Exhibit 10.1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

NEW ORLEANS DIVISION

 

IN RE: FEMA TRAILER      MDL NO. 1873      FORMALDEHYDE           PRODUCT
LIABILITY LITIGATION      SECTION “N-5”           JUDGE ENGELHARDT          
MAG. JUDGE CHASEZ     

THIS DOCUMENT IS RELATED TO ALL CASES

 

 

STIPULATION OF SETTLEMENT

It is hereby Stipulated and Agreed, by and between Plaintiffs and Settlors (as
those terms are hereinafter defined), that all claims set forth in the Pending
Actions are settled, compromised and dismissed on the merits and with prejudice
as to the Settlors on the terms and conditions set forth in this Stipulation of
Settlement (hereinafter “Agreement” or “Settlement Agreement”), subject to the
approval of the Court.

 

I. DEFINITIONS

As used in this Agreement and the attached exhibits (which are an integral part
of this Agreement and are incorporated in their entirety by reference), the
following terms have the following meanings, unless a section or subsection of
this Agreement or its exhibits provides otherwise

A. “Agreement” or “Settlement Agreement” means this Stipulation of Settlement
and the attached exhibits.

 

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B. “Attorneys’ Fees and Expenses” means such funds as may be awarded to the PSC
by the Court, for distribution to the PSC and/or any Class Member’s attorney,
out of the Settlement Fund in connection with the MDL or any Pending Action.

C. “Claim” means a request for Class Benefits that is submitted by a Class
Member or his or her authorized representative to the Special Master in
accordance with Section VI herein.

D. “Claim Form” means the document attached hereto as Exhibit B.

E. “Claim Form Deadline” means the deadline set by the Court by which Claimants
are required to submit a Claim to the Special Master as provided in this
Agreement

F. “Claimant” is a Class Member, or the legal or authorized representative of a
Class Member, who submits a Claim to the Special Master.

G. “Claims Process” means the process and procedure for the submission,
evaluation and resolution of Claims, as more particularly described in Section
VI of this Agreement.

H. “Class” and “Class Members” means:

(a) All individuals who claim Damages and who are named as Plaintiffs in any and
all of the Pending Actions as of the time this class settlement is submitted for
Court approval at a Fairness Hearing; and

(b) All individuals not included in subparagraph (a), who claim to have:

(i) been exposed to formaldehyde in an EHU that (1) was Manufactured by any
Manufacturer; and (2) was provided by FEMA to persons displaced by Hurricanes
Katrina and/or Rita; and

 

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(ii) suffered or experienced, as of the date of the final Court approval of this
class settlement, any discomfort, illness, sickness (medical, psychological or
psychiatric), symptom, complaint, disability, or loss of any kind as a result of
such exposure.

I. “Class Benefits” or “Class Relief” means those monetary benefits to be given
to Entitled Class Members.

J. “Class Benefit Formula” means the formula, established by the Special Master
and approved by the Court, to establish payment amounts from the several
Settlement Funds, as appropriate, to all Entitled Class Members. The Special
Master shall submit the Class Benefit Formula to the Court for approval five
(5) days prior to the Fairness Hearing.

K. “Class Notice Package” means the notice package, as approved in form and
content by the PSC, the Settlors and the Court, and attached hereto as Exhibit
E, to be provided to potential Class Members as set forth in Section V herein.

L. “Class Representative” shall mean and refer to the those Class Members whose
names will be submitted to the Court for consideration as adequate
representatives of the Class and who will be designated by the Court to appear
on behalf of and to represent the Class in the Action pursuant to Rule 23 of the
Federal Rules of Civil Procedure. Named as provisional class representatives for
precertification purposes are those persons identified on Exhibit F attached
hereto.

M. “Court” means the United States District Court for the Eastern District of
Louisiana, New Orleans Division, Hon. Kurt D. Engelhardt presiding.

N. “Damages” means any and all elements of relief, remedies, or recovery of
whatsoever nature, whether now known or now unknown, existing now or arising in
the future, recognized by the law of any jurisdiction, including, but not
limited to money damages, past and

 

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future medical expenses, economic loss, property loss, compensatory, equitable,
punitive or exemplary damages, loss of past or future income and wage earnings
capacity, unpaid wages, past and future physical impairment and disability, loss
of enjoyment of life, past and future pain, suffering, and mental anguish, past
and future disfigurement, wrongful death, loss of past and future society,
companionship, and consortium, future loss of life, hearing loss, fear of
injury, fear of future injury, physical injury and disease of the head, heart,
chest, lungs, back, neck, hips, extremities, and all other parts of the body,
disease or other injury related to alleged exposure to formaldehyde, and harm
not yet known resulting from exposure to formaldehyde (including, but not
limited to sensory irritation of the eyes, nose, and throat; upper respiratory
tract pathology; pulmonary function; asthma and atopy; neurologic and behavioral
toxicity; reproductive and developmental toxicity; and immunological toxicity),
cancer of any type, classification, or nature, psychological injuries,
psychiatric and psychological disorders and syndromes, depression and anxiety,
lost wages, repatriation expenses, claim for transportation, court costs, and
any other types of damages cognizable under any law, whether now known or now
unknown or now manifested or not manifested.

O. “Disbursing Account” means and refers to the account to be established, upon
final approval by the Court, for disbursement of settlement proceeds.

P. “EHU” means Emergency Housing Unit, which is a travel trailer, park model
trailer or other recreational vehicle Manufactured or alleged to have been
Manufactured by a Manufacturer and that was provided by FEMA for use as
emergency housing for individuals after Hurricanes Katrina and Rita.

Q. “Entitled Class Member” means a Class Member whose Claim(s) has been adjudged
(1) timely, and (2) valid and payable by the Special Master based upon the
Claims Process set forth in Section VI herein.

 

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R. “Fairness Hearing” means the hearing at or after which the Court will make a
final decision whether to approve this Settlement Agreement as fair, reasonable
and adequate. The Parties will propose a date to the Court for this hearing.

S. “FEMA” means the Federal Emergency Management Agency.

T. “Final Order and Judgment” means the Court’s Order giving its final approval
to the settlement and this Agreement, and the judgment entered pursuant to that
Order, as contemplated in Section XII of this Agreement and attached as Exhibit
G hereto.

U. “Final Settlement Date” means the date on which the Final Order and Judgment
approving this Agreement becomes final. For purposes of this definition, the
Final Order and Judgment shall become final:

 

  (i) if no appeal is taken therefrom, ten days after the time to appeal
therefrom has expired;

 

  (ii) if any appeal is taken therefrom, ten days after the date on which all
appeals therefrom, including petitions for rehearing or reargument, petitions
for rehearing en banc and petitions for certiorari or any other form of review,
have been finally disposed of in a manner resulting in an affirmance of the
Final Order and Judgment; or

 

  (iii) on a date after entry of the Final Order and Judgment, which date
counsel for the Parties agree to in writing.

V. “Individual Settlement Sheet” means the individual sheets which are
collectively attached to this Settlement Agreement as Exhibit A and which have
been executed by each Settlement Group. Each Individual Settlement Sheet shall
contain: (1) the names of the settling Manufacturer(s) and/or their insurer(s);
(2) the names of the counsel for the Manufacturer(s) and/or Insurer(s); (3) the
Settlement Amount to be paid by that Settlement Group; and (4) any particular
provisions unique to Plaintiffs and/or that Settlement Group.

 

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W. “Lien Resolution Administrator” or “LRA” means the Garretson Firm Resolution
Group, Inc., appointed to perform certain functions as described in more detail
in Section XIV.

X. “Manufactured” means constructed or assembled an EHU and/or any component
parts thereof.

Y. “Manufacturer” means a Settlor that Manufactured an EHU.

Z. “MDL” means the Multi-District Litigation proceeding captioned “In Re FEMA
Trailer Formaldehyde Product Liability Litigation, MDL No. 1873 (E.D. of
Louisiana, New Orleans Division).

AA. “Opt-Out” means a request for exclusion from the Class as provided in
Section VII of this Settlement Agreement.

BB. “Opt-Out Deadline” means June 25, 2012, the final day by which a Class
Opt-Out must be received by the PSC to be valid.

CC. “Parties” means Plaintiffs and Settlors collectively and, where applicable,
their respective counsel. “Party” means a Plaintiff or a Settlor.

