Exhibit 10.2

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

 

 

 

 

 

 

 

 

 

 

 

 

DANA GOLD, TAMMY EMERY, MARY LOUISE FERENCE, LAURA NORRIS, DONALD FURSMAN, and
JOHN TRIANA, on behalf of themselves and all others similarly situated,

 

Plaintiffs,

           v.

LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES 1 through 200,
inclusive,

Defendants.

 

 

      No. 3:14-cv-05373-RS

 

 

 

 

AGREEMENT OF COMPROMISE AND SETTLEMENT

 

IT IS HEREBY AGREED by, between, and among Representative Plaintiffs Dana Gold,
Tammy Emery, Mary Louise Ference, Laura Norris, Donald Fursman, and John Triana,
in their individual and representative capacities on behalf of themselves and a
putative Settlement Class (as defined herein) (“Plaintiffs”), and Defendant
Lumber Liquidators, Inc. (hereinafter “Lumber Liquidators”) (collectively
“Parties”), by and through their duly authorized counsel, that, in consideration
of the promises and covenants set forth in this Agreement of Compromise and
Settlement (hereinafter “Agreement” or “Settlement Agreement”) and upon entry by
the United States District Court for the Northern District of California (the
“Court”) of a Final Order and Judgment approving the settlement as set forth in
this Agreement, the claims asserted against Lumber Liquidators shall be settled,
dismissed, and compromised on a nationwide basis upon the terms and conditions
set forth in this Agreement.

 

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RECITALS

A.        WHEREAS, on December 8, 2014, Plaintiff Dana Gold filed a nationwide
class action lawsuit against Lumber Liquidators, in the United States District
Court for the Northern District of California, Gold, et al. v. Lumber
Liquidators, Inc., et al., 3:14-cv-05373, seeking to recover damages on behalf
of herself and a class of individuals who had purchased allegedly defective
Morning Star Bamboo sold by Lumber Liquidators.  On February 13, 2015,
Plaintiffs filed a nationwide First Amended Class Action Complaint, adding Tammy
Emery, Edwin Mendez, and Christopher Massaro as plaintiffs, and asserting a
nationwide class action as well as four state sub-classes for California,
Illinois, New York, and West Virginia.

B.         WHEREAS, on August 3, 2015, Lumber Liquidators filed motions to
dismiss Plaintiffs’ First Amended Class Action Complaint and to strike the class
allegations.  On September 11, 2015, Plaintiffs filed responses to Lumber
Liquidators’ motions to dismiss and strike.  On September 25, 2015, Lumber
Liquidators filed replies in support of its motions to dismiss and strike.  On
October 26, 2015, the Court heard arguments on Lumber Liquidator’s motions.  On
November 30, 2015, the Court entered an order granting in part and denying in
part Lumber Liquidators’ motions.

C.         WHEREAS, on December 16, 2015, Plaintiffs filed a nationwide Second
Amended Class Action Complaint, adding Russel Dornon, Laura Norris, John Foster,
Donald Fursman, and John Triana as plaintiffs and asserting eight state
sub-classes for California, Florida, Illinois, Minnesota, New York, Ohio,
Pennsylvania, and West Virginia.

D.        WHEREAS, on January 20, 2016, Plaintiffs filed a nationwide Third
Amended Class Action Complaint, removing Russel Dornon and John Foster as
plaintiffs and asserting seven state sub-classes for California, Florida,
Illinois, Minnesota, New York, Pennsylvania, and West

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Virginia.  On February 3, 2016, Lumber Liquidators filed an answer to
Plaintiffs’ Third Amended Class Action Complaint.

E.         WHEREAS, the Parties engaged in extensive discovery.

F.         WHEREAS, approximately fourteen (14) fact depositions and seven (7)
expert depositions were conducted.

G.        WHEREAS, Lumber Liquidators produced pursuant to discovery requests
approximately 855,000 pages of documents.

H.        WHEREAS Plaintiffs responded to multiple sets of discovery including
document production requests and interrogatories.

I.          WHEREAS, on February 17, 2017, Plaintiffs filed a motion and
memorandum in support of class certification.  On April 14, 2017, Lumber
Liquidators filed an opposition to Plaintiffs’ motion for class certification
and a motion to exclude Plaintiffs’ expert witnesses.  On April 28, 2017,
Plaintiffs filed an opposition to Lumber Liquidators’ motion to exclude.  On May
5, 2017, Lumber Liquidators filed its brief in support of its motion to
exclude.  On May 8, 2017, Plaintiffs filed a reply in support of its motion for
class certification.  On May 19, 2017, Lumber Liquidators filed a sur-reply in
opposition to Plaintiffs’ motion for class certification.

J.          WHEREAS, on May 23, 2017, Plaintiffs filed a Motion for Leave to
file their Fourth Amended Class Action complaint, requesting leave to narrow the
class definition to no longer include the nationwide class and to make other
revisions to the class definition.  On June 6, 2017, Lumber Liquidators filed
its opposition to Plaintiffs’ motion for leave.  On June 9, 2017, Plaintiffs
filed their reply in support of their motion for leave.  On June 19, 2017, the
Court heard arguments on Plaintiffs’ motion for leave.  On June 22, 2017, the
Court granted in part and denied in part Plaintiffs’ motion for leave.  On June
26, 2017, Plaintiffs filed a Fourth Amended Class

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Action Complaint, removing the nationwide class allegations and limiting the
alleged defective product to Morning Star Strand Bamboo Flooring.  This Fourth
Amended Class Action Complaint asserted a six-  state class action for
California, Florida, Illinois, Minnesota, Pennsylvania, and West Virginia.

K.        WHEREAS, on July 10, 2017, Lumber Liquidators filed a motion to
dismiss the Fourth Amended Class Action Complaint for lack of personal
jurisdiction.  On July 24, 2017, Plaintiffs filed an opposition to Lumber
Liquidators’ motion to dismiss.  On July 31, 2017, Lumber Liquidators filed a
reply in support of its motion to dismiss Plaintiffs’ Fourth Amended Class
Action Complaint for lack of personal jurisdiction.

L.         WHEREAS, on July 10, 2017, Plaintiffs filed a supplemental brief in
support of class certification and in opposition to Lumber Liquidators’ motion
to exclude Plaintiffs’ expert witnesses.  On July 10, 2017, Lumber Liquidators
filed a supplemental brief in opposition to Plaintiffs’ motion for class
certification and in support of its motion to exclude Plaintiffs’ expert
witnesses.

M.        WHEREAS, on August 8, 2017, Lumber Liquidators filed a motion to
transfer the case under FRCP 1404.  On August 23, 2017, Plaintiffs filed an
opposition to motion to transfer the case under FRCP 1404.  WHEREAS, on
September 19, 2017, the Court denied Lumber Liquidators’ motion to dismiss
Plaintiffs’ Fourth Amended Class Action Complaint for lack of jurisdiction and
transfer the case.

N.        WHEREAS, on October 3, 2017, Lumber Liquidators filed an answer to
Plaintiffs’ Fourth Amended Class Action Complaint.

O.        WHEREAS, on November 13, 2017, the Court heard arguments on the
Plaintiffs’ motion for class certification and Lumber Liquidators’ motion to
exclude Plaintiffs’ expert

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witnesses.  On November 15, 2017, the Court granted Plaintiffs’ motion for class
certification and granted in part and denied in part Lumber Liquidators’ motion
to exclude Plaintiffs’ expert witnesses.

P.         WHEREAS, on December 1, 2017, Lumber Liquidators filed a petition for
permission to appeal the Court’s order granting class certification with the
United States Court of Appeals for the Ninth Circuit.  On December 11, 2017,
Plaintiffs filed an answer to Lumber Liquidators’ petition for permission to
appeal.  On March 19, 2018, the United States Court of Appeals for the Ninth
Circuit denied Lumber Liquidator’s petition.

