IN THE UNITED STATES DISTRICT COURT FOR ... - Cleveland.com

MICHAEL SHAUGHNESSY (“Directors”) — having learned of the alleged non-payment of
wages to InkStop’s employees after September 13, 2009, have desired — well before the
Lawsuit and the Related Lawsuit were filed — to compensate substantially these employees for
their unpaid service to the Company, despite their belief that they have no legal obligation to do
so;
WHEREAS, as of the date of this Agreement, the Named Plaintiffs have incurred
attorneys’ fees and incurred costs in the investigation and prosecution of the Lawsuit and the
Related Lawsuit;
WHEREAS, the Parties and Directors recognize that numerous bona fide disputes would
need to be addressed were the Lawsuit and Related Lawsuit to continue including, without
limitation, disputes concerning the liability of individuals under the FLSA in the circumstances
existing here, the propriety of proceeding in the absence of InkStop which is in bankruptcy,
numerous factual issues impacting the exempt status of the Store Managers and the good faith
nature of Defendants’ actions, and that the resolution of the issues by the Court would have a
substantial impact on the outcome of the Lawsuit and Related Lawsuit;
WHEREAS, the Parties and the Directors desire to settle fully and finally all differences
between them relating to InkStop’s compensation of Named Plaintiffs and all similarly-situated
individuals, including, but not necessarily limited to, any differences embodied in or related to
the Lawsuit and the Related Lawsuit;
WHEREAS, the Parties and the Directors, with the assistance of the Wage & Hour office
of the Department of Labor in Cleveland, Ohio, have identified the salaried and hourly
employees employed by InkStop after September 13, 2009 who were allegedly not paid for
some or all of their work after that date (except for the five InkStop officers who were members
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