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SETTLEMENT AGREEMENT AND RELEASE

Settlement Agreement

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Sharper Image Corporation

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Title: SETTLEMENT AGREEMENT AND RELEASE
Date: 1/19/2007
Law Firm: Brown Raysman;Thelen Reid     Sector: Services

SETTLEMENT AGREEMENT AND RELEASE, Parties: sharper image corporation
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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 05-21251-ALTONAGA/BANDSTRA

MANUEL FIGUEROA, individually and on behalf of those similarly situated,

 

Plaintiff,

 

vs.

SHARPER IMAGE CORPORATION a Delaware corporation, and ZENION INDUSTRIES, INC., a California corporation,

 

Defendants.

SETTLEMENT AGREEMENT AND RELEASE

By And Among

Plaintiffs Manuel Figueroa and Dixie M. Garner, the Settlement Class, and Defendant Sharper Image Corporation


SETTLEMENT AGREEMENT AND RELEASE

 

TABLE OF CONTENTS

 

1.  

 

Definitions  

 

2  

2.  

 

The Class Action and Settlement Class Covered by This Settlement Agreement  

 

11  

3.  

 

Commitment To Support  

 

12  

4.  

 

Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination  

 

13  

5.  

 

Procedure For Certification and Approving Settlement  

 

15  

6.  

 

Procedure For Final Approval  

 

16  

7.  

 

Notice To Class  

 

19  

8.  

 

Settlement Benefits  

 

20  

9.  

 

Cost of Notice and Additional Expenses  

 

23  

10.  

 

      Attorneys’ Fees, Class Representative Fees, And Litigation Costs And Expenses  

 

24  

11.  

 

      Opt-Out Rights  

 

25  

12.  

 

      Claims Procedure  

 

26  

13.  

 

      Claims Administration  

 

26  

14.  

 

      Agreement Not to Disparage Ionic Breeze® Products  

 

30  

15.  

 

      Release  

 

31  

16.  

 

      Other Pending Actions  

 

33  

17.  

 

      Final Approval of This Agreement  

 

34  

18.  

 

      Final Judgment  

 

34  

19.  

 

      Effect of Failure of Court To Approve  

 

34  

20.  

 

      Successors & Assigns  

 

35  

21.  

 

      Entire Agreement  

 

35  

22.  

 

      Exhibits  

 

36  

23.  

 

      No Presumption Against Drafter  

 

36  

24.  

 

      Governing Law  

 

36  

25.  

 

      Continuing Jurisdiction and Exclusive Venue  

 

36  

26.  

 

      Authority  

 

38  

27.  

 

      Currency Dates & Times  

 

38  

28.  

 

      Notices  

 

38  

29.  

 

      Preliminary Injunction and Stays of Other Actions  

 

39  

30.  

 

      Permanent Injunction as Part of Final Judgment  

 

40  

31.  

 

      Order of Dismissal With Prejudice of Other Pending Actions  

 

41  

32.  

 

      Stay  

 

41  

33.  

 

      Additional Terms  

 

42  

34.  

 

      Counterparts  

 

43  

 

i

 

SF #1197395 v10


      THIS SETTLEMENT AGREEMENT AND RELEASE (“Settlement Agreement”) is conditionally made effective upon Preliminary Settlement Approval by the Court (as provided in § 5.1), by and among defendant Sharper Image Corporation (“Sharper Image” or “Settling Defendant”) and plaintiff Manuel Figueroa and Dixie M. Garner (“Plaintiffs” or “Settlement Class Representatives”) and the Settlement Class (as defined in § 2.2 ), and becomes unconditionally effective when the Final Order and Final Judgment become Final as defined herein.

