6 7 KIMBERLY FERENCZ, on her own behalf 8 9 v. 10 ...

HEYRICH KALISH MCGUIGAN PLLC

600 Stewart Street, Suite 901 Seattle, Washington 98101

(206) 838-2504

SETTLEMENT AGREEMENT & RELEASE

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IN THE SUPERIOR COURT OF WASHINGTON FOR KING COUNTY

KIMBERLY FERENCZ, on her own behalf

and on behalf of other similarly situated

persons,

Plaintiff,

v.

INTERNATIONAL CLINIC

CONSULTANTS LLC, a Hawaii company

doing business as UNIVERSAL MEN’S

CLINIC,

Defendant.

Case No. 13-2-15314-9 SEA SETTLEMENT AGREEMENT & RELEASE


1325 Fourth Avenue, Suite 540 Seattle, Washington 98101

(206) 838-2504

SETTLEMENT AGREEMENT & RELEASE - 1

CIVIL CASE NO.: 2:10-cv-01139 JCC

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I. INTRODUCTION

Plaintiff Kimberly Ferencz, pursuing a class action in King County Superior Court (Case

No. 13-2-15314-9 SEA), joined with Plaintiff Deborah Birrane, (collectively “Class

Representatives”), pursuing a related class action in the United States District Court of Western

Washington (Case No. 2:13-CV-01365-JCC), on behalf of themselves and the Settlement Class

(as defined in Paragraph 2.34, infra) on the one hand, and defendants International Men’s Clinic

Consultants LLC, Universal Men’s Clinic, Hawaii Male Clinic, Washington Clinic Consultants

LLC, MJD Medical P.S., INC., Terry Harmon, and Tom Harmon, as well as all affiliates,

successors, and assigns on the other hand, hereby enter into this Settlement Agreement. This

Settlement Agreement provides, subject to the approval of King County Superior Court, for the

full and final settlement of all claims asserted, or which could have been asserted, by the Class

Representatives or by any member of the Settlement Class, against any of the Settling

Defendants in both the State Action (Ferencz v. International Clinic Consultants LLC, Inc., et

al., Case No. 13-2-15314-9 SEA), and the Federal Action (Birrane v. Terry Harmon, et al., Case

No. 2:13-CV-01365-JCC). This Settlement Agreement will be Exhibit 1, attached to and made

part of, the Motion for Preliminary Approval of Class Action Settlement to be made in the State

Action. This Agreement requires the parties to seek preliminary approval of the proposed

settlement of the claims of the class against the aforementioned Settling Defendants, and for the

procedure for final approval of the settlement of such claims, all of which are subject to the

recitals, definitions, terms and conditions set forth herein.

II. DEFINITIONS

2.1 “Action” shall mean both the above-captioned class action proceeding pending

before the King County Superior Court, as well as the related action in the United States District

Court for the Western District of Washington. When necessary, “State Action” shall refer to



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Ferencz v. International Clinic Consultants LLC, Inc., et al., Case No. 13-2-15314-9 SEA in

Superior Court, King County, Washington, and “Federal Action” shall refer to Birrane v. Terry

Harmon, et al., Case No. 2:13-CV-01365-JCC in United States District Court for the Western

District of Washington

2.2 “Agreement” shall mean and include this Settlement Agreement and all

attachments hereto.

2.3 “Attorneys’ Fees and Costs Award” shall mean that portion of the Common Fund

that Settling Defendants do not oppose as payment to Class Counsel for their fees, expenses and

costs incurred in connection with this Action in an amount approved by the Court up to

$350,000.

2.4 “Defendants’ Counsel” shall mean Scott Shaffer and Andrew B. Lustigman of

Olshan Frome Wolosky, LLP, and James D. Nelson of Betts, Patterson & Mines, P.S.

2.5 “Claims Administrator” shall be Berdon LLP.

2.6 “Claims Administration Costs” shall mean the costs of notice and claims

administration in this Action.

2.7 “Claim Form” shall mean the form in substantially the same form as that attached

hereto as Exhibit A.

2.8 “Claims Period” shall mean the time period through which claims by members of

the Settlement Class may be submitted and shall conclude forty-five (45) days after the Notice

Date with respect to this settlement.

2.9 “Class Counsel” shall mean Donald W. Heyrich of Heyrich Kalish McGuigan

PLLC.

2.10 “Class Notice” shall mean the Court-approved form of notice mailed to

Settlement Class members, in substantially the same form as that attached hereto as Exhibit B,



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with respect to, inter alia, (i) certification of the Settlement Class, (ii) preliminary approval of

the Settlement, (iii) scheduling of the Final Approval Hearing, (iv) the opportunity to submit a

claim by submitting a Claim Form; and (v) the delivery of the Merchandise Voucher..

2.11 “Class Period” shall mean the time period from the filing of the initial Complaint

back three years.

2.12 “Class Representatives” shall mean the putative class representatives as listed in

the operative complaints in this action, Kimberly Ferencz and Deborah Birrane.

2.13 “Common Fund” shall mean the sum total of funds amassed to benefit the

Settlement Class as part of the Settlement of this Action, or up to $3,806,300.00, which includes

Merchandise Vouchers, cash claims to participating Settlement Class members submitting valid

claims, the Service Award, and the Attorneys’ Fees and Costs Award. .

2.14 “Settling Defendants” shall mean International Clinic Consultants LLC, Universal

Men’s Clinic, Hawaii Male Clinic, Washington Clinic Consultants LLC, MJD Medical P.S.,

INC., Terry Harmon, and Tom Harmon, as well as all their affiliates, agents, successors, and

assigns.

