Case 1:20-cv-00761-LY Document 39 Filed 04/12/22 Page 1

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

JULIO LOPEZ and MICHAEL OROS, On Behalf of Themselves and All Others Similarly Situated,

Plaintiffs,

v. VOLUSION, LLC, Defendant.

Case No.: 1:20-cv-00761-LY

PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS

ACTION SETTLEMENT, PRELIMINARY CERTIFICATION,

AND APPROVAL OF NOTICE PLAN

Case 1:20-cv-00761-LY Document 39 Filed 04/12/22 Page 1 of 28

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TABLE OF CONTENTS

I. INTRODUCTION .................................................................................................................................... 1

II. FACTUAL AND PROCEDURAL BACKGROUND ....................................................................... 2

III. THE TERMS OF THE PROPOSED SETTLEMENT ..................................................................... 4

A. Certification of the Class ..................................................................................................................... 4

B. Relief for the Class ............................................................................................................................... 4

C. Settlement Release ................................................................................................................................ 5

D. Attorneys’ Fees, Costs, and Service Awards .................................................................................... 5

E. Notice Program .................................................................................................................................... 6

F. Opt-Out and Objection Deadlines and Procedures ....................................................................... 6

G. Claims Administration ......................................................................................................................... 7

IV. ARGUMENT .............................................................................................................................................. 7

A. Legal Standard ...................................................................................................................................... 7

B. The Proposed Settlement is Fair, Adequate, and Reasonable ....................................................... 9

1. Plaintiffs and Class Counsel Have Adequately Represented the Class .................................. 9

2. The Settlement Is the Result of Arm’s-Length Negotiations and Without

Fraud or Collusion ...................................................................................................................... 10

3. The Settlement is Favorable Given the Complexity, Expense, and Likely

Duration of the Litigation .......................................................................................................... 10

4. The State of Litigation and the Available Discovery.............................................................. 13

5. The Settlement Terms Represent a Highly Favorable Compromise that Appropriately

Balances the Merits of Plaintiffs’ Claims and the Likelihood of Success with the

Attendant Risk ............................................................................................................................. 13


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6. The Settlement Is in the Class’s Best Interests ....................................................................... 15

7. The Settlement Treats Class Members Equitably Relative to Each Other ......................... 15

C. The Court Should Preliminarily Certify the Class ......................................................................... 16

1. The Class Meets the Requirements of Federal Rule of Civil Procedure 23(a) ................... 16

2. The Class Meets the Demands of Rule 23(b)(3). .................................................................... 18

3. The Court Should Approve the Proposed Class Notice Program. ...................................... 19

V. CONCLUSION. ....................................................................................................................................... 20


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TABLE OF AUTHORITIES

Cases Page(s)

Abboud v. Agentra, LLC, No. 3:19-CV-00120-X, 2020 WL 5526557 (N.D. Tex. Sept. 14, 2020) ........................................... 19

Amchem Prods. v. Windsor, 521 U.S. 591 (1997) .......................................................................................................................... 16, 18

Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455 (2013) ................................................................................................................................. 18

Assoc. for Disabled Am., Inc. v. Amoco Oil Co., 211 F.R.D. 457 (S.D. Fla. 2002) ...................................................................................................... 10-11

Ayers v. Thompson, 358 F.3d 356 (5th Cir. 2004) ...................................................................................................... 11, 12, 13

Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) ........................................................................................................... 8, 11

DeHoyos v. Allstate Corp., 240 F.R.D. 269 (W.D. Tex. 2007) .................................................................................................. 13, 14

Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) ............................................................................................................................ 6, 19

Gen. Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318 (1980) .................................................................................................................................. 16

Hays v. Eaton Grp Attys., LLC, No. 17-88-JWD-RLB, 2019 U.S. Dist. LEXIS 17029 .......................................................................... 9

In re Corrugated Container Antitrust Litig., 659 F.2d 1322 (5th Cir. 1981) ................................................................................................................ 14

In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig., 851 F. Supp. 2d 1040 (S.D. Tex. 2012) ......................................................................... 9, 10, 13, 17, 18

In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, 910 F. Supp. 2d 891 (E.D. La. 2012) aff’d sub nom In re Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014) .............................................................................................................. 8, 16

In re Talbert, 347 B.R. 804 (E.D. La. 2005) .................................................................................................................. 16

In re Yahoo! Inc. Customer Data Sec. Breach Litig., No. 16-MD-02752-LHK, 2020 WL 4212811 (N.D. Cal. July 22, 2020) .................................. 17, 18

James v. City of Dallas, 254 F.3d 551 (5th Cir. 2001) .................................................................................................................. 17


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Klein v. O’Neal, Inc., 705 F. Supp. 2d 632 (N.D. Tex. 2010) ........................................................................... 8, 9, 10, 11, 15

Langbecker v. Elec. Data Sys. Corp., 476 F.3d 299 (5th Cir. 2007) .................................................................................................................. 17

Manchaca v. Chater, 927 F. Supp. 962 (E.D. Tex. 1996) ......................................................................................................... 9

McGlenn v. Driveline Retail Merch., Inc., No. 18-CV-2097, 2021 WL 165121 (C.D. Ill. Jan. 19, 2021) ............................................................ 14

Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620 (5th Cir. 1999) .................................................................................................................. 16

Odonnell v. Harris Cnty., No. H-16-1414, 2019 WL 4224040 (S.D. Tex. Sep. 5, 2019) ................................................. 8, 16, 20

Parker v. Anderson, 667 F.2d 1204 (5th Cir. 1982) ................................................................................................................ 13

Pettway v. Am. Cast Iron Pipe Co., 576 F.2d 1157 (5th Cir. 1978) .................................................................................................................. 8

Purdie v. Ace Cash Express, Inc., No. 301CV1754L, 2003 WL 22976611 (N.D. Tex. Dec. 11, 2003) ................................................... 8

Reed v. General Motors Corp., 703 2d 170 (5th Cir. 1983) ................................................................................................................. passim

San Antonio Hispanic Police Officers’ Org., Inc. v. City of San Antonio, 188 F.R.D. 433 (W.D. Tex. 1999) ......................................................................................................... 13

Sosna v. Iowa, 419 U.S. 393 (1975) ................................................................................................................................. 17

Stott v. Capital Fin. Servs., Inc., 277 F.R.D. 316 (N.D. Tex. 2011) .......................................................................................................... 15

Stukenberg v. Perry, 675 F.3d 832 (5th Cir. 2012) ................................................................................................................... 16

Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632.ll (5th Cir. 2012) .................................................................................................................. 8

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) ................................................................................................................................. 16

Rules

Federal Rule of Civil Procedure 23 ....................................................................................................... passim


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Statutes

11 U.S.C. §362 .................................................................................................................................................. 3

Other

Manual for Complex Litigation, § 21.632 .......................................................................................................... 16

McLaughlin on Class Actions § 6:7 (15th ed. 2018) ............................................................................................ 8

Newberg on Class Actions § 13:10 (5th ed.) ....................................................................................................... 7


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I. INTRODUCTION

Plaintiffs Julio Lopez and Michael Oros, on behalf of themselves and all others similarly

situated, with the consent of Defendant Volusion, LLC, respectfully request entry of an order granting

preliminary approval of the class action settlement (“Settlement”) set forth in the parties’ Settlement

Agreement,1 certifying the Class, appointing Class Counsel, appointing Plaintiffs as Class

Representatives, providing for issuance of Notice to the Class, and scheduling a date for the Final

Approval Hearing. Plaintiffs’ claims arise from the Data Security Incident, an alleged data breach

involving malware placed on Volusion’s e-commerce platform between on or about September 7,

2019 and October 10, 2019, which allegedly compromised the personally identifiable information

(“PII”) of approximately 502,000 individuals who provided their PII to merchants to make purchases

through online stores using Volusion’s payment software.

The proposed Settlement is the result of arm’s-length negotiations with the assistance of

mediator Bruce A. Friedman, Esq. of JAMS and provides substantial and meaningful relief to the

Class. If approved, Volusion and its insurance company, Hartford Fire Insurance Company, will be

obligated to pay all valid claims submitted by Class Members, subject to an agreed aggregate cap or

maximum obligation of Hartford’s remaining policy limits, which is estimated to be approximately

$4,300,000.00 at the time of the Settlement Agreement (less additional defense expenses reasonably

incurred in connection with the documentation, approval, and administration of the Settlement

Agreement), Costs of Administration, attorneys’ fees and costs, and Service Awards. The Settlement

will resolve all claims that Plaintiffs and the Class have against the Released Parties arising from the

Data Security Incident. Class Members who submit a valid Claim Form and supporting documentation

will be entitled to a cash payment of up to $1,500.00 per person, including compensation for time

spent responding to the Data Security Incident (up to 3 hours at $20.00/hour). The proposed

Settlement is fair and well within the range of preliminary approval. See Joint Declaration of Class

Counsel, ¶ 16, attached hereto as Exhibit 2 (“Decl.”). By settling now, the Class can take advantage

1 Capitalized terms shall have the same meaning as those assigned to them in the Settlement Agreement, which is attached hereto as Exhibit 1 and cited herein as “Agreement.”


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of remedies that would be unavailable or worth substantially less by the time of a litigated final

judgment. See id. ¶ 23. And that, of course, assumes Plaintiffs could certify their claims for class

treatment and prevail on the merits with respect to such claims, neither of which is certain. Plaintiffs

respectfully request that the Court preliminarily approve the Settlement.

II. FACTUAL AND PROCEDURAL BACKGROUND

Volusion is a technology company that provides “the infrastructure behind some of the most

successful ecommerce stores online.” See Class Action Complaint (“Compl.”), ECF No. 1 ¶ 1. It offers

an “all-in-one platform” for thousands of businesses to set up e-commerce shops, including by

offering services that allow businesses to accept credit card payments. Id. Between September 7, 2019

and October 10, 2019, unauthorized actors gained access to Volusion’s e-commerce platform by

inserting malicious code into a Volusion JavaScript library, including a “payment card skimmer” that

accessed and acquired PII of consumers making purchases through Volusion’s e-commerce platform,

including Plaintiffs’. Id. ¶¶ 2, 6. Consumers who made purchases through the online stores using

Volusion’s compromised payment software during this time period had their card details and other

personal information stolen and passed to an unauthorized third party. Id. ¶ 3. The PII stolen in the

Data Security Incident (referred to in the Complaint as the “Data Breach”) included names, addresses,

phone numbers, email addresses, credit card numbers, CVVs, and expiration dates. Id. Ex. A.

Although Volusion discovered the Data Security Incident on or about October 8, 2019, it was not

until April 21, 2020 that Volusion distributed a Notice of Data Incident to its customers, including

Plaintiffs. See id. Plaintiffs allege Volusion is liable for the Data Security Incident because it failed to:

(a) exercise reasonable care and implement and maintain adequate security systems, protocols, and

practices; (b) detect the breach while it was ongoing; and (c) timely notify Plaintiffs and Class members

of the Data Security Incident. See, e.g., id. ¶ 98. Plaintiffs and Class Members have allegedly suffered

economic and noneconomic injuries. See, e.g., id. ¶¶ 59-61, 68, 71, 100.

Plaintiff Lopez filed a Class Action Complaint in the United States District Court for the

Southern District of Florida on April 24, 2020 (the “S.D. Fla. Action”), asserting claims against

Volusion related to the Data Security Incident. On June 18, 2020, Volusion filed a Motion to Dismiss


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for Lack of Jurisdiction. On July 16, 2020, Plaintiff Lopez filed a Notice of Voluntary Dismissal of

the S.D. Fla. Action, without prejudice, and, together with Plaintiff Oros, filed a Class Action

Complaint in this Court on July 17, 2020, asserting the same claims alleged in the S.D. Fla. Action, as

well as claims for violations of certain Illinois statutory provisions. See generally Compl.

On July 27, 2020 Volusion filed a Voluntary Chapter 11 Petition for Non-Individuals

Bankruptcy, whereupon an automatic stay pursuant to 11 U.S.C. §362(a) went into place. See ECF No.

16. On August 10, 2020, this Court entered its Order staying the Litigation. See ECF No. 17. On

November 20, 2020 the Bankruptcy Court confirmed Debtors’ Combined Plan of Reorganization and

Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code.2 See Order,

In re Volusion LLC, No. 5:20-BK-50082 (ECF No. 128) (attached hereto as Exhibit 3). The Effective

Date of the Plan occurred on January 19, 2021. On June 2, 2021, the Bankruptcy Court entered its

Order allowing Plaintiffs to pursue the Litigation provided that any recovery awarded shall be limited

to any available insurance proceeds covering the Reorganized Debtor (i.e., Volusion).3 See id. (ECF

No. 223). On August 18, 2021, this Court lifted the stay in the Litigation, and Volusion was ordered

to file an answer to Plaintiffs’ Class Action Complaint on or before September 13, 2021. See ECF 26.

On September 13, 2021, Volusion filed its Motion to Dismiss. See ECF No. 27. Plaintiffs filed their

Response in Opposition to the Motion to Dismiss on October 11, 2021, and Volusion filed its Reply

on November 11, 2021. See ECF Nos. 31 and 32.

While the Motion to Dismiss remained pending, on February 7, 2022, the Parties mediated

with experienced privacy litigation class action mediator Bruce A. Friedman, Esq. of JAMS. In

advance, the Parties submitted lengthy mediation briefs, and Volusion provided settlement discovery

to Plaintiffs regarding the limited insurance funds it has to resolve this Litigation. Decl. ¶ 10. Mediation

2 The Court ordered that “The Plaintiffs may pursue the Lawsuit individually and on behalf of a putative class in the United States District Court for the Western District of Texas to final judgment, provided that any recovery awarded to the Plaintiffs, individually and/or on behalf of any class, on account of the Claim or the Complaint or any matter related thereto, shall be limited to any available proceeds from the Policy and the Reorganized Debtor shall have no liability with respect to same.” See Ex. 3. 3 Volusion’s insurance policy from Hartford covers certain cyber risks.


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was not successful that day, but Mr. Friedman and counsel continued communicating, resulting in the

Parties’ agreement to the material Settlement terms. Id. ¶ 12.

III. THE TERMS OF THE PROPOSED SETTLEMENT

The Settlement fully and finally resolves the claims and disputes between the Parties. The

Settlement Agreement defines the Class, describes the Parties’ agreed-upon exchange of consideration,

and proposes a Notice Plan and Claim administration procedures.

A. Certification of the Class

The Parties agree to certification of a nationwide Class for settlement purposes as follows:

[A]ll persons to whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020, advising that on or about October 8, 2019, Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform. Excluded from the Class is any judge presiding over this matter and any members of their first-degree relatives, judicial staff, the officers and directors of Volusion and its customers who were impacted by the Data Security Incident, Class Counsel and their first-degree relatives, and persons who timely and validly request exclusion from the Class.

Agreement ¶ II.H.

B. Relief for the Class

The Settlement Agreement provides significant monetary relief in the form of Settlement

Benefits. Except as otherwise provided in the Settlement Agreement, all Settlement Benefits shall be

paid by Hartford, Volusion’s insurer. Agreement ¶ VI.A. Hartford and Volusion’s obligation to pay is

subject to an agreed aggregate cap or maximum obligation of Hartford’s remaining policy limits

(approximately $4,300,000.00 at the time of the Settlement Agreement) less additional defense

expenses reasonably incurred in connection with the documentation, approval, and administration of

the Settlement Agreement. Id. ¶¶ VI.B-C. Hartford shall pay to the Settlement Administrator an

amount sufficient to pay for and fund: Settlement Benefits, the Costs of Administration, Service

Awards, and Class Counsel’s reasonable attorneys’ fees and costs. Id. ¶ VI.A. Each Class Member

filing a valid Claim will be eligible for the following Settlement Benefits: (1) reimbursement for

documented out-of-pocket losses up to a maximum of $1,500.00 per person, upon submission of a


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Claim Form and supporting documentation, including out of pocket expenses incurred as a result of

the Data Security Incident and fees for credit reports, credit monitoring, or other identity theft

insurance product purchased between the date of Volusion’s Notice of Data Incident and the date of

the Claims Deadline; and (2) Compensation for time spent responding to the Data Security Incident

(up to three 3 hours at $20.00/hour), which will be included within the $1,500 per-person limit and

will not require supporting documentation. Id. ¶¶ III.A.1-3. In the highly unlikely event the aggregate

amount of Hartford’s and Volusion’s obligation to pay and fund the Settlement as set forth herein

would otherwise exceed Hartford’s remaining policy limits, less additional defense expenses

reasonably incurred in connection with the documentation, approval, and administration of this

Settlement Agreement, then Settlement Benefits shall be subject to a pro rata reduction, if necessary.

Id. ¶ VII.A. Any remaining funds after distribution will be paid to a Cy Pres Recipient approved by

the Court. Id. ¶ VIII.B. The Parties propose Electronic Frontier Foundation. Id. ¶ II.P.

C. Settlement Release

In consideration for the monetary and other relief afforded in the Settlement Agreement,

upon the Effective Date, Plaintiffs and Class members who do not submit a timely Request for

Exclusion will be deemed to have released Volusion and Released Parties from any and all claims

actually alleged in the Litigation and all potential claims, whether known or unknown, reasonably

arising out of the same set of operative facts, under the laws of any jurisdiction, including federal law,

state law, and common law, whether at law or equity. Id. ¶¶ IX.G, XIV.A, XIV.E.

D. Attorneys’ Fees, Costs, and Service Awards

At least 30 days before the Opt-Out and Objection Deadlines, Class Counsel will file a fee

application for an award of attorneys’ fees and costs not to exceed $450,000.00 and a Service Award

of $2,500.00 to each Class Representative (for a total of $5,000.00). See id. ¶¶ IV.A, V.A. The Service

Award shall be separate and apart from any other sums agreed under the Settlement Agreement. Id. ¶

IV.A. No decision by the Court, or modification or reversal or appeal of any decision by the Court,

concerning the amount of attorneys’ fees and costs or the Service Awards shall constitute grounds for

termination of the Settlement Agreement. Id. ¶¶ IV.B, V.A.


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E. Notice Program

Pursuant to Federal Rule of Civil Procedure 23(e), this Court must “direct notice in a

reasonable manner to all class members who would be bound” by the proposed settlement. Fed. R.

Civ. P. 23(e)(1). Notice of a proposed settlement to class members must be the “best notice

practicable,” Fed. R. Civ. P. 23(c)(2)(B), which means “individual notice to all members who can be

identified through reasonable effort.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173 (1974). The

Settlement Agreement proposes a notice and administration process that best ensures that all Class

Members will be informed of the pending settlement and, if it is approved, will receive their payment

for approved Claims electronically or by award check sent by U.S. mail if a Class Member cannot

receive funds electronically. See Agreement ¶¶ X.A, VIII. Not later than 10 calendar days after the

Court enters the Preliminary Approval Order, Volusion will provide to the Settlement Administrator

a list of all persons to whom Volusion sent its Notice of Data Incident (i.e., the Class Members). Id. ¶

IX.C. Not later than 14 calendar days after receiving this list, the Settlement Administrator4 will

commence sending Class Notice to Class Members, i.e., the Class Notice Date. Id. ¶¶ II.K, IX.D. The

Settlement Administrator shall send Email Notice to all Class Members for whom Volusion provided

an email address, and it shall disseminate Postcard Notice via First Class Mail to all Class members

for whom the Settlement Administrator does not have a valid email address. Id. ¶¶ X.A.1-2. The

Settlement Administrator will also establish a dedicated settlement website that includes the Settlement

Agreement and other important Litigation documents; as well as a toll-free telephone number, e-mail

address, and mailing address for Class Members to contact the Settlement Administrator directly. Id.

¶ XI.C.2.

F. Opt-Out and Objection Deadlines and Procedures

The Settlement Agreement provides for opt-out procedures. See id. ¶ XII. Any Class Member

may make a Request for Exclusion by mailing or delivering such request in writing to the Settlement

Administrator by the Opt-Out Deadline. Id. The Settlement Agreement also provides for objection

4 The Declaration of Justin R. Hughes of Kroll Settlement Administration LLC (“Kroll”), the proposed Settlement Administrator, is attached hereto as Exhibit 4.


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procedures. See id. ¶ XIII. Any Class member who wishes to be heard orally at the Hearing, or who

wishes for any objection to be considered, may file a written notice of objection by the Objection

Deadline. Id. The Notice shall advise Class members of the foregoing. Id.

G. Claims Administration

The Settlement Agreement requires the Settlement Administrator to administer and calculate

the Class Members’ Claims. See id. ¶ XI. The Settlement Administrator will carefully review and decide

whether to approve all Claims received by the Claims Deadline (90 days after the Class Notice Date).

The Settlement Administrator shall have sole discretion to review for eligibility, completeness, and

plausibility whether the Claim requirements have been met. Id. ¶ III.B.1. If the Settlement

Administrator determines a Claim is deficient in whole or part, the Settlement Administrator shall

contact the Class Member and seek additional documentation or information to support the Claim.

Id. ¶ III.B.2. The Settlement Administrator shall have the sole discretion and authority to determine

whether the prerequisites have been met in order to award payments, but may consult with Class

Counsel and Defense Counsel in making individual determinations. Id. ¶ III.B.3. The Settlement

Administrator shall distribute Settlement Benefits for approved Claims not later than 30 business days

after the Settlement’s Effective Date. Id. ¶ XI.C.14.

IV. ARGUMENT

Before the Settlement can be approved, Class Members who will be bound by its terms must

be notified and given an opportunity to object or otherwise react to the proposed Settlement. Fed. R.

Civ. P. 23(e). This process takes time and can be expensive, so it has become customary for courts to

first conduct a preliminary fairness review. See Newberg on Class Actions § 13:10 (5th ed.). Here,

preliminary approval of the Settlement is warranted for the reasons set forth below.

A. Legal Standard

Under the revised Rule 23(e), the question for preliminary approval is whether “the court will

likely be able to . . . approve the proposal under Rule 23(e)(2),” which provision governs final approval.

A proposed settlement “will be preliminarily approved unless there are obvious defects in the notice

or other technical flaws, or the settlement is outside the range of reasonableness or appears to be the


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product of collusion, rather than arms-length negotiation.” 2 McLaughlin on Class Actions § 6:7 (15th

ed. 2018). The Rule 23(e)(2) standard for final approval of a proposed class action settlement remains

whether it is “fair, reasonable and adequate,” which requires the Court to consider whether “(A) the

class representatives and class counsel have adequately represented the class”; “(B) the proposal was

negotiated at arm’s length”; (C) “the relief provided for the class is adequate”; and “(D) the proposal

treats class members equitably relative to each other.” Common-law criteria preceded the Rule 23

factors. In Reed v. General Motors Corp., 703 2d 170, 172 (5th Cir. 1983), the Fifth Circuit laid out six

factors for courts to consider in determining the fairness, reasonableness, and adequacy of a proposed

class settlement:

(1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of the plaintiffs’ success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and absent class members.

Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632, 639 n . l l (5th Cir. 2012) (quoting Reed, 703

F.2d at 172). “Because the Rule 23 and case-law factors overlap, courts in this circuit often combine

them in analyzing class settlements.” Odonnell v. Harris Cnty., No. H-16-1414, 2019 WL 4224040, at *8

(S.D. Tex. Sep. 5, 2019) (citations omitted). “When considering [Rule 23(e)(2)] factors, the court

should keep in mind the strong presumption in favor of finding a settlement fair.” Purdie v. Ace Cash

Express, Inc., No. 301CV1754L, 2003 WL 22976611, at *4 (N.D. Tex. Dec. 11, 2003); see also In re Oil

Spill by Oil Rig Deepwater Horizon in Gulf of Mexico, on Apr. 20, 2010, 910 F. Supp. 2d 891, 930-31 (E.D.

La. 2012) (“Because the public interest strongly favors the voluntary settlement of class actions, there

is a strong presumption in favor of finding the settlement fair, reasonable, and adequate.), aff’d sub nom

In re Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014); Klein v. O’Neal, Inc., 705 F. Supp. 2d 632, 650

(N.D. Tex. 2010) (“strong presumption that an arms-length class action settlement is fair—especially

when doing so will result in significant economies of judicial resources”).

Because “compromise is the essence of a settlement,” “the settlement need not accord the

plaintiff class every benefit that might have been gained after full trial.” Pettway v. Am. Cast Iron Pipe

Co., 576 F.2d 1157, 1214 (5th Cir. 1978); see also Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977).


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Accordingly, “absent fraud, collusion, or the like, [courts] should be hesitant to substitute [their] own

judgment for that of counsel.” Klein, 705 F. Supp. 2d at 649. Moreover, “[w]here, as here, the motion

is for preliminary, and not final, approval, the standards are less stringent.” Hays v. Eaton Grp Attys.,

LLC, No. 17-88-JWD-RLB, 2019 U.S. Dist. LEXIS 17029, at *20 (citations and internal quotation

marks omitted). “If the proposed settlement discloses no reason to doubt its fairness, has no obvious

deficiencies, does not improperly grant preferential treatment to class representatives or segments of

the class, does not grant excessive compensation to attorneys, and appears to fall within the range of

possible approval, the court should grant preliminary approval.” Id. (citations omitted).

B. The Proposed Settlement is Fair, Adequate, and Reasonable

For the following reasons, the Court should find it will likely be able to approve the proposed

Settlement under Rule 23(e)(2) and certify the Class. Fed. R. Civ. P. 23(e)(1)(B).

1. Plaintiffs and Class Counsel Have Adequately Represented the Class.

Plaintiffs here have no conflicts of interest with other Class Members, are subject to no unique

defenses, and they and their counsel have vigorously prosecuted and continue to vigorously prosecute

this case on behalf of the Class. See Decl. ¶ 30. Further, Class Counsel are experienced in the litigation

and settlement of class actions, including data privacy cases. Id. ¶ 21; In re Heartland Payment Sys., Inc.

Customer Data Sec. Breach Litig. (“Heartland”), 851 F. Supp. 2d 1040, 1055 (S.D. Tex. 2012) (adequacy

satisfied where counsel had “extensive experience representing consumers, and other plaintiff classes,

in class-action litigation,” including “in similar data-breach cases”). Class Counsel also thoroughly

investigated the facts before and during the course of the Litigation. Decl. ¶ 7. This investigation

allowed Class Counsel to better understand the key issues in negotiating the Settlement, i.e., they had

a “full understanding of the legal and factual issues surrounding this case.” Manchaca v. Chater, 927 F.

Supp. 962, 967 (E.D. Tex. 1996); Decl. ¶ 11. Having sufficiently investigated the facts and given the

risks of no recovery at all, Class Counsel and Plaintiffs settled this Litigation on a favorable basis

without unduly prolonging it and without the expense and risk of a trial. They have adequately

represented the Class under Rule 23(e)(2)(A).


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2. The Settlement Is the Result of Arm’s-Length Negotiations and Without Fraud or Collusion.

The Settlement should be approved under Rule 23(e)(2)(B) and the first Reed factor. Before

commencing litigation, Class Counsel investigated the potential claims against Volusion, interviewed

potential plaintiffs, and gathered information about the Data Security Incident and its potential impact

on consumers. Decl. ¶ 7. Class Counsel’s appreciation of the merits of this case prior to settlement

allowed them to engage in vigorous, arms-length negotiations with Volusion. See Heartland, 851 F.