      WHEREAS, Sharper Image denies and has asserted a number of defenses to each and every one of the allegations in the above-captioned litigation (the “Class Action”) regarding the efficacy of the Ionic Breeze® products. Sharper Image stands behind the Ionic Breeze® and contends that scientific testing has demonstrated the high quality, efficacy, and safety of the Ionic Breeze®, but, regardless of the merits of this Class Action, the outcome of any litigation is always inherently uncertain; therefore, Sharper Image has concluded that it is in the best interest of Sharper Image, its shareholders, and its customers to settle this Class Action.

      WHEREAS, Plaintiffs equally believe in the allegations and assertions made in their Complaint and the merits of this Class Action, but also believe that settlement is in the best interest of the Settlement Class Members; WHEREAS, Plaintiffs, Settlement Class, and Settling Defendant agree that this Settlement Agreement, and any papers filed or prepared in connection with this Settlement Agreement, shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by Settling Defendant or of the truth of any of the claims or allegations made in this Class Action or otherwise; WHEREAS, arm’s length settlement negotiations have taken place between Plaintiffs, Settlement Class Counsel (as defined in § 1.46), Settling Defendant’s Counsel, and the Settling Defendant; WHEREAS, as a product of those negotiations, this Settlement Agreement, including its exhibits, which embodies all of the terms and conditions of the settlement between the Settling 1


Defendant and the Plaintiffs, both individually and on behalf of the Settlement Class, has been reached, subject to the final approval of the United States District Court for the Southern District of Florida (the “Court”); WHEREAS, Settlement Class Counsel and the Plaintiffs have concluded, after due investigation and after carefully considering the relevant circumstances of the Settling Defendant, the Class Action, and the applicable law, that it would be in the best interest of the Settlement Class to enter into this Settlement Agreement in order to avoid the uncertainties of litigation and to assure that the benefits reflected herein are obtained for the Settlement Class, and further, that Settlement Class Counsel and the Plaintiffs consider the settlement set forth herein to be fair, reasonable, adequate, and in the best interests of the Settlement Class; WHEREAS, the Settling Defendant, without admitting any liability or wrongdoing, has concluded, despite its belief that it is not liable for the claims asserted and has good defenses thereto, that it will enter into this Settlement Agreement solely to avoid the further expense, inconvenience, and burden of this protracted and complex litigation, the risks inherent in uncertain complex litigation, and the distraction and diversion of its personnel and resources, and thereby put to rest this controversy; and NOW THEREFORE, it is agreed by and among the undersigned, on behalf of the Settling Defendant, the Plaintiffs, and the Settlement Class, that this Class Action be conditionally settled, compromised, and dismissed in its entirety with prejudice, subject to the approval of the Court, on the following terms and conditions:

1.      

Definitions.

 

 

1.1 “Agreement” and “Settlement Agreement” both mean this agreement by and

 

among Defendant Sharper Image, Plaintiffs Manuel Figueroa and Dixie M. Garner, and the Settlement Class, as defined in § 2.2 of this Settlement Agreement.

      1.2 “Claim Form” means the form to be used by Settlement Class Members, who do not process their claim on the Claims Web Site, to manually make a claim under this Settlement Agreement in substantially the same form as Exhibit F hereto.

2


      1.3 “Claims Administration” means the process by which this Settlement Agreement is administered pursuant to § 13.

      1.4 “Claims Administrator” means the person or entity appointed by the Court to administer this Settlement Agreement pursuant to § 13.1.

      1.5 “Claims Web Site” means the web site administered jointly by the Claims Administrator and Settling Defendant located at “ www.ibsettlement.com ”. The Claims Web Site will enable Settlement Class Members who are contained in the Ionic Breeze Database to process their claims, execute an electronic release, and obtain their Merchandise Credit Confirmation Number. Settlement Class Members who are not in the Ionic Breeze® Database will be able to obtain a Claim Form on the Claims Web Site that they can submit with proof of purchase to the Claims Administrator to apply for a Merchandise Credit. Settlement Class Members will be required to use the Claims Web Site for processing their claims or obtaining a Claim Form, except for those Settlement Class Members that do not have reasonable access to the Internet. Notice of Final Approval will be made to those Settlement Class Members who process their claims on the Claims Web Site by publication on the Claims Website. Settlement Class Members, at the time that they obtain their Merchandise Credit Confirmation Number, will be told to check back within a certain period of time to find out (1) whether the Court has approved the settlement; (2) that they now have a valid Merchandise Credit; and (3) the expiration date of the Merchandise Credit.