2.15 “Effective Date” shall be the tenth business day after the latest of the following

occurrences: (1) the Court has entered, without material change, the Final Approval Order; (2)

the final disposition of any related appeals; or (3) in the case of no appeal or review being filed,

the expiration of the applicable appellate period.

2.16 “Final Approval Hearing” shall mean the hearing at which the Court will

consider and enter a final decision as to whether to enter the Final Approval Order.

2.17 “Merchandise Voucher” shall mean the voucher redeemable for a health

screening through LabCorp. or similar diagnostic entity, with an estimated value of $200. The

voucher will be “claims paid” to all class members.



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2.18 “Notice Date” shall mean the date upon which notice is distributed to the

Settlement Class, which date commences the Claims Period.

2.19 “Objection Date” shall mean the date prior to the Final Approval Hearing, as

ordered by the Court, for Settlement Class members to object to the Agreement’s terms or

provisions, to object to the application of Class Counsel for fees and reimbursement of costs and

expenses, and to submit any required statements, proof, or other materials and/or argument.

2.20 “Opt-Out Deadline” shall mean the date prior to the Final Approval Hearing, as

ordered by the Court, by which any Settlement Class members who do not wish to be included in

the Settlement Class and participate in the settlement must complete the acts necessary to

properly effect such election.

2.21 “Opt-Out List” shall mean a written list prepared by Class Counsel of all

Settlement Class members who submit timely Requests for Exclusion.

2.22 “Opt Out Notice” shall mean a Request for Exclusion.

2.23 “Parties” shall mean the Class Representatives and all Defendants in the State and

Federal Actions.

2.24 “Released Claims” shall mean and refer to any and all manner of claims related

to the transmission of text messages during the period of January 2013 through the present

including but not limited to all claims in any way seeking, alleging or including damages or any

other relief for interruption of service, loss of use, down time, invasion of privacy, trespass,

nuisance, or any violation of any type of the Telephone Consumer Protection act, 47 U.S.C.§ 227

and its implementing regulations (“TCPA”), the Washington Commercial Electronic Mail Act

(“CEMA”), RCW, 19.190.010 et seq., the Washington Consumer Protection Act, RCW

19.86.010, et seq.(“WCPA”), and/or any other federal or state law and any claims that were

brought or could have been brought in the Action (including but in no way limited to any claims



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related directly or indirectly in any manner whatsoever to any claims raised by Class

Representatives, Class Counsel, or the Settlement Class in any pleading, motion or brief filed in

the Action), and any grievances, controversies, allegations, accusations, demands, judgments,

causes of action, actions, suits, whether class, representative, individual or otherwise in nature,

damages whenever incurred, liabilities of any nature whatsoever as well as all forms of relief,

including all remedies, costs, losses, liabilities, damages, debts, expenses, penalties, interest, and

attorneys’ and other professionals’ fees and related disbursements, whether known or unknown,

foreseen or unforeseen, suspected or unsuspected, asserted or unasserted, whether (a) claiming

compensation, money damages, equitable, injunctive, or other type of relief; (b) based on any

federal, state, or municipal statute, law, ordinance, or regulation; (c) based on common law or

public policy; or (d) sounding in tort or contract, whether oral or written, express or implied, law

or equity, statutory or common law, or any other causes of action that any Releasing Party,

whether directly, representatively, derivatively, or in any other capacity, ever had, now has, or

hereafter can, shall, or may have against the Released Parties through the Effective Date; which

arises from, or any way is related to the transmission of text messages, telephone calls, or

advertising to the Class by any Defendant in this action. This release does not include claims

that are in no way related to the marketing practices of Defendants to Plaintiffs and/or the Class.

2.25 “Released Parties” shall mean the Settling Defendants, Michael Dimitrion and

James Rautio as identified in paragraph 9 of the operative Complaint in the Federal Action, as

well as all of their subsidiary companies, affiliates, stores, divisions, independent contractors,

service providers, vendors and branches thereof, and including their officers, directors,

employees, insurers, reinsurers, adjusters, representatives, agents, predecessors, successors,

attorneys, and assigns.

2.26 “Releasing Parties” shall mean Class Representatives as well as the entire



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Settlement Class.

2.27 “Settlement” shall mean the Agreement by the Parties to resolve this Action, the

terms of which have been memorialized and provided for in this Agreement.

2.28 “Settlement Agreement” shall mean this Agreement and all the exhibits attached

hereto.

2.29 “Settlement Class” shall mean all individuals who received upon their cellular

telephones at least one text message that marketed Defendants’ services, and who shall be provided

notice of this settlement via United States Postal Service, First Class Mailing.

2.30 “Service Award” shall mean that portion of the Common Fund, or $10,000.00,

agreed to be designated as total compensation to the Class Representatives, each of whom shall

receive $5000.00, for their service in bringing the Action.

III. RECITALS

3.1 This putative class action was commenced initially on March 25, 2013 in the

Western District of Washington. The case was later split into two actions, the State Acton

asserting claims under Washington’s CEMA and WCPA, and the Federal Action asserting

related claims under the TCPA. The class actions arose from the alleged transmission of

unsolicited text message advertisements sent on behalf of Universal Men’s Clinic promoting

their services regarding men’s health issues.

3.2 Generally, the Actions allege that transmission of the text message advertisements

violated both state and federal law. At all times, Settling Defendants have denied and continue

to deny any wrongdoing whatsoever and have denied and continue to deny that they committed

any wrongful act or violation of law alleged in the Action.

3.3 Discovery has been commenced in the Action, such that the parties hereto are in a

sufficient position to assess the merits and weaknesses of their respective claims and defenses.



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3.4 Class Counsel and counsel for Settling Defendants have participated in a full day

of in-person negotiations before a well-respected mediator in Seattle, Washington.