DD. “Pending Actions” shall mean and refer to all of the civil lawsuits, in
state or federal court, filed by putative Class Members against any of the
Settlors, whether or not such civil lawsuits have been transferred into , are
pending in, or have been remanded from the MDL. Exhibit H provides a list of all
currently known Pending Actions.

EE. “Plaintiff” or “Plaintiffs” means those Class Members listed on Exhibit F
and/or any other Class Members added to the Action as named plaintiffs, in their
individual and representative capacities.

FF. “Preliminary Approval Order” means the Order to be entered by the Court
concerning notice, administration and the Fairness Hearing, as contemplated in
Section IV of this Agreement.

 

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GG. “PSC” means Plaintiffs’ Steering Committee, comprised of the following
counsel appointed by the Court:

 

Gerald E. Meunier

Justin I. Woods

Gainsburgh, Benjamin, David, Meunier & Warshauer, LLC

2800 Energy Centre

1100 Poydras Street

New Orleans, LA 70163

Anthony G. Buzbee

Buzee Law Firm

600 Travis, Suite 7300

Houston, Texas 77002

Robert M. Becnel

Law Offices of Robert M. Becnel

425 W. Airline Highway, Suite B

Laplace, Louisiana 70068

Raul R. Bencomo

Bencomo & Associates

639 Loyola Avenue

New Orleans, Louisiana 70113

Frank J. D’Amico, Jr.

Law Offices of Frank D’Amico

622 Baronne Street

New Orleans, Louisiana 70113

Matthew B. Moreland

Becnel Law Firm, LLC

106 W. Seventh Street

Reserve, Louisiana 70084

Dennis C. Reich

Reich & Binstock

4265 San Felipe, Suite 1000

Houston, Texas 77027

Mikal C. Watts

Watts, Guerra & Craft

Bank of America Plaza, Suite 100

300 Convent Street

San Antonio, Texas 78205

Robert C. Hilliard

Hilliard Munoz Guerra, L.L.P.

719 S. Shoreline Boulevard

Suite 500

Corpus Christi, Texas 78401

 

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HH. “Publication Notice” means the notice published in accordance with the
Settlement Notice Plan.

II. “Release” means the release and waiver set forth in Section IX of this
Agreement.

JJ. “Released Claims” means any and all claims, existing now or arising in the
future, for any Damages, injunctive relief or other equitable relief against any
of the Released Parties that any Releasor has, or may have had, or may have in
the future that have been, or that could have been raised in any action,
including the Pending Actions, regardless of whether the claimed injuries and/or
damages are not yet known or manifested or whether such claim is known or
unknown, filed or unfiled, asserted or not asserted in any action, including the
Pending Actions, and regardless of the legal theory involved, including, but not
limited to, all of the claims set forth in Section IX herein.

KK. “Releasees” or “Released Parties” means the Settlors, including but not
limited to, all entities comprising each and every Settlement Group, and each of
their past, present and future parents (including intermediate and ultimate
parents), subsidiaries, predecessors, affiliates, manufacturing companies,
facilities and plants, successors and assigns, and each of their respective
past, present and future officers, directors, employees, general agents, agents,
representatives, attorneys, heirs, administrators, executors, insurers,
predecessors, successors and assigns, or any of them, including any person or
entity acting on their behalf or for their benefit or at the direction of any of
them.

LL. “Releasor” or “Releasors” means any Class Member who does not timely submit
an Opt-Out pursuant to Section VII herein, anyone representing that Class Member
or acting on his or her behalf or for his or her benefit, and those Class
Members’ agents, attorneys, predecessors, successors, insurers, administrators,
heirs, executors and assigns.

 

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MM. “Settlement Amount” shall mean and refer to the total amount to be paid by
each Settlement Group as reflected on each Settlement Group’s Individual
Settlement Sheet (Exhibit A), which amount will be deposited in the Registry of
the Court under this Settlement Agreement.

NN. “Settlement Fund” shall mean that portion of the Settlement Amount
(initially paid into the registry of the Court as the Settlement Amount by some
or all members of a Settlement Group) remaining at any time after addition of
all interest earned or accrued thereon, and deduction of any court-approved
disbursements.

OO. “Settlement Group” shall mean those Settlors listed on an Individual
Settlement Sheet.

PP. “Settlement Notice Plan” or “Notice Plan” means the comprehensive plan
approved in form and content by Class Counsel, Settlors’ Counsel and the Court,
to notify the Class of the proposed settlement of the Pending Actions, which
articulates the manner and forms of notice. A copy of the Settlement Notice Plan
proposed by the Parties for the Court’s approval is attached hereto as Exhibit
D.

QQ. “Settlor” means any of those entities (Manufacturers and their insurers)
identified on Individual Settlement Sheets which are attached hereto
collectively as Exhibit “A” and incorporated into this Settlement Agreement.

RR. Settlors’ Counsel means the lawyers who represent the Settlors, as indicated
on the Individual Settlement Sheets.

 

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SS. “Special Master” means any third-party agent or administrator who the PSC
and Settlors’ Counsel agree upon with the Court’s approval, and who the PSC then
retains, to help implement the terms of this Agreement.

 

II. INTRODUCTION AND STATUS OF LITIGATION

A. After the landfalls of Hurricanes Katrina and Rita, the homes of hundreds of
thousands of citizens of the United States who resided along the Gulf Coast were
rendered uninhabitable, leaving these citizens homeless. FEMA provided housing
for these citizens, in part by acquiring EHUs Manufactured by certain
Manufacturers.

B. Plaintiffs allege that they were exposed to hazardous levels of formaldehyde
in EHUs. The Settlors deny these allegations.

C. Substantial testing, discovery, document production, motion practice and
litigation have been completed in the MDL and the Pending Actions, such that the
parties hereto are in a reasonable position to assess the factual and legal
merits and weaknesses of their respective claims and defenses.

D. As of this date, the parties to the MDL have conducted three bellwether jury
trials to verdict, all of which have resulted in defense verdicts and have
awarded no money or benefits to the bellwether plaintiffs.

E Substantial time and effort have been expended by the parties and their
counsel in negotiating this Settlement Agreement and the settlement contemplated
herein.

F. As a result of the extensive litigation completed or in progress, as well as
the information at hand, the results of the bellwether trials to date, the
Plaintiffs and the Settlors in the Pending Actions conducted negotiations for a
global settlement of the Pending Actions, taking in account the following
considerations; (a) the merits of the complaints or the lack

 

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thereof; (b) the relative strengths and weaknesses of the Plaintiffs’ claims and
their respective positions vis-a-vis the issues of liability and damages;
(c) the time, expense and effort necessary to maintain the Pending Actions to
conclusion; (d) the possibilities of success weighed against the possibilities
of loss; (e) the range of potential judgment values, if any, that should be
awarded; (f) the legal complexities of the contested issues in the Pending
Actions, (h) the risks inherent in protracted litigation; (i) the magnitude of
benefits to be gained from immediate settlement in light of both the maximum
potential of a favorable outcome with the attendant expense and likelihood of an
unfavorable outcome; (j) the strong possibility of no recovery to any potential
Class Members whatsoever in light of the past results of the bellwether trials;
and (k) the fairness of benefits to or from an immediate settlement under all of
the foregoing considerations.

G. In the entering into this settlement, each of the Settlors has denied, and
continues to deny, any liability, wrongdoing or responsibility in connection
with the claims made in MDL, including but not limited to the Pending Actions,
and believes that such claims are without merit and that such claims are barred
in whole or in part. Each Settlor that is an insurer denies that any policies
issued by it provides coverage for the claims made in the MDL or Pending
Actions.

H. The PSC has evaluated the claims in the Pending Actions from a settlement
perspective, considering the nature and extent of the alleged injuries and the
alleged liability of the Released Parties, the results of the bellwether trials,
the costs of prosecuting claims in light of the risks of zero or limited
recovery.

I. In light of the foregoing, the consensus of the Parties to this Settlement
Agreement is that payment of the proposed Settlement Amount applicable to each
Settlement Group and the management thereof under the supervision of the Court
would more likely result in the greatest benefit to the potential Class Members
in the Pending Actions. Accordingly, as

 

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more fully described in Section IV below, the Parties to this Settlement
Agreement shall submit this Settlement Agreement and the exhibits attached
hereto to the Court for approval, pursuant to a Joint Motion for Preliminary
Approval of Proposed Settlement to be heard on the Court’s docket at a time to
be determined by the Court.

