**1. Definitions.**          1.1. The following definitions shall apply to this Settlement Agreement.          1.2. “Claims Committee” means individuals to be appointed by Lead Plaintiffs’ Counsel whowill be responsible for recommending to the Third Party Administrator the amount of SettlementFunds to be allocated to each Plaintiff and Claimant under the Settlement Program.          1.3. “Effective Date” means the date that this Settlement Agreement is fully executed byall of the Parties.          1.4. “Escrow Agent” means a Marshall & Ilsley Trust Company, N.A**.**The Escrow Agent shallbe responsible for holding funds to be distributed pursuant to the Settlement Program.          1.5. “Escrow Account” means an account at a financial institution to be managed by theEscrow Agent. Settlement Funds will be deposited by Defendants Matrixx Initiatives, Inc. andZicam LLC into the Escrow Account as set forth in Paragraphs 4.1, 4.2, 4.3, 4.4 and 4.6 of thisSettlement Agreement.          1.6. “Lead Defense Counsel” means Charles Preuss and Alan Lazarus of Drinker Biddle & ReathLLP.          1.7. “Lead Plaintiffs’ Counsel” means Lead MDL Counsel Charles Zimmerman of Zimmerman ReedP.L.L.P., Lead Counsel for California Plaintiffs Steven Skikos of Skikos, Crawford, Skikos,Koseph & Millican LLP and Lead Counsel for Arizona Plaintiffs Stephen Leshner of Stephen I.Leshner, P.C.          1.8. “Notification Date” means the date that Lead Plaintiffs’ Counsel notifies Lead DefenseCounsel pursuant to Paragraph 3.2 that the following has occurred: (a) ninety-seven percent(97%) of all Plaintiffs and Claimants identified in Revised Schedule A who used a Zicam ColdRemedy Nasal Gel dispensed with a single hole actuator pump have enrolled and agreed toparticipate in the Settlement Program and (b) ninety-four percent (94%) of all Plaintiffs andClaimants identified in Revised Schedule A who only used other Zicam products have enrolled andagreed to participate in the Settlement Program.          1.9. “Plaintiffs and Claimants” means the individuals identified in Revised Schedule A whoare known to have claims as of the Effective Date.          1.10. “Plaintiffs’ and Claimants’ Counsel” means counsel who represent the Plaintiffs andClaimants identified on Revised Schedule A that are known as of [ the Effective Date.          1.11. “Releasees” means all defendants who are being released as part of the Releaseattached hereto as Schedule D.
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          1.12. “Settlement Funds” means the funds to be deposited by Defendants Matrixx Initiatives,Inc. and Zicam LLC under Paragraphs 4.1, 4.2, 4.3, 4.4 and 4.6 of this Settlement Agreement.          1.13. “Settlement Program” means a program to be developed by Plaintiffs’ Counsel thatprovides for the distribution of Settlement Funds by a Third Party Administrator.          1.14. “Third Party Administrator” means an entity or person to be selected by LeadPlaintiffs’ Counsel that will be responsible for allocating Settlement Funds based on theSettlement Program.     **2. Reconciliation of Schedule A**          2.1. This Settlement Agreement encompasses all Plaintiffs and Claimants known byPlaintiffs’ and Claimants’ Counsel as of the Effective Date.          2.2. The names of all Plaintiffs and Claimants known by Defendants as of November 22, 2010are identified on the attached Schedule A.          2.3. Plaintiffs’ and Claimants’ Counsel shall verify that Plaintiffs and Claimantsidentified on Schedule A are still pursuing their claims and delete from Schedule A anyindividuals who are no longer pursuing a claim or are no longer represented by counsel.Plaintiffs’ and Claimants’ Counsel shall add to Schedule A any additional Plaintiffs orClaimants who become known to them up through the Effective Date of this Settlement Agreement.          