1.6      

“Class Action” means the above-captioned litigation.

 

1.7      

“Class Notice” means the Court approved form of notice of the conditional

 

certification of the Settlement Class and notice of Fairness Hearing to the Putative Class Members, which shall be in substantially the same form as Exhibit D hereto.

      1.8 “Closing Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Agreement when using said defined term. If the Court sets a date or deadline for doing or 3


completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.9 “Confirmatory Discovery” shall mean that discovery to be concluded by Settlement Class Counsel to perform their due diligence with respect to the fairness and appropriateness of the terms of the Settlement Agreement to the Putative Class Members and the Settlement Class Members in relation to the factual basis for the lawsuit; 1.10 “Court” means the United States District Court for the Southern District of Florida, Miami Division.

      1.11 “Customer Number” means the Sharper Image customer number that will be used to assist Sharper Image in identifying Putative Class Members in the Ionic Breeze® Database.

      1.12 “Effective Date of Settlement” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.13 “Execution Date of The Settlement Agreement” means the date upon which the last of all parties and counsel listed as signatories on the Settlement Agreement have executed it.

      1.14 “Fairness Hearing” means the hearing at which the Court will consider and finally decide whether to certify the Settlement Class, approve this Settlement Agreement, approve payment of fees and expenses, enter the Final Order and Final Judgment, and make such other final rulings as are contemplated by this Settlement Agreement or are otherwise necessary to effectuate this Settlement.

4


      1.15 “Fairness Hearing Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.16 “Final” means the time when the Final Order and Final Judgment represent a final and binding judgment with respect to the this Class Action, which shall take place upon the occurrence of any of the following: (i) the date of final affirmance on an appeal (without any material modification or reversal of the Final Order and/or Final Judgment), or the date of affirmance by means of a writ or other proceeding (without any material modification or reversal of the Final Order and/or Final Judgment), and the expiration of the time for a petition for or a denial of a writ of certiorari to review such orders, or, if certiorari is granted, the date of final affirmance (without any material modification or reversal of the Final Order and/or Final Judgment) following review pursuant to that grant; or (ii) the date of final dismissal of any appeal from the final dismissal of any proceeding on certiorari to review the Final Order and/or Final Judgment; or (iii) if no appeal is filed, the expiration date of the time for the filing or noticing of any appeal or filing or initiating any other appellate proceeding challenging the Court’s Final Order and/or Final Judgment, i.e ., expected to be thirty (30) days after entry of the Final Order and Final Judgment (or the expiration of any extension of time for the filing of any appeal or other appellate proceeding as may result from operation of law or order of the Court).

      1.17 “Final Claims Bar Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a

5


date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.18 “Final Judgment” means the final judgment and order of dismissal with prejudice, which certifies the Settlement Class, approves this Settlement Agreement, approves payment of attorneys’ fees and expenses, dismisses the Class Action with prejudice, enters a permanent injunction against other actions, and makes such other final rulings as are contemplated by this Settlement Agreement, and which is entered in conjunction with the Final Order. It is an express condition of this Settlement that the Final Judgment be substantially in the form attached as Exhibit C, with such additional orders as may be determined by the Court as to only those matters that this Settlement Agreement leaves to the determination of the Court or as are necessary to effectuate this settlement.

      1.19 “Final Order” means the final Order by which the Court approves this Settlement Agreement.

      1.20 “Household” refers to the street address at which a Purchaser registers as his/her/its address and all other places in which that Person has resided for more than thirty

(30)      

days in any calendar year since May 6, 1999.

