Exhibit 10.1
WAYNE S. KREGER, State Bar No. 154759
wkreger@maklawyers.com
PETER J. FARNESE, State Bar No. 251204
pfarnese@maklawyers.com
MILSTEIN, ADELMAN & KREGER, LLP
2800 Donald Douglas Loop North
Santa Monica, California 90405
Telephone: (310) 396-9600
Facsimile: (310) 396-9635
Attorneys for Plaintiffs,
Denise Wally, Lauren Fleischer and the Class
DANIEL J. HERLING (State Bar No. 103711)
Herling@khlaw.com
KELLER AND HECKMAN LLP
3 Embarcadero Center
Suite 450
San Francisco, CA 94111
Telephone: (415) 948-2820
Facsimile: (415) 948-2808
Attorneys for Defendant
CCA INDUSTRIES, INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES

     
DENISE WALLY, individually and on behalf of all others similarly situated,
  CASE NO. BC422833
 
 
Plaintiff,
  STIPULATION AND AGREEMENT OF SETTLEMENT
 
   
vs.
   
 
   
CCA INDUSTRIES, INC., et al.
   
 
   
Defendants.
   

STIPULATION AND AGREEMENT OF SETTLEMENT

 

 

--------------------------------------------------------------------------------

 

It is hereby stipulated and agreed by and between the undersigned Parties,
subject to the approval of the Court pursuant to California Rule of Court
Rule 3.769, that the settlement of this Action shall be effectuated pursuant to
the terms and conditions set forth in this Settlement Agreement.
ARTICLE I — PREAMBLE
1. WHEREAS Denise Wally (“Wally”) is the named plaintiffs in the above-captioned
action entitled Denise Wally, on behalf of herself and all others similarly
situated, Plaintiff, vs. CCA Industries, Inc, Defendant, Los Angeles County
Superior Court, No. BC422833 (“the Action”);
2. WHEREAS Lauren Fleischer (“Fleischer”) is the named claimant in a draft
complaint that has been shared with Defendant CCA Industries, Inc. (“CCA”), but
has not yet been filed in state court in New Jersey (the “New Jersey Dispute”);
3. WHEREAS CCA is the defendant in the Action and the putative defendant in the
New Jersey Dispute;
4. WHEREAS Wally alleges that she relied upon allegedly false and misleading
statements contained on the label and in advertisements for a certain CCA
product called “Mega-T Ultra” regarding ingredients contained in the product and
the ability of the product to promote weight loss, and that such statements
violate California consumer protections laws;
5. WHEREAS Fleischer alleges that she relied upon allegedly false and misleading
statements contained on the labels and in advertisements and marketing materials
for certain other “Mega-T” brand products regarding ingredients contained in the
products, and that such statements violate New Jersey consumer protection laws;
6. WHEREAS Wally seeks to recover monetary and equitable remedies on behalf of
herself and classes of similarly situated persons
7. WHEREAS Fleischer seeks to recover equitable remedies on behalf of herself
and classes of similarly situated persons;
8. WHEREAS the Parties have engaged in discovery and have had a full and fair
opportunity to evaluate the strengths and weaknesses of their respective
positions;
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 1 -

--------------------------------------------------------------------------------

 

9. WHEREAS CCA denies the allegations of the Action and the New Jersey Dispute,
denies all allegations of wrongdoing and of liability, and denies any causation
of harm or damage to the Settlement Classes;
10. WHEREAS CCA nevertheless has concluded that, in light of the costs, risks
and disruption of litigation, this Settlement is appropriate on the terms and
conditions set forth herein;
11. WHEREAS Wally and Fleischer believe that the claims asserted in their
actions are meritorious;
12. WHEREAS Wally and Fleischer nevertheless have concluded that, in light of
the costs, delay and risks of litigation of the matters in dispute, the risk
that the Court will not certify their claims as a class action, particularly in
complex class action proceedings, the risk of losing on the merits, and in the
desire to provide relief to the class sooner rather than later, this Settlement
is fair, reasonable, adequate, and in the best interests of the Settlement
Classes;
13. WHEREAS the performance of any act referenced in this Settlement Agreement,
or any other circumstance regarding the Parties’ agreement to settle, shall not
be considered an admission of liability or as an admission of any allegations
made in any claim or litigation, including this Action and the New Jersey
Dispute; and
14. WHEREAS the Parties hereto agree that this Settlement Agreement shall not be
deemed or construed to be an admission or evidence of any violation of any
federal or state statute, rule or regulation, principle of common law or equity,
or of any liability or wrongdoing whatsoever by CCA, or of the truth of any of
the Claims asserted in the Second Amended Complaint, any prior complaints in
this Action, or elsewhere;
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 2 -

--------------------------------------------------------------------------------

 