2.4. Lead Plaintiffs’ Counsel shall provide to Lead Defense Counsel a Revised Schedule A nolater than 5:00 p.m. (Pacific Standard Time) on December 20, 2010 that includes one hundredpercent of all Plaintiffs and Claimants known by Plaintiffs’ and Claimants’ Counsel as of theEffective Date. Revised Schedule A shall include the name of each Plaintiff or Claimant, theproduct used, the caption of the lawsuit, if any, and the name of the attorney or attorneysrepresenting each Plaintiff or Claimant.          2.5. In submitting Revised Schedule A to Defense Counsel pursuant to Paragraph 2.4, LeadCounsel for MDL Plaintiffs represent that they have communicated with all lawyers representingone or more Plaintiffs or Claimants on Revised Schedule A and that each of those lawyers haveagreed to be bound by the terms of this Settlement Agreement and have confirmed that one hundredpercent of all Plaintiffs and Claimants represented by his or her firm as of the Effective Dateare to be included on Revised Schedule A.          2.6. Defendants’ Right to Void and Cancel the Settlement Agreement Upon Reconciliationof Schedule A. If the number of Plaintiffs and Claimants on the Revised Schedule A containsthree percent (3%) less than the number of Plaintiffs and Claimants identified on the originalSchedule A attached hereto then Defendants have the right to void and cancel this SettlementAgreement in its entirety in their sole discretion. Lead Defense Counsel shall notify LeadPlaintiffs’ Counsel of any decision to void and cancel the
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Settlement Agreement pursuant to this Paragraph no later than five (5) days after receivingRevised Schedule A.     **3. Scope of Settlement**          3.1. This Settlement Agreement encompasses all Plaintiffs and Claimants known byPlaintiffs’ and Claimants’ Counsel as of the Effective Date Each Plaintiff or Claimant knownmust be identified on Revised Schedule A and will be used to calculate whether the thresholdrequirements under Paragraph 3.2 are met.          3.2. No later than 5:00 p.m. (Pacific Standard Time) on January 20, 2011, Lead Plaintiffs’Counsel shall notify Lead Defense Counsel whether (a) ninety-seven percent (97%) of allPlaintiffs and Claimants who used a Zicam Cold Remedy Nasal Gel dispensed with a single holeactuator pump identified on Revised Schedule A have enrolled and agreed to participate in theSettlement Program and (b) ninety-four percent (94%) of all Plaintiffs and Claimants who onlyused other Zicam products identified on Revised Schedule A have enrolled and agreed toparticipate in the Settlement Program. The notice to be sent by Lead Plaintiffs’ Counsel toLead Defense Counsel under this Paragraph shall identify by name each Plaintiff and Claimant whohas agreed to participate in the Settlement Program and the product used.          3.3. Defendants’ Right to Void and Cancel the Settlement Agreement If Thresholds AreNot Met. If either or both of the ninety-seven percent (97%) and ninety-four percent (94%)thresholds set forth in Paragraph 3.2 are not met by 5:00 p.m. (Pacific Standard Time) onJanuary 20, 2011, Defendants have the right and option to void and cancel this SettlementAgreement in its entirety at their sole discretion.     **4. Funding of Settlement**          4.1. Defendant Matrixx Initiatives, Inc. and Zicam LLC will pay a total of no more thanfifteen million five hundred thousand dollars ($15,500,000) to settle all claims of Plaintiffsand Claimants who enroll and agree to participate in the Settlement Program, subject to anydeduction in payment of Settlement Funds set forth in Paragraph 4.6. These Settlement Fundsinclude all costs, attorneys’ fees (including any common benefit fees) and other expenses andshall be paid pursuant to Paragraphs 4.2, 4.3, 4.4 and 4.6 below. In no event will Defendantsbe responsible for payment of additional settlement funds to settle these claims.          