSEL S FEE AND EXPENSE AWARD AND CLASS REPRESENTATIVES INCENTIVE AWARDS.1 Incentive Awards. In recognition of the time and effort that the Class Representatives expended in pursuing this Consolidated Action and in fulfilling their obligations and responsibilities as Class Representatives, including responding to discovery, attending their depositions, and preparing to appear at trial, Class Counsel will submit an application for Incentive Awards of $,000 to each Class Representative. Any Court-ordered Incentive Award will be paid to the Class Representatives by Hyland s no later than days after the Final Settlement Approval Date.. Fee and Expense Award. Class Counsel will make an application to the Court for an Attorneys Fee and Expense Award in an amount not to exceed $. million, which includes reimbursement of Class Counsel s costs and expenses. (a) CASE NO. :1-CV-0 GHK (MRW) Such Class Counsel s Fee and Expense Award shall be paid by wire transfer to Class Counsel, subject to Court approval, as follows: $0,000 within days after Preliminary Approval, and the remainder in quarterly installments over four years from the date of final approval, subject to paragraph.(b) below. The quarterly installments shall be paid on dates to be agreed on by the Parties following entry of the Settlement Approval Order and Final Judgment. (b) The Fee and Expense Award shall be the total obligation of Hyland s to pay for attorneys fees, costs, and/or expenses of any kind (including, but not limited to, travel, filing fees, court reporter, and videographer expenses, expert fees, and costs, and document review and production costs) related to this

19 1 1 1 Consolidated Action or any claims asserted in the Consolidated Action. Notwithstanding the foregoing, if the Final Settlement Approval Order and Final Judgment or any part of it is vacated, overturned, reversed, or rendered void or unenforceable as a result of any appeal, or the Settlement Agreement is voided, rescinded, or otherwise terminated for any other reason, then Class Counsel shall, within 0 days, repay to Hyland s the full amount of the attorneys fees and costs paid by Hyland s to Class Counsel. Class Counsel shall provide an undertaking satisfactory to Defendants Counsel and the Settlement Administrator to repay to Hyland s all attorneys fees and costs paid by Hyland s to Class Counsel if the Settlement is not finally approved or the award of attorneys fees and expenses is later modified or reversed for any reason. Such undertaking may be in the form of a promissory note or letter of credit acceptable to Defendants and the Settlement Administrator.. Class Counsel shall have the sole and absolute discretion to allocate the Fee and Expense Award amongst Plaintiffs Counsel and any other attorneys for Plaintiffs. Hyland s shall have no liability or other responsibility for allocation of any such attorney s fees and expenses awarded, and, in the event that any dispute arises relating to allocation of fees, Class Counsel agree to hold Hyland s harmless from, and indemnify Hyland s with respect to, any and all such liabilities, costs, and expenses, including attorneys fees and costs of such dispute. V. NOTICE TO THE CLASS AND ADMINISTRATION OF SETTLEMENT.1 The Class Notice shall conform to all applicable requirements of the Federal Rules of Civil Procedure, the United States Constitution (including the Due Process Clauses), the Class Action Fairness Act of 0, U.S.C., and any other applicable law, and shall otherwise be in the manner and form approved by the Court. CASE NO. :1-CV-0 GHK (MRW)

20 General Notice Terms. The Class Notice Shall: (a) inform Settlement Class Members that, if they do not exclude themselves from the Class, they may be eligible to receive the relief under the proposed Settlement Agreement; (b) contain a short, plain statement of the background of the Consolidated Action, the Class certification for settlement purposes and the proposed Settlement Agreement; (c) describe the proposed settlement relief outlined in this Stipulation of Settlement; (d) state that any relief to Settlement Class Members is contingent on the Court s final approval of the proposed Settlement Agreement; (e) inform Settlement Class Members of their rights to exclude themselves form the Settlement Class or object to the proposed Settlement Agreement as described in Section VI below.. Time and Manner of Notice. Class Notice shall be provided in the manner that Class Notice was provided upon Class Certification in this Consolidated Action, as follows: (a) CASE NO. :1-CV-0 GHK (MRW) On or before the Notice Date, which is 0 days following Preliminary Approval, the Settlement Administrator shall cause a copy of the Long Form notice to be sent by to all class members for whom addresses are identified; (b) On or before the Notice Date, the Settlement Administrator shall cause a copy of the Long Form notice to be sent by regular mail to all class members for whom the Parties do not have a valid address but do have a mailing address; (c) On or before the Notice Date, Class Counsel shall cause a copy of the Long Form Notice to be posted on a dedicated website together with links to