Supp. 2d at 1064 (approving settlement where parties showed “they possessed sufficient information

to gauge the strengths and weaknesses of the claims and defenses” where only informal discovery was

taken and case settled at an early stage). The parties also engaged in extensive arm’s-length negotiations

overseen by an experienced mediator. Before mediation, Volusion provided information to Class

Counsel about the limited resources it had to resolve this action. Decl. ¶ 10. The parties also briefed

a heavily contested Motion to Dismiss and submitted lengthy mediation briefs. Id. ¶¶ 10-11. The

mediation did not result in a settlement that first day; but with Mr. Friedman’s assistance, the Parties

ultimately agreed to the material Settlement terms. Id. ¶ 12.

“The Court may presume that no fraud or collusion occurred between counsel, in the absence

of any evidence to the contrary.” Klein, 705 F. Supp. 2d at 651 (citation omitted). Here, not only is the

Settlement the result of arm’s-length negotiations, but there were no discussions about attorneys’ fees

and Service Awards until after an agreement regarding the class benefits was reached. Decl. ¶ 27. Thus,

there is no threat of fraud or collusion affecting the fairness of the settlement negotiations. See

Heartland, 851 F. Supp. 2d at 1064 (“[T]he parties negotiated and agreed to the proposed settlement

before reaching the issue of attorneys’ fees. . . . This factor supports approval of the settlement.”).

Given the arm’s-length negotiations and lack of evidence of fraud or collusion, the Settlement is fair,

reasonable, and adequate under Rule 23(e)(2)(B) and the first Reed factor.

3. The Settlement is Favorable Given the Complexity, Expense, and Likely Duration of the Litigation.

There exists “an overriding public interest in favor of settlement, particularly in class actions

that have the well-deserved reputation as being most complex.” Assoc. for Disabled Am., Inc. v. Amoco


000029/01388007_1 11

Oil Co., 211 F.R.D. 457, 466 (S.D. Fla. 2002) (citing Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.

1977)). “When the prospect of ongoing litigation threatens to impose high costs of time and money

on the parties, the reasonableness of approving a mutually-agreeable settlement is strengthened.” Klein,

705 F. Supp. 2d at 651 (citing Ayers v. Thompson, 358 F.3d 356, 369 (5th Cir. 2004)). Although this case

was settled while a motion to dismiss was pending, the parties engaged in lengthy litigation to reach

this point; specifically, they briefed and negotiated hotly contested issues before the Southern District

of Florida, the Southern District of Texas (Bankruptcy), and this Court. Id. ¶ 15.

By negotiating a Settlement at this early stage, the parties have ensured that Class Members

will receive the substantial benefits described above while avoiding the risks and potential pitfalls of

prolonged litigation. Id. ¶ 23. While confident in the strength of their claims, Plaintiffs and Class

Counsel also recognize the risks inherent in litigation of a complex data breach case. Id. ¶ 25. Indeed,

it was this pragmatism and cognition of litigation risks that led Plaintiffs and Class Counsel to agree

to cap the potential recovery while still ensuring that Plaintiffs’ and the Class’s claims would be

litigated. Id. The negotiations with Volusion’s bankruptcy counsel to avoid the risks of costly litigation

in the bankruptcy court depleting the insurance policy of a bankrupt defendant, as well as the risk of

having Plaintiffs’ claims disallowed entirely in bankruptcy, resulted in the parties’ agreement to

continue litigating the claims’ merits in this Court, provided that Plaintiffs’ total available recovery be

limited to the amount remaining on Volusion’s applicable insurance policy. Id.

The risks, expense, complexity, and likely duration of further litigation support preliminary

approval of the Settlement. Id. ¶ 23. Should litigation continue, Plaintiffs’ claims could be dismissed

or narrowed at the motion to dismiss stage, summary judgment, at trial, or on a subsequent appeal. Id.

¶ 25. Plaintiffs would also risk denial of class certification or the exclusion of key expert testimony. Id.

Plaintiffs recognize each risk, by itself, could impede the success of their claims at trial and in an

eventual appeal—which would result in zero recovery for the Class. Id. Even if they prevailed at trial,

any recovery could be delayed for years by appeals. Id. It is also possible, in fact, likely, any non-

negotiated award at trial might never be recovered by Plaintiffs due to collectability issues. Id. As

discussed above, the Bankruptcy Court confirmed Volusion’s Combined Plan of Reorganization and


000029/01388007_1 12

Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code, see Ex. 3,

and subsequently ordered that this Litigation may proceed but any recovery is “limited to any available

proceeds from the Policy and the Reorganized Debtor shall have no liability with respect to same.”

The Settlement provides immediate and substantial benefits to approximately 502,000 Class

Members—similar to the relief and benefits obtained in other data breach class actions. See, e.g.,

Settlement Agreement, Bahnmaier v. Wichita State University, No. 2:20-cv-02246-JAR (D. Kan.) (ECF

No. 33) (claims-made settlement capped at $300 per class member for out-of-pocket losses, including

up to 3 hours of lost time at $20 per hour, for class of 443,000 whose names, email addresses, dates

of birth, and Social Security numbers were compromised); id. at ECF No. 43 (granting final approval);

Settlement Agreement, Gordon v. Chipotle Mexican Grill, Inc., No. 1:17-cv-01415-CMA-SKC (D. Col.)

(ECF No. 102-1) (claims-made settlement capped at $250 per class member for ordinary out-of-

pocket losses (and up to $10,000 for certain defined, unreimbursed “extraordinary losses”), including

up to 4 hours of lost time at $20 per hour, for class of approximately 10 million affected by payment

card data breach); id. at ECF No. 128 (granting final approval); Final Approval Order, In re Banner

Health Data Breach Litig., No. 2:16-cv-02696-PHX, ECF No. 198 (D. Az.) (claims-made settlement

capped at $6 million after 3 years of litigation where breach compromised names, Social Security

numbers, and PHI of approximately 2.9 people).

If the Settlement is not approved, the parties will likely need to litigate through multiple

dispositive motions, a motion for class certification, a potential motion to decertify the class, and

multiple Daubert motions, among other things, which would likely take years to resolve and involve

expensive expert discovery. Decl. ¶ 23. Yet there is no guarantee lengthy litigation and expensive

discovery would lead to greater benefits for Class Members. Id. Instead, there would be multiple

inflection points at which the Class’s claims could be narrowed or dismissed. Id. Moreover, the parties

will bear the cost of this litigation if it continues. Id. An early resolution, before both sides spend

significant sums on litigation costs, is in the best interest of the Class. Id. In short, “settling now avoids

the risks and burdens of potentially protracted litigation.” Ayers, 358 F.3d at 369. Thus, the Settlement

should be preliminarily approved under Rule 23(e)(2)(C)(i) and the second Reed factor.


000029/01388007_1 13

4. The State of Litigation and the Available Discovery.

Under the third Reed factor, the key issue is whether “the parties and the district court possess

ample information with which to evaluate the merits of the competing positions.” Heartland, 851 F.

Supp. 2d at 1064 (quoting Ayers, 358 F.3d at 369). “A settlement can be approved under this factor

even if the parties have not conducted much formal discovery.” Id. (citations omitted); see also San

Antonio Hispanic Police Officers’ Org., Inc. v. City of San Antonio, 188 F.R.D. 433, 459 (W.D. Tex. 1999)

(the “[s]ufficiency of information does not depend on the amount of formal discovery which has been

taken because other sources of information may be available”).

Here, prior to filing the case, Class Counsel investigated the Data Security Incident, as

confirmed by the extensive public sources cited in the Complaint. Decl. ¶ 7. This allowed Class

Counsel to determine the nature of the Data Security Incident, its perpetrator, the type of information

compromised, and the number of putative Class Members. Id. Drawing on their previous experience

in similar data-breach class actions, Class Counsel were able to determine the Settlement’s adequacy

in relation to the probability of success on the merits were this litigation to continue. See id. ¶ 22.

Because the parties “possess ample information with which to evaluate the merits of the competing

positions,” Ayers, 358 F.3d at 369, this factor also favors preliminary approval of the proposed

settlement. See Reed, 703 F.2d at 172.

5. The Settlement Terms Represent a Highly Favorable Compromise that Appropriately Balances the Merits of Plaintiffs’ Claims and the Likelihood of Success with the Attendant Risks.

When evaluating a proposed class action settlement, “the most important factor is the [fourth

Reed factor,] probability of plaintiffs’ success on the merits.” Parker v. Anderson, 667 F.2d 1204, 1209

(5th Cir. 1982). “[T]he Court must compare the terms of the settlement with the rewards the class

would have been likely to receive following a successful trial.” DeHoyos v. Allstate Corp., 240 F.R.D.

269, 287 (W.D. Tex. 2007) (citing Reed, 703 F.2d at 172). At the same time, a district court “must not

try the case in the settlement hearings because the very purpose of the compromise is to avoid the

delay and expense of such a trial.” Reed, 703 F.2d at 172 (internal quotation marks and alteration


000029/01388007_1 14

omitted). This factor favors approval of the settlement when the class’s likelihood of success on the

merits is questionable. See In re Corrugated Container Antitrust Litig., 659 F.2d 1322, 1326-27 (5th Cir.

1981) (affirming finding that this factor favored approving settlement when class faced major obstacles

in establishing proof of liability and damages); DeHoyos, 240 F.R.D. at 290 (“Because the laws of

numerous states may be relevant to individual class member claims, plaintiffs would apparently face a

further significant challenge to certifying the class outside the settlement context.”). Similarly, the fifth

Reed factor concerns “whether the range of possible recovery or the benefit of the settlement to

plaintiffs outweighs the risks of proceeding through litigation.” DeHoyos, 240 F.R.D. at 290-91. The

fourth and fifth Reed factors weigh in favor of preliminary approval.

First, the Settlement terms approximate the rewards the Class likely would have received

following a successful trial. Decl. ¶ 16. As described above, valid Class Member claims are eligible to

receive up to $1,500.00, subject to a pro rata reduction, if necessary. See Section III.B, supra. These

Settlement Benefits represent a highly favorable compromise that balances the merits of Plaintiffs’

claims and the likelihood of succeeding at trial and on appeal with the attendant risks. Decl. ¶ 26.

Though Plaintiffs and Class Counsel are confident they ultimately would have been able to prove their

claims, they also understand the claims could be dismissed or narrowed at the motion to dismiss stage,

class certification, summary judgment, at trial, or on a subsequent appeal. Id. ¶ 25; see, e.g., McGlenn v.

Driveline Retail Merch., Inc., No. 18-CV-2097, 2021 WL 165121, at *6 (C.D. Ill. Jan. 19, 2021) (denying

class certification in data breach case because “the issues of causation and injury require individual

inquiry”). Further, even if Plaintiffs prevailed, the amount Plaintiffs and the Class would have been

awarded in damages, if any, is uncertain, as are the sources available to fund those allowed claims given

Volusion’s extremely limited resources following bankruptcy with limited insurance coverage fully

funding the Settlement. See Agreement ¶ VI.A.

The inherent uncertainty in litigation presents a risk to Plaintiffs of expending time and money

on this case with the possibility of no recovery at all for the Class. Decl. ¶ 25. Finally, even assuming

success at trial and Volusion’s ability to pay a judgment, lengthy appeals are likely. Id. The proposed

Settlement avoids these uncertainties and provides immediate, meaningful, and certain monetary relief;


000029/01388007_1 15

thus, Plaintiffs and Class Counsel appropriately determined that the Settlement Benefits outweigh the

risks of continued litigation. Id. Accordingly, the Settlement should be preliminarily approved under

Rule 23(e)(2)(C)(i) and the fourth and fifth Reed factors.

6. The Settlement Is in the Class’s Best Interests.

Finally, Plaintiffs and Class Counsel firmly believe that this Settlement is fair, reasonable, and

adequate, and in the best interests of Class Members, which is an important consideration in any class

settlement analysis. Decl. ¶ 16. See Klein, 705 F. Supp. at 649 (“The Fifth Circuit has repeatedly stated

that the opinion of class counsel should be accorded great weight” when “evaluating a proposed

settlement.”); Reed, 703 F.2d at 172 (“the opinions of the class counsel, class representatives, and

absent class members” is one of six factors to consider when evaluating a class settlement); Stott v.

Capital Fin. Servs., Inc., 277 F.R.D. 316, 346 (N.D. Tex. 2011) (in evaluating a class action settlement,

“the trial court is entitled to rely upon the judgment of experienced counsel for the parties.”) (citation

and quotation marks omitted). Here, Class Counsel are all highly experienced in class action litigation

and well positioned to evaluate the strengths and weaknesses of continued litigation, as well as the

reasonableness of the Settlement. Decl. ¶ 22. They have collectively recovered over a billion dollars

for class members in other litigation, including data breach cases. See id. ¶¶ 21, 32. Accordingly, the

sixth Reed factor also supports preliminary approval.

7. The Settlement Treats Class Members Equitably Relative to Each Other.

The final factor, Rule 23(e)(2)(D), considers whether class members are treated equitably.

Here, the Settlement provides for a notice plan that is designed to reach as many Class Members as

possible and provides Class Members with direct email notice and mail notice if email notice is not

possible. It also informs Class Members of their right to object to, or opt out of, the Settlement. Every

Class Member who submits a valid Claim is eligible to receive up to $1,500.00, only subject to pro rata

reduction, if necessary. Thus, the Settlement treats Class Members equitably relative to each other,

satisfying Rule 23(e)(2)(D). See Fed. R. Civ. P. 23(e)(2)(D).

* * *


000029/01388007_1 16

Each factor identified under Rule 23(e)(2) and required by the Fifth Circuit in Reed is satisfied.

Given the litigation risks involved and the complexity of the underlying issues, the recovery is an

excellent result. It could not have been achieved without full commitment by Plaintiffs and Class

Counsel who respectfully submit that the Settlement is fair, reasonable, and adequate and meets each

of the Rule 23(e)(2) and Reed factors such that notice of the Settlement should be sent to the Class.

See Odonnell, 2019 WL 4224040, at *13 (preliminarily finding the proposed consent decree and

settlement agreement terms were fair, reasonable, and adequate under Rule 23(e) and the governing

case law where “[a]ll of the Rule 23(e)(2) and Reed factors weigh[ed] in favor of preliminarily approving

the proposed consent decree and settlement agreement”).

C. The Court Should Preliminarily Certify the Class

1. The Class Meets the Requirements of Federal Rule of Civil Procedure 23(a).

In assessing the parties’ Settlement, the Court should also confirm that the underlying Class

meets the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy. See Amchem

Prods. v. Windsor, 521 U.S. 591, 620 (1997); Manual for Complex Litigation, § 21.632.

Numerosity. The class must be so numerous that joinder of all members is impracticable. Fed.

R. Civ. P. 23(a)(1). This determination “requires examination of the specific facts of each case and

imposes no absolute limitations.” Gen. Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 330 (1980).

A showing that the class consists of more than forty members “should raise a presumption that joinder

is impracticable.” Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir. 1999) (citation

omitted); see also In re Talbert, 347 B.R. 804, 808-809 (E.D. La. 2005) (numerosity with 88 members).

Here, numerosity is easily met with approximately 502,000 Class members. See Decl. ¶ 28.

Commonality. Rule 23(a)(2)’s commonality requirement demands that “there are questions of

law or fact common to the class.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 368 (2011). “The

principal requirement of [Dukes] is merely a single common contention that enables the class action

‘to generate common answers apt to drive the resolution of the litigation.’” In re Deepwater Horizon, 739

F.3d at 811 (quoting M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 840 (5th Cir. 2012)). “These ‘common

answers’ may . . . relate to the defendant’s injurious conduct.” Id. Regardless, “a single common question


000029/01388007_1 17

will do.” Id. (quoting Dukes, 564 U.S. at 359) (emphasis added). Commonality is easily satisfied here.

All Class Members’ claims turn on whether Volusion’s security environment was adequate to protect

Class Members’ PII. Thus, common questions include, inter alia, whether Volusion engaged in the

wrongful conduct alleged; whether Class Members’ PII was compromised in the Data Security

Incident; whether Volusion owed a duty to Plaintiffs and Class Members; whether Volusion breached

its duties; and whether Volusion committed the common law and statutory violations alleged in the

Complaint. See, e.g., Heartland, 851 F. Supp. 2d at 1054 (“The common factual question in this case is

what actions Heartland took before, during, and after the data breach to safeguard the Consumer

Plaintiffs’ financial information.”); In re Yahoo! Inc. Customer Data Sec. Breach Litig., No. 16-MD-02752-

LHK, 2020 WL 4212811, at *3 (N.D. Cal. July 22, 2020) (common questions of whether defendant

employed sufficient data security measures, knew of inadequacies, and timeliness of data breach

disclosure satisfy commonality requirement).

Typicality. Rule 23(a)(3) “requires that the named representatives’ claims be typical of those of

the class.” Langbecker v. Elec. Data Sys. Corp., 476 F.3d 299, 314 (5th Cir. 2007). Here, Plaintiffs’ claims

are typical of Class Members’ claims because they arise from the same course of alleged conduct and

are premised on the same legal theory. Plaintiffs had PII that was stored on Volusion’s systems and

was compromised in the Data Security Incident; they suffered the same injury, were harmed by the

same inadequate data security, received notice of the data breach at the same time, and seek to assert

the same underlying claims as the Class. See James v. City of Dallas, 254 F.3d 551, 571 (5th Cir. 2001)

(“[T]he critical inquiry is whether the class representative’s claims have the same essential

characteristics of those of the putative class. If the claims arise from a similar course of conduct and

share the same legal theory, factual differences will not defeat typicality.”).

Adequacy. The Court should also easily conclude that “the representative parties will fairly and

adequately protect the interests of the class,” as required by Rule 23(a)(4). This requirement is satisfied,

as here, when (i) there are no substantial conflicts of interest between the class representatives and the

class; and (ii) the representatives and their attorneys will properly prosecute the case. Sosna v. Iowa, 419

U.S. 393, 403 (1975). Plaintiffs adequately represent the Class, as they have no conflicts of interest


000029/01388007_1 18

with other Class members, are subject to no unique defenses, and they and Class Counsel have and

continue to vigorously prosecute this case on behalf of the Class. See Decl. ¶ 30. Further, Class Counsel

are experienced in the successful litigation and settlement of class action litigation, including data

privacy cases. Id.; see also Heartland, 851 F. Supp. 2d at 1055 (adequacy satisfied where class counsel

had “extensive experience representing consumers, and other plaintiff classes, in class-action

litigation,” including “in similar data-breach cases”).

2. The Class Meets the Demands of Rule 23(b)(3).

“In addition to satisfying Rule 23(a)’s prerequisites, parties seeking class certification must

show that the action is maintainable under Rule 23(b)(1), (2), or (3).” Amchem Prods., 521 U.S. at 614.

Plaintiffs seek Rule 23(b)(3) certification, which requires “that the questions of law or fact common

to class members predominate over any questions affecting only individual members, and that a class

action is superior to other available methods for fairly and efficiently adjudicating the controversy.”

Fed. R. Civ. P. 23(b)(3). However, “[s]o long as there is sufficient commonality to establish that the

class is generally cohesive, the propriety of a settlement need not depend on satisfaction of a

‘predominance’ requirement.” Heartland, 851 F. Supp. 2d at 1058 (citation omitted).

Predominance. Common legal and factual questions predominate in this Litigation relating to

the Data Security Incident and Volusion’s response to the same. Rule 23(b)(3) does not require a

plaintiff seeking class certification to prove that each element of the claim is susceptible to classwide

proof. Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 469 (2013). Rather, it requires that

common questions predominate over questions affecting only individual class members. Id. Here, for

settlement purposes, central common questions predominate over any questions that may affect

individual Class Members, including whether Volusion owed a duty to Plaintiffs and Class Members;

breached its duty; and unreasonably delayed in notifying Plaintiffs and Class Members of the Data

Security Incident’s material facts. These issues are subject to classwide proof and outweigh those issues

that are subject to individualized proof. “Indeed, the focus on a defendant’s security measures in a

data breach class action is the precise type of predominant question that makes class-wide adjudication

worthwhile.” In re Yahoo! Inc. Customer Data Sec. Breach Litig., 2020 WL 4212811, at *7 (quotation marks


000029/01388007_1 19

omitted) (collecting cases). Predominance is satisfied. Certification will meet Rule 23(b)(3)’s objective

to promote economy and efficiency of time, effort, and expense over separate suits.

Superiority. This class action is the superior means of adjudication under Rule 23(b)(3). The

value of each Class Members’ claim is miniscule in comparison to the cost of litigating individual

actions, particularly as Volusion has already demonstrated that it will vigorously defend against the

claims asserted here. Thus, Class Members would not individually be able to seek redress in this matter

in an economically feasible manner. It is also desirable to concentrate the litigation of the claims before

this Court in view of the scale of the Class under Rule 23(b)(3)(C). With approximately 502,000 Class

members, a class action would be superior to individual adjudication. See Abboud v. Agentra, LLC, No.

3:19-CV-00120-X, 2020 WL 5526557, at *4 (N.D. Tex. Sept. 14, 2020) (class treatment superior to

host of individual lawsuits where estimated class numbered in the thousands).

3. The Court Should Approve the Proposed Class Notice Program.

Notice of a proposed settlement to class members must be the “best notice practicable,” Fed.

R. Civ. P. 23(c)(2)(B), which means “individual notice to all members who can be identified through

reasonable effort.” Eisen, 417 U.S. at 173. The proposed Class Notice meets these requirements. The

Settlement Agreement requires Volusion to provide to the Settlement Administrator a list of all

persons to whom it sent its Notice of Data Incident. Agreement ¶ IX.C. The Settlement Administrator

will send Class Notice to Class Members via email and First-Class U.S. Mail if email is not available.

Id. ¶¶ X.A, Ex. B (Postcard Notice); Ex. C (Email Notice). From the date of the first Notice, and

thereafter for a period of no less than 6 months after the Effective Date, a dedicated settlement website

that will contain relevant documents, including the Class Notice, the Settlement Agreement, this

Motion, the Preliminary Approval Order, Plaintiffs’ fee application, and a downloadable and online

version of the Claim Form and Long Form Notice. Id. ¶ XI.C.2, Ex. D (Long Form Notice). It will

also include a toll-free telephone number, e-mail address, and mailing address for Class Members to

contact the Settlement Administrator directly. Id.

Substantively, Rule 23(c)(2)(B) requires, and the Class Notice provides, information, written

in easy-to-understand plain language, regarding:


000029/01388007_1 20

(i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who request exclusions; (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3).

“There are no rigid rules to determine whether a settlement notice to the class satisfies constitutional

or Rule 23(e) requirements.” Odonnell, 2019 WL 4224040, at *26. Instead, it need only satisfy the broad

reasonableness standards imposed by due process. Id. Here, the Class Notice defines the Class;

explains all Class members’ rights, the scope and impact of Released Claims, and the applicable

deadlines for submitting Claims, objecting, opting out; and describes in detail the monetary relief

provided by the Settlement Agreement, including the procedures for allocating and distributing the

Settlement Benefits amongst the Class Members, Class Representatives, Class Counsel, and the

Settlement Administrator. The Notice also indicates the time and place of the Final Approval Hearing

and explains the methods for objecting to or opting out of the Settlement. It details the provisions for

payment of Attorneys’ Fees, Costs and Service Awards, and provides contact information for Class

Counsel. Thus, the Class Notice is designed to give the best notice practicable, is tailored to reach the

Class members, and protects their due process rights.

V. CONCLUSION

Based on the foregoing, Plaintiffs respectfully request that for settlement purposes only, this

Court: (a) preliminarily certify the Class; (b) preliminarily approve the Settlement as fair, adequate, and

reasonable; (c) appoint Plaintiffs as Class Representatives; (d) appoint Class Counsel as counsel for

the Class; (e) and set the Class Notice Date, Claims Deadline, Opt-Out Deadline, and Objection

Deadline; (f) approve the form and contents of the Class Notice to be posted on the settlement website

substantially similar to the ones attached to the Settlement Agreement; (g) approve a Claim Form

substantially similar to that attached to the Settlement Agreement; (h) appoint Kroll as the Settlement

Administrator; and (i) schedule the Final Approval Hearing. A proposed Order Granting Preliminary

Approval is attached as Exhibit 5.


000029/01388007_1 21

Date: April 12, 2022

/s/ Jonathan M. Streisfeld __________ Jonathan M. Streisfeld (pro hac vice) KOPELOWITZ OSTROW FERGUSON WEISELBERG GILBERT 1 W. Las Olas Blvd., Suite 500 Fort Lauderdale, FL 33301 Telephone: (954) 525-4100 Fax: (954) 525-4300 [email protected] Jeff Edwards Tex. Bar No. 24014406 Michael Singley Tex. Bar No. 00794642 David James Tex. Bar No. 24092572 EDWARDS LAW GROUP 1101 East 11th St. Austin, TX 78702 512-623-7727 Fax: 512-623-7729 [email protected] [email protected] [email protected] Melissa S. Weiner (pro hac vice) PEARSON, SIMON & WARSHAW, LLP 800 LaSalle Avenue, Suite 2150 Minneapolis, MN 55402 Telephone: (612) 389-0600 Fax: (612) 389-0610 [email protected] Mark A. Clifford (pro hac vice) Hassan A. Zavareei (pro hac vice) TYCKO & ZAVAREEI LLP 1828 L Street NW, Suite 1000 Washington, D.C. 20036 Telephone: (202) 973-0900 Facsimile: (202) 973-0950 [email protected] Counsel for Plaintiffs and the Proposed Class


000029/01388007_1 22

CERTIFICATE OF SERVICE

I hereby certify that on this 12th day of April, 2022, I caused a true and correct copy of the

foregoing document to be filed with the Clerk of the Court for the Western District of Texas via the

Court’s CM/ECF system, which will send notification of such filing to the counsel of record in the

above-captioned matters.

Date: April 12, 2022 /s/ Jonathan M. Streisfeld Jonathan M. Streisfeld


EXHIBIT 1

Case 1:20-cv-00761-LY Document 39-1 Filed 04/12/22 Page 1 of 56

1

CLASS ACTION SETTLEMENT AGREEMENT AND RELEASE

Plaintiffs Julio Lopez and Michael Oros (collectively referred to as “Plaintiffs” or “Class

Representatives”), on behalf of themselves and all others similarly situated, and Defendant

Volusion, LLC (“Volusion” or “Defendant”) (collectively, the “Parties”), by and through their

respective counsel, hereby enter into this Class Action Settlement Agreement and Release

(“Settlement Agreement”), subject to Court approval. In consideration of the mutual promises,

agreements, and covenants contained herein, the sufficiency and receipt of which are hereby

acknowledged, the Parties stipulate and agree as follows:

I. RECITALS

A. WHEREAS, on July 17, 2020, Plaintiffs, on behalf of themselves and all others

similarly situated, filed their Class Action Complaint against Volusion in the

United States District Court for the Western District of Texas, Austin Division (the

“District Court”), Case No. 1:20-cv-00761-LY (the “Litigation”), alleging that

between on or about September 7, 2019 and October 10, 2019, unauthorized third

parties were able to steal consumers’ personally identifiable information (“PII”)

from Volusion’s e-commerce platform by inserting malicious code into a Volusion

JavaScript library and alleging that on “April 21, 2020, Volusion distributed a

notice of the Data Breach to its victims, including Plaintiffs Lopez and Oros”;

B. WHERAS, on July 27, 2020, Volusion filed a voluntary chapter 11 petition in the

United States Bankruptcy Court for the Southern District of Texas (the

“Bankruptcy Court”), Case No. 20-50082 (the “Bankruptcy Case”), whereupon

the automatic stay of 11 U.S.C. § 362(a) went into place and stayed the prosecution

of the Litigation;

C. WHEREAS, on August 10, 2020, the District Court entered its Order staying the

Litigation [Dkt. No. 17];

D. WHEREAS, on November 20, 2020, the Bankruptcy Court entered its Order

Confirming the Debtor’s Combined Plan of Reorganization and Approving on a

Final Basis the Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of

the Bankruptcy Code [Dkt. No. 128] (the “Confirmation Order”), confirming, as

modified therein, the Combined Plan of Reorganization and Disclosure Statement


2

of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code [Dkt. No. 128]

(the “Plan”). The effective date of the Plan occurred on January 19, 2021;

E. WHEREAS, on June 2, 2021, the Bankruptcy Court entered its Stipulation and

Agreed Order Regarding Claim 24 Filed by Julio Lopez and Michael Oros [Dkt.