Q.        WHEREAS, on February 2, 2018, Plaintiffs filed a Fifth Amended Class
Action Complaint asserting a six-state class action for California, Florida,
Illinois, Minnesota, Pennsylvania, and West Virginia.  On February 16, 2018,
Lumber Liquidators filed an answer to Plaintiffs’ Fifth Amended Class Action
Complaint.

R.         WHEREAS, on August 15, 2018, Lumber Liquidators filed a motion for
summary judgment.  On September 26, 2018, Plaintiffs filed a stipulation to
modify the class period from 2008-present to 2012-present.  On September 27,
2018, the Court granted Plaintiffs’ stipulation to modify the class period.  On
September 28, 2018, Plaintiffs filed an opposition to Lumber Liquidators’ motion
for summary judgment.  On November 2, 2018, Lumber Liquidators filed a reply in
support of its motion for summary judgment.  On November 5, 2018, the Court
heard arguments on the motion for summary judgment.  On January 2, 2019, the
Court denied Lumber Liquidators’ motion for summary judgment.

S.         WHEREAS, throughout this litigation, the Parties have engaged in
extensive, arms-length negotiations regarding the settlement of claims involving
the Flooring.

T.         WHEREAS, the Parties participated in mediations on December 13, 2017
and

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January 26, 2018 with the Honorable Edward A. Infante (Ret.) (JAMS); and May 17,
2018 and October 4, 2018 with Bruce A. Friedman (JAMS).

U.        WHEREAS, Plaintiffs and Class Counsel have evaluated the time and
expense that will be necessary to prosecute this case to final judgment, the
delays that are likely before any judgment may be entered, and the uncertainty
inherent in predicting the outcome of any complex litigation such as this and,
based upon such evaluation, have concluded that further proceedings in this
action are likely to be further protracted, complex, and expensive, and that the
outcome is uncertain.

V.        WHEREAS, without conceding any lack of merit of any of their claims,
Plaintiffs and Class Counsel have concluded that it is in the best interests of
the putative class to settle these actions on the terms set forth herein, and
that the settlement with Lumber Liquidators embodied in this Agreement is fair,
reasonable, and adequate to Plaintiffs and the Class.

W.         WHEREAS, while denying any fault, wrongdoing, or liability, and
relying on the provisions of this Agreement that the settlement embodied herein
shall in no event be construed as or deemed to be evidence of an admission or a
concession on the part of Lumber Liquidators (or any of its predecessors,
successors, parent or subsidiary companies, affiliates, officers, directors,
agents, attorneys, representatives, insurers, suppliers, distributors or
vendors) of any fault, wrongdoing, or liability whatsoever, or that any of the
allegations in the Complaint are true, and without conceding any infirmity in
its defenses, Lumber Liquidators considers it desirable to enter into this
Agreement in order to avoid further expense, to dispose of burdensome and
protracted litigation, and to avoid the uncertain outcome of proceeding with
this litigation.

 

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DEFINITIONS

As used in this Settlement Agreement, the following terms shall have the
following meanings:

a.          “Approved Claim” means a Claim submitted by a Claimant that the
Settlement

Administrator determines to be accurate,  timely, and eligible.

b.         “Approved Claimant” means a Settlement Class Member whose Claim has
been approved by the Settlement  Administrator pursuant to the terms of this
Settlement Agreement.

c.          “CAFA Notice” means the notice to be sent by the Settlement
Administrator to appropriate federal and state officials pursuant to the
requirements of the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §
1715(b).

d.         “Claim” means the form provided for Settlement Class Members to
submit

to obtain a Settlement Award under this Settlement Agreement.

e.          “Claimant” means a Settlement Class Member who has submitted a Claim
by the Claim Deadline.

f.         “Claim Deadline” means the date by which all Claim Forms must be
postmarked,

or received by the Settlement Administrator, to be considered timely. The Claim
Deadline shall be 180 days after the Notice Date

g.         “Claim Form” means the form provided for Settlement Class Members to
submit

to obtain a Settlement Award under this Settlement Agreement, as set forth in
Exhibit C  to this Settlement Agreement.

h.         “Class Counsel” for this case are Charles LaDuca and Brendan Thompson
from Cuneo Gilbert & LaDuca, LLP; Michael Ram of Robins Kaplan; and Jeffrey
Cereghino of the Cereghino Law Group.

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i.          “Class Notice” means the Notice of Proposed Class Action Settlement
to be sent to the Settlement Class, pursuant to the terms of the Court’s
Preliminary Approval Order and any other Notices as may be ordered by the Court.
The initial Class Notice shall be substantially in the form attached as Exhibit
A to this Settlement Agreement.

j.          “Class Period” means January 1, 2012 through March 15, 2019.

k.         “Complaint” means Plaintiffs’ operative class action lawsuit filed
against Lumber

Liquidators in the United States District Court for the Northern District of
California, Gold, et al. v. Lumber Liquidators, Inc., et al., 3:14-cv-05373.

l.          “Court” means the United States District Court for the Northern
District of California.

m.        “Damages” shall refer to claims of cupping, warping, buckling,
splintering, scratching,  cracking, shrinking, delaminating, deteriorating,
gapping, and/or other damages to the Flooring, baseboards, moldings and/or
subfloor as alleged in the Operative Complaint.

n.         “Days” mean calendar days, excluding federal holidays.

o.         “Defendant” means Lumber Liquidators, Inc.

p.         “Effective Date” means the first date by which all of the following
events shall have occurred:

(1)        The Court has entered the Preliminary Approval Order.

(2)        The Court has entered the Final Approval Order and Judgment approving
the Settlement Agreement in all respects, dismissing the Gold litigation with
prejudice.

(3)        The time for appeal from the Final Approval Order and Judgment shall
have expired, or if any appeal of the Final Approval Order and Judgment as to
the Settlement Agreement is taken, that appeal shall have been finally
determined by the

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highest court, including any motions for reconsideration and/or petitions for
writ of certiorari, and which Final Approval Order and Judgment is not subject
to further adjudication or appeal.

q.         “Eligible Claimant” means all Settlement Class Members who either:
(i) purchased the Flooring for personal, family or household use and own the
residence with the Flooring when the Settlement Class Member submits a Claim;
(ii) previously owned such a residence and, prior to making the Claim, sold or
transferred the residence and at the time of the sale or transfer retained the
right to make a claim for the Flooring pursuant to a valid documented
assignment; or (iii) prior owner of such a residence who paid for repairs to the
Flooring directly arising from the types of damage alleged in the operative
complaint and seeks reimbursement.  Eligible Claimants must timely submit a
completed and accurate Claim Form by the Claim Deadline to be considered for any
award payment pursuant to Section B  of Consideration to Plaintiffs and
Available Benefits, below.

r.          “Final Approval and Fairness Hearing” means the hearing at which the
Court will:

(1) determine whether to grant Final Approval of this Settlement Agreement; (2)
consider any timely objections to this Settlement Agreement; and (3) consider
Class Counsel’s request for an award of attorneys’ fees, costs and expenses.

s.          “Final Approval Order and Judgment” shall mean the order finally
approving this

Settlement Agreement and dismissing the Complaint.

t.          “Flooring” shall mean Morning Star Strand Bamboo flooring sold by

Lumber Liquidators at any time during the Class Period including but not limited
to the list of product names and SKU numbers attached as Exhibit D.

u.         “Notice” means, collectively, the communications by which purchasers
of

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Flooring are to be notified of this Settlement Agreement and the Court’s
Preliminary Approval of this Settlement Agreement as required by Fed. R. Civ. P.
23(e) and any subsequent communications to purchasers of Flooring as ordered by
the Court.

v.         “Notice Date” shall be thirty  (30) days after entry of the
Preliminary Approval Order, or as soon as possible thereafter.

w.        “Notice Plan” means the notice program used by Parties and the
Settlement Administrator to inform Settlement Class Members about the Settlement
Agreement.