In addition, any settlement involving a bankrupt Manufacturer (and/or Insurer
whose alleged insured is bankrupt) shall be submitted to the Bankruptcy Court
where such Settlor or alleged insured’s bankruptcy case is pending for approval.
If the Bankruptcy Court does not approve the settlement as to that Manufacturer,
this agreement shall remain in full force and effect as to other Settlors and/or
Settlement Groups.

 

III. SETTLEMENT RELIEF

A. Special Master. The Parties shall jointly agree on and the Court shall
appoint a Special Master for this settlement. Pursuant to this Agreement, the
availability of Class Relief to a Class Member will be determined by the Special
Master’s evaluation of the Claim Form and other materials submitted by the
Claimant, as well as any additional materials that the Special Master may obtain
that are related to each Claim.

The fees of the Special Master shall be payable from the appropriate Settlement
Fund, subject to Court approval. In the event this Court does not give final
approval to this Settlement, the Special Master shall immediately stop any and
all activity on this case, and will not be paid any fees for activity taking
place thereafter, and the charges of the Special Master shall be borne equally
(50/50) between the PSC and the Settlement Groups, up to a maximum amount set
out in Section III (B) below (to be shared pro-rata by or on behalf of
individual Manufacturers) and any remaining charges above that maximum amount
shall be paid by the PSC, unless otherwise provided in a particular
Settlor’s/Settlement Group’s Memorandum of Understanding.

 

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B. Settlement Fund

Each Settlement Group shall pay the Settlement Amount reflected on each
Individual Settlement Sheet. Each such Settlement Amount after the addition of
any earned interest and the subtraction of Court-approved disbursements shall be
the Settlement Fund, for the settlement of all Released Claims pertaining to
that Settlement Group. There is no joint and several liability among the
Settlors or Settlement Groups for the payment of Settlement Amounts. Thus, each
Settlement Group is responsible for payment of only that Settlement Amount
reflected on its Individual Sheet (Exhibit A), in the respective shares agreed
to by members of that Settlement Group and no Settlement Group shall be
responsible for more than that Settlement Amount. Further, each Settlor is not
jointly and severally liable with other Settlors in the same Settlement Group
and is only responsible for the individual amounts listed in the Individual
Settlement Sheet and not for other amounts.

Any Class Representative’s Award shall be paid from the appropriate Settlement
Fund as determined by the Special Master, with such amount(s) submitted to the
Court prior to the Fairness Hearing for approval.

All attorneys’ fees for any PSC or non-PSC attorney, or any other attorney
representing a Class Member, shall be paid out of the appropriate Settlement
Fund and determined by the PSC, and shall be approved by the Court.

Any Settlement Group that has not deposited its Settlement Amount into the
registry of the Court prior to signing this Settlement Agreement, shall deposit
the Settlement Amount into the registry of the Court:

(a) as required by any agreement or Memorandum of Understanding applicable to
that Settlement Group; or

 

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(b) If no such agreements or Memoranda of Understanding apply, within thirty
(30) days of the Court’s order granting Preliminary Approval of this Settlement.

Upon final approval of the Settlement, a Disbursing Account shall be
established. The Parties agree that all funds deposited into the Court’s
registry shall be transferred to the establishing Disbursing Account and that
all expenses associated with the Disbursing Account shall be paid from the
global settlement fund.

This Settlement Agreement provides that certain fees and expenses will be
deducted from the appropriate Settlement Fund(s), such as attorneys’ fees,
notice costs, Special Master fees, all fees related to the Disbursing Account,
and others. There shall be a reserve established for all of the fees and
expenses listed in this Settlement Agreement that are to be deducted from the
appropriate Settlement Fund(s), and that reserve shall be 48% of the Settlement
Fund(s), globally and individually, such that the total of all of the fees and
expenses to be deducted from the Settlement Fund(s) shall not exceed 48% of each
Settlement Fund. That reserve does not include monies to be deducted from a
Class Benefit to an individual Class Member pursuant to section (XIV) (Medicare
Reporting and Lien Resolution) herein to satisfy a lien. To the extent that any
of these combined fees and expenses exceed 48% of an appropriate Settlement
Amount for any reason, the Claimant or Claimant’s counsel shall be responsible
for the overage. Settlors shall in no way be responsible or liable for any such
overage.

The Special Master and/or plaintiffs’ counsel shall provide each Settlement
Group with a per plaintiff allocation of that Settlement Group’s Settlement
Amount and all amounts deducted therefrom.

In the event this Court does not give final approval to this Settlement, the
entire Settlement Amount for each Settlement Group shall be returned to that
Settlement Group within five (5) days of any such Court order denying final
approval of the Settlement, after deducting

 

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the amount needed to pay one-half of the unpaid (1) costs of class notice, and
(2) charges of the Special Master, subject to the $35,000 pro-rata limitation
for the Settlement Groups provided above, unless a particular Settlor’s
Memorandum of Understand provides otherwise. Any remaining costs or charges
shall be paid by the PSC.

C. No Further Payment From Settlors.

The PSC and Settlors further expressly agree that, except for the payment of
their respective Settlement Amounts, and as set forth above in the event the
settlement is not Court-approved, under no circumstances whatsoever shall
Settlors be responsible for paying any monies, benefits, costs, administrative
costs, expense or attorneys fees in connection with this Settlement Agreement,
nor will Settlors be required to take any action or incur any liability or pay
any expense or be required to do any other thing, except as expressly provided
herein.

 

IV. REQUEST FOR PRELIMINARY APPROVAL.

A. The Parties shall submit this Settlement Agreement to the Court for
preliminary approval. This submission shall be made by means of a Joint Motion
for Preliminary Approval of Proposed Class Settlement signed by the PSC on
behalf of the Class and the Settlors, with an attached proposed form of
Preliminary Approval Order substantially in the form attached hereto as Exhibit
C.

B. Failure of the Court to issue the Preliminary Approval Order attached hereto
as Exhibit C shall be sufficient cause for the termination of this Settlement
Agreement, but only after a conference is held with the PSC, the Settlors, the
Court, and the Special Master to attempt to resolve those issues delaying or
preventing the Court’s approval. Thereafter, if no such resolution occurs,
written notification of termination shall be provided to the PSC and Settlors’
Counsel by any terminating Party. If certain other Settlors and the Class, as
represented by the

 

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PSC, individually and on behalf of the Class, wish to proceed with the
settlement after one or more Settlors have terminated this Agreement, they may
do so without objection by any terminating Settlor, by resubmitting to the Court
for preliminary approval a revised Settlement Agreement.

C. Pursuant to 28 U.S.C. 1715, the Parties shall provide the required notice(s)
and accompanying documents to the United States Attorney General and the
“appropriate state official” under the terms of that statute within 10 days of
the submission of the Preliminary Approval Order to the Court.

 

V. NOTICE TO THE CLASS

A. List of Potential Class Members. By April 27, 2012, the PSC will create, at
its own expense and only to the extent that such information is reasonably
available to the PSC, a List of Potential Class Members. The List of Potential
Class Members shall include: (1) any Class Member on whose behalf any member of
the PSC has filed a complaint in any court similar to the allegations made in
this Action; (2) any plaintiff in a Pending Action; (3) any Class Member who has
been a client of the PSC and who is known to the PSC to have
formaldehyde-related claims covered by this Settlement Agreement; and (4) any
Class Member whose identity (name and address) is otherwise known to the PSC.
The List of Potential Class Members shall include, if the information is
reasonably available to the PSC, the Class Member’s name and address, the
manufacturer(s) of the EHU(s) to which the Class member is matched; and if the
Class Member is known by the PSC to be represented by counsel, the Class
Member’s name, name of attorney representing that Class Member, and the
attorney’s address.

 

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B. First Class Mail and Publication Notice.

Subject to the Court’s Preliminary Approval Order and no later than May 11,
2012, the Special Master, at the PSC’s expense, shall send via First Class Mail,
a Class Notice Package, including a Claim Form, to each person (or that person’s
attorney, if known by the PSC), listed on the List of Potential Class Members.
The Class Notice Package will among other things inform Class Members of the
Settlement and the Class Benefits available. Subject to the Preliminary Approval
Order, the PSC will begin Publication Notice on the date set by the Court.

