Case 1:13-cv AJN Document 44-1 Filed 12/20/13 Page 1 of 43

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

DAJIA DAVENPORT, on behalf of herself and all

others similarly situated.

Plaintiff,

V.

ELITE MODEL MANAGEMENT

CORPORATION,

Defendant.

1: 13-cv-0 I 061-AJN

CLAS

ACTION SETTLEMENT AGREEMENT AND RELEASE

This Class Action Settlement Agreement and Release ("Agreement") is entered into by and

among Dajia Davenport ("Plaintiff''), Polina Mosendz, Stacey Robinson, Annie Byun, and

Elizabeth Defeo (each, an "Opt-In Plaintiff''), on behalf of themselves and as representatives of the

Settlement Class Members (as hereinafter defined), and Elite Model Management Corporation

("Elite" or "Defendant"). The Plaintiff and the Opt-In Plaintiffs are collectively referred to herein

as the "Class Representatives." The Class Representatives and Elite are collectively referred to

herein as the "Parties."

This Agreement is made for the sole purpose of attempting to consummate the settlement

of the action entitled Davenport v. Elite Model Management Corporation, 13-cv-1061 (S.D.N.

Y.)

(the "Action") on a class-wide basis (the "Settlement"). As detailed below, in the event that the

Court does not execute and file an Order Granting Final Approval of the Settlement (as hereinafter

defined), or in the event that the associated Judgment does not become final for any reason, this

Agreement shall be deemed null and void ab initio and shall be of no force or effect whatsoever.

A.

FACTUAL BACKGROUND AND RECITALS

l.

On

February

15,2073, Plaintiff

filed

a

Class

and Collective Action

Complaint

(the

"Complaint")

in

the

Action

initiating

a purported class and collective action

lawsuit

against Elite

in the United States

District

Court for the Southern

District

of New

York

(the

"Court").

2.

The Complaint alleged causes

of

action under the Fair Labor Standards

Act ("FLSA"),29

U.S.C.

_{$$ 201-219,}

for a

failure

to

pay minimum

wages and

overtime

and

failure

to

keep and

maintain appropriate records and, under

Article 6

and

Article

19

of

the

New York

Labor Law

("NYLL"),

and the

New

York

Codes, Rules and Regulations,

for

failure to

pay

minimum

wages,

overtime, and "spread

of

hours" pay, failure to keep and maintain appropriate records, and failure to provide wage statements and certain other wage-related notices.

3.

On

April

26,

2013,

Plaintiff

filed

a First

Amended Class

Action Complaint. Plaintiff

s

First Amended Class

Action

Complaint

withdrew

her recordkeeping and notice-related causes

of

action, and added factual allegations regarding

Plaintiff

s alleged internship

hours.

On June 14,

2013,

Plaintiff filed

a Second Amended Class

Action

Complaint,

which

is the current complaint in the

Action.

In

the

Second Amended Class

Action

Complaint,

Plaintiff

alleges

FLSA

claims

for

failure to

pay

minimum

wages and overtime

on

behalf

of

herself and

all

persons

who

served as

unpaid interns

for

Elite

in

the

United

States at any

time

since February

15,2010,

and

New York

state law claims

for

failure to pay

minimum

wages, overtime, and "spread

of

hours" pay on behalf

of

herself and

all

persons

who

served as unpaid interns

for Elite in New York

at any

time

since Februarv 15.2007.

4.

Subsequent to the commencement of the

Action,

the Opt-In Plaintiffs

joined

the

Action

by

2013;

Stacey

Robinson-April

28,

2013;

Annie

Byun-May 30,

2013;

and

Elizabeth

Defeo-September

17, 2013.

5.

On

June

24.

2013.

Plaintiff

filed

a

motion

for

conditional

certification

of

an

FLSA

collective

action. By

order

dated

July

19,

2013,

Plaintiffs

motion

for

conditional

FLSA

certification

was administratively denied

with

leave

to re-file

on

or

before September

17,2013.

By

order dated October 15,2013, the Court administratively denied

Plaintiff

s

re-filed

motion

for

conditional FLSA certification, in

light

of the Parties' resolution of this Action.

6.

On

September

26,

2013,

the

Parties participated

in

a

mediation before

Alfred G.

Feliu,

Esq., of the

firm

of

Vandenberg

&

Feliu,

LLP,

an experienced and

well

regarded neutral mediator.

That

effort

was productive, and based on the Parties' extensive discussions at the mediation and

continuing thereafter,

the

Parties reached the conditional agreement reflected

in

this

Agreement.

At

all

times,

the

Parties'

negotiations

were vigorous,

adversarial,

non-collusive, and

at

arms' length.

7.

In

connection

with

the

litigation

of

this

Action,

Class Representatives have

filed

a motion for collective action conditional certification under the FLSA, and reviewed and analyzed the facts

and circumstances relating to the claims asserted

in

the

Action

as known

by

Class Representatives

to date,

including

analyzing thousands

of

documents produced

by Elite in

connection

with

and

for

the purposes

of

the mediation, communicating

with

the

Opt-In Plaintiffs,

engaging

in

numerous discussions, communications, and negotiations

with Elite's

counsel, preparing

for

(including

the submission

of

an extensive mediation

briefl

and participating

at the

mediation, and researching

pertinent case

law.

Based

on this

investigation, Class Counsel and

the

Class Representatives

maintain that the claims and contentions

in

the

Action

have merit.

but

have decided

to

enter into

this

Agreement after

taking

into

account, among other things,

(i)

the facts developed during the

course of mediation-related discovery and negotiations;

(ii)

the risks

of

continued

litigation

and the absence

of

any

Second

Circuit ruling

on the

issues;

(iii)

the

costs

of

litigation both

in

absolute terms and

in

proportion

to

the maximum potential recovery;

(iv)

the conclusion reached

by

Class

Counsel

and

the

Class Representatives

that the

settlement reached

herein

is

fair,

reasonable,

adequate

and

in

the

best

interests

of

the

Class

Members.

Class

Counsel

and

the

Class Representatives also recognize and acknowledge the significant expense and length

of

continued proceedings necessary to prosecute the

Action

against

Elite

through

trial

and through appeals, and are

mindful

of

the

inherent problems

of proof

and possible defenses

to

the Alleged Claims

(as

hereinafter

defined).

