UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

Transcription

1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY JOSEPH MIRAKAY, LOUIS MESSINA, ) MICHAEL ELEFTERAKIS & JOHN ) GEMBINSKI, on behalf of themselves and ) Others similarly situated, ) ) Case No. 3:13-cv JAP-LHG Plaintiffs, ) ) v. ) ) DAKOTA GROWERS PASTA COMPANY, ) INC., GLENCORE XSTRATA, and VITERRA, ) INC., ) ) Defendants. ) SETTLEMENT AGREEMENT AND GENERAL RELEASE This Settlement Agreement and General Release ( Settlement Agreement or Agreement or Settlement ) is entered into between Plaintiffs Joseph Mirakay, Louis Messina, Michael Elefterakis, John Gembinski, and Jesse Weiss (collectively, Plaintiffs ), on the one hand, and Defendant Dakota Growers Pasta Company, Inc. ( Dakota Growers or Defendant ), on the other (collectively, the Parties ). RECITALS A. Dakota Growers has sold and marketed Dreamfields Pasta since At various times, Dreamfields Pasta has been marketed as a lower digestible carbohydrate pasta and as a pasta that produces a lower blood sugar response as measured by glycemic index (GI) testing. Dreamfields Pasta has been sold primarily to retailers for resale to consumers in a variety of shapes and in different size boxes. B. In July 2013, a putative nationwide class action complaint was filed in the United States District Court of Minnesota, styled Weiss v. Dakota Growers, Inc., et al., No. 13-cv-01946

2 ( Weiss ). Shortly thereafter, a second lawsuit was filed in the United Stated District Court of New Jersey styled Mirakay v. Dakota Growers, Inc., et al., No. 3:13-cv JAP-LHG ( Mirakay ). Collectively, the Weiss lawsuit and the Mirakay lawsuit are referred to herein as the Litigation or the Lawsuits. The Lawsuits make similar claims. In both, Plaintiffs assert that certain marketing claims regarding Dreamfields Pasta are false and misleading. C. Dakota Growers answered the complaints in the Lawsuits, denying the allegations. Thereafter, the Parties conducted a meeting pursuant to Rule 26, and filed a Rule 26(f) report in the Weiss matter. The Magistrate Judge in Weiss held a Rule 16 conference on October 29, 2013 and subsequently entered a scheduling order. D. On October 1, 2013, Plaintiffs served Dakota Growers with formal discovery, including document requests, requests for admission, and interrogatories. Dakota Growers responded to Plaintiffs requests (interposing objections where necessary), and produced responsive documents. E. In connection with the preparation of the Rule 26(f) report in October 2013, Dakota Growers and Plaintiffs discussed the possibility of a class action settlement. The Parties exchanged further formal and informal discovery in connection with those discussions and explored a possible structure for, and the potential size of, a possible settlement. The Parties, however, could not reach agreement at that time. F. On December 10, 2013, the Hon. Garrett E. Brown, Jr. (ret.), the former Chief Judge of the District of New Jersey, conducted a lengthy mediation in an attempt to resolve the Parties differences regarding a possible class action settlement. The mediation was professional 2

3 but highly contentious, lasting over 12 hours. It concluded at approximately 10 p.m. that evening with a signed Memorandum of Understanding. G. Ultimately, this Settlement was reached only after protracted, arm s-length negotiations over six months, requiring the assistance of Judge Brown. H. The Lawsuits, if they were to continue, would likely result in expensive and protracted litigation, appeals, and continued uncertainty as to outcome. I. Plaintiffs, through their counsel, have examined the law and facts relating to the Litigation, including but not limited to documents produced by Dakota Growers, and have concluded that this Settlement Agreement provides substantial benefits to Plaintiffs and to members of the Settlement Class (as defined below), and is intended to resolve the Lawsuits without prolonged litigation and the risks and uncertainties inherent therein. J. Plaintiffs and their counsel have concluded that this Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Settlement Class. K. Dakota Growers consents to the Settlement Agreement solely to avoid the expense, inconvenience, and inherent risk of litigation, as well as the concomitant disruption of its business operations. Dakota Growers denies the material allegations raised in the Litigation, and denies any wrongdoing and any liability in connection with the claims asserted in the Litigation. L. Nothing in this Settlement Agreement shall be construed as an admission or concession by Dakota Growers of the truth of any allegations raised in the Litigation, or of any fault, wrongdoing, or liability of any kind. 3

4 M. This Settlement Agreement, its terms, documents related to it, and the negotiations or proceedings connected with it, shall not be offered or received into evidence in the Litigation, or any other action or proceeding, to establish any liability or admission by Dakota Growers. NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants, promises, and general releases set forth below, the Parties hereby agree as follows: PROPOSED CLASS FOR SETTLEMENT PURPOSES 1. Settlement Class. The products covered by this Settlement are all Dreamfields Pasta products sold in the United States for personal use and not resale or distribution, with a label that referred to glycemic index or digestible carbs, between February 2004 and the date that the Settlement Class is first notified of the Settlement (the Covered Products ). The Parties agree to certification, for settlement purposes only, of a nationwide settlement class consisting of all individuals who purchased the Covered Products (the Settlement Class ). Counsel are: 2. Settlement Class Counsel. Subject to approval by the Court, Settlement Class Brian D. Penny GOLDMAN SCARLATO KARON & PENNY, P.C. 101 East Lancaster Avenue, Suite 204 Wayne, PA William B. Federman FEDERMAN & SHERWOOD North Pennsylvania Avenue Oklahoma City, OK John D. Zaremba ZAREMBA BROWNELL & BROWN PLLC 40 Wall Street, 27 th Floor New York, New York