x.         “Operative Complaint” shall mean the last amended complaint filed
with the Court.

y.         “Party” and “Parties” means Plaintiffs and Lumber Liquidators.

z.          “Person(s)” shall mean any natural person, individual, corporation,
association,

partnership, trust, or any other type of legal entity.

aa. “Preliminary Approval” or “Preliminary Approval Order” means the Court’s

entry of an order of initial approval of this Settlement Agreement pursuant to
Fed. R. Civ. P. 23.

bb. “Proof of Damages” means submission of 1) Verified responses to the Claim
Form; 2) Photographs depicting Damages to the Flooring; 3) Paperwork from a
Certified Flooring Inspector or Installer detailing the labor and materials
necessary to repair the Damages; 4) an averment from the Settlement Class Member
that he/she followed all installation instructions to the best of his/her
ability and/or hired a certified flooring installer to perform the installation
according to Lumber Liquidators’ installation instructions; and 5) an averment
that the Damages are not due to any sudden or accidental water damage, including
but not limited to wet mopping, leakage from a refrigerator, dishwasher, ice
maker or water heater, and/or flooding.   The Settlement Administrator, at its
sole discretion, may request additional proof not listed above, if

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necessary, to assess the validity of a claim.

cc.        “Released Claims” shall have the meaning set forth in this Settlement
Agreement.

dd.       “Released Parties” shall have the meaning set forth in this Settlement
Agreement.

ee.        “Releasing Parties” shall have the meaning set forth in this
Settlement Agreement.

ff.         “Representative Plaintiff(s)” means Dana Gold, Tammy Emery, Mary
Louise  Ference, Laura Norris, Donald Fursman, and John Triana.

gg.       “Request for Exclusion” means a request to opt-out or be excluded from
the Class which is timely submitted upon receiving and complying with
instructions contained in the Notice.

hh.       “Service Awards” means cash awards paid to the Representative
Plaintiffs for their service in this case.

ii.         “Settlement Administrator” means CPT Group.

jj.         “Settlement Agreement” or “Agreement” or “Settlement” refers to this
document, and supersedes any prior agreements or discussions.

kk.       "Settlement Award" means the award that each Settlement Class Member
shall be entitled to receive pursuant to the terms of the Settlement Agreement
if he or she timely submits an Approved Claim.

ll.         “Settlement Class Member” means persons in the United States who
purchased, for personal, family, or household use, the Flooring during the Class
Period, including but not limited to those persons that are part of the
litigation class certified by this Court on November 15, 2017 as subsequently
amended by Orders of December 22, 2017 and September 27, 2018.   Excluded from
the Class are (1) Defendant, (2) all present and former affiliates and/or
officers or directors of Defendant, (3) the Judge to whom this case is assigned
and any member of the

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Judge’s immediate family and judicial staff, (4) all individuals who have
already entered into a release or prior settlement with Lumber Liquidators
related to the Flooring during the Class Period, (5) contractors, persons, or
other entities who purchased the Flooring for resale, and (6) all persons who
timely request to be excluded from this Settlement pursuant to the Notice.

mm.     “Settlement Fund” means $14 million in cash and $14 million in
Store-credit Vouchers, with a potential additional $2 million in Store-credit
Vouchers based on obtaining a claims percentage of more than 7%, for an
aggregate settlement of up to $30 million.

nn        “Store-credit Vouchers” or “Vouchers” means product vouchers which may
be used for any product Defendant sells or labor costs through Defendant’s
flooring installation network and distributed by the Claims Administrator as
part of this Settlement Agreement.

CONSIDERATION TO PLAINTIFFS AND AVAILABLE BENEFITS

A.        Consideration to Plaintiffs:

In exchange for the terms and conditions set forth herein, Defendant will
provide the following consideration:

1.         A common fund will be established whereby Lumber Liquidators will pay
$14 million dollars in cash and $14 million dollars in Store-credit
Vouchers.  An additional $2 million dollars in Store-credit Vouchers will be
provided upon a 7% claims rate being reached.  The Settlement Fund shall be paid
in the following manner:

a.          Within 5 days of the Court’s preliminary approval of settlement,
Lumber Liquidators will transfer $1,000,000.00 to the settlement fund escrow
account to be used to pay for Notice and the Settlement Administrator’s fees.

b.         Within 30 days of the Final Approval Order, Lumber Liquidators will

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transfer $13,000,000.00 in cash (Cash) to the settlement fund escrow account.

c.          Lumber Liquidators will work with Plaintiffs’ Counsel and the
Settlement Administrator to prepare up to $16,000,000.00 worth of Store-credit
Vouchers (Vouchers) for distribution to Approved Claimants.

d.         The payments described above constitute the entire payment due from
Defendant or any of the Released Parties under the Settlement Agreement. The
Parties agree and acknowledge that none of the settlement funds paid by
Defendant under the Settlement Agreement shall be deemed to be, in any way, a
penalty or a fine of any kind.

2.         An escrow account shall be established and administered by Class
Counsel under the Court’s continuing supervision and control.  No disbursements
of funds from the escrow account will occur without order of the Court.  The
escrow account is intended by the Parties to be treated as a “qualified
settlement fund” for federal income tax purposes pursuant to Treasury Reg.
1.468B-1, and to that end, the Parties shall cooperate with each other and shall
not take a position in any filing or before any tax authority that is
inconsistent with such treatment.

3.         Lumber Liquidators shall have no responsibility or liability relating
to the administration, investment, or distribution of the Settlement Fund, which
shall be the sole responsibility of Class Counsel and the Settlement
Administrator.

4.         Following the Effective Date, Lumber Liquidators shall not be
entitled to any reverter or return of common fund benefits.

 

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B.         Benefits under this Settlement Agreement:

1.         To be entitled to participate in the Settlement Fund, a Settlement
Class Member, who has not requested exclusion pursuant to the Notice, must
submit a valid Claim Form on or before the deadline established by the
Court.  Any Settlement Class Member who does not submit a timely and valid Claim
shall not be entitled to participate in this Settlement, but nonetheless shall
be barred and enjoined from asserting any of the Released Claims described
herein.

2.         Settlement Class members with an Approved Claim will be issued Cash
and/or Vouchers.   Claimants will be limited to one recovery per household, but
if multiple purchases were made, the total purchase price of all purchases will
be used to calculate the award.

Benefits to Eligible Claimants will be issued in accordance with the criteria
below subject to participation,  eligibility and, Damages, if any:

Compensation Level One:  All Approved Claimants will be eligible to receive
benefits  from the Compensation Fund.   Level One benefits will be calculated on
a pro-rata basis based on the total purchase price of the Flooring.  The exact
pro-rata percentage will be determined by taking the total value of all claims
submitted and allocating the available Cash/Vouchers from the Compensation Fund
on an equal percentage basis to each claimant.

Compensation Level Two:  Any Approved Claimant with Flooring that is manifesting
warping, cupping, buckling, scratching, cracking, delaminating, splintering,
deteriorating or gapping (Manifested Conditions) may submit, in the Claim Form,
proof of Manifested Conditions to be eligible for Level Two Benefits.  Level Two
Benefits will be determined based on the value of the repair cost pursuant to a
Contractors Bid, photographs and other requirements as part of the Settlement
Class member’s proof of Manifested Conditions.  Both Level One and Level Two
Benefits shall be allocated equally on a pro-rata basis within each Level,
however Class Counsel reserves the right to allocate the percentages of Vouchers
and Cash paid to Level One and Level Two Approved Claimants dependent upon
claims rate and value of respective claims. It is anticipated that Level One
benefits will consist of more value in Vouchers than in Cash.

The amount of Funds allocated to both Compensation Levels shall be all the
available Compensation Fund, net of administrative and attorney fees, costs and
Service Awards.  Class Members may submit both Compensation Level One and Level
Two claims, however Class

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Members who submitted both Level One and Level Two claims will have approved
Level Two claims deducted from their total Flooring Claims.