 

 

1.21 “Hybrid” refers to the Sharper Image Hybrid Air Purifier, including the

 

following model: SI724 Hybrid, and other models to be developed under the Hybrid name. 1.22 “Ionic Breeze®” or “Ionic Breeze” means the Sharper Image branded Ionic Breeze® Silent Air Purifiers identified as the following models: SI737 - Professional Series™ Ionic Breeze® Quadra®; SI830 - Professional Series™ Ionic Breeze GP®; SI397 - Ionic Breeze® 3.0; SI637 - Ionic Breeze® Quadra®; SI697 - Ionic Breeze® Quadra® Compact; SI730 - Ionic Breeze GP®; SI720 - Ionic Breeze GP® Desktop; SI853 Professional Series™ Plus Midi; SI719 Professional Series™ Plus Tabletop; SI867 Professional Series™ Plus Quadra®; SI871 Professional Series™ Plus GP; SI620 Compact Ionic Breeze®; SI624 Ionic Breeze® – 2.0; SI626 – Ionic Breeze® Night Light; SI589 – Ionic Breeze® cat litter box; 6


SI633 – Ionic Breeze® car air purifier; SI717 – Ionic Breeze® small spaces/bathrooms – plug-in; SI627 – Ionic Breeze® plug-in; S1628 – Ionic Breeze® plug-in; SI629 – Ionic Breeze® dashboard ionizer; SI861 – Ionic Breeze® GP Professional Series™ with OzoneGuard; SI837 – Ionic Breeze® Quadra® with OzoneGuard; SI857 – Ionic Breeze® Quadra® Professional Series™ with Ozoneguard; SI827 – Compact Ionic Breeze® Quadra® with Ozoneguard; SI037

     

Ionic Breeze® Quadra® Professional Series™ with Ozoneguard QVC.

 

 

1.23 “Ionic Breeze® Database” means the database to be compiled by Settling

 

Defendant, which includes information on Purchasers who Purchased an Ionic Breeze® directly from Sharper Image, and includes information on Purchasers that Settling Defendant is able to obtain from third-party retailers.

1.24      

“Merchandise Credit”

 

 

1.24.1 “Merchandise Credit” means the credit given to Settlement Class

 

Members that are redeemable only for Sharper Image Branded Products to which Settlement Class Members are entitled as provided in § 8.

      1.24.2 Merchandise Credits can only be redeemed from (1) Sharper Image retail stores in the United States; (2) Sharper Image’s online store at www.sharperimage.com ; or (3) by phone or mail order directly from Sharper Image.

      1.25 “Merchandise Credit Confirmation Number” means the number used to track those Settlement Class Members who have qualified for a Merchandise Credit.

      1.26 “Notice” or “Notices” means the manner in which the Class Notice, Summary Notice of Settlement, and Notice of Final Approval are given and published as provided in § 7.

      1.27 “Notice Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

7


      1.28 “Notice of Final Approval” means the form of notice to be provided to Settlement Class Members that the Court has finally approved this Settlement Agreement, in a form to be submitted by the parties and determined and approved by the Court.

      1.29 “Objection Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.30 “Opt-Out Deadline” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.31 “Opt-Out Form(s)” means the written communication that must be provided by Putative Class Members to exclude themselves from the Settlement Class.

      1.32 “Person” and “Persons” mean all persons and entities (including but not limited to natural persons, individuals, corporations, agencies, bodies, governments, associations, partnerships, trusts, and their predecessors, successors, administrators, heirs and assigns).

      1.33 “Plaintiffs” means Manuel Figueroa and Dixie M. Garner, proposed Settlement Class Representatives.

      1.34 “Preliminary Settlement Approval” and “Preliminary Settlement Approval Order” both mean the Order that the Court enters as provided in § 5.1, in substantially the same form as Exhibit B hereto.

8


      1.35 “Preliminary Settlement Approval Hearing” means the hearing set by the Court to preliminarily approve this Settlement Agreement and conditionally certify a provisional Settlement Class.