The Publication Notice shall inform Class Members that they may obtain a Class
Notice Package and Claim Form by any one of several methods including by calling
a toll-free number associated with notice. Publication Notice, as set forth in
the Settlement Notice Plan, shall constitute advertisements placed in newspapers
in Louisiana, Texas, Alabama and Mississippi. The Settlement Notice Plan, agreed
to by the PSC and Settlors’ Counsel, is attached hereto as Exhibit D. The Class
Notice Package, agreed to by the PSC and Settlors’ Counsel, is attached hereto
as Exhibit E. The written Publication Notice for the print media is attached as
Exhibit I.

C. Class Notice Package

The Special Master shall send a Class Notice Package, including a Claim Form, to
each Class Member or Claimant who requests such package from the PSC as a result
of receiving Publication Notice, within seven (7) business days after the PSC
receives the Class Member’s request, provided such request is made at least ten
(10) days prior to the Opt-Out Deadline. Furthermore, the Special Master will
employ other methods by which this Class Notice Package can be obtained easily,
including by downloading from a website and by toll free telephone request.

 

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D. Notice Costs.

All costs for Notice under this Settlement Agreement shall be initially paid by
the PSC, including but not limited to the costs for Publication Notice, and the
costs associated with producing and mailing the Class Notice Package and with
making the package available by the other means consistent with the Settlement
Notice Plan. The cost of all notice to the class will be ultimately paid from
the appropriate Settlement Fund(s), and thus, if the Court enters an order
giving final approval to the Settlement, the PSC shall be reimbursed by the
appropriate Settlement Fund(s) for its expenses incurred in executing the notice
provisions of this Settlement Agreement, prior to any disbursements of the
Settlement Fund(s) to Class Members. If the settlement is not approved, the
costs of notice shall be borne equally (50/50) between the PSC and the
Settlement Groups, up to a maximum amount set out in Section III (B) above (to
be shared pro-rata by or on behalf of individual Manufacturers) and any
remaining costs above that maximum amount shall be paid by the PSC, unless a
particular Settlor’s Memorandum of Understanding provides otherwise.

 

VI. CLAIM PROCESS

A. All administrative costs for this settlement are to be paid out of the
Settlement Fund(s), in the amounts and ratios determined by the Special Master.

B. The Special Master shall establish a Class Benefit Formula for payments by
the Special Master from the appropriate Settlement Fund(s) to all Entitled Class
Members. The Special Master shall submit that Class Benefit Formula to the Court
for approval five (5) days prior to the Fairness Hearing.

C. To submit a Claim, a Class Member must submit a Claim Form to the Special
Master, completed by or for the Claimant, according to the instructions
contained in the Claim

 

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Form. The Claim Form must be postmarked on or before the Claim Form Deadline or
will be rejected as untimely. A Class Member, though otherwise bound by any
judgments to be issued by the Court, including the Final Order and Judgment and
its release provisions, is not entitled to Class Relief if he/she submits a
Claim Form postmarked after the Claim Form Deadline, or, subject to the
provisions of sub-paragraphs D and E below, if the Claim Form submitted is not
complete. There shall be no appeal from the Special Master’s denial of Class
Benefits based on an untimely Claim Form. Within five (5) business days after
the Claim Form Deadline, the Special Master shall give the LRA a first list of
all Claimants who submitted timely Claim Forms complete with Class Member’s full
name, address, gender, date of birth and social security number.

D. Each Claim Form shall request proof that the Claimant suffered symptoms or
injuries as a result of exposure to formaldehyde in an EHU Manufactured by a
Manufacturer (and/or an alleged insured of a Manufacturer) and dates of such
exposure. Such proof must be received and approved by the Special Master within
ninety (90) days of the Claim Form Deadline. A Class Member, though otherwise
bound by any judgments to be issued by the court, including the Final Order and
Judgment and its release provisions, is not entitled to Class Relief if this
proof is not timely provided by that deadline, and the Special Master’s denial
of a Claim based on failure to timely provide this proof is not appealable.

E. As to each Claim Form it receives, the Special Master shall ascertain whether
the Claimant is an Entitled Class Member solely based on the Claim Form
submitted and any supporting documents attached thereto. The Special Master
shall determine whether a Claim Form is complete. No Claim Form shall be
adjudged complete by the Special Master if it does not accurately provide the
Class Member’s full name, address, gender, date of birth, and social security
number, Manufacturer and dates of exposure. If a Claim Form is incomplete, the

 

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Special Master has the discretion to seek additional information if needed from
the Claimant. The Special Master may seek the Court’s assistance in obtaining
any information needed to help complete a Claim Form. All Claim Forms, however,
should be complete as to an accurate full name of class member, address of class
member, gender, date of birth of Class Member, and social security number of
Class Member, Manufacturer and dates of exposure within thirty (30) days after
the Claim Form Deadline, and if Claimant has not provided such requested
information by that date, the Special Master shall deny the Claim as incomplete
and untimely. Within thirty-five (35) days after the Claim Form Deadline, the
Special Master shall give the LRA a second and final list of all Claimants who
submitted timely Claim Forms initially incomplete, but later complete with Class
Member’s full name, address, gender, date of birth and social security number.

F. The PSC shall provide the Special Master with copies of all Plaintiffs’ Fact
Sheets produced in this Action by the Claim Form Deadline. For those Class
Members for whom the PSC provides the Special Master with a copy of his or her
Plaintiff’s Fact Sheet, such Plaintiff’s Fact Sheet shall qualify as a submitted
and timely Claim Form, provided that it contains (1) the Class Member’s full
name, address, gender, date of birth, social security number, Manufacturer and
dates of exposure, or provided that such information is given to the Special
Master within thirty (30) days after the Claim Form Deadline; and (2) proof that
the Claimant suffered symptoms or injuries as a result of exposure to
formaldehyde in an EHU Manufactured by a Manufacturer, or provided that such
proof is given to the Special Master within ninety (90) days after the Claim
Form Deadline. All provisions relevant to Claim Forms herein apply to
Plaintiff’s Fact Sheets submitted by the PSC to the Special Master as Claim
Forms.

G. The Special Master shall notify a Claimant if he concludes that such Claim is
not the Claim of an Entitled Class Member. Actions and decisions of the Special
Master as to

 

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whether a Claimant is an Entitled Class Member, with the following exceptions,
may be appealed to the District Judge presiding over the Action, if such appeal
is filed within fourteen (14) days after the Special Master’s decision. The
District Judge’s decisions on appeal shall be final and non-appealable pursuant
to the terms of this Settlement Agreement. The costs of any appeal shall be paid
by the appropriate Settlement Funds. The following decisions of the Special
Master are not appealable: (1) denial of a Claim based on the Claim Form not
being postmarked on or before the Claim Form Deadline; (2) denial of the Claim
based on a Claimant’s failure to accurately and timely provide the Class
Member’s full name, address, gender, date of birth, and social security number,
Manufacturer and dates of exposure, within thirty days after the Claim Form
Deadline; and (3) denial of a Claim Form based on the Claimant’s failure to
timely provide proof that the Class Member was exposed in an EHU Manufactured by
a Manufacturer.

H. No payments shall be made by the Special Master on any Claim until after
(1) the Final Settlement Date; (2) the Settlors have received a Formal Repayment
Agreement, or similar document showing satisfaction and discharge of any
statutory claim to any Class Member’s Class Relief or any portion thereof, by
all relevant governmental authorities, including Medicare, any relevant state
Medicaid agency, TRICARE, the Veteran’s Administration, and Indian Health
Services; and (3) the Special Master receives a release agreement signed by each
Claimant and/or Class Representative. The Special Master shall have authority to
re-allocate settlement funds in all cases where the Claimant fails to claim or
collect an allocation made through the Special Master’s protocol.

I. The Special Master shall provide to the Settlors (a) a list of the Claimants
approved for payment, (b) a copy of each release agreement signed by any
Claimant and/or Class Representative, and (c) a list of the amounts each
Claimant approved for payment to receive from the appropriate Settlement Fund.