Both Compensation Level One and Compensation Level Two Benefits shall be
allocated equally on a pro-rata basis within each level however Class Counsel
reserves the right to allocate the percentages of Vouchers and Cash paid to
Compensation Level One and Compensation Level Two Approved Claimants dependent
upon claims rate,  value of respective claims and potential claimant weighted
election of benefits in Compensation Level Two between more Cash and less
Vouchers or more Vouchers and less Cash

3.         At the time of making a settlement claim, or within 10 days of
receiving notice that  their claim is approved, Settlement Class members may
designate a family member, a nationally recognized charity or a third party to
be the recipient of the Vouchers.

The Settlement Administrator will determine whether a charity is a nationally
recognized charity for purposes of this Settlement.  If a third party is
designated to be the recipient of the Vouchers, the Settlement Class member must
notify the settlement administrator within 10 days after designation as to the
identity of the third party including all contact information.  The third party
may not transfer or sell any of the Vouchers.

4.         Settlement Class Members may use their Vouchers to purchase any
product Defendant sells or for labor to install any Lumber Liquidators’  product
and may have the product shipped to a third party within the United States.
Except as described above, Vouchers will not be transferrable, nor may they be
sold or redeemed for cash.

5.         Defendant will provide the Vouchers, good for one per household,

(a)        Vouchers  are good for 3 years from date of issuance, one per
household, with the

following exceptions based on state escheat laws:

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(b)        Vouchers issued to Approved Claimants in the following states shall
have no expiration date: California, Connecticut, Florida, Maine, Minnesota, New
Jersey, Rhode Island, and Washington.

(c)        Vouchers issued to Approved Claimants in the following states shall
have the expiration dates identified below:

(i)         Colorado – 5 year expiration

(ii)       D.C. – 5 year expiration

(iii)      Georgia – 5 year expiration

(iv)       Hawaii – 5 year expiration

(v)        Illinois – 5 year expiration

(vi)       Louisiana – 5 year expiration

(vii)     Maryland – 4 year expiration

(viii)    Mississippi – 5 year expiration

(ix)       New York – 5 year expiration

(x)        New Mexico – 5 year expiration

(xi)       North Dakota – 6 year expiration

(xii)     South Dakota – 5 year expiration

(xiii)    Virginia – 5 year expiration

6.         The Parties agree that the total amount of Cash shall not exceed the
amount set forth in the Settlement Fund described above.

(i)         In the event that the Cash portion of the Settlement Fund is not
exhausted and after all claims, attorneys’ fees, costs, service awards, and
administration costs been paid, Approved Claimants will receive a proportional
additional cash payment.

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(ii)       If after having paid all attorneys’ fees, costs, service awards,
and administrative costs,   the Cash portion of the Settlement Fund is reduced
such that it cannot pay claimants the anticipated amount, the Cash payments will
be proportionally reduced across all the Approved Claimants.

(iii)      If any amounts remain in the Cash portion of the Settlement Fund
(for example because of uncashed checks), Plaintiffs’ counsel may seek a cy
pres  award.

PRELIMINARY APPROVAL OF SETTLEMENT

Class Counsel shall prepare the motion seeking Preliminary Approval of the
Settlement Class and the Parties shall work in good faith to support the
motion.  The Court shall be asked to approve the terms and conditions of the
Settlement Agreement, the Notice to the Class, the method of Notice, the Claim
Form, and the procedure for submitting claims.   As part of this Settlement,
Plaintiffs will file a Sixth Amended Complaint to facilitate resolving all
issues on a nationwide basis.  This motion seeking preliminary approval must
comply with the United States District Court for the Northern District of
California’s Class Action Settlement Guidance.

SETTLEMENT CLAIMS ADMINISTRATOR

The Settlement Administrator, CPT Group, has been selected based on cost,
experience and reputation. The Settlement Administrator will work to:

1.         Send Notice to members of the Class;

2.         Maintain and monitor a Settlement website;

3.         Review, evaluate, and pay where eligible, claims;

4.         Monitor and maintain any Requests for Exclusion, Claim Forms, and any
and all other written communications from Class Members in response to the
Notice for a period of one (1) year following the end of the Claim Period, or
pursuant to further order of the Court.  All

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written communications received by the Settlement Administrator from Class
Members relating to the Settlement Agreement shall be available and provided
upon request to Class Counsel and Counsel for Lumber Liquidators.

5.         Distribute the proceeds of the Settlement Fund pursuant to the
Settlement Agreement;

6.         Confirm the issuance of payment to the Approved Claimants;

7.         Provide any necessary certifications to the Court concerning the
administration and processing of the claims; and

8.         Timely respond to inquiries from Class Counsel, their co-counsel,
Counsel for Lumber Liquidators, the Court, and Settlement Class Members.

NOTICE OF PROPOSED SETTLEMENT

A.        Notice Program

Class Counsel shall work with the Settlement Administrator to prepare the Notice
Plan.  Class Members shall receive constitutionally adequate Notice of the
Settlement.  Class Counsel shall submit to the Court for approval the Notice
Plan. The Notice Plan will provide the best Notice practicable under the
circumstances of the foregoing actions, conform to all aspects of Federal Rule
of Civil Procedure 23, satisfy the Due Process Clause of the United States
Constitution, and comply with the terms and conditions of the Agreement.  Class
Counsel shall work with the Settlement Administrator and/or other class notice
specialists, as necessary, to prepare drafts of the proposed Class
Notice.  Lumber Liquidators shall have the right to review and approve the
proposed Class Notice, including the content of the Settlement website. If any
objections to the proposed Class Notice cannot be resolved by the Parties, they
shall be submitted to the Court for resolution.

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B.         Class Member Contact Information

Lumber Liquidators shall provide Class Counsel and the Settlement Administrator
with the contact information within its possession (included the name, e-mail
address, telephone number, physical mailing address, and total value of Flooring
purchased) of each reasonably identifiable person who falls within the
definition of the Settlement Class by the time this Settlement Agreement is
executed (“Class Member Information”).  Lumber Liquidators warrants and
represents that the Class Member Information provided to Class Counsel
accurately reflects the information retained by Lumber Liquidators in the
ordinary course of business.

C.        Settlement Website

Prior to the Notice Date, the Settlement Administrator shall establish an
Internet website, www.bamboosettlement.com that will inform Settlement Class
members of the terms of this Settlement, their rights, dates and deadlines and
related information. The website shall include, in .pdf format and available for
download, the following: (i) the Long Form Notice; (ii) the Claim Form; (iii)
the Preliminary Approval Order; (iv) this Settlement Agreement (including all of
its Exhibits), (v) the Operative Complaint filed in this case; and (vi) any
other materials agreed upon by the Parties and/or required by the Court.  The
Internet website shall provide Settlement Class Members with the ability to
complete and submit the Claim Form electronically.  The Internet website shall
also make the Claim Form available for download.

D.        Toll-Free Telephone Number

Commencing by the Notice Date, the Settlement Administrator shall establish a
toll-free telephone number, through which Settlement Class members may obtain
information about the Settlement, and request an  electronic copy of the Long
Form Notice and/or the Claim Form,

19

pursuant to the terms and conditions of this Settlement.  The Claim Form will be
mailed to all persons who request one via the toll-free phone number maintained
by the Settlement Administrator.

E.         Direct Notice – United States Mail

By the Notice Date, the Settlement Administrator will send the Long Form Notice
(Notice) United States Postal Service (“USPS”) first class mail to all
Settlement Class Members for whom a physical mailing address can be identified
from the Class Member Information.  Each Notice will include a claim number and
to the extent available purchase information for each individual class member.
Prior to the initial mailing of the Notice, postal mailing addresses will be
checked against the National Change of Address (“NCOA”) database maintained by
the USPS.   Notices that are returned as undeliverable by the USPS and have a
forwarding address will be re-mailed to that forwarding address, and Notices
that are returned as undeliverable by the USPS without a forwarding address will
be subject to address verification (“skip tracing”), utilizing a wide variety of
data sources, including public records, real estate records, electronic
directory assistance listings, etc. to locate updated addresses.  Notices will
then be re-mailed to updated addresses located through skip tracing.