Both Class Counsel and the Class Representatives believe that the settlement set

forth in

this Agreement confers substantial benefits upon the Settlement Class and each

of

the Settlement Class Members.

8.

Nothing

in

this

Agreement,

nor

the

fact

of

the

Agreement

itself,

shall be

construed or

deemed to be an admission

of liability,

culpability,

negligence

or

wrongdoing

of

any

kind

on the

part

of

Elite

with

respect

to

the

Alleged

Claims (as hereinafter

defined). Elite

denies

all of

the

claims and contentions alleged by the Class Representatives

in

the

Action.

Nonetheless,

Elite

has

concluded

that further litigation would be

protracted

and

expensive,

and would also

divert

management and employee

time.

Elite

has taken into account the uncertainty and risks inherent in

litigation, particularly

in

multi-party

cases.

Elite

has therefore concluded that

it

is

desirable that the Action be

fully

and

finally

settled in the manner and upon the terms and conditions set

forth

in

this Agreement.

9.

The Parties are

sufficiently familiar

with

the facts

of

the

Action

and the applicable

law

so

Parties exchanged

discovery including

Elite's

production

of

thousands

of

pages

of

documents

including hardcopy documents and e-mails pertaining to

Elite's

internships.

10.

The Parties are represented

by

competent counsel and have had the opportunity to consult

with

counsel prior to the submission of this Agreement to the Court.

I

1.

Pursuant to Federal Rule of Evidence 408, this Agreement, and any related documents hled

or

created

in

connection

with

it,

shall be inadmissible

in

evidence

in

any proceeding, except as

necessary to approve, interpret or enforce this Agreement.

NOW THEREFORE,

IT

IS HEREBY STIPULATED AND AGREED by

and among

the

Class Representatives,

for

themselves

and

for

the

members

of

the

Settlement Class (as hereinafter defined), and

Elite

that, subject

to

the conditions precedent set

forth in

Paragtaph 52

below, the

Action

and

the

Released

Claims

(as hereinaftgr

defined) shall be

finally

and

fully

compromised, released, resolved, relinquished, discharged and settled, and

the

Action

shall

be dismissed

with

prejudice, and

without

any advers

else, upon and subject to the terms and conditions

B.

DEFINITIONS

As used in this Agreement, the

following

te

12.

"Alleged

Claims" means the claims that

Class

Action Complaint,

the

Second

Amend subsequent or amended complaints that might be

claims that

Elite

failed

to

pay

minimum

wages,

to

keep appropriate

or

maintain appropriate rec provide accurate wage statements or other notice

14.

"Claims Administrator"

means Tilghman

&

Co., P.C., the non-party claims administration

firm

selected and retained by Class Counsel.

15.

"Claim Form"

means the

"Claim

Form, IRS Form, and Release" attached

to

the Notice

of

Class

Action

Settlement.

16.

"Class" and "Class Members" mean the members of the

NYLL

Class and the

FLSA

Class,

collectively.

17.

"Class Counsel" means The Law Office

of

Steven

L.

Wittels, P.C.

18.

"Class Period" means

(a)

for

members

of

the

NYLL

Class, the period

from

February 15, 2007

to

the Date

of

Preliminary Approval;

and

(b) for

members

of

the

FLSA

Class, the period

from February 15,2010 to the Date of Preliminary Approval.

19.

"Class Representatives" means Dajia Davenport, Polina Mosendz, Stacey Robinson, Annie Byun, and Elizabeth Defeo.

20.

"Compensable Workweeks" means the

total

number

of

calendar weeks a Settlement Class Member served as an intern

for Elite

during the Class Period, as stated by a Participating Claimant

on a _{Qualifying Claim} Form.

21.

"Court"

means the United States

District

Court for the Southern

District

of New York.

22.

"Date

of

Final Approval"

means

the

date

the Court

enters

an Order

Granting

Final Approval of the Settlement.

23.

.,Date

_of

_Preliminary

_Approval"

_means

_the

_date

_{the Court}

_enters

_an

_Order

Granting Preliminary Approval of the Settlement.

24.

..Day,'

_{or "Days"}

_{(whether capitalized}

_or

_{not) means calendar day, unless expressly} stated otherwise.

a.

If

no

objections

to

the

Settlement are submitted,

the

day

the

Judgment approving the Settlement is entered;

b.

If

any objections are submitted, and no appeal is taken, the date on

which

the time to

file

any appeal from the Judgment has expired; or

c.

If

any objections are submitted, and an appeal

is

timely filed with

respect

to

the

Judgment, the date such an appeal is dismissed or the Judgment is affirmed, and the

Judgment is not subject to further

judicial

review or reconsideration by any court.

26.

,,Final

Approval Hearing" shall

have

the

meaning

set

forth

in

Paragraph

54

of

the Agreement.

27.

,,FLSA

Class" means

all

individuals,

other than

the

members

of

the

NYLL

Class, who served as unpaid interns

for Elite or

any subsidiary

of Elite in

the

United

States between February

15,2010 and the Date

of

Preliminary Approval of the Settlement.

2g.

.,Judgment" _{means the judgment or order to be rendered and entered} by the Court pursuant to this Agreement.

29.

"Last Known

Address" means the most recently recorded

mailing

address

(if

known) and

e-mail

address

(if

known)

for

a

Class Member as such

information

is

maintained

in

the regular course of business in

Elite's

records.

30.

..Litigation

Expenses" means those expenses and costs

of

litigation

actually

incurred by Class Counsel and approved for reimbursement by the Court, excluding costs or fees of the Claims

Administrator.

31.

,,Maximum Settlement

Amount"

means the maximum amount that

Elite

shall pay under the

terms

of this

Agreement,

which is

Four

Hundred

Fifty

Thousand

Dollars

($450,000.00), and is

Administration Costs, and Service Awards

to

the

Class Representatives.

This

amount does not

include

Elite's

share

of

payroll

taxes, such as

FICA

and

FUTA,

except

to

the

extent that those taxes may be paid by Elite using any Unclaimed Amount'

32.

..Net

Settlement

Amount"

means

the

Maximum

Settlement

Amount

less

the

maximum amounts

Class Counsel

may

request

for

Attorneys'

Fees

and Litigation

Expenses, Claims Administration Costs, and any Service Awards to the Class Representatives.

33.

