Common use of LITIGATION BACKGROUND Clause in Contracts

LITIGATION BACKGROUND. A. Plaintiffs allege that, during the Class Period, Defendant deceptively advertised discounts of its products, including Sitewide Discounts that purported to apply sitewide (except for a certain number of excluded products) on the Hot Topic Website. Based on these allegations, Plaintiff ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ filed suit on March 15, 2023, in the Central District of California. Plaintiff ▇▇▇▇▇▇ ▇▇▇▇ joined that suit on April 5, 2023. And Plaintiff ▇▇▇▇▇ ▇▇▇▇▇▇▇ filed a suit in the District of Oregon on August 25, 2023. Plaintiffs allege violations of certain California and Oregon consumer protection statutes, and bring claims for breach of contract, breach of express warranty, and unjust enrichment. Plaintiffs seek injunctive relief, compensatory damages, and restitution in amounts by which Defendant was allegedly unjustly enriched based on its product sales. B. Defendant expressly denies any deceptive advertising and further denies any liability or wrongdoing of any kind or that Plaintiffs or any putative Class member has been damaged in any amount or at all in connection with the claims alleged in the Action, and further contends that, for any purpose other than Settlement, this Action is not appropriate for class treatment. Defendant does not admit or concede any actual or potential fault, wrongdoing, or liability against it in the Actions or any other actions. Defendant maintained during the entire pendency of the Actions, and continues to maintain, that Plaintiffs misrepresent Defendant’s advertising practices, which are not deceptive or misleading as a matter of law. C. In the ▇▇▇▇▇ case, on July 10, 2023, Defendant filed a motion to dismiss Plaintiffs’ First Amended Complaint in its entirety, challenging each of Plaintiffs’ claims on a variety of grounds. Defendant also filed a request for judicial notice, asking the Court to take notice of multiple documents that Defendant argued were relevant to Plaintiffs’ claims and the motion to dismiss. The Parties extensively briefed the issues raised by Defendant’s motion to dismiss. The Court issued an order on the motion to dismiss on November 16, 2023, granting Defendant’s DocuSign Envelope ID: 22A46851-61DB-445F-A46C-D3152294B406 motion and giving Plaintiffs leave to amend their complaint. In response, Plaintiffs filed a Second Amended Complaint on December 12, 2023. D. After briefing the motion to dismiss, the Parties began discussing settlement of both the California and Oregon cases, and engaged in negotiations over a four-month period. The Parties scheduled a mediation, and, in the lead up to it, exchanged informal discovery, including detailed financial and sales records allegedly relevant to the claims and alleged damages. Plaintiffs’ Counsel spent significant time and effort analyzing these detailed records, and enlisted the help of a consultant with extensive experience in consumer class actions involving false advertising claims to assist them in doing so. The Parties also prepared and exchanged comprehensive mediation briefs that discussed the claims, defenses, and alleged damages in detail. E. On January 10, 2024, the Parties participated in an initial in-person mediation in Los Angeles, with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ “▇▇▇” ▇▇▇▇▇ (▇▇▇.)