F.         Direct Notice – E-mail Notice

By the Notice Date, the Settlement Administrator shall e-mail each Settlement
Class Member included in the Class Member Information provided by Defendant
(“Email Notice”). The content of the Email Notice shall substantially conform to
the information provided in the Claim Form and will contain a link that the
Settlement Class members can click to take them directly to the claim filing
page on the settlement agreement website where they can enter
their individualized claim number and confirmation code.

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G.        Publication

By the Notice Date, and subject to the requirements of this Agreement and the
Preliminary Approval Order, the Settlement Administrator will provide Notice to
the Settlement Class as follows: Publishing the publication notice and digital
notice pursuant to the Preliminary Approval Order and as set forth in the Notice
Plan described in the Declaration of the Settlement Administrator attached
hereto as Exhibit B; Publishing, on or before the Notice Date, the Long Form
Notice on the settlement website (www.bamboosettlement.com), as specified in the
Preliminary Approval Order and as set forth in the Notice Plan described in the
Declaration of the Settlement Administrator attached hereto as Exhibit B; and
Providing the Internet address, in the Long Form Notice, to the settlement
website (www.bamboosettlement.com).

H.        Notice to Appropriate Federal and State Officials

Not later than 10 days after for the Court enters the Preliminary Approval
Order, the Settlement Administrator shall comply with 28 U.S.C. § 1715.

SETTLEMENT CLASS MEMBERS’ RIGHT OF EXCLUSION

A Settlement Class Member may opt out of the Settlement Class.  To exercise this
exclusion right, the Settlement Class Member must send written notification of
the decision to request exclusion via first class mail to Class Counsel.  The
request for exclusion must bear the signature of the Settlement Class Member
(even if represented by counsel), state the Settlement Class Member’s name,
email address, address of the property(ies) that has Flooring installed and
specify the number of units of residential property or other structures at each
address containing Flooring. The request should also include substantially the
following statement “I want to opt out of the Settlement Class in the Lumber
Liquidators bamboo flooring litigation.”  If the Settlement Class Member has
entered into a written or oral agreement to be represented by counsel, the
request

21

for exclusion shall also be signed by the attorney who represents the Settlement
Class Member.  Such request must be postmarked or personally delivered on such
schedule as the Court may direct.  In seeking Preliminary Approval of this
Settlement, the Parties will request that the deadline for submission of
requests for exclusion shall be set on a date no less than 45 days after the
publication of the Notice.  Exclusions sent by any Settlement Class Member to
incorrect locations shall not be valid.  Any Settlement Class Member who submits
a timely request for exclusion shall not be permitted to object to the
Settlement.

Except for those Settlement Class Members who have properly and timely opted out
of the Class, all Settlement Class Members will be deemed Settlement Class
Members for all purposes under this Settlement and shall be bound by all the
terms and provisions of the Settlement Agreement, and any order related to the
Settlement, whether or not such Settlement Class Members received actual notice
or have objected to the Settlement, and whether or not such Settlement Class
Member makes a Claim or participates in the Settlement.

Any Settlement Class Member who has not timely and properly filed a written
request for exclusion from the Settlement Class shall be bound by this
Settlement and by all subsequent proceedings, orders, and judgments.  Any
Settlement Class Member who elects to opt out of the Settlement Class pursuant
to this Agreement shall not be entitled to relief under or be affected by this
Agreement.

Settlement Class Members who have elected to opt out of the Settlement Class may

withdraw their opt out requests prior to the Effective Date, but only if they
accept the benefits and terms of this Settlement and dismiss with prejudice any
other pending action against Lumber Liquidators arising from damage to their
homes or other structures because of any alleged defects in any Flooring.

22

Class Counsel shall have the right to contact persons who file exclusion
requests and to challenge the timeliness and validity of any exclusion request,
as well as the right to effect the withdrawal of any exclusion filed in error
and any exclusion request which a Settlement Class Member wishes to withdraw for
purposes of participating in the Settlement as set forth in this Agreement.  The
Court shall determine whether any of the contested opt outs is valid.

Within five (5) days of the closing of the opt out period, Class Counsel shall
provide

counsel for Lumber Liquidators, by electronic mail, facsimile, and/or hand
delivery, with a list identifying each person who has requested exclusion from
the Settlement Class and attaching copies of all such requests for exclusion.

If the number of Requests for Exclusion exceeds 1% of the total class size,
Lumber Liquidators has the option to terminate the Settlement Agreement.

Plaintiffs and Plaintiffs’ Counsel in the Gold Litigation covenant and agree to
take no actions, directly or indirectly, designed or intended to influence any
putative member of the Settlement Class to opt out of the settlement, file a
claim, or to assist others in doing so. The parties acknowledge, however, that
if and when Plaintiffs’ Counsel in the Gold Litigation answer Settlement Class
Member questions pertaining to their respective matters, the Parties’
settlement, or the Settlement Agreement or related matters, answering these
questions shall not constitute taking action to influence any putative member of
the Settlement Class to opt out of the settlement or to assist others in doing
so.

SETTLEMENT CLASS MEMBERS’ RIGHT OF OBJECTION

A.        Settlement Class Members who do not request exclusion from the Class
may object to the Settlement Agreement. Settlement Class Members who choose to
object to the Settlement must file written notices of intent to object with the
Court and serve copies of any

23

such objection on Class Counsel and Counsel for Lumber Liquidators.  Any
Settlement Class Member may appear at the Final Approval and Fairness Hearing,
in person or by counsel, and be heard to the extent permitted under applicable
law and allowed by the Court.  The right to object to the Settlement Agreement
must be exercised individually by an individual Settlement Class Member and,
except in the case of a deceased, minor, or incapacitated Person or where
represented by counsel, not by the act of another Person acting or purporting to
act in a representative capacity.

To be effective, an objection to the Settlement Agreement that is filed with the
Court must:

1.         Contain a caption that includes the case name and the case number as
follows: Gold, et al. v. Lumber Liquidators, Inc., et al., 3:14-cv-05373 (N.D.
of Cal.).

2.         Provide the name, mailing address, e-mail address, telephone number
and signature of the Settlement Class Member filing the intent to object, and
identify his or her individual counsel, if any;

3.         Provide a valid proof of membership in the Settlement Class;

4.         File a written letter or brief detailing the specific basis for each
objection, including any legal and factual support the objector wishes to bring
to the Court’s attention and any evidence the objector wishes to introduce in
support of the objection with the Court not later than thirty (30) days prior to
the Final Approval and Fairness Hearing;

5.         Be served contemporaneously on Class Counsel and Counsel for Lumber
Liquidators (unless filed via the Court’s ECF system, such that copies will be
transmitted electronically to these counsel);

6.         Contain the number of class action settlements objected to by the

24

Settlement Class Member in the last three (3) years;

7.         List prior representations of objectors in class action cases by the
objector’s counsel and all sanctions or discipline ordered by any court, bar
association or governmental agency against that counsel.

8.         State whether the objecting Settlement Class Member intends to appear
at the Final Approval and Fairness Hearing, either in person or through counsel.

9.         State that the objecting Settlement Class Member is financially
capable and prepared to post a bond in an amount to be determined by the Court
to adequately compensate class members for the loss of value to Settlement Class
Member compensation occasioned by any delay in payment due to an objection, or
notice of appeal.

Any Settlement Class Member who does not file a timely and adequate notice of
intent to object in accordance with this Settlement Agreement waives the right
to object or to be heard at the Final Approval and Fairness Hearing, unless the
Court permits otherwise, and shall be forever barred from making any objection
to the Settlement.  To the extent any Settlement Class Member objects to the
Settlement Agreement, and such objection is overruled in whole or in part, such
Settlement Class Member will be forever bound by this Settlement Agreement, the
Final Approval Order, and Judgment of the Court.