..Notice

of

Class

Action

Settlement"

or

'Notice"

shall

have

the

meaning set

forth

in

Paragraph 63 of this Agreement.

34.

,.Notice

_period"

_{shall have the meaning set forth in} Paragraph 66 of this Agreement'

35.

.NYLL

Class"

means

all

individuals who

served

as

unpaid interns

for

Elite

or

any subsidiary of Elite in

New

york

from February 15,20Q7 through the Date of Preliminary Approval

of the Settlement.

36.

.,Order Granting

Final

Approval

of

the

Settlement"

shall

have

the

meaning set

forth

in

Paragraph 52 of this Agreement.

37

.

..Order Granting Preliminary Approval

of

the Settlement" shall have the meaning set

forth

in Paragraph 52 of this Agreement.

3g.

.,participating Claimant" means each Class Member who submits a

Qualifying

Claim Form

in response to the Notice

of

Class

Action

Settlement'

39.

..preliminary

_Approval

_Motion"

_{shall have} the meaning set

forth in

Paragraph 54

of

this

Agreement.

40.

,.Qualifying

claim

Form"

means

a claim

Form that

is

properly

completed, properly

executed, and

timely

returned to the

claims

Administrator.

42.

..Released

_parties"

_means

_Elite

_Model

_Management

corp.,

Elite

Model

Management

Corporation,

a

California

Corporation,

Elite Model

Management

Miami

Corporation,

a

Florida

Corporation,

and

their

respective present

or

former officers, directors,

direct

or

indirect stockholders,

partners, members,

or

other

owners,

or

the

affiliates,

subsidiaries, divisions,

predeCeSSors, SuCC9SSOTS, agents, employeeS, insurers, co-insurerS, attorneys, aOcountants' auditOrs'

advisors, representatives, consultants, pension and welfare plans, plan fiduciaries, administrators, trustees andior assigns

of

any of the foregoing'

43.

.,Settlement" means the terms and conditions set forth in this Agreement.

44.

.,settlement _{Class" and "settlement Class} Member" mean

all

members

of

the

NYLL

Class

who have not opted

out

of

the Settlement after

Notice,

and

all

members

of

the

FLSA

Class who have submitted

eualifying

Claim

Forms, and

who

are therefore

in

the

class

that

is

certified for

purposes

of

Settlement

only, following

the entry

of

an appropriate Order by the Court'

4s.

..Settlement

payment"

_means

the

total,

gross amount due

to

an

individual

Participating

Claimant, which shall be calculated as described

in

Paragraphs 70 and 73 of this Agreement'

46.

.,Service

_Award"

_{shall have the meaning} set forth in Paragraph 59 of this Agreement'

47.

,.Total

Settlement

Amount"

means

the total

amount

paid

by

Elite

in

consideration

for

settlement of the

Action,

including Settlement Payments,

Attorneys'

Fees and

Litigation

Expenses'

Claims Administration Costs,

and

Service

Awards

to

the

Class

Representatives'

The

Total

Settlement Amount shall not include any Unclaimed Amount.

4g.

,.Unclaimed

Amount"

shall have the meaning set

forth in

Paragraph 73

of

this Agreement'

Elite

shall, at

all

times, retain custody,

control,

and exclusive

final

possession

of

the unclaimed

Amount.

50.

"Updated

Address"

means

a mailing

address

that was

updated

via

an

updated mailing

address provided by the United States Postal Service or a Class Member.

C.

CONDITIONS

PRECEDENT

TO THE

EFFECTIVENESS OF

THIS AGREEMENT

51.

The Parties enter into this Agreement and the Settlement on a conditional basis.

52.

This

Agreement

will

become

final

and

effective

only

upon

the

occurrence

of

all of

the

following

events:

a.

b.

c.

d.

The Court enters an Order Granting Preliminary Approval of the Settlement;

The Court enters an Order Granting Final Approval of the Settlement;

Judgment is entered by the Court dismissing the

Action with

prejudice; and

The Effective Date

occurs,

and any

challenge

to

the

Settlement,

whether

by objection or appeal, is resolved in favor

of

enforcement of the Settlement.

Unless the

Court

orders otherwise

or

agreed

to in writing by

the Parties,

this

Agreement

shall be deemed

null

and void

ab

initio

upon the

failure

of

any

of

the foregoing events

to

occur.

Upon the

failure

of

any

of

these

four

events

to

occur, the

Action

will

resume unless the Parties

jointly

agree to seek Court approval

of

a renegotiated settlement.

D.

CONDITIONAL

CLASS

ACTION AND COLLECTIVE ACTION CERTIFICATION

53.

The

Parties stipulate

to

class

certification

of

the

NYLL

Class

and collective

action

certification

of

the

FLSA

Class solely

for

the purposes

of

this settlement.

If

the Court does not grant preliminary or

final

approval

of

this Settlement or,

if

appealed, the Judgment is not affirmed,

the

Parties agree

that

class

certification

and

collective

action

certification

will

automatically be deemed

revoked.

The Parties

will

take any other steps necessary to

decertiff

the Settlement Class.

In

the

case

that

class

certification

and

collective

active

certification

are deemed revoked, those

certifications shall have no precedential value and shall not be introduced into evidence or used

for

any other purpose.

E.

MOTIONS

FOR

COURT APPROVAL

54.

Motion for

Preliminary

Approval.

On

or

before December

19,2013 (or

such later date as

may be set

by

the

Court),

Plaintiff

shall

file

a

motion

for

an Order

Conditionally Certifying

the Class

for

Settlement Purposes and

Preliminarily

Approving the Settlement

("Preliminary

Approval

Motion"),

together

with:

(a) a copy

of

this Agreement; (b) separately, a proposed Order Granting Preliminary Approval

of

the Settlement,

in which

the Court shall set

a

date

for

a hearing

for

hnal approval

of

the

settlement

("Final

Approval Hearing");

and

(c)

any other

documents consistent

with

the

Settlement and reasonably necessary

to

obtain

the Court's

approval

of

the

Settlement.

Class Counsel

will

provide

Elite with

reasonable

time

to

review and

approve

the

Preliminary Approval

Motion

and

all

supporting papers.

55.

Motion

for

Final

Approval.