      1.36 “Preliminary Settlement Approval Hearing Date” means the date so designated on Exhibit A that is attached hereto and incorporated herein by reference, or such other date as may be set by the Court for the doing or completion of the acts required to be completed by said date, as contemplated by this Settlement Agreement when using said defined term. If the Court sets a date or deadline for doing or completing such acts other than the date designated on Exhibit A, then this defined term shall mean the date set by the Court rather than the date designated on Exhibit A.

      1.37 “Product Identification Documentation” means the documentation with respect to claims that is required by § 13 and the Claim Form.

      1.38 “Proof of Purchase” means the documentation required by the Claim Form with respect to purchases not confirmed by the Ionic Breeze® Database. Proof of Purchase will constitute any one or more of the following evidencing the purchase of an Ionic Breeze®: a copy of a receipt; a cancelled check; a bank copy or bank generated record of a negotiated check; a credit card bill or receipt.

      1.39 “Purchaser(s)” means any and all Persons who Purchased in or from a location in the United States of America an Ionic Breeze® from any source between May 6, 1999 and the Execution Date of The Settlement Agreement. Purchasers will not include those who have sold and/or returned all of their Purchased Ionic Breeze(s)®, unless at least one unit was returned in exchange for another Ionic Breeze®. Class Members may not separate Purchases within Households in order to create a right to additional recovery.

      1.40 “Purchased” means paid monetary consideration for the Ionic Breeze®, subject to the qualifications in § 1.39.

9


      1.41 “Putative Class Member(s)” means all Persons who are within the scope of the definition of “Settlement Class,” including those who validly and timely request exclusion from the Settlement Class, as provided in this Settlement Agreement.

      1.42 “Released Parties” means those Persons released under § 15 and more particularly defined therein.

      1.43 “Released Rights” or “Released Claims” means any and all manner(s) of claims, demands, actions, suits, and causes of action released under § 15.

      1.44 “Settlement Agreement” and “Agreement” both mean this agreement by and among Defendant Sharper Image, Plaintiffs Manuel Figueroa and Dixie M. Garner, and the Settlement Class, as defined in § 2.2 of this Settlement Agreement.

      1.45 “Settlement Class” is the FRCP 23 class covered by this Settlement Agreement, as defined in § 2.2 of this Settlement Agreement.

      1.46 “Settlement Class Counsel” means Lightfoot Franklin & White LLC, and Haggard, Parks, Haggard & Lewis, P.A., and their respective attorneys.

      1.47 “Settlement Class Members” means all Purchasers who are within the scope of the definition of the “Settlement Class” and who do not validly and timely requested exclusion from the Settlement Class, as provided in this Settlement Agreement.

      1.48 “Settlement Class Representatives” means Manuel Figueroa and Dixie M. Garner and/or such other person(s) as the Court may appoint as representatives of the Settlement Class.

      1.49 “Settling Defendant” means Sharper Image Corporation, the Defendant in this Class Action.

      1.50 “Settling Defendant’s Counsel” means Thelen Reid Brown Raysman & Steiner LLP fka Thelen Reid & Priest LLP and its attorneys, and Lowndes, Drosdick, Doster, Kantor

  • Reed, P.A. and its attorneys.
    1.51 “Settlement Packages” means the consideration afforded the Settlement Class

Members under § 8.

10


      1.52 “Sharper Image” or “Sharper Image Corporation” means the Sharper Image Corporation, the defendant in this Class Action, which is also defined above as “Settling Defendant.” 1.53 “Sharper Image Branded Product” means a product sold by Sharper Image that has the trademark Sharper Image® or Sharper Image Design® displayed on the product or box. A product shall not be deemed a Sharper Image Branded Product solely as a result of such product being sold or offered for sale using promotional or advertising materials prepared by Settling Defendant or promotional or advertising materials using the Sharper Image® or Sharper Image Design® trademark.