NOW THEREFORE, it is hereby stipulated and agreed that, in consideration of the
agreements, promises, and covenants set forth in this Settlement Agreement, and
subject to approval of the Court, the Action and the New Jersey Dispute shall be
fully and finally settled and dismissed with prejudice under the following terms
and conditions:
ARTICLE II — DEFINITIONS
As used in this Settlement Agreement and the related documents attached hereto
as exhibits, the terms set forth below shall have the meanings set forth below.
The singular includes the plural and vice versa.
1. “Aggregate Fees, Costs, and Expenses” means the aggregate attorneys’ fees and
costs, the costs of notice, the administrative expenses, and the incentive
awards.
2. “Action” means the civil action entitled Denise Wally, on behalf of herself
and all others similarly situated, Plaintiffs, vs. CCA Industries, Inc., et al.,
Defendants, Los Angeles County Superior Court Case No. BC422833.
3. “Class Counsel” means Wayne S. Kreger and Donald A. Beshada, and the law firm
of Milstein, Adelman & Kreger, LLP.
4. “Class-Related Releasing Parties” means all Settlement Class Members.
5. “Class Released Claims” means any and all actions, causes of action, claims,
demands, liabilities, obligations, fees, costs, sanctions, proceedings, and/or
rights of any nature and description whatsoever, including, without limitation,
violations of any state or federal statutes, rules or regulations, or principles
of common law, whether liquidated or unliquidated, known or unknown, in law or
in equity, whether or not concealed or hidden, that have been asserted in the
Action and the New Jersey Dispute through the date the Final Approval Order and
Judgment is entered. “Class Released Claims” also means any and all actions,
causes of action, claims, demands, liabilities, obligations, fees, costs,
sanctions, proceedings, and/or rights of any nature and description whatsoever,
including, without limitation, violations of any state or federal statutes,
rules or regulations, or principles of common law, whether liquidated or
unliquidated, known or unknown, in law or in equity, whether or not concealed or
hidden, that could have been asserted in the Action or the New Jersey Dispute
alleging that the marketing, labeling and/or advertising of its Mega-T Ultra,
Mega-T Plus, Mega-T Green Tea Dietary Supplement, Mega-T Dietary Supplement,
and/or Mega-T Effervescent products is or was false or misleading to consumers
through the date the Final Approval Order and Judgment is entered.
6. “Class Representatives” means Wally and Fleischer.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 3 -

--------------------------------------------------------------------------------

 

7. “Common Fund” means a fund in the amount of two million five hundred thousand
dollars ($2,500,000.00), to be funded by CCA as set forth herein. The Aggregate
Fees, Costs, and Expenses shall also be paid from the Common Fund. The Common
Fund represents the absolute, capped amount of CCA’s financial liability for the
entire settlement.
8. “Court” means the Superior Court of the State of California for the County of
Los Angeles.
9. “Effective Date” means the first date by which all of the following events
shall have occurred: (a) the Court has entered the Preliminary Approval Order
and (b) the Court has entered the Final Approval Order and Judgment.
10. “Escrow Account” means the Milstein, Adelman & Kreger Client Trust Account
in which the funds to be used to fully fund the Common Fund will be held by
Milstein, Adelman & Kreger, LLP, until after the Effective Date of this
Settlement Agreement, at which point the Common Fund will be funded in full from
the funds held in the Escrow Account.
11. “Fee and Cost Application” means that written motion or application by which
Wally, Fleischer and/or Class Counsel requests that the Court award attorneys’
fees, costs, expenses and incentive awards.
12. “Final” means that the Final Approved Order and Judgment has been entered on
the docket in the Action. Neither the pendency of the Fee and Cost Application,
nor any appeal pertaining solely to a decision on the Fee and Cost Application,
shall in any way delay or preclude the Final Approval Order and Judgment from
becoming Final.
13. “Final Approval Hearing” means the hearing scheduled to take place at least
sixty days after the date of entry of the Preliminary Approval Order at which
the Court shall: (a) determine whether to grant final approval to this
Settlement Agreement and to certify the Settlement Classes; (b) consider any
timely objections to this Settlement and all responses thereto; and (c) rule on
the Fee and Cost Application.
14. “Final Approval Order and Judgment” means the order, substantially in the
form of Exhibit B attached hereto, in which the Court grants final approval of
this Settlement Agreement, certifies the Settlement Classes, and authorizes the
entry of a final judgment and dismissal of the Action with prejudice.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 4 -

--------------------------------------------------------------------------------

 