The Parties shall request that the

Final Approval

Hearing be set

for

hearing

within

45 days after the last day

of

the

Notice

Period,

or

as soon thereafter as the

Court's calendar shall

allow,

but in no event shall

it

be set sooner than 100 days

following

the date the Preliminary

Approval Motion

is

filed with

the

Court. At

least seven (7) days

prior

to the Final

Approval Hearing, Class Representatives shall

file

a

motion

for final

approval

of

the

Settlement

that

asks

the Court

to

enter an order

which:

(l)

grants

final

approval

to

the

Settlement as fair,

adequate and reasonable; (2) incorporates the terms

of

the Release, as described

in

Paragraphs 86

and 87

of

this

Agreement; (3) permanently enjoins

all

Settlement Class Members

from

pursuing and/or seeking to reopen any Released Claim; and (4) dismisses the

Action with

prejudice

("Final

Approval

Motion").

The Final

Approval Motion

shall include the proposed Order Granting Final Approval of the Settlement.

At

the same time that Class Representatives

file

their Final Approval

Motion,

they shall also

file

their Motion(s)

for

Attorney's

Fees and

Litigation

Expenses, Claims

Administration Costs, and Class Representative Service

Awards.

Class Counsel

will

provide Elite

with at

least fourteen

(14)

days

to

review

and

approve

the Final Approval Motion

and all

supporting papers.

F.

ATTORAIEY'S

FEES

AND

LITIGATION

EXPENSES

56.

Class Counsel

will

submit an application

for

an award

of

no more than One Hundred Forty

Three Thousand Five Hundred Dollars ($143,500.00) for

Attorneys'

Fees and

Litigation

Expenses.

The

amounts

set

forth

in

this

Paragraph

will

constitute

complete

consideration

for all

work

performed and expenses incurred

to

date and

for all

worked

to

be performed and expenses

to

be incurred through the completion

of

the

Action

and

its

Settlement.

Elite

will

not

oppose a motion

for

approval

of

Class Representatives'

Attorneys'

Fees and

Litigation

Expenses consistent

with

this Paragraph. The application

for Attorneys'

Fees and

Litigation

Expenses, as set forth herein, is a matter separate and apart

from

the Settlement among the Parties, and

no

decision

by

the Court

concerning the granting,

in

whole or

in

part,

of

such

Attorneys'

Fees

or Litigation

Expenses as set

forth herein shall affect the

validity

of

this Agreement

or

finality

of the Settlement

in

any manner.

In

the event the Court awards Class Representatives'

Attorneys'

Fees and

Litigation

Expenses

of

less than $143,500.00, the difference shall become an Unclaimed

Amount

(to be retained

by

Elite in accordance

with

Paragraph 73), subject to the Court's approval.

57.

The

Attorneys'

Fees and

Litigation

Expenses shall be paid according to Paragraphs 82 and 83 of this Agreement.

G.

CLAIMS

ADMINISTRATION

COSTS

58.

"Claims Administration Costs" shall include

all

costs

and

expenses

due

to

the

Claims

Administrator

in

connection

with

its administration of the Settlement including, but not

limited

to,

providing the Notice

to

Class Members,

processing

Opt-Out Forms and Claim

Forms,

and administering and

distributing

Settlement Payments to the Participating

Claimants.

Class Counsel

will

submit an application

for

an award of no more than Fifteen Thousand Dollars ($15,000.00) to be paid from the

Maximum

Settlement Amount

for

Claims

Administration Costs.

The application

for

Claims Administration

Costs,

as

set

forth

herein,

is

a

matter

separate

and

apart

from

the Settlement among the Parties, and no decision by the Court concerning the granting, in whole or

in

part,

of

such

Claims Administration

Costs

as

set

forth

herein shall affect

the validity

of

this Agreement

or finality

of

the

Settlement

in

any

manner.

In

the

event

the Court

awards Claims

Administration

Costs

of

less

than Fifteen

Thousand

Dollars

($15,000.00),

the

difference

shall become an Unclaimed Amount, subject to the Court's approval.

H.

CLASS

REPRESENTATIVE

SERVICE

AWARDS

59.

Class Counsel

will

submit

an application

for

no

more than

a

total

of

Twenty

Thousand

Dollars ($20,000.00) as "Service

Awards" to

the Class Representatives

for

their time, effort

and

participation

in

the

Action as

Class

Representatives,

to

be

distributed among

the

Class

Representatives

as

follows:

Dajia

Davenport-$5,000; Polina Mosendz-$3,500;

Stacey

Robinson-$3,500; Annie

Byun-$4,750;

Elizabeth

Defeo-$3,250.

Elite

will

not

oppose a

motion

for

approval

of

such Service

Awards,

and agrees

that the

request

is fair

and reasonable under the circumstances

of

this

case.

The application

for

Service Awards, as set

forth

herein, is a

matter separate and apart

from

the

Settlement among

the

Parties, and

no

decision

by

the

Court

concerning the granting,

in

whole or

in

part,

of

such Service Awards as set forth herein shall affect

the

validity of

this Agreement

or

finality

of

the Settlement

in

any

manner. In

the event the Court

awards Service Awards

of

less than

Twenty

Thousand

Dollars

($20,000.00), the difference shall become an Unclaimed Amount, subject to the Court's approval.

60.

The Service Awards shall be paid according to Paragraphs 82 and 83 of this Agreement.

I.

COOPERATION

61.

The parties shall cooperate

fully with

one another

in

seeking approval

of

the Court

of

this

Agreement and

to

use

their

respective best

effons

to

consummate

the

Settlement and cause the Judgment to be entered and to become

final.

The Parties therefore agree to cooperate

in

good

faith

to

promptly

prepare,

execute

and

finalize

all

Settlement-related documents, seek

all

necessary

Court approvals, and do

all

other things necessary to consummate the Settlement-

All

Settlement-related documents, including, but not

limited

to, this Agreement, the Preliminary Approval

Motion

(and any supporting papers), and the Final Approval

Motion

(and any supporting papers) must be acceptable in both

form

and content to each of the

Parties.

In the event that the Parties are unable

to reach agreement on the

form

or content

of

any documents needed

to

implement the Settlement,

or on

any

supplemental

provisions

that

may

become necessary

to

effectuate

the

terms

of

the

Settlement, the parties agree

to

seek the assistance

of

the

Court.

The Parties

fuither

agree that all

such

documents, supplemental

provisions, and

requests

for

assistance

of

the Court shall

be

consistent

with

this Agreement.