3.5 Substantial time and effort has been expended by the parties and their counsel in

litigating this case and in negotiating this Agreement and the settlement contemplated therein.

3.6 Settling Defendants have concluded that settlement is desirable in order to avoid

the time, expense, and inherent uncertainties of defending protracted litigation to resolve finally

and completely all pending and potential claims of the Class Representatives and all members of

the Settlement Class relating to the claims asserted in the Actions in both state and federal court.

3.7 Class Representatives recognize the costs and risks of prosecution of this Action,

and believe that it is in their interest, and the interests of all Settlement Class members, to resolve

these Actions through the execution of this Settlement Agreement.

IV. GENERAL PROVISIONS OF THE SETTLEMENT

4.1 Class Counsel and the Class Representatives, on behalf of the Settlement Class,

enter into this Agreement to terminate and settle all claims that were made or could have been

made in the Action against the Released Parties in recognition of: (a) the existence of complex

and contested issues of law and fact, (b) the risk, difficulty, and uncertainty of success associated

with endeavoring to litigate this Action, (c) the comparative degree of the alleged liability, if any,

of the Settling Defendants, (d) the likelihood that future proceedings will be unduly protracted

and expensive if the proceeding is not settled by voluntary agreement by the parties, (e) the

magnitude of the benefits derived from the contemplated settlement in light of both the

maximum potential and the likely range of recovery to be obtained through further litigation and

the expense thereof and the risk associated therewith, and (f) the determination by the Class

Representatives and Class Counsel that the settlement is fair, reasonable, and adequate and in the

best interest of, and will substantially benefit, the class members.



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4.2 The Parties have agreed that the Common Fund and the settlement will be

administered in such a manner that proper records and proof of all Class Members who claim or

are paid a benefit are available to the court for verification. Settling Defendants will be

responsible for payment of all Claims Administration Costs up to $50,000.00 (as more fully

outlined in Section VII, infra), and Settling Defendants will be responsible for funding of

portions of the Common Fund (as more fully outlined in Sections VI and VIII, infra). The notice

and the administration of the settlement will be performed by the Claims Administrator.

4.3 Settling Defendants enter into this Agreement notwithstanding their continued

denial of liability for the claims asserted in the Action in order to terminate all controversies and

to put to rest all claims against Settling Defendants and the Released Parties and to avoid further

litigation without any admission on the part of Settling Defendants or the Released Parties of any

liability whatsoever for any damages of any type under any law in any way arising out of the

claims or allegations set forth in the Action.

4.4 Whether or not the Effective Date occurs, neither this Agreement nor the

Settlement contained herein, nor any act performed or document executed pursuant to or in

furtherance of this Agreement or the Settlement:

a. May be deemed, or shall be used, offered, or received against the Released

Parties as an admission, concession, or evidence of, the validity of any

Released Claims, the truth of any fact alleged by the Class

Representatives, the appropriateness of class certification (other than for

purposes of settlement) the deficiency of any defense that has been or

could have been asserted in the Action, or of any alleged wrongdoing,

liability, negligence, or fault of the Released Parties, or any of them;

b. Is, may be deemed, or shall be used, offered, or received against the



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Released Parties, as an admission, concession, or evidence of any fault,

misrepresentation or omission with respect to any statement or written

document approved or made by the Released Parties, or any of them;

c. Is, may be deemed, or shall be used, offered, or received against Plaintiffs

or the Settlement Class, or each of any of them, as an admission,

concession or evidence of, the infirmity or strength of any claims raised in

the Action, the truth or falsity of any fact alleged by Defendant, or the

availability or lack of availability of meritorious defenses to the claims

raised in the Action;

d. Is, may be deemed, or shall be used, offered, or received against the

Released Parties, or each or any of them, as an admission or concession

with respect to any liability, negligence, fault, or wrongdoing as against

any Parties to the Agreement, in any civil, criminal, or administrative

proceeding in any court, administrative agency, or other tribunal;

e. Is, may be deemed, or shall be construed against Class Representatives

and the Settlement Class or each or any of them, or against the Released

Parties, or each or any of them, as an admission or concession that the

consideration to be given hereunder represents an amount equal to, less

than, or greater than the amount that could have or would have been

recovered after trial; and

f. Is, may be deemed, or shall be construed as, or received in, evidence as an

admission or concession against Class Representatives and the Settlement

Class, or each and any of them, or against the Released Parties, or each or

any of them, that any of Class Representatives’ claims are with or without



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merit or that damages recoverable in the Action would have exceeded or

would have been less than any particular amount.

4.5 Notwithstanding the foregoing, the Settlement, this Agreement, and any acts

performed or documents executed in furtherance of or pursuant to this Agreement may be used

in any proceedings as may be necessary to effectuate the provisions of this Agreement. In

addition, if this Agreement is approved by the Court, any party or any of the Released Parties

may file this Agreement and/or the Final Judgment and Order of Dismissal with Prejudice in any

action that may be brought against such party or parties in order to support a defense or

counterclaim based on principles of res judicata, collateral estoppel, release, good-faith

settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion

or similar defense or counterclaim.