No. 223] (the “Order”), and that Order allows Plaintiffs to pursue the Litigation

provided that any recovery awarded shall be limited to any available proceeds

from any insurance policy covering the Reorganized Debtor (i.e., Volusion);

F. WHEREAS, Hartford Fire Insurance Company (“Hartford”) issued a policy of

insurance to Volusion that includes coverage for certain cyber risks;

G. WHEREAS, on August 18, 2021, the District Court Ordered [Dkt. No. 26] that the

stay in the Litigation imposed by the District Court on August 10, 2020 [Dkt. No.

17] was lifted, and Volusion was ordered to file an answer to Plaintiffs’ Class

Action Complaint on or before September 13, 2021;

H. WHEREAS, on September 13, 2021, Volusion filed its Motion to Dismiss

Plaintiffs’ Class Action Complaint for Failure to State a Claim (“Motion to

Dismiss”), by which Volusion moved to dismiss all causes of action against it for

failure to state a claim upon which relief may be granted;

I. WHEREAS, on October 11, 2021, Plaintiffs filed their Response in Opposition to

Volusion’s Motion to Dismiss;

J. WHEREAS, on November 11, 2021, Volusion filed its Reply in Support of its

Motion to Dismiss;

K. WHEREAS, the Parties desired to compromise and settle all issues, claims, and/or

facts asserted in the Litigation, or that could reasonably have been asserted based

upon the operative facts alleged in the Litigation, by or on behalf of Plaintiffs and

others similarly situated;

L. WHEREAS, while Volusion’s Motion to Dismiss remained pending, on February

7, 2022, the Parties commenced Mediation with experienced privacy litigation

class action mediator Bruce A. Friedman, Esq. of JAMS;

M. WHEREAS, Plaintiffs, by and through Class Counsel, have: (a) made a thorough

investigation of the facts and circumstances surrounding the allegations asserted

in the Litigation; (b) engaged in investigation and discovery of the claims asserted


3

in the Litigation, including discovery obtained by Plaintiffs in connection with the

Litigation and prior to execution of this Settlement Agreement, and (c) evaluated

and considered the law applicable to the claims asserted in the Litigation, including

the defenses that Volusion has asserted in its Motion to Dismiss and additional

defenses Volusion likely would assert if the Litigation continues;

N. WHEREAS, Class Counsel are experienced in this type of class litigation,

recognize the costs and risks of prosecution of this Litigation, and believe that it

is in Plaintiffs’ interest, and the interest of all Class Members, to resolve this

Litigation, and any and all claims against Volusion and any and all other persons

or entities arising from the conduct alleged in the Litigation, on the terms recited

in this Settlement Agreement;

O. WHEREAS, Volusion does not believe Plaintiffs’ claims are meritorious and has

denied and continues to deny any and all claims alleged by Plaintiffs, has denied

and continues to deny that it is legally responsible or liable to Plaintiffs or any

Class Members for any of the matters and/or claims asserted in the Litigation, and

has denied and continues to deny that anyone was injured or harmed as a result of

the events alleged in the Litigation, but has concluded that settlement is desirable

to avoid the time, expense, and inherent uncertainties of defending protracted

litigation and to resolve, finally and completely, all pending and potential claims

of Plaintiffs and all Class Members relating to claims which were or could have

been asserted by Plaintiffs and the Class in the Litigation;

P. WHEREAS, with the assistance of mediator Bruce A. Friedman, Esq., the Parties

engaged in significant arm’s length settlement negotiations and, as a result, this

Settlement Agreement has been reached without collusion, subject to the Court-

approval process set forth herein.

Q. WHEREAS, the undersigned Parties and their attorneys believe and agree that this

Settlement Agreement offers significant Benefits to Class Members and is fair,

reasonable, adequate and in the best interest of Class Members.

II. DEFINITIONS

In addition to terms defined at various points within this Settlement Agreement, the


4

following defined terms shall have the meanings set forth below:

A. “Benefits to Class Members” or “Settlement Benefits” means the benefits

available to Class Members who have not submitted a timely and valid Request

for Exclusion from participation in this Settlement Agreement through the claim

submission process as provided in this Settlement Agreement.

B. “Business day” means normal business workdays excluding Saturdays, Sundays,

and federally recognized holidays.

C. “CAFA Notice” means the notice of this Settlement Agreement to the appropriate

federal and state officials, as provided by the Class Action Fairness Act, 28 U.S.C.

§1715, et seq. (“CAFA”).

D. “Claim” means a written or electronic request by a Class Member to obtain

Benefits to Class Members submitted to the Settlement Administrator before the

Claims Deadline.

E. “Claim Form” means the form(s) Class Members must submit to be eligible for

Settlement Benefits under the terms of the Settlement Agreement, which is

attached hereto as Exhibit A.

F. “Claims Deadline” means the last day to submit a timely Claim Form, which will

be ninety (90) days after the Class Notice Date.

G. “Claims Period” means the period of time during which Class Members may

submit Claim Forms to receive Settlement Benefits, which will end on the Claims

Deadline.

H. “Class” means All persons to whom Volusion sent its Notice of Data Incident

dated on or about April 21, 2020, advising that on or about October 8, 2019,

Volusion learned that personal information of some customers of Volusion’s

merchant clients may have been improperly exposed as a result of malware placed

on Volusion’s e-commerce platform. Excluded from the Class is any judge

presiding over this matter and any members of their first-degree relatives, judicial

staff, the officers and directors of Volusion and its customers who were impacted

by the Data Security Incident, Class Counsel and their first-degree relatives, and

persons who timely and validly request exclusion from the Class.


5

I. “Class Member” means those persons to whom Volusion sent its Notice of Data

Incident dated on or about April 21, 2020, advising that on or about October 8,

2019, Volusion learned that personal information of some customers of Volusion’s

merchant clients may have been improperly exposed as a result of malware placed

on Volusion’s e-commerce platform.

J. “Class Notice” means the Court-approved form of notice to the Class, informing

Class Members of, among other things, (i) the preliminary approval of the

Settlement Agreement; (ii) the scheduling of the Final Approval Hearing; and (iii)

their opportunity to submit a claim and participate in, object to, or exclude

themselves from, the Settlement Agreement. Class Notice includes the Postcard

Notice (Exhibit B), Email Notice (Exhibit C) and Long Form Notice (Exhibit D).

K. “Class Notice Date” means the date by which the Settlement Administrator

commences the sending by email or U.S. mail a copy of the Class Notice to Class

Members, which shall be no later than fourteen (14) calendar days after receiving

the list of all persons to whom Volusion sent its Notice of Data Incident dated on

or about April 21, 2020.

L. “Class Counsel” means Michael Singley, Edwards Law Group, Austin, Texas;

Melissa S. Weiner, Pearson, Simon & Warshaw, LLP, Minneapolis, Minnesota;

Jonathan M. Streisfeld, Kopelowitz Ostrow Ferguson Weiselberg and Gilbert, Fort

Lauderdale, Florida; and Hassan A. Zavareei, Tycko & Zavareei LLP, Washington

D.C.

M. “Class Representatives” means Plaintiffs Julio Lopez and Michael Oros.

N. “Costs of Administration” means the fees and cost incurred by the Settlement

Administrator in performing the duties of the Settlement Administrator pursuant

to this Settlement Agreement and includes any fees and costs incurred by the

Settlement Umpire in performing the duties of the Settlement Umpire pursuant to

this Settlement Agreement, including, without limitation, all expenses or costs

associated with providing Notice to the Class, locating Class Members, processing

claims, determining the eligibility of any person to be a Class Member, and

administering, calculating and distributing the Settlement Benefits to Class

Members. Costs of Administration also includes all reasonable third-party fees


6

and expenses incurred by the Settlement Administrator and Settlement Umpire in

administering the terms of this Settlement Agreement.

O. “Court” means the United States District Court for the Western District of Texas,

Austin Division (the “District Court”), Case No. 1:20-cv-00761-LY.

P. “Cy Pres Recipient” means the non-profit entity approved by the Court to receive

any residual distributions from the Settlement Administrator as provided in this

Settlement Agreement. It is the Parties’ intent to suggest that the Court approve

the Electronic Frontier Foundation as the Cy Pres Recipient.

Q. “Data Security Incident” means the incident described in Volusion’s Notice of

Data Incident dated on or about April 21, 2020, advising that Volusion is an e-

commerce platform that hosts websites for many online merchants and that on or

about October 8, 2019, Volusion learned that personal information of some

customers of Volusion’s merchant clients may have been improperly exposed as a

result of malware placed on Volusion’s e-commerce platform.

R. “Defense Counsel” means Jon P. Kardassakis, Lewis Brisbois Bisgaard & Smith

LLP Los Angeles, California; and Robert A. Ewert, Lewis Brisbois Bisgaard &

Smith LLP, Dallas, Texas.

S. “Effective Date” means one (1) business day following the latest of: (i) the date

upon which time expires for filing or noticing any appeal of the Final Approval

Order; or (ii) if any appeal, petition, request for rehearing, or other review has been

filed, one (1) business day after the Final Approval Order is affirmed without

material change or the appeal is dismissed or otherwise disposed of, no other

appeal, petition, rehearing, or other review is pending, and the time for further

appeals, petitions, requests for rehearing, or other review has expired.

T. “Final Approval Order” means the Order of the Court granting final approval of

this Settlement Agreement.

U. “Hartford” means Hartford Fire Insurance Company.

V. “Service Awards” mean the awards approved by the Court to be paid to Class

Representatives in recognition of their time and efforts in the Litigation.

W. “Litigation” means the action titled Julio Lopez and Michael Oros, on behalf of

themselves and all others similarly situated. v. Volusion, LLC, filed with the


7

United States District Court for the Western District of Texas, Austin Division (the

“District Court”), Case No. 1:20-cv-00761-LY.

X. “Objection Deadline” means the last day for a person to object to approval of this

Settlement Agreement, which is ninety (90) days from the Class Notice Date, or a

date otherwise ordered by the Court.

Y. “Parties” means Plaintiffs Julio Lopez and Michael Oros and Defendant Volusion,

Inc.

Z. “Preliminary Approval Order” means the order of the Court preliminarily

approving this Settlement Agreement.

AA. “Released Claims” means any and all claims actually alleged in the Litigation and

all potential claims, whether known or unknown, reasonably arising out of the

same set of operative facts alleged in the Litigation, under the laws of any

jurisdiction, including federal law, state law, and common law, whether at law or

equity.

BB. “Released Parties” means Hartford and Volusion, and their parent companies,

subsidiaries, predecessors, successors, divisions, joint ventures, affiliates and

related entities, and all of their respective past and present directors, officers,

employees, partners, principals, stockholders, owners, agents, attorneys, insurers,

reinsurers, assigns, lenders, and related or affiliated entities and any other persons

or entities who may be responsible for the Data Security Incident.

CC. “Request for Exclusion” means a timely and valid request by any Class Member

for exclusion from the Settlement Agreement, also known as opting-out of the

Settlement Agreement.

DD. “Request for Exclusion Deadline” means the last day for a Class Member to

request exclusion from participation in this Settlement Agreement, which will be

ninety (90) from the Class Notice Date, or a date otherwise ordered by the Court.

EE. “Settlement Administrator” means the entity approved by the Court to carry out

the duties of the Settlement Administrator provided in this Settlement Agreement.

FF. “Settlement Umpire” means Bruce A. Friedman, Esq. or any other person

approved by the Court, to carry out the duties of the Settlement Umpire provided

in this Settlement Agreement.


8

III. BENEFITS TO CLASS MEMBERS

A. The Settlement Administrator shall send notice of this Settlement Agreement to

each Class Member. Each Class Member who has not submitted a timely and valid

Request for Exclusion from participation in this Settlement Agreement may

submit a Claim seeking to receive the following Settlement Benefits:

1. Reimbursement for documented out-of-pocket losses up to a maximum of

fifteen hundred dollars ($1,500.00) per person, upon submission of a Claim

Form and supporting documentation, including out of pocket expenses

incurred as a result of the Data Security Incident including bank fees, long

distance phone charges, cell phone charges, data charges, postage, gasoline

for local travel, fees for credit reports, credit monitoring, or other identity

theft insurance product purchased between the date of Volusion’s Notice

of Data Incident and the date of the Claims Deadline, and

2. Compensation for time spent responding to the Data Security Incident of

up to three (3) hours of lost time at $20.00/hour. Compensation for time

spent responding to the Data Security Incident will be included within, and

not in addition to, the calculation of reimbursement for documented out-

of-pocket losses up to a maximum of fifteen hundred dollars ($1,500.00)

per person;

3. In order for a Claim for reimbursement for documented out-of-pocket

losses to be approved and paid, a Class Member must provide reasonable

documentation to establish both the fact of actual loss and the dollar

amount of the loss, and must have made reasonable efforts to exhaust all

other sources of reimbursement, such as insurance benefits available as a

result of the purchase of credit monitoring or identity monitoring. For

Claims for time spent responding to the Data Security Incident, no

documentation is required.

B. Approving Claims.

1. The Settlement Administrator will carefully review and decide whether or

not to approve all Claims received by the Claims Deadline from Class


9

Members. The Settlement Administrator shall have sole discretion to

review for eligibility, completeness, and plausibility whether the

requirements as stated in this Settlement Agreement have been met in order

to determine whether to approve any or all aspects of a Claim.

2. To the extent the Settlement Administrator determines a Claim is deficient

in whole or part, the Settlement Administrator shall make reasonable

efforts to contact the Class Member and seek additional documentation or

information to support the Claim.

3. The Settlement Administrator shall have the sole discretion and authority

to determine whether the prerequisites have been met in order to award

payments, but may consult with Class Counsel and Defense Counsel in

making individual determinations.

4. The Settlement Administrator shall consider all evidence submitted by a

Class Member, Class Counsel, Defense Counsel, and by Volusion in

making determinations regarding Claim approval.

C. Resolution of Disputed Claims.

1. A Class Member or Defense Counsel may challenge the Settlement

Administrator’s decision as to any Claim in writing within five business

days of receipt of written notice of the Settlement Administrator’s decision.

2. If Class Counsel and Defense Counsel agree on the proper disposition of a

disputed Claim, the Settlement Administrator shall follow joint written

instructions from Class Counsel and Defense Counsel as to approval or

disapproval of a Claim.

3. If Class Counsel and Defense Counsel are not able to agree, the Settlement

Administrator shall provide all information received in connection with

that disputed Claim to the Settlement Umpire. The Settlement Umpire

may, but is not required to, allow the Class Member, Class Counsel, and/or

Defense Counsel to submit additional documentation and information. The

Settlement Umpire shall resolve any disputed Claims. The Settlement

Umpire’s decision shall be final and binding.


10

4. Subject to approval by the Court, Bruce A. Friedman, Esq. who was the

Mediator in connection with the negotiation of this Settlement Agreement,

will be the Settlement Umpire. If for any reason Bruce A. Friedman, Esq.

is unwilling or unable to perform the duties of the Settlement Umpire, the

Parties will consult and attempt to reach agreement as to an alternate

Settlement Umpire to be approved by the Court. If the Parties are unable

to reach agreement as to an alternate Settlement Umpire to be approved by

the Court, any of the Parties may file a noticed motion asking the Court to

appoint an alternate Settlement Umpire. Hartford and/or Volusion, at their

discretion, shall be solely responsible for any costs associated with use of

the Settlement Umpire. Class Counsel, Plaintiffs, and Class Members shall

have no obligation to pay for any cost associated with the Settlement

Umpire.

IV. SERVICE AWARDS TO CLASS REPRESENTATIVES.

A. At least thirty (30) days before the Request for Exclusion and Objection Deadlines,

Class Counsel will file a fee application that will include a request for a Service

Award for the Class Representatives in recognition for their contributions to this

Litigation. Plaintiffs shall seek a Service Award of Two Thousand Five Hundred

Dollars ($2,500.00) to each Plaintiff, subject to Court approval. This Service

Award shall be separate and apart from any other sums agreed under this

Settlement Agreement. The Settlement Administrator shall make the Service

Award payment approved by the Court to the Class Representatives.

B. In the event the Court declines to approve, in whole or in part, the payment of

Service Awards in the amount requested, the remaining provisions of this

Settlement Agreement shall remain in full force and effect. No decision by the

Court, or modification or reversal or appeal of any decision by the Court,

concerning the amount of the Service Awards shall constitute grounds for

termination of this Settlement Agreement.

C. The Service Awards shall be in addition to the Class Representatives’ right to

submit a Claim for Benefits to Class Members.


11

V. PAYMENT OF CLASS COUNSELS’ FEES AND COSTS.

A. At least thirty (30) days before the Request for Exclusion and Objection Deadlines,

Class Counsel will file a fee application for an award of attorneys’ fees and costs

not to exceed Four Hundred and Fifty Thousand Dollars ($450,000.00). Prior to

the disbursement or payment of attorneys’ fees and costs, Class Counsel shall

provide to Volusion and the Settlement Administrator a properly completed and

duly executed IRS Form W-9. Attorneys’ fees and costs approved by the Court

shall be paid by the Settlement Administrator, in the amount approved by the

Court, no later than eighteen (18) business days after the Effective Date. No

decision by the Court, or modification or reversal or appeal of any decision by the

Court, concerning the amount of attorneys’ fees and costs shall constitute grounds

for termination of this Settlement Agreement.

B. Unless otherwise ordered by the Court, Class Counsel shall have the sole and

absolute discretion to allocate any approved attorneys’ fees and costs amongst

Class Counsel and any other attorneys for Plaintiffs. Volusion shall have no

liability or other responsibility for allocation of any such attorneys’ fees and costs.

VI. VOLUSION’S OBLIGATION TO PAY AND FUND THE SETTLEMENT

A. Except as otherwise provided in this section, all settlement funds shall be paid by

Hartford, Volusion’s insurer. Hartford shall pay to the Settlement Administrator

an amount sufficient to pay for and fund:

1. Benefits to Class Members as provided in Section III and approved by the

Settlement Administrator or, if a decision of the Settlement Administrator

is challenged, by the Settlement Umpire.

2. The Costs of Administration of this Settlement Agreement. This includes

the fees and cost incurred by the Settlement Administrator in performing

the duties of the Settlement Administrator pursuant to this Settlement

Agreement and includes any fees and costs incurred by the Settlement


12

Umpire in performing the duties of the Settlement Umpire pursuant to this


3. Service Awards to the Class Representatives, as approved by the Court, in

an amount not to exceed Two Thousand Five Hundred Dollars ($2,500.00)

to each of the two Class Representatives.

4. Class Counsels’ reasonable attorneys’ fees and costs, as approved by the

Court, in an amount not to exceed Four Hundred Fifty Thousand Dollars

($450,000.00).

B. Hartford and Volusion’s obligation to pay is subject to an agreed aggregate cap or

maximum obligation of Hartford’s remaining insurance policy limits, which is

estimated to be approximately Four Million Three Hundred Thousand Dollars

($4,300,000.00) at the time of this Settlement Agreement, less additional defense

expenses reasonably incurred in connection with the documentation, approval and

administration of this Settlement Agreement.

C. Notwithstanding any other provision in this Settlement Agreement, under no

circumstances shall Hartford or Volusion be required to pay more than Hartford’s

remaining policy limits, less additional defense expenses reasonably incurred in

connection with the documentation, approval and administration of this Settlement

Agreement.

D. Time to Fund.

1. Hartford shall pay to the Settlement Administrator on Volusion’s behalf an

amount sufficient to fund Benefits to Class Members approved by the

Settlement Administrator or, if a decision of the Settlement Administrator

is challenged, by the Settlement Umpire, within fifteen (15) business days

of the Effective Date or within fifteen (15) business days of the date the

Settlement Administrator communicates to Volusion in writing the amount

required to fund these benefits, whichever date is later.


amount sufficient to pay Service Awards to Class Representatives, as

approved by the Court, within fifteen (15) business days after the Court


13

enters its Order approving those Service Awards or within fifteen (15)

business days after the Effective Date, whichever is later.


amount sufficient to pay Class Counsels’ attorneys’ fees and costs, as

approved by the Court, within fifteen (15) business days after the Court

enters its Order approving Class Counsels’ attorneys’ fees and costs or

within fifteen (15) business days after the Effective Date, whichever is

later.

4. Hartford shall pay to the Settlement Administrator on Volusion’s behalf

the Costs of Administration within a reasonable time after receiving the

Settlement Administrator’s written invoice(s).

VII. PRIORITY OF PAYMENT

A. In the highly unlikely event the aggregate amount of Hartford’s and Volusion’s

obligation to pay and fund the Settlement as set forth herein would otherwise

exceed Hartford’s remaining policy limits, less additional defense expenses

reasonably incurred in connection with the documentation, approval, and

administration of this Settlement Agreement, then all Costs of Administration shall

be paid as a first priority; Class Counsels’ fees and costs approved by the Court

shall paid as a second priority; Service Awards approved by the Court shall be

paid as a third priority; and Settlement Benefits to Class Members shall be paid as

a fourth priority, subject to any pro rata reduction, if necessary. If a pro rata

reduction is necessary, then pro rata reduction shall occur in the following order:

first, each Class Member’s payment for lost time shall be reduced pro rata such

that no Class Member’s payment for lost time shall be reduced below $20.00;

second, if after the first pro rata reduction, the balance of the settlement fund is

still insufficient to pay the remaining Claims, then a second pro rata reduction

shall be made to Class Members’ claims for out-of-pocket losses such that no Class

Member’s payment for Out-of-Pocket Losses shall be reduced more than 50%;

and third, if after the second pro rata reduction the balance of the settlement fund

is still insufficient to pay the remaining Claims, then all Claims shall be reduced

proportionally.


14

VIII. UNCASHED CHECKS

A. To the extent any check or electronic payment issued by the Settlement

Administrator remains uncashed ninety (90) days after issuance, the Settlement

Administrator may re-issue any check or payment that appears to have been lost

or mis-delivered.

B. To the extent any check or electronic payment issued by the Settlement

Administrator remains uncashed ninety (90) days after issuance and the Settlement

Administrator has no reasonable means to re-issue the check or payment or if a re-

issued check or payment remains uncashed an additional ninety (90) days

thereafter, those unpaid funds are forfeited by a Class Member and may be

distributed by the Settlement Administrator to the Cy Pres Recipient approved by

the Court.

IX. REQUIRED EVENTS

A. Promptly after execution of this Settlement Agreement by all Parties, Class

Counsel and Defense Counsel shall take all reasonable and necessary steps to

obtain entry of the Preliminary Approval Order and obtain entry of the Final

Approval Order. Class Counsel, with Defense Counsel’s pre-filing review, shall

prepare and file all documents in connection with the Motion for Preliminary

Approval and the Motion for Final Approval.

B. Not later than ten (10) calendar days after the filing of this Settlement Agreement

with the Court, the Settlement Administrator, on Volusion’s behalf, shall serve or

cause to be served notice of the proposed Settlement upon the appropriate federal

and state officials, as provided by CAFA.

C. Not later than ten (10) calendar days after the Court enters the Preliminary

Approval Order, Volusion will provide to the Settlement Administrator a list of all

persons to whom Volusion sent its Notice of Data Incident dated on or about April

21, 2020, advising that on or about October 8, 2019, Volusion learned that personal

information of some customers of Volusion’s merchant clients may have been


15

improperly exposed as a result of malware placed on Volusion’s e-commerce

platform.

D. Not later than fourteen (14) calendar days after receiving the list of all persons to

whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020,

the Settlement Administrator will commence sending Class Notice to Class

Members.

E. In the event that the Court fails to issue the Preliminary Approval Order, or fails

to issue the Final Approval Order, the Parties agree to use their best efforts,

consistent with this Settlement Agreement, to cure any defect(s) identified by the

Court. If, despite their best efforts, the Parties cannot cure said defects, the

Settlement Agreement is voidable at the election of Plaintiffs or Volusion with

each party returning to their respective pre-settlement posture and without

prejudice or waiver to any party’s pre-settlement position on any legal or factual

issue.

F. The Parties acknowledge that prompt approval, consummation, and

implementation of this Settlement Agreement are essential. The Parties shall

cooperate with each other in good faith to carry out the purposes of and effectuate

this Settlement Agreement, shall promptly perform their respective obligations

hereunder, and shall promptly take any and all reasonable actions and execute and

deliver any and all additional documents and all other materials and/or information

reasonably necessary or appropriate to carry out the terms of this Settlement

Agreement and the transactions contemplated hereby.

G. Upon Entry of the Final Approval Order, the Court shall enter judgment in

accordance with the terms of this Settlement Agreement, substantially as provided

in the Final Approval Order. The judgment shall enjoin the prosecution of any

litigation or class action by Plaintiffs or any Class Member of any and all claims

or causes of action alleged in the Litigation and/or that could have been alleged in

the Litigation, under the laws of any jurisdiction, including federal law, state law,

and common law, whether at law or equity, that reasonably arise out of the same

set of operative facts alleged in the Class Action Complaint filed in the Litigation

or Volusion’s Notice of Data Incident. The scope of the Released Claims is limited


16

to the operative facts set forth in the operative Complaint in the Litigation and all

potential claims, whether known or unknown, reasonably arising out of the same

set of operative facts, and/or arising from the facts described in Volusion’s Notice

of Data Incident.

X. NOTICE TO CLASS MEMBERS

A. The Parties will use their best efforts to provide to the Settlement Administrator a

notification list containing the names and email address or street addresses of Class

Members to be used by the Settlement Administrator to provide notice to Class

Members and administer the settlement. Wherever possible the Settlement

Administrator shall provide email notice to Class Members. Where email notice

is not possible, the Settlement Administrator shall provide notice by U.S. mail and

will use reasonable efforts to update and use current mailing addresses. Subject

to Court approval, the Settlement Administrator will provide the Class Notice to

all Class Members as described herein. The cost of such Notice will be paid by

Hartford.

1. Email Notice. As soon as practicable, but starting no later than 14 days

from receipt of the names, email addresses and/or street addresses of Class

Members, the Settlement Administrator shall send the Email Notice to all

Class Members for whom Volusion provided an email address. It will be

conclusively presumed that the intended recipients received the Email

Notice if the Settlement Administrator did not receive a hard bounce-back

message.

2. Postcard Notice. As soon as practicable, but starting no later than 40 days

from the entry of the Preliminary Approval Order, the Settlement

Administrator shall disseminate Postcard Notice via First Class Mail to all

Class Members for whom the Settlement Administrator does not have a

valid email address (i.e., either a valid email address was not provided to

the Settlement Administrator by Volusion or the Settlement Administrator

received a hard bounce-back message after an attempt to provide Email

Notice). Before mailing the Postcard Notice, the Settlement Administrator

will update the addresses provided by Volusion with the National Change


17

of Address database. It shall be conclusively presumed that the intended

recipients received the Postcard Notice if the mailed Postcard Notices have

not been returned to the Settlement Administrator as undeliverable within

fifteen (15) days of mailing. If the Postcard Notice is returned as

undeliverable, the Settlement Administrator will conduct a skip trace to

attempt to locate the Class Members’ current address and resend the

Postcard Notice.