62.

No

party

to

this

Agreement

shall

seek

to

evade

her

or its

good

faith

obligations

to

seek

approval and implementation of this Settlement by virtue

of

any

ruling,

order, governmental report

or

other development, whether

in

the Actions,

in

any other

litigation or

otherwise that hereafter might occur and might be deemed

to

alter the relative strengths

of

the Parties

with

respect

to

any

claims or defenses or

their

relative bargaining power

with

respect

to negotiating.

The Parties and their respective counsel

of

record deem

this

Settlement to be

fair

and reasonable and have arrived

at

this

settlement

in

arms-length negotiations

taking

into

account

all

relevant factors, present or

potential.

J.

NOTICE

PROCEDURE

63.

Notice

to

Class

Members.

Within

fifteen (15) business days after the Date

of

Preliminary Approval,

Elite

will

provide

to

the Claims

Administrator

the name and Last

Known

Address

of

each Class Member

(the

"Class

List").

With

the production

to

the

Claims

Administrator

of

the Class

List, Elite

shall have satisfied its obligation

to

furnish Class Members' contact information.

Elite

will

act

in

good

faith to

respond

to

inquiries

from

the Claims

Administrator

regarding, or to

clarify

information

contained

on, the

Class

List.

However,

the Claims Administrator shall

be

solely responsible

for

conducting the

Notice. Not

later than

forty five (45)

days

following

the

Date

of

Preliminary Approval, the Claims Administrator shall

send,

via

U.S.

Mail

and e-mail (provided

both

addresses are available)

to

each

Last

Known

Address

of

the

Class Members, a

Notice

of

Class

Action

Settlement (hereinafter, the

"Notice"),

and a

Claim

Form (each

of

which

shall have a unique identification number for purposes of verification), each in a form approved by

the

Court.

The

Notice

shall

inform

each Class Member

of

the material terms

of

the

Settlement,

including the

Maximum

Settlement Amount and the procedure

for

obtaining a Settlement Payment

and

the

procedure

for

opting out

of

the

Settlement,

and

shall

include

an

explanation

of

how

Settlement Payments

will

be

calculated. In

advance

of

the Claims Administrator emailing

any

Notice, counsel for the Parties shall negotiate

in

good faith

(l)

the content of the email which shall attach the

Notice,

and (2) a

list of

frequently asked questions and answers

("FAQs")

to be used by

the Claims Administrator

in

responding to inquiries from Class Members

following

the issuance

of

any

Notice.

If

the Claims

Administrator

determines that

it

cannot respond

to

a Class Member's

inquiry

because the

inquiry falls

outside

of

the scope

of

the FAQs, then the Claims Administrator shall contact counsel

for

the Parties simultaneously

by

email and request

guidance.

Counsel

for

in

good

faith

any

issues

raised

by

the

Class

Member's

inquiry.

Thereafter,

the

Claims

Administrator

shall

communicate

the

agreed-upon response

to

the

Class

Member.

If

neither

Plaintiffs'

nor

Defendant's

counsel

timely

responds

to

an

issue

raised

by a

Class Member's

inquiry,

then

the Claims Administrator

shall use

its

professional

judgment

in

responding

to

the

Class

Member's

inquiry and shall promptly

advise

counsel

for

the

Parties

via

email

of

the response.

64.

For any Class Member to whom Notice is sent

only by

mail, Notice shall be

deemed

mailed on the

date

the Claims Administrator

places the

Notice

with

the U.S. Postal Service

for mailing.

For any Class Member

to

whom

Notice is

sent

only by e-mail, the Notice shall be deemed mailed on the date the Claims Administrator sends the

e-mail.

For Class Members

to

whom the Claims

Administrator

sends

Notice bv

both

mail

and

e-mail, Notice shall be deemed mailed on the earliest of the date the Claims Administrator places the

notice

with

the U.S. Postal Service

for mailing or

sends the

Notice via

e-mail. In

the event that, subsequent to the

first mailing

and at least seven

(7)

days

prior to

the end

of

the Notice Period, a

mailed

Notice

is

retumed

by

the U.S.

Postal Service

to

the Claims

Administrator

with

a

forwarding

address

for

the recipient, the Claims Administrator shall re-mail the notice

to

that address no later than the last day

of

the Notice Period, and the forwarding address

will

be deemed the Updated Address

for

that Class

Member.

In the event that subsequent to the

first mailing

and

at

least seven

(7)

days

prior to

the end

of

the

Notice

Period the

Notice

is

returned

by the

U.S. Postal Service

to

the Claims

Administrator without a forwarding

address (i.e.,

the

address

is

no

longer

valid

and

the

envelope

is

marked

"Return

to

Sender"),

the

Claims Administrator

shall complete one standard skip trace

in

an effort to ascertain the current address of the particular Class

Member

in

question and,

if

such address is ascertained, the Claims Administrator

will

re-send the

Notice no later than the last day of the Notice Period;

if

no updated Address is ascertained for that

class

Member, the

claims

Administrator

will

re-send the

Notice to

the Last

Known

Address no later than the last day

of

the

Notice

Period. In

the event

that

an e-mailed

Notice is

returned as undeliverable

to

the claims

Administrator

because

of

an invalid e-mail

address

for a

class Member

to

whom

only

e-mailed

Notice

was sent,

the

Claims

Administrator

shall complete one standard skip trace

in

an

effort to

ascertain the current address

of

the particular Class Member

in

question and,

if

such address

is

ascertained, the Claims

Administrator

will

re-send the

Notice

no later than the last day of the Notice Period'

65.

For those Class Members who are re-sent the Notice under Paragraph 64, the Notice Period shall be extended another ten (10) days beyond the

initial

Notice Period, except that

for

any class

Member

who

was sent

Notice

only by mail

and re-sent

Notice

under Paragraph

64,

the Notice

Period shall be extended another twenty (20) days beyond the

initial

Notice Period'

66.

Opt-Out and Claims Procedure

a.

NYLL

Class

Members.