4.6 It is the intention and a condition of this Agreement, and the Parties agree, that by

the Effective Date, the Agreement will fully and completely settle the Released Claims. Without

limiting the foregoing, it is also the intention and a condition of this Agreement, and the Parties

hereto agree, that upon the Effective Date: (i) Settling Defendants and the Released Parties will

be finally released from any and all claims by, through and on behalf of each Releasing Parties,

(ii) the Action, insofar as affecting Settling Defendants and the Released Parties, and all claims

of whatever nature related to the Action which the Class Members asserted or could have

asserted against Settling Defendants or the Released Parties will be dismissed, on the merits,

with prejudice, (iii) each and every Releasing Party and all other persons claiming by, through or

on behalf of a Releasing Party, will be forever barred and enjoined from instituting or

maintaining any action against Settling Defendants or the Released Parties with respect to the

Released Claims, and (iv) that as against Settling Defendants and the Released Parties, the relief

provided through the Common Fund shall be the exclusive remedy of all Releasing Parties with



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respect to all such Released Claims. It is also the intention and a condition of this Agreement,

and the parties agree, that Settling Defendants and the Released Parties are not, and in the future

will not, be subject to any liability or expense of any kind to any Releasing Party or any person

claiming by, through or under any Releasing Party, with regard to such claim.

4.7 It is the intention and a condition of this Agreement that the Final Judgment and

Order of Dismissal be entered in the State Action and that Class Counsel file a voluntary

dismissal without prejudice in the Federal Action upon the full execution of this Agreement, and

such dismissal shall become with prejudice upon preliminary approval of the Settlement

Agreement in the State Action. The Parties agree to take all actions necessary and appropriate to

fulfill and satisfy this intention and condition.

4.8 It is the intention and a condition of this Agreement, and the Parties agree, that

Settling Defendants and the Released Parties shall never again face litigation by or liability to

any Releasing Party with regard to any of the Released Claims.

4.9 It is the intention and a condition of this Agreement that no Class Member shall

be entitled to seek recovery, directly or indirectly, of any sums from Settling Defendants or any

Released Party, other than those received from the Common Fund for the Released Claims.

V. CLASS CERTIFICATION

5.1 For purposes of this Settlement Agreement, the Parties hereby stipulate to the

conditional certification of the following Settlement Class:

All consumers who were sent at least one text message to their

cellular telephone number advertising defendants’ sexual health

clinics without prior express consent.

5.2 This stipulation is to clarify that, notwithstanding the Court’s order granting class

certification in the State Action, and Settling Defendants’ subsequent petition for appeal of that

order, the parties hereby stipulate to the certification for purposes of the Settlement Agreement,



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which includes specifically identified individuals of 11,321 class members..

5.3 The Settlement Class shall be conditionally certified by stipulation as set forth

above for purposes of this Settlement Agreement only and without prejudice to appeal and/or to

contest the certification of any class should the Settlement Agreement not be approved by the

Court as set forth herein.

VI. SETTLEMENT AMOUNT & COMMON FUND

6.1 In consideration of dismissal of the Action with prejudice and the Released

Claims, Settling Defendants agree to the creation of a Common Fund, to be funded and

distributed in accordance with Section VIII, infra, totaling up to Three Million Eight Hundred

and Six Thousand, Three Hundred Dollars ($3,806,300.00) as follows:

a. Two Million Two Hundred and Sixty Four Thousand, Two Hundred

Dollars ($2,264,200.000) worth of Merchandise Vouchers for certain

medical screenings provided through LabCorp or similar diagnostic

laboratory, with a retail value of approximately $200.00 each, to be

distributed to each Settlement Class member;

b. Cash claims of $100 each to each Settlement Class member submitting a

valid claim, or up to One Million One Hundred and Thirty Two Thousand,

One Hundred Dollars ($1,132,100.00) total in cash claims;

c. A Service Award of a total of Ten Thousand Dollars ($10,000.00) to be

divided equally among the two Class Representatives ($5,000.00 each) for

their service in bringing this Action;

d. An attorneys’ fee and cost award of up to Three Hundred and Fifty

Thousand Dollars ($350,000.00), to be distributed as described below; and

e. Claims administration costs of up to Fifty Thousand Dollars ($50,000.00).



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6.2 Under no circumstances shall any Settling Defendant be required under this

Agreement to incur or pay any amount that the Settling Defendant is not explicitly obligated to

incur or pay under this Agreement.

VII. CLAIMS ADMINISTRATION COSTS

7.1 In consideration of dismissal of the State and Federal Actions with prejudice and

the Released Claims, Settling Defendants agree to pay for Claims Administration Costs of up to

Fifty Thousand Dollars ($50,000.00), provided that an Accounting is submitted as defined in

Section XV, infra. If claims administration costs exceed Fifty Thousand Dollars ($50,000.00),

there may be a pro rata reduction in the cash claim amount in Section 6.1(b). If costs of claims

administration are less than Fifty Thousand Dollars ($50,000.00), excess funds will be retained

by Settling Defendants.

VIII. FUNDING, DISBURSEMENT OF COMMON FUND & OTHER AMOUNTS

8.1 The Parties agree that certain portions of the Common Fund, along with funds for

Claims Administration Costs, should be deposited in a Settlement Account as follows. The

Settlement Account shall be an account at a mutually agreed upon financial institution to be

managed by the Claims Administrator.

8.2 Five (5) business days after entry of the Preliminary Approval Order, Settling

Defendants will deposit a sum into the Settlement Account, to be used for purposes of Claims

Administration Costs. The amount of the deposit will be subject to paragraph 7.1 hereof, and

determined through negotiations between the Claims Administrator and the Settling Defendants.

8.3 Ten (10) business days after the Effective Date, the Settling Defendants will

deposit an amount into the Settlement Account sufficient to provide for payment of One Hundred

Dollars ($100.00) to each Settlement Class member who has submitted a valid claim. The



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amount will be determined by the Claims Administrator after reviewing and determining the

validity of all Claim Forms submitted by the Settlement Class, pursuant to Section XIV, infra,

and as reported in the Accounting, pursuant to Section XV, infra.