XI. SETTLEMENT ADMINISTRATION

A. Engagement of Settlement Administrator. The Parties shall engage Kroll Settlement Administration as the Settlement Administrator, subject to Court approval.

B. Duties of Settlement Administrator. In addition to other duties as set forth in this

Settlement Agreement, the Settlement Administrator shall be solely responsible

for the following:

1. Not later than ten (10) calendar days after the filing of this Settlement

Agreement with the Court, serving (on Volusion’s behalf) or causing to be

served (on Volusion’s behalf) the proposed Settlement upon the

appropriate federal and state officials, as provided by CAFA.

2. Preparing, printing, and disseminating the Class Notice to Class Members.

C. Not later than fourteen (14) calendar days after receiving the list of all persons to

whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020,

the Settlement Administrator will send Class Notice to Class Members.

1. Certifying to the Court and the Parties that it has provided notice to all

Class Members.

2. From the date of the first Notice, and thereafter for a period of no less than

six (6) months after the Effective Date of Class Settlement, maintaining (i)

the settlement website, www.Volusionprivacyclassaction.com, which shall

contain relevant documents, including, but not limited to, the Class Notice,

this Settlement Agreement, Plaintiff’s Motion for Preliminary Approval of

the Settlement, the Preliminary Approval Order, Plaintiff’s fee application,

and a downloadable and online version of the Claim Form and Longform


18

Notice. The settlement website shall also include a toll-free telephone

number, e-mail address, and mailing address through which Class Members

may contact the Settlement Administrator directly. The settlement website

shall not include any advertising and shall remain operational until at least

sixty (60) days after all settlement payments have been distributed.

3. Keeping track of Requests for Exclusion, including maintaining the

original mailing envelope in which the request was mailed.

4. Filing a declaration attaching all Requests for Exclusion received with the

Court and serve copies on Defense counsel and Class Counsel no later than

seven (7) days after the Request for Exclusion period expires.

5. Keeping track of objections, including maintaining the original mailing

envelope in which the objection was mailed.

6. Keeping track of all other communications from Class Members, including

maintaining the original mailing envelope in which any communication

was mailed.

7. Maintaining adequate records of its activities, including the dates of each

mailing of Class Notices, returned mail and other communications and

attempted written or electronic communications with Class Members.

8. Promptly furnishing to counsel for the Parties (i) copies of any Requests

for Exclusion from Class Members; (ii) copies of objections by Class

Members; and (iii) all other written or electronic communications received

from Class Members.

9. Determining whether Requests for Exclusion comply with the terms of this

Settlement Agreement and are valid and effective to exclude the submitting

Class Member from the Class.

10. Delivering to the Parties’ counsel in a reasonably timely manner, but in no

event later than seven (7) days after the Objection and Request for

Exclusion Deadlines, a written report concerning all Requests for

Exclusion, all revocations of Requests for Exclusion, and all objections.

11. Establishing a Qualified Settlement Fund (QSF), as defined by 26 C.F.R.

1.468B-1, for the deposit of the payment of funds for this Settlement


19

Agreement, ensuring that all taxes associated with the administration of the

Settlement Fund are timely paid to the appropriate tax authorities and all

tax filings are timely filed, which shall be paid from the Settlement Fund.

12. Determining whether to approve Claims in accordance with this Settlement

Agreement.

13. Providing to Class Counsel and Defense Counsel a written report listing

all approved Claims and dollar amounts.

14. Not later than thirty (30) business days after the Effective Date, distributing

Benefits to Class Members for approved Claims.

15. Not later than thirty (30) business days after the Effective Date, distributing

Service Awards approved by the Court to the appropriate Class

Representative.

16. Not later than eighteen (18) business days after the Effective Date,

distributing Class Counsel’s reasonable attorneys’ fees and costs approved

by the Court to Class Counsel.

17. Confirming in writing completion of the administration of the Settlement.

XII. REQUESTS FOR EXCLUSION BY CLASS MEMBERS

A. Any Class Member may make a Request for Exclusion by mailing or delivering

such request in writing to the Settlement Administrator at the address set forth in

the Class Notice.

B. Any Request for Exclusion must be postmarked or delivered not later than ninety

(90) days after the Class Notice Date or such other date specified in the Court’s

Preliminary Approval Order (i.e., the Request for Exclusion Deadline).

C. The Request for Exclusion shall (i) state the Class Member’s full name and current

address, and (ii) clearly state his or her desire to be excluded from the Settlement

and from the Class. Failure to comply with these requirements and to timely

submit the Request for Exclusion will result in the Class Member being bound by

the terms of the Settlement Agreement.

D. Any Class Member who submits a timely Request for Exclusion may not file an

objection to the Settlement Agreement and shall be deemed to have waived any

rights or benefits under this Settlement Agreement.


20

E. The Settlement Administrator shall not approve a Claim submitted by a Class

Member who submits a timely Request for Exclusion.

F. The Settlement Administrator shall provide Class Counsel and Defense Counsel

with a weekly report informing them of any Requests for Exclusion received by

the Settlement Administrator during each week following the Class Notice Date.

G. The Settlement Administrator shall file a Declaration attaching all timely and valid

Requests for Exclusion received with the Court and serve copies on Defense

counsel and Class Counsel no later than seven (7) days after the Request for

Exclusion Deadline.

XIII. OBJECTIONS BY CLASS MEMBERS

A. The Parties will request the Court to enter an order requiring any Class Member

who wishes to be heard orally at the Final Approval Hearing, or who wishes for

any objection to be considered, to file a written notice of objection by the

Objection Deadline, i.e., within ninety (90) days from the Class Notice Date or

such date as otherwise ordered by the Court, as well as a notice of intention to

appear at the Final Approval Hearing.

B. Unless otherwise ordered by the Court, to state a valid objection to the Settlement,

the written objection must include (i) the name of the proceedings; (ii) the Class

Member’s full name, current mailing address, current e-mail address, e-mail

address which received the Notice of Data Incident from Volusion, and telephone

number; (iii) a statement of the specific grounds for the objection, as well as any

documents supporting the objection; (iv) a statement as to whether the objection

applies only to the objector, to a specific subset of the class, or to the entire class;

(v) the identity of any attorneys representing the objector; (vi) a statement

regarding whether the Class Member (or his/her attorney) intends to appear at the

Final Approval Hearing; and (vii) the signature of the Class Member or the Class

Member’s attorney. The Class Member must file the objection with the Court on

or before the Objection Deadline and mail the objection to the Settlement

Administrator (who shall forward it to Class Counsel and Defense Counsel),

postmarked on or before the Objection Deadline.


21

C. The Class Notice must set forth the time and place of the Final Approval Hearing

(subject to change) and state that any Class Member who does not file a timely

and adequate objection in accordance with this Paragraph waives the right to

object or to be heard at the Final Approval Hearing and shall be forever barred

from making any objection to the Settlement.

D. Subject to approval of the Court, any objecting Class Member may appear, in

person or by counsel, at the Final Approval Hearing held by the Court, to show

cause why the proposed Settlement should not be approved as fair, adequate, and

reasonable, or object to any petitions for reasonable attorneys’ fees, Service

Awards, and reimbursement of reasonable litigation costs and expenses.

E. Any objecting Class Member intending to appear, in person or by counsel, at the

Final Approval Hearing must file with the Clerk of the Court and mail to the

Settlement Administrator (who shall forward it to Class Counsel and Defense

Counsel) a notice of intention to appear at the Final Approval Hearing (“Notice of

Intention to Appear”) by the Objection Deadline. The Notice of Intention to

Appear must include copies of any papers, exhibits, or other evidence that the

objecting Class Member (or his/her counsel) will present to the Court in

connection with the Final Approval Hearing.

F. Any Class Member who does not provide a Notice of Intention to Appear in

complete accordance with specifications set forth in the Class Notice, subject to

approval by the Court, may be barred from speaking or otherwise presenting any

views at the Final Approval Hearing.

G. The agreed-upon procedures and requirements for filing objections in

connection with the Final Approval Hearing are intended to ensure the efficient

administration of justice and the orderly presentation of any Class Member’s

objection to the Settlement Agreement, in accordance with the due process rights

of all Class Members.

H. The Preliminary Approval Order and Class Notice will require all Class Members

who have any objections to file such notice of objection or request to be heard with

the Court, and serve by mail or hand delivery such notice of objection or request

to be heard to the Settlement Administrator at the address set forth in the Class


22

Notice, by no later than the Objection Deadline. The Preliminary Approval Order

will further provide, in the Court’s discretion, that objectors who fail to properly

or timely file their objections with the Court, along with the required information

and documentation set forth above, or to serve them as provided above, may not

be heard during the Final Approval Hearing, their objections may be waived and

their objections may not be considered by the Court.

I. Class Counsel will defend the Court’s Final Approval Order, Final Approval Order

on Fees, Judgment, and any related orders, in the event of an appeal.

XIV. RELEASE OF CLAIMS AND JURISDICTION OF COURT

A. Plaintiffs and Class Members who do not submit a timely and valid Request for

Exclusion hereby release Volusion and Released Parties from any and all claims

actually alleged in the Litigation and all potential claims, whether known or

unknown, reasonably arising out of the same set of operative facts, under the laws

of any jurisdiction, including federal law, state law, and common law, whether at

law or equity.

B. Plaintiffs and Class Members expressly waive and relinquish, to the fullest extent

permitted by law, the provisions, rights, and benefits of section 1542 of the

California Civil Code, and any similar federal or state law, all claims actually

alleged in the Litigation and all potential claims reasonably arising out of the same

set of operative facts.

C. Section 1542 of the California Civil Code provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH

THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS

OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,

WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

D. This Settlement Agreement does not affect the rights of Class Members who

timely and properly make a Request for Exclusion from the Settlement Agreement.

E. Upon issuance of the Final Approval Order: (i) the Settlement Agreement shall be

the exclusive remedy for any and all Class Members, except those who have

submitted a timely and valid request for exclusion in accordance with the terms


23

and provisions hereof; (ii) Volusion and Released Parties shall not be subject to

liability or expense of any kind to any Class Member(s) for reasons related to the

Litigation except as set forth herein; and (iii) Class Members shall be permanently

barred from initiating, asserting, or prosecuting any and all released claims against

Volusion and Released Parties.

XV. DENIAL OF WRONGDOING AND LIABILITY

A. Volusion denies each and every claim and contention alleged against it in the

Litigation and all charges of wrongdoing or liability alleged against it.

Nonetheless, Volusion and its counsel have concluded that further continuation of

the Litigation would be protracted and expensive, and that it is desirable that the

Litigation be fully and finally settled in the manner and upon terms and conditions

set forth in this Settlement Agreement. Volusion has also taken into account the

uncertainty and risks inherent in any litigation, including in class action cases such

as this Litigation. Volusion has, therefore, determined that it is desirable that the

Litigation be settled in the manner and upon the terms and conditions set forth in

this Agreement.

XVI. MISCELLANEOUS PROVISIONS

A. This Settlement Agreement is not to be used in evidence (except in connection

with obtaining approval of this Settlement Agreement and enforcing its terms) and

shall not at any time be construed or deemed to be any admission or concession

by Volusion with respect to any alleged wrongdoing, fault, or omission of any kind

whatsoever, regardless of whether or not this Settlement Agreement results in

entry of a Final Approval Order as contemplated herein. Volusion specifically

denies all of the allegations made in connection with the Litigation. Neither this

Settlement Agreement nor any class certification pursuant to it shall constitute, in

this or in any other proceeding, an admission by Volusion, or evidence or a finding

of any kind, that any requirement for class certification is satisfied with respect to

the Action, or any other litigation, except for the limited purpose of settlement

pursuant to this Settlement Agreement. This Settlement Agreement is made with

the Parties’ express understanding and agreement that (a) if for any reason this


24

Settlement Agreement is not approved by the Court, Volusion may continue to

contest and deny that any class, including the proposed Class, is suitable for

certification as a class under the law of any jurisdiction.

B. This Settlement Agreement is entered into only for purposes of Settlement. In the

event that the Final Approval Order is not entered or a Final Approval Order is

subsequently reversed on appeal, the Parties agree to use their best efforts to cure

any defect(s) identified by the Court. If, despite their best efforts, the Parties

cannot cure said defects, this Settlement Agreement, including any releases or

dismissals hereunder, is canceled, and no term or condition of this Settlement

Agreement, or any draft thereof, or of the discussion, negotiation, documentation

or other part or aspect of the Parties’ settlement discussions, shall have any effect,

nor shall any such matter be admissible in evidence for any purpose, or used for

any purposes whatsoever in the Litigation, and all Parties shall be restored to their

prior rights and positions as if the Settlement Agreement had not been entered into.

C. The Parties agree that Volusion may, at its discretion, withdraw or terminate this

Settlement Agreement prior to the Final Approval Hearing if more than two

percent (2%) of Class Members have submitted valid and timely Requests for

Exclusion within five (5) business days following the delivery by the Settlement

Administrator to Defense Counsel a complete report listing all valid Requests for

Exclusion from the Settlement Administrator. For purposes of determining

whether the conditions for withdrawal or termination of the Settlement Agreement

have occurred, the Settlement Administrator shall submit a Declaration attaching

copies of all Requests for Exclusion timely received, together with copies of all

written revocations of any Requests for Exclusion, with the Court and serve copies

on Defense counsel and Class Counsel no later than seven (7) days after the

Request for Exclusion Deadline. If Volusion exercises this option and withdrawals

from this Settlement Agreement in accordance with the terms of this paragraph,

this Settlement Agreement shall become null and void and of no further force and

effect, and the Parties will be restored to their positions prior to their execution of

this Settlement Agreement.


25

D. The headings of the sections and paragraphs of this Settlement Agreement are

included for convenience only and shall not be deemed to constitute part of this

Settlement Agreement or to affect its construction.

E. Capitalized words, terms and phrases are used as defined in Section II, above.

F. The terms and provisions of this Settlement Agreement may be amended,

modified, or expanded by written agreement of the Parties and approval of the

Court; provided, however, that, after entry of the Preliminary Approval Order, the

Parties may, by written agreement, effect such amendments, modifications, or

expansions of this Settlement Agreement and its implementing documents

(including all exhibits hereto) without further notice to the Class or approval by

the Court if such changes are consistent with the Court’s Preliminary Approval

Order and do not materially alter, reduce, or limit the rights of Class Members

under this Settlement Agreement.

G. This Settlement Agreement may be executed in one or more counterparts, each of

which shall be deemed an original but all of which together shall constitute one

and the same instrument.

H. Except as otherwise provided in this Settlement Agreement, each party to this

Settlement Agreement shall bear his, her, or its own costs of the Litigation.

I. The Parties to this Settlement Agreement reserve the right, by agreement and

subject to the Court’s approval, to grant any reasonable extensions of time that

might be necessary to carry out any of the provisions of this Settlement Agreement,

as well as to correct any inadvertent, non-substantive mistakes or typographical

errors contained in any of the Settlement papers.

J. The administration and consummation of the Settlement Agreement shall be under

the authority of the Court. The Court shall retain jurisdiction to protect, preserve,

and implement the Settlement Agreement, including, but not limited to, the

release. The Court expressly retains jurisdiction to enter such further orders as may

be necessary or appropriate in administering and implementing the terms and

provisions of the Settlement Agreement, including, but not limited to, orders

enjoining Class Members from prosecuting claims that are released pursuant to the


26

Settlement Agreement as provided herein, and allowing for discovery related to

objectors, if any.

K. The determination of the terms of, and the drafting of, this Settlement

Agreement has been by mutual agreement after negotiation, with consideration by

and participation of all Parties and their counsel. Because this Settlement

Agreement was drafted with the participation of all Parties and their counsel, the

presumption that ambiguities shall be construed against the drafter does not apply.

The Parties were represented by competent and effective counsel throughout the

course of settlement negotiations and in the drafting and execution of this

Settlement Agreement, and there was no disparity in bargaining power among the

Parties to this Settlement Agreement.

L. This Settlement Agreement constitutes the entire, fully integrated agreement

among the Parties and cancels and supersedes all prior written and unwritten

agreements and understandings pertaining to the Settlement of the Litigation.

M. The Parties agree that any disputes regarding the meaning of the terms and

conditions of this Settlement Agreement, the Parties’ rights and obligations under

this Settlement Agreement, and/or as to any disagreement regarding the manner in

which any issue or dispute arising under this Settlement Agreement should be

resolved, shall be submitted to the Court for resolution.

N. All time periods set forth herein shall be computed in calendar days except where

this Settlement Agreement provides for business days. In computing any period of

time prescribed or allowed by this agreement or by order of the Court, the day of

the act, or default, from which the designated period of time begins to run shall

not be included. The last day of the period so computed shall be included, unless

it is a Saturday, a Sunday or a federally recognized legal holiday, in which event

the period shall run until the end of the next day that is not one of the

aforementioned days. Each of the Parties reserves the right, subject to the Court’s

approval, to seek any reasonable extensions of time that might be necessary to

carry out any of the provisions of this agreement, and to modify or supplement any

notice contemplated hereunder.


27

O. Any failure by any of the Parties to insist upon the strict performance by any of

the other Parties of any of the provisions of this agreement shall not be deemed a

waiver of any provision of this agreement, and such Party, notwithstanding such

failure, shall have the right thereafter to insist upon the specific performance of

any and all of the provisions herein.

P. All notices to the Parties or counsel required by this Settlement

Agreement shall be made in writing and communicated by electronic and regular

mail to the following addresses (unless one of the Parties subsequently designates

one or more other designees):

For Class Counsel: Mike Singley EDWARDS LAW GROUP 1101 East 11th St. Austin, Texas 78702 Tel: (512) 623-7727 Fax: (512) 623-7729 [email protected] Melissa S. Weiner PEARSON, SIMON & WARSHAW, LLP 800 LaSalle Avenue, Suite 2150 Minneapolis, Minnesota 55402 Tel: (612) 389-0600 Fax: (612) 389-0610 [email protected] Hassan A. Zavareei TYCKO & ZAVAREEI LLP 1828 L Street NW, Suite 1000 Washington D.C. 20036 Tel: (202) 973-0900 Fax: (202) 973-0950 [email protected] Jonathan M. Streisfeld KOPELOWITZ OSTROW FERGUSON WEISELBERG GILBERT 1 West Las Olas Blvd, Suite 500 Fort Lauderdale, Florida 33301 Tel: (954) 525-4100 Fax: (954) 525-4300

For Volusion, Inc.: Jon Kardassakis LEWIS BRISBOIS BISGAARD & SMITH, LLP 633 W. 5th Street, Suite 4000 Los Angeles, California 90071 Tel: (213) 250-1800 Fax: (213) 250-7900 [email protected] Robert A. Ewert LEWIS BRISBOIS BISGAARD & SMITH, LLP 2100 Ross Avenue, Suite 2000 Dallas, Texas 75201 Tel: (972) 638-8660 Fax: (214) 722-7111 [email protected]


28

[email protected]

IN WITNESS HEREOF, the undersigned have caused this Settlement Agreement to be executed as of the dates set forth below.

MICHAEL OROS, individually and as Class Representative Signature: _______________________

Date: ___________________________

JULIO LOPEZ, individually and as Class Representative Signature: _______________________

Date: ___________________________

VOLUSION, LLC

By: ____________________________ Print Name: ______________________ Title: ____________________________ Date: ___________________________

AS TO FORM AND CONTENT ONLY

PEARSON, SIMON & WARSHAW, LLP, as Class Counsel

By: _____________________________ Print Name: _____________________ Title: ___________________________ Date: ___________________________

TYCKO & ZAVAREEI LLP, as Class Counsel

By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________


29


EDWARDS LAW GROUP, as Class Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________

LEWIS BRISBOIS BISGAARD & SMITH, LLP, as Defense Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________

KOPELOWITZ OSTROW FERGUSON WEISELBERG GILBERT, as Class Counsel


28

[email protected]

IN WITNESS HEREOF, the undersigned have caused this Settlement Agreement to be executed as of the dates set forth below.

MICHAEL OROS, individually and as Class Representative Signature: _______________________ Date: ___________________________

JULIO LOPEZ, individually and as Class Representative Signature: _______________________ Date: ___________________________

VOLUSION, LLC. By: ____________________________ Print Name: ______________________ Title: ____________________________ Date: ___________________________

AS TO FORM AND CONTENT ONLY

PEARSON, SIMON & WARSHAW, LLP, as Class Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________

TYCKO & ZAVAREEI LLP, as Class Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________

KOPELOWITZ OSTROW FERGUSON WEISELBERG GILBERT, as Class Counsel


29


EDWARDS LAW GROUP, as Class Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________

LEWIS BRISBOIS BISGAARD & SMITH, LLP, as Defense Counsel By: _____________________________ Print Name: ______________________ Title: ___________________________ Date: ___________________________


csnyder

Typewritten Text

Jon Kardassaski

csnyder

Typewritten Text

April 12, 2022

csnyder

Typewritten Text

Defendant, Volusion LLC

EXHIBIT A


Page 1 of 3 4872-1799-9643.1

CLAIM FORM

Deadline: Your claim must be either

submitted online or postmarked and mailed by:

Month Day, Year

VOLUSION, LLC SETTLEMENT c/o Kroll Settlement Administration

PO Box 5324 New York, NY 10150-5324 Toll-Free: 833-620-3589

www.VolusionPrivacyClassAction.com

If you are a person to whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020, advising that on or about October 8, 2019, Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform, you may be eligible for benefits from a class action settlement.

CLAIMS DEADLINE: Claims, along with any required supporting documentation, must be submitted online at www.VolusionPrivacyClassAction.com or postmarked by mail to the address listed above no later than [CLAIM DEADLINE]. Claims submitted after this date will not be considered valid, and you will not be paid.

You may submit a claim to receive the following Settlement Benefits:

1. Reimbursement for Out-of-Pocket Losses: Compensation will be made for documented unreimbursed losses, up to a total of $1,500.00 per person for certain out-of-pocket expenses incurred as a result of the Data Security Incident. Upon submission of a Claim Form and required supporting documentation, out of pocket expenses may include bank fees, long distance phone charges, cell phone charges, data charges, postage, gasoline for local travel, fees for credit reports, credit monitoring, or other identity theft insurance products purchased between the date of Volusion’s Notice of Data Incident and the date of the Claims Deadline.

2. Compensation for Time Spent Responding to Data Incident: You may be compensated for time spent responding to the Data Security Incident of up to three (3) hours of Lost Time at $20.00/hour. Compensation for time spent responding to the Data Security Incident will be included within, and not in addition to, the calculation of reimbursement for documented Out-of-Pocket Losses up to a maximum of $1,500.00 per person.

In order for a Claim for reimbursement for documented out-of-pocket losses to be approved and paid, a Class Member must provide reasonable documentation to establish both the fact of actual loss and the dollar amount of the loss, and must have made reasonable efforts to exhaust all other sources of reimbursement, such as insurance benefits available as a result of the purchase of credit monitoring or identity monitoring. For Claims for time spent responding to the Data Security Incident, no documentation is required.

The sum total of payments for Approved Claims shall not exceed the Net Settlement Fund. In the event total claims exceed the Net Settlement Fund, the claim of each Settlement Class member shall be reduced on a pro rata basis. See the Settlement Agreement for further information on pro rata reductions.

Settlement Benefits will be distributed only after the Settlement is approved by the Court and all appeals are resolved in favor of the Settlement.

Please note: the Settlement Administrator may contact you to request additional documents or information needed to process your claim.


http://www.volusionprivacyclassaction.com/


Page 2 of 3 4872-1799-9643.1

I. CLAIMANT INFORMATION

Please fill out the below information to submit a claim. We will use this information to contact you and process your claim. If any of the following information changes, you must promptly notify us in writing, by mail at VOLUSION, LLC SETTLEMENT, c/o Kroll Settlement Administration, P.O. Box 5324, New York, NY 10150-5324, or by email at [email protected].

CLAIMANT ID: _____________________________________________________ (Your Claimant ID is listed on the email or postcard notice you received.)

First Name: ________________________ Middle Initial: ________Last Name: _______________________________

Street Address: ___________________________________________________________________________________

City: ______________________________ State: _________________________ Zip: ________________________

Contact Phone Number: ____________________________________________________________________________

Contact Email Address: ___________________________________________________________________________ (To be used to contact you)

II. OUT-OF-POCKET LOSSES

Compensation for Out-of-Pocket Losses: If you have unreimbursed out-of-pocket losses that were inurred as a result of the Data Security Incident, including bank fees, long distance phone charges, cell phone charges, data charges, postage, gasoline for local travel, fees for credit reports, credit monitoring, or other identity theft insurance product purchased between the date of Volusion’s Notice of Data Incident and the date of the Claims Filing Deadline, you may submit a claim for documented out-of-pocket losses of up to a maximum of $1,500.00 per person. You must provide reasonable documentation to establish both the fact of actual loss and the dollar amount of the loss, and must have made reasonable efforts to exhaust all other sources of reimbursement, such as insurance benefits available as a result of the purchase of credit monitoring or identity monitoring. You must attach and submit any supporting documentation proving and supporting your unreimbursed out-of-pocket losses.

Loss Type and Examples of Documents Amount Out-of-Pocket Losses and Supporting Documents

(Identify the amount of money you spent or lost, and what supporting documents you are attaching)

Bank fees, long distance charges, cell phone charges, data charges, credit monitoring, credit reports, identity theft protection services, incurred postage, or gasoline for local travel related to the Data Security Incident which occurred between 4/21/2020 and [Claims Deadline].

Documentation MUST be attached to Claim for Out-of-Pocket Losses.

$


mailto:[email protected]

Page 3 of 3 4872-1799-9643.1

III. CLAIM TIME SPENT DEALING WITH THE DATA SECURITY INCIDENT

If you spent time dealing with the Data Security Incident (e.g., researching issues, protecting yourself from possible harm, time securing identity theft insurance products, freezing and unfreezing your credit report), you may claim up to three (3) hours of lost time at $20.00/hour. Claims for time spent are included within the $1,500.00 cap on Out-of-Pocket Losses as detailed above. To claim reimbursement for time spent related to the Data Security Incident, you must check the following box and fill out the section below in full. You do not need to provide documentation.

Are you claiming time spent dealing with the Data Security Incident?

⎕ Yes, I am claiming for time spent dealing with the Data Security Incident. ⎕ No, I am not claiming time under this Section.

If you selected “Yes”, you must provide detail below attesting how your time was spent dealing with the Data Security Incident.

Date Time in Hours (up to 3 hours total)

Description of how your time was spent related to the Data Security Incident

IV. PAYMENT SELECTION If you made a claim for a Out-of-Pocket Losses and/or Lost Time on this Claim Form, you can elect to receive your payment either electronically or by check. Please select only one of the options below. If no selection is made, or if the required information is not provided, Settlement benefit payments will be mailed to the address you provided above.

PayPal - PayPal Account Email Address: _________________________________________________ Venmo - Venmo User Name: _________________________________________________________

Venmo Account Email Address: _______________________________________________________

Venmo Account Phone Number: _______________________________________________________

Check (will be mailed to address above)

V. AFFIRMATION AND SIGNATURE

• I affirm and swear under the laws of the United States that the information supplied in this claim form and any supplemental documentation attached is true and correct to the best of my knowledge.