      1.54 “Summary Notice of Settlement” means the Court approved form of notice of the conditional certification of the Settlement Class and notice of Fairness Hearing to the Putative Class Members, which shall be in substantially the same form as Exhibit E hereto.

1.55 “Zenion” refers to Zenion Industries, Inc., former named defendant in this Class

 

Action.

 

2.      

The Class Action and Settlement Class Covered by This Settlement Agreement 2.1 This Settlement Agreement governs, within the scope of its subject matter, the

 

Settling Defendant, Settling Defendant’s Counsel, Settlement Class Counsel, Putative Class Members, and those purporting to act on behalf of any Putative Class Member.

      2.2 The “Settlement Class” is defined and composed of any and all Persons who Purchased in or from a location in the United States of America an Ionic Breeze® from any source between May 6, 1999, and the Execution date of The Settlement Agreement. The Settlement Class does not include any Person who sold and/or returned all of their Purchased Ionic Breeze(s)®, unless at least one unit was returned in exchange for another Ionic Breeze®. The Settlement Class does not include Settling Defendant, Zenion Industries, Inc., or those who timely and properly opted-out of this Agreement. The Settlement Class may not separate purchases within Households in order to create a right to additional recovery.

11


3.      

Commitment To Support .

 

 

3.1      

Plaintiffs, the Settling Defendant, Settlement Class Counsel, and Settling

 

 

Defendant’s Counsel agree to recommend approval of and vigorously support this Settlement Agreement to the Court and to the Putative Class Members and to undertake reasonable steps and efforts contemplated by this Settlement Agreement and any other reasonable steps and efforts that may be necessary or appropriate, by order of the Court or otherwise, to carry out the terms of this Settlement Agreement. The parties to this Class Action shall aggressively cooperate, assist, and undertake all reasonable actions in order to accomplish the above on a timely basis in accordance with Exhibit A hereto. Settlement Class Members, Plaintiffs, and Settlement Class Counsel expressly concur and agree that Settling Defendant is entitled to communicate with the Putative Class Members, except as it relates to this Class Action (other than as provided in this Agreement). Settling Defendant will not aid or encourage any objections to this Settlement Agreement (or any of its terms or provisions) nor to final certification of the Settlement Class, nor encourage any Putative Class Members to elect to opt out.

 

 

3.2      

The Settlement Class Counsel shall make every reasonable effort to encourage

 

 

Putative Class Members to participate and not to opt out. In addition, the parties shall make all reasonable efforts to enforce the jurisdictional and injunctive provisions of this Settlement Agreement, including assisting and joining in any motions or stipulations that may be necessary to stay current or future-filed actions that may come within the scope of this Agreement.

 

 

3.3      

The failure of either party to cooperate and assist with regard to settlement as

 

 

expressly and implicitly contemplated in this Agreement shall constitute a material breach of this Agreement.

 

 

3.4      

No material modifications to the Final Judgment, Exhibit C, shall be permitted

 

 

unless approved expressly in writing by the parties. If the Court materially modifies Exhibit C,

 

12


such modifications shall give either party the right to terminate this Settlement Agreement and render this Class Action as if the Settlement Agreement had never been executed.

4.      

Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination

 

 

4.1 This Settlement Agreement shall be conditioned on the occurrence of all of the

 

 

following events:  

 

 

4.1.1  

 

The Court has entered the Final Order;  

4.1.2  

 

The Court has entered the Final Judgment, Exhibit C, without material  

modifications;  

 

 

4.1.3  

 

The Final Order and Final Judgment have become Final; and  

4.1.4  

 

Neither Settling Defendant nor Plaintiffs have elected to terminate this  

 

Settlement Agreement in accordance with the terms of this Agreement.

      4.2 If all of the conditions specified in Paragraph 4.1 are not met, then the Settlement Agreement will be subject to termination in accordance with the terms of this Settlement Agreement.