 

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VII. OPT-OUTS

A. Any potential Class Member who wishes to be excluded from the Class must mail
a written request for exclusion to the PSC, known as an “Opt-Out,” at the
address provided in the Class Notice, with a mandatory statement as to which
Settlement Group the Class Member has claims against. The Opt-Out must state the
following to be valid: (i) identify the Class Member’s name, address and phone
number, (ii) identify which Settlement Group (and/or alleged insured) the Class
Member has claims against, and (iii) state that the Class Member wishes to be
excluded from the Class. The request for exclusion must be received by the PSC
by the Opt-Out Deadline. The PSC’s decision as to whether a request for
exclusion is or is not timely and received by the Opt-Out Deadline is final and
binding. A list reflecting all timely requests for exclusion, identifying the
person requesting exclusion and the Settlement Group the Class Member has claims
against, shall be assembled by the PSC and filed with the Court at or before the
Fairness Hearing. The PSC shall provide that list to Settlor’s Counsel no later
than twenty-one (21) days before the Fairness Hearing.

B. Any potential Class Member who is not excluded by the filing of a timely
written request for exclusion by the Opt-Out Deadline and/or who does not
provide the statement as to which Settlement Group the Class Member has claims
against shall be bound by all subsequent proceedings, orders and judgment in
this Action, even if he or she has pending, or subsequently initiates,
litigation, arbitration or any other proceeding against the Settlement Group for
any of the Released Claims.

C. If the PSC receives any Opt-Outs identified for any particular Settlement
Group, this Settlement Agreement is voidable at the discretion of that
Settlement Group. Such decision to void the Settlement Agreement must be made
within fourteen (14) days after the Settlement Group(s) is provided with the
list of exclusions/Out-Outs described in Section VII (A) above.

 

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Should any Settlement Group decide to void the Settlement Agreement pursuant to
this paragraph, the Settlement Agreement shall remain in force as to all the
remaining Settlement Groups unless any of those Settlement Groups agree with the
plaintiffs that the agreement is void and unenforceable as to that particular
Settlement Group.

If the PSC receives any Opt-Outs for a particular Settlement Group and fewer
than all of the Settlors in the Settlement Group seek to void the settlement,
the agreement is void as to that individual Settlor only and remains in effect
as to the remaining Settlors in that Settlors Group. Such decision to void the
Settlement Agreement must be made within fourteen (14) days after Settlement
Group(s) is provided with the list of exclusions/Opt-outs described in Section
VII (A) above, and written notice to the other Settlors in the Settlement Group
of the Settlors intention to void the Settlement Agreement as to that Settlor
must be given to the remaining Settlors at least five (5) days prior to giving
notice to the PSC and/or Court.

 

VIII. OBJECTIONS TO SETTLEMENT

A. Any Class Member who has not filed a timely written request for exclusion and
who wishes to object to the fairness, reasonableness or adequacy of this
Agreement or the proposed settlement, must deliver to the Court Clerk, and to
Gerald Meunier and Ryan E. Johnson at the addresses provided in Section (I)(Q)
and (I)(MM) herein, a written objection which references this Action and
contains: (i) the name, address, and telephone number of the Class Member,
(ii) a statement of each objection being made, (iii) a detailed description of
the legal authorities underlying each such objection, (iv) a statement of
whether the objector intends to appear at the Fairness Hearing, (v) a list of
witnesses whom the objector may call by live testimony, oral deposition
testimony or affidavit during the Fairness Hearing, (vi) a description of the
testimony to be offered, and (vii) a list of the exhibits which the objector may
offer during the Fairness Hearing, along with copies of those exhibits. Such
written objection must be

 

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received by the Court Clerk, Gerald Meunier and Ryan E. Johnson by July 13,,
2012, or the Class Member shall be forever barred from separately objecting to
the Class, separately challenging the Class or in any way collaterally attacking
the Class and/or this Settlement.

B. The Special Master must be notified within two (2) days of any objection
properly mailed. The Special Master shall respond in writing to any timely filed
written objection and shall schedule a hearing to try to resolve the objection.
Any person filing the objection must appear in person at the hearing with and
scheduled by the Special Master prior to the Fairness Hearing, at the date,
time, and place set by the Special Master, and then, if the objection is not
resolved, the objector must appear in person at the Fairness Hearing. Any
objections which are not resolved in the hearing before the Special Master will
be considered by the Court at the time of the Fairness Hearing. The objector may
hire his or her individual counsel, hired at the objector’s expense, to appear
with the objector at the Special Master’s hearing and/or the Fairness Hearing.

C. The Court, within its discretion and at the request of the PSC or Settlors’
Counsel, may order the deposition prior to the Fairness Hearing of any Class
Member (and any witness identified in the written objection) who has not filed a
timely written request for exclusion and objects to the fairness, reasonableness
or adequacy of this Agreement or the proposed settlement.

D. If a Class Member hires an attorney to represent him or her, the attorney
must: (i) file a notice of appearance with the Clerk of Court, and (ii) deliver
to Gerald Meunier and Ryan E. Johnson, at the addresses provided in Section
(I)(Q) and (I)(MM) herein, a copy of the same, and (iii) otherwise comply with
any order of the Court regarding depositions of objecting Class Members. The
notice of appearance must be received by the Clerk of Court, Gerald Meunier and
Ryan E. Johnson by the date set by the Court, or the attorney will not be
allowed to appear at the Fairness Hearing.

 

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E. Any Class Member who files and serves a written objection meeting the
requirements set forth herein, may appear at the Fairness Hearing, either in
person or through personal counsel hired at the Class Member’s expense, to
object to the fairness, reasonableness or adequacy of this Agreement or the
proposed settlement. Class Members or their attorneys intending to make an
appearance at the Fairness Hearing must deliver to Gerald Meunier at the address
provided in Section HH above, and to Ryan E. Johnson at Jones Walker, 8555
United Plaza Blvd, 5th Floor, Baton Rouge, LA 70809, a notice of intention to
appear. Such notice of intention to appear must be received by the Court, Gerald
Meunier and Ryan E. Johnson, by July 13, 2012. The Court, within its discretion
and at the request of the PSC or Settlors’ Counsel, may order the deposition
prior to the Fairness Hearing of any Class Member (and any witness identified in
the written objection) who has not filed a timely written request for exclusion
and who wishes to appear (either in person or through personal counsel) and
object to the fairness, reasonableness or adequacy of this Agreement or the
proposed settlement.

F. No objection shall be heard by the Court that does not comply with the
requirements of this Section, that is not timely filed with the Court, that is
not served on Gerald Meunier and Ryan E. Johnson and filed with the Court at the
addresses provided in Section (I)(Q) and (I)(MM) herein, or when the objecting
Class Member (or his/her witness) has failed to appear and sit for such
depositions as ordered by the Court. Any Class Member who fails to comply with
the orders of the Court or provisions of this Section shall waive and forfeit
any and all rights he or she may have to appear separately and/or object, and
shall be bound by all the terms of this Agreement and by all proceedings, orders
and judgments in this Action.

G. The Court, within its discretion, may exercise its right to deem any
objection as frivolous and award appropriate costs and fees to the PSC and/or
Settlors’ counsel.

 

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IX. RELEASE AND WAIVER

A. Release and Waiver

1. In return for the consideration provided in the Agreement, the Plaintiffs and
all other Class Members, on their behalf and on behalf of all other Releasors,
shall release, acquit and forever discharge the Releasees from the Released
Claims, including but not limited to any and all past, present and future causes
of action, claims, damages (including but not limited to compensatory damages,
punitive damages, or damages from wrongful death), or any other Damages, awards,
equitable, legal and administrative relief, interest, demands or rights that are
based upon, related to, or connected with, directly or indirectly, in whole or
in part (1) the Released Claims; or (2) the allegations, facts, subjects or
issues that were, could have been, may be or could be set forth or raised in any
action or in any Pending Action, or (3) exposure to formaldehyde in any EHU
Manufactured by a Manufacturer.

2. Plaintiffs and all other Class Members, on their own behalf and on behalf of
all other Releasors agree, covenant and acknowledge that they shall not now or
hereafter initiate, participate in, maintain, or otherwise bring any claim or
cause of action, either directly or indirectly, derivatively, on their own
behalf, or on behalf of the Class or the general public, or any other person or
entity, against the Releasees based on allegations that are based upon or
related to, directly or indirectly, in whole or in part: (1) the Released
Claims; (2) the allegations, facts, subjects or issues that have been, could
have been, may be or could be set forth or raised in any Pending Action; or
(3) exposure to formaldehyde in any EHU.