4.2. Subject to Defendants’ right to void and cancel this Settlement Agreement pursuant toParagraph 2.5,no later than seven (7) business days after Lead Defense Counsel receives RevisedSchedule A, Defendants Matrixx Initiatives, Inc. and Zicam LLC will deposit eleven million fivehundred thousand dollars ($11,500,000) into the Escrow Account to be managed by the Escrow Agentfor purposes of distributing the Settlement Funds under the Settlement Program. In the eventthat the threshold number of Plaintiffs and Claimants set forth in Paragraph 3.2 do not agree toparticipate in the Settlement Program and the Defendants void and cancel this SettlementAgreement under Paragraph 3.3, the Escrow
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Agent shall return Settlement Funds deposited under this Paragraph to Defendants MatrixxInitiatives, Inc. and Zicam LLC within five (5) business days.          4.3. An additional two million dollars ($2,000,000) in Settlement Funds shall be depositedby Defendants Matrixx Initiatives, Inc. and Zicam LLC into the Escrow Account no later thaneight months after the initial settlement payment is made pursuant to Paragraph 4.2. In theevent that Defendants have exercised their right to void and cancel the Settlement Agreementpursuant to Paragraphs 2.5 or 3.3, no payment shall be made under this Paragraph.          4.4. A final payment of two million dollars ($2,000,000) in Settlement Funds, minus theamount to be deducted under Paragraph 4.6, shall be deposited by Defendants Matrixx Initiatives,Inc. and Zicam LLC into the Escrow Account no later than twenty months after the initialsettlement payment is made pursuant to Paragraph 4.2.. In the event that Defendants haveexercised their right to void and cancel the Settlement Agreement pursuant to Paragraphs 2.5 or3.3, no payment shall be made under this Paragraph.          4.5. Any interest earned from the Escrow Account shall be made available for Plaintiffs’Counsel to pay costs associated with administering, or payments to Plaintiffs or Claimantsunder, the Settlement Program. If Defendants exercise their right to cancel and void thisSettlement Agreement, all interest shall be returned to Defendants Matrixx Initiatives, Inc. andZicam LLC.          4.6. No later than 5 p.m. (Pacific Standard Time) on January 20, 2011, Lead Plaintiffs’Counsel shall provide to Lead Defense Counsel a list of each Plaintiff or Claimant who has optednot to participate in the Settlement Program. As to each Plaintiff or Claimant identified inRevised Schedule A who elected not to participate in the Settlement Program, Lead Plaintiffs’Counsel shall provide to Lead Defense Counsel within thirty (30) calendar days of theNotification Date the amount that these individuals would qualify for under the SettlementProgram if they had agreed to participate. To the extent that Defendants dispute the amount ofthe award based on the criteria used for allocating awards, Lead Plaintiffs’ Counsel and DefenseCounsel agree to have the Third Party Administrator resolve the disputed amount. Defendantsshall be entitled to a reduction in the amount of Settlement Funds to be deposited underParagraph 4.4 for each Plaintiff or Claimant who opts not to participate in the SettlementProgram. If the amount of the award is unknown based on the information available to LeadPlaintiffs’ Counsel, Defendants shall be entitled to a reduction in the amount of the SettlementFunds to be deposited under Paragraph 4.4 based on the average award for a Plaintiff or Claimantwho used the same product and delivery device.          4.7. No funds shall be paid from the Escrow Account to any Plaintiff, Claimant or counselwithout the express consent of Lead Plaintiffs’ Counsel and Lead Defense Counsel.     **5. Settlement Program**          5.1. Plaintiffs’ Counsel will draft and develop a Settlement Program that sets fortheligibility criteria for payments that will be made to individual Plaintiffs and Claimants whoenroll in the Settlement Program.