21 1 1 1 important case documents, such as the Preliminary Approval Order, this Stipulation of Settlement, the Consolidated Amended Class Action Complaint, Defendants Answer to Consolidated Amended Class Action Complaint, and any Second Amended Class Action Complaint; (d) CASE NO. :1-CV-0 GHK (MRW) Class Counsel shall have registered for this purpose, along with several additional domains that will mirror and/or link to that website, including Class members will be directed to the website by hyperlinks embedded in the version of the Long Form Notice and by references in both the Long Form and Short Form Notices. The website will allow Class Members to submit Claim Forms online and will contain information relevant to Class Members, including but not limited to all applicable deadlines, this Stipulation of Settlement, Class Notice, a downloadable Claim Form, all papers filed by the Parties in support of the proposed Settlement Agreement (including Plaintiffs anticipated motion for a Fee and Expense Award), orders of the Court pertaining to this Stipulation of Settlement, and contact information for the Settlement Administrator for a toll-free telephone number, , and U.S. mail. The Parties shall use reasonable efforts to agree on all information and documents to be posted on this website and no information shall be posted or provided on the website without the Parties express approval. The website shall be rendered inactive 0 days after the Final Settlement Approval Date; and (e) Commencing on or before the Notice Date, the Settlement Administrator shall undertake Publication Notice as provided in Section 1... Notice Period. The Notice Period shall run for 1 days following the Notice Date. The Long Form and Short Form Notices shall inform Class Members of the Opt-Out Deadline and the Objection Deadline, which will be set by the Court in the Preliminary Approval Order. Any Class Member who does not file a valid and

22 1 1 1 timely Request for Exclusion will be bound by the Settlement Agreement set forth in this Stipulation of Settlement and by Final Judgment concluding this Consolidated Action.. Responsibilities of Settlement Administrator. The Settlement Administrator will help implement the terms of this Stipulation of Settlement. The Settlement Administrator shall be responsible for administrative tasks, including, without limitation, (a) notifying the appropriate state officials about the Settlement Agreement, (b) arranging, as set forth in this Section and in the Preliminary Approval Order, for distribution of Class Notice (in the form approved by the Court) and Claims Forms (in the form approved by the Court) to Settlement Class Members, (c) answering inquiries from Settlement Class Members and/or forwarding such written inquiries to Class Counsel or their designee, (d) receiving and maintaining on behalf of the Court and the Parties any Settlement Class Member correspondence regarding Requests for Exclusion from the Settlement Agreement, (e) posting notices on the Settlement Website, Claim Forms, and other related documents, (f) receiving and processing claims and distributing cash payments to Settlement Class Members, and (g) otherwise assisting with implementation and administration of the Settlement Agreement terms. The actual costs and expenses of the Settlement Administrator will be paid by Hyland s as part of the Settlement Consideration as described in Section III above. VI. CLASS SETTLEMENT PROCEDURES.1 Settlement Class Member Eligibility Requirements. To be eligible to receive relief under the Settlement Agreement, Settlement Class Members must submit a claim to the Claims Administrator by completing and certifying the online Claim Form on the Settlement Website or completing, certifying and mailing the Claim Form to the Claims Administrator. The Claim Form must be submitted online or postmarked no later than the Claim Deadline. Claim Forms submitted or CASE NO. :1-CV-0 GHK (MRW)

23 1 1 1 postmarked after the Claim Deadline shall be denied by the Claims Administrator and Hyland s will not be obligated to make any payment on such claims.. Requirements for Valid Claim Forms. No Claim Form will be deemed valid unless it is signed in hard copy or in online form by the Settlement Class Member under penalty of perjury, and is postmarked or submitted online on or before the Claim Deadline.. Review by Claims Administrator. The Claims Administrator shall review all submitted Claim Forms within a reasonable time to determine each Settlement Class Member s eligibility for relief, and the amount of such relief, if any. Copies of submitted Claim Forms shall be provided to Defense Counsel and to Class Counsel upon request. Settlement Class Members who submit valid Claim Forms shall be entitled to relief as set forth in paragraph.1(a) of this Stipulation of Settlement. Settlement Class Members who submit Claims Forms that do not meet the Eligibility Requirements or the Requirements for Valid Claim Forms, as described in this Section VI of this Stipulation of Settlement, shall not be entitled to the relief set forth in paragraph.1(a) of this Stipulation of Settlement. The Claims Administrator shall use standard and customary procedures to prevent the payment of fraudulent claims and to pay only legitimate claims.. Incomplete Claim Forms. Failure to provide all information requested in the Claim Form will not result in nonpayment of a claim. Instead, the Settlement Administrator will take customary steps to determine whether the Settlement Class Member is eligible for payment and to determine the amount of the payment based on the information contained in the Claim Form or otherwise submitted, or based on other reasonably available information. Claim Forms that omit essential or required information that cannot be identified from reasonably available information shall be returned by the Claims Administrator with a Notice of Missing or Inaccurate Information via to the Settlement Class Member s address indicated on CASE NO. :1-CV-0 GHK (MRW)

