Giles v. Frey

Filing 37

DECLARATION of Evan J. Smith, Esquire in Support re: 42 MOTION to Approve Preliminarily a Class Action Settlement, Certification of Settlement Class, and Notice Plan.. Document filed by "A Million Little Pieces" Plaintiffs' Group. (Attachments: # 1 Exhibit A (Settlement Agreement)# 2 Executed Signature Pages to Settlement Agreement (Exhibit A above)# 3 Exhibit C# 4 Exhibit D)Filed In Associated Cases: 1:06-md-01771-RJH,1:06-cv-00669-RJH,1:06-cv-00693-RJH,1:06-cv-01167-RJH,1:06-cv-04642-RJH, 1:06-cv-04643-RJH,1:06-cv-04644-RJH,1:06-cv-04645-RJH,1:06-cv-04646-RJH,1:06-cv-04647-RJH, 1:06-cv-04648-RJH,1:06-cv-05402-RJH(Smith, Evan)

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Giles v. Frey Doc. 37 Att. 1 Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 1 of 59 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ) ) ) ) 06-md-1771 (RJH) ) ) Judge Richard J. Holwell ) ) In Re "A Million Little Pieces" Litigation SETTLEMENT AGREEMENT AND RELEASE Dockets.Justia.com Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 2 of 59 TABLE OF CONTENTS Page RECITALS. ....................................................................................................................................1 PROPOSED CLASS FOR SETTLEMENT PURPOSES ..........................................................3 1. 2. 3. 4. 5. 6. 7. 8. 9. Certification of Settlement Class ..........................................................................................3 Settlement Purposes Only. ....................................................................................................4 Vacating Settlement Certification and Reservation of Rights. .............................................4 Payment to Claimants. ..........................................................................................................4 Total Settlement Costs. .........................................................................................................6 Additional Prospective Relief ...............................................................................................7 Treatment of Uncashed Checks ............................................................................................8 Cy Pres Contribution.............................................................................................................8 Taxation of Settlement Payments .........................................................................................8 BENEFITS TO THE SETTLEMENT CLASS. ..........................................................................4 10. Incentive Payments ...............................................................................................................9 11. Attorneys' Fees and Costs ....................................................................................................9 RELEASES.....................................................................................................................................9 12. Release of Claims .................................................................................................................9 13. Release of Unknown Claims...............................................................................................11 CLASS NOTICE..........................................................................................................................12 14. Settlement Administrator. ...................................................................................................12 15. First Class Mailed Notice....................................................................................................13 16. Publication Notice...............................................................................................................13 17. Supplemental Internet Notice .............................................................................................14 SETTLEMENT APPROVAL PROCESS .................................................................................14 18. Preliminary Approval Order ...............................................................................................14 19. Settlement Schedule............................................................................................................15 20. Rights of Exclusion.............................................................................................................16 21. Right to Object....................................................................................................................17 22. Final Judgment and Order...................................................................................................17 -i- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 3 of 59 23. Finality of Judgment ...........................................................................................................18 24. Defendants' Option to Withdraw........................................................................................19 25. Effect of Withdrawal or Non-Approval..............................................................................19 MISCELLANEOUS PROVISIONS...........................................................................................20 26. Confirmatory Discovery .....................................................................................................20 27. CAFA Notice ......................................................................................................................21 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. Interpretation......................................................................................................................21 Headings. ...........................................................................................................................21 No Recission on Grounds of Mistake ................................................................................21 Amendment........................................................................................................................21 Construction.......................................................................................................................22 Effective Date ....................................................................................................................22 Integration of Exhibits .......................................................................................................22 Jurisdiction........................................................................................................................22 No Admission. ..................................................................................................................22 Governing Law .................................................................................................................23 Notices ..............................................................................................................................23 Counterparts; Facsimile ....................................................................................................23 EXHIBITS ........................................................................................................................................ A. ...................................................................................................................... Claim Form B. ........................................................................................ Description of Notice Program C. ............................................................................................................Long Form Notice D. .............................................................................................................. Published Notice E. ............................................................................................ Preliminary Approval Order F. ................................................................................Proposed Final Judgment and Order -ii- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 4 of 59 Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 5 of 59 SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release ("Settlement Agreement") is entered into among plaintiffs Marcia Vedral, Michele Snow, Sara Brackenrich, Jennifer Cohn, Jimmy Floyd, Jill Giles, Diane Marolda, Pilar More, Shera Paglinawan, Wendy Shaw and Ann Marie Strack ("Plaintiffs"), individually and on behalf of the Settlement Class (defined below) on one hand, and Random House, Inc., Doubleday & Company, Inc., and Random House V.G., Inc. (collectively "the Random House Defendants") and James Frey, Maya Frey, and Big Jim Industries, Inc. (collectively "the Frey Defendants") on the other hand. The Random House Defendants and the Frey Defendants shall be referred to herein collectively as "Defendants," and all Plaintiffs and Defendants shall be referred to herein collectively as "Parties." RECITALS WHEREAS, beginning in or around January 2006, Plaintiffs filed lawsuits against the Random House Defendants and/or the Frey Defendants, among other parties, in a number of federal and state courts across the country (the "Lawsuits"); WHEREAS, those Lawsuits originally filed in state court were removed to federal court, and by order dated June 14, 2006, all of the Lawsuits were consolidated and transferred by the Judicial Panel on Multi-District Litigation to the United States District Court for the Southern District of New York, and assigned to the Honorable Richard J. Holwell (the "Court"); WHEREAS, the Lawsuits allege various claims against the Defendants relating to the publishing and marketing of the book "A Million Little Pieces," by defendant James Frey (the "Book"); -1- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 6 of 59 WHEREAS, on July 26, 2006, following several months of arms-length negotiations, through their respective attorneys, Plaintiffs and Defendants reached an agreement in principle to settle the claims asserted in the Lawsuits; WHEREAS, Plaintiffs and their respective counsel Larry D. Drury, Ltd. (Vedral), Brodsky & Smith, LLC (Snow), Law Offices of Thomas M. Mullaney (Marolda), Myers & Company, P.L.L.C. (Paglinawan & Shaw), Thomas E. Pakenas (More), Napoli Bern Ripka LLP (Floyd), Statman, Harris, Siegel & Eyrich, LLC (Giles), Zimmerman and Associates, P.C. (Strack), and DiTommaso & Lubin, PC (Brackenrich) (collectively "Settlement Class Counsel"), have concluded that this Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Settlement Class; WHEREAS, on September 14, 2006, the Court entered an order appointing Thomas M. Mullaney as "Plaintiffs' Liaison Counsel" in this matter; WHEREAS, the Parties and Settlement Class Counsel, subject to the approval of the Court, agree to the appointment of Larry D. Drury, Ltd. and Brodsky & Smith, LLC as "CoLead Class Counsel"; WHEREAS, Defendants deny any wrongdoing or liability, including denying any and all claims of liability or wrongdoing and all charges and allegations that have been asserted against them; WHEREAS, Defendants have determined to enter into this settlement on the terms and conditions set forth herein to halt the substantial expense that continues to be attendant to the Lawsuits; -2- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 7 of 59 WHEREAS, Plaintiffs have agreed to settle their claims, those of the Settlement Class, upon the terms and conditions set forth herein after balancing the benefits that they and the Settlement Class will receive from this settlement against the uncertain outcome and risks from continued litigation, and concluding, with the advice and assistance of Settlement Class Counsel, that the settlement is in the best interests of the Settlement Class; WHEREAS, Plaintiffs and Defendants desire to promptly and fully resolve and settle with finality all of the claims asserted or that could have been asserted against Defendants in the Lawsuits or otherwise; and WHEREAS, to accomplish that goal, Plaintiffs and Defendants have reached a settlement by and through their respective undersigned counsel on the terms and conditions set forth in this Settlement Agreement. NOW, THEREFORE, Plaintiffs and Defendants, in consideration of the promises, covenants and agreements herein described, and intending to be legally bound, do hereby mutually agree as follows: PROPOSED CLASS FOR SETTLEMENT PURPOSES 1. Certification of Settlement Class. For purposes of this settlement only, the Parties agree to jointly move the Court, to conditionally certify a nationwide class pursuant to Rule 23(b)(3) (the "Settlement Class"). The Settlement Class shall consist of all persons who purchased the Book, in any format (including, but not limited to, in hardback, trade paperback, cassette, CD, or any other electronic media), on or before January 26, 2006 ("Settlement Class -3- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 8 of 59 Members"). The Settlement Class shall be represented by plaintiffs Marcia Vedral and Michele Snow ("Settlement Class Representatives"). 2. Settlement Purposes Only. Defendants agree to certification of the Settlement Class described in paragraph 1 only for the purpose of effectuating the Settlement Agreement; Defendants reserve all rights to object to the propriety of class certification in the Lawsuits in all other contexts and for all other purposes, including but not limited to objections concerning the manageability or superiority of any putative class and the propriety of the legal basis for any putative class proceeding and the relief sought (which have been and are disputed legal issues). 3. Vacating Settlement Certification and Reservation of Rights. The certification of the Settlement Class shall be binding only with respect to the settlement of the Lawsuits. 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 is reversed, vacated, or modified in any material respect by the Court or any other court, the certification of the Settlement Class shall be vacated, the Lawsuits shall proceed as though the Settlement Class had never been certified, and no reference to the prior Settlement Class or any documents related thereto shall be made for any purpose. BENEFITS TO THE SETTLEMENT CLASS 4. Payment to Claimants. a. Any Settlement Class Member who believes he or she was misled into purchasing the Book shall be entitled to make a claim for compensation. In order to make a claim, the class member shall complete a claim form ("Claim Form") and return the Claim Form to the Settlement Administrator (as defined in paragraph 14 herein). The Claim Form shall be -4- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 9 of 59 made available to Settlement Class Members via mail if they request one from the Settlement Administrator or via download from one or more internet websites. Each Settlement Class member who submits a valid claim shall be identified herein as a "Claimant." b. The Claim Form will require Claimants to provide the following information: name, address, the approximate date on which the Book was purchased, the media that was purchased, and the amount spent on the purchase. Claimants must also provide a sworn statement indicating that they believe they were misled by the marketing of the Book. The form of the Claim Form is attached