B.         The filing of an objection allows Class Counsel and Counsel for
Lumber Liquidators to request the Court to notice such objecting Settlement
Class Member for and take his or her deposition consistent with the Federal
Rules of Civil Procedure at an agreed-upon location, and to seek any documentary
evidence or other tangible things that are relevant to the objection. Failure by
an objecting Settlement Class Member to make himself or herself available for a
deposition or to comply with expedited discovery requests may result in the
Court striking

25

the Settlement Class Member’s objection and otherwise denying that Settlement
Class Member the opportunity to make an objection or be further heard.  The
Parties reserve the right to ask the Court to tax the costs of any such
discovery to the objecting Settlement Class Member’s separate counsel should the
Court determine that the objection is frivolous or is made for an improper
purpose.

C.         If the objection is made through an attorney, the written objection
must also include: (1) the identity and number of the Settlement Class Members
represented by objector’s counsel; and (2) the number of such represented
Settlement Class Members who have opted out of the Settlement Class.

REPORT BY SETTLEMENT ADMINISTRATOR

A.        No later than thirty (30) days before the Final Approval and Fairness
Hearing, the Settlement Administrator shall provide to Class Counsel and Counsel
for Lumber Liquidators the following information:

i.          The number of Notices mailed or sent to Settlement Class Members;

ii.         The number of claims submitted

iii.        The number of Settlement Class Members to date who have submitted
Approved Claims;

iv.        The number of Settlement Class Members who have submitted Requests
for Exclusion from the Settlement Classes and the names of such persons;

v.         Any information about any objections to the Settlement Agreement that
the Settlement Administrator has not previously forwarded; and

vi.        Any other tracking information reasonably requested by Class Counsel
or Counsel for Lumber Liquidators.

26

B.         A report stating the total number of Settlement Class Members who
have submitted timely and valid Requests for Exclusions and the names of such
Settlement Class Members shall be filed by Class Counsel not later than ten (10)
days before the Final Approval and Fairness Hearing.

FINAL APPROVAL

A.        If the Court preliminarily approves the Settlement Agreement, Class
Counsel, with the cooperation of counsel for Lumber Liquidators, shall submit a
motion for final approval of the Settlement Agreement by the Court at a date set
by the Court, but no later than one hundred twenty (120) days from the date of
Notice.  The parties may submit supplemental memoranda in support of the motions
for final settlement approval or the awarding of costs and fees at a date set by
the Court, but no later than ten (10) days before the Final Approval and
Fairness Hearing.  The motion seeking final approval shall take into
consideration the United States District Court for the Northern District of
California’s Class Action Settlement Guidance.

B.         The Notice to the Settlement Class shall contain a date, time and
location for the Final Approval and Fairness Hearing to be conducted by the
Court. The Parties shall jointly request the Court to set a hearing on Final
Approval of the Settlement Agreement approximately forty-five (45) days from the
end of the claims period or such later date as the Court may determine.

C.         The Parties shall request the Court upon final approval of this
Settlement Agreement, to enter the Final Approved Order and Judgment, which
shall include:

i.          Grant final approval to the Settlement and Settlement Agreement as
fair, reasonable, adequate, in good faith and in the best interests of the
Settlement Class, and order the Parties to carry out the provisions of this
Settlement Agreement;

27

ii.         Dismiss with prejudice and without costs the Complaint and
litigation against Lumber Liquidators and the Released Parties;

iii.        Adjudge that Releasing Parties are conclusively deemed to have
released Lumber Liquidators and the Released Parties of the Released Claims;

iv.        Bar and permanently enjoin each Settlement Class Member who has not
timely submitted a Request for Exclusion from prosecuting against the Released
Persons any and all of the Released Claims;

v.         Reserve continuing and exclusive jurisdiction by the Court to preside
over any ongoing proceedings relating to the Claims or this Settlement
Agreement; and

vi.        Determine under Fed. R. Civ. P. 54(b) that there is no just reason
for delay and direct that the Final Judgment as to the Released Parties to be
final and appealable and entered forthwith.

CLASS COUNSEL FEES AND ADMINISTRATIVE COST

A.        Plaintiffs’ Counsel will apply to the Court by motion for an award to
Plaintiffs’ Counsel for attorneys’ fees of up to 33.33% of the Settlement Fund,
and for actual costs and expenses, together with the cost of notice and
administrative costs to be paid from the Settlement Fund.

B.         Within forty-five  (45) days of Effective Date of  the Final Approval
Order and Judgment and entry by the Court of an order awarding attorneys’ fees,
costs, and expenses (“Fee, Cost, and Expense Order”), any awarded attorneys’
fees, costs, and expenses shall be paid to Class Counsel from the Escrow Account
by the Escrow Agent, notwithstanding the existence of or pendency of any appeal
or collateral attack on the Settlement or any part thereof or the Fee, Cost, and
Expense Order.  In the event that the Effective Date does not occur or the
Settlement

28

Agreement is terminated pursuant to its terms, or if, as the result of any
appeal or further proceedings on remand, or successful collateral attack, the
Fee, Cost, and Expense Order is reversed or modified pursuant to a final court
order and attorneys’ fees, costs, and expenses have been paid out of the Escrow
Account to any extent, then Class Counsel shall be obligated and does hereby
agree, within ten (10) business days after receiving notice of the foregoing
from Lumber Liquidator’s Counsel or from a court of appropriate jurisdiction, to
refund to the Escrow Account such attorneys’ fees, costs, and expenses that have
been paid, plus interest thereon at the same rate as would have been earned had
those sums remained in the Escrow Account.

SERVICE AWARDS

Subject to approval by the Court, each of the named Representative Plaintiffs in
the Sixth Amended Complaint will receive $7,500 for their participation in this
litigation.  If a husband and wife, or other co-purchasers were both Plaintiffs,
they are entitled to a single Service Award.  This amount is to be paid from the
Settlement Fund.

CLAIM PROCESSING AND DISTRIBUTION OF SETTLEMENT

A.        Class Members may electronically complete and sign the appropriate
Claim Form and submit it to the Settlement Administrator via an electronic Claim
Form submission process to be established by the Settlement Administrator.
Alternatively, Settlement Class Members may submit such Claim Form via U.S.
mail. A Claim Form shall be considered defective if the Claimant fails to timely
submit the Claim Form, provide the required information on the Claim Form, or
fails to electronically or physically sign certifying that the Claimant is
entitled to the benefit sought.

B.         Within thirty (30) days of the entry of the Final Approval Order and
Judgment, the Settlement Administrator will notify Class Counsel of any
Settlement Class Member who has

29

submitted a deficient Claim Form, and those Settlement Class Members will be
given ten (10) calendar days from the date of the deficiency notice to cure the
deficiency.

C.         Within sixty (60) days of the Effective Date, the Settlement
Administrator will distribute the checks and the vouchers.

D.        Cash payments made pursuant to this Settlement Agreement will be made
to Approved Claimants via physical checks mailed to the address provided on the
Claim Form. Store-credit Vouchers will be mailed to the address of the Approved
Claimant (or appropriate assignee), provided on the Claim Form. Class Counsel
and Counsel for Lumber Liquidators shall confer before the Settlement
Administrator begins to distribute the checks or Store-credit Vouchers to the
Approved Claimants. If an appeal is filed, distribution of Settlement Fund to
Approved Claimants will be stayed until further order by the Court.

E.         The Class Members acknowledge that the Claims process may take longer
than described above due to the number of potential Settlement Class Members.
The Settlement Administrator will employ all due commercially reasonable speed
to distribute claimed cash payments and Store-credit Vouchers to Approved
Claimants as set forth herein.