15. “CCA” means CCA Industries, Inc.
16. “CCA-Related Released Parties” means (a) CCA; (b) CCA’s counsel; (c) CCA’s
past, present, and future direct and indirect owners, parents, subsidiaries, and
other corporate affiliates; (d) CCA’s successors and predecessors and their
past, present, and future direct and indirect owners, parents, subsidiaries, and
other corporate affiliates; (e) CCA’s retailers of the Mega-T Products and
(f) for each of the foregoing Persons, each of their past, present, or future
officers, directors, shareholders, owners, employees, representatives, agents,
principals, partners, members, administrators, legatees, executors, heirs,
estates, predecessors, successors, or assigns.
17. “CCA’s Counsel” means Keller and Heckman LLP.
18. “Mega T Ultra” means the CCA product that contains the brand name “Mega-T
Ultra” on the label, including all sizes, whether sold individually or in
multiple-unit packages.
19. “Mega T Plus” means the CCA product that contains the brand name “Mega-T
Plus” on the label, including all sizes, whether sold individually or in
multiple-unit packages.
20. “Mega-T Effervescent” means the CCA product that contains the brand name
“Mega-T Effervesent” on the label, including all sizes, whether sold
individually or in multiple-unit packages.
21. “Mega-T Green Tea Dietary Supplement” means the CCA product that contains
the brand name “Mega-T Green Tea Dietary Supplement” on the label, including
“with Hoodia”, “with Acai Berry”, “Caffeine Free”, “Packettes”, including all
sizes, whether sold individually or in multiple-unit packages.
22. “Mega-T Dietary Supplement” means the CCA product that contains the brand
name “Mega-T Dietary Supplement” on the label, including, “Green Tea”, “Green
Tea Water Weight Loss Pill”, “with Acai Berry”, including all sizes, whether
sold individually or in multiple-unit packages.
23. “Mega-T Products” means, collectively, Mega-T Ultra, Mega-T Plus, Mega-T
Effervescent, Mega-T Green Tea Dietary Supplement and Mega-T Dietary Supplement.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 5 -

--------------------------------------------------------------------------------

 

24. “New Jersey Dispute” means the action threatened by Fleischer against CCA in
New Jersey.
25. “Notice” shall mean Publication Notice.
26. “Parties” means Wally, Fleischer and CCA.
27. “Person” means any natural person, firm, corporation, unincorporated
association, partnership, or other form of legal entity or government body,
including its agents and representatives.
28. “Preliminary Approval Order” means the order, substantially in the form of
Exhibit A attached hereto, in which the Court grants its preliminary approval to
this Settlement Agreement and preliminarily certifies the Settlement Classes,
authorizes dissemination of Notice to the Settlement Classes, and appoints the
Settlement Administrator.
29. “Publication Notice” means the long-form and short-form notices,
substantially in the form of Exhibits D and E attached hereto. The long-form
Publication Notice will be published on the Internet at the settlement website,
envisioned to be www.megatsettlement.com, and the short-form Publication Notice
will be published in national print media and on the internet as set forth in
the Preliminary Approval Order, pursuant to California Rule of Court 3.771(b).
30. “Request for Exclusion” means a valid request for exclusion from a member of
the Class. To be valid, a request for exclusion must (a) be submitted by the
member of the Class; (b) be submitted to the Settlement Administrator and
postmarked by a date not later than 21 days before the Final Approval Hearing;
(c) contain the submitter’s name, address and telephone number; and (d)
otherwise comply with the instructions set forth in the Notice.
31. “Second Amended Complaint” means the Second Amended Complaint, a copy of
which is attached to this Settlement Agreement as Exhibit C, and which shall be
filed by Plaintiffs within seven (7) days of the Court’s entry of the
Preliminary Approval Order.
32. “Settlement Administrator” means Epiq Systems, Inc.
33. “Settlement Agreement,” “Settlement,” or “Agreement” means this Stipulation
and Agreement of Settlement, including the attached exhibits.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 6 -

--------------------------------------------------------------------------------

 

34. “Settlement Class” means all persons (1) who purchased for person
consumption, and not for re-sale, the Mega-T Ultra, Mega-T Plus, Mega-T
Effervescent, Mega-T Green Tea Dietary Supplement and/or Mega-T Dietary
Supplement in the United States from September 29, 2005, until [DATE OF
PRELIMINARY APPROVAL ORDER], except for the judge presiding over this matter.
35. “Settlement Class Member” means any Person within the Settlement Class who
does not submit a timely and valid Request for Exclusion.
36. “Valid Claim” means a claim for reimbursement submitted by a Settlement
Class Member that satisfies all the criteria to qualify for reimbursement
established by the Parties’ Counsel and the Claims Administrator.
ARTICLE III — SETTLEMENT CLASS RELIEF
In consideration of a full, complete, and final settlement of the Action,
dismissal of the Action with prejudice, and the Releases in Article VII below,
and subject to the Court’s approval, the Parties agree to the following relief:
1. Common Fund
Within ten (10) days of the date of entry of the Preliminary Approval Order, CCA
shall deposit two million five hundred thousand dollars ($2,500,000.00) into the
Milstein, Adelman & Kreger LLP Client Trust Account for the purpose of being
paid into the Common Fund on the Effective Date. In no event shall CCA’s
monetary liability under this Settlement Agreement exceed the amount of the
Common Fund.
2. Distribution of the Common Fund
The Aggregate Fees, Costs, and Expenses shall be paid from the Common Fund
consistent with the provisions of Article VI of this Settlement Agreement.
Distribution of funds from the Common Fund to the Settlement Class shall
commence within fourteen (14) days after the Effective Date.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 7 -