as Exhibit A hereto. c. In order to provide proof that the Claimant (a) purchased the Book and (b) feels misled by the marketing relating to the Book, Claimants shall tear off the front cover of the trade paperback and return it with their Claim Form to the Settlement Administrator. If a Claimant purchased the Book in some other media, in lieu of the front cover, he or she shall provide the following: if in hardcover, return p. 163; if in CD or cassette, some portion of the container in which the media was housed, and if in some other media, some proof of purchase or other supporting documentation. d. All Claim Forms must be received by the Settlement Administrator on or before May 15, 2007, or such other date as set by the Court (the "Claims Expiration Date"). Any Claim Form that is received after the Claims Expiration Date, and any claim submission that fails to include any of the information referenced in sections 4(b) and (c) above, or that is sent to any address other than the one designated in the Claim Form, shall be invalid and the person(s) submitting such a Claim Form shall not be entitled to any relief provided pursuant to this Settlement Agreement. -5- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 10 of 59 e. Subject to the limitations of paragraph 5, each Claimant who submits a valid claim shall be eligible to receive the amount listed on their Claim Form paid in full, provided that the amount does not exceed the Full Retail Price of the Book. The Full Retail Price of the Book is defined as $23.95 for the hardcover, $14.95 for the trade paperback, $34.95 for the for the audio book, and $9.95 for the e-book. f. Within 60 days after the Claims Expiration Date as described in paragraph 4(d) above, each Claimant who is determined to have a valid claim shall be sent a check for the amount to be paid on their claim ("Settlement Payment Check") to be determined in accordance with paragraphs 4 and 5. Upon completion of the distribution of checks, Defendants (or the Settlement Administrator) shall provide Settlement Class Counsel with a list of the Claimants to whom checks were distributed, and the amount of such checks. Any disputes regarding payment of Settlement Payment Checks to Claimants shall be addressed by and between Co-Lead Class Counsel and counsel for the Defendants. 5. Total Settlement Costs. a. definitions shall apply: (1) "Claimed Amount" shall mean the sum of the dollar value of all For purposes of this Settlement Agreement, the following valid claims submitted by Claimants. (2) "Settlement Costs" shall mean costs of class notice and settlement administration (with the lone exception of the CAFA Notice defined in paragraph 27), all of Settlement Class Counsel's fees and expenses, any incentive awards, and any other amounts awarded by the Court for any reason in the Lawsuits. -6- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 11 of 59 (3) "Contribution Amount" shall mean the sum of the Claimed Amount plus Settlement Costs. (4) b. "Settlement Cap" shall mean the amount of $2,350,000. For each Claimant who submits a valid claim, Defendants will provide a full refund in the amount of the claim (in accordance with the procedures set forth in paragraph 4 above), so long as providing such a full refund does not cause the total Contribution Amount to exceed the Settlement Cap. If providing each Claimant with a full refund will cause the Contribution Amount to exceed the Settlement Cap, each Claimant shall be provided their pro rata share of the difference between the Settlement Cap and the Settlement Costs. Each Claimant shall be entitled to a maximum of two payments (from the Contribution Amount), provided that the Claimant submits a separate claim form and the required evidence of purchase for each Book. c. Defendants shall have no obligation to provide any amounts other than the Contribution Amount and the CPF Portion of the Cy Pres Fund as set forth in paragraph 8 below. 6. Additional Prospective Relief. Defendants agree that, in all future printings of the Book by the Random House Defendants, Defendants will include a disclaimer indicating that not all portions of the Book are factually accurate. For a period of at least one year from the execution of this Settlement Agreement, the disclaimer shall consist of the author's note and publisher's note that have been included in the new trade paperback edition of the Book. -7- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 12 of 59 7. Treatment of Uncashed Checks. Settlement Payment Checks must be cashed within six months after they are mailed to Claimants. If Settlement Payment Checks are not cashed within six months, they will be void, and the Claimant will not be entitled to any further relief. If there are any uncashed checks, the amounts attributable to those checks will be distributed to a designated cy pres organization(s) to be mutually agreed upon by the Parties, and approved by the Court, within nine months after the Settlement Payment Checks are distributed. 8. Cy Pres Contribution. The Parties agree to create a fund that will be contributed to designated cy pres organization(s) to be mutually agreed upon by the Parties and approved by the Court (the "Cy Pres Fund"). The funding for the Cy Pres Fund shall come from two sources: uncashed checks, as described in paragraph 7 above, and through a contribution from Defendants depending upon the Contribution Amount (the "CPF Portion"). The CPF Portion of the Cy Pres Fund shall be computed as follows: in the event that the Contribution Amount is less than $1,000,000, the CPF Portion will be $235,000 plus the 50% of the difference between $1,000,000 and the Contribution Amount; in the event that the Contribution Amount is greater than $1,000,000 but less than $2,000,000, the CPF Portion will be $35,000 plus 20% of the difference between $2,000,000 and the Contribution Amount; in the event that the Contribution Amount is greater than $2,000,000 but less than the Settlement Cap, the CPF Portion will be 10% of the difference between the Settlement Cap and the Contribution Amount; and in the even that the Contribution Amount equals the Settlement Cap, the CPF Portion will be $0. 9. Taxation of Settlement Payments. Each of the Plaintiffs, the Settlement Class Members, and without admitting any liability, the Defendants, intends that any payment to a Claimant as discussed above is to be treated, for federal income tax purposes, as a "restorative -8- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 13 of 59 payment" within the meaning of Internal Revenue Service Revenue Ruling 2002-45, 2002-2 C.B. 116 (June 26, 2002). Plaintiffs and the Settlement Class Members acknowledge that none of the Defendants or any Released Parties as defined below have any responsibility for any filings with respect to, or payment of any taxes due on, any payments to Claimants discussed above or any funds that Settlement Class Counsel receive. Nothing herein shall constitute an admission or representation that any such taxes will or will not be due. 10. Incentive Payments. Each of the Plaintiffs identified above shall receive an incentive award in the amount of $1,500, which amount shall be payable within 30 Days of the Effective Date of the Settlement. All incentive awards paid to Plaintiffs will come from, and count toward, the Contribution Amount. 