F.         The Settlement Class Members shall be entitled solely to the
Settlement Funds and Store- Credit Vouchers for settlement and satisfaction
against Defendant and the Released Parties for the Released Claims and shall not
be entitled to any other payment or relief from Defendant or the Released
Parties. The Representative Plaintiffs, Settlement Class Members and their
counsel, Class Counsel, as well as the Settlement Administrator will be
reimbursed and indemnified solely out of the Settlement Funds.  Defendant and
the other Released Parties shall not be liable for any costs, fees, or expenses
of any description, including any costs, fees or expenses of the Representative
Plaintiffs or their attorneys, experts, advisors, or other

30

representatives of the Settlement Class.

RELEASE BY ALL SETTLEMENT CLASS MEMBERS

A.        Effective upon Final Approval, Plaintiffs, for and on behalf of
themselves, and every member of the Settlement Class, every purchaser of
Flooring during the Class Period, and each of their respective heirs and
assigns, except for those who have requested to be excluded from the Classes,
(hereafter the “Releasing Parties”) jointly and severally, hereby RELEASE, HOLD
HARMLESS, FOREVER DISCHARGE, AND SHALL FOREVER BE ENJOINED FROM PROSECUTION
against Defendant and the Released Parties of any and all claims, causes of
action, lawsuits, proceedings, damages, judgments, losses, penalties,
liabilities, rights, obligations, duties, demands, liens, actions,
administrative proceedings, remedies, costs, fees of any kind, expenses, and
claims of any kind whatsoever, including based on fraud, whether known or
unknown, contingent or unsuspected, disclosed or undisclosed, liquidated or
unliquidated, asserted or unasserted, accrued or un-accrued, in law, in equity
or otherwise, in contract, tort, warranty, strict liability or otherwise, that
have been, could have been, or in the future can or might be asserted in any
court, tribunal or proceeding (including but not limited to any claims arising
under federal, state, foreign or common law, including any federal or state
consumer protection law), by or on behalf of Plaintiffs or any member of the
Settlement Class, whether individual, direct, class, representative, legal,
equitable, or other type or in any other capacity against Defendant and the
Released Parties, which the Releasing Parties ever had, now have, or may have
had, from the beginning of time to the Effective Date, by reason of, arising out
of, relating to, or in connection with the acts, events, facts, matters,
transactions, occurrences, statements, representations, misrepresentations,
omissions, or any other matter whatsoever related directly or indirectly to: (1)
the Plaintiffs’ and Settlement Class Members’ purchase

31

and/or use of Morning Star Strand Bamboo Flooring sold by Lumber Liquidators
between January 1, 2012 and March 15, 2019; (2) the manufacture, sale,
distribution, labeling, marketing or advertising of Flooring during the Class
Period; (3) Defendant’s warranty related to the Flooring purchased during Class
Period for any claim that the product is subject to premature cracking,
splitting, buckling, warping, cupping, and shrinking or moisture-related issue
and/or (4) any claim by Plaintiffs or Settlement Class Members of any nature
related to Flooring sold by Defendant between January 1, 2012 to March 15, 2019,
except as specified below (hereafter the “Released Claims”).

The Released Claims, however, shall not include any claims to enforce the
Settlement Agreement, personal injury claims, or the request of Class Counsel
for fees, costs, and expenses as set forth in, or as related to, this Settlement
Agreement.

B.         The “Released Parties” shall include Lumber Liquidators, Inc., its
parent, subsidiaries, and affiliates, including but not limited to, Lumber
Liquidators Holdings, Inc.; Lumber Liquidators Services, LLC; Lumber Liquidators
Leasing, LLC; individual Lumber

Liquidators retail stores located throughout the United States; the China
Regional Office; and  the seven suppliers of Flooring1. All of these entities
shall be released including but not limited to any controlling persons,
associates, affiliates, or subsidiaries and each and all of their respective
past or present officers, members, managers, directors, stockholders,
principals, representatives, employees, attorneys, financial or investment
advisors, insurers, consultants, experts, accountants, bankers, testing
laboratories, advisors or agents, heirs, executors, trustees, general

 

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

1         The seven suppliers are: (1) Maisoon International; (2) Zhejiang
Chanxiang Senda Bamboo & Wood; (3) Zhejiang Tianzhen Bamboo & Wood; (4)
Changxing Jingwei Bamboo Products; (5) Wuxi Boda Bamboo & Wood Industrial; (6)
Fujian Jianou Huayu Bamboo Industry; and (7) Yixing New Senda.

32

 

or limited partners or partnerships, limited liability companies, members, joint
ventures, personal or legal representatives, estates, administrators,
predecessors, successors, and assigns.

C.         In agreeing to the foregoing waiver, the Releasing Parties expressly
acknowledge and understand that they may hereafter discover facts in addition to
or different from those which they now believe to be true with respect to the
subject matter of the claims released herein, but expressly agree that they have
taken these possibilities into account in electing to participate in this
release, and that the release given herein shall be and remain in effect as a
full and complete release notwithstanding the discovery or existence of any such
additional or different facts, as to which the Releasing Parties expressly
assume the risk.

D.        As of the Effective Date, by operation of the entry of the Final
Approval Order and Judgment, each Class Member who does not file a valid Request
for Exclusion, automatically, upon entry of the Final Approval Order and
Judgment, shall be held to have fully released, waived, relinquished, and
discharged the Released Parties from the Released Claims, to the fullest extent
permitted by law, and shall be enjoined from continuing, instituting, or
prosecuting any legal proceeding against the Released Parties relating in any
way whatsoever to the Released Claims.

E.         The Releasing Parties, on behalf of themselves and their respective
assigns, agree not to sue or otherwise make a claim against any of the Released
Parties that is in any way related to the Released Claims.

F.         With respect to the Released Claims, the Releasing Parties shall
expressly waive any and all provisions, rights, and benefits conferred by any
law of any state or territory of the United States which is similar, comparable
or equivalent to California Civil Code Section 1543, which provides:

 

33

 

A general release does not extend to claims which the creditor or releasing
party 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 or released party.

DISMISSAL

The Releasing Parties stipulate and agree that upon the Court’s entry of the
Final Approval Order and Judgment, and after expiration of any appeals of that
Order, Gold, et al. v. Lumber Liquidators, Inc., et al., 3:14-cv-05373 (N.D.
Cal.) shall be DISMISSED WITH PREJUDICE.

CONFIDENTIALITY

This Agreement of Compromise and Settlement and its terms shall remain
confidential from the public until a jointly approved press release can be
prepared. Lumber Liquidators, however, may disclose this proposed settlement to
regulators, such as the Department of Justice, Securities and Exchange
Commission (“SEC”), and the Attorneys General of certain states, as well as to
certain financial, auditing, or other business consultants and may make public
disclosures in its filings with the SEC. The Parties also agree that they will
cooperate in drafting a joint press release regarding the settlement to be
issued upon the issuance of the Final Approval Order.

Otherwise, the Parties and their counsel agree that they will not affirmatively
seek media coverage in print, Internet, or other media regarding this Settlement
Agreement, but may naturally respond to press or media inquiries by describing
the settlement as a good result for the class, or other substantially similar
words. Nothing in this paragraph, however, restricts the Parties from:

a.          Publishing the Settlement Agreement and the result on their
websites;

b.         Utilizing media as set forth in the Court-approved Notice plan;

34

c.          Issuing a press release with language to be agreed upon between the
Parties;

d.         Truthfully responding privately to inquiries concerning the
Settlement Agreement from their clients, including Settlement Class Members; or

e.          Truthfully responding to any press or media inquiries regarding
details of the Settlement Agreement.

Plaintiffs and Plaintiffs’ Counsel also agree that they will not make any
statements or engage in any conduct which disparages Defendant’s or Release
Parties’ conduct, character, or business reputation or the conduct, character,
or reputation of any agent of such entity.