--------------------------------------------------------------------------------

 

3. Settlement Class Member Claims
a. The Common Fund, net of all Aggregate Fees, Costs and Expenses, shall be
available to pay Valid Claims submitted by Settlement Class Members. Settlement
Class Members who make a Valid Claim will be entitled to reimbursement of $10.00
for each of the Mega-T Products purchased for personal consumption during the
Class Period, upon submission of proof of purchase (i.e. a copy of the original
sales receipt that identifies the product and shows the amount paid and date of
purchase). If no proof of purchase is available, Settlement Class Members may
submit a Claim for a maximum of 6 bottles of Mega-T Products (in the aggregate)
if accompanied by an affirmation that such products were purchased, along with
other requested information relating to the purchase of the product that are
sufficient to satisfy the reasonable requests of the Claims Administrator for
the purpose of determining whether the Class member has made a Valid Claim, such
as where the purchases took place and the approximate dates of purchase.
b. If the aggregate value of Valid Claims submitted by Settlement Class Members
exceeds the amount remaining in the Common Fund after payment of all Aggregate
Fees, Costs, and expenses, then the amount of reimbursement per bottle will be
adjusted downward on a per bottle basis. If the aggregate value of Valid Claims
submitted by Settlement Class Members is less than the amount remaining in the
Common Fund after payment of all Aggregate Fees, Costs, and expenses, then, at
the Parties’ option, Settlement Class Members may receive up to $20.00 per
bottle of the Mega-T Products (representing the full purchase price) purchased
during the Class Period, subject to the provisions of paragraph 3a, above (i.e.,
full reimbursement with proof of purchase, and up to a maximum of 6 without upon
presentation of the referenced Declaration). Whether or not the Parties agree to
increase the amount to class members, any remaining funds in the Common Fund,
after payment of all Aggregate Fees, Costs, and expenses, and payments to
Settlement Class Members, shall be distributed cy pres as follows to the
American Diabetes Association and the Lymphoma Research Foundation.
c. Settlement Class Members will be able to obtain Claim Forms by calling the
toll-free number established for purposes of administering this Agreement, by
requesting one by mail at the address established by the Claims Administrator,
or by downloading the form from the Internet website established by the Claims
Administrator. The Claim Form shall include instructions for the submission
process. Claims Forms will be deemed valid only if they meet the criteria
established by counsel for the Parties. Settlement Class Members may submit
Claim Forms online or by mail to the Claims Administrator at the address
provided.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 8 -

--------------------------------------------------------------------------------

 

4. Equitable Relief and Future Conduct by CCA
CCA agrees not to make any of the statements set forth in Exhibit F in product
labeling, advertising or promotional materials, unless it has competent and
reliable scientific evidence substantiating such statement or statements. In
addition, CCA agrees to utilize the packaging attached as Exhibit F for future
sales of the Mega-T Products.
It is specifically understood and agreed that that CCA shall be permitted
without liability to manufacture and sell to wholesalers, distributors and
retailers (for resale to consumers) through October 31, 2010, Mega-T Products
using labels or finished goods that it possessed as of the date of the Final
Approval Order, even if statements contained on Exhibit F and those referenced
above appear on such labels. Nothing in this Settlement Agreement shall require
CCA to recall any Mega-T Products that it sold to any wholesaler, distributor,
retailer, or other Person for resale to consumers.
ARTICLE IV — NOTICE AND REQUESTS FOR EXCLUSION
1. Publication Notice
Publication Notice to the Settlement Classes shall be provided in the forms
approved by the Court in the Preliminary Approval Order, in those newspapers
and/or other related print and/or internet media as set forth in the Preliminary
Approval Order. The Publication Notice shall be substantially in the same forms
as the exemplars submitted as Exhibits D and E. The Publication Notice shall be
published promptly after entry of the Preliminary Approval Order on dates to be
agreed upon by the Parties so as to provide the best practical notice to the
Settlement Class. The Parties and the Settlement Administrator shall use best
efforts to cause the Publication Notice to commence within 15 days, and to
conclude within 45 days, after the date of entry of the Preliminary Approval
Order. The publication of the Publication Notice shall be administered by the
Settlement Administrator. The cost of publishing the Publication Notice shall be
paid for from the Common Fund.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 9 -

--------------------------------------------------------------------------------

 