• By signing this Claim Form you attest that the expenses listed above and/or time you spent were incurred as a result of the Data Security Incident.

• I understand that I may be asked to provide more information by the Settlement Administrator before my claim is complete.

Signature: ___________________________________________ Date: _________________________


Page 4 of 3 4872-1799-9643.1


EXHIBIT B


Volusion Privacy Settlement c/o Kroll Settlement Administration PO Box 5324 New York, NY 10150-5324

A Texas Federal Court authorized this Notice. This is not a solicitation.

If you were sent a notice by Volusion, LLC dated on or about April 21, 2020,

regarding a Data Security Incident, you may be eligible for benefits from

a class action settlement.

Para una notificación en español, visite

www.VolusionPrivacyClassAction.com

Claimant ID Number: [xxxxxxxxxxxxxxxx] [BARCODE] [PRINTER ID] [NAME] [ADDRESS 1] [ADDRESS 2] [CITY], [STATE] [ZIP CODE]

FIRST CLASS MAIL

US POSTAGE PAID

Permit#__



You are receiving this notice to inform you of your rights and options in a proposed settlement in a class action lawsuit called Julio Lopez and Michael Oros, et al v. Volusion, LLC, W.D. Tex (the “Settlement”).

What is this about? The lawsuit relates to an incident that took place on or about October 8, 2019, when Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform (the “Data Security Incident”). Volusion denies all allegations of wrongdoing or liability made in the lawsuit. Both sides have agreed to the Settlement to avoid the cost of further litigation. Why am I being contacted? Records from Volusion indicate that your information may have been affected by the Data Security Incident and your rights may be affected by the proposed Settlement. What does the Settlement provide? The proposed Settlement provides for funds up to $4.3 million less additional defense expenses. The Settlement Fund will be used to pay for the following: (1) all Notice and Administration Expenses; (2) any award of Attorneys’ Fees and Expenses not to exceed $450,000, as approved by the Court; (3) any Service Award to the Class Representatives, not to exceed $2,500; and (4) Settlement Benefits for Approved Claims for Out-of-Pocket Losses and Approved Claims for lost time. Settlement Benefits are described more fully in the Settlement Agreement available at www.VolusionPrivacyClassAction.com. What can I get? If the Court approves the Settlement, Class Members who have submitted Approved Claims are eligible to receive the following:

Compensation for Out-of-Pocket Losses: Compensation for Out-of-Pocket Losses, up to a total of $1,500.00 per person for certain out-of-pocket expenses incurred because of the Data Security Incident. You must provide documentation of all Out-of-Pocket Losses claimed. Payment for Time Spent: You may be compensated for your time spent responding to the Data Security Incident of up to three (3) hours of lost time at $20.00/hour. Payment for time spent will be included within, and not in addition to, out-of-pocket losses claimed up to the maximum $1,500.00 per person.

How do I file a claim? To receive Settlement Benefits, go to www.VolusionPrivacyClassAction.com to file online or download a Claim Form. You can write: Volusion Privacy Settlement, c/o Kroll Settlement



Administration, PO Box 5324, New York, NY 10150-5324, email: [email protected]. All Claim Forms must be submitted online or postmarked by [MM/DD/YYYY]. What are my other options? Do Nothing: If you do nothing, you will not get any Settlement Benefits and you will give up your right to sue or continue to sue Volusion, LLC for the claims in this case. Exclude Yourself: If you exclude yourself or remove yourself from the Class, you will not receive any Settlement Benefits. You will keep your right to sue or continue to sue Volusion, LLC for the claims in this case. Exclusion requests must be postmarked by [MM/DD/YYYY]. Object. If you do not exclude yourself from the Settlement you may object to it or tell the Court what you don’t like about the Settlement. Objections must be filed with the Clerk of Court by [MM/DD/YYYY]. For more details about your rights and options and how to exclude yourself or object, go to www.VolusionPrivacyClassAction.com. What happens next? The Court will hold a Final Approval Hearing on [Month Day, Year] at XX:XX a.m./p.m., in Courtroom __ at the US District Court for the Western District of Texas, 501 West Fifth Street, Austin, Texas 78701, to consider whether to approve the Settlement, Class Counsel’s attorneys’ fees and expenses, and Class Representatives’ Service Awards. Class Counsel’s fee motion will be posted to the website below once filed. The Court has appointed Edwards Law Group, Pearson, Simon & Warshaw, LLP, Kopelowitz Ostrow Ferguson Weiselberg and Gilbert, and Tycko & Zavareei LLP as Class Counsel. Class Counsel will answer any questions that the Court may have. You or your attorney may ask to speak at the hearing at your own cost, but you don’t have to. A Notice of Intention to Appear at the Final Approval Hearing must be filed by [MM/DD/YYYY]. How do I get more information? To view the full notice and important documents such as the Settlement Agreement, go to www.VolusionPrivacyClassAction.com or contact the Settlement Administrator by writing to Volusion Privacy Settlement, c/o Kroll Settlement Administration, PO Box 5324, New York, NY 10150-5324, or emailing [email protected], or calling 1-833-620-3589.

PLEASE DO NOT CONTACT THE COURT OR THE COURT CLERK’S OFFICE


Carefully separate this Address Change Form at the perforation

Name: ______________________________________________

Current Address: _____________________________________

____________________________________________________

____________________________________________________

Volusion Privacy Settlement c/o Kroll Settlement Administration PO Box 5324 New York, NY 10150-5324


EXHIBIT C


From: [email protected] To: [CLASS MEMBER Email] Subject: Legal Notice of Volusion Privacy Settlement

A Texas Federal Court authorized this Notice. This is not a solicitation.

If you were sent a notice by Volusion, LLC dated on or about April 21, 2020, regarding a Data Security Incident, you may be eligible for benefits from a class action settlement.

Para una notificación en español, visite www.VolusionPrivacyClassAction.com

Dear [CLASS MEMBER]: You are receiving this notice to inform you of your rights and options in a proposed settlement in a class action lawsuit called Julio Lopez and Michael Oros, on behalf of themselves and all others similarly situated v. Volusion, LLC, W.D. Tex (the “Settlement”).

What is this about? The lawsuit relates to an incident that took place on or about October 8, 2019, when Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform (the “Data Security Incident”). Volusion denies all allegations of wrongdoing or liability made in the lawsuit. Both sides have agreed to the Settlement to avoid the cost of further litigation.

Why am I being contacted? Records from Volusion indicate that your information may have been affected by the Data Security Incident and your rights may be affected by the proposed Settlement.

What does the Settlement provide? The proposed Settlement provides for funds up to $4.3 million less additional defense expenses. The Settlement Fund will be used to pay for the following: (1) all Notice and Administration Expenses; (2) any award of Attorneys’ Fees and Expenses not to exceed $450,000, as approved by the Court; (3) any Service Award to the Class Representatives, not to exceed $2,500; and (4) Settlement Benefits for Approved Claims for Out-of-Pocket Losses and Approved Claims for lost time. Settlement Benefits are described more fully in the Settlement Agreement available at www.VolusionPrivacyClassAction.com.

What can I get? If the Court approves the Settlement, Class Members who have submitted Approved Claims are eligible to receive the following:

Compensation for Out-of-Pocket Losses: Compensation for Out-of-Pocket Losses, up to a total of $1,500.00 per person for certain out-of-pocket expenses incurred because of the Data Security Incident. You must provide documentation of all Out-of-Pocket Losses claimed.

Payment for Time Spent: You may be compensated for your time spent responding to the Data Security Incident of up to three (3) hours of lost time at $20.00/hour. Payment for time spent will be included within, and not in addition to, out-of-pocket losses claimed up to the maximum $1,500.00 per person.

How do I file a claim? To receive Settlement Benefits you must file a claim. To file a claim online, go to www.VolusionPrivacyClassAction.com or download a Claim Form. You can also write:






Volusion Privacy Settlement, c/o Kroll Settlement Administration, PO Box 5324, New York, NY 10150-5324, or email: [email protected]. All Claim Forms must be submitted online or postmarked by [MM/DD/YYYY].

What are my other options? Do Nothing: If you do nothing, you will not get any Settlement Benefits and you will give up your right to sue or continue to sue Volusion, LLC for the claims in this case.

Exclude Yourself: If you exclude yourself or remove yourself from the Class, you will not receive any Settlement Benefits. You will keep your right to sue or continue to sue Volusion, LLC for the claims in this case. Exclusion requests must be postmarked by [MM/DD/YYYY].

Object. If you do not exclude yourself from the Settlement you may object to it or tell the Court what you don’t like about the Settlement. Objections must be filed with the Clerk of Court by [MM/DD/YYYY]. For more details about your rights and options and how to exclude yourself or object, go to www.VolusionPrivacyClassAction.com.

What happens next? The Court will hold a Final Approval Hearing on [Month Day, Year] at XX:XX a.m./p.m., in Courtroom __ at the US District Court for the Western District of Texas, 501 West Fifth Street, Austin, Texas 78701, to consider whether to approve the Settlement, Class Counsel’s attorneys’ fees and expenses, and Class Representatives’ Service Awards. Class Counsel’s fee motion will be posted to the website below once filed. The Court has appointed Edwards Law Group, Pearson, Simon & Warshaw, LLP, Kopelowitz Ostrow Ferguson Weiselberg and Gilbert, and Tycko & Zavareei LLP as Class Counsel. Class Counsel will answer any questions that the Court may have. You or your attorney may ask to speak at the hearing at your own cost, but you don’t have to. A Notice of Intention to Appear at the Final Approval Hearing must be filed by [MM/DD/YYYY].

How do I get more information? To view the full notice and important documents such as the Settlement Agreement, go to www.VolusionPrivacyClassAction.com or contact the Settlement Administrator by writing to Volusion Privacy Settlement, c/o Kroll Settlement Administration, PO Box 5324, New York, NY 10150-5324, or emailing [email protected], or calling 1-833-620-3589.


To unsubscribe, please click on the following link: unsubscribe




http://www.volusionprivacyclassactioon.com/

EXHIBIT D


QUESTIONS? Visit www.VolusionPrivacyClassAction.com or call toll-free at 1-833-620-3589 Page 1 of 10

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THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS

If you were mailed a notice by Volusion, LLC dated on or about April 21, 2020, regarding a Data Incident, you may be eligible for benefits from a class action settlement.

Para una notificación en español, visite www.VolusionPrivacyClassAction.com

A Federal Court authorized this Notice. This is not an advertisement or a solicitation from a lawyer.

• A proposed Settlement has been reached in a class action lawsuit called Julio Lopez and Michael Oros,on behalf of themselves and all others similarly situated v. Volusion, LLC, United States District Courtfor the Western District of Texas, Austin Division (the “Court”), Case No. 1:20-cv-00761-LY (the“Settlement”).

• Volusion, LLC (“Volusion”) is an ecommerce platform that hosts websites for businesses to set up e-commerce shops, including by offering services that allow businesses to accept credit card payments.

• The lawsuit relates to a data security incident that took on or about October 8, 2019, potentiallyaffecting certain personal information of some of Volusion’s merchant clients’ customers (the “DataSecurity Incident”). On or about October 8, 2019, Volusion learned that personal information of somecustomers of Volusion’s merchant clients may have been improperly exposed as a result of malwareplaced on Volusion’s e-commerce platform.

• Volusion denies all responsibility or liability made in the lawsuit.• The Court has not decided who is right or wrong. Instead, both sides have agreed to the Settlement to

avoid the cost of further litigation.• You are a Class Member if you were sent a Notice of the Data Security Incident by Volusion dated on

or about April 21, 2020, advising that on or about October 8, 2019, Volusion learned that personalinformation of some customers of Volusion’s merchant clients may have been improperly exposed asa result of malware placed on Volusion’s e-commerce platform.

• The proposed Settlement provides for a fund totaling not more than $4.3 million less additionaldefense expenses. The Settlement Fund will be used to pay for the following in the following order:(1) all Notice and Administration Expenses; (2) any award of Attorneys’ Fees and Expenses approvedby the Court; (3) any Service Award to the Class Representatives; and (4) Settlement Benefits to ClassMembers for Approved Claims for Out-of-Pocket Losses and Approved Claims for Lost Time.

• Class Members’ rights and options—and the deadlines to exercise them—are explained in this notice.The deadlines may be moved, canceled, or otherwise modified, so please check the SettlementWebsite, www.VolusionPrivacyClassAction.com, regularly for updates and further details.

• Payments will be made if the Court approves the Settlement and after any appeals are resolved. Pleasebe patient.





QUESTIONS? Visit www.VolusionPrivacyClassAction.com or call toll-free at 1-833-620-3589

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Your legal rights may be affected whether or not you act. Please read this notice carefully.

YOUR LEGAL RIGHTS AND OPTIONS

FILE A CLAIM

• File a claim for Settlement Benefits online or by mail • Be bound by the Settlement • Give up your right to sue or continue to sue Volusion

for the claims in this case

Submit online or postmarked by [MONTH, DAY YEAR]

ASK TO BE EXCLUDED

(“OPT OUT”)

• Remove yourself from the Settlement and receive no Settlement Benefits

• Keep your right to sue or continue to sue Volusion for the claims in this case

Postmarked by [MONTH, DAY YEAR]

OBJECT

• Tell the Court what you do not like about the proposed Settlement

• You will still be bound by the Settlement, and you may still file a claim

• You cannot both request exclusion and object

Postmarked by [MONTH DAY YEAR]

ATTEND THE HEARING

• Ask to speak in Court about the Settlement • If you want your own attorney to represent you, you

must pay for him or her yourself • File your Notice of Intention to Appear by [DATE]

[MONTH DAY, YEAR at TIME]

DO NOTHING • Receive no Settlement Benefits • Give up your right to sue or continue to sue Volusion

for the claims in this case




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WHAT THIS NOTICE CONTAINS

Basic Information...................................................................................................................................... 4 1. Why is there a notice? ...................................................................................................................... 4 2. What is this lawsuit about? .............................................................................................................. 4 3. Why is this a class action? ............................................................................................................... 4 4. Why is there a Settlement? .............................................................................................................. 4

Who is in the Settlement? ......................................................................................................................... 4 5. Am I part of the Settlement? ............................................................................................................ 4 6. What if I am still not sure if I am included in the Settlement? ........................................................ 5

Settlement Benefits – What Class Members Get ................................................................................... 5 7. What does the Settlement provide?.................................................................................................. 5 8. What can I get from the Settlement? ................................................................................................ 5

How to Get Settlement Benefits ............................................................................................................... 6 9. How can I get Settlement benefits? ................................................................................................. 6 10. When would I get my Settlement benefits? ................................................................................. 6 11. What am I giving up to get Settlement benefits or stay in the Settlement? ................................. 6

Excluding Yourself from the Settlement................................................................................................. 6 12. How do I get out of the Settlement? ............................................................................................. 7 13. If I don’t exclude myself, can I sue the Defendant for the same thing later? .............................. 7 14. If I exclude myself, can I still get Settlement benefits? ............................................................... 7

The Lawyers Representing You .............................................................................................................. 7 15. Do I need to hire my own lawyer? ............................................................................................... 7 16. How will the lawyers be paid? ..................................................................................................... 8

Objecting to the Settlement ...................................................................................................................... 8 17. How do I tell the Court if I do not like the Settlement? ............................................................... 8 18. What is the difference between objecting and excluding? ........................................................... 9

The Court’s Final approval Hearing....................................................................................................... 9 19. When and where will the Court decide whether to approve the Settlement? .............................. 9 20. Do I have to come to the hearing?................................................................................................ 9 21. May I speak at the hearing?.......................................................................................................... 9

If You Do Nothing ................................................................................................................................... 10 22. What happens if I do nothing at all? .......................................................................................... 10

Getting More Information ..................................................................................................................... 10 23. How do I get more information? ................................................................................................ 10




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BASIC INFORMATION

1. Why is there a notice?

You have a right to know about a proposed Settlement of a class action lawsuit, and about your options, before the Court decides whether to approve the Settlement. The Court in charge of this case is the United States District Court for the Western District of Texas, Austin Division. The case is called Julio Lopez and Michael Oros, on behalf of themselves and all others similarly situated v. Volusion, LLC, Case No. 1:20-cv-00761-LY. The individuals who sued, Plaintiffs Julio Lopez and Michael Oros (“Class Representatives”) on behalf of themselves and all other persons similarly situated are, collectively, called “Plaintiffs.” The company that Plaintiffs sued, Volusion, LLC, is called the Defendant.

2. What is this lawsuit about?

The lawsuit relates to a data security incident that took place on or about October 8, 2019, potentially affecting certain personal information of some of Volusion’s merchant clients’ customers. On or about October 8, 2019, Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform. Volusion denies all allegations of wrongdoing or liability made in the lawsuit. Both sides have agreed to the Settlement to avoid the cost of further litigation.

3. Why is this a class action?

In a class action, one or more people called Class Representatives (in this case Julio Lopez and Michael Oros), sue on behalf of people who have similar claims. All these people together are a “class” or “class members.” Individual class members do not have to file a lawsuit to participate in the class action settlement or be bound by the judgment in the class action. One court resolves the issues for all class members, except for those who exclude themselves from the class.

4. Why is there a Settlement?

The Court has not decided who is right or wrong. Instead, both sides, with the assistance of experienced privacy litigation class action mediator Bruce A. Friedman, Esq. of JAMS have agreed to the Settlement. Both sides want to avoid the cost of further litigation. The Class Representatives and their attorneys think the Settlement is in the best interests of the Class and is fair, reasonable, and adequate.

WHO IS IN THE SETTLEMENT?

5. Am I part of the Settlement?

The Class consists of all persons to whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020, advising that on or about October 8, 2019, Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform.




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6. What if I am still not sure if I am included in the Settlement?

If you are not sure whether you are a Class Member, or have any other questions about the Settlement, you should visit the Settlement Website, www.VolusionPrivacyClassAction.com, or contact the Settlement Administrator by email at [email protected], or call toll-free at 1-833-620-3589.

SETTLEMENT BENEFITS – WHAT CLASS MEMBERS GET

7. What does the Settlement provide?

The proposed Settlement provides for a fund totaling up to $4.3 million less additional defense expenses, which will be used to pay for the following: (1) all Notice and Administration Expenses; (2) any award of Attorneys’ Fees and Expenses not to exceed $450,000.00; (3) any Service Award to the Class Representative, not to exceed $2,500.00; and (4) Settlement Benefits to Class Members for Approved Claims for Out-of-Pocket Losses and Approved Claims for Lost Time spent responding to the Data Incident.

8. What can I get from the Settlement?

If the Court approves the Settlement, Class Members who have not excluded themselves from the Settlement and have submitted Approved Claims are eligible to receive the following:

Reimbursement for Out-of-Pocket Losses: Compensation will be made for unreimbursed losses, up to a total of $1,500.00 per person for certain out-of-pocket expenses incurred as a result of the Data Security Incident. Upon submission of a Claim Form and required supporting documentation, out of pocket expenses may include bank fees, long distance phone charges, cell phone charges, data charges, postage, gasoline for local travel, fees for credit reports, credit monitoring, or other identity theft insurance products purchased between the date of Volusion’s Notice of Data Incident and the date of the Claims Deadline.

Compensation for Time Spent Responding to Data Incident: You may be compensated for time spent responding to the Data Security Incident of up to three (3) hours of Lost Time at $20.00/hour. Compensation for time spent responding to the Data Security Incident will be included within, and not in addition to, the calculation of reimbursement for documented Out-of-Pocket Losses up to a maximum of fifteen hundred dollars ($1,500.00) per person.

Payment of funds to Class Members cannot exceed the available funds to the Settlement. In the unlikely event this occurs, payments will be reduced pro rata, such that they will be pro-rated down proportionately. If a pro rata reduction is necessary, then pro rata reduction shall occur in the following order: first, each Class Member’s payment for Lost Time shall be reduced pro rata such that no Class Member’s payment for Lost Time shall be reduced below $20.00; second, if after the first pro rata reduction, the balance of the settlement fund is still insufficient to pay the remaining Claims, then a second pro rata reduction shall be made to Class Members’ claims for Out-of-Pocket Losses such that no Class Member’s payment for Out-of-Pocket Losses shall be reduced more than 50%; and third, if after the second pro rata reduction the balance of the settlement fund is still insufficient to pay the remaining Claims, then all Claims shall be reduced proportionally.



http://www.schooldatabreach.com/



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To the extent any check or electronic payment issued by the Settlement Administrator remains uncashed ninety (90) days after issuance and the Settlement Administrator has no reasonable means to re-issue the check or payment or if a re-issued check or payment remains uncashed an additional ninety (90) days thereafter, those unpaid funds are forfeited by a Class Member and may be distributed by the Settlement Administrator to the Cy Pres Recipient approved by the Court.

HOW TO GET SETTLEMENT BENEFITS

9. How can I get Settlement benefits?

To be eligible to receive Settlement benefits, you must complete and submit a timely and valid Claim Form, along with any required documentation, online or by mail postmarked no later than [MONTH DAY, YEAR]. You may submit a Claim Form electronically or obtain a blank Claim Form at www.VolusionPrivacyClassAction.com. You may also request one from the Settlement Administrator by mail or email as follows:

Volusion Privacy Settlement c/o Kroll Settlement Administration

PO Box 5324 New York, NY 10150-5324

Email: [email protected]

If you do not submit a valid Claim Form by [MONTH DAY, YEAR], you will not receive Settlement Benefits, but you will be bound by the Court’s judgment in this case.

10. When would I get my Settlement Benefits?

Settlement Benefits will be made to Class Members who filed a timely and valid claim after the Court grants “final approval” to the Settlement and after all appeals are resolved. If the Court approves the Settlement, there may be appeals. It’s always uncertain whether these appeals can be resolved and resolving them can take time. Please be patient.

11. What am I giving up to get Settlement Benefits or stay in the Settlement?

If you are a Class Member, unless you exclude yourself from the Settlement, you cannot sue the Defendant, continue to sue, or be part of any other lawsuit against the Defendant about the claims released in this Settlement. It also means that all the decisions by the Court will bind you. The Released Claims are defined in the Settlement Agreement and describe the legal claims that you give up if you stay in the Settlement. The Settlement Agreement is available at www.VolusionPrivacyClassAction.com.

EXCLUDING YOURSELF FROM THE SETTLEMENT

If you don’t want a payment from the Settlement or you want to keep the right to sue or continue to sue the Defendant on your own about the claims released in this Settlement, then you must take steps to get out. This is called excluding yourself—or it is sometimes referred to as “opting out” of the Settlement.







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12. How do I get out of the Settlement?

To exclude yourself (or “opt-out”) from the Settlement, you must complete and mail to the Settlement Administrator a written Request for Exclusion. The Request for Exclusion must include:

• The name of the case, Julio Lopez and Michael Oros, on behalf of themselves and all others similarly situated v. Volusion, LLC, United States District Court for the Western District of Texas, Austin Division, Case No. 1:20-cv-00761-LY;

• your full name and current address;

• your personal signature; and

• a statement at the top of the communication containing the words “Request for Exclusion” or a comparable statement indicating your desire to be excluded from the Settlement.

You must mail your exclusion request, postmarked by [MONTH DAY, YEAR], to the Settlement Administrator at the following address:

Volusion Privacy Settlement – Exclusion Request c/o Kroll Settlement Administration

PO Box 5324 New York, NY 10150-5324

If you do not submit a timely and valid Request for Exclusion, you will lose the opportunity to exclude yourself from the Settlement and will be bound by the Settlement. If you ask to be excluded, you shall be deemed to have waived any rights or benefits under the Settlement, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue (or continue to sue) the Defendant about the claims in this lawsuit.

13. If I don’t exclude myself, can I sue the Defendant for the same thing later?

No. Unless you exclude yourself, you give up any right to sue the Defendant for the claims that this Settlement resolves. If you have a pending lawsuit, speak to your lawyer in that lawsuit immediately. You must exclude yourself from this Settlement to continue your own lawsuit. If you properly exclude yourself from the Settlement, you will not be bound by any orders or judgments entered in the litigation relating to the Settlement.

14. If I exclude myself, can I still get Settlement Benefits?

No. You will not get any of the Settlement Benefits if you exclude yourself. If you exclude yourself from the Settlement, do not send in a Claim Form asking for benefits as that claim will not be approved.

THE LAWYERS REPRESENTING YOU

15. Do I need to hire my own lawyer?

No. The Court has appointed Edwards Law Group, Pearson, Simon & Warshaw, LLP, Kopelowitz Ostrow Ferguson Weiselberg and Gilbert, and Tycko & Zavareei LLP as Class Counsel. Class Counsel will answer any questions that the Court may have. You will not be charged for these lawyers. If you want to




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be represented by your own lawyer, you may hire one at your own expense. You or your attorney may ask to speak at the hearing at your own cost, but you don’t have to.

16. How will the lawyers be paid?

Class Counsel will file a motion seeking a fee and expense award not to exceed $450,000.00, as well as the Class Representative Service Award of up to $2,500.00 as approved by the Court, if any. The Court will determine the amounts of fees, expenses, and a Service Award, which will be paid from the Settlement Fund.

OBJECTING TO THE SETTLEMENT

17. How do I tell the Court if I do not like the Settlement?

If you are a Class Member and have not excluded yourself from the Settlement, you may object to the Settlement or Class Counsel’s Fee Application by filing a written statement of objection with the Court on or before the Objection Deadline. The written objection must include:

• The name of the case, Julio Lopez and Michael Oros, on behalf of themselves and all others similarly situated v. Volusion, LLC, United States District Court for the Western District of Texas, Austin Division, Case No. 1:20-cv-00761-LY,

• your full name, current mailing address, current e-mail address, e-mail address used to access Volusion, and telephone number,

• a statement of the specific grounds for the objection, as well as any documents supporting the objection,

• the identity of any attorneys representing you, • a statement regarding whether you or your attorney intend to appear at the Final Approval

Hearing, and • your signature or the signature of your attorney.

Your objection must be submitted to the Court either by filing it with the Court or by mailing it via U.S. Mail to the Court postmarked by Month DD, 2022, to the following address: United States District Court for the Western District of Texas, Austin Division, 501 West Fifth Street, Austin, Texas 78701. You must also mail a copy of the your objection to the Settlement Administrator:Volusion Privacy Settlement - Objection

c/o Kroll Settlement Administration PO Box 5324

New York, NY 10150-5324

If you do not file a timely and adequate objection, you will waive your right to object or to be heard at the Final Approval Hearing and will be forever barred from making any objection to the Settlement. If you intend to appear in person or by counsel at the Final Approval Hearing, a Notice of Intention to Appear at the Final Approval Hearing must be filed with the Clerk of the Court and a copy sent by mail to the Settlement Administrator by Month DD, 2022, that must include copies of any papers, exhibits, or other evidence that you or your counsel will present to the Court in connection with the Final Approval Hearing.




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18. What is the difference between objecting and excluding?

Objecting is simply telling the Court that you don’t like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. Excluding yourself from the Settlement is telling the Court that you don’t want to be part of the Settlement. If you exclude yourself from the Settlement, you have no basis to object to the Settlement because it no longer affects you.