5 Charles W. Branham, III BRANHAM LAW GROUP, LLP 3900 Elm Street Dallas, TX Settlement Purposes Only. Dakota Growers does not agree to certification of the Settlement Class for any purpose other than to effectuate the Settlement Agreement and, therefore, certification is only binding with respect to the settlement of the Litigation. In the event that the Settlement Agreement is terminated pursuant to its terms or is not approved in all material respects by the Court, or such approval is reversed, vacated, or modified in any material respect by this or any other court, (a) certification of the Settlement Class shall be deemed vacated, and the Litigation shall proceed as if the Settlement Class had never been certified, (b) the Settlement Agreement, and any documents, communications, or negotiations related in any way thereto, shall not be admissible in this or any other action for any purpose, and (c) the Parties have reserved all rights regarding class certification, including but not limited to Plaintiffs right to seek certification and Defendant s right to oppose any motion for class certification on any and all factual and legal grounds in this or any other action. BENEFITS TO THE CLASS 4. Cash Consideration A. Defendant agrees to pay a total of $5 million ($5,000,000.00) for (i) notice, claims administration, and fees arising under paragraph 8 of the Escrow Agreement, and (ii) cash payments to or on behalf of the members of the Settlement Class ( Total Available Amount ). B. Settlement Class members who purchased a Covered Product shall be entitled to receive cash compensation as follows: 5

6 (i) Settlement Class members who purchased Covered Products online shall receive a check in an amount equal to $1.99 multiplied by the number of boxes purchased online. There is no box limit for online purchases. These online purchasers will also be given the opportunity to submit a claim form for any purchases they made in stores in accordance with subsection 4.B(ii). If the class notice to any such class member cannot be effected via mailing, then no payment will be made to that class member under this paragraph 4.B(i); however, such members of the Settlement Class are still entitled to submit a claim in accordance with 4.B(ii). (ii) Class members who submit a timely and valid claim shall receive $1.99 per box purchased, up to a maximum of fifteen (15) boxes purchased in stores per household. Settlement Class members who received compensation pursuant to 4.B(i) can only make a claim under this subparagraph 4.B(ii) for purchases in stores. C. If the total costs for notice and claims administration, and the initial total amount of payments required to be made under paragraph 4.B, when added together, are less than the Total Available Amount, then the cash consideration paid pursuant to paragraph 4.B shall be increased by up to 50 percent. If any funds remain from the Total Available Amount after making the foregoing adjustment, the residual shall be donated on a cy pres basis to the American Diabetes Association. D. If the total costs for notice and claims administration, and the initial total amount of payments required to be made under paragraph 4.B, when added together, are more than the Total Available Amount, then the amounts due under paragraph 4.B shall 6

7 be reduced proportionally so that the payments for notice and administration and the total amount of payments pursuant to paragraph 4.B equal the Total Available Amount. 5. Labeling Changes. A. Without admitting liability and solely to avoid the cost and disruption of further litigation, Dakota Growers, and its present, former, and future direct and indirect affiliates, agents, divisions, predecessors, parent companies, subsidiaries, and successors, agree to remove from the packaging of Dreamfields Pasta, for a one-year period running from the date of the Final Judgment and Order (as defined below), regardless of any appeal (the Compliance Period ), the following claims: (i) lower glycemic index than other traditional pasta; (ii) ability to reduce spikes in (or otherwise control) blood glucose levels; and (iii) only 5 grams digestible carbohydrates. The labeling changes set forth in this paragraph are not an admission by Dakota Growers regarding Plaintiffs claims. Neither Dakota Growers nor any of the retailers of the Covered Products shall be required to recall, remove from shelves, or pull from distribution or inventory any Covered Products, including those that are shipped by Dakota Growers prior to the date of the Final Judgment and Order or that do not comply with terms of this paragraph 5.A. B. Dakota Growers may elect, in its sole and unilateral discretion, to continue the label changes identified in paragraph 5.A beyond the Compliance Period. C. With respect to any Dreamfields Pasta label that complies with paragraph 5.A and for as long as a Dreamfields Pasta product continues to be sold with labels that comply with the terms of paragraph 5.A even beyond the Compliance Period, any Releasing Party who purchases such product(s) hereby releases and agrees not to assert 7

8 any claim or cause of action against any Released Party based on any claim that arises out of or relates in any way to the subject matter of paragraph 5.A.i, 5.A.ii, and 5.A.iii. D. If Dreamfields Pasta is sold with labels that are subject to but do not conform to the terms of paragraph 5.A ( Non-Conforming Labels ), the following remedies shall apply: i. If Dakota Growers sells Dreamfields Pasta during the Compliance Period with Non-Conforming Labels, it shall, within 60 days of first learning of such non-compliance, correct the label and begin shipping Dreamfields Pasta with compliant labels within the same 60-day period (the Corrective Action ). The Compliance Period shall be tolled from the date Dakota Growers first learns of the Non-Conforming Labels until 30 days after it begins shipping Dreamfields Pasta with labels that comply with paragraph 5.A. The releases in paragraph 5.C shall not apply to any purchases of Dreamfields Pasta with a Non-Conforming Label. ii. If Dakota Growers inadvertently sells Dreamfields Pasta with a Non-Conforming Label after the Compliance Period (plus any time added pursuant to paragraph 5.D.i), it may elect but is not required to take Corrective Action. In the event it takes Corrective Action, the releases in paragraph 5.C shall remain effective except as to any purchases of Dreamfields Pasta with a Non- Conforming Label. iii. The remedies in this paragraph 5.D shall be the sole and exclusive remedies regarding any Dreamfields Pasta products sold with Non-Conforming Labels. 8