2. Notice by Internet Posting
The long-form of the Publication Notice shall be posted on the Internet at a
website established by the Settlement Administrator commencing on the first date
on which Notice is published under this Settlement Agreement. CCA also shall
post a link on its website, located at www.mega-diet.com, notifying the public
of the Settlement Agreement. The link shall state “click here for class action
settlement information,” or substantially similar directions. The link shall
provide access to the website established by the Settlement Administrator, and
shall remain posted on the www.mega-diet.com website through the final date
Class Members may submit claims to the Settlement Administrator under this
Settlement Agreement.
3. Declarations Of Compliance
The Settlement Administrator shall prepare a declaration attesting to compliance
with the publication requirements set forth above. Such declaration shall be
provided to Class Counsel and CCA’s Counsel and filed with the Court no later
than 10 days prior to the Final Approval Hearing.
4. Best Notice Practicable
The Parties agree, and the Preliminary Approval Order shall state, that
compliance with the procedures described in this Article is the best notice
practicable under the circumstances and shall constitute due and sufficient
notice to the Settlement Class of the pendency of the Action, certification of
the Settlement Class, the terms of the Settlement Agreement, and the Final
Approval Hearing, and shall satisfy the requirements of the California Rules of
Court, the California Code of Civil Procedure, the Constitution of the State of
California, the United States Constitution, and any other applicable law.
5. Report On Requests For Exclusion
Not later than ten days before the Final Approval Hearing, the Settlement
Administrator shall prepare and deliver to Class Counsel, who shall file it with
the Court, and CCA’s Counsel, a report stating the total number of Persons that
have submitted timely and valid Requests for Exclusion from the Settlement
Class, and the names of such Persons. Such Persons will not be entitled to
receive any relief under this Settlement Agreement.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 10 -

--------------------------------------------------------------------------------

 

6. Inquiries From Settlement Class Members
It shall be the responsibility of Class Counsel to establish procedures for
receiving and responding to all inquiries from Settlement Class Members with
respect to this Settlement. CCA and CCA’s counsel may respond, but are not
required to respond, to such inquiries.
ARTICLE V — COURT APPROVAL OF SETTLEMENT
1. Preliminary Approval
As soon as practicable after the execution of this Settlement Agreement,
Class Counsel and CCA’s Counsel shall jointly apply for entry of the Preliminary
Approval Order in the form of Exhibit A hereto. The Preliminary Approval Order
shall include provisions: (a) preliminarily certifying the Settlement Classes
for settlement purposes only; (b) preliminarily approving this Settlement and
finding this Settlement sufficiently fair, reasonable and adequate to allow
Notice to be disseminated to the Settlement Class; (c) approving the form,
content, and manner of the Notice; (d) setting a schedule for proceedings with
respect to final approval of this Settlement; (e) providing that, pending entry
of a Final Approval Order and Judgment, no Settlement Class Member (either
directly, in a representative capacity, or in any other capacity) shall commence
or continue any action against CCA or other CCA-Related Released Parties
asserting any of the Class Released Claims; and (f) staying the Action, other
than such proceedings as are related to this Settlement.
2. Objections To Settlement
Any Settlement Class Member wishing to object to or to oppose the approval of
this Settlement and/or the Fee and Cost Application shall file a written
objection (with a statement of reasons) with the Court and serve it on the
Parties at least twenty-one days before the date of the Final Approval Hearing.
Any Settlement Class Member that fails to do so shall be foreclosed from making
such objection or opposition. Wally and Fleischer will file with the Court their
brief in support of final settlement approval, in support of final certification
of the Settlement Class, and in response to any objections at least seven days
before the date of the Final Approval Hearing. Any Settlement Class Member that
fails to file a timely written objection and to appear and speak at the final
approval hearing shall have no right to file an appeal relating to the approval
of this Settlement.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 11 -

--------------------------------------------------------------------------------

 

3. Final Approval Hearing
The Parties shall request that the Court, on the date set forth in the
Preliminary Approval Order, or on such other date that the Court may set,
conduct a Final Approval Hearing to: (a) determine whether to grant final
approval to this Settlement Agreement and to certify the Settlement Class;
(b) consider any timely objections to this Settlement and the Parties’ responses
to such objections; (c) rule on the Fee and Cost Application, and (d) rule on
any applications for incentive awards. At the Final Approval Hearing, the
Parties shall ask the Court to give final approval to this Settlement Agreement.
If the Court grants final approval to this Settlement Agreement, then the
Parties shall ask the Court to enter a Final Approval Order and Judgment,
substantially in the form of Exhibit B attached hereto, which approves this
Settlement, certifies the Settlement Class, authorizes entry of a final
judgment, and dismisses the Action with prejudice.
4. Disapproval, Cancellation, Termination, Or Nullification Of Settlement
a. Each Party shall have the right to terminate this Settlement Agreement if
either (i) the Court denies preliminary approval or final approval to this
Settlement Agreement, or (ii) the Final Approval Order and Judgment does not
become Final by reason of a higher court reversing final approval by the Court,
and the Court thereafter declining to enter a further order or orders approving
settlement on the terms set forth herein. If a Party elects to terminate this
Settlement Agreement under this paragraph, that Party must provide written
notice to the other Parties’ counsel within 21 days of the occurrence of the
condition permitting termination. Such written notice shall be provided by hand
delivery or mail to the Parties’ counsel.
b. CCA shall have the right to terminate this Settlement Agreement if, prior to
the date of the Final Approval Order and Judgment, the total number of Persons
that have submitted timely and valid Requests for Exclusion from the Settlement
Class constitutes greater than 20% of the estimated size of the Settlement
Class. If CCA elects to terminate this Settlement Agreement under this
paragraph, CCA must provide written notice to the other Parties’ counsel on or
before the date of the Final Approval Order and Judgment. Such written notice
shall be provided by hand delivery or mail to the Parties’ counsel.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 12 -