11. Attorneys' Fees and Costs. All attorneys' fees and expenses will come from, and count toward, the Contribution Amount. Defendants will not take any position regarding the fee petition submitted to the Court by Settlement Class Counsel. RELEASES 12. Release of Claims. a. definitions shall apply: (1) "Released Parties" shall include the following persons and entities: For purposes of this Settlement Agreement, the following (i) each of the Random House Defendants and all of their predecessors, successors, members, divisions, affiliates, imprints, parents, subsidiaries, and each and all of their respective current and former officers, directors, employees, affiliates, agents, consultants, attorneys, representatives, beneficiaries, heirs, and assigns, (ii) each of the Frey Defendants and all of their predecessors, successors, members, divisions, affiliates, imprints, parents, subsidiaries, and each -9- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 14 of 59 and all of their respective current and former officers, directors, members, employees, affiliates, agents, consultants, attorneys, representatives, beneficiaries, heirs, and assigns, (iii) all of the remaining entities named as defendants in any of the Lawsuits and/or any other consolidated and transferred action pending before the Court, including but not limited to Nan A. Talese, Kassie Evashevski, Sean McDonald, Barnes & Noble Booksellers, Inc., Barnes & Noble Publishing, Inc., Barnes & Noble, Inc., Borders Group, Inc, and all of their respective current and former officers, directors, members, employees, affiliates, agents, consultants, attorneys, representatives, beneficiaries, heirs, and assigns; (iv) Brillstein-Grey Management, LLC and its predecessors, successors, members, divisions, affiliates, imprints, parents, subsidiaries, and each and all of their respective current and former officers, directors, members, employees, affiliates, agents, consultants, attorneys, representatives, beneficiaries, heirs, and assigns; and (v) any other entity involved in any manner in the publication, printing, marketing, distribution, or sale of the Book, including but not limited to the HighBridge Company, and any retail bookseller (brick and mortar or online), and all of their respective current and former officers, directors, members, employees, affiliates, agents, consultants, attorneys, representatives, beneficiaries, heirs, and assigns. The Released Parties that are not signatories to this Settlement Agreement are intended to be third-party beneficiaries of this Settlement Agreement and are entitled to enforce the releases described in paragraphs 12 and 13 against Plaintiffs and all Settlement Class members. (2) "Released Claims" shall mean any and all actual or potential claims, actions, causes of action, demands, obligations, or liabilities, whether arising under local, state, or federal law, whether by statute, contract, common law, or equity, whether brought in an individual, representative, or other capacity, whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or -10- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 15 of 59 unliquidated that have been, could have been, or could be brought and arise out of or are related in any way to the acts, omissions, facts, statements, matters, transactions, or occurrences that have been alleged or referred to in the Lawsuits, including but not limited to any and all causes of actions or claims that relate in any way to the publishing, marketing, distribution, or sale of the Book. (3) "Releasing Parties" shall mean the Plaintiffs and each Settlement Class Member, on behalf of themselves, their heirs, executors, administrators, successors, and assigns, and any person they represent. b. By operation of the Final Judgment and Order, the Releasing Parties shall be deemed to have released the Released Parties from all Released Claims. 13. Release of Unknown Claims. Without limiting the matters described in paragraph 12, the term "Released Claims" shall also include any Unknown Claims. For purposes of this paragraph, "Unknown Claims" means any Released Claims which Plaintiffs and/or any Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Parties which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Parties, or might have affected his, her or its decision not to object to this settlement. Without admitting that California law is in any way applicable to this agreement, in whole or in part, with respect to any and all claims, the Parties stipulate and agree that, upon the Effective Date, Plaintiffs, and each Settlement Class Member shall be deemed to have, and by operation of the Final Judgment and Order shall have, expressly waived the provisions, rights and benefits of California Civil Code 1542, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT -11- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 16 of 59 THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Plaintiffs, and each Settlement Class Member shall be deemed to have, and by operation of the Final Judgment and Order shall have, expressly waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code 1542. The Plaintiffs, or any Settlement Class member may hereafter discover facts in addition to or different from those which he or she now knows or believes to be true with respect to the subject matter of the claims being released, but Plaintiffs and Settlement Class members, upon the Effective Date, shall be deemed to have, and by operation of the Final Judgment and Order shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Plaintiffs and each Settlement Class member shall be deemed by operation of the Final Judgment and Order to have acknowledged that the foregoing waiver was separately bargained for and a key element of the settlement of which this release is a part. CLASS NOTICE 14. Settlement Administrator. The Parties agree that an appropriate class action settlement administrator ("Settlement Administrator") that is mutually acceptable to the Parties and approved by the Court will be appointed and that the Settlement Administrator will -12- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 17 of 59 assist the Parties in the design and implementation of an appropriate notice program ("Notice Program") pursuant to which Settlement Class Members shall receive notice of the proposed settlement ("Class Notice"). The various methods of Class Notice in the Notice Program will depend upon the means by which the Claimant purchased the Book, and shall include but may not be limited to the methods described below. A more complete description of the Notice Program is attached as Exhibit B. 15. First Class Mailed Notice. For any person who purchased the Book on Random House's website ("Website Purchaser"), Defendants shall provide first class mailed Class Notice in the form of Exhibit C ("Long Form Notice"). Within 60 days after receiving preliminary approval of the Settlement Agreement, Defendants shall cause a copy of the Long Form Notice to be sent to each Website Purchaser by first-class mail. In an effort to maximize the likelihood of successful delivery, Defendants shall cross-reference any list of Website Purchasers with the National Change of Address ("NCOA") database prior to the mailing referenced above. 16. Publication Notice. For any person who purchased the Book from a source other than Random House's website, the Parties cannot identify Settlement Class Members and do not possess listings of the names and addresses of Settlement Class Members. The Parties therefore agree that notice must be accomplished by publication. The Parties agree that the Class Notice shall be published in the form of Exhibit D ("Published Noticed") in appropriate publications. The Parties agree that they will consult with the Settlement Administrator to develop the publication component of the Notice Program that is designed to maximize the effectiveness of notice to the settlement class consistent with the amount of the -13- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 18 of 59 settlement. Publication of the Published Notice shall be completed within 60 days after receipt of preliminary approval of the Settlement Agreement. 