Subject

to

Court

approval,

NYLL

Class Members shall

have sixty (60) days from the date that the Claims Administrator mails the Notice to them (referred

to hereafter as the ..Notice

period") to

properly complete the

claim

Form

or

an

opt-out

Form (a

written

statement

with

the

Class Member's name, address, and phone number stating

"I'

[insert

name],

wish

to

opt-out

of

the

Elite

class

action

settlement, and

not

receive

any

benefits

or

be bound

by

the

judgment

in

the

case.")

and

to

return

it

by mail, e-mail,

or

fax

to

the

claims

Administrator

prior

to

midnight,

eastern standard

time, on

the

final

day

of

the

Notice

Period'

Members of the

NYLL

Class who do not properly and/or

timely

submit an Opt-Out Form become Settlement class Members and shall be subject to the Judgment.

b.

FLSA

Class

Members.

Subject to Court approval,

FLSA

Class Members shall have

until

no later than the last day

of

the Notice Period to properly complete the

Claim

Form (which

shall constitute evidence

of

such

FLSA

Class Members' consent to

join

the

Action),

and to return

it

by mail, e-mail,

or

fax

to

the Claims Administrator

prior

to

midnight,

eastern standard time, on the final day of the Notice

Period.

Members of the

FLSA

Class who do not

properly

and,lortimely submit a Claim Form _{shall not be subject to the Judgment.}

c.

The date

of

mailing

of

an Opt-Out Form

or Claim

Form

is

deemed

to

be the date

the form

is

(1) deposited

in

the U.S.

Mail,

postage

prepaid, as

evidenced

by

the

post-mark, (2) received electronically

_{by fax by}

_{the Claims}

_{Administrator,}

_{as evidenced}

_by

_{the transmission}

data appearing

on the Claims Administrator's

fax-received

copy

of

the Opt-Out

Form

or

Claim Form;

or (3)

received electronically

by

e-mail

by

the Claims

Administrator,

as evidenced

by

the

"received date" appearing on the Claims

Administrator's

copy

of

the email transmitting the

Opt-Out

Form

or Claim

Form.

Any

Opt-Out Form

or

Claim Form mailed after midnight,

eastern standard time, on the

final

day

of

the Notice Period is untimely and shall not be considered by the Claims Administrator.

d.

Class Members who submit both a Claim Form and an Opt-Out Form shall be sent

a cure letter by the Claims Administrator seeking

clarification

of the response they want to submit.

Absent any cure, such Class Members

will

be deemed

to

have excluded

him

or

herself

from

the Settlement.

the omitted information.

e.

The Settlement Administrator

will

e-mail simultaneously Class Counsel and

Elite's

counsel copies

of

all

Claim

Forms and Opt-Out Forms received

from

Class Members

within

three

(3) business days of their

receipt.

The Claims Administrator shall retain the originals of

all

Claims

Forms and

opt-out

Forms received

by mail,

and envelopes accompanying

_{mailed Claim}

_Forms and Opt-Out Forms,

in

its

files until

such time as the Claims Administrator is relieved

of

its duties and responsibilities under

this Agreement.

For

all claim

Forms and

opt-out

Forms received by

mail,

the

Claims

_{Administrator shall}

_{stamp the postmarked date}

_{on the original}

_of

each Claim

Form and Opt-Out Form.

f'

Within ten (10)

days

after

the

expiration

of

the

Notice period,

_the

_Claims

Administrator shall provide

simultaneously

Class

Counsel

and

Elite's

counsel

with

final

information regarding

(i)

any Class Members who have opted out

of

the Class; and

(ii)

the Class Members who have submitted

_eualifying

Claim Forms.

g.

The Parties and counsel

for

the Parties agree

to work

in

good

faith

with

each other and

the

Claims

Administrator

in

order

to

resolve any disputes

which

arise regarding whether a

Claim Form or Opt-Out Form was properly _{completed and executed, and}

_timely

_submitted.

h.

If

ten percent

(10%)

or

more

of

the

members

of

the

NYLL

Class

opt-out

of

the Settlement, then

Elite

shall

have

the

right, in its

sole discretion,

to void this

Agreement and to

revoke class

certification

and

collective

action

certification.

Elite

has

twenty (20)

business days

following

its

notification by

the Claims Administrator regarding the

final

number

of

NYLL

Class Members who have opted

out

of

the

Settlement

to

notify

Class Counsel

of its

intent

to void

this Agreement and to revoke class certification.

i.

Class Representatives and Class Counsel represent and warrant that they have not,

nor

will

they: (a) attempt

to void

this Agreement

in

any

way; (b)

opt-out

of

the Settlement Class;

(c) solicit, encourage or assist in any fashion Class Members to opt-out; or (d) solicit, encourage or assist

in

any fashion

any effort

by

any

person

(natural

or

legal)

to

object

to

the

Settlement.

Nothing

in

this provision shall prevent Class Counsel

from

advising a

client of his

or her

right

to opt out or object.

j.

Elite

represents and warrants

that

it

has

not, nor

will it:

(a)

attempt

to void

this Agreement

in

any

way,

except as

provided

in

Paragraph

66(h)

of

this

Agreement;

(b)

solicit,

encourage

or

assist

in

any fashion Class Members

to

opt-out;

or

(c)

solicit,

encourage

or

assist in

any fashion any effort by any person (natural or legal) to object to the Settlement.

67.

Objections. Any

Class

Member

who

wishes

to

object

to

the

Settlement

must

file

and

deliver

a written

objection

with the

Court,

and serve copies

of

the written

objection

to

Class

Counsel and counsel

for

Elite, no later than the last day of the Notice

Period.

The date of delivery

of

the written objection

is

deemed

to

be the

date

the objection

is

deposited

in

the U.S. Mail,

postage pre-paid, as evidenced by the

postmark.

The objection must set forth,

in

clear and concise terms, the legal and factual arguments supporting the

objection.

Unless otherwise ordered

by

the

Court, Class Members

shall not

be

entitled

to

speak at

the Final Approval

Hearing unless they have submitted a

timely written

objection pursuant

to this

Paragraph. Class Members who have

properly and

timely

submitted objections may appear at the Final Approval Hearing, although they are not required

to

do so, either

in

person or through a lawyer retained at

their

own expense.

If

a

Class Member intends to object to the Settlement through retained counsel, then that counsel must

file

a

notice

of

appearance

no

later

than

the last day

of

the

Notice

Period

and

a

statement

of

whether counsel intends

to

appear at the

Final Approval

Hearing.