--------------------------------------------------------------------------------

 

c. If this Settlement Agreement is terminated pursuant to its terms, then:
(i) this Settlement Agreement shall be rendered null and void; (ii) this
Settlement Agreement and all negotiations and proceedings relating hereto shall
be of no force or effect, and without prejudice to the rights of the Parties;
and (iii) all Parties shall be deemed to have reverted to their respective
status in the Action or New Jersey Dispute as of the date and time immediately
preceding the execution of this Settlement Agreement and, except as otherwise
expressly provided, the Parties shall stand in the same position and shall
proceed in all respects as if this Settlement Agreement and any related orders
had never been executed, entered into, or filed, except that the Parties shall
not seek to recover from one another any costs incurred in connection with this
Settlement.
ARTICLE VI — ADMINISTRATIVE EXPENSES, ATTORNEYS’ FEES, COSTS
1. Costs Of Notice
All costs of providing the Notice as provided herein, including the costs of
publishing the Notice, shall be paid for out of the Common Fund, subject to the
terms hereof.
2. Costs Of Administering Settlement
All costs of administering this Settlement, including all fees of the Settlement
Administrator and the costs of generating and mailing any checks to be issued as
part of this Settlement, shall be paid for out of the Common Fund. In the event
that this Settlement Agreement is terminated pursuant to its terms, CCA shall
bear any costs of administering this Settlement already incurred.
3. Attorneys’ Fees And Costs
Wally and Fleischer and/or Class Counsel may make a Fee and Cost Application to
be heard at the Final Approval Hearing seeking an award of attorneys’ fees in an
amount not to exceed $750,000 and reimbursement of expenses in an amount not to
exceed $25,000. CCA will not oppose or undermine the application or solicit
others to do so. Attorneys’ fees and costs consistent with this paragraph that
are approved by the Court shall be paid out of the Common Fund within three days
after the Effective Date of the Settlement Agreement. Payments under this
provision shall be made to the law firm of Milstein, Adelman & Kreger, LLP.
Class Counsel shall be solely responsible for further distributing any payments
made under this provision.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 13 -

--------------------------------------------------------------------------------

 

4. Incentive Award
Wally and Fleischer, or Class Counsel on their behalf, may make an application
to be heard at the Final Approval Hearing for incentive awards to be paid out of
the Common Fund in an amount not to exceed $5,000 per individual. CCA will not
oppose or undermine the application or solicit others to do so. Not later than
fifteen days after the Effective Date, and only in the event that the Effective
Date occurs, Class Counsel shall pay out of the Common Fund incentive awards as
approved by the Court. These payments shall be compensation and consideration
for the efforts of Wally and Fleischer as the class representatives in the
Action and the New Jersey Dispute.
5. Effect On Settlement
The Parties agree that the rulings of the Court regarding the amount of
attorneys’ fees or costs and any incentive award, and any claim or dispute
relating thereto, will be considered by the Court separately from the remaining
matters to be considered at the Final Approval Hearing as provided for in this
Settlement Agreement and any determinations in that regard will be embodied in a
separate order. Any order or proceedings relating to the amount of attorneys’
fees or incentive award, including any appeals from or modifications or
reversals of any order related thereto, shall not operate to modify, reverse,
terminate, or cancel the Settlement Agreement, affect the releases provided for
in the Settlement Agreement, or affect whether the Final Approval Order and
Judgment becomes Final as defined herein.
ARTICLE VII — RELEASES UPON EFFECTIVE DATE
1. Binding and Exclusive Nature of Settlement Agreement
On the Effective Date, the Parties and each and every Settlement Class Member
shall be bound by this Settlement Agreement and shall have recourse exclusively
to the benefits, rights, and remedies provided hereunder. No other action,
demand, suit or other claim may be pursued against the CCA-Related Released
Parties with respect to the Class Released Claims.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 14 -

--------------------------------------------------------------------------------

 