9 E. The sale of any Dreamfields Pasta, whether during or after the Compliance Period, with labels that are subject to but do not conform to the terms of paragraph 5.A shall not affect in any way whatsoever the scope or enforceability of any releases in this Agreement except as expressly and specifically set forth in paragraphs 5.D.i and 5.D.ii. 6. Attorneys Fees, Incentive Awards, and Costs. Subject to Court approval, Defendant will pay up to $2,920,000 for all attorneys fees, costs, and incentive awards. Plaintiffs agree that any incentive awards shall not exceed $20,000 total. The payments under this paragraph 6 shall be referred to as the Attorneys Fee Award. Defendant will not object to an aggregate Attorneys Fees Award as set forth in this paragraph. Any Attorneys Fee Award is to be paid separate and apart from, and without diminishing or eroding, the payment of claims referenced in paragraph Total Payments. The total aggregate amount to be paid under this Settlement by Defendant and any other Released Party shall not exceed $7,920,000 under any circumstances. RELEASES 8. Release by Plaintiffs, the Settlement Class, and Defendant. A. As used in this Agreement, the Releasing Plaintiffs and Released Plaintiffs shall mean Plaintiffs and each Settlement Class member (except a person who has obtained proper and timely exclusion from the Settlement Class pursuant to paragraph 16), on her/his own behalf and on behalf of her/his present and former spouse(s), as well as the present, former, and future respective administrators, agents, assigns, attorneys, executors, heirs, partners, predecessors-in-interest, and successors of any of the foregoing. 9

10 B. As used in this Agreement, the Releasing Defendants and Released Defendants shall mean (i) Defendant Dakota Growers and its present, former, and future direct and indirect affiliates, agents, divisions, predecessors, parent companies, subsidiaries, and successors; (ii) Glencore Xstrata plc and Viterra Inc. and their present, former, and future direct and indirect affiliates, agents, divisions, parent companies, predecessors, subsidiaries, and successors; (iii) Post Holdings, Inc. and its present, former, and future direct and indirect affiliates, agents, divisions, parent companies, predecessors, subsidiaries, and successors; (iv) any person or entity in the chain of distribution of the Covered Products (other than Settlement Class members), including but not limited to raw materials suppliers, distributors, and retailers, and their present, former, and future direct and indirect affiliates, agents, divisions, parent companies, predecessors, subsidiaries, and successors; and (v) all of the aforementioneds respective present, former, and future agents, assigns, attorneys, directors, employees, officers, and shareholders. C. The term Releasing Parties includes the Releasing Plaintiffs and the Releasing Defendants. D. As used in this Agreement, the Released Claims shall mean any and all rights, duties, obligations, allegations, contentions, claims, actions, causes of action, or liabilities, whether arising under local, state, or federal law, whether by statute, contract, common law, or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or unliquidated that arise out of or relate in any way to (i) allegations, claims, or contentions that were or could have been asserted in the Litigation; or (ii) the Covered Products, including, but not 10

11 limited to, their performance, as well as any advertising, labeling (including but not limited to packaging), marketing, claims, or representations of any type whatsoever regarding such products. The Released Claims shall also include the ones identified in paragraph 5.C. The Released Claims do not encompass any claim for personal injuries. Nor do the Released Claims encompass a claim that arises out of any new representations by Dakota Growers, made for the first time after December 2013, regarding Dreamfields pasta if such representation (x) was made on a label (including but not limited to a package) that conforms with paragraph 5.A(i), 5.A(ii), and 5.A(iii), and (y) is materially different from representations made prior to December E. The Releasing Plaintiffs hereby release and forever discharge the Released Defendants from the Released Claims as of the date the Final Judgment and Order (as defined below) is entered, provided that the Final Judgment and Order is entered pursuant to paragraph 18. F. The Releasing Defendants hereby release and forever discharge the Released Plaintiffs and Class Counsel, and all of their respective related or affiliated persons or entities, from all claims and causes of action of every nature and description, whether known or unknown, whether arising under federal, state, common or foreign law, that arise out of or relate in any way to the institution, prosecution, or settlement of this action or any of the claims that were asserted therein, except for claims arising out of or relating to this Settlement Agreement or related orders including but not limited to the Preliminary Approval Order or the Final Judgment and Order. Furthermore, no person shall have any claims against Class Counsel, or the Settlement Administrator, or the Releasing Defendants or Defendants Counsel based on distributions made substantially 11