8.4 Five (5) business days after an order granting Class Representatives’ Attorneys’

Fees and Costs, Settling Defendants will deposit Fifty Thousand ($50,000.00), into the

Settlement Account, to provide for the initial payment of the Attorneys’ Fee and Cost Award.

8.5 Five (5) business days after entry of the Final Approval Order, Settling

Defendants will deposit Ten Thousand dollars ($10,000) into the Settlement Account, to provide

for payment of the Service Award to Class Representatives.

8.6 The Parties agree that the Settlement Account should be distributed as outlined

herein:

a. First, to claims administration, costs of up to Fifty Thousand Dollars

($50,000.00), provided that an Accounting is submitted as defined in

Section XV, infra. If claims administration exceeds Fifty Thousand

Dollars ($50,000.00), there may be a pro rata reduction in the cash claim

amount in Section 6.1(b). If costs of claims administration are less than

Fifty Thousand Dollars ($50,000.00), excess funds will be returned to

Settling Defendants;

b. Second, to payment in full to Class Counsel of all attorneys’ fees and costs

of an initial Fifty Dollars ($50,000.00), subject to entry of an order

granting Class Representatives’ Motion for Attorneys’ Fees and Costs;

Settling Defendants will further agree to pay Ten Thousand ($10,000.00)

in Fees and Costs on the final business day of each month thereafter until a

total of Three Hundred and Fifty Thousand ($350,000.00) has been fully



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satisfied.

c. Third, to Class Members who make valid claims, in the amount of One

Hundred Dollars ($100.00) to each Class Member submitting a valid

claim, or up to One Million One Hundred and Thirty Two Thousand, One

Hundred Dollars ($1,132,100.00) total in cash claims;

d. Fourth, to payment of the two Class Representatives, the total sum of Ten

Thousand Dollars ($10,000.00), to be distributed among them as follows:

(1) $5,000.00 to Kimberly Ferencz; and (2) $5,000.00 to Deborah Birrane;

e. Fifth, in the event that there is a surplus of the Common Fund remaining

after payment of One Hundred Dollars ($100.00) to every Class Member

submitting a valid claim, Claims Administration Costs, Service Award to

Class Representatives, the Attorneys’ Fee and Costs Award, the remainder

shall be retained by Settling Defendants.

8.7 The Claims Administrator will be solely responsible for administering the

Settlement Account. Any interest generated from the common fund shall remain in the

Settlement Account and shall be used for disbursements as detailed in Paragraph 8.6, supra, or if

there is a remaining balance, revert to Settling Defendants as further described below.

8.8 Merchandise Vouchers, as described in Section IX, infra, will be funded and

administered separately from the Settlement Account.

IX. MERCHANDISE VOUCHERS

9.1 Released Parties will provide Merchandise Vouchers to requesting members of

the Settlement Class, in the form of a Voucher Certificate from LabCorp. or similarly qualified

diagnostic laboratory, a sample of which is attached hereto as Exhibit C.

a. Each Merchandise Voucher shall be valid for a free medical screening



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with any LabCorp facility with an estimated value of two hundred dollars

($200.00). Additional fees may apply for services greater than the free

screening.

b. The Merchandise Vouchers shall be issued in the name of the Settlement

Class member and may not be sold, transferred or given to third parties.

c. Use of the Merchandise Vouchers shall not be a pre-requisite for any

Settlement Class member to otherwise obtain cash compensation upon

submitting a valid claim pursuant to the terms of the Settlement.

d. The Merchandise Vouchers shall expire three months following Notice

Date, as approved by the Court.

e. The Parties shall not be advised of any member of the Settlement Class

who uses the Merchandise Voucher.

X. CLAIMS ADMINISTRATOR

10.1 The Parties shall agree upon a Claims Administrator, to be selected by the Settling

Defendants and approved by Class Counsel, approval not to be unreasonably withheld,

conditioned or delayed. The Claims Administrator shall provide notice to the Settlement Class,

as approved by the Court, process claims, maintain and administer the Common Fund and the

Settlement Account, and report to the Parties on the claims administration process.

XI. NOTICE

11.1 The Parties agree to the content of the Class Notice and Summary Notice,

substantially in the form of Exhibit B, a copy of which is attached hereto.

11.2 The Class Notice and Summary Notice shall be sent in postcard form. It will

include dates by which potential Settlement Class members must choose to make claims, be

excluded, or file objections, if any, to the Settlement, which will be forty-five (45) days from the



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date the Class Notice is mailed by the Claims Administrator (the “Notice Date”).

11.3 Class Notice will be provided by United States mail, based upon identification of

addresses of Settlement Class members. All addresses will be run through a national address

data base and skip tracking shall be used to ensure the maximum amount of valid addresses are

identified and confirmed.

11.4 No later than fourteen (14) days prior to the final approval hearing, the Claims

Administrator will file with the Court a declaration, with a copy to Class and Defendant’s

Counsel, attesting that Class Notice was disseminated by the Claims Administrator in a manner

consistent with the terms of this Settlement Agreement.

XII. RELEASED CLAIMS AND COVENANT NOT TO SUE

12.1 This Agreement shall be the sole and exclusive remedy for any and all Released

Claims against the Released Parties, including all Settling Defendants. The Releasing Parties

shall be permanently barred from initiating, asserting, or prosecuting Released Claims or any

claims released under this Agreement.

12.2 Upon entry of the Final Approval Order, each Releasing Party, without any other

action, fully, finally, and forever releases, relinquishes, and discharges the Released Parties from

the Released Claims. Without limiting the breadth of this release, the Releasing Parties,

regardless of whether they received a payment from the Common Fund or executed and

delivered a Claim Form, on behalf of themselves, without any further action, shall be deemed to

have fully, finally, and forever released, relinquished, and discharged the Released Parties from

the Released Claims and, by operation of the Final Approval Order, all of the Released Claims

shall be dismissed with prejudice.