17. Supplemental Internet Notice. In addition to the First Class Mailed Notice and the Publication Notice described above, within 30 days after receiving preliminary approval of the Settlement Agreement, the Parties agree to publish the Long Form Notice on the websites of Random House, Inc. (www.randomhouse.com), Big Jim Industries, Inc. (www.bigjimindustries.com), and a website to be established by the Settlement Administrator. The Published Notice shall identify one or more of these websites. SETTLEMENT APPROVAL PROCESS 18. Preliminary Approval Order. The Parties agree to petition the Court after execution of this Settlement Agreement for a preliminary order approving the Settlement Agreement (the "Preliminary Approval Order"). A copy of the order agreed to by the Parties is attached as Exhibit E. That order shall provide, inter alia, that: a. the settlement proposed in the Settlement Agreement has been negotiated at arms-length and is preliminarily determined to be fair, reasonable, adequate, and in the best interests of the Settlement Class; b. the Notice Program and Class Notice fully comply with the requirements of Rule 23 of the Federal Rules of Civil Procedure and due process, constitutes the best notice practicable under the circumstances, and is due and sufficient notice to all persons entitled to notice of the settlement of this lawsuit; c. the Settlement Class defined herein be certified, and that the Settlement Class Representatives, Settlement Class Counsel, Co-Lead Class Counsel as defined -14- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 19 of 59 herein be appointed on the condition that the certification and designations shall be automatically vacated if the Settlement Agreement 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 Settlement 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; and e. in aid of the Court's jurisdiction to implement and enforce the proposed settlement, Plaintiffs and all Settlement Class Members shall be preliminarily enjoined and barred from commencing or prosecuting any action asserting any of the Released Claims as defined above in paragraphs 12 and 13, 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 person or entity who knowingly violates such injunction shall pay the costs and attorneys' fees incurred by the Parties and/or as a result of the violation. Nothing in this paragraph shall be construed to prevent a Settlement Class Member from presenting objections to this Court regarding the Settlement Agreement in accordance with paragraph 22. 19. Settlement Schedule. If preliminary approval is granted, the Parties expect that the schedule for the settlement will be as follows: Class Notice will be provided during the months of January and February 2007; requests for exclusion pursuant to paragraph 21 of the Settlement Agreement and written objections to the settlement pursuant to paragraph 22 of the Settlement Agreement must be submitted on or before March 28, 2007; the Claims -15- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 20 of 59 Expiration Date will be June 15, 2007; and the final approval hearing for the settlement will be held in April 2007. 20. Rights of Exclusion. Settlement Class Members shall have until a date set by the Court (that is approximately forty-five (45) days from the date of Publication Notice) to opt out of the Settlement Class. All Settlement Class Members who properly file a written request for exclusion from the Settlement Class shall be excluded from the Settlement Class, shall have no rights as Settlement Class Members pursuant to this Settlement Agreement, and shall receive no payments as provided herein. A request for exclusion must be in writing and state the name, address and phone number of the person(s) seeking exclusion, as well as the approximate date on which the person(s) purchased the Book and the amount(s) paid for the Book. Each request must also contain a signed statement that: "I/we hereby request that I/we be excluded from the proposed Settlement Class in the In re A Million Little Pieces litigation." The request must be mailed to the Settlement Administrator at the address provided in the Class Notice and must be received no later than 45 days of the Publication Notice, or such other date as set by the Court. A request for exclusion that does not include all of the foregoing information, or that is sent to any address other than the one designated in the Class Notice, or that is not received within the time specified, shall be invalid and the person(s) serving such a request shall be a member(s) of the Settlement Class and shall be bound as a Settlement Class Member(s) by the settlement of the Lawsuits, if approved. The Settlement Administrator shall forward copies of all requests for exclusion to Defendants' counsel and Co-Lead Class Counsel and Liaison Class Counsel no later than seven days after the deadline for the Settlement Class Members to submit such requests. -16- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 21 of 59 21. Right to Object. Settlement Class Members shall have until a date set by the Court (that is approximately forty-five (45) days from the date of Publication Notice) to object to the Settlement. Any Settlement Class Member who objects to the settlement may appear in person or through counsel, at his or her own expense, at the final approval hearing to present any evidence or argument that may be proper or relevant. No Settlement Class member shall be heard and no papers, briefs, pleadings or other documents submitted by any Settlement Class Member shall be received and considered by the Court unless, prior to the deadline to be set by the Court for objections, the Settlement Class member files with the Court and mails to Settlement Class Counsel and counsel for Defendants (at the addresses specified below), written objection that include (a) a notice of intention to appear, (b) a statement of membership in the Settlement Class, and (c) the specific grounds for the objections and any reasons why the Settlement Class Member desires to appear and be heard, as well as all documents or writings that such Class Member or Subclass Member desires the Court to consider. Any Settlement Class Member 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 the Lawsuits or in any other action or proceeding. 22. Final Judgment and Order. The final approval hearing shall take place 15 days after the last date for class members to opt out or object, or as soon thereafter as the Court can set a date for such hearing. The Parties shall jointly request at the final approval hearing that the Court enter final judgment (the "Final Judgment and Order"). A copy of the proposed Final Judgment and Order agreed to by the Parties is attached hereto as Exhibit E. That order shall provide, inter alia, that: -17- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 22 of 59 a. the Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Settlement Class. b. the Notice Program and Class Notice fully comply with the requirements of Rule 23 of the Federal Rules of Civil Procedure and due process, constitutes the best notice practicable under the circumstances, and are due and sufficient notice to all persons entitled to notice of the settlement of the Lawsuits. c. the Lawsuits and any other consolidated and transferred actions before the Court be dismissed with prejudice, without fees or costs except as provided in this Settlement Agreement. d. Plaintiffs and all Settlement Class Members (other than those who opt out of the Settlement as provided in this Settlement Agreement) are permanently enjoined and barred from commencing or prosecuting any action asserting any of the Released Claims, 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. e. the Court shall retain continuing 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 their administration, implementation, interpretation, or enforcement. 