THE COURT’S FINAL APPROVAL HEARING

19. When and where will the Court decide whether to approve the Settlement?

The Court will hold a Final Approval Hearing on [MONTH DAY, YEAR at TIME] in Courtroom __ at the United States District Court for the Western District of Texas, Austin Division, 501 West Fifth Street, Austin, Texas 78701. At the Final Approval Hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. The Court will also consider how much to pay award Class Counsel for attorneys’ fees and costs and the Class Representative as a Service Award. If there are objections, the Court will consider them at this time. After the hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions will take.

20. Do I have to come to the hearing?

No. Class Counsel will answer any questions that the Court may have, but you may come at your own expense. If you submit an objection, you don’t have to come to Court to talk about it. As long as you filed and served your written objection on time to the proper addresses, the Court will consider it. You may also pay your own lawyer to attend, but it’s not necessary.

21. May I speak at the hearing?

Yes. You may ask the Court for permission to speak at the Final Approval Hearing. To do so, you musthave timely filed an objection and Notice of Intention to Appear in accordance with the procedures explained in Question 17 above. Any request for appearance that fails to satisfy these requirements, or that has otherwise not been properly or timely submitted, will be deemed ineffective and a waiver of such Class Member’s rights to appear and to comment on the Settlement at the Final Approval Hearing. Only the Parties, Class Members, or their counsel may request to appear and be heard at the Final Approval Hearing. Persons or entities that opt-out may not request to appear and be heard at the Final Approval Hearing.




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IF YOU DO NOTHING

22. What happens if I do nothing at all?

If you do nothing, you will not get any of the Settlement Benefits. Unless you exclude yourself, you won’t be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendant about the legal issues in this case, ever again.

GETTING MORE INFORMATION

23. How do I get more information?

This notice summarizes the proposed Settlement. More details are in the Settlement Agreement, available at the Settlement Website, www.VolusionPrivacyClassAction.com. If you have additional questions, you can visit the Settlement Website or contact the Settlement Administrator:

Volusion Privacy Settlement

c/o Kroll Settlement Administration PO Box 5324

New York, NY 10150-5324

Email: info@ VolusionPrivacyClassAction.com Toll-Free: 1- 833-620-3589






EXHIBIT 2



AUSTIN DIVISION

JULIO LOPEZ and MICHAEL OROS, On Behalf of Themselves and All Others Similarly Situated,

Plaintiffs,

v. VOLUSION, LLC, Defendant.

Case No.: 1:20-cv-00761-LY

JOINT DECLARATION OF CLASS COUNSEL, JONATHAN M. STREISFELD, MELISSA S. WEINER, HASSAN A. ZAVAREEI, AND MICHAEL SINGLEY IN

SUPPORT OF PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT,

PRELIMINARY CERTIFICATION, AND APPROVAL OF NOTICE PLAN

Jonathan M. Streisfeld, Melissa S. Weiner, Hassan A. Zavareei, and Michael Singley, declare as

follows:

1. We are counsel of record for Plaintiffs Julio Lopez and Michael Oros and proposed

Class Counsel1 for the Class in the above-captioned matter. We submit this declaration in support of

Plaintiffs’ Unopposed Motion for Preliminary Approval of Class Action Settlement, Preliminary

Certification, and Approval of Notice Plan. Unless otherwise noted, we have personal knowledge of

the facts set forth in this declaration and could and would testify competently to them if called upon

to do so.

2. The firm resume of Kopelowitz Ostrow P.A., including the biography of Jonathan M.

Streisfeld, is attached as Exhibit A to this declaration.

1 The capitalized terms used herein are defined in and have the same meaning as those found in the Settlement Agreement unless otherwise stated.


2

3. The firm resume of Pearson, Simon & Warshaw, LLP, including the biography of

Melissa S. Weiner, is attached as Exhibit B to this declaration.

4. The firm resume of Tycko & Zavareei LLP, including the biography of Hassan A.

Zavareei, is attached as Exhibit C to this declaration.

5. The resume of Michael Singley of Edwards Law Group is attached as Exhibit D to

this declaration.

6. Plaintiffs’ claims in this Litigation arise from the Data Security Incident, an alleged

data breach involving malware placed on Defendant Volusion LLC’s e-commerce platform between

on or about September 7, 2019 and October 10, 2019, which allegedly compromised the personally

identifiable information (“PII”) of approximately 502,000 individuals who provided their PII to

merchants to make purchases through online stores using Volusion’s payment software.

7. Before commencing litigation, Class Counsel investigated the potential claims against

Volusion, interviewed potential plaintiffs, and gathered information about the Data Security Incident

and its potential impact on consumers, as confirmed by the extensive public sources cited in the

Complaint. This allowed Class Counsel to determine the nature of the Data Security Incident, its

perpetrator, the type of information compromised, and the number of putative Class Members.

8. Plaintiff Julio Lopez filed a Class Action Complaint in the United States District Court

for the Southern District of Florida on April 24, 2020 (the “S.D. Fla. Action”), asserting claims against

Volusion related to the Data Security Incident. On June 18, 2020, Volusion filed a Motion to Dismiss

for Lack of Jurisdiction. On July 16, 2020, Plaintiff Julio Lopez filed a Notice of Voluntary Dismissal

of the S.D. Fla. Action, without prejudice, and, together with Plaintiff Michael Oros, filed a Class

Action Complaint in this Court on July 17, 2020, asserting the same claims alleged in the S.D. Fla.

Action, as well as claims for violations of certain Illinois statutory provisions.

9. On July 27, 2020 Volusion filed a Voluntary Chapter 11 Petition for Non-Individuals

Bankruptcy, whereupon an automatic stay pursuant to 11 U.S.C. §362(a) went into place. On August

10, 2020, this Court entered its Order staying the Litigation. On November 20, 2020 the Bankruptcy

Court confirmed Debtors’ Combined Plan of Reorganization and Disclosure Statement of Volusion,


3

LLC Pursuant to Chapter 11 of the Bankruptcy Code. The Effective Date of the Plan occurred on

January 19, 2021. On June 2, 2021, the Bankruptcy Court entered its Order allowing Plaintiffs to

pursue the Litigation in this Court provided that any recovery awarded be limited to any available

insurance proceeds covering the Reorganized Debtor (i.e., Volusion). On August 18, 2021, this Court

lifted the stay in the Litigation, and Volusion was ordered to file an answer to Plaintiffs’ Class Action

Complaint on or before September 13, 2021. On September 13, 2021, Volusion filed its Motion to

Dismiss. Plaintiffs filed their Response in Opposition to the Motion to Dismiss on October 11, 2021,

and Volusion filed its Reply on November 11, 2021.

10. While Volusion’s fully briefed and heavily contested Motion to Dismiss remained

pending, on February 7, 2022, the Parties engaged in an extensive, arm’s-length mediation before

experienced privacy litigation class action mediator Bruce A. Friedman, Esq. of JAMS. In advance,

the Parties submitted lengthy mediation briefs to the mediator, and Volusion provided settlement

discovery to Plaintiffs regarding the limited insurance funds it has to resolve this Litigation.

11. Class Counsel’s appreciation of the merits of this case and thorough investigation of

the facts before and during the course of the Litigation allowed them to better understand the key

issues and engage in vigorous, arm’s-length negotiations with Volusion.

12. The mediation did not result in a settlement on that first day. However, Mr. Friedman

and counsel continued to communicate, with further negotiations resulting in the Parties’ agreement

to the material Settlement terms.

13. On February 16, 2022, the Parties filed a Notice of Settlement and Request to Stay

Deadlines Pending Settlement Approval, which was granted on February 16, 2022.

14. On April 12, 2022, the Parties entered into the Settlement Agreement, a true and

correct copy of which is attached as Exhibit 1 to Plaintiffs’ Unopposed Motion for Preliminary

Approval of Class Action Settlement, Preliminary Certification, and Approval of Notice Plan.

15. Although this case was settled while a motion to dismiss was pending, the Parties

engaged in lengthy litigation to reach this point. They engaged in briefing and negotiated hotly


4

contested issues before the Southern District of Florida, the Southern District of Texas (Bankruptcy),

and this Court.

16. Plaintiffs and Class Counsel firmly believe that this Settlement is fair, reasonable, and

adequate, and in the best interests of Class Members. The Settlement terms approximate the rewards

the Class likely would have received following a successful trial.

17. Pursuant to the terms of the Settlement Agreement, Volusion’s obligation to pay is

subject to an agreed aggregate cap or maximum obligation of Hartford’s remaining policy limits

(approximately $4,300,000.00 at the time of the Settlement Agreement) less additional defense

expenses reasonably incurred in connection with the documentation, approval, and administration of

the Settlement Agreement. Hartford shall pay to the Settlement Administrator an amount sufficient

to pay for and fund: Settlement Benefits, the Costs of Administration, Service Awards, and Class

Counsel’s reasonable attorneys’ fees and costs. Each Class Member filing a valid Claim will be eligible

for the following Settlement Benefits: (1) reimbursement for documented out-of-pocket losses up to

a maximum of $1,500.00 per person, upon submission of a Claim Form and supporting

documentation, including out of pocket expenses incurred as a result of the Data Security Incident

and fees for credit reports, credit monitoring, or other identity theft insurance product purchased

between the date of Volusion’s Notice of Data Incident and the date of the Claims Deadline; and (2)

Compensation for time spent responding to the Data Security Incident (up to three 3 hours at

$20.00/hour), which will be included within the $1,500 per-person limit and will not require

supporting documentation.

18. Plaintiffs and Class Counsel will continue to vigorously protect the interests of the

Class. Class Counsel has not been paid for their extensive efforts or reimbursed for litigation costs

and expenses. Class Counsel intends to request attorneys’ fees and costs of up to $450,000.00. Class

Counsel will formally request their attorneys’ fees and costs through a fee application at least thirty

days before the Request for Exclusion and Objection Deadlines. Further, upon approval by the Court,

Plaintiffs shall each receive a Service Award of $2,500.00 for serving as the Class Representatives.


5

19. With the Court’s approval, Kroll Settlement Administration LLC (“Kroll”), a well-

respected and reputable third-party class action Settlement Administrator, will oversee the Class

Notice and Claim Administration. Kroll was selected only after the Parties engaged in a bidding

process for the notice and claims administration and determined that Kroll’s bid price and proposed

notice and administration procedures provided the best practicable notice to the Class. The Settlement

Administrator costs will be paid from Hartford’s remaining policy limits.

20. The Class Notice is designed to give the best notice practicable, is tailored to reach the

Class Members, and protects their due process rights. It (a) defines the Class; (b) explains all Class

Members’ rights, the scope and impact of Released Claims, and the applicable deadlines for submitting

Claims, objecting, and opting out; and (c) describes in detail the monetary relief provided by the

Settlement Agreement through a claim process, including the procedures for allocating and

distributing the Settlement Benefits amongst the Class Members, Class Representatives, Class

Counsel, and the Settlement Administrator. The Notice also indicates the time and place of the Final

Approval Hearing and explains the methods for objecting to or opting out of the Settlement. It details

the provisions for payment of attorneys’ fees, costs, and Service Awards, and provides contact

information for Class Counsel.

21. Class Counsel is familiar with the claims they have litigated. As can be seen from their

attached resumes, Class Counsel have substantial experience in the litigation, certification, trial, and

settlement of class action cases, including data privacy cases. This experience proved beneficial to

Plaintiffs and the Class during negotiations of the Settlement.

22. Based on our experience, Volusion’s counsel are also highly experienced in this type

of litigation. It is thus our considered opinion that counsel for each side have fully evaluated the

strengths, weaknesses, and equities of the Parties’ respective positions and believe that the proposed

settlement fairly resolves their respective differences.

23. The risks, expense, complexity, and likely duration of further litigation support

preliminary approval of the Settlement. Any settlement requires the parties to balance the merits of

the claims and defenses asserted against the attendant risks of continued litigation and delay. By


6

negotiating a Settlement at this early stage, the Parties have ensured that Class Members will receive

the substantial benefits described above while avoiding the risks and potential pitfalls of prolonged

litigation. For example, if the Settlement is not approved, the parties will likely need to litigate through

multiple dispositive motions, a motion for class certification, a potential motion to decertify the class,

and multiple Daubert motions, among other things. That process would likely take years to resolve and

involve expensive expert discovery. Yet there is no guarantee lengthy litigation and expensive

discovery would lead to greater benefits for Class Members. Instead, there would be multiple inflection

points at which the Class’s claims could be narrowed or dismissed. Moreover, the parties will bear the

cost of this litigation if it continues. An early resolution, before both sides spend significant sums on

litigation costs, is in the best interest of the Class.

24. Indeed, it was this pragmatism and cognition of litigation risks that led Plaintiffs and

Class Counsel to agree to cap the potential recovery while still ensuring that Plaintiffs’ and the Class’s

claims would be litigated. The negotiations with Volusion’s bankruptcy counsel to avoid the risks of

costly litigation in the bankruptcy court depleting the insurance policy of a bankrupt defendant, as

well as the risk of having Plaintiffs’ claims disallowed entirely in bankruptcy, resulted in the parties’

agreement to continue litigating the claims’ merits in this Court, provided that Plaintiffs’ total available

recovery be limited to the amount remaining on Volusion’s applicable insurance policy.

25. Though Plaintiffs and Class Counsel are confident they ultimately would have been

able to prove their claims, they also recognize the risks inherent in litigation of a complex data breach

case. They understand that should litigation continue, Plaintiffs’ claims could be dismissed or

narrowed at the motion to dismiss stage, summary judgment, at trial, or on a subsequent appeal.

Plaintiffs would also risk denial of class certification or the exclusion of key expert testimony. Plaintiffs

recognize each risk, by itself, could impede the success of their claims at trial and in an eventual

appeal—which would result in zero recovery for the Class. Even if they prevailed at trial, any recovery

could be delayed for years by appeals. It is also possible, and in fact, likely, that any non-negotiated

award at trial might never be recovered by Plaintiffs due to collectability issues.


7

26. The Settlement Benefits represent a highly favorable compromise that balances the

merits of Plaintiffs’ claims and the likelihood of succeeding at trial and on appeal with the attendant

risks. The inherent uncertainty in litigation presents a risk to Plaintiffs of expending time and money

on this case with the possibility of no recovery at all for the Class.

27. The Settlement was reached in the absence of collusion, and is the product of good-

faith, informed, and arm’s-length negotiations between experienced attorneys who are familiar with

class action litigation and with the legal and factual issues in this Litigation, with the assistance of a

well-respected and experienced mediator. The parties did not discuss attorneys’ fees and costs or any

potential Service Award until they first agreed on the material terms of the Settlement, including an

agreement regarding the Settlement Benefits.

28. The consists of approximately 502,000 members, and joinder of all such persons is

impracticable.

29. There are multiple questions of law and fact that are common to the Class, that are

alleged to have injured all Class Members in the same way, and that would generate common answers.

All Class Members’ claims turn on whether Volusion’s security environment was adequate to protect

Class Members’ PII. Thus, common questions include, inter alia, whether Volusion engaged in the

wrongful conduct alleged; whether Class Members’ PII was compromised in the Data Security

Incident; whether Volusion owed a duty to Plaintiffs and Class Members; whether Volusion breached

its duties; and whether Volusion committed the common law and statutory violations alleged in the

Complaint. There will be no issue demonstrating Class Members have suffered the same injury.

30. Plaintiffs adequately represent the Class, as they have no conflicts of interest with other

Class Members, are subject to no unique defenses, and they and Class Counsel have and continue to

vigorously prosecute this case on behalf of the Class.

31. Plaintiffs’ claims are also typical of Class Members’ claims because they arise from the

same course of alleged conduct and are premised on the same legal theory. Plaintiffs had PII that was

stored on Volusion’s systems and was compromised in the Data Security Incident; they suffered the


8

same injury, were harmed by the same inadequate data security, received notice of the data breach at

the same time, and seek to assert the same underlying claims as the Class.

32. Plaintiffs’ interests are coextensive with, not antagonistic to, the interests of the Class

because Plaintiffs and the absent Class Members have the same interest in the relief the Settlement

affords, and the absent members of the Class have no diverging interests. Further, as stated above,

Plaintiffs and the Class are represented by qualified and competent Class Counsel. Indeed, each firm

representing the Class is a leader in the class action field. Each attorney has extensive experience and

expertise prosecuting complex class actions and has used this experience to vigorously litigate on

behalf of the Class thus far.

33. Liability questions common to all Class Members substantially outweigh any possible

issues that are individual to some Class Members. Further, resolution of thousands of claims in one

action is far superior to individual lawsuits, because it promotes consistency and efficiency of

adjudication.

* * *

I declare under penalty of perjury that the foregoing is true of my own personal knowledge.

Executed in Fort Lauderdale, Florida, on April 12, 2022.

/s/ Jonathan M. Streisfeld JONATHAN M. STREISFELD


Executed in Minneapolis, Minnesota, on April 12, 2022.

/s/ Melissa S. Weiner MELISSA S. WEINER


Executed in Washington, D.C., on April 12, 2022.

/s/ Hassan A. Zavareei HASSAN A. ZAVAREEI


9


Executed in Austin, Texas, on April 12, 2022.

/s/ Michael Singley MICHAEL SINGLEY


EXHIBIT A


One West Las Olas Boulevard, Suite 500Fort Lauderdale, Florida 33301

Telephone: 954.525.4100Facsimile: 954.525.4300 Website: www.kolawyers.com

Miami – Fort Lauderdale – Boca Raton

FIRM RESUME


WHO WE ARE

The firm has a roster of accomplished attorneys. Clients have an

opportunity to work with some of the finest lawyers in Florida and the

United States, each one committed to upholding KO’s principles of

professionalism, integrity, and personal service. Among our roster, you’ll

find attorneys whose accomplishments include: being listed among the

“Legal Elite Attorneys” and as “Florida Super Lawyers”; achieving an AV®

Preeminent™ rating by the Martindale-Hubbell peer review process; being

Board Certified in their specialty; serving as in-house counsel for major

corporations, as a city attorney handling government affairs, as a public

defender, and as a prosecutor; achieving multi-millions of dollars through

verdicts and settlements in trials, arbitrations, and alternative dispute

resolution procedures; successfully winning appeals at every level in Florida

state and federal courts; and serving government in various elected and

appointed positions.

KO has the experience and resources necessary to represent large putative

classes. The firm’s attorneys are not simply litigators, but rather,

experienced trial attorneys with the support staff and resources needed to

coordinate complex cases.

For over two decades, Kopelowitz Ostrow Ferguson Weiselberg Gilbert

(KO) has provided comprehensive, results-oriented legal representation to

individual, business, and government clients throughout Florida and the

rest of the country. KO has the experience and capacity to represent its

clients effectively and has the legal resources to address almost any legal

need. The firm’s 26-plus attorneys have practiced at several of the nation’s

largest and most prestigious firms and are skilled in almost all phases of

law, including consumer class actions, multidistrict litigation involving mass

tort actions, complex commercial litigation, and corporate transactions. In

the class action arena, the firm has experience not only representing

individual aggrieved consumers, but also defending large institutional

clients, including multiple Fortune 100 companies.

OUR FIRM


Since its founding, KO has initiated and served as co-lead counsel and liaison

counsel in many high-profile class actions. Currently, the firm serves as liaison

counsel in a multidistrict class action antitrust case against four of the largest

contact lens manufacturers pending before Judge Schlesinger in the Middle

District of Florida. See In Re: Disposable Contact Lens Antitrust Litigation,

MDL 2626 as well as co-lead counsel in In re Zantac (Ranitidine) Prods. Liab. Litig.,

9:20-md-02924-RLR (S.D. Fla.).

Further, the firm has served or is currently serving as lead or co-lead counsel in

dozens of certified and/or proposed class actions against national and regional

banks involving the unlawful re-sequencing of debit and ATM transactions

resulting in manufactured overdraft fees, and other legal theories pertaining to

overdraft fees and insufficient funds (NSF) fees. The cases are pending, or were

pending, in various federal and state jurisdictions throughout the country,

including some in multidistrict litigation pending in the Southern District of

Florida and others in federal and state courts dispersed throughout the country.

KO’s substantial knowledge and experience litigating overdraft class actions and

analyzing overdraft damage data has enabled the firm to obtain about a dozen

multi-million dollar settlements (in excess of $400 million) for the classes KO

represents.

Additionally, other current cases are being litigated against automobile insurers

for failing to pay benefits owed to insureds with total loss vehicle claims; data

breaches; false advertising; defective consumer products and vehicles; antitrust

violations; and suits on behalf of students against colleges and universities

arising out of the COVID-19 pandemic.

The firm has in the past litigated certified and proposed class actions against

Blue Cross Blue Shield and United Healthcare related to their improper

reimbursements of health insurance benefits. Other insurance cases include

auto insurers failing to pay benefits owed to insureds with total loss vehicle

claims. Other class action cases include cases against Microsoft Corporation

related to its Xbox 360 gaming platform, ten of the largest oil companies in the

world in connection with the destructive propensities of ethanol and its impact

on boats, Nationwide Insurance for improper mortgage fee assessments, and

several of the nation’s largest retailers for deceptive advertising and marketing at

their retail outlets and factory stores.

CLASS ACTION

PLAINTIFF


The firm also brings experience in successfully defended many classactions on behalf of banking institutions, mortgage providers andservicers, an aircraft maker and U.S. Dept. of Defense contractor, amanufacturer of breast implants, and a national fitness chain.

The firm also has extensive experience in mass tort litigation, including thehandling of cases against Bausch & Lomb in connection with its Renu withMoistureLoc product, Wyeth Pharmaceuticals related to Prempro, BayerCorporation related to its birth control pill YAZ, and HowmedicaOsteonics Corporation related to the Stryker Rejuvenate and AGB II hipimplants. In connection with the foregoing, some of which has beenlitigated within the multidistrict arena, the firm has obtained millions inrecoveries for its clients.

CLASS ACTIONDEFENSE

MASS TORTLITIGATION

OTHER AREASOF PRACTICE

In addition to class action and mass tort litigation, the firm has extensiveexperience in the following practice areas: commercial and general civillitigation, corporate transactions, health law, insurance law, labor andemployment law, marital and family law, real estate litigation andtransaction, government affairs, receivership, construction law, appellatepractice, estate planning, wealth preservation, healthcare providerreimbursement and contractual disputes, white collar and criminal defense,employment contracts, environmental, and alternative dispute resolution.

FIND USONLINE

To learn more about KO, or any of the firm’s other attorneys, please visitwww.kolawyers.com.


Smith v. Fifth Third Bank, 1:18-cv-00464-DRC-SKB (W.D. Ohio 2021) - $5.2 million

Lambert v. Navy Federal Credit Union, 1:19-cv-00103-LO-MSN (S.D. Va. 2021) - $16 million

Roberts v. Capital One, N.A., 16 Civ. 4841 (LGS) (S.D.N.Y 2021) - $17 million

Baptiste v. GTE Financial, 20-CA-002728 (Cir. Ct. Hillsborough 2021) - $975,000,000

Morris v. Provident Credit Union, CGC-19-581616 (Sup. Ct. San Francisco 2020) - $1.1 million

Lloyd v. Navy Federal Credit Union, 17-cv-01280-BAS-RBB (S.D. Ca. 2019) - $24.5 million

Farrell v. Bank of America, N.A., 3:16-cv-00492-L-WVG (S.D. Ca. 2018) - $66.6 million

Bodnar v. Bank of America, N.A., 5:14-cv-03224-EGS (E.D. Pa. 2015) - $27.5 million

Morton v. Green Bank, 11-135-IV (20th Judicial District Tenn. 2018) - $1.5 million

Hawkins v. First Tennessee Bank, CT-004085-11 (13th Judicial District Tenn. 2017) -

$16.75 million

Payne v. Old National Bank, 82C01-1012 (Cir. Ct. Vanderburgh 2016) - $4.75 million

Swift. v. Bancorpsouth, 1:10-CV-00090 (N.D. Fla. 2016) - $24.0 million

Mello v. Susquehanna Bank, 1:09-MD-02046 (S.D. Fla. 2014) – $3.68 million

Johnson v. Community Bank, 3:11-CV-01405 (M.D. Pa. 2013) - $1.5 million

McKinley v. Great Western Bank, 1:09-MD-02036 (S.D. Fla. 2013) - $2.2 million

Blahut v. Harris Bank, 1:09-MD-02036 (S.D. Fla. 2013) - $9.4 million

Wolfgeher Commerce Bank, 1:09-MD-02036 (S.D. Fla. 2013) - $18.3 million

Case v. Bank of Oklahoma, 09-MD-02036 (S.D. Fla. 2012) - $19.0 million

Hawthorne v. Umpqua Bank, 3:11-CV-06700 (N.D.Ca. 2012) - $2.9 million

Simpson v. Citizens Bank, 2:12-CV-10267 (E.D. Mi. 2012) - $2.0 million

Nelson v. Rabobank, RIC 1101391 (Riverside County, Ca. 2012) - $2.4 million

Harris v. Associated Bank, 1:09-MD-02036 (S.D. Fla. 2012) - $13.0 million

LaCour v. Whitney Bank, 8:11-CV-1896 (M.D. Fla. 2012) - $6.8 million

Orallo v. Bank of the West, 1:09-MD-202036 (S.D. Fla. 2012) - $18.0 million

Taulava v. Bank of Hawaii, 11-1-0337-02 (1st Cir. Hawaii 2011) - $9.0 million

Trevino v. Westamerica, CIV 1003690 (Marin County, CA 2010) - $2.0 million

FINANCIALINSTITUTIONS

CLASS ACTION AND MASS TORT SETTLEMENTSCase 1:20-cv-00761-LY Document 39-2 Filed 04/12/22 Page 16 of 83

FALSEPRICING

Gattinella v. Michael Kors (USA), 14-Civ-5731 (WHP) (S.D. NY 2015) - $4.875 million

Stathakos v. Columbia Sportswear, 4:15-cv-04543-YGR (N.D. Ca. 2018) - Injunctive relief prohibiting deceptive pricing practices

CONSUMERPROTECTION

Ostendorf v. Grange Indemnity Ins. Co., 2:19-cv-01147-ALM-KAJ (E.D. Ohio 2020) –$12.6 million

Walters v. Target Corp., 3:16-cv-1678-L-MDD (S.D. Cal. 2020) – $8.2 million

Papa v. Grieco Ford Fort Lauderdale, LLC, 18-cv-21897-JEM (S.D. Fla. 2019) - $4.9 million

Bloom v. Jenny Craig, Inc., 18-cv-21820-KMM (S.D. Fla. 2019) - $3 million

DiPuglia v. US Coachways, Inc., 1:17-cv-23006-MGC (S.D. Fla. 2018) - $2.6 million

Masson v. Tallahassee Dodge Chrysler Jeep, LLC, 1:17-cv-22967-FAM (S.D. Fla. 2018) -$850,000

MASSTORT

In re Zantac (Ranitidine) Prods. Liab. Litig., 9:20-md-02924-RLR (S.D. Fla.) - MDL No. 2924 – Co-Lead Counsel

In re: Stryker Rejuvenate and ABG II PRODUCTS LIABILITY LITIGATION, 13-MD-2411 (17th Jud. Cir. Fla. Complex Litigation Division)

In re: National Prescription Opiate Litigation, 1:17-md-02804-DAP (N.D. Ohio) - MDL 2804

In re: Smith and Nephew BHR Hip Implant Products Liability Litigation, MDL-17-md-2775

Yasmin and YAZ Marketing, Sales Practivces and Products Liability Litigation, 3:09-md-02100-DRH-PMF (S.D. Ill.) – MDL 2100

In re: Prempro Products Liability Litigation, MDL Docket No. 1507, No. 03-cv-1507 (E.D. Ark.)