The Parties

may

file with

the

Court

written

responses

to

any

filed

objections

no

later than three

(3)

days

before

the

Final

Approval

Hearing. Any

NYLL

Class Member who has opted out of the Settlement may not object to the Settlement or speak at the Final Approval Hearing'

68'

Declaration

_{of compliance. No}

_{later than (20)}

days

prior

to

the Final

Approval

Hearing,

the Claims

Administrator

shall

provide

_{Class Counsel and}

_{Elite,s counsel}

_with

a Declaration

_of

Compliance to be

filed with

the Court _{by Class Counsel.}

K.

69'

Total

Settlement

_Amount.

_Elite

_agrees

_to

_pay

_each

_{participating}

claimant his

or

her Settlement Payment

as

consideration

_for

settlement

_of

the

Action.

The

Maximum

Settlement

Amount

shall

not

exceed

the

aggregate

sum

of

Four

Hundred

Fifty

Thousand

Dollars ($450,000'00)' Notwithstanding _{any other provision in this Agreement, aside}

from Elite,s share

of

payroll

taxes,

in

no event

will

Elite

be obligated

to

pay more than Four Hundred

Fifty

Thousand

Dollars

($450,000.00)

_in

_total

_settlement

_of

_{the Action, including}

_all

Settlement payments,

Litigation

Expenses,

_{Claims Administration Costs,}

_Service

_Award,

_or

_any

_other

amounts whatsoever.

70.

_{Each Participating Claimant}

shall

receive

a

Settlement Payment,

_{which is a}

_share

_of

_the

_Net

_Settlement

_Amount

_based

_on

_the

_number

_of

Compensable Workweeks

for which

the Participating Claimant interned

for

Elite.

The Settlement

Payment

for

each

individual

Participating

_{Claimant shall}

_be

_calculated

_by

_multiplying

_the Participating

Claimant's

Compensable Workweeks,

up

to

a

maximum

of

ten (10)

weeks,

by

the

amount

_of

One Hundred

Seventy

Five Dollars

and

Sixteen Cents

($175.16).

The

maximum

Settlement Payment to any Participating Claimant shall be $1,751.61. Each participating Claimant

shall

receive

a

minimum

_{Settlement Payment calculated based}

_upon

_four

₍₄₎

_Compensable Workweeks, for a

minimum

Settlement Payment to each Participating Claimant

of

$700.64.

71.

Within fifteen (15)

days

after

the Date

of

Preliminary

Approval,

Elite

will

provide verification to

Plaintiff

as to the number

of

Class Members reflected

in

its records

in

the form

of

a

declaration to be furnished

by

Elite.

If

the

final

number

of

Class Members as reflected

in

Elite,s records exceeds

155,

_{the maximum and minimum}

_Settlement

_Payment

_to

_any

participating

Claimant, as described

in

ParagraphT0, shall be reduced on a pro rata

basis.

At

Plaintiffs'

option,

if

the

final

number

of

Class Members as reflected

in

Elite's

_{records exceeds 171, the Parties shall}

have additional discussions regarding the terms

of

the

distribution of

the

Net

Settlement Amount

described in Paragraph 70.

72.

Elite agrees to pay Service Awards

of

a total

of

Twenty Thousand Dollars ($20,000.00), to

be

divided

among

the

Class Representatives,

upon

Class Counsel's application and

the

Court's

approval, pursuant to Paragraphs 59 and 60 of this Agreement. The Class Representatives shall be issued an IRS Form 1099 for any Service Award.

73.

Unclaimed Portion

of

the

Net

Settlement Amount.

Elite

shall

not

be required

to

pay any

amount

of

the

Net

Settlement

Amount that

remains after payment

of

the

Settlement Payments. The "Unclaimed

Amount"

shall be the sum

of

the amount

of

the

Net

Settlement

Amount

less the

total

of

Settlement Payments allocated to Participating Claimants, plus any difference between the amounts requested

by

Class Counsel

for

Attorneys'

Fees and Expenses,

Claims

Administration

Costs, and Service Awards and the amounts awarded

by

the Court

for

such fees, expenses, costs and awards.

Elite

shall, at

all

times, retain custody, control, and exclusive

final

possession

of

the Unclaimed Amount.

a.

In the event that the

total

amount

of

Settlement Payments allocated

to

Participating

Claimants

is

less than

Ninety

Thousand

Dollars

($90,000.00), the

total

amount

of

the Settlement Payments

to

the Participating Claimants shall be adjusted accordingly

to

equal

Ninety

Thousand

Dollars

($90,000.00).

In

that case,

the

Settlement Payment

for

each Participating Claimant shall

be increased

to

include a

pro

rata

share

of

the

adjustment amount,

not

to

exceed an additional

$1,000

per

Participating

_Claimant.

_If

_any

_amount

_of

_the

$90,000 remains unclaimed

after

the additional

pro

rato

_{distribution to Participating claimants,}

that amount shall _{be donated under the}

cy pres doctrine to the _{National Employment Lawyers Association,}

which

is a charity _{selected by}

Plaintiff

_{and Class Counsel.}

b'

The

claims

_{Administrator shall}

_{notify class}

_counsel

_and

Elite,s

counsel

of

the

unclaimed Amount pursuant to paragraph g0 of this Agreement.

74'

Elite _{understands and agrees that}

_it

_{shall be responsible}

for

paying _{the employer,s share}

_of

any applicable payroll taxes, including _{those collected under the authority of}

the Federal Insurance

contributions

_{Act (FICA),}

_{separate and apart}

_from,

and

in

addition

to,

the

Maximum

Settlement

Amount'

Elite shall use funds from the Unclaimed Amount,

if

any, to pay the

FICA

taxes.

75'

The

Total

Settlement

Amount

will

constitute adequate consideration

_{for this}

_Settlement

and

will

be made

in

full

and

final

settlement of:

a.

The Released Claims;

b.

Class Counsel's claim for

Attomeys'

Fees and

Litigation

Expenses;

c.

Service Awards;

d.

Claims Administration _{Costs; and}

e'

Any

other obligation of _{the Parties and/or Class Counsel under this Agreement.}

76'

Receipt

of

a Settlement Payment does not entitle Class Representatives or any participating

Claimant

to

any

additional

compensation

or

_benefits,

_or

_create

_eligibility

_for

_any

such compensation

or

benefits, under

any

of

Elite's

compensation

or

benefit

plans

or

agreements

in

place

_{during the}

_{Class Period,}

_nor

_{will it}

_{entitle the}

_{Class Representatives}

or

any

participating Claimant

_{to, without limitation,}

_{any retirement}

_{benefits,4l0(k)}

_{contributions,}

severance benefits,

deferred compensation

_{benefits, vacation}

_pay,

_or

_holiday

_pay.