      4.3 Settling Defendant reserves the right to terminate the Settlement Agreement if the Preliminary Settlement Approval Hearing does not take place by March 1, 2007, or the Court has not otherwise entered the Preliminary Settlement Approval Order prior to March 1, 2007. Further, Settling Defendant reserves the right to terminate the Settlement Agreement if Preliminary Settlement Approval and the Final Judgment do not include the issuance of an injunction(s) that effectively enjoins the prosecution of all pending litigation against Settling Defendant and those Persons listed in the release at § 15, or each of them, involving claims related the Ionic Breeze®, including, but not limited to, any and all claims related in any way to the efficacy, advertisements, emissions or reactions (e.g. ozone, terpenes and reactions with terpenes, or any other type of reaction related to the operation of the Ionic Breeze®), volatile organic compounds, ultrafine particles, health risks, and/or performance of the Ionic Breeze®, including but not limited to, claims for alleged false advertising, breach of express and/or implied warranties, unjust enrichment, Magnuson-Moss Warranty Act, conspiracy, unfair 13


competition, state consumer protection statutes, common law prohibiting unfair or deceptive trade practices, breach of contract, fraud, and/or misrepresentation and equity prohibiting unjust enrichment or requiring restitution or disgorgement; and that are, were, or could have arisen out of or been related in any way to Settling Defendant’s advertising or sale of the Ionic Breeze® and the disclosures relating thereto, which actions include but are not limited to,

Potter and Rittenhouse v. Sharper Imag e, Cox v. Sharper Image , Robertson v. Sharper Image

(all currently pending in the Superior Court of California, in and for the County of San Francisco), and Bryant v. Sharper Image (pending in the Circuit Court for the State of Florida, County of Duval), including the successful defeat of all challenges to any such injunctions. Settling Defendant further reserves the right to terminate this Settlement Agreement if the Final Judgment does not include a permanent injunction in conformance with the above and does not include an order requiring the dismissal with prejudice of the above actions.

      4.4 Plaintiffs reserve the right to terminate the Settlement Agreement if, in the course of Confirmatory Discovery, Settlement Class Counsel obtains information that they did not previously know or have reason to know, and such information relates directly to and would have materially and substantially improved Plaintiffs’ likelihood of prevailing in this Class Action if it had continued.

      4.5 The Settling Defendant and Plaintiffs do not agree to the conditional certification of the Settlement Class, the conditional appointment of Settlement Class Counsel, or the conditional appointment of Settlement Class Representatives for any purpose other than to effectuate this Settlement Agreement. If this Settlement Agreement is terminated pursuant to its terms, or if the Effective Date of Settlement does not occur for any reason, then the conditional certification of the Settlement Class and the appointment of the Settlement Class Representatives and Settlement Class Counsel shall be vacated, and the Class Action shall proceed as though the Settlement Class had never been certified and this Agreement has not been negotiated or entered into, the appointments had not been made, and nothing done with regard to this Settlement Agreement and any papers filed in support thereof shall be deemed an 14


admission by Sharper Image, and in such event will also be without prejudice to Plaintiffs’ right to file a motion to certify a class or classes and seek the appointment of settlement class representatives and settlement class counsel.

5.      

Procedure For Certification and Approving Settlement. 5.1 Preliminary Settlement Approval.

 

 

As soon as is possible after execution of this Settlement Agreement and in all events no

 

later than January 16, 2007, the parties shall submit to the Court: a motion for preliminary approval of this Settlement Agreement, for conditional certification of the Settlement Class, for conditional appointment of Settlement Class Counsel, and for conditional appointment of Settlement Class Representative(s); a motion and order to protect the jurisdiction of the Court; the draft of proposed form of Preliminary Settlement Approval; the draft of proposed form of Final Judgment; and proposed stay of all proceedings in the Class Action against all Putative Class Members, Settlement Class Members, Plaintiffs, Settlement Class Counsel, and Settling Defendant, until the Final Order and Final Judgment have been entered. The hearing on the preliminary approval of the settlement, conditional certification of the Settlement Class, conditional appointment of Settlement Class Counsel, and conditional appointment of Settlement Class Representatives shall be decided in the Order on Preliminary Settlement Approval Order. The parties agree to move the Court to enter the Preliminary Settlement Approval Order without a hearing or to set the Preliminary Settlement Approval Hearing on the date stated on Exhibit A.