2. Releases
On the Effective Date, the Class-Related Releasing Parties shall be deemed to
have, and by operation of this Settlement Agreement shall have, fully, finally
and forever released, relinquished and discharged the CCA-Related Released
Parties from any and all of the Class Released Claims.
3. Stay And Dismissal Of The Action
The Parties agree to request that the Court, in connection with Preliminary
Approval, issue an immediate stay of the Action.
4. Waiver of Unknown Claims
On the Effective Date, the Class-Related Releasing Parties shall be deemed to
have, and by operation of this Settlement Agreement shall have, with respect to
the subject matter of the Class Released Claims, expressly waived the benefits
of any statutory provisions or common law rule that provides, in sum or
substance, that a general release does not extend to claims which the party does
not know or suspect to exist in its favor at the time of executing the release,
which if known by it, would have materially affected its settlement with any
other party. In particular, but without limitation, the Class-Related Releasing
Parties waive the provisions of California Civil Code § 1542 (or any like or
similar statute or common law doctrine), and do so understanding the
significance of that waiver. Section 1542 provides:
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.
Neither this paragraph nor any other provision of this Settlement Agreement
shall be construed to effectuate a general release of claims. The releases
provided for in this Settlement Agreement are limited to the Class Released
Claims as defined in Article II(5) above.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 15 -

--------------------------------------------------------------------------------

 

5. Assumption of Risk
In entering into this Settlement Agreement, each of the Parties assumes the risk
of any mistake of fact or law. If either Party should later discover that any
fact which the Party relied upon in entering this Settlement Agreement is not
true, or that the Party’s understanding of the facts or law was incorrect, the
Party shall not be entitled to modify, reform, or set aside this Settlement
Agreement, in whole or in part, by reason thereof. The Parties agree that at the
time this Settlement Agreement was executed, there were unsettled issues of law,
and the Parties agree to honor this Agreement regardless of developments in the
law after execution; specifically, the Class Representatives and Class Counsel
recognize and agree that, given these uncertainties in the law, the
Class Representatives and Class Counsel are receiving valuable consideration for
the settlement of the Action at this time and per the terms of this Agreement.
The Parties will advocate for Court approval of this Settlement Agreement.
ARTICLE VIII — LIMITATIONS ON USE OF SETTLEMENT AGREEMENT
1. No Admission
Neither the acceptance by CCA of the terms of this Settlement Agreement nor any
of the related negotiations or proceedings constitutes an admission with respect
to the merits of the claims alleged in the Complaint, the validity of any claims
that could have been asserted by any of the Settlement Class Members in the
Complaint, or the liability of CCA in the Action or the New Jersey Dispute. CCA
specifically denies any liability or wrongdoing of any kind associated with the
claims alleged in the Action and the New Jersey Dispute. Neither the acceptance
by Wally and Fleischer of the terms of this Settlement Agreement, nor any of the
related negotiations or proceedings constitutes an admission with respect to the
merits of the claims alleged in the Action or the New Jersey Dispute.
2. Limitations on Use
This Settlement Agreement shall not be used, offered, or received into evidence
in the Action for any purpose other than to enforce, to construe, or to finalize
the terms of the Settlement Agreement and/or to obtain the preliminary and final
approval by the Court of the terms of the Settlement Agreement. Neither this
Settlement Agreement nor any of its terms shall be offered or received into
evidence in any other action or proceeding.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 16 -

--------------------------------------------------------------------------------

 

ARTICLE IX — MISCELLANEOUS PROVISIONS
1. Amendment Of Second Amended Complaint; Class Certification
Within seven (7) days of the Court’s entry of the Preliminary Approval Order,
the named plaintiff in this Action shall file a Second Amended Complaint in
exact same form as the draft Second Amended Complaint in the form attached
hereto as Exhibit C. CCA shall stipulate to the filing of the Second Amended
Complaint, solely for purpose of this Settlement and without prejudice to its
rights absent this Settlement. Should this Settlement not be finalized for any
reason, the Parties shall stipulate to an order striking the Second Amended
Complaint, and the First Amended Complaint shall be the operative pleading in
this Action.
2. No Assignment
Each Party represents, covenants, and warrants that he or it has not directly or
indirectly assigned, transferred, encumbered, or purported to assign, transfer,
or encumber any portion of any liability, claim, demand, cause of action, or
rights that he or it herein releases.
3. Binding On Assigns
This Settlement Agreement shall be binding upon and inure to the benefit of the
Parties and their respective heirs, trustees, executors, successors, and
assigns.
4. Captions
Titles or captions contained herein are inserted as a matter of convenience and
for reference, and in no way define, limit, extend, or describe the scope of
this Settlement Agreement or any provision hereof. Each term of this Settlement
Agreement is contractual and not merely a recital.
5. Class Member Signatures
It is agreed that, because the Settlement Class Members are so numerous, it is
impractical to have each Settlement Class Member execute this Settlement
Agreement. The Notice will advise all Settlement Class Members of the binding
nature of the Releases and of the remainder of this Settlement Agreement, and in
the absence of a valid and timely Request for Exclusion, such Notice shall have
the same force and effect as if each Settlement Class Member executed this
Settlement Agreement.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 17 -