12.3 On the Effective Date of this Agreement, for the Settlement Class benefits and for

other good and valuable consideration, the receipt and sufficiency of which are hereby



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acknowledged, the Releasing Parties fully and forever release, acquit, and discharge the Released

Parties in each case of and from any and all Released Claims. It is expressly intended and

understood by the Parties that this Agreement is to be construed as a complete settlement,

accord, and satisfaction of the Released Claims.

12.4 The Releasing Parties acknowledge that they are releasing both known and

unknown and suspected and unsuspected claims and causes of action and are aware that they

may hereafter discover legal or equitable claims or remedies presently unknown or unsuspected,

or facts in addition to or different from those which they now know or believe to be true with

respect to the allegations in and subject matter of the Action or otherwise with respect to the

Released Claims. Nevertheless, it is the intention of the Releasing Parties to fully, finally, and

forever settle and release whether known or unknown, foreseen or unforeseen, suspected or

unsuspected, asserted or un-asserted, whether based on: (a) any federal, state, or municipal

statute, law, ordinance, or regulation; (b) based on any federal, state, or municipal statute, law,

ordinance, or regulation; (c) based on common law or public policy; or (d) sounding in tort or

contract, whether oral or written, express or implied, law or equity, statutory or common law, or

any other causes of the Settlement Class, whether directly, representatively, derivatively, or in

any other capacity, ever had, now has, or hereafter can, shall, or may have against the Released

Parties through the Effective Date; which arises from, or any way is related to the transmission

of text messages, telephone calls, or advertising to the Class by any Defendant in this action.

This release does not include claims that are in no way related to the telemarketing/ text

message campaign practices of Defendants to Plaintiffs and/or the Class.

12.5 The Releasing Parties further covenant and agree that (a) they will not sue or

bring any action or cause of action, including by way of third-party claim, cross-claim, or

counterclaim, against any of the Released Parties in respect of any of the Released Claims; (b)



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they will not initiate or participate in bringing or pursuing any class action against any of the

Released Parties in respect of any of the Released Claims; (c) if involuntarily included in any

such class action, they will opt-out of the lawsuit if possible and will, in any event, be ineligible

for any recovery in such subsequent action; and (d) they will not assist any third party in

initiating or pursing a class action suit in respect of any of the Released Claims.

12.6 The release does not bar any Releasing Party or Released Party from bringing an

action, claim, or demand to enforce the terms of this Agreement. In the event of any action,

claim, or demand brought to enforce the terms of this Agreement, the prevailing party shall be

entitled to any and all costs and expenses arising therefrom (including but not limited to

reasonable attorneys' fees and disbursements of counsel and other professionals and court costs

incurred in connection therewith).

XIII. PRELIMINARY APPROVAL OF THE AGREEMENT

13.1 Class Counsel shall file a Motion for (a) preliminary approval of the Settlement

Agreement, such Motion to be consistent with the terms hereof; (b) approval of the Class Notice

(as described in Section XI, supra); and (c) scheduling of final approval hearing. Class Counsel

shall note such motion no later than thirty (30) days after this Settlement Agreement is signed by

all Parties.

XIV. CLAIMS PROCEDURES

14.1 No person or entity may make a claim to, or receive any benefit under this

Agreement, unless the person is a Settlement Class member and complies with these claims

procedures.

14.2 Settlement Class members must submit a completed Claim Form postmarked by

the Claims Deadline. A completed Claim Form shall be deemed to include a request for a

Merchandise Voucher. However, a duly completed Claim Form shall not be required in order to



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receive a Merchandise Voucher.

14.3 The Claims Administrator will determine, in good faith, the validity of the claims

and examine the proofs submitted on claims using their records and other available information.

The Claims Administrator shall also advise the parties of all requests for a Merchandise

Voucher.

14.4 A submitted Claim Form must satisfy the following conditions to be valid: (1) the

Claim Form must provide all the information requested; (2) the Claim Form must be duly

executed and dated by the Settlement Class member submitting the Claim Form; (3) if the person

executing the Claim Form is acting in a representative capacity because the Settlement Class

member is incapacitated, the Claim Form must be accompanied by a statement or other

documentation affirming the authority of that person to act on behalf of, and to bind, the

Settlement Class member; (4) the completed Claim Form must be postmarked no later than the

Claims Deadline; and (5) the Claim must be duly verified by the Claims Administrator as

belonging to a member of the Settlement Class as defined in Paragraph 5.1 hereof. If a mailed

Claim Form is not dated, but the envelope in which the Claim Form was mailed to the Claims

Administrator has a valid and readable postmark, then the Claim Form will not be rejected for

lack of a date.

14.5 The Administrator shall provide counsel for the Parties with the information

contained in Section 15.1 (5) through (8) in order to dispute any claims, and upon receipt of such

information, the Settling Defendants shall consult with Class Counsel to resolve any disputed

claims.

14.6 In the event the Parties cannot resolve any disagreements over the validity of any

claims, the matter will be submitted in writing to the Court.

14.7 Any Settlement Class members shall have the right to be excluded or to “opt-out”



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from the settlement. On or before the opt-out deadline established by the Court, each individual

electing to opt-out of the Settlement Class must deposit in the U.S. mail and have post-marked an

opt-out notice addressed to the Claims Administrator identifying his or her name and address and

clearly stating that he or she desires to be excluded from the Settlement Class.