24 1 1 1 the Claim Form. If the Claims Administrator is unable to return the Claim Form with a Notice of Missing or Inaccurate Information as a result of omitted information, the Claims Administrator will reject that Settlement Class Member s claim, and Hyland s will not be obligated to provide the Class Benefit set forth in paragraph.1(a) above.. Inaccurate Claim Forms. Claim Forms submitted with inaccurate or disqualifying information shall be returned by the Claims Administrator with a Notice of Missing or Inaccurate Information via to the Settlement Class Member s address indicated on the Claim Form. If the Claims Administrator is unable to return the Claim Form with a Notice of Missing or Inaccurate Information as a result of inaccurate information, the Claims Administrator will reject that Settlement Class Member s claim, and Hyland s will not be obligated to provide the Class Benefit set forth in paragraph.1(a) above.. Resubmission of Claim Forms following Notice of Missing or Inaccurate Information. Settlement Class Members whose Claim Forms are returned with a Notice of Missing or Inaccurate Information shall have until the Claim Deadline, or 0 days from when the Notice of Missing or Inaccurate Information was ed by the Settlement Administrator, whichever is later, to respond to the Notice of Missing or Inaccurate Information with a revised Claim Form that is complete and contains no inaccurate or disqualifying information. If a Settlement Class Member fails to timely respond to the Notice of Missing or Inaccurate Information, or resubmits a Claim Form that is incomplete or inaccurate the Claims Administrator shall reject that Settlement Class Member s Claim Form, and Hyland s will not be obligated to provide the Class Benefit set forth in paragraph.1(a) above.. Provision of Class Benefit. All Settlement Class Members who are eligible and who submit a valid Claim Form shall be sent cash awards, or a letter CASE NO. :1-CV-0 GHK (MRW)

25 1 1 1 explaining the rejection of their Claim Form, within calendar days of the Final Settlement Approval Date. Hyland s shall pay the Settlement Administrator the aggregate value of all cash awards to be distributed to Settlement Class Members no later than calendar days after the Final Settlement Approval Date. All cash awards to Settlement Class Members will be in the form of checks, and such checks will state that the must be redeemed within 0 calendar days of the Final Settlement Approval Date or they will become void.. Requests for Exclusion. Any individual who would otherwise be a Settlement Class Member but who does not wish to obtain the Class Benefit or to be bound by the terms of this Stipulation of Settlement must postmark a written Request for Exclusion to the Claims Administrator no later than the Opt-Out Date. The Request for Exclusion must be in writing and include a statement of intention to be excluded from the Settlement Class. Additionally, to be valid, a Request for Exclusion must contain: cv- GHK (MRWx); and (a) the name of this lawsuit, Forcellati v. Hyland's Inc., Case No. 1- (b) (c) CASE NO. :1-CV-0 GHK (MRW) the individual s name, current address, and telephone number; the individual s signature.. Each Request for Exclusion must be submitted individually. Each Request for Exclusion may not be submitted on behalf of more than one individual. So-called mass or class Requests for Exclusion shall not be allowed.. Any individual who submits a timely and valid Request for Exclusion will not be bound by this Stipulation of Settlement or have any right to object, appeal or comment thereon.. At least seven calendar days prior to the Fairness Hearing, Class Counsel shall prepare or cause the Settlement Administrator to prepare a list of the

26 1 1 1 persons who have excluded themselves in a valid and timely manner from the Settlement Class, and Class Counsel shall file that list with the Court..1 Objections. Settlement Class Members shall have the right to appear and present objections as to any reason why the terms of this Stipulation of Settlement and the Settlement Agreement set forth herein should not be given Final Approval. Any objection must be in writing and filed with the Court, with a copy delivered to Class Counsel and Defense Counsel at the addresses set forth in the Class Notice, no later than the Objection Deadline to be set by the Court. Additionally, to be valid, objections must: (a) CASE NO. :1-CV-0 GHK (MRW) include the Settlement Class Member s name, current address, and telephone number, or the Settlement Class Member s lawyer s name, current address and telephone number; (b) contain a caption or title that identifies it as an objection to the Settlement Agreement in Forcellati v. Hyland s, Inc., Case No. 1-cv- GHK (MRWx); (c) contain a clear and concise statement of the Settlement Class Member s objection, including the facts supporting the objection and the legal grounds on which the objections is based; (d) Fairness Hearing; and (e) whether the Settlement Class Member intends to appear at the include documents sufficient to establish membership in the Settlement Class such as a verification under oath as to the date and location of their purchase of a Settlement Class Product or a Proof of Purchase as defined herein..1 No Settlement Class Member shall be entitled to be heard at the Fairness Hearing (whether individually or through separate counsel) or to object to the Settlement Agreement, and no written objections or briefs by any Settlement Class Member shall be considered by the Court at the Fairness Hearing unless a