Jeff Ostrow is the Managing Partner of Kopelowitz Ostrow P.A. He established his ownlaw practice immediately upon graduation from law school in 1997, co-founded the currentfirm in 2001, and has since grown it to nearly 50 attorneys in 3 offices throughout SouthFlorida. In addition to overseeing the firm’s day-to-day operations and strategic direction,Mr. Ostrow practices full time in the areas of consumer class actions, sports and businesslaw. He is a Martindale-Hubbell AV® Preeminent™ rated attorney in both legal ability andethics.

Mr. Ostrow is an accomplished trial attorney who represents both Plaintiffs andDefendants, successfully trying many cases to verdict involving multi-million dollar damageclaims in state and federal courts. Currently, he serves as lead counsel in nationwide andstatewide class action lawsuits against many of the world’s largest financial institutions inconnection with the unlawful assessment of fees. To date, his efforts have successfullyresulted in the recovery of over $400,000,000 for tens of millions of bank customers, aswell as monumental changes in the way banks assess fees. In addition, Mr. Ostrow haslitigated consumer class actions against some of the world’s largest clothing retailers, healthinsurance carriers, technology companies, and oil conglomerates, along with serving asclass action defense counsel for some of the largest advertising and marketing agencies inthe world, banking institutions, real estate developers, and mortgage companies.

JEFF OSTROWManaging Partner

Bar AdmissionsThe Florida Bar

Court AdmissionsSupreme Court of the United States U.S. Court of Appeals for the Eleventh CircuitU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of FloridaU.S. District Court, Northern District of FloridaU.S. District Court, Northern District of IllinoisU.S. District Court, Eastern District of MichiganU.S. District Court, Western District of TennesseeU.S. District Court, Western District of Wisconsin

EducationNova Southeastern University, J.D. - 1997University of Florida, B.S. – 1994



Mr. Ostrow often serves as outside General Counsel to companies, advising them inconnection with their legal and regulatory needs. He has represented many Fortune 500®Companies in connection with their Florida litigation. He has handled cases covered bymedia outlets throughout the country and has been quoted many times on various legaltopics in almost every major news publication, including the Wall Street Journal, New YorkTimes, Washington Post, Miami Herald, and Sun-Sentinel. He has also appeared on CNN,ABC, NBC, CBS, FoxNews, ESPN, and almost every other major national andinternational television network in connection with his cases, which often involve industrychanging litigation or athletes in Olympic Swimming, the NFL, NBA and MLB.

In addition to the law practice, he is the President of ProPlayer Sports LLC, a full-servicesports agency and marketing firm. He represents both Olympic swimmers and select NFLathletes and is licensed by both the NFL Players Association and the NBA PlayersAssociation as a certified Contract Advisor. Mr. Ostrow handles all player-teamnegotiations of contracts, represents his clients in legal proceedings, negotiates allmarketing engagements, and oversees public relations and crisis management. He hasextensive experience in negotiating, mediating and arbitrating a wide-range of issues onbehalf of clients with the NFL Players Association, the International Olympic Committee,the United States Olympic Committee, USA Swimming and the United States Anti-DopingAgency.

He is the founder and President of Class Action Lawyers of American, a member of thePublic Justice Foundation, and a lifetime member of the Million Dollar Advocates Forum.The Million Dollar Advocates Forum is the most prestigious group of trial lawyers in theUnited States. Membership is limited to attorneys who have won multi-million dollarverdicts. Additionally, he has been named as one of the top lawyers in Florida by SuperLawyers® for several years running, honored as one of Florida’s Legal Elite Attorneys,recognized as a Leader in Law by the Lifestyle Media Group®, and nominated by theSouth Florida Business Journal® as a finalist for its Key Partners Award. Mr. Ostrow is arecipient of the Gator 100 award for the fastest growing University of Florida alumni-owned law firm in the world.’

When not practicing law, Mr. Ostrow serves on the Board of Governors of NovaSoutheastern University’s Wayne Huizenga School of Business and is a Member of theBroward County Courthouse Advisory Task Force. He is also the Managing Member ofOne West LOA LLC, a commercial real estate development company. Mr. Ostrow is afounding board member for the Jorge Nation Foundation, a 501(c)(3) non-profitorganization that partners with the Joe DiMaggio Children’s Hospital to send childrendiagnosed with cancer on all-inclusive Dream Trips to destinations of their choice. He haspreviously sat on the boards of a national banking institution and a national healthcaremarketing company.


Robert C. “Bobby” Gilbert has over three decades of experience handling class actions,multidistrict litigation and complex business litigation throughout the United States. He hasbeen appointed lead counsel, co-lead counsel, coordinating counsel or liaison counsel inmany federal and state court class actions. Bobby has served as trial counsel in class actionsand complex business litigation tried before judges, juries and arbitrators. He has alsobriefed and argued numerous appeals, including two precedent-setting cases before theFlorida Supreme Court.

Bobby was appointed as Plaintiffs’ Coordinating Counsel in In re Checking Account OverdraftLitig., MDL 2036, class action litigation brought against many of the nation’s largest banksthat challenged the banks’ internal practice of reordering debit card transactions in amanner designed to maximize the frequency of customer overdrafts. In that role, Bobbymanaged the large team of lawyers who prosecuted the class actions and served as theplaintiffs’ liaison with the Court regarding management and administration of themultidistrict litigation. He also led or participated in settlement negotiations with thebanks that resulted in settlements exceeding $1.1 billion, including Bank of America ($410million), Citizens Financial ($137.5 million), JPMorgan Chase Bank ($110 million), PNCBank ($90 million), TD Bank ($62 million), U.S. Bank ($55 million), Union Bank ($35million) and Capital One ($31.7 million).

Bobby has been appointed to leadership positions is numerous other class actions andmultidistrict litigation proceedings. He is currently serving as co-lead counsel in In re Zantac(Ranitidine) Prods. Liab. Litig., 9:20-md-02924-RLR (S.D. Fla.), as well as liaison counsel in Inre Disposable Contact Lens Antitrust Litig., MDL 2626 (M.D. Fla.); liaison counsel in In re 21stCentury Oncology Customer Data Security Beach Litig., MDL 2737 (M.D. Fla.); and In re Farm-Raised Salmon and Salmon Products Antitrust Litig., No. 19-21551 (S.D. Fla.). He previouslyserved as liaison counsel for indirect purchasers in In re Terazosin Hydrochloride AntitrustLitig., MDL 1317 (S.D. Fla.), an antitrust class action that settled for over $74 million.

ROBERT C. GILBERTPartner

Bar AdmissionsThe Florida BarDistrict of Columbia Bar

Court AdmissionsSupreme Court of the United StatesU.S. Court of Appeals for the 11th CircuitU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of Florida

EducationUniversity of Miami School of Law, J.D. - 1985Florida International University, B.S. - 1982



For the past 18 years, Bobby has represented thousands of Florida homeowners in classactions to recover full compensation under the Florida Constitution based on the FloridaDepartment of Agriculture’s taking and destruction of the homeowners’ private property.As lead counsel, Bobby argued before the Florida Supreme Court to establish thehomeowners’ right to pursue their claims; served as trial counsel in non-jury liability trialsfollowed by jury trials that established the amount of full compensation owed to thehomeowners for their private property; and handled all appellate proceedings. Bobby’stireless efforts on behalf of the homeowners resulted in judgments exceeding $93 million.

Bobby previously served as an Adjunct Professor at Vanderbilt University Law School,where he co-taught a course on complex litigation in federal courts that focused onmultidistrict litigation and class actions. He continues to frequently lecture and makepresentations on a variety of topics.

Bobby has served for many years as a trustee of the Greater Miami Jewish Federation andpreviously served as chairman of the board of the Alexander Muss High School in Israel,and as a trustee of The Miami Foundation.


JONATHAN M. STREISFELDPartner


Court AdmissionsSupreme Court of the United StatesU.S. Court of Appeals for the First, Second, Fourth, Fifth, Ninth,and Eleventh CircuitsU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of FloridaU.S. District Court, Northern District of FloridaU.S. District Court, Northern District of IllinoisU.S. District Court, Western District of MichiganU.S. District Court, Western District of New YorkU.S. District Court, Western District of Tennessee

EducationNova Southeastern University, J.D. - 1997Syracuse University, B.S. - 1994


Jonathan M. Streisfeld joined KO as a partner in 2008. Mr. Streisfeld concentrates his practice inthe areas of consumer class actions, business litigation, and appeals nationwide. He is a Martindale-Hubbell AV® Preeminent™ rated attorney in both legal ability and ethics.

Mr. Streisfeld has vast and successful experience in class action litigation, serving as class counsel innationwide and statewide consumer class action lawsuits against the nation’s largest financialinstitutions in connection with the unlawful assessment of fees. To date, his efforts havesuccessfully resulted in the recovery of over $400,000,000 for millions of bank and credit unioncustomers, as well as profound changes in the way banks assess fees. Additionally, he has andcontinues to serve as lead and class counsel for consumers in many class actions involving falseadvertising and pricing, defective products, and data breach. In addition, Mr. Streisfeld has litigatedclass actions against some of the largest health and automobile insurance carriers and oilconglomerates, and defended class and collective actions in other contexts.

Mr. Streisfeld has represented a variety of businesses and individuals in a broad range of businesslitigation matters, including contract, fraud, breach of fiduciary duty, intellectual property, realestate, shareholder disputes, wage and hour, and deceptive trade practices claims. He also assistsbusiness owners and individuals with documenting contractual relationships. Mr. Streisfeld alsoprovides legal representation in bid protest proceedings.

Mr. Streisfeld oversees the firm’s appellate and litigation support practice, representing clients inthe appeal of final and non-final orders, as well as writs of certiorari, mandamus, and prohibition.His appellate practice includes civil and marital and family law matters.

Previously, Mr. Streisfeld served as outside assistant city attorney for the City of Plantation andVillage of Wellington in a broad range of litigation matters.

As a member of The Florida Bar, Mr. Streisfeld served for many years on the Executive Council ofthe Appellate Practice Section and is a past Chair of the Section’s Communications Committee.Mr. Streisfeld currently serves as a member of the Board of Temple Kol Ami Emanu-El.




DANIEL TROPINPartner


Court AdmissionsU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of Florida

EducationUniversity of Virginia, J.D. - 2012Emory University, B.A. - 2008


Daniel Tropin is a litigator who specializes in complex commercial cases and class actionlitigation. Mr. Tropin joined the law firm as a partner in 2018, and has a wealth ofexperience across the spectrum of litigation, including class actions, derivative actions,trade secrets, arbitrations, and product liability cases.

Mr. Tropin graduated from the University of Virginia law school in 2012, and prior tojoining this firm, was an associate at a major Miami law firm and helped launch a new lawfirm in Wynwood. He was given the Daily Business Review’s Most Effective Lawyers,Corporate Securities award in 2014. His previous representative matters include:

• Represented a major homebuilder in an action against a former business partner, whohad engaged in a fraud and defamation scheme to extort money from the client.Following a jury trial, the homebuilder was awarded $1.02 billion in damages. The awardwas affirmed on appeal.

• Represented the former president and CEO of a cruise line in a lawsuit against a majorinternational venture capital conglomerate, travel and entertainment company, based onallegations of misappropriation of trade secrets, breach of a non-disclosure agreement,and breach of a partnership agreement.

• Represented the CEO of a rapid finance company in an action seeking injunctive reliefto protect his interest in the company.

• Represented a medical supply distribution company an action that involved allegationsof misappropriation and breach of a non-circumvention agreement.

• Represented a mobile phone manufacturer and distributor in a multi-million-dollardispute regarding membership interests in a Limited Liability Company, with claimsalleging misappropriation of trade secrets and breach of fiduciary duty.

• Represented a major liquor manufacturer in a products liability lawsuit arising out of anincident involving flaming alcohol.


JOSH LEVINEPartnerBar AdmissionsThe Florida Bar

Court AdmissionsU.S. Court of Appeals for the Fifth CircuitU.S. Court of Appeals for the Sixth CircuitU.S. Court of Appeals for the Eleventh CircuitU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of FloridaU.S. District Court, Northern District of Illinois

EducationUniversity of Miami School of Law, J.D. - 2011University of Central Florida, B.A. - 2006Email: [email protected]

Josh Levine is a litigation attorney, and his practice takes him all over the State of Floridaand the United States. Mr. Levine focuses on civil litigation and appellate practice, primarilyin the areas of class actions and commercial litigation.

Mr. Levine has handled over 175 appeals in all five of Florida’s District Courts of Appealand the Florida Supreme Court, as well as multiple federal appellate courts. Mr. Levine hasrepresented both businesses and individuals in litigation matters, including contractualclaims, fraud, breach of fiduciary duty, negligence, professional liability, enforcement ofnon-compete agreements, trade secret infringement, real estate and title claims, otherbusiness torts, insurance coverage disputes, as well as consumer protection statutes.

Mr. Levine is a member of the Florida Bar Appellate Court Rules Committee, currentlyserving as the vice-chair of the Civil Practice Subcommittee and is an active member ofthe Appellate Practice Section of the Florida Bar and the Broward County Bar Association.Mr. Levine recently completed a four-year term as a member of the Board of Directors ofthe Broward County Bar Association Young Lawyers Section.

Mr. Levine received a Juris Doctor degree, Magna Cum Laude, from the University ofMiami School of Law. While attending law school, he served as an Articles and CommentsEditor on the University of Miami Inter-American Law Review and was on the Dean’sList, and a Merit Scholarship recipient. Mr. Levine also was awarded the Dean’s Certificateof Achievement in Legal Research and Writing, Trusts & Estates, & ProfessionalResponsibility classes.

Before joining KO, Mr. Levine worked at an Am Law 100 firm where he also focused oncivil litigation and appellate practice, primarily representing banks, lenders, and loanservicers in consumer finance related litigation matters.


KRISTEN LAKE CARDOSOPartner


Court AdmissionsU.S. District Court, Southern District of FloridaU.S. District Court, Middle District of Florida

EducationNova Southeastern University, J.D., 2007 University of Florida, B.A., 2004


Kristen Lake Cardoso is a litigation attorney focusing on complex commercial cases andconsumer class actions. She has gained valuable experience representing individuals andbusinesses in state and federal courts at both the trial and appellate levels in a variety oflitigation matters, including contractual claims, fraud, breach of fiduciary duty, negligence,professional liability, real estate claims, enforcement of non-compete agreements, tradesecret infringement, shareholder disputes, deceptive trade practices, other business torts, aswell as consumer protection statutes.

Mrs. Cardoso’s class action cases have involved, amongst other things, data breaches,violations of state consumer protection statutes, and breaches of contract. Mrs. Cardosohas represented students seeking reimbursements of tuition, room and board, and otherfees paid to their colleges and universities for in-person education, housing, meals, andother services not provided when campuses closed during the COVID-19 pandemic. Ms.Cardoso has also represented consumers seeking recovery of gambling losses from techcompanies that profit from illegal gambling games offered, sold, and distributed on theirplatforms.

Mrs. Cardoso is admitted to practice law throughout the State of Florida, as well as in theUnited States District Courts for the Southern District of Florida and the NorthernDistrict of Florida. Mrs. Cardoso attended the University of Florida, where she receivedher Bachelor's degree in Political Science, cum laude. She received her law degree fromNova Southeastern University, magna cum laude. While in law school, Mrs. Cardoso servedas an Articles Editor for the Nova Law Review, was on the Dean's List, and was therecipient of a scholarship granted by the Broward County Hispanic Bar Association for heracademic achievements. When not practicing law, Mrs. Cardoso serves as a volunteer atSaint David Catholic School. She has also served on various committees with the JuniorLeague of Greater Fort Lauderdale geared towards improving the local communitythrough leadership and volunteering.


EXHIBIT B


965601.1

LOS ANGELES

15165 Ventura Boulevard Suite 400

Sherman Oaks, CA 91403 Tel (818) 788-8300 Fax (818) 788-8104

SAN FRANCISCO

350 Sansome Street Suite 680

San Francisco, CA 94104 Tel (415) 433-9000 Fax (415) 433-9008

WWW.PSWLAW.COM

MINNEAPOLIS

800 LaSalle Avenue Suite 2150

Minneapolis, MN 55402 Tel (612) 389-0600 Fax (612) 389-0610

Pearson, Simon & Warshaw, LLP (“PSW”) is an AV-rated civil litigation firm with offices

in Los Angeles, San Francisco and Minneapolis. The firm specializes in complex litigation, including state coordination cases and federal multi-district litigation. Its attorneys have extensive experience in antitrust, securities, consumer protection, and unlawful employment practices. The firm handles national and multi-national class actions that present cutting-edge issues in both substantive and procedural areas. PSW attorneys understand how to litigate difficult and large cases in an efficient and cost-effective manner, and they have used these skills to obtain outstanding results for their clients, both through trial and negotiated settlement. They are recognized in their field for excellence and integrity, and are committed to seeking justice for their clients.

CASE PROFILES

PSW attorneys currently hold, or have held, a leadership role in the following representative cases:

• In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation, Northern District of California, MDL No. 2451. PSW attorneys currently serve as co-lead counsel in this multidistrict litigation that alleges the NCAA and its member conferences violate the antitrust laws by restricting the value of grant-in-aid athletic scholarships and other benefits that college students who are football and basketball players can receive. PSW settled the damages case, recently obtaining final approval of a $208 million dollar settlement. PSW attorneys with co-counsel have completed a bench trial for the injunctive portion of the case. A verdict for Plaintiffs was awarded, and the United States Supreme Court recently issued an Opinion affirming the verdict 9-0. See NCAA v. Alston, 141 S.Ct. 2141 (2021).

• In re Credit Default Swaps Antitrust Litigation, Southern District of New York, MDL No. 2476. PSW attorneys served as co-lead counsel and represented the Los Angeles County Employees Retirement Association (“LACERA”) in a class action on behalf of all purchasers and sellers of Credit Default Swaps (“CDS”) against twelve of the world’s largest banks. The lawsuit alleged that the banks, along with other defendants who controlled the market infrastructure for CDS trading, conspired for years to restrain the efficient trading of CDS, thereby inflating the cost to trade CDS. The alleged antitrust


http://www.pswlaw.com/

PEARSON, SIMON & WARSHAW, LLP

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conspiracy resulted in billions of dollars in economic harm to institutional investors such as pension funds, mutual funds, and insurance companies who used CDS to hedge credit risks on their fixed income portfolios. After nearly three years of litigation and many months of intensive settlement negotiations, PSW helped reach a settlement with the defendants totaling $1.86 billion plus injunctive relief. On April 15, 2016, the Honorable Denise L. Cote granted final approval to the settlement, which is one of the largest civil antitrust settlements in history.

• In re TFT-LCD (Flat Panel) Antitrust Litigation, Northern District of California, MDL No. 1827. PSW served as co-lead counsel for the direct purchaser plaintiffs in this multidistrict litigation arising from the price-fixing of thin film transistor liquid crystal display (“TFT-LCD”) panels. Worldwide, the TFT-LCD industry is a multi-billion dollar industry, and many believe that this was one of the largest price-fixing cases in the United States. PSW helped collect over $405 million in settlements before the case proceeded to trial against the last remaining defendant, Toshiba Corporation and its related entities. PSW partner Bruce L. Simon served as co-lead trial counsel, successfully marshaled numerous witnesses, and presented the opening argument. On July 3, 2012, PSW obtained a jury verdict of $87 million (before trebling) against Toshiba. PSW later settled with Toshiba and AU Optronics to bring the total to $473 million in settlements. In 2013, California Lawyer Magazine awarded Mr. Simon a California Lawyer of the Year Award for his work in the TFT-LCD case.

• In re Potash Antitrust Litigation (No. II), Northern District of Illinois, MDL No. 1996. PSW partner Bruce L. Simon served as co-lead counsel for the direct purchaser plaintiffs in this multidistrict litigation arising from the price-fixing of potash sold in the United States. After the plaintiffs defeated a motion to dismiss, the defendants appealed, and the Seventh Circuit Court of Appeals agreed to hear the case en banc. Mr. Simon presented oral argument to the en banc panel and achieved a unanimous 8-0 decision in his favor. The case resulted in $90 million in settlements for the direct purchaser plaintiffs, and the Court’s opinion is one of the most significant regarding the scope of international antirust conspiracies. See Minn-Chem, Inc. v. Agrium Inc., 683 F. 3d 845 (7th Cir. 2012).

• Vakilzadeh v. The Trustees of The California State University, Los Angeles County Superior Court, Case No. 20STCV23134. PSW partner Daniel L. Warshaw serves as co-lead counsel for a putative class of California State University students who were not provided refunds of tuition and fees from the closing all campuses and ending in-person learning and activities.

• North American Soccer League, LLC v. United States Soccer Federation, Inc., and Major

League Soccer, L.L.C., Eastern District of New York, Case No. 1:17-cv-05495-MKB-ST. PSW, along with co-counsel, represents the North American Soccer League in a matter against the United States Soccer Federation and Major League Soccer alleging antitrust violations. The complaint alleges that U.S. Soccer and MLS have driven NASL out of business and have prevented NASL from competing against MLS (the sole Division I



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league) and the United Soccer League (the sole Division II league), which is affiliated with MLS.

• In re Broiler Chicken Antitrust Litigation, Northern District of Illinois, Case No. 1:16-cv-08637. PSW attorneys currently serve as interim co-lead counsel on behalf of direct purchaser plaintiffs. The complaint alleges that the nation’s largest broiler chicken producers violated antitrust laws by limiting production and manipulating the price indices. Thus far, PSW and co-counsel have secured final approval of over $169 million in settlements for the direct purchaser plaintiffs with numerous defendants remaining in the litigation.

• In re Pork Antitrust Litigation, District of Minnesota, Case No. 0:18-cv-01776. PSW attorneys currently serve as interim co-lead counsel on behalf of direct purchaser plaintiffs. The complaint alleges that the nation’s largest pork producers violated antitrust laws by limiting production and manipulating the price indices. Thus far, PSW and co-counsel have secured over $100 million in settlements for the direct purchaser plaintiffs with numerous defendants remaining in the litigation.

• Greg Kihn, et al. v. Bill Graham Archives, LLC, et al., Northern District of California Case No. 4:17-cv-05343-JSW. PSW attorneys currently serve as Class counsel in this certified copyright class action alleging that defendants broadcasted, continue to broadcast, or otherwise make available to the public, copyrighted musical works of Plaintiffs and the Class without proper licenses, as required under the Copyright Act.

• Grace v. Apple, Inc., Northern District of California, 5:17-CV-00551. PSW partner Daniel L. Warshaw currently serves as class counsel in this California certified class action on behalf of consumers who allege Apple intentionally broke its “FaceTime” video conferencing feature for Apple iPhone 4 or iPhone 4S users operating on iOS 6 or earlier.

• In re Santa Fe Natural Tobacco Company Marketing, Sales Practices, and Products Liability Litigation, District of New Mexico, Case No. 1:16-md-02695-JB-LF. PSW partner Melissa S. Weiner chairs the Executive Committee and PSW partner Daniel L. Warshaw serves on the executive committee. This class action alleges that defendants’ “natural” and “additive free” claims on their tobacco products were false and misleading to consumers.

• In re Keurig Green Mountain Single-Serving Coffee Antitrust Litigation, Southern District of New York, MDL No. 2542. In June 2014, Judge Vernon S. Broderick appointed PSW to serve as interim co-lead counsel on behalf of indirect purchaser plaintiffs in this multidistrict class action litigation. The case arises from the alleged unlawful monopolization of the United States market for single-serve coffee packs by Keurig Green Mountain, Inc. Keurig’s alleged anticompetitive conduct includes acquiring competitors, entering into exclusionary agreements with suppliers and distributors to prevent competitors from entering the market, engaging in sham patent infringement litigation, and



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redesigning the single-serve coffee pack products in the next version of its brewing system to lock out competitors’ products. PSW and co-counsel recently obtained final approval of a $31 million settlement.

• Senne, et al. v. Office of the Commissioner of Baseball, et al., Northern District of California, Case No. 14-cv-0608. PSW attorneys currently serve as co-lead counsel in this certified class action and FLSA collective action on behalf of minor league baseball players who allege that Major League Baseball and its member franchises violate the FLSA and state wage and hour laws by failing to pay minor league baseball players minimum wage and overtime.

• In re KIND LLC “Healthy and All Natural” Litigation, Southern District of New York, MDL No. 2645. PSW partner Daniel L. Warshaw currently serves as interim co-lead counsel in this multistate certified class action on behalf of consumers who allege that they purchased KIND snack bars that were falsely advertised as “all natural,” “non-GMO,” and/or “healthy.”

• Trepte v. Bionaire, Inc., Los Angeles County Superior Court, Case No. BC540110. PSW attorneys served as Class Counsel in this certified class action alleging that the defendant sold defective space heaters. The complaint alleged that defendant breached the warranty and falsely advertised the safety of the heaters due to design defects that cause the heaters to fail – and, as a result of the failure, the heaters could spark, smoke and catch fire. Final approval of the class settlement was recently granted.

• In re Carrier IQ Consumer Privacy Litigation, Northern District of California, MDL No. 2330. PSW attorneys served as interim co-lead counsel in this putative nationwide class action on behalf of consumers who alleged privacy violations arising from software installed on their mobile devices that was logging text messages and other sensitive information.

• Sciortino, et al. v. PepsiCo, Inc., Northern District of California, Case No. 14-cv-0478. PSW attorneys served as interim co-lead counsel in this putative California class action on behalf of consumers who alleged that PepsiCo failed to warn them that certain of its sodas contain excess levels of a chemical called 4-Methylimidazole in violation of Proposition 65 and California consumer protection statutes.

• James v. UMG Recordings, Inc., Northern District of California, Case No. 11-cv-01613. PSW partner Daniel L. Warshaw served as interim co-lead counsel in this putative nationwide class action on behalf of recording artists and music producers who alleged that they had been systematically underpaid royalties by the record company UMG.

• In re Warner Music Group Corp. Digital Downloads Litigation, Northern District of California, Case No. 12-cv-00559. PSW attorneys served as interim co-lead counsel, with partner Bruce L. Simon serving as chairman of a five-firm executive committee, in this



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putative nationwide class action on behalf of recording artists and music producers who alleged that they had been systematically underpaid royalties by the record company Warner Music Group.

• In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, Northern District of California, MDL No. 1486. PSW partner Bruce L. Simon served as co-chair of discovery and as a member of the trial preparation team in this multidistrict litigation arising from the price-fixing of DRAM, a form of computer memory. Mr. Simon was responsible for supervising and coordinating the review of almost a terabyte of electronic documents, setting and taking depositions, establishing and implementing protocols for cooperation between the direct and indirect plaintiffs as well as the Department of Justice, presenting oral arguments on discovery matters, working with defendants on evidentiary issues in preparation for trial, and preparation of a comprehensive pretrial statement. Shortly before the scheduled trial, class counsel reached settlements with the last remaining defendants, bringing the total value of the class settlements to over $325 million.

• In re Methionine Antitrust Litigation, Northern District of California, MDL No. 1311. PSW partner Bruce L. Simon served as co-lead counsel in this nationwide antitrust class action involving a conspiracy to fix prices of, and allocate the markets for, methionine. Mr. Simon was personally responsible for many of the discovery aspects of the case including electronic document productions, coordination of document review teams, and depositions. Mr. Simon argued pretrial motions, prepared experts, and assisted in the preparation of most pleadings presented to the Court. This action resulted in over $100 million in settlement recovery for the Class.