_Elite

Settlement Payments _{"compensation" for purposes of determining}

_eligibility

_for,

_{or benefit accrual}

within, an

employee

pension

_{benefit plan, an}

_employee

_welfare

_{benefit plan,}

_or

_other

_plan

sponsored by Elite _{or its predecessors, subsidiaries, or successors.}

77

'

The

_{Settlement Payments}

_{shall be paid}

_according

_to

_Paragraphs

82

and

83

of

this Agreement.

L.

TAX CONSIDERATIONS

78.

For purposes

of

calculating _{applicable taxes, the Parties agree that one}

_third

_{(33 ll3%)}

_of

each Settlement Payment constitutes wages (and each Participating

Claimant

will

be

issued an

IRS Form

W-2 for

such payment

to

her or

him),

and one

third (33

Il3%)

liquidated damages and one

third

interest

(33

ll3%)

(for

which

each Participating Claimant

will

be issued an IRS Form

1099).

Elite

shall

not

be responsible

for

payroll tax

payments

on

any

portion

of

the

Settlement

Consideration

that

is

attributable

to

Attorneys' Fees

and

Litigation

Expenses,

Claims

Administration

Costs, liquidated damages, interest,

or

any Class Representative _{Service Award.} The Parties further understand that the Class Representatives and any Participating Claimant who receives any Settlement Payment pursuant

to

this

Agreement shall be solely responsible

for

any and all tax obligations associated

with

such receipt, except as set forth in this Paragraph.

M. PAYMENT

OF

CLAIMS

79-

As a _{condition of receiving any Settlement Payment under this Agreement, (a) members}

_of

the

NYLL

Class must not

"opt out" of

the Class, must submit a

_Qualifying

Claim Form, and must release the Released Claims; and (b) members of the

FLSA

Class must submit a

_Qualifying

Claim Form, and must release

the

Released Claims. Each Participating

Claimant

shall be entitled

to

a

payment equal

to

the

sum

of

the

Settlement Payment, less the Participating

Claimant's

share

of

taxes and

withholding.

The Settlement Payment shall be determined _{by the Claims Administrator}

in the manner described

in

_{Paragraph 70 (and Paragraph 73,}

_if

_{necessary) of this Agreement.}

80.

Within

ten (10)

days

of

notice

by

the

Claims

Administrator

of

the

Class Members who have made claims and

who

have opted

out

of

the Class

in

accordance

with

paragraph

66(f),

the Claims Administrator

will

notify

Elite's

counsel

ofi

(a) the

Net

Settlement

Amount;

(b) the Total

Settlement

Amount; (c)

the Unclaimed

Amount,

if

any; and

(d)

the

Settlement payments due to each Class Member.

81.

Not

later than

thirty

(30) days

following

the Effective Date,

Elite

shall provide the Claims

Administrator

with

the

Total

Settlement

Amount.

However,

in

the event that the Order on Class Counsel's application

for

Class Representatives'

Attorneys'

Fees and

Litigation

Expenses, Claims

Administration

Costs, and Service

Awards

is not final within thirty (30)

days

of

the

Effective

Date, any amounts payable under such Order as part

of

the

Total

Settlement

Amount

will

be paid

by Elite within thirty (30)

days

after

such

Order

is

deemed

final

and

no

longer

subject

to

any further j udicial reconsideration, review or appeal.

82.

The Claims Administrator shall be

responsible

for mailing

payments

to

the

Settlement Class Members, as

well

as issuing payment of any Service Awards,

Attorneys'

Fees and

Litigation

Expenses, and Claims Administration Costs.

83'

Not

later than

forty

(40) days

following

the Effective Date, the Claims Administrator shall (a) mail to each Settlement Class Member a check

in

the amount calculated pursuant to Paragraph 70 (and Paragraph

13,if

necessary) of this Agreement; and (b) issue to Class Counsel payment

for

Attorneys'

Fees and

Litigation

Expenses, Claims

Administration

Costs, and Service

Awards.

The Claims Administrator shall be responsible

for

making any applicable employee

payroll

deductions

from

the

Settlement

Payments.

Payments

of

Attorneys'

Fees and

Litigation

Expenses, Claims

Administration Costs, and Service Awards shall be

in

a manner to be specified

by

Class Counsel,

without withholding, and reported to the IRS and each respective payee on an IRS

Form 1099. In

order

to

receive

payments

under

this

Paragraph,

Class Counsel, Class

Representatives, and

Participating Claimants

shall provide

to the

Claims Administrator

their

taxpayer identification

number and/or social security number, as applicable.

84.

Any

checks issued to Participating Claimants shall remain negotiable

for

a period of ninety

(90)

days

from

the

date

of mailing.

Any

check issued

to

a

Participating

Claimant that

is

not

negotiated

within

the 90-day period

will

be

void,

and

a

stop payment

will

be placed

on

it.

The

Claims Administrator shall return

all

funds relating to non-negotiated Settlement Payment checks

to Elite

within thirty

(30) days of the expiration of the 90-day

period.

Participating Claimants who

fail

to negotiate their check(s)

in

a

timely

fashion shall,

like

all

Settlement Class Members, remain subject to the terms of the Judgment.

85.

Elite agrees not

to

seek reimbursement

from Plaintiffs

or the Claims Administrator

for

any costs or expenses incurred

by Elite in providing

information to the Claims Administrator

or

Class Counsel that is necessary

to identify

or pay Participating Claimants,

including

any cost associated

with

advising the Claims

Administrator

of

information necessary

for

the Claims Administrator to

make the required

tax

deductions before payments are made

to

Participating Claimants, and to

notify

the appropriate taxing authorities.

N.

RELEASE OF

CLAIMS

86.

Settlement Class Release. The Class Representatives and

the

Settlement Class Members, on behalf of themselves, and each of their heirs, representatives, successors, assigns, and attorneys,

hereby compromise, release, resolve, relinquish, discharge and settle each and

all

of

the Released

Parties

from

each

of

the

Released

Claims

that exist

in

their favor

throush

the

Date

of

Final