12 in accordance with the Settlement Agreement, the plan of allocation, or further Court Orders. 9. Release of Unknown Claims. The Releasing Parties acknowledge that they may have claims that are currently unknown and that the release in this Agreement is intended to and will fully, finally, and forever discharge all Released Claims, whether now asserted or unasserted, known or unknown, suspected or unsuspected, which now exist, or heretofore existed or may hereafter exist that could have been asserted in the Litigation, which if known, might have affected their decision to enter into this release. Each Releasing Party shall be deemed to waive any and all provisions, rights, and benefits conferred by any law of the United States, any state or territory of the United States, or any state or territory of any other country, or principle of common law or equity, which governs or limits a person s release of unknown claims. In making this waiver, the Releasing Parties understand and acknowledge that they may hereafter discover facts in addition to or different from those that are currently known or believed to be true with respect to the subject matter of this release, but agree that they have taken that possibility into account in reaching this Settlement Agreement and that, notwithstanding the discovery or existence of any such additional or different facts, as to which the Releasing Parties expressly assume the risk, they fully, finally, and forever settle and release any and all Released Claims, known or unknown, suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery or existence of such additional or different facts. The foregoing waiver includes, without limitation, an express waiver, to the fullest extent not prohibited by law, by Plaintiffs, the Settlement Class members, and all Releasing Parties, of any and all rights under California Civil Code Section 1542, which provides: 12

13 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. In addition, Plaintiffs, Settlement Class members, and all Releasing Parties also expressly waive any and all provisions, rights, and benefits conferred by any law or principle of common law or equity, that are similar, comparable, or equivalent, in whole or in part, to California Civil Code Section SETTLEMENT NOTICE AND ADMINISTRATION 10. Notice and Administration Costs. The costs of notice and administration of the Settlement provided in paragraph 12 shall be deducted from the Total Available Amount before the payments to individual class members are calculated. 11. Settlement Administrator. The Parties agree that a third party, Rust Consulting, shall serve as the settlement administrator to administer the settlement and advise the Parties on a notice plan (the Settlement Administrator ). The Settlement Administrator shall work under the direction of the Parties and be responsible for, inter alia, publishing notice, establishing and operating a settlement website, mailing claim forms, processing and reviewing claims, and arranging for the payment of Valid Claims (as defined below). 12. Class Notice. Subject to Court approval, the Parties have agreed to commit up to $1,000,000 from the Total Available Amount to provide notice to the class according to the following plan. 13

14 A. The Parties agree upon the notice plan attached hereto as Exhibit B (the Notice Plan ), the terms of which are hereby incorporated into this Settlement Agreement. Any material deviations from the Notice Plan must be approved by the Parties and the Court. B. A copy of the proposed short-form notice, long-form notice, and claim forms are attached hereto as Exhibits C, D, and E, respectively. The notices attached as Exhibits C and D shall be referred to collectively as the Notice. No internet banner ads, posts, or other content regarding the Litigation or the Settlement will be placed on Dakota Growers own website (dreamfieldsfoods.com), its Facebook page, its Twitter account, or any other social media page or website maintained by Dakota Growers or any other Released Defendant. Dakota Growers agrees to remove, as soon as reasonably possible and where Dakota Growers has the ability to do so, any content regarding the Litigation or the Settlement that is placed on any such page, website, or social media controlled by Dakota Growers. C. No additional notice or extra-judicial publicity by the Parties other than that provided by the Notice Plan or this Agreement shall be permitted, absent express agreement by the Parties and Court approval where necessary. 13. Claims Process. The consideration and payment of claims shall proceed as follows: A. A copy of the claim form approved by the Parties is attached as Exhibit A hereto. A Settlement Class member can request a claim form from the Settlement Administrator or download a form from the Settlement Website. Each claim form shall have a unique identifier to assist in preventing fraud in the claims process. 14

15 B. A claim shall be considered valid (a Valid Claim ) if it (i) is postmarked, ed, or uploaded no later than sixty (60) days from the date the Notice is first published, (ii) contains all of the information required by the Notice, claim form, or any applicable court order, and (iii) is truthful and bears a signature by the Settlement Class member under penalty of perjury. C. The claim form may be submitted to the Settlement Administrator either by U.S. mail, , or by uploading the completed and signed claim form to the settlement website. Electronic signatures and online claims submission will be permitted, provided that the process for online claims is agreed upon by the Parties and includes, at a minimum, two clear and conspicuous disclosures regarding the legal significance of an electronic signature, the consequences of submitting a false claim, and the opportunity to amend or not submit a claim. The second disclosure shall appear on a separate screen without other language, immediately prior to the screen permitting the claimant to submit the online claim. D. The Settlement Administrator shall be responsible for reviewing all claims to determine their validity. Any claim that does not comply with the terms of paragraph 13.B and is not cured in a reasonable time shall be rejected. The Settlement Administrator shall provide a report of any rejected claims to Dakota Growers counsel and Settlement Class Counsel. If Settlement Class Counsel do not agree with the rejection of a claim, they shall bring it to the attention of counsel for Defendant, and the Parties shall attempt, in good faith, to resolve any disputed rejected claims. The Settlement Administrator, after considering the positions of the Parties, shall make the final decision. 15