• In re Sodium Gluconate Antitrust Litigation, Northern District of California, MDL No.

1226. PSW partner Bruce L. Simon served as class counsel in this consolidated antitrust class action arising from the price-fixing of sodium gluconate. Mr. Simon was selected by Judge Claudia Wilken to serve as lead counsel amongst many other candidates for that position, and successfully led the case to class certification and settlement.

• In re Citric Acid Antitrust Litigation, Northern District of California, MDL No. 1092. PSW partner Bruce L. Simon served as class counsel in antitrust class actions against Archer-Daniels Midland Co. and others for their conspiracy to fix the prices of citric acid, a food additive product. Mr. Simon was one of the principal attorneys involved in discovery in this matter. This proceeding resulted in over $80 million settlements for the direct purchasers.

• Olson v. Volkswagen of America, Inc., Central District of California, Case No. CV07-05334. PSW attorneys brought this class action lawsuit against Volkswagen alleging that the service manual incorrectly stated the inspection and replacement intervals for timing belts on Audi and Volkswagen branded vehicles equipped with a 1.8 liter turbo-charged engine. This case resulted in a nationwide class settlement.



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• Swain et al. v. Eel River Sawmills, Inc. et al., California Superior Court, DR-01-0216. Bruce L. Simon served as lead trial counsel for a class of former employees of a timber company whose retirement plan was lost through management’s investment of plan assets in an Employee Stock Ownership Plan. Mr. Simon negotiated a substantial settlement on the eve of trial resulting in a recovery of approximately 40% to 50% of plaintiffs’ damages after attorneys’ fees and costs.

• In re Homestore Litigation, Central District of California, Master File No. 01-11115. PSW

attorneys served as liaison counsel and class counsel for plaintiff CalSTRS in this securities class action. The case resulted in over $100 million in settlements to the Class.

• In re MP3.Com, Inc., Securities Litigation, Southern District of California, Master File No.

00-CV-1873. PSW attorneys served as defense counsel in this class action involving alleged securities violations under Rule 10b-5.

• In re Automotive Refinishing Paint Cases, Alameda County Superior Court, Judicial

Council Coordination Proceeding No. 4199. PSW attorneys served as class counsel with other law firms in this coordinated antitrust class action alleging a conspiracy by defendants to fix the price of automotive refinishing products.

• In re Beer Antitrust Litigation, Northern District of California, Case No. 97-20644 SW.

PSW partner Bruce L. Simon served as primary counsel in this antitrust class action brought on behalf of independent micro-breweries against Anheuser-Busch, Inc., for its attempt to monopolize the beer industry in the United States by denying access to distribution channels.

• In re Commercial Tissue Products Public Entity Indirect Purchaser Antitrust Litigation,

San Francisco Superior Court, Judicial Counsel Coordination Proceeding No. 4027. PSW partner Bruce L. Simon served as co-lead counsel for the public entity purchaser class in this antitrust action arising from the price-fixing of commercial sanitary paper products.

• Hart v. Central Sprinkler Corporation, Los Angeles County Superior Court, Case No.

BC176727. PSW attorneys served as class counsel in this consumer class action arising from the sale of nine million defective fire sprinkler heads. This case resulted in a nationwide class settlement valued at approximately $37.5 million.

• Rueda v. Schlumberger Resources Management Services, Inc., Los Angeles County

Superior Court, Case No. BC235471. PSW attorneys served as class counsel with other law firms representing customers of the Los Angeles Department of Water & Power (“LADWP”) who had lead-leaching water meters installed on their properties. The Court granted final approval of the settlement whereby defendant would pay $1.5 million to a cy pres fund to benefit the Class and to make grants to LADWP to assist in implementing a replacement program to the effected water meters.



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• In re Louisiana-Pacific Corp. Inner-Seal OSB Trade Practices Litigation, Northern

District of California, MDL No. 1114. PSW partner Bruce L. Simon worked on this nationwide product defect class action brought under the Lanham Act. The proposed class was certified, and a class settlement was finally approved by Chief Judge Vaughn Walker.

• In re iPod nano Cases, Los Angeles County Superior Court, Judicial Counsel Coordination

Proceeding No. 4469. PSW attorneys were appointed co-lead counsel for this class action brought on behalf of California consumers who own defective iPod nanos. The case resulted in a favorable settlement.

• Unity Entertainment Corp. v. MP3.Com, Central District of California, Case No. 00-11868.

PSW attorneys served as defense counsel in this class action alleging copyright infringement.

• Vallier v. Jet Propulsion Laboratory, Central District of California, Case No. CV97-1171.

PSW attorneys served as lead counsel in this toxic tort action involving 50 cancer victims and their families.

• Nguyen v. First USA N.A., Los Angeles County Superior Court, Case No. BC222846. PSW

attorneys served as class counsel on behalf of approximately four million First USA credit card holders whose information was sold to third party vendors without their consent. This case ultimately settled for an extremely valuable permanent injunction plus disgorgement of profits to worthy charities.

• Morales v. Associates First Financial Capital Corporation, San Francisco Superior Court,

Judicial Council Coordination Proceeding No. 4197. PSW attorneys served as class counsel in this case arising from the wrongful sale of credit insurance in connection with personal and real estate-secured loans. This case resulted in an extraordinary $240 million recovery for the Class.

• In re AEFA Overtime Cases, Los Angeles County Superior Court, Judicial Council

Coordination Proceeding No. 4321. PSW attorneys served as class counsel in this overtime class action on behalf of American Express Financial Advisors, which resulted in an outstanding class-wide settlement.

• Khan v. Denny’s Holdings, Inc., Los Angeles County Superior Court, Case No. BC177254.

PSW attorneys settled a class action lawsuit against Denny’s for non-payment of overtime wages to its managers and general managers.

• Kosnik v. Carrows Restaurants, Inc., Los Angeles County Superior Court, Case No.

BC219809. PSW attorneys settled a class action lawsuit against Carrows Restaurants for non-payment of overtime wages to its assistant managers and managers.



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• Castillo v. Pizza Hut, Inc., Los Angeles County Superior Court, Case No. BC318765. PSW

attorneys served as lead class counsel in this California class action brought by delivery drivers who claimed they were not adequately compensated for use of their personally owned vehicles. This case resulted in a statewide class settlement.

• Baker v. Charles Schwab & Co., Inc., Los Angeles County Superior Court, Case No.

BC286131. PSW attorneys served as class counsel for investors who were charged a fee for transferring out assets between June 1, 2002 and May 31, 2003. This case resulted in a nationwide class settlement.

• Eallonardo v. Metro-Goldwyn-Mayer, Inc., Los Angeles County Superior Court, Case No.

BC286950. PSW attorneys served as class counsel on behalf a nationwide class of consumers who purchased DVDs manufactured by defendants. Plaintiffs alleged that defendants engaged in false and misleading advertising relating to the sale of its DVDs. This case resulted in a nationwide class settlement.

• Gaeta v. Centinela Feed, Inc., Los Angeles County Superior Court, Case No. BC342524.

PSW attorneys served as defense counsel in this class action involving alleged failures to pay wages, overtime, employee expenses, waiting time penalties, and failure to provide meal and rest periods and to furnish timely and accurate wage statements.

• Leiber v. Consumer Empowerment Bv A/K/A Fasttrack, Central District of California, Case

No. CV 01-09923. PSW attorneys served as defense counsel in this class action involving copyrighted music that was made available through a computer file sharing service without the publishers’ permission.

• Higgs v. SUSA California, Inc., Los Angeles County Superior Court Case No. BC372745. PSW attorneys are serving as co-lead class counsel representing California consumers who entered into rental agreements for the use of self-storage facilities owned by defendants. In this certified class action, plaintiffs allege that defendants wrongfully denied access to the self-storage facility and/or charged excessive pre-foreclosure fees.

• Fournier v. Lockheed Litigation, Los Angeles County Superior Court. PSW attorneys

served as counsel for 1,350 residents living at or near the Skunks-Works Facility in Burbank. The case resolved with a substantial confidential settlement for plaintiffs.

• Nasseri v. CytoSport, Inc., Los Angeles County Superior Court, Case No. 439181. PSW

attorneys served as class counsel on behalf of a nationwide class of consumers who purchased CytoSport’s popular protein powders, ready to drink protein beverages, and other “supplement” products. Plaintiffs alleged that these supplements contain excessive amounts of lead, cadmium and arsenic in amounts that exceed Proposition 65 and negate CytoSport’s health claims regarding the products. The case resulted in a nationwide class



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action settlement which provided monetary relief to the class members and required the reformulation of CytoSport supplement products.

• In re Samsung Top-Load Washing Machine Marketing, Sales Practice and Products Liability Litigation, Western District of Oklahoma, Case No. 5:17-ml-02792-D. Plaintiffs allege that the top-load washing machines contain defects that cause them to leak and explode. PSW Partner Melissa S. Weiner was appointed to the Plaintiffs’ Steering Committee in this multi-district class action.



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ATTORNEY PROFILES

FOUNDING PARTNERS

CLIFFORD H. PEARSON

Clifford H. Pearson is a civil litigator, business lawyer and mediator focusing on complex litigation, class actions, and business law. In 2013, 2016 and 2021 Mr. Pearson was named by the Daily Journal as one of the Top 100 lawyers in California. Additionally, Mr. Pearson was named as one of the Daily Journal’s 2019 Top Plaintiff Lawyers. He was instrumental in negotiating a landmark settlement totaling $1.86 billion in In re Credit Default Swaps Antitrust Litigation, a case alleging a conspiracy among the world’s largest banks to maintain opacity of the credit default swaps market. Mr. Pearson also negotiated $473 million in combined settlements in In re TFT-LCD (Flat Panel) Antitrust Litigation, an antitrust case in the Northern District of California that alleged a decade-long conspiracy to fix the prices of TFT-LCD panels and over $90 million in In re Potash Antitrust Litigation, an antitrust case in the Northern District of Illinois that alleged price fixing by Russian, Belarusian and North American producers of potash, a main ingredient used in fertilizer. Mr. Pearson currently serves as co-lead counsel in both the In re Broiler Chicken Antitrust Litigation and In re Pork Antitrust Litigation antitrust class action cases alleging price fixing in the broiler and pork industries.

Before creating the firm in 2006, Mr. Pearson was a partner at one of the largest firms in the San Fernando Valley, where he worked for 22 years. There, he represented aggrieved individuals, investors and employees in a wide variety of contexts, including toxic torts, consumer protection and wage and hour cases. Over his 38-plus year career, Mr. Pearson has successfully negotiated substantial settlements on behalf of consumers, small businesses and companies. In recognition of his outstanding work on behalf of clients, Mr. Pearson has been regularly selected by his peers as a Super Lawyer (representing the top 5% of practicing lawyers in Southern California). He has also attained Martindale-Hubbell’s highest rating (AV) for legal ability and ethical standards.

Mr. Pearson is an active member of the American Bar Association, Los Angeles County Bar Association, Consumer Attorneys of California, Consumer Attorneys Association of Los Angeles, and Association of Business Trial Lawyers.

Current Cases: • In re Broiler Chicken Antitrust Litigation (N.D. Ill.) • In re Pork Antitrust Litigation (D. Minn.) • North American Soccer League, LLC v. United States Soccer Federation, Inc., and Major

League Soccer, L.L.C. (E.D.N.Y.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.) • City of Oakland v. The Oakland Raiders, et al. (Los Angeles County Superior Court)

Education:

• Whittier Law School, Los Angeles, California – J.D. – 1981



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• University of Miami, Miami, Florida – M.B.A. – 1978 • Carleton University, Ontario, Canada – B.A. – 1976

Bar Admissions:

• California • Ninth Circuit Court of Appeals • U.S. District Court, Central District of California • U.S. District Court, Eastern District of California • U.S. District Court, Northern District of California • U.S. District Court, Southern District of California

Professional Associations and Memberships:

• American Bar Association • Association of Business Trial Lawyers • Consumer Attorneys Association of Los Angeles • Consumer Attorneys of California • Los Angeles County Bar Association

BRUCE L. SIMON

Bruce L. Simon is a partner emeritus at Pearson, Simon & Warshaw, LLP and has lead the firm to national prominence. Mr. Simon specializes in complex cases involving antitrust, consumer fraud and securities. He has served as lead counsel in many business cases with national and global impact.

In 2019, Mr. Simon was named as one of the Daily Journal’s Top Plaintiff Lawyers. In 2018, Mr. Simon was awarded “Antitrust Lawyer of the Year” by the California Lawyers Association. In 2013 and 2016, Mr. Simon was chosen by the Daily Journal as one of the Top 100 attorneys in California. In 2013, he received the California Lawyer of the Year award from California Lawyer Magazine and was selected as one of seven finalists for Consumer Attorney of the Year by Consumer Attorneys of California for his work in In re TFT-LCD (Flat Panel) Antitrust Litigation, MDL No. 1827 (N.D. Cal.). That year, Mr. Simon was included in the Top 100 of California’s “Super Lawyers” and has been named a “Super Lawyer” every year since 2003. He has attained Martindale-Hubbell's highest rating (AV) for legal ability and ethical standards.

Mr. Simon was co-lead class counsel in In re TFT-LCD (Flat Panel) Antitrust Litigation, a case that lasted over five years and resulted in $473 million recovered for the direct purchaser plaintiffs. Mr. Simon served as co-lead trial counsel and was instrumental in obtaining an $87 million jury verdict (before trebling). He presented the opening argument and marshalled numerous witnesses during the six-week trial.

Also, Mr. Simon was co-lead class counsel in In re Credit Default Swaps Antitrust Litigation, a case alleging a conspiracy among the world’s largest banks to maintain opacity of the credit default



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swaps market as a means of maintaining supracompetitive prices of bid/ask spreads. After three years of litigation and many months of intensive settlement negotiations, the parties in CDS reached a landmark settlement amounting to $1.86 billion. It is one of the largest civil antitrust settlements in history.

Mr. Simon was also co-lead class counsel in In re Potash Antitrust Litigation (II), MDL No. 1996 (N.D. Ill.), where he successfully argued an appeal of the district court’s order denying the defendants’ motions to dismiss to the United States Court of Appeals for the Seventh Circuit. Mr. Simon presented oral argument during an en banc hearing before the Court and achieved a unanimous 8-0 decision in his favor. The case resulted in $90 million in settlements for the direct purchaser plaintiffs, and the Court’s opinion is one of the most significant regarding the scope of international antirust conspiracies.

More recently, Mr. Simon completed the trial seeking injunctive relief in the In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation. The plaintiffs allege that the NCAA and its member conferences violate the antitrust laws by restricting the value of grant-in-aid athletic scholarships and other benefits that college football and basketball players can receive.

Current Cases: • In re Broiler Chicken Antitrust Litigation (N.D. Ill.) • In re Pork Antitrust Litigation (D. Minn.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.) • North American Soccer League, LLC v. United States Soccer Federation, Inc., and Major

League Soccer, L.L.C. (E.D.N.Y.)

Reported Cases: • Minn-Chem, Inc. et al. v. Agrium Inc., et al., 683 F.3d 845 (7th Cir. 2012) • In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust

Litigation, 594 U.S. ___ (2021). Education:

• University of California, Hastings College of the Law, San Francisco, California – J.D. – 1980

• University of California, Berkeley, California – A.B. – 1977 Bar Admissions:

• California • Supreme Court of the United States • Ninth Circuit Court of Appeals • Seventh Circuit Court of Appeals • U.S. District Court, Central District of California • U.S. District Court, Eastern District of California



965601.1 13

• U.S. District Court, Northern District of California • U.S. District Court, Southern District of California

Recent Publications:

• Class Certification Procedure, Ch. V, ABA Antitrust Class Actions Handbook (3d ed.), (forthcoming)

• Reverse Engineering Your Antitrust Case: Plan for Trial Even Before You File Your Case, Antitrust, Vol. 28, No. 2, Spring 2014

• The Ownership/Control Exception to Illinois Brick in Hi-Tech Component Cases: A Rule That Recognizes the Realities of Corporate Price Fixing, ABA International Cartel Workshop February 2014

• Matthew Bender Practice Guide: California Unfair Competition and Business Torts, LexisNexis, with Justice Conrad L. Rushing and Judge Elia Weinbach (Updated 2013)

• The Questionable Use of Rule 11 Motions to Limit Discovery and Eliminate Allegations in Civil Antitrust Complaints in the United States, ABA International Cartel Workshop February 2012


• California State Bar Antitrust and Unfair Competition Section, Advisor and Past Chair • ABA Global Private Litigation Committee, Co-Chair • ABA International Cartel Workshop, Steering Committee • American Association for Justice, Business Torts Section, Past Chair • Business Torts Section of the American Trial Lawyers Association, Past Chair • Hastings College of the Law, Board of Directors (2003-2015), Past Chair (2009-2011)

DANIEL L. WARSHAW

Daniel L. Warshaw is a civil litigator and trial lawyer who focuses on complex litigation, class actions, and consumer protection. Mr. Warshaw has held leadership roles in numerous state, federal and multidistrict class actions, and obtained significant recoveries for class members in many cases. These cases have included, among other things, antitrust violations, high-technology products, automotive parts, entertainment royalties, intellectual property and false and misleading advertising. Mr. Warshaw has also represented employees in a variety of class actions, including wage and hour, misclassification and other Labor Code violations.

Mr. Warshaw played an integral role in several of the firm’s groundbreaking cases. In the In re TFT-LCD (Flat Panel) Antitrust Litigation, he assisted in leading this multidistrict to trial and securing $473 million in recoveries to the direct purchaser plaintiff class. After the firm was appointed as interim co-lead counsel in In re Credit Default Swaps Antitrust Litigation, Mr. Warshaw along with his partners and co-counsel successfully secured a $1.86 billion settlement on behalf of the class.



965601.1 14

Currently he serves in a lead or co-lead position in the following cases: Vakilzadeh v. The Trustees of The California State University, Los Angeles County Superior Court, Case No. 20STCV23134, a putative class action alleging the students were not refunded for tuition and fees when the California Statue University System closed its campuses and provided remote learning in lieu of in person education; Grace v. Apple, Inc., 5:17-CV-00551-YGR (N.D. Cal.), a certified class action on behalf of consumers who allege that Apple intentionally broke its “FaceTime” video conferencing feature for iPhones with older operating systems that recently settled for $18 million on behalf of a California class; In re KIND LLC “Healthy and All Natural” Litigation, MDL No. 2645, (S.D.N.Y.), a multistate certified class action on behalf of consumers who allege that they purchased KIND snack bars that were falsely advertised as “all natural,” and/or “non-GMO”; Seene v. The Office of the Commissioner of Baseball, 3:14-cv-00608-JCS (N.D. Cal.), a certified multistate class action alleging that Major League Baseball and its teams violate state and federal wage and hour laws relating to minor league players.

Mr. Warshaw’s cases have received significant attention in the press, and Mr. Warshaw has been profiled by the Daily Journal for his work in the digital download music cases. In 2019 and 2020, Mr. Warshaw was named as one of the Daily Journal’s Top Plaintiff Lawyers. And in 2020 he was also named one of the Daily Journal’s Top Antitrust Lawyers. Additionally, Mr. Warshaw has been selected by his peers as a Super Lawyer (representing the top 5% of practicing lawyers in Southern California) every year since 2005. He has also attained Martindale-Hubbell's highest rating (AV) for legal ability and ethical standards.

Mr. Warshaw has assisted in the preparation of two Rutter Group practice guides: Federal Civil Trials & Evidence and Civil Claims and Defenses. Mr. Warshaw is the founder and Chair of the Class Action Roundtable. The purpose of the Roundtable is to facilitate a high-level exchange of ideas and in-depth dialogue on class action litigation.

Current Cases:

• Vakilzadeh v. The Trustees of The California State University, (Cal. Super. Ct.) • Grace v. Apple, Inc. (N.D. Cal.) • Greg Kihn, et al. v. Bill Graham Archives, LLC, et al. (N.D. Cal.) • In re KIND LLC “Healthy and All Natural” Litigation (S.D.N.Y.) • In re Pork Antitrust Litigation (D. Minn.) • In re. Santa Fe Natural Tobacco Company Marketing, Sales Practices, and Products

Liability Litigation (D. N.M.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.)

Education:

• Whittier Law School, Los Angeles, California – J.D. – 1996 • University of Southern California – B.S. – 1992

Bar Admissions: • California • Ninth Circuit Court of Appeals



965601.1 15

• U.S. District Court, Central District of California • U.S. District Court, Eastern District of California • U.S. District Court, Northern District of California • U.S. District Court, Southern District of California • U.S. District Court, Western District of Texas


• American Bar Association • Association of Business Trial Lawyers, Board Member • Consumer Attorneys of California • Los Angeles County Bar Association, Complex Court Committee, Member • Plaintiffs’ Class Action Roundtable, Chair

PARTNERS

BOBBY POUYA

Bobby Pouya is a partner in the firm’s Los Angeles office, focusing on complex litigation, class actions, and consumer protection. Mr. Pouya has been an attorney with Pearson, Simon & Warshaw, LLP since 2007, and has extensive experience in representing clients in a variety of contexts. He has served as a primary member of the litigation team in multiple cases that resulted in class certification or a class-wide settlement, including cases that involved high-technology products, price fixing, consumer safety and false and misleading advertising. The cases that Mr. Pouya has worked on have resulted in hundreds of millions of dollars in judgments and settlements on behalf of effected plaintiffs and class members.

Mr. Pouya has served as one of the attorneys representing direct purchaser plaintiffs in several complex antitrust cases, including In re Polyurethane Foam Antitrust Litigation (N.D. Ohio) and In re Fresh and Processed Potatoes Antitrust Litigation (D. Idaho). Mr. Pouya is currently actively involved in the prosecution of In re Broiler Chicken Antitrust Litigation (N.D. Ill), In re Pork Antitrust Litigation (D. Minn.), Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.), as well as several prominent consumer class action lawsuits.

Mr. Pouya’s success has earned him recognition by his peers as a Super Lawyers Rising Star (representing the top 2.5% of lawyers in Southern California age 40 or younger or in practice for 10 years or less) every year since 2008. Mr. Pouya earned his Juris Doctorate from Pepperdine University School of Law in 2006, where he received a certificate in dispute resolution from the prestigious Straus Institute for Dispute Resolution and participated on the interschool trial and mediation advocacy teams, the Dispute Resolution Law Journal and the Moot Court Board.

Current Cases:

• In re Broiler Chicken Antitrust Litigation (N.D. Ill) • In re Pork Antitrust Litigation (D. Minn.)



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• In re Cattle Antitrust Litigation (D. Minn.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.) • Greg Kihn, et al. v. Bill Graham Archives, LLC, et al. (N.D. Cal.)

Education:

• Pepperdine University School of Law, Malibu, California – J.D. – 2006 • University of California, Santa Barbara, California – B.A., with honors – 2003

Publications:

• Should Offers Moot Claims?, Daily Journal, Oct. 10, 2014 • Central District Local Rules Hinder Class Certification, Daily Journal, April 9, 2013

Bar Admissions:



• American Bar Association • Consumer Attorneys Association of Los Angeles • Consumer Attorneys of California • Los Angeles County Bar Association


• California State Bar Antitrust and Unfair Competition Section, Advisor and Past Chair • ABA Global Private Litigation Committee, Co-Chair • ABA International Cartel Workshop, Steering Committee • American Association for Justice, Business Torts Section, Past Chair • Business Torts Section of the American Trial Lawyers Association, Past Chair • Hastings College of the Law, Board of Directors (2003-2015), Past Chair (2009-2011)

MELISSA S. WEINER

Melissa S. Weiner is a partner and civil litigator whose work is squarely focused on combating consumer deception. Her experience is expansive, including class actions related to consumer protection, product defect, intellectual property, automotive, false advertising and the Fair Credit Reporting Act. Ms. Weiner has taken a leadership role in numerous large class actions and MDLs in cases across the country.



965601.1 17

A contributor to her professional community, Ms. Weiner serves on the Executive Board for Public Justice as the Co-Vice Chair of the Development Committee, former co-chair of the Mass Tort and Class Action Practice Group for the Minnesota Chapter of the Federal Bar Association and serves on the Minnesota Bar Association Food & Drug Law Council. In recognition of her outstanding efforts in the legal community, each year since 2012, Ms. Weiner has been named a Super Lawyers Rising Star by Minnesota Law & Politics.

Ms. Weiner has been appointed to leadership positions in the following MDLs and consolidated cases:

• In Re: Luxottica of America, Inc. Data Security Breach Litigation (S.D. Ohio) (Appointed Interim Executive Committee Member);

• Culbertson v. Deloitte Consulting LLP (S.D.N.Y.) (Appointed to Plaintiffs’ Executive Committee), a nationwide data breach class action

• In Re: Fairlife Milk Products Marketing and Sales Practices Litigation (N.D. Ill.) (Appointed Interim Co-Lead Counsel);

• In Re: Deva Concepts Products Liability Litigation (S.D.N.Y.) (Appointed Interim Co-Lead Counsel);

• In Re Santa Fe Natural Tobacco Company Marketing & Sales Practices and Products Liability Litigation (D.N.M.) (chair of the Plaintiffs’ Steering Committee and member of the Plaintiffs’ Oversight Committee);

• In Re Samsung Top-Load Washing Machine Marketing, Sales Practices & Product Liability Litigation (W.D. Okla.), (appointed to Plaintiffs’ Executive Committee), a nationwide class action regarding a design defect in 2.8 million top loading washing machines, which resulted in a nationwide settlement;

• In Re Windsor Wood Clad Window Product Liability Litigation (E.D. Wis.), a nationwide class action regarding allegedly defective windows, which resulted in a nationwide settlement.

• In Re: Blackbaud, Inc. Customer Data Security Breach Litigation (D.S.C.), nationwide data breach class action, (appointed to Plaintiffs’ Steering Committee).

Current Cases: • Aguilera v. NuWave, LLC (N.D. Ill.) (product defect and false advertising) • Anurag Gupta v. Aeries Software, Inc. (C.D. CA) (data breach) • Ashour v. Arizona Beverages USA LLC et al. (S.D. NY) (false advertising/mislabeling) • Benson et al v. Newell Brands Inc., et al. (N.D. IL) (false advertising/mislabeling) • Connor Burns v. Mammoth Media, Inc. (C.D. CA) (data breach) • Culbertson v. Deloitte Consulting LLP (S.D.N.Y.) (data breach) • Daniels v. Delta Air Lines, Inc. (N.D. Ga.). (COVID-19 pandemic relief) • In Re: Deva Concepts Products Liability Litigation (S.D.N.Y.) (false

advertising/mislabeling) • In Re Fairlife Milk Products Marketing and Sales Practices Litigation (N.D. IL) (false

advertising)



965601.1 18

• Ford v. [24]7.AI, Inc. (N.D. Cal.) (data breach) • In Re Pork Antitrust Litigation (D. Minn.) • In Re Samsung Top-Load Washing Machine Marketing, Sales Practices, and Products

Liability Litigation (W.D. Okla.) • In Re Santa Fe Natural Tobacco Company Marketing, Sales Practices, and Products

Liability Litigation (D. N.M.) (false advertising/mislabeling) • Wedra v. Cree, Inc. (S.D.N.Y)

Education:

• William Mitchell College of Law - J.D. – 2007 • University of Michigan – Ann Arbor - B.A. – 2004

Bar Admissions:

• New York • Minnesota • Ninth Circuit Court of Appeals