14.8 Settlement Class members who do not timely opt out of the settlement or who fail

to properly opt-out of the settlement remain members of the Settlement Class and may receive

any of the benefits of the Settlement Class, and shall be bound by any order(s) of the Court

regarding the Settlement Class.

14.9 The Claims Administrator shall provide copies of any opt-out notices to Class

Counsel and Settling Defendants’ counsel within a reasonable time of receipt of the same by the

Claims Administrator, but no later than fourteen (14) days prior to the Final Fairness Hearing.

14.10 Any objections to the settlement or petitions to intervene in Class

Representatives’ claims must be in writing, and must include: (1) evidence that the objector or

intervener is a member of the Settlement Class as defined above; (2) notice of intent to appear at

the Final Fairness Hearing if the objector or intervener intends to so appear; (3) a statement of

the objection(s) being asserted; (4) a detailed description of the facts and legal authorities

underlying each objection; (5) a list of any witnesses who may be called to testify at the Final

Fairness Hearing, whether in person, by deposition, or affidavit; and (6) a list of any exhibits,

and copies of same, which the objector may offer at the Final Fairness Hearing. All documents

specified in this paragraph must be filed with the Court and served upon designated Class

Counsel and counsel for Settling Defendants, no later than thirty (30) days after notice to the

Settlement Class.

14.11 No person shall be entitled to contest in any way the approval of the terms and

conditions of this Agreement or the Final Approval Order except by filing and serving written



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objections in accordance with the provisions of this Agreement. Any member of the Settlement

Class who fails to exclude himself or herself from the Settlement Class in accordance with this

Agreement, or who fails to object in the manner prescribed, shall be deemed to have waived, and

shall be foreclosed forever from raising objections to the settlement and from asserting any

claims arising out of, related to, or based in whole or in part on any of the facts or matters

alleged, or which could have been alleged, in any litigation or arbitration involving the parties.

14.12 A Settlement Class member may not assign or otherwise transfer to any other

Person the right to make a claim for cash payment or for the Merchandise Voucher under the

Agreement in this Action.

14.13 Once received by the Claims Administrator, the Claim Form shall be deemed

submitted to the Claims Administrator in accordance with these provisions if mailed by first

class U.S. Mail and postmarked with a date on or before the Claims Deadline.

14.14 By submitting a Claim Form, each Settlement Class member submits himself,

herself, or itself to the jurisdiction of the Court for the purpose of asserting a claim to

compensation under the Agreement in this Action, and each Claim Form will be subject to

examination, investigation, and final determination by the Claims Administrator as to a

Settlement Class member’s entitlement to compensation under this Agreement.

14.15 Under no circumstances shall Settling Defendants, the Released Parties, the

Claims Administrator, its authorized agents, or any person affiliated with Settling Defendants or

acting on Settling Defendants' behalf have any liability to a Settlement Class member relating to

the performance of the duties of claims review and administration required under this Agreement

and the Final Approval Order, except as expressly provided in this Agreement. No person,

including the Class Representatives and members of the Settlement Class, shall be permitted to

commence a cause of action regarding such matters. Any issue regarding the performance by



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Settling Defendants and/or the Claims Administrator of duties under this Agreement or the Final

Judgment may be raised only by motion to the Court under its continuing jurisdiction over the

Action.

XV. ACCOUNTING

15.1 The Claims Administrator shall cause to be maintained at all times detailed

written accounts (“Accounting”) that reflect, separately for each sub-account that may be

established hereunder and in the aggregate: (1) the principal amounts deposited into the

Settlement Fund by Settling Defendants; (2) the earnings thereon; (3) the fees and expenses

(including legal expenses and claims administration fees) paid, assessed or debited pursuant to

this Settlement Agreement; (4) the amounts transferred or disbursed from the Settlement Fund

pursuant to Section VIII above; (5) the total number of claims submitted; (6) the total number

and dollar value of all valid claims, (7) the dollar value of claims rejected as invalid, and (8) the

claims rejected and the reasons for such rejections

XVI. FINAL APPROVAL AND EFFECT OF THE AGREEEMENT

16.1 If the Court enters the Preliminary Approval Order as described in Section XIII,

the Parties shall proceed with due diligence to conduct the fairness hearing as ordered by the

Court. At the fairness hearing, Class Counsel will request that the Court, inter alia, (i) consider

any properly filed objections to the proposed settlement, (ii) determine whether the settlement set

forth in the Agreement is fair, reasonable and adequate and entered in good faith and without

collusion and should be finally approved, and (iii) if settlement is approved, dismiss the Action

on the merits, with prejudice in a Final Approval Order.

16.2 This Agreement is subject to and conditioned upon the issuance by the Court and

subsequent entry, following the fairness hearing, of a Final Approval Order. If the Court does

not issue a Final Approval Order of the proposed settlement for any reason whatsoever, or fails



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to approve any material term, then the Parties shall proceed as detailed in Section XVIII, infra.

Nothing herein shall be construed to suggest that class certification is appropriate other than for

purposes of settlement, and no party may cite this Agreement in support of class certification

other than for purposes of settlement. All costs and expenses in issuing class notice, shall not be

reimbursable by Defendants or in any way charged to Plaintiffs, their counsel, or class in the

event the Court does not issue a Final Approval Order, or for any reason the case proceeds again

to litigation.

16.3 The Court will retain jurisdiction over the Parties to the Agreement for the

purpose of administering, supervising, construing and enforcing the Agreement, Preliminary

Approval Order, and Final Approval Order, and supervising the administration and disbursement

of the Common Fund, without prejudice to the rights of any party to contest personal jurisdiction

or for any other purpose.