16 E. At any time during the claims process, if the Settlement Administrator has a reasonable suspicion of fraud, it shall immediately notify both Settlement Class Counsel and counsel for Defendant of that fact, and the basis for its suspicion. Settlement Class Counsel and Defendant s counsel shall endeavor to reach an agreedupon appropriate solution to any suspected fraud and, if necessary, Defendant s counsel may suspend the claims process, after which the Parties will promptly seek assistance from the Court. SETTLEMENT APPROVAL PROCESS 14. Confirmatory Discovery. Plaintiffs have conducted confirmatory discovery and firmly believe that the settlement described herein in is fair and reasonable. 15. Preliminary Approval Order. The Parties agree to petition the Court promptly after execution of this Settlement Agreement for an order preliminarily approving the Settlement Agreement (the Preliminary Approval Order ). A copy of the form of the proposed Preliminary Approval Order agreed to by the Parties is attached as Exhibit F hereto. The Preliminary Approval Order shall provide, inter alia, that: A. There is probable cause to believe that the settlement proposed in the Agreement has been negotiated at arm s-length and is preliminarily determined to be fair, reasonable, adequate, and in the best interests of the Settlement Class for settlement purposes; B. The Notice fully complies with the requirements of Rule 23 and due process, constitutes the best notice practicable under the circumstances, and is due and sufficient notice to all persons entitled to notice of this Settlement; 16

17 C. The Settlement Class is conditionally certified, with the Plaintiffs serving as class representatives, and the attorneys and law firms listed in paragraph 2 serving as Settlement Class Counsel, on the condition that the certification and designations shall be automatically vacated if the Settlement is terminated or is disapproved in whole or in part by the Court, any appellate court, or any of the Parties; D. A final hearing on the settlement proposed in this Agreement shall be held before the Court to determine whether the proposed settlement is fair, reasonable, and adequate, and whether it should be approved by the Court ( Fairness Hearing ); E. In further aid of the Court s jurisdiction to review, consider, implement and enforce the Settlement, Plaintiffs and members of the Settlement Class are preliminarily enjoined and barred from commencing, prosecuting, or otherwise litigating, in whole or in part, either directly, representatively, derivatively, or in any other capacity, whether by a complaint, counterclaim, defense, or otherwise, in any local, state, or federal court, or in any agency or other authority or forum wherever located, any contention, allegation, claim, cause of action, matter, lawsuit, or action (including but not limited to actions pending as of the date this settlement is preliminarily approved by the Court), that arises out of or relates in any way to the Released Claims. Any person or entity who knowingly violates such injunction shall pay the reasonable costs and attorneys fees incurred by Dakota Growers as a result of such violation. 16. Rights of Exclusion. All Settlement Class members who properly deliver to the Settlement Administrator a timely written request to opt-out of the Settlement shall be excluded from the Settlement Class, shall have no rights as members of the Settlement Class pursuant to this Settlement Agreement, and shall receive no payments as provided herein. A request for 17

18 exclusion from the Settlement Class must be in writing, identify the case name Mirakay, et al. v. Dakota Growers Pasta Company, Inc., and state the name, address, and phone number of the Settlement Class member(s) seeking exclusion. Each request must also contain a signed statement that: I/We hereby request to be excluded from the proposed Settlement Class in the Dreamfields Pasta Litigation. The request must be mailed to the Settlement Administrator at the address provided in the Notice and postmarked no later than sixty (60) days after the Notice is first published. A request for exclusion that does not include all of the foregoing information, that is sent to an address other than the one designated in the Notice, or that is not received within the time specified, shall be invalid and the person(s) serving such a request shall be deemed member(s) of the Settlement Class, and shall be bound as class member(s) by the Settlement. The Settlement Administrator shall promptly forward copies of all requests for exclusion to Settlement Class Counsel and counsel for Dakota Growers. 17. Right to Object or Comment. Any member of the Settlement Class may comment in support of or in opposition to the Settlement or the proposed Attorneys Fee Award, and may do so in writing, in person, or through counsel, at his or her own expense, at the Fairness Hearing. Except as the Court may order otherwise, no Settlement Class member objecting to the Settlement shall be heard and no papers, briefs, pleadings, or other documents submitted by any such class member shall be received and considered by the Court unless such class member shall both file with the Court and mail to Settlement Class Counsel and counsel for Dakota Growers a written objection with the caption Mirakay, et al. v. Dakota Growers Pasta Company, Inc., No. 3:13-cv JAP-LHG, that includes: (a) the Settlement Class member s full name and current address; (b) a signed declaration that he or she is a member of the Settlement Class and that identifies the product(s) purchased as well as the approximate date and 18

19 location of the purchase(s); (c) the specific grounds for the objection or comment in support of the settlement; (d) all documents, writings, or testimony that such Settlement Class member desires the Court to consider; and (e) a notice of intention to appear (if any). Any Settlement Class member who intends to appear at the Fairness Hearing through counsel must also state the identity of all attorneys representing him/her who will appear at the Fairness Hearing. Any such Settlement Class member also must (1) identify every case by name, court, and case number in which his/her attorney has appeared as an objector s counsel within the past five years; (2) provide a copy of the papers the attorney, as objector s counsel, filed in any such case; (3) identify any sanction that such counsel has received from any court in connection with the attorney s efforts as an objector s counsel; and (4) provide any court order in which a court refers to or discusses the objector s counsel, the objector represented by such counsel, or the objection raised by such objector and counsel. All written objections shall be filed and postmarked no later than sixty (60) days after the Notice is first published. Any member of the Settlement Class who fails to object in the manner prescribed herein shall be deemed to have waived his or her objections and forever be barred from making any such objections in this action or in any other action or proceeding. To appeal from any provision of an order approving the settlement as fair, reasonable, and adequate; any incentive awards to the named Plaintiffs; or any award of attorneys fees and expenses to Settlement Class Counsel, the Settlement Class member must appear in person at the Fairness Hearing, or through his or her counsel, or seek leave of Court excusing such appearance prior to the Fairness Hearing, or as otherwise may be permitted by the Court at the Fairness Hearing. While the statement described in subparagraph 17(b) is prima facie evidence that the objector is a member of the Settlement Class, Plaintiffs, Dakota Growers, or both may take 19