--------------------------------------------------------------------------------

 

6. Construction
The Parties agree that the terms and conditions of this Settlement Agreement are
the result of lengthy, intensive arms-length negotiations between the Parties
and that this Settlement Agreement shall not be construed in favor of or against
any Party by reason of the extent to which any Party, or his or its counsel,
participated in the drafting of this Settlement Agreement.
7. Counterparts
This Settlement Agreement and any amendments hereto may be executed in one or
more counterparts, and either Party may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and both of
which counterparts taken together shall constitute but one and the same
instrument. A facsimile or pdf signature shall be deemed an original for all
purposes.
8. Governing Law
Construction and interpretation of the Settlement Agreement shall be determined
in accordance with the laws of the State of California, without regard to the
choice-of-law principles thereof.
9. Integration Clause
This Settlement Agreement, including the Exhibits referred to herein, which form
an integral part hereof, contains the entire understanding of the Parties with
respect to the subject matter contained herein. There are no promises,
representations, warranties, covenants, or undertakings governing the subject
matter of this Settlement Agreement other than those expressly set forth in this
Settlement Agreement. This Settlement Agreement supersedes all prior agreements
and understandings among the Parties with respect to the settlement of the
Action. This Settlement Agreement may not be changed, altered or modified,
except in a writing signed by the Parties and approved by the Court. This
Settlement Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the Parties.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 18 -

--------------------------------------------------------------------------------

 

10. Jurisdiction
The Court shall retain jurisdiction, after entry of the Final Approval Order and
Judgment, with respect to enforcement of the terms of this Settlement, and all
Parties and Settlement Class Members submit to the exclusive jurisdiction of the
Court with respect to the enforcement of this Settlement and any dispute with
respect thereto.
11. Presiding Judicial Officer
The Parties agree that The Honorable Anthony Mohr shall preside over the
settlement approval process, including without limitation any application for an
award of attorneys’ fees, costs, expenses and incentive awards. In the event
that Judge Mohr is unable to preside, the Parties agree to jointly request that
the settlement approval process be presided over by a different judge from the
Superior Court of California, County of Los Angeles.
12. No Collateral Attack
This Settlement Agreement shall not be subject to collateral attack by any
Settlement Class Member at any time on or after the Effective Date. Such
prohibited collateral attacks shall include, but shall not be limited to, claims
that a Settlement Class Member’s claim was improperly denied, that the payment
to a Settlement Class Member was improperly calculated, and/or that a Settlement
Class Member failed to receive timely notice of the Settlement Agreement.
13. Parties’ Authority
The signatories hereto represent that they are fully authorized to enter into
this Settlement Agreement and bind the Parties to the terms and conditions
hereof.
14. Receipt Of Advice Of Counsel
The Parties acknowledge, agree, and specifically warrant to each other that they
have read this Settlement Agreement, have received legal advice with respect to
the advisability of entering into this Settlement, and fully understand its
legal effect.
STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 19 -

--------------------------------------------------------------------------------

 

15. Waiver Of Compliance
Any failure of any Party to comply with any obligation, covenant, agreement, or
condition herein may be expressly waived in writing, to the extent permitted
under applicable law, by the Party or Parties entitled to the benefit of such
obligation, covenant, agreement, or condition. A waiver or failure to insist
upon compliance with any representation, warranty, covenant, agreement, or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
16. Settlement Conditioned on Certain Matters
This entire Settlement Agreement is contingent upon the Parties reaching
agreement on the contents of the exhibits and ancillary agreements hereto.

              DATED: May __, 2010   KELLER AND HECKMAN LLP    
 
           
 
  By:        
 
     
 
DANIEL J. HERLING    
 
                Attorneys for Defendant
CCA INDUSTRIES, INC.    
 
            DATED: May __, 2010   MILSTEIN, ADELMAN & KREGER, LLP    
 
           
 
  By:        
 
     
 
WAYNE S. KREGER    
 
                Attorneys for Plaintiffs
WALLY, FLEISCHER, and the Proposed Class    

STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 20 -

--------------------------------------------------------------------------------

 

             
DATED: May  __, 2010
           
 
           
 
  By:        
 
     
 
            on behalf of CCA INDUSTRIES, INC.    
 
           
DATED: May  __, 2010
           
 
           
 
  By:        
 
     
 
            DENISE WALLY, on behalf of herself and the Proposed Class    
 
           
DATED: May  __, 2010
           
 
           
 
  By:        
 
     
 
            LAURA FLEISCHER, on behalf of herself and the Proposed Class    

STIPULATION AND AGREEMENT OF SETTLEMENT

 

- 21 -