AMENDMENT

This Agreement may be modified, amended or supplemented only by written
agreement signed by or on behalf of all Parties, and if such modification,
amendment or supplement is to be executed and become effective subsequent to the
entry of the Preliminary Approval Order, only with the approval of the Court.

AUTOMATIC TERMINATION OF SETTLEMENT AGREEMENT AND TERMINATION RIGHTS

 

In the event that this Settlement Agreement does not become a final, enforceable
contract that is approved by the Court and upheld on appeal for any reason:

A.        Except as expressly stated herein, this Settlement Agreement shall
automatically become null and void and have no further force or effect, and all
proceedings that have taken place with regard to this Settlement shall be
without prejudice to the rights and contentions of the Parties;

B.         If the Settlement Agreement is not preliminarily or finally approved
by the Court, the Parties will resume the litigation of Gold, et al. v. Lumber
Liquidators, Inc., et al., 3:14-cv-05373

35

(N.D. Cal.) at the procedural juncture as of January 26, 2019, including the
Fifth Amended Complaint remaining the operative complaint;

C.         If this Settlement Agreement; the order preliminarily approving the
Settlement Agreement and/or Final Order and Judgment approving this Settlement
Agreement is vacated, materially modified or reversed, in whole or part, this
Settlement Agreement will be deemed terminated, unless the Parties, in their
sole discretion within thirty (30) days of receipt of such ruling, agree to
proceed with the Settlement Agreement as modified by the Court or on appeal.

D.        If the Settlement Agreement is terminated, any Settlement Funds in the
Settlement Fund Escrow Account or that have come into possession of the
Plaintiffs or Class Counsel, except for any funds paid or owed to the Settlement
Administrator or to any other Notice consultant or provider, or any funds
otherwise paid or owed for any Settlement administration or Notice-related
purpose, shall be returned to Defendant within ten (10) Days of termination.

E.         This Section and the Section on Confidentiality shall survive any
termination of this Settlement Agreement.

SETTLEMENT ADMISSIBILITY

This Settlement Agreement, any provision of this Settlement Agreement and the
fact of this Settlement Agreement having been made, shall not be admissible or
entered into evidence for any purpose except by the Parties to enforce the terms
of the Settlement Agreement; nor will any information produced solely in
connection with any of the Parties’ mediations be admissible.

SEVERABILITY

With the exception to provisions contained herein, in the event any covenant,
term or other provision contained in this Settlement Agreement is held to be
invalid, void or illegal, the same shall be deemed severed from the remainder of
this Settlement Agreement and shall in no

36

way affect, impair or invalidate any other covenant, condition or other
provision herein.  If any covenant, condition or other provision herein is held
to be invalid due to its scope or breadth, such covenant, condition or other
provision shall be deemed valid to the extent of the scope or breadth permitted
by law.

INCORPORATION OF EXHIBITS

All attached exhibits are hereby incorporated by reference as though set forth
fully herein and are a material part of the Settlement Agreement.

GOVERNING LAW AND COMPLIANCE WITH TERMS

OF SETTLEMENT AGREEMENT

All questions with respect to the construction of this Settlement Agreement and
the rights and liabilities of the Parties shall be governed by the laws of
California, without giving effect to its law of conflict of laws.

The Court shall have continuing and exclusive jurisdiction to resolve any
dispute that may arise with regard to the terms and conditions of this
Settlement Agreement, and the Parties hereby consent to such jurisdiction.

PREPARATION OF SETTLEMENT AGREEMENT, SEPARATE COUNSEL AND AUTHORITY TO ENTER
SETTLEMENT AGREEMENT

 

A.        The Parties and their counsel have each participated and cooperated in
the drafting and preparation of this Settlement Agreement. Hence, in any
construction to be made of this Settlement Agreement, the same shall not be
construed against any Party as drafter of the Settlement Agreement.

B.         In entering this Settlement Agreement, each Party has relied upon the
advice of the Party’s own attorneys of choice and has not relied upon any
representation of law or fact by any other Party hereto.

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C.         This Settlement Agreement, including exhibits attached hereto,
supersedes any and all prior agreements, including, without limitation, the
Memorandum of Understanding, and it constitutes the entire understanding between
and among the Parties with regard to the matters herein.  There are no
representations, warranties, agreements, or undertakings, written or oral,
between the Parties hereto, relating to the subject matter of this Settlement
Agreement which are not fully expressed herein, with the exception of the
Stipulated Undertaking re Attorney Fees and Costs in connection with the
proposed Class Action Settlement.

D.        The Parties each represent and warrant that each of the Persons
executing this Settlement Agreement is duly empowered and authorized to do so.

COUNTERPARTS

This Settlement Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

BINDING EFFECT

This Settlement Agreement shall be binding upon and inure to the benefit of the
Parties and to their respective heirs, assigns, and successors-in-interest.

ENTIRE AGREEMENT

This Settlement Agreement represents the entire agreement between the Parties
and supersedes all other oral and written agreements and discussions.  Each of
the Parties covenants that he, she or it has not entered into this Settlement
Agreement as a result of any representation, agreement, inducement, or coercion,
except to the extent specifically provided herein.  Each Party further covenants
that the consideration recited herein is the only consideration for
entering into this Settlement Agreement and that no promises or representations
of another or further

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consideration have been made by any Person,

NOTICE

All notices, requests, demands and other communications to the Parties or their
counsel required or permitted to be given pursuant to this Settlement Agreement
shall be in writing and shall be delivered personally or mailed postage-prepaid
by First Class U.S. Mail to the following persons at their addresses set forth
as follows:

Class Counsel for Plaintiffs:

 

Charles LaDuca

Brendan Thompson

CUNEO GILBERT & LADUCA LLP

4725 Wisconsin Avenue, NW, Suite 200

Washington, DC 20016

 

Michael F. Ram

Robins Kaplan

2440 West El Camino Real, Suite 100

Mountain View, CA 94040

 

Jeffrey B. Cereghino

Cereghino Law Group

101 Montgomery Street, Suite 1800

San Francisco, CA 94104

 

Counsel for Defendant Lumber Liquidators, Inc.

 

Diane P. Flannery

McGuireWoodsLLP

800 East Canal Street

Richmond, VA 23219

 

Bethany Lukitsch

McGuire WoodsLLP

Wells Fargo Center,  South Tower

355 South Grand Street, Suite 4200

Los Angeles,  CA. 90071

 

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WHEREFORE, the undersigned, being duly authorized, have caused this Settlement
Agreement to be executed on the dates shown below and agreed that it shall take
effect on the last date of execution by all undersigned representatives of the
Parties.

Dated this 30th day of September 2019.

 

Class Counsel for Plaintiffs:

 

/s/ Brendan Thompson

 

Charles LaDuca

 

Brendan Thompson

 

CUNEO GILBERT & LADUCA LLP

 

4725 Wisconsin Avenue, NW, Suite 200

 

Washington, DC 20016

 

 

 

 

 

/s/ Michael F. Ram

 

Michael F. Ram

 

Robins Kaplan LLP

 

2440 West El Camino Real, Suite 100

 

Mountain View, CA 94040

 

 

 

 

 

/s/ Jeffrey B. Cereghino

 

Jeffrey B. Cereghino

 

Cereghino Law Group

 

101 Montgomery Street, Suite 1800

 

San Francisco, CA 94104

 

 

 

Defendant, Lumber Liquidators, Inc.

 

 

 

 

 

/s/ Lee Reeves

 

Lee Reeves

 

Sr. Vice President, Chief Legal Officer & Corporate Secretary

 

Lumber Liquidators, Inc.

 

3000 John Deere Road

 

Toano, VA 23168

 

 

 

 

 

 

 

 

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Counsel for Defendant Lumber Liquidators, Inc.

 

 

 

 

 

/s/ Bethany Lukitsch

 

Bethany Lukitsch

 

McGuireWoodsLLP

 

Wells Fargo Center, South Tower

 

355 S. Grand Ave., Suite 4200

 

Los Angeles, CA 90071

 

 

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