5.2      

Forms and Notice Approval.

 

 

5.2.1 Along with the Motion for Preliminary Settlement Approval, the parties

 

will also submit to the Court for its approval mutually agreeable forms of the Claim Form, Class Notice, and Summary Notice of Settlement. Sharper Image will mail and publish the Notices on the date stated on Exhibit A by mailing the Class Notice as an affixed inclusion in the Sharper Image catalog (to be selected by Sharper Image) to each Putative Class Member contained in the Ionic Breeze® Database, by mailing the Class Notice to each Putative Class Member who is contained in the Ionic Breeze® Database to whom a catalog is not mailed, and by publishing the 15


Summary Notice of Settlement in a manner to be agreed by and between Settlement Class Counsel and Settling Defendant’s Counsel, at a cost not to exceed $200,000.00.

      5.2.2 The Court’s approval or determination of said forms and notices shall be determined as part of the Preliminary Settlement Approval.

5.3 Confirmatory Discovery.

      Settlement Class Counsel already have propounded discovery, reviewed documents provided by Settling Defendant, deposed representatives of Settling Defendant, engaged in expert discovery, and retained experts. In addition, Settlement Class Representatives will have 60 days in which to conduct confirmatory discovery. Settling Defendant will provide Settlement Class Counsel with confirmatory discovery, including producing documents, and making corporate representatives available for deposition or interviews, and documentation upon request, on issues, including, but not limited to, the following: (1) efficacy; (2) ozone emission; and (3) recordkeeping relating to tracking of Purchasers. Settlement of this Class Action is contingent upon Settlement Class Representatives’ confirmation through this discovery of material factual representations made by Settling Defendant during settlement negotiations and completion of Confirmatory Discovery, subject to § 4.4 of this Agreement.

6.      

Procedure For Final Approval . 6.1 Overview.

 

 

As provided above, the parties contemplate that this Settlement Agreement shall be

 

presented to the Court for Preliminary Settlement Approval. Settlement Class Members shall have until the Objection Date to file, in the manner specified in the Class Notice, any objection or other response to the proposed Settlement Agreement. The parties agree to urge the Court to set the Objection Date as stated on Exhibit A. The Class Notice and Summary Notice of Settlement also shall provide that Putative Class Members may request exclusion from the Settlement Class by providing notice, in the manner specified in the Class Notice on or before a date set by the Court as the Opt-Out Deadline, and as more particularly provided in § 11. The parties agree to urge the Court to set the Opt-Out Deadline as stated on Exhibit A.

16


6.2      

Opt-Outs.

 

 

6.2.1 As more particularly provided in § 11, Putative Class Members shall be

 

required to elect to opt out on or before the Opt-Out Deadline by placing the completed Opt-Out Form in the mail to the Claims Administrator.

      6.2.2 The parties will move that the Court enter an order requiring that the Opt-Out Form require that the Putative Class Member provide: (1) the Person’s name, address, and telephone number; and (2) a statement or acknowledgment that the Person wishes to be excluded from the Settlement Class. Any Putative Class Member who does not timely and validly request exclusion from the Settlement Class in the manner required by the Settlement Agreement and Notices shall be bound by all the terms of the Settlement Agreement.

6.3      

Filing Objections Before The Fairness Hearing.

 

 

6.3.1 The parties will move that the Court enter an order requiring any

 

Settlement Class Member who wishes to be heard orally at the Fairness Hearing or who wishes for any objection to be considered to file a written notice


 
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