XVII. ATTORNEYS’ FEES AND COSTS

17.1 At the final fairness hearing, the Court shall determine whether, and in what

amounts, reasonable and necessary attorney fees and reimbursement of costs and expenses

should be awarded to Class Counsel. Class Counsel will not seek an award greater than Three

Hundred and Fifty Thousand ($350,000.00), which award shall be inclusive of any and all fees,

costs, and expenses whatsoever. Settling Defendants will not oppose any award of reasonable

and necessary attorney fees and costs that does not exceed Three Hundred and Fifty Thousand

($350,000.00) and which shall be subject to Paragraph 8.6(a) hereof. Any award of attorneys’

fees and costs shall be paid exclusively from the Common Fund.

17.2 Attorney fees shall be paid as follows. Within ten business days following the

entry of the Final Approval Order, Releasing Defendants shall pay an initial Fifty Thousand

($50,000.00) payment for fees and costs to Class Counsel. Thereafter Releasing Defendants



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shall pay Ten Thousand ($10,000.00) in monthly payments due on the last day of each month

until the balance of fees and costs, in the amount approved by the Court not to exceed

$350,000.00, have been paid.

17.3 Defendant Terry Harmon agrees to execute all documents necessary to effectuate

a personal guarantee in a mutually agreeable form for all of these settlement amounts.

17.4 In the event Releasing Defendants fail to make an above payment, the entire

amount of fees and costs will be immediately due.

17.5 Class Counsel’s reasonable costs as determined by the Court at the fairness

hearing shall be included in any award made by the Court. Settling Defendants and the Released

Parties shall not be liable for any fees or expenses of Class Counsel or any Settlement Class

member in connection with the Action or this settlement other than those set forth in the Court's

Attorneys' Fees and Cost Award, which shall be paid exclusively from the Common Fund

described in Section VIII.

XVIII. EFFECT OF NON-APPROVAL

18.1 In the event the Court in this Action or any other Court (a) disapproves, sets aside,

or modifies this Settlement Agreement; (b) declines for any reason to enter or give effect to a

Preliminary Approval Order; (c) declines for any reason to enter or give effect to Final Approval

Order; or (d) holds that the Order for Final Judgment, or any judgment entered pursuant thereto,

should in any material part be overturned or modified in any material way, then the Parties shall

use their best efforts to effectively repair deficiencies in order to obtain Court approval, but

either party may at their sole election then terminate any further obligations under this agreement

and proceed to litigation.

18.2 In the event such efforts are unsuccessful, and after the passage of sixty (60) days

from the date of the Court’s actions outlined in Paragraph 18.1 herein, then this Settlement



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Agreement shall become null and void, and the State Action shall be deemed to revert to its

status as of the date and time immediately prior to the execution of this Settlement Agreement.

18.3 Upon such an occurrence, the Parties jointly shall move that any and all orders

entered pursuant to this Settlement Agreement be vacated and shall proceed with the Action as if

this Settlement Agreement had never been executed and the Federal Action may be refiled;

provided, however, that in the event that the Parties, within fifteen (15) days of any such action

of any court, jointly elect to appeal from or otherwise seek review or reconsideration of such

court action, this Settlement Agreement shall not be deemed null and void until such time as

such court action becomes final after any proceedings arising directly or indirectly from the

Parties’ appeal(s) or other attempt(s) to have such court action reversed, withdrawn, or

overturned.

XIX. MISCELLANEOUS PROVISIONS

19.1 Waiver. The waiver by any of the Parties of any breach of this agreement by any

of the other Parties shall not be deemed as a waiver of any other prior or subsequent breaches of

this agreement.

19.2 Entire Agreement. This Agreement sets forth the entire agreement and

understanding of the Parties with respect to the matters set forth herein, and supersedes all prior

negotiations, agreements, arrangements and unde1iakings with respect to the matters set forth

herein. No representations, warranties, or inducements have been made to any Party concerning

this Agreement other than the representations, warranties, and covenants contained and

memorialized in such documents. This Agreement may be amended or modified only by a

written instrument signed by or on behalf of all Parties or their respective successors-in-interest.

19.3 Alternative Dispute Resolution. In the event any dispute arises as to the

interpretation or enforcement of the terms or language of the Settlement Agreement, the Parties



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agree to refer the dispute to Judge Terry Lukens first for mediation and, if that fails, binding

arbitration before Judge Terry Lukens under the JAMS arbitration rules.

19.4 Authority. Each counsel or other Person executing this Agreement or any related

settlement documents on behalf of any Party hereto hereby warrants and represents that such

Person has the full authority to do so and has the authority to take appropriate action required or

permitted to be taken pursuant to the Agreement to effectuate its terms.

19.5 Counterparts. This Agreement may be executed in one or more counterparts. All

executed counterparts and each of them shall be deemed to be one and the same instrument

provided that counsel for the Parties to this Agreement all exchange original signed counterparts.

A complete set of original executed counterparts shall be filed with the Court.

19.6 Binding Effect. This Agreement shall be binding upon, and inure to the benefit

of, the successors and assigns of the Parties hereto and the Released Parties.

19.7 No Third-Party Beneficiaries. This Settlement Agreement creates no rights in,

grants no remedies to, and delegates no duty, obligation, or undertaking established herein, to

any third party as a beneficiary to this Agreement, excepting those Released Parties who are not

parties to this Agreement.

19.8 Joint Drafting. This Agreement is deemed to have been prepared by counsel for

all Parties, as a result of arms’ length negotiations among the Parties. Whereas all parties have

contributed substantially and materially to the preparation of this Agreement, it shall not be

construed more strictly against one party than another.

19.9 Choice of Law. This Agreement shall be governed by and interpreted according

to the substantive laws of the State of Washington without regard to its choice of law or conflict

of laws principles.

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