3. Plaintiffs and all other Class Members and all the other Releasors, and
anyone acting on their behalf or for their benefit, without limitation, are
precluded and estopped from bringing any claim or cause of action in the future,
related to in any way, directly or indirectly, in whole or in part: (1) the
Released Claims, (2) the allegations, facts, subjects or issues that have been,
could have been, may be or could be set forth or raised in any Pending Action,
or (3) exposure to formaldehyde in any EHU.

 

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4. Plaintiffs and the Class Members, on their behalf and on behalf of all other
Releasors, acknowledge that they are releasing both known and unknown and
suspected and unsuspected claims and causes of action, and are aware that they
may hereafter discover legal or equitable claims or remedies or injuries or
damages presently unknown or unsuspected or unmanifested (including but not
limited to personal injury claims), or facts in addition to or different from
those which they now know or believe to be true with respect to the allegations
and subject matters in the complaint or other filings in any Pending Actions.
Nevertheless, it is the intention of Plaintiffs and the Class Members to fully,
finally and forever settle and release all such matters, and all claims and
causes of action relating thereto, which exist, hereafter may exist, or might
have existed (whether or not previously or currently asserted in any Pending
Action).

5. Plaintiffs and the Class Members, on their behalf and on behalf of all other
Releasors, hereby expressly acknowledge certain principles of law applicable in
some states provided that a general release does not extend to claims (including
claims related to unknown or future injuries) that a person 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 may have materially affected his or her settlement with
the Released Parties. Notwithstanding such principles of law (statute,
regulation, or common law) that may apply, Plaintiffs and the Class Members
hereby agree and acknowledge that any such claims (including claims related to
unknown or future injuries) are hereby knowingly and voluntarily released,
waived and relinquished by Plaintiffs and the Class Members, and Plaintiffs and
the Class Members agree and acknowledge that this provision is an essential term
of the Agreement and this Release. Plaintiffs, the Class Members, and the PSC

 

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warrant and represent that they have specifically contemplated and bargained for
the waiver and relinquishment of the claims (including claims related to unknown
or future injuries) referenced in this Agreement, including claims that they may
not know or suspect to exist at this time and that, if known, may have
materially affected this settlement. Plaintiffs, the Class Members, and the PSC
also warrant and represent that this Agreement, including the referenced waiver
and relinquishment is fair, reasonable, and is being made knowingly,
voluntarily, and with all information necessary for the waiver and
relinquishment.

6. Plaintiff and Class Members, on their behalf and on behalf of all other
Releasors, further agree that no third party, including but not limited to any
private attorney general or Cal. Bus. and Prof. Code § 17200 Plaintiff, shall
bring any claims released herein on their behalf.

B. The Parties will seek and obtain from the Court a Final Order and Judgment as
further described below in Section XII. The Final Order and Judgment shall,
among other things: (i) approve this Settlement Agreement as fair, reasonable
and adequate, (ii) dismiss all claims against the Released Parties in the MDL
and any Pending Actions, with prejudice and on the merits; and (iii) incorporate
the terms of the Release as written herein.

 

X. ATTORNEYS’ FEES AND EXPENSES

All attorneys’ fees and expenses related to the MDL and any Pending Action shall
be paid out of the appropriate Settlement Fund, with prior approval by the
Court.

 

XI. FAIRNESS HEARING

If the Court enters the Preliminary Approval Order, the Parties shall proceed
with due diligence to conduct the Fairness Hearing as ordered by the Court. At
such Fairness Hearing, the

 

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Parties shall present such evidence as sufficient to justify the Court’s
certification of the Class. Further, at such hearing, the Settlors shall not
object to (a) the reasonable presentation of evidence in support of the
certification of the Class for settlement purposes only or (b) the certification
of the Class for settlement purposes only. However, the parties acknowledge and
agree, and shall stipulate to the Court at the Fairness Hearing, that (a) the
Class is being certified for settlement purposes only pursuant to the Settlement
Agreement, and (b) the Released Parties reserve the right to object to class
certification de novo in the event this Agreement is terminated for any reason.

At the Fairness Hearing the Court shall, inter alia, (a) determine whether the
Class should be certified, and (b) if the Court determines that the Class is
capable of certification under Rule 23 of the Federal Rules of Civil Procedure,
as requested by the parties, (i) consider any properly filed objections to the
proposed settlement, (ii) determine whether the settlement set forth in the
Settlement Agreement is fair, reasonable and adequate and entered into in good
faith and without collusion and should be approved, and (iii) if appropriate,
contemporaneously certify the Class and dismiss the MDL and all Pending Actions
on the merits with prejudice and with each party to bear its own costs, except
as provided in this Settlement Agreement.

 

XII. FINAL APPROVAL AND FINAL ORDER AND JUDGMENT

Prior to entering the Final Order and Judgment, the Court shall enter any order
necessary to transfer any Pending Action that is not already part of the Action
and/or MDL to the MDL.

The Settlement Agreement is subject to and completely conditional upon (a) the
issuance by the Court and subsequent entry, following the Fairness Hearing, of
the Final Order and Judgment certifying the Class and granting final approval of
the Settlement Agreement in accordance with Rule 23(e) of the Federal Rules of
Civil Procedure, and (b) such Final Order

 

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and Judgment becoming final as of the Final Settlement Date. The Final Order and
Judgment shall be substantially in the form attached hereto as Exhibit G or in a
form mutually agreeable to the PSC and Settlors. The Parties shall take all
reasonable and necessary actions to obtain the Final Order and Judgment and to
have it made final, as promptly as practicable.

Within five (5) days of the Court entering a Final Order and Judgment in this
case, the PSC shall dismiss the MDL and all Pending Actions with prejudice, as
to the Released Parties.

In the event that any appeal is filed of the Final Order and Judgment, all
remaining deadlines set forth herein shall be stayed, and all activity of the
Special Master and the LRA shall be stayed, until the Final Settlement Date.

 

XIII. INDEMNIFICATION

To the extent of each Class Member’s individual net recovery and the extent the
claim described in this section arises out of the claim of the Class Member,
each Class Member shall defend, indemnify, and hold harmless the Released
Parties from and against: (a) any and all past, present of future claims,
demands, suits, causes of actions, rights of action, liabilities, liens
privileges, or judgment of any kind whatsoever (including all expenses, costs
and attorneys fee expenses related thereto) by, on behalf of, through, or
deriving solely from the claims of that Class Member, or by, on behalf of,
through, or deriving from his, her, or its heirs, executors, representatives,
attorneys or former attorneys, successor, employers, insurers, employers’
insurers, health insurers, health care providers, assignee, subrogees,
predecessors in interest, Medicare or Medicaid, TRICARE, the Veteran’s
Administration, or Indian Health Services, successors in interest, beneficiaries
or survivors related to the Released Claims; and (b) any claims for
Contribution, Indemnity, and/or Subrogation, whether arising under tort,
contract or otherwise, related to or connected in any way with the Released
Claims of that Class Member.

 

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The indemnity and defense obligation in this Section shall include any and all
claims, demands, suits, causes of action, rights of action, liabilities, liens
or judgment of any kind whatsoever (including any claims of the Released Parties
for reasonable attorneys’ fees and costs) related, directly or indirectly, to
the disbursement of or from, or the failure to make disbursement of or from, the
appropriate Settlement Fund(s) with respect to the Class Member. To the extent
that claims for wrongful death or any other claims of any Class Member have not
been released effectively, that Class Member binds himself or herself, and his
or her succession or estate, executors, heirs, successors, beneficiaries,
assignees, and subrogees, to defend, protect, indemnify, and hold harmless the
Released Parties from and against any and all claims, demands, suits,
liabilities, liens judgments, rights of action, or causes of action of any kind
whatsoever related to the Released Claims, whether arising under tort, contract
or otherwise, brought by any person, succession, or estate for the wrongful
death or any other claims of that Class Member. This defense and indemnity
obligation is intended to apply to any and all claims for wrongful death,
whether arising under Louisiana law (including Louisiana Civil Code art, 2315.2)
or law of any other state, and whether presently existing or in existence at the
time of the death of the Class Member. Anything contained in this Settlement
Agreement to the contrary notwithstanding, a Class Member’s obligation to
defend, indemnify, and hold harmless the Released Parties from claims for
wrongful death of such Class Member shall be limited to that Class Member’s
individual net recovery.