20 discovery regarding the matter, subject to Court approval. Any Settlement Class members who object to the Settlement shall make themselves available to be deposed by Settlement Class Counsel and counsel for Defendant in the county of the objector s residence within ten (10) days of service of his or her timely filed objection. 18. Final Judgment and Order. If this Settlement Agreement is preliminarily approved by the Court, the Parties shall jointly request at the Fairness Hearing that the Court enter final judgment approving the Settlement Agreement (such judgment, the Final Judgment and Order ). The Fairness Hearing shall be held no earlier than ninety (90) days after Defendant serves the notice required under 28 U.S.C and twenty-one (21) days after the deadline for all Settlement Class members to opt-out or object under paragraphs 16 and 17 of this Agreement. A copy of the form of the proposed Final Judgment and Order agreed to by the Parties is attached hereto as Exhibit G. The Final Judgment and Order shall provide, inter alia, that: A. The Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Settlement Class; B. The Notice and Notice Plan fully complied with the requirements of Rule 23 and due process, constituted the best notice practicable under the circumstances, and was due and sufficient notice to all persons entitled to notice of this Settlement; C. The Released Claims are dismissed with prejudice as to all Released Parties, without fees or costs except as provided in this Settlement Agreement; D. Plaintiffs and members of the Settlement Class are permanently enjoined and barred from commencing, prosecuting, or otherwise litigating, in whole or in part, either directly, representatively, derivatively, or in any other capacity, whether by a 20

21 complaint, counterclaim, defense, or otherwise, in any local, state, or federal court, or in any agency or other authority or forum wherever located, the Released Claims. Any person or entity who knowingly violates such injunction shall pay the reasonable costs and attorneys fees incurred by Dakota Growers as a result of such violation; and E. The Court shall retain exclusive jurisdiction over this action, the Parties, and all Settlement Class members to determine all matters relating in any way to the Final Judgment and Order, the Preliminary Approval Order, or the Settlement Agreement, including but not limited to the administration, implementation, interpretation, or enforcement of such orders or Agreement. 19. Finality of Judgment. The Final Judgment and Order shall be deemed final on the later of: (i) the expiration of the time to appeal the Final Judgment and Order with no appeal having been filed; or (ii) if any such appeal is filed, the termination of such appeal on terms which affirm the Final Judgment and Order or dismiss the appeal with no material modification of the Final Judgment and Order, and the expiration of the time to obtain any further appellate review of the Final Judgment and Order ( Effective Final Judgment Date ). 20. Dismissal. Within ten (10) business days of the Effective Final Judgment Date, Plaintiffs shall voluntarily dismiss, with prejudice, Weiss v. Dakota Growers, Inc., et al., No. 13- cv The action styled as Mirakay v. Dakota Growers, Inc., et al., No. 3:13-cv JAP- LHG shall be dismissed with prejudice by operation of the Final Judgment Order. 21. Dates of Payment Obligations. A. Dakota Growers shall have no obligation to make any payments under this Settlement Agreement until the Court enters the Preliminary Approval Order. 21

22 B. Within 10 business days following the entry of the Preliminary Approval Order, Dakota Growers shall deposit $7,920,000 into an interest-bearing escrow account (the Escrow Account ) held at the Huntington National Bank (the Escrow Agent ). If requested by Escrow Agent, Plaintiffs and Dakota Growers shall execute an escrow agreement in Escrow Agent s customary form. Any fees required to be paid under paragraph 8 of the Escrow Agreement shall be paid from the Total Available Amount. Once the funds have been transferred to the Escrow Account, Plaintiffs and the Settlement Class bear all risk of loss, including but not limited to the loss of all amounts contained in the Escrow Account. Without limiting the foregoing, the loss of some or all of the $7,920,000 deposited in the Escrow Account shall not affect the scope or enforceability of the Released Claims. Prior to the Effective Final Judgment Date, no funds shall be disbursed from the Escrow Account except as follows: i. Notice and Administration Costs. Funds necessary to pay for reasonable costs incurred by the Settlement Administrator in designing and effecting the Notice Plan, and consistent with the terms of this Agreement, may be withdrawn from the Escrow Account. In the event that the Settlement does not receive final approval from the Court or the Final Judgment and Order does not become final pursuant to paragraph 19, Defendant may not seek the return of such funds paid to the Settlement Administrator. All funds disbursed from the Escrow Account prior to the Effective Final Judgment Date pursuant to this paragraph 21.B.i shall require a written agreement of the Parties or their counsel and shall require appropriate supporting documentation. ii. Attorneys Fee Award. No sooner than 10 business days after the Court enters the Final Judgment and Order, Settlement Class counsel may, in their 22