27 1 1 1 written objection is filed with the Court and delivered to Class Counsel and Defense Counsel by the Objection Deadline..1 Class Counsel, on behalf of Plaintiffs and the Settlement Class, and Defense Counsel, on behalf of Hyland s, shall have the right to respond to any objection prior to the Fairness Hearing.. Settlement Class Members who do not request exclusion and who fail to file and timely serve written objections in the manner specified herein shall be deemed to have waived any objections and shall be foreclosed from making any objection (whether by appeal or otherwise) to Final Approval of the Settlement Agreement, and shall be bound, to the extent allowed by law, by the terms of this Stipulation of Settlement. VII. RELEASES.1 Release by Settlement Class Members. Effective as of the Final Settlement Approval Date, each and every Settlement Class Member (except any such person who has filed a proper and timely Request for Exclusion) shall release and forever discharge, and shall be forever barred from asserting, instituting or maintaining against any or all of the Released Persons, any and all claims, demands, actions, causes of action, lawsuits, arbitrations, damages, or liabilities whether legal, equitable, or otherwise, relating in any way to the claims asserted or the factual allegations made in the Consolidated Action, including without limitation the allegation that Settlement Class Products ingredients are ineffective, the allegation that the Settlement Class Products are not all natural, and/or the purchase of any of the Settlement Class Products during the Settlement Class Period (collectively, the Claims ). With respect to the Claims released pursuant to this paragraph, each Settlement Class Member shall be deemed to have waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of California Civil Code section (and equivalent, comparable, or analogous provisions of the laws CASE NO. :1-CV-0 GHK (MRW)

28 1 1 1 of the United States of America or any state or territory thereof, or of the common law or civil law). Section provides that: 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. Each and every term of this paragraph shall inure to the benefit of each and all of the Released Persons, and each and all of their respective successors and personal representatives, which persons and entities are intended to be beneficiaries of this paragraph.. Effectuation of Settlement. None of the above releases include releases of claims or otherwise affects the rights to enforce the terms of this Stipulation of Settlement.. No Admission of Liability. This Stipulation of Settlement and the Settlement Agreement set forth herein reflects, among other things, the compromise and settlement of disputed claims among the Parties, and neither this Stipulation of Settlement nor the releases given herein, nor any consideration therefor, nor any actions taken to carry out the terms of this Stipulation of Settlement, are intended to be, nor may they be deemed or construed to be, an admission or concession of liability, or the validity of any claim, defense, or of any point of fact or law on the part of any party. Hyland s denies the material allegations of the Consolidated Amended Class Action Complaint and any Second Amended Complaint that may be filed in this Consolidated Action following execution of this Stipulation of Settlement. Neither this Stipulation of Settlement, nor the fact of the Settlement Agreement set forth herein, nor the settlement proceedings, nor the settlement negotiations, nor any related document, shall be used as an admission of any fault or omission by any or all of the Released Persons, or be offered or received in evidence CASE NO. :1-CV-0 GHK (MRW)

29 1 1 1 as an admission, concession, presumption, or inference of any wrongdoing or liability by any or all of the Released Persons in any proceeding, other than such proceedings as may be necessary to consummate, interpret or enforce this Stipulation of Settlement. VIII. SUBMISSION OF THE SETTLEMENT TO THE COURT.1 As soon as is practicable following the signing of this Stipulation of Settlement, Class Counsel shall apply to the Court for entry of the Preliminary Approval Order, for the purpose of, among other things: (a) CASE NO. :1-CV-0 GHK (MRW) Finding that the Settlement Agreement is within the range of reasonableness and possible Final Approval such that the Class Notice should be provided pursuant to this Stipulation of Settlement; (b) Approving the Class Notice, including the Long Form Notice and Short Form Notice, substantially in the form set forth at Exhibits C and E; (c) Finding that the requirements for certification of the Settlement Class for settlement purposes have been satisfied, appointing Plaintiffs as the representatives of the Class, and their counsel as Class Counsel; (d) Scheduling the Fairness Hearing on a date ordered by the Court, provided in the Preliminary Approval Order, and in compliance with applicable law, to determine whether the Settlement Agreement should be approved as fair, reasonable, and adequate, and to determine whether a Final Order and Final Judgment should be entered; (e) Determining that the Notice of the Settlement Agreement and of the Fairness Hearing, as set forth in this Stipulation of Settlement, complies with all legal requirements, including but not limited to the Due Process Clause of the United States Constitution; (f) Administrator; Appointing KCC Class Action Services, LLC as the Settlement