 

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XIV. MEDICARE REPORTING AND LIEN RESOLUTION

The Parties agree to the following process for resolving possible statutory and
other claims to Class Relief by governmental authorities, making a good faith
effort to adequately protect the interests of Medicare and other governmental
authorities:

A. Appointment of Lien Resolution Administrator. The PSC will hire The Garretson
Firm Resolution Group, Inc. as the LRA to perform certain functions pursuant to
this Section XIV in connection with reimbursement claims that may be asserted by
federal Medicare (Part A and B) (“Medicare”), Medicaid, and certain other
governmental health care programs with statutory reimbursement or subrogation
rights, limited to TRICARE, VA, and Indian Health Services benefits
(hereinafter, collectively referred to as “Governmental Authority Third Party
Payer/Providers”). The LRA shall not be responsible for identifying or resolving
any other liens including, without limitation, liens by any other third-party
payers, subrogation claims, liens or other rights to payment relating to medical
treatment or lost wages, or any liens based on any legal expenses, bills or
costs that have been or may be asserted by any healthcare provider, employer,
insurer, including any coverage offered through private insurance companies
intended to supplement or replace any plan of a Governmental Authorities Third
Party Payer/Provider (including but not limited to Federal Employees Health
Benefit (FEHB) plans such as Blue Cross Federal, or Blue 365), or any other
person or entity with such reimbursement rights (“Other Liens”). The LRA’s fees
and expenses shall be paid by the PSC, with later reimbursement from the
appropriate Settlement Fund after the Court has entered final approval of this
Settlement.

B. Any Class Member making a Claim must identify Governmental Authority Third
Party Payer/Provider Reimbursement Obligations to Lien Resolution
Administrator. Each Claimant shall identify, directly, or through counsel, to
the LRA all Governmental Authority Third Party Payers/Providers known to them to
hold or assert a statutory reimbursement right with respect to any individual
settlement payment (and/or the right to receive such individual settlement
payment), through procedures and protocols to be established by the
LRA. Claimants and their counsel must cooperate with the procedures and
protocols established by the LRA.

 

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C. LRA shall resolve Governmental Authority Third Party Tort Recovery Claims and
Liens. According to the LRA’s procedures and protocols, the LRA shall resolve
all conditional payment reimbursement rights that have been or may be asserted
by Medicare within the meaning of the Medicare Secondary Payer statute (42
U.S.C. §1395y), and all payment reimbursement rights made by state Medicaid
agencies, as appropriate, and any other federal reimbursement right asserted by
TRICARE, Veteran’s Administration or Indian Health Services based upon the
provision of medical care or treatment provided to the Class Member on whose
behalf a Claim is filed; provided however, that nothing herein is intended to
create a right of reimbursement where none would otherwise exist under
applicable state or federal tort recovery statutes. LRA shall provide a copy of
its reporting form to Settlors through Settlors’ Counsel.

D. LRA shall identify amounts necessary to resolve Governmental Authority Third
Party Tort Recovery Claims and Liens. Within ninety (90) days after the LRA
receives the first list of complete Claim Forms from the Special Master pursuant
to Section VI herein, the LRA shall, as to each Class Member on that list,
certify to Settlors whether: (1) any statutory claim is being asserted under
federal laws by the Centers for Medicare and Medicaid Services (“CMS”) for
federal Medicare (Parts A and B); (2) any statutory lien is being asserted under
state laws by the respective state Medicaid agency which paid for a Class
Member’s injury-related medical expenses; and/or (3) any other federal
reimbursement right is being asserted under any of TRICARE, VA or Indian Health
Services, where any such claim and/or lien is determined to exist. Within ninety
(90) days after the LRA receives the second list of complete Claim Forms from
the Special Master pursuant to Section VI herein, the LRA shall, as to each
Class Member on that second list, certify to Settlors whether: (1) any statutory
claim is being asserted under federal laws by the Centers for Medicare and
Medicaid Services (“CMS”) for federal Medicare

 

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(Parts A and B); (2) any statutory lien is being asserted under state laws by
the respective state Medicaid agency which paid for a Class Member’s
injury-related medical expenses; and/or (3) any other federal reimbursement
right is being asserted under any of TRICARE, VA or Indian Health Services,
where any such claim and/or lien is determined to exist. The LRA shall further
certify to Settlors for all Class Members on both the first and second lists
combined either: (1) the amount to resolve any and all such claims and/or liens
as established by the agreement of the LRA and CMS and the LRA and the other
respective federal or state agencies (“Final Statutory Lien Amount”); or (2) the
“holdback” amount agreed to by CMS and the respective federal or state agencies
under which such agencies have agreed to finally resolve their respective
statutory claims and/or liens (“Holdback Amount”). The Final Statutory Lien
Amount and/or the Holdback Amount, whichever is applied, shall be paid from
Class Benefits prior to the disbursement of any Class Benefits.

E. When Funds May Be Disbursed. The Special Master shall not disburse any
settlement monies to any Claimant until Settlors have obtained from all
Governmental Authority Third Party Payer/Providers satisfactory proof of
satisfaction and discharge of all statutory Medicare claims asserted as to any
Entitled Class Member, any statutory liens asserted by a state Medicaid agency
or agencies as to any Entitled Class Member, and any statutory reimbursement or
subrogation right asserted by any other Governmental Third Party Payer/Provider,
as set forth in Section XIV (G), along with certification from the LRA as to the
same.

F. Compliance with MMSEA. The LRA’s duties include not only ensuring compliance
with all relevant provisions of the Medicare Secondary Payer Act (42 U.S.C.
§1395y) as discussed above, but also include ensuring compliance under
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (42 U.S.C.
§1395y(b)(8))(MMSEA)), which poses certain reporting requirements for certain
entities involved in settling personal

 

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injury claims involving a Medicare beneficiary. The LRA shall obtain and provide
information satisfactory to Settlors, from the Centers for Medicare and Medicaid
Services (“CMS”) central offices, that all of Settlors’ MMSEA reporting
obligations, to the extent applicable to Settlors, have been satisfied prior to
all associated deadlines and/or disbursement of proceeds to Medicare-entitled
Claimants as agreed by the Parties.

G. Proof of Satisfaction of Third Party Payments to Settlors. Settlors shall be
entitled to proof of satisfaction and discharge of any or all such statutory
Medicare claims asserted by CMS in relation to any particular Claimant, any
statutory liens asserted by a state Medicaid agency or agencies, and any
statutory reimbursement or subrogation right asserted by any other Governmental
Third Party Payer/Provider, including a copy of the actual closure documentation
that the LRA receives from an Governmental Authority Third Party Payer/Provider
The LRA shall provide to Settlors that proof at the earliest time possible.

H. Indemnity from LRA. The PSC shall seek to secure a mutually agreeable
indemnity agreement from the LRA in favor of the Settlors. Unless the parties
agree otherwise, this Settlement Agreement shall be conditioned upon the
execution of such an indemnity agreement.

I. Access to Information. Settlors shall have access to individual plaintiff
information provided to Garretson as LRA. Plaintiffs’ counsel will provide
Settlors initially with the following personal information for each known
claimant: (1) full legal name; (2) date of birth; (3) full social security
number; and (4) sex. Whenever it may be determined by anyone that reporting to
CMS is required with regard to any claimant, plaintiffs’ counsel will further
supply to Settlors any and all additional personal information regarding each
such claimant that may be required by Settlors to enable them to fulfill all
Medicare Secondary Payer Mandatory Reporting requirements. This information will
be used by Settlors only for purposes of compliance with

 

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Medicare Secondary Payer Reporting Requirements. Alternatively, if Garretson can
present Settlors with a written confirmed waiver of Settlors’ Medicare Secondary
Reporting Requirements as to any one or more claimants, issued by CMS prior to
disbursement of any Class Benefits, then provision of the above-described
personal information will not be necessary as to such claimants.

 

XV. PSC REPRESENTATION

A. The PSC covenants, represents and warrants to the Settlors that:

1. Prior to the Fairness Hearing, the PSC shall have explained the terms and
effect of this Settlement Agreement to the Class Representatives and their
signatures shall have been obtained in support of this Settlement Agreement;
such signatures shall be filed into the record of the Action at the Fairness
Hearing.

2. The PSC has not and will not make any undisclosed payment or promise to any
Class Representative for the direct or indirect purpose of obtaining that Class
Representative’s consent to the Agreement.