23 discretion, make a one-time, single withdrawal up to $2,920,000 from the Escrow Account pursuant to a written notice agreed upon and executed by all Parties; provided, however, that not less than 10 business days prior to the date of such withdrawal, Settlement Class counsel shall deliver, or cause to be delivered, to counsel for Defendant an irrevocable letter of credit in an aggregate face amount equal to such proposed withdrawal plus interest accrued on such amount through the stated maturity of the Letter of Credit at a per annum rate of not less than 3.25 percent, and otherwise in form and substance acceptable to Dakota Growers, as the beneficiary of the Letter of Credit (the Beneficiary ) and issued by a financial institution acceptable to the Beneficiary (the Issuer ) in its sole discretion (such letter of credit, the Letter of Credit ), which Letter of Credit shall provide that the Beneficiary shall immediately be entitled to draw thereunder upon certification by the Beneficiary to the Issuer that any of the following events have occurred (and no other conditions): (w) the Court vacates or withdraws the Final Judgment and Order; (x) the United States Court of Appeals or the United States Supreme Court issues an order that does not affirm the Final Judgment and Order in its entirety; (y) the Letter of Credit will expire within 90 days and the Beneficiary has not received a replacement or extension of such Letter of Credit satisfactory to it, in its sole discretion, at least 90 days prior to the expiration of the Letter of Credit; or (z) the Court, the United States Court of Appeals, or the United States Supreme Court awards Settlement Class Counsel less than $2.92 million (the Modified Attorneys Fee Award ), provided, however, that under subparagraph (z) only, the Beneficiary is entitled to draw only an amount equal to the difference between $2.92 million and the Modified Attorneys Fee Award, plus interest earned at a rate of 3.25% per annum thereon, 23

24 accruing on such difference for the period commencing on the date the Letter of Credit is issued, until and including such date of drawing. Settlement Class Counsel shall pay all fees or costs of the Issuer associated with issuance, amendment, extension, and drawing under the Letter of Credit. Neither the Defendant nor the Beneficiary shall have any obligation to first seek repayment from Settlement Class Counsel of the funds withdrawn from the Escrow Account pursuant to this paragraph 21.B.ii, nor shall the consent of Settlement Class Counsel or Plaintiffs be required to draw upon the Letter of Credit. C. Within 10 business days following the Effective Final Judgment Date, and upon receiving written agreement of the Parties or their counsel, the Escrow Agent shall (i) release to the Settlement Administrator $5 million plus interest thereon, less any disbursements made pursuant to paragraph 21.B.i and 21.B.ii, and (ii) release to Settlement Class Counsel $2.92 million plus any interest thereon (or the actual amount awarded by the Court), less any prior disbursement made pursuant to paragraph 21.B.ii. The Settlement Administrator shall use best efforts to mail all checks to Class Members entitled to payment under this Agreement no later than 150 days after the Effective Final Judgment Date. D. On the Effective Final Judgment Date, any interest accrued on $5 million of the funds deposited into the Escrow Account shall be added to the Total Available Amount, and Settlement Class Counsel shall be entitled to any interest on the $2.92 million available for the Attorneys Fee Award provided, however, that if the Court awards a Modified Attorneys Fee, Settlement Class Counsel shall only be entitled to the Modified Attorneys Fee Award and interest on that amount. Interest calculated under this paragraph 21.D shall commence beginning from the date that Dakota Growers 24

25 deposits funds into the Escrow Account in accordance with paragraph 21.B. The difference between the Modified Attorneys Fee Award and $2.92 million, as well as the interest earned thereon, shall revert to Defendant. On the earlier of (i) the date the Court vacates or withdraws the Final Judgment and Order, (ii) the date the United States Court of Appeals or the United States Supreme Court issues an order that does not affirm the Final Judgment and Order in its entirety, (iii) the date the Attorneys Fee Award is decreased on appeal, or (iv) such date as Defendants and Settlement Class Counsel on behalf of Plaintiffs shall mutually agree, such date in clauses (i), (ii), (iii), and (iv) being the Escrow Termination Date, all funds in the Escrow Account (and all interest earned thereon), except those funds disbursed in accordance with paragraph 21.B.i, shall be released by the Escrow Agent to Defendants without further order by the Court, provided however, that if approval of the Settlement Agreement is affirmed on appeal but the Attorneys Fee Award is decreased on appeal, on the Escrow Termination Date, the Escrow Agent shall release only the Modified Attorneys Fee Award, plus interest earned thereon (to the extent such funds have not already been withdrawn pursuant to paragraph 21.B.ii), to Settlement Class Counsel, and shall release the difference between $2.92 million and the Modified Attorneys Fee Award, plus interest earned on the amount of the difference (to the extent such funds have not already been withdrawn pursuant to paragraph 21.B.ii), to Defendants. 22. Un-cashed Checks. Checks issued to pay any amounts due under this Settlement Agreement and related Court orders shall expire 180 days after the date of issue, and shall no longer be negotiable after that date. All funds reflected by such expired checks shall be distributed on a cy pres basis pursuant to paragraph 4.C. 25