23. Finality of Judgment. The Final Judgment and Order shall be deemed final on the latest of the following events: (a) 35 days after it is entered, if no document is filed -18- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 23 of 59 within that time seeking appeal, review, rehearing, reconsideration, or any other action regarding that judgment and order; or (b) 35 days after the entry of a fee award, if no document is filed within that time seeking appeal, review, rehearing, reconsideration, or any other action regarding that judgment and order and should such date be later than the date the Final Judgment and Order is entered; or (c) if any document seeking appeal of any order or judgment is filed, then 14 days after the date upon which all appellate and/or other proceedings resulting from such document have been finally terminated in such a manner as to permit no further judicial action, and with the Settlement Agreement, Preliminary Approval Order, and Final Judgment and Order being affirmed and approved in all material respects. 24. Defendants' Option to Withdraw. Defendants have the option to withdraw from the Settlement Agreement, and thereby render this settlement void, if (i) Plaintiffs or Settlement Class Counsel breach any provision of the Settlement Agreement or the Preliminary Approval Order, or fail to fulfill any material obligation hereunder or thereunder; (ii) any other litigation involving claims by any person that are the same as, similar to, or related to, the Released Claims may, in the good-faith view of Defendants, render the Settlement Agreement ineffective as a practical matter to bring an end to all significant controversy against any Released Parties; (iii) the number of valid and timely requests for exclusion received from Settlement Class Members seeking to opt out of the Settlement Class equals or exceeds 4,000 persons; (iv) the attorney general or other authorized officer of the United States or any state, or any representative of any local, state, or federal agency or branch of government, intervenes in the Lawsuits, or advises the Court in writing of opposition to the terms of the Settlement Agreement, and in the good-faith view of Defendants, renders the Settlement Agreement ineffective as a practical matter to bring an end to all significant controversy against any -19- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 24 of 59 Released Parties; or (v) upon such other grounds as may be agreed to by the Parties or permitted by the Court. With respect to subsections (ii) and (iv) above, Plaintiffs in their reasonable discretion may demand that the issue of the Defendants' good-faith be referred to the Court for approval. 25. Effect of Withdrawal or Non-approval. In the event that (i) Defendants withdraw from the Settlement Agreement, (ii) the Settlement Agreement, Preliminary Approval Order, or Final Judgment and Order are not approved in all material respects by this Court, or (iii) the Settlement Agreement, Preliminary Approval Order, or Final Judgment and Order is reversed, vacated, or modified in any material respect by this or any other court, then the Settlement Agreement shall become void; the Lawsuits may continue; and any and all orders entered pursuant to the Settlement Agreement shall be deemed vacated, including, without limitation, any order certifying or approving certification of a class for settlement purposes; provided, however, that if the Parties hereto agree to jointly appeal an adverse ruling and the 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. MISCELLANEOUS PROVISIONS 26. Confirmatory Discovery. The Parties acknowledge that Co-Lead Class Counsel have requested certain discovery in order to further confirm that this settlement is fair, reasonable, adequate, and in the best interests of the Settlement Class and that such discovery has been provided by Defendants and reviewed by Co-Lead Class Counsel. -20- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 25 of 59 27. CAFA Notice. In compliance with 28 U.S.C. 1715, Defendants will cause notice of this settlement to be given to the appropriate state and federal officials pursuant to ("CAFA Notice"). 28. Interpretation. This Settlement Agreement contains the entire agreement among the parties hereto and supersedes any prior negotiations, agreements or understandings among them. All terms are contractual and not mere recitals. 29. 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. 30. No Recission 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. The Parties shall cooperate to the extent necessary to respond to questions of fact that may be raised by parties not party to this agreement during the approval process. 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. 31. Amendment. This Settlement Agreement may be amended or modified only by a written instrument signed by the Parties or their counsel, or by a document filed with the Court and agreed to or not objected to by the Parties with the Court. Amendments and -21- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 26 of 59 modifications may be made without notice to the Settlement Class unless notice is required by law or by the Court. 32. 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. 33. Effective Date. The effective date of this Settlement Agreement (the "Effective Date") shall occur five business days after the Final Judgment and Order is deemed final in accordance with paragraph 23. 34. 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. 35. Jurisdiction. The Court has jurisdiction over the Parties to this Settlement Agreement, the Settlement Class Members, the claims asserted in the Lawsuits, and the claims being released and compromised pursuant to the Settlement Agreement. 36. 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 Defendants, 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. . -22- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 27 of 59 37. Governing Law. This Settlement Agreement shall be governed by the laws of the United States of America, to the extent applicable, and otherwise in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State of New York. 38. Notices. Except as otherwise provided herein, Notice to Defendants' counsel and Co-Lead Class Counsel under this Settlement Agreement shall be sent to the following addresses: Notice to Plaintiffs: Larry D. Drury Larry D. Drury Ltd. 205 W. Randolph Street, Suite 1430 Chicago, Illinois 60606 (312) 346-7950 Notice to Random House Defendants: Mark B. Blocker Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Tel: (312) 853-7000 Fax: (312) 853-7036 Notice to Frey Defendants: Derek J. Meyer McDermott Will & Emery LLP 227 West Monroe Street, Suite 4400 Chicago, Illinois 60606 Tel: (312) 372-2000 Fax: (312) 984-7700 39. Counterparts; Facsimile. This Settlement Agreement may be executed in Evan J. Smith, Esquire Brodsky & Smith, LLC Two Bala Plaza, Suite 602 Bala Cynwyd, PA 19004 (610) 667-6200 counterparts, and may be executed by facsimile, and as so executed shall constitute one agreement. -23- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 28 of 59 IN WITNESS WHEREOF, the undersigned have caused