3. No member of the PSC will represent any Class Member requesting exclusion
from the Class if to do so would constitute a violation of the Rules of
Professional Conduct.

4. The PSC and the Class Members are solely responsible for the payment of any
liens against the Class Benefits received. No Class Benefits will be disbursed
to any Class Member until all valid liens are paid.

5. The PSC represents that no Class Member has assigned any of his/her/its
rights of action herein to anyone else.

 

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B. Except as otherwise provided herein, without prior written approval of the
Court, the PSC will not use, distribute, give, sell, or transfer any materials
obtained from any one or more of the Settlors as a result of the MDL or the
Pending actions for use in any other litigation or purpose.

C. The PSC, the Class, and the Settlors shall use their best efforts to conclude
the settlement and obtain the Final Order and Judgment. The PSC, the Class, and
the Settlors agree that it is essential that this proposed settlement be
prosecuted to a successful conclusion in accordance with all applicable
provisions of law and the exercise of good faith on the part of the PSC, the
Class, and the Settlors. Inherent in the accomplishment of this mutual goal is
the understanding among the Parties that the PSC, the Class, and the Settlors
assume the mutual obligation to each other to assist and cooperate in the
effectuation of the settlement in accordance with all applicable legal
requirements. To that end, the PSC, the Class, and the Settlors commit to
affirmatively support the settlement in the event of appeal, to maintain the
integrity and goals of the settlement in all further proceedings in the Action,
and to take such action as may be legally proper to assure the jurisdiction of
the Court in this and all subsequent proceedings. The PSC, the Class, and the
Settlors agree to be bound by and to the terms of this settlement in any court
of competent jurisdiction to the same extent as they agree to be bound herein,
to which end the PSC, the Class, and the Settlors agree that the terms hereof
are contractual, binding and enforceable obligations and not merely a recital.
In furtherance of this Agreement, the PSC, the Class, and the Settlors agree to
take such action as may be appropriate to secure court approval of the terms of
this settlement in a court of competent jurisdiction.

D. The PSC further warrants and represents to the Settlors that it has the full
authority to enter into this Settlement Agreement on behalf of and bind the
Class and all of the Plaintiffs and their attorneys in the MDL and the Pending
Actions.

 

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XVI. STAY ORDERS

Simultaneously with the filing of this Settlement Agreement with the Court, the
Parties shall submit to the Court a joint motion for stay of the Pending Actions
signed by or on behalf of the Class, the PSC, and the Settlors, with a proposed
form of stay order attached thereto, pursuant to which stay order, the Court
shall enjoin and stay, during the pendency of the settlement proceedings
contemplated by this Agreement, the commencement and/or prosecution of any and
all Pending Actions or any other action by any Class Member or anyone on his or
her behalf against any of the Releasees asserting Released Claims, such stay and
injunction to remain effective during the pendency of such settlement
proceedings unless modified by further order of the Court. The Parties shall use
their best efforts to obtain this stay order.

 

XVII. ENTIRE AGREEMENT AND SEVERABILITY

The Settlement Agreement, including the Individual Settlement Sheets attached
hereto collectively as Exhibit “A,” together with the Memoranda of Understanding
executed by the individual Settlors and/or Settlement Groups, contain the entire
agreement between the Parties with respect to the subject matter hereof and,
except as specifically set forth herein or therein, supersedes and cancels all
previous agreements, negotiations, and commitments in writings between the
Parties hereto with respect to the subject matter hereof. This Settlement
Agreement may not be changed or modified in any manner unless in writing and
signed by a duly authorized officer of each Settlor, and a duly authorized
representative of the PSC. The terms of this Settlement Agreement may be amended
by agreement of the Parties and with approval of the Court without further
notice to the Class, if such changes are consistent with the Preliminary
Approval Order and do not limit the rights of Class Members. This Settlement
Agreement may be signed in multiple counterparts, each of which shall be deemed
to be an original and all of which shall be deemed to be one and the same
instrument.

 

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This Settlement Agreement shall be binding on the successors and assigns of the
Parties.

If any court of competent jurisdiction determines any portion of this Settlement
Agreement is unenforceable and/or void for any reason, that unenforceable
provision shall be severed and the remaining portions of this Settlement
Agreement will remain in full force, unless removing the remaining provision
materially alters the provisions of the Settlement Agreement. In that effect,
the entire Settlement Agreement will not be enforceable unless agreed to by the
Parties.

 

XVIII. NOTICE TO COUNSEL

Anytime that notice to or delivery of any document to Settlors’ Counsel or the
PSC is required as set forth in this Agreement, such notice and/or documentation
shall be mailed to Settlors’ Counsel at the addresses listed in on the
Individual Settlement Sheets for each Settlor and/or Settlement Group , and to
the PSC at the address listed in Section I(MM) (“PSC” definition) of this
Agreement, unless otherwise specified.

Agreed to this      day of April, 2012.

 

 

Gerald E. Meunier Gainsburgh, Benjamin, David, Meunier & Warshauer, LLC 2800
Energy Center 1100 Poydras St. New Orleans, LA 70163 On behalf of the PSC and
Plaintiffs/Class Members

 

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INDIVIDUAL SETTLEMENT SHEET

(EXHIBIT A to Stipulation of Settlement)

NAME OF SETTLOR:

SETTLOR’S COUNSEL:

SETTLEMENT AMOUNT:

OTHER APPLICABLE PROVISIONS:

 

 

 

 

Plaintiffs’ Counsel

  Date

 

 

 

Settlors’ Counsel

  Date

 

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INDIVIDUAL SETTLEMENT SHEET

(EXHIBIT A to Stipulation of Settlement)

NAME OF SETTLORS:

Thor Industries, Inc.

Citair, Inc.

Damon Motor Coach

DS Corp., d/b/a CrossRoads RV

Dutchmen Manufacturing, Inc.,

Four Winds International, Inc.

Keystone RV Company

Komfort Corp.

Thor Industries, Inc.

Thor California, Inc., a.k.a., MPV RV, Inc.

Chartis Specialty Insurance Company (formerly known as American International

Specialty Lines Insurance Company)

National Union Fire Insurance Company of Pittsburg, Pa.

SETTLOR’S COUNSEL:

James C. Percy

Ryan E. Johnson

Jones Walker

8555 United Plaza Blvd., Fifth Floor

Baton Rouge, Louisiana 70809

(Counsel for Citair, Inc., Damon Motor Coach, DS Corp, Dutchmen Manufacturing,
Inc.,

Four Winds International, Inc., Keystone RV Company, Komfort Corp., Thor
Industries,

Inc., Thor California, a/k/a MPV RV, Inc.)

Charles E. Leche

Deutsche, Kerrigan & Stiles, L.L.P.

755 Magazine Street

New Orleans, Louisiana 70130

(Counsel for Chartis Specialty Insurance Company and National Union Fire
Insurance

Company of Pittsburg, Pa.)

 

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SETTLEMENT AMOUNT:

$6,250,000

OTHER APPLICABLE PROVISIONS:

This is Settlement Agreement is subject to and incorporates the provisions of
the February 10, 2012 Memorandum of Understanding executed between the parties.

 

/s/ Justin I. Woods     4-13-12 Plaintiffs’ Counsel     Date

 

/s/ Ryan E. Johnson     4-13-12 Settlors’ Counsel     Date (Ryan E. Johnson)    

 

/s/ Charles E. Leche (with permission REJ)     4-13-12 Settlors’ Counsel    
Date (Charles E. Leche)    

 

2

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INDIVIDUAL SETTLEMENT SHEET

(EXHIBIT A to Stipulation of Settlement)

NAME OF SETTLORS: Heartland Recreational Vehicles, L.L.C. and its insurers, The

Burlington Insurance Company and Westchester Insurance Company.

SETTLOR’S COUNSEL: Thomas G. Buck, BLUE WILLIAMS, LLP

SETTLEMENT AMOUNT: $552,600.00

OTHER APPLICABLE PROVISIONS:

This is Settlement Agreement is subject to and incorporates the provisions of
the Memorandum of Understanding executed between the parties.

 

/s/ Justin I. Woods       4-13-2012 Plaintiffs’ Counsel       Date      

 

/s/ Thomas G. Buck       4-13-2012

Settlors’ Counsel

(Thomas G. Buck)

      Date

 

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