26 23. Option to Withdraw. Either Dakota Growers or Settlement Class Counsel, on behalf of the Settlement Class, shall have the option to withdraw from the Settlement Agreement, and thereby render this Settlement null and void, if the other Party breaches any material provision of the Settlement Agreement or the Preliminary Approval Order, or fails to fulfill any material obligation hereunder or thereunder, or upon such other grounds as may be agreed to by the Parties or permitted by the Court. Dakota Growers shall have the option to withdraw from the Settlement Agreement, and thereby render this Settlement null and void, if the number of persons submitting valid and timely written requests to opt-out of the Settlement equals or exceeds the number set forth in Exhibit H. Any election made by a Party to terminate this Agreement pursuant to this paragraph shall be made no later than seven (7) days prior to the Fairness Hearing. 24. Effect of Withdrawal/Rejection. In the event that (i) either Party withdraws from the Settlement Agreement pursuant to paragraph 23; (ii) the Settlement Agreement, Preliminary Approval Order, and Final Judgment and Order are not approved in all material respects by the Court; or (iii) the Settlement Agreement, Preliminary Approval Order, or Final Judgment and Order are reversed, vacated, or modified in any material respect by this or any other Court; then (a) the Settlement Agreement shall become null and void; (b) Dakota Growers shall cease to have any payment or other obligations, except for all notice and administrative costs incurred as of the date the Settlement Administrator is notified that the Settlement Agreement has become null and void; (c) the Litigation may continue; and (d) any and all orders entered pursuant to or in connection with the Settlement Agreement shall be deemed vacated, including, without limitation, any order certifying or approving certification of the Settlement Class; provided, however, that if the Parties hereto agree to appeal jointly such ruling and the 26

27 Settlement Agreement and Final Judgment and Order are upheld on appeal, then the Settlement Agreement and Final Judgment and Order shall be given full force and effect according to their terms. 25. Immediate and Continuing Effect of Certain Paragraphs. The provisions of paragraphs 3, 24, and 34 shall become effective when this Settlement Agreement has been signed by the Parties and shall be binding on the Parties and their counsel regardless of whether the Settlement Agreement is approved by this Court or any other court and regardless of whether the Settlement Agreement is otherwise rendered null and void. MISCELLANEOUS PROVISIONS 26. Interpretation. This Settlement Agreement contains the entire agreement among the Parties hereto and supersedes any prior discussions, agreements, or understandings among them. All terms are contractual. In the event of an alleged ambiguity, there will be no presumption or construction against either side as the drafter. 27. Binding Effect. The terms are and shall be binding upon each of the Parties hereto, their administrators, agents, assigns, attorneys, executors, heirs, partners, representatives, predecessors-in-interest, and successors, and upon all other persons claiming any interest in the subject matter hereto through any of the Parties hereto including any Settlement Class. 28. Headings. The headings contained in this Settlement Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Settlement Agreement. 27

28 29. No Rescission on Grounds of Mistake. The Parties acknowledge that they have made their own investigations of the matters covered by this Settlement Agreement to the extent they have deemed it necessary to do so. Therefore, the Parties agree that they will not seek to set aside any part of the Settlement Agreement on the grounds of mistake. Moreover, the Parties understand, agree, and expressly assume the risk that any fact not recited, contained, or embodied in the Settlement Agreement may turn out hereinafter to be other than, different from, or contrary to the facts now known to them or believed by them to be true, and further agree that the Settlement Agreement shall be effective in all respects notwithstanding and shall not be subject to termination, modification, or rescission by reason of any such difference in facts. 30. Amendment. This Settlement Agreement may be amended or modified only by a written instrument signed by the Parties or their counsel. Amendments and modifications may be made without notice to the Settlement Class unless notice is required by law or by the Court. 31. Construction. For the purpose of construing or interpreting this Settlement Agreement, the Parties agree that it is to be deemed to have been drafted equally by all Parties hereto and shall not be construed strictly for or against any Party. 32. Integration of Exhibits. The exhibits to this Settlement Agreement are an integral and material part of the Settlement and are hereby incorporated and made a part of the Settlement Agreement. 33. Jurisdiction. The United States District Court for the District of New Jersey shall have jurisdiction over the Parties to this Settlement Agreement and the Settlement Class. 28

29 34. No Admission. Neither this Settlement Agreement, nor any of its provisions, nor any of the documents (including but not limited to drafts of the Settlement Agreement, the Preliminary Approval Order, or the Final Judgment and Order), negotiations, or proceedings relating in any way to the Settlement, shall be construed as, or deemed to be evidence of, an admission or concession by any person, including Dakota Growers, and shall not be offered or received in evidence, or subject to discovery, in this or any other action or proceeding except in an action brought to enforce its terms or except as may be required by law or Court order. 35. Governing Law. This Settlement Agreement shall be governed by and construed in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State of New Jersey. 36. Counterparts. This Settlement Agreement may be executed in counterparts, and may be executed by facsimile, and as so executed shall constitute one agreement. 37. No Media Statements. Neither the Parties nor their counsel shall issue any press release, or make any statement to any media or press of any sort regarding this Settlement, other than to state that the Litigation has been resolved on terms satisfactory to the Parties. Settlement Class Counsel may provide a copy of the long-form or short-form notice, claim forms, a short description of the settlement consistent with this Settlement Agreement and first approved by Dakota Growers, and a link to the settlement website on their law firms existing websites. Nothing in this paragraph shall be construed to limit the Settlement Administrator from effecting the Notice in accordance with this Settlement Agreement. 29