this Settlement Agreement to be executed as of the dates set forth below: FOR THE FREY DEFENDANTS: ______________________________________ James Frey Date:________________ ______________________________________ James Frey Big Jim Industries, Inc. Date:________________ ______________________________________ Maya Frey FOR THE RANDOM HOUSE DEFENDANTS: ______________________________________ Robert Sorrentino Senior Vice President, Taxes, Random House, Inc. Date:________________ ______________________________________ Robert Sorrentino President, Doubleday & Company, Inc. Date:________________ ______________________________________ Robert Sorrentino Vice President, Taxes, Random House VG, Inc. Date:________________ ______________________________________ Mark B. Blocker Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Attorney for the Random House Defendants Date:________________ Date:________________ ______________________________________ Derek J. Meyer McDermott Will & Emery LLP 227 West Monroe Street, Suite 4400 Chicago, Illinois 60606 Attorney for the Frey Defendants Date:________________ -24- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 29 of 59 FOR THE PLAINTIFFS: ______________________________________ Plaintiff Marcia Vedral Date:________________ ______________________________________ Larry D. Drury Larry D. Drury Ltd. 205 W. Randolph Street, Suite 1430 Chicago, Illinois 60606 Proposed Co-Lead Class Counsel Attorney for Plaintiff Marcia Vedral ______________________________________ Plaintiff Michele Snow Date:________________ ______________________________________ Evan J. Smith, Esquire Brodsky & Smith, LLC Two Bala Plaza, Suite 602 Bala Cynwyd, PA 19004 (610) 667-6200 Proposed Co- Lead Class Counsel Attorney for Plaintiff Michele Snow Date:________________ Date:________________ ______________________________________ Plaintiff Jennifer Cohn Date:________________ ______________________________________ Thomas Mullaney 708 Third Avenue, Suite 2500 New York, New York 10017 Phone: (212) 223-0800 Liaison Class Counsel Attorneys for Plaintiff Jennifer Cohn Date:________________ ______________________________________ Plaintiff Ann Marie Strack Date:________________ ______________________________________ Thomas A. Zimmerman, Jr. Zimmerman and Associates, P.C. 100 West Monroe Street, Suite 1300 Chicago, Illinois 60603 Attorney or Plaintiff Ann Marie Strack Date:________________ -25- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 30 of 59 ______________________________________ Plaintiff Jimmy Floyd Date:________________ ______________________________________ Alan S. Ripka Napoli Bern Ripka LLP 115 Broadway New York, New York 10006 Attorney for Plaintiff Jimmy Floyd ______________________________________ Plaintiff Jill Giles Date:________________ ______________________________________ Alan J. Statman Colleen M. Hegge (of counsel) 2900 Chemed Center 255 East Fifth Street Cincinnati, Ohio 45202 Attorneys for Plaintiff Jill Giles Date:________________ ______________________________________ Plaintiff Shera Paglinawan Date:________________ _____________________________________ Plaintiff Wendy Shaw Date:________________ ______________________________________ Michael David Myers Myers & Company, P.L.L.C. 1809 Seventh Avenue, Suite 700 Seattle, Washington 98101 Attorney for Plaintiff Shera Paglinawan Date:________________ Date:________________ ______________________________________ Plaintiff Pilar More Date:________________ ______________________________________ Thomas E. Pakenas Dale and Pakenas 641 W. Lake Street, Suite 400 Chicago, Illinois 60661 Attorneys for Plaintiff Pilar More Date:________________ ______________________________________ Plaintiff Sara Brackenrich Date:________________ ______________________________________ Vincent L. DiTommaso DiTommaso & Lubin, PC 17W 220 22nd Street, Suite 200 Oakbrook Terrance, Illinois 61081 Attorney for Plaintiff Sara Brackenrich Date: ________________ -26- Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 31 of 59 EXHIBIT A Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 32 of 59 CLAIM FORM A MILLION LITTLE PIECES SETTLEMENT Name Address City ( ) Telephone Number Approximate date of purchase Indicate type (Hardcover, paperback, CD, book on tape, e-book) Purchased online? (yes or no) State Zip Total purchase price Please fill out the above information completely. If the information you provide is insufficient to determine whether you are a Class Member, your claim may be rejected. THE UNDERSIGNED DECLARES UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE UNITED STATES OF AMERICA THAT THE FOLLOWING IS TRUE AND CORRECT: a) to the best of my knowledge, the information provided in this claim form is true and correct; b) I was misled by the marketing of A Million Little Pieces and would not have purchased the book if I had known prior to purchase that certain facts in the book had been altered and certain incidents had been embellished. Signature: _________________________ Date: _______________________ PROOF OF PURCHASE: YOU MUST TEAR OFF THE FRONT COVER OF THE BOOK AND RETURN IT WITH THIS CLAIM FORM AS PROOF OF PURCHASE. IF YOU PURCHASED MEDIA OTHER THAN THE PAPERBACK VERSION, PLEASE CONSULT THE INSTRUCTIONS BELOW. Mail this Claim Form, along with the front cover of the paperback (or one of the other proof-ofpurchase items described in the instructions), to the following address: [Address to be determined]. YOUR CLAIM FORM MUST BE RECEIVED AT THE ABOVE ADDRESS ON OR BEFORE ______________. Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 33 of 59 INSTRUCTIONS 1. Please print your name carefully. A check will be sent to the person whose name appears in the claim form. 2. In the "Approximate date of purchase," it is sufficient to list a month and year of purchase, unless the purchase occurred in January 2006. If the purchase was made in January 2006, please give an approximate date. 3. In the "total purchase price," you may include: (a) the actual cost of the book, (b) any sales tax, and (c) if purchased online, the cost of shipping, if any. You may not include any other costs. 4. In order to make a claim, you must tear off the front cover of the trade paperback and return it along with this claim form. If you purchased the book in a form other than the trade paperback version, please include the following: a. if you purchased the HARDCOVER, please tear off and send p. 163 of the book rather than the front cover of the book. b. if you purchased a CD, BOOK ON TAPE, or E-BOOK, please include any of the housing from your purchase (or, if you did not save such housing, any other form of proof of purchase) c. if you purchased the book in any other form, please include anything that shows proof of purchase. 5. Your claim form will be rejected as invalid if you do not include the appropriate proof of purchase. 6. You must fill out a separate claim form, and include the appropriate proof of purchase, for each copy of the book purchased. Please be aware, however, that no person may receive compensation for more than two copies of the book. Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 34 of 59 EXHIBIT B Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 35 of 59 Publication Notice Program In addition to the First Class Mailed Notice and Supplemental Internet Notice referenced in the Settlement Agreement, the Parties agree that the Published Noticed attached as Exhibit D to the Settlement Agreement shall appear in Parade and USA Weekend newspaper supplements (described in further detail below) in accordance with the terms of the Settlement Agreement. *** Parade and USA Weekend, inserts known as newspaper supplements, are carried in weekend or weekly editions of 962 newspapers reaching every media major market in the country (eight newspapers carry more than one supplement). These magazines, published on newsprint, contain articles written for broad, general appeal and they encourage readership through brevity. Issues are typically less than 30 pages. They provide coverage in all 50 states and the District of Columbia. Parade is inserted in the Sunday edition of 373 daily newspapers and is the highest circulating magazine in the U.S. with an estimated circulation of 32,700,000. Carrier newspapers serve major urban and suburban markets in the United States. USA Weekend is inserted in the weekend edition of 589 daily newspapers with an estimated circulation of 22,700,000. It appears in major markets as well as numerous suburban areas complementing the U.S. markets served by Parade. Attached is a complete list of newspapers in which Parade and/or USA Weekend are inserted. The list was compiled by Kinsella/Novak Communications, Ltd. Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 36 of 59 EXHIBIT C Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 37 of 59 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ______________________________________ IN RE "A MILLION LITTLE PIECES" LITIGATION ______________________________________ No. 06-md-1771 Hon. Richard J. Holwell NOTICE OF PROPOSED CLASS ACTION SETTLEMENT IF YOU PURCHASED THE BOOK A MILLION LITTLE PIECES BEFORE JANUARY 26, 2006 IN ANY FORMAT, PLEASE READ THIS NOTICE CAREFULLY BECAUSE IT MAY AFFECT CERTAIN OF YOUR RIGHTS IN A PENDING LAWSUIT. This notice provides you with important information in connection with the settlement of a lawsuit concerning the book A Million Little Pieces. If you wish to recover money you must act by ________, 2006. You should read this Notice carefully. A federal Court has authorized this notice. This is not a solicitation from a lawyer. This Notice has been issued pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of New York (the "Court"). The purpose of this Notice is to inform you of the pendency and proposed Settlement of this Class Action lawsuit, and of the hearing to be held by the court to consider the fairness, reasonableness, an adequacy of the Settlement. This Notice is not intended to be, and should not be construed as, an expression of any opinion by the Court with respect to the truth of the allegations in this litigation, or the merits of the claims or defenses asserted. This Notice describes the rights you may have in connection with the settlement and what steps you may take in relation to the Settlement and this class action lawsuit. WHY SHOULD YOU READ THIS NOTICE? You should read this notice because you may be eligible to receive money from the settlement of a class action lawsuit relating to the publication of the book A Million Little Pieces. WHAT IS THE LAWSUIT ABOUT? James Frey is the author of the book A Million Little Pieces. Random House published the book in 2003. The book was marketed as a "memoir/literature." In early January 2006, it was reported on the Internet, various television programs, including a widely covered January 26, 2006 telecast of a nationally syndicated program, and other media outlets that certain facts in the book had been altered and that incidents had been embellished. Both prior to and following the January 26, 2006 telecast and many of the other reports referenced above, a Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 38 of 59 number of putative class action lawsuits were filed claiming that purchasers of the book had been misled by the marketing of the book and would not have purchased the book had they known that certain facts in the book had been altered and that incidents had been embellished. These class actions were later consolidated into one action in a New York federal court. The parties have now reached an agreement to settle the actions and compensate purchasers of the book who claim they were misled. WHY IS THIS LAWSUIT A CLASS ACTION? In a class action, one or more people called Class Representatives sue on behalf of people who have similar claims. All of these people are referred to collectively as the settlement class, or individually as Settlement Class Members. One Court resolves the issues for all Settlement Class Members, except for those who exclude themselves from the Settlement Class. HOW DO I KNOW IF I AM A CLASS MEMBER? The Court has preliminarily determined that the following persons are members of the Settlement Class: All persons who purchased the book A Million Little Pieces in any format (including, but not limited to, in hardback, paperback, cassette, CD, or any other electronic media), on or before January 26, 2006. WHY IS THERE A SETTLEMENT? The Court did not decide on behalf of the Plaintiffs or the Defendants. Instead, Class Representatives and the Defendants agreed to a settlement. The Class Representatives and their respective attorneys believe the Settlement is best for all Settlement Class Members. WHAT AMOUNT OF MONEY AM I ENTITLED TO RECEIVE? Under the proposed settlement, each Settlement Class Member is eligible to receive a refund up to the full purchase price of the book (or other media), so long as such refunds do not cause defendants to pay more than $2.35 million for all costs associated with settlement. If the amount of refund claims exceeds the amount available for distribution, then each Settlement Class Member will receive a pro rata share of the amount available for distribution. HOW DO I CLAIM MY SHARE OF THE SETTLEMENT? To receive a refund, a Settlement Class Member must complete a Claim Form and submit it together with the front cover of the book (or other specified proof of purchase depending on the media purchased) by __________, 2006. You can obtain a claim form by calling _____________ or you can download one from the following website: [insert to come]. The Claim Form explains how to make a claim. If you do not submit a claim form, you will not receive any part of the settlement. Case 1:06-cv-04647-RJH Document 37-2 Filed 01/04/2007 Page 39 of 59 WHAT IS THE LEGAL EFFECT OF THE SETTLEMENT? The settlement provides for a broad release of all claims relating to the sale and marketing of the book. For the precise details of the broad release of claims, consult the settlement agreement on file with the Court or available at www.________.com. WHO WILL DETERMINE IF THE SETTLEMENT IS FAIR? The Court has ordered that a hearing be held on _____________, 200_ at ______ __.m. in Room 17B of the federal courthouse in Manhattan, located at 500 Pearl Street, New York, New York, to determine whether the proposed settlement is fair, reasonable, and adequate and whether it should be approved by the Court; whether judgment should be entered dismissing the lawsuit with prejudice; and the amount of attorneys' fees and costs to be awarded to Class Counsel. The Settlement Hearing may be continued from time to time by the Court. WHAT IF I OBJECT TO THE SETTLEMENT? A Settlement Class Member wishing to object to the settlement must file a written objection to it. Your written objection must be received on or before __________, 200_. Your objection must list your name, address, telephone number and, if applicable, the name, address and telephone number of your attorney. Your objection must be accompanied by copies of any supporting papers or briefs you intend to submit in support of your objection. Objections must be mailed to the Court, Class Counsel, and Defendants' Counsel at the addresses listed below. You may also attend the se

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