LITIGATION BACKGROUND. A. Plaintiffs allege that, during the Class Period, Defendant deceptively advertised various discounts of its products, including Sitewide Discounts that purported to apply sitewide (except for a certain number of excluded products) products on the Hot Topic Websiteits website. Based on these allegations, Plaintiff ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ the Actions were filed suit in California, Washington, Oregon, and Missouri on March 15May 17, June 30, July 13, and August 11, 2023, in the Central District of Californiarespectively. Plaintiff ▇▇▇▇▇▇ ▇▇▇▇ joined that suit on April 5, 2023. And Plaintiff ▇▇▇▇▇ ▇▇▇▇▇▇▇ filed a suit in the District of Oregon on August 25, 2023. Plaintiffs The Actions allege violations of certain California California, Washington, Oregon, and Oregon Missouri consumer protection statutes, and bring claims for breach of contract, breach of express warranty, and unjust enrichment. Plaintiffs seek injunctive relief, compensatory damages, and restitution in amounts by which Defendant was allegedly unjustly enriched based on its product sales. B. Defendant expressly denies any deceptive advertising and further denies any liability or wrongdoing of any kind or that Plaintiffs or any putative Class class member has been damaged in any amount or at all in connection with the claims alleged in the ActionActions, and further contends that, for any purpose other than Settlement, this Action is the Actions are not appropriate for class treatment. Defendant does not admit or concede any actual or potential fault, wrongdoing, or liability against it in the Actions or any other actions. Defendant maintained during the entire pendency of the Actions, and continues to maintain, that Plaintiffs misrepresent Defendant’s the challenged advertising practices, which practices are not deceptive or misleading as a matter of law. C. In the ▇▇▇▇▇ case, on July 10, 2023, Defendant filed a motion to dismiss Plaintiffs’ First Amended Complaint in its entirety, challenging each of Plaintiffs’ claims on a variety of grounds. Defendant also filed a request for judicial notice, asking the Court to take notice of multiple documents that Defendant argued were relevant to Plaintiffs’ claims and the motion to dismiss. The Parties extensively briefed the issues raised by Defendant’s motion to dismiss. The Court issued an order on the motion to dismiss on November 16, 2023, granting Defendant’s DocuSign Envelope ID: 22A46851-61DB-445F-A46C-D3152294B406 motion and giving Plaintiffs leave to amend their complaint. In response, Plaintiffs filed a Second Amended Complaint on December 12, 2023. D. After briefing the motion to dismiss, the Parties began discussing settlement of both the California and Oregon cases, and engaged in negotiations over a fourseven-month period. The Parties scheduled a mediation, and, period relating to the facts and legal issues in the lead up Actions. Although the Parties agreed to itstay formal discovery and case deadlines, the Parties exchanged informal discovery, including detailed financial and sales records allegedly relevant to the claims and alleged damages. Plaintiffs’ Counsel counsel represents that they spent significant time and effort analyzing these detailed records, and enlisted the help of a consultant with extensive experience in consumer class actions involving false advertising claims an expert witness to assist them in doing so. The Parties also prepared and exchanged comprehensive mediation briefs that discussed the claims, defenses, and alleged damages in detail. E. On January 10, 2024, the Parties participated in followed by an initial in-person mediation in Los AngelesAngeles on November 10, 2023, with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ “▇▇▇” ▇▇▇▇▇▇ (▇▇▇Retired) of Signature Resolution. The Parties reached a tentative agreement on most issues but continued to engage in extensive and contentious negotiations over the following three weeks, until a settlement was finally reached. A term sheet was executed on December 1, 2023. As a result of these lengthy, substantive, and good faith negotiations, Class Counsel was able to assess thoroughly the claims of the Settlement Class Members,Defendant’s marketing practices, and Defendant’s defenses.) D. Based on the above-outlined investigation and litigation, the current state of the law, the expense, burden, and time necessary to prosecute the Actions through trial and possible appeals, the risks and uncertainty of further prosecution of the Actions considering the defenses at issue, the sharply contested legal and factual issues involved, and the relative benefits to be conferred upon the Settlement Class Members pursuant to this Agreement, Plaintiffs and Class Counsel have concluded that a Settlement with Defendant on the terms set forth herein is fair, reasonable, adequate, and in the best interests of the Settlement Class in light of all known facts and circumstances. E. Defendant and Defendant’s counsel recognize the expense and length of continued proceedings necessary to continue the Actions through trial and through possible appeals. Defendant also recognizes that the expense and time spent pursuing the Actions has and will further detract from resources that may otherwise be used to run Defendant’s business. While Defendant denies any wrongdoing or liability arising out of any of the facts or conduct alleged in the Actions and believes that it has valid defenses to Plaintiffs’ claims, Defendant has determined that the Settlement is fair, adequate, and reasonable. F. Based on the foregoing, which the Parties expressly incorporate as material terms of the Agreement, it is the desire of the Parties to fully, finally, and forever settle, compromise, and discharge all disputes and claims arising from or related to the Actions which exist between the Parties. Therefore, it is the intention of Plaintiffs and the Settlement Class that this Agreement shall constitute a full and complete Settlement and release of the Released Claims against Defendant.