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          5.2. Within twenty (20) calendar days of the Effective Date, Lead Plaintiffs’ Counsel willprovide to Lead Defense Counsel the Settlement Program describing how Settlement Funds will bedistributed to eligible Plaintiffs and Claimants.          5.3 A Claims Committee to be selected by Lead Plaintiffs’ Counsel will be responsible forrecommending allocations of the Settlement Funds to each Plaintiff and Claimant pursuant to theSettlement Program with the amounts to be approved by the Third Party Administrator.     **6. Known Plaintiffs and Claimants**          6.1. The undersigned Plaintiffs’ Counsel represent that as of the Effective Date they arenot aware of any other cases or claims involving Zicam Cold Remedy or other Zicam productsalleging loss of smell and/or taste other than those that will be identified on Revised ScheduleA and agree to join all Plaintiffs and Claimants known as of the Effective Date on RevisedSchedule A. Lead Plaintiffs’ Counsel for MDL Plaintiffs further represent that each Plaintiff’sand Claimant’s counsel with one or more Plaintiffs or Claimants on Revised Schedule A haverepresented that Revised Schedule A includes one hundred percent (100%) of all Plaintiffs andClaimants represented by his or her firm as of the Effective Date and that each Plaintiff’s andClaimant’s Counsel have represented that they agree to be bound by the terms of this SettlementAgreement.     **7. Medicare Eligibility**          7.1. Each Plaintiff or Claimant who elects to participate in the Settlement Program shallsubmit to Lead Defense Counsel full and complete responses to the questions set forth inSchedule C hereto within thirty (30) days of the Notification Date. No Settlement Funds may bedistributed to any Plaintiff or Claimant who has not complied with this requirement.     **8. Releases and Dismissals**          8.1. Plaintiffs and Claimants who agree to participate in the Settlement Program willexecute Releases and Dismissals as described in Paragraphs 8.2 and 8.3 below. Under nocircumstances shall any payment from the Settlement Funds be made to a Plaintiff or Claimant whohas not fully executed a Release and Dismissal and provided a signed copy to Lead DefenseCounsel.          8.2. Releases. Each Plaintiff and Claimant who has elected to participate in theSettlement Program shall execute a Release in the same form as set forth in Schedule D attachedhereto and provide it to Lead Defense Counsel within thirty (30) calendar days of theNotification Date.          8.3. Dismissals. Each Plaintiff who has agreed to participate in the SettlementProgram shall complete and execute a Dismissal in the same form as set forth in Schedule Eattached hereto and provide it to Lead Defense Counsel within thirty (30) calendar days of theNotification Date. Defense Counsel shall not file the Dismissal with the Court until finalpayment is disbursed to the Plaintiff or Claimant under the Settlement Program. LeadPlaintiffs’ Counsel shall notify Lead Defense Counsel within five (5) calendar days after a
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check is issued from the Escrow Account to individual Plaintiffs and Claimants as paymentunder the Settlement Program.     **9. Confidentiality**          9.1. Plaintiffs, Claimants and their counsel shall maintain in strict confidence any andall information disclosed to them by Defendants or their counsel in the negotiations leading tothis settlement, the contents of the Release and the consideration that may be paid to thePlaintiff or Claimant, and shall take every reasonable precaution to prevent disclosure of suchinformation to third parties, except as may be disclosed pursuant to Paragraph 8.2. Plaintiffsand Claimants shall strictly comply with the confidentiality provisions of their Release.Plaintiffs and Claimants shall refrain from making, causing to be made, or participating inmaking of any public announcements concerning their lawsuit or their settlement, and shallrefrain from contacting, causing another to contact, or participating in the dissemination ofinformation concerning their lawsuit or their settlement to the news media, any attorney ororganization or attorneys, or any consumer organization, except as permitted under Paragraph9.2. Plaintiffs and Claimants shall cooperate in efforts to preserve confidentiality of thissettlement.          9.2. The Parties and their counsel shall not issue any press releases or have anycommunications to the public concerning this Settlement Agreement except (1) as agreed to by theParties, (2) where Defendants or their counsel determine it is necessary or appropriate tocomply with reporting requirements of the Securities and Exchange Commission, or (3) as requiredby the Court. The Parties agree to draft a joint press release briefly describing that asettlement has been reached.     **10. Notices**          10.1. All notices, demands or other communications in connection with this SettlementAgreement shall be in writing and shall be deemed to have been given as of the second businessday after emailing through electronic mail, addressed as follows:     **Lead Counsel for MDL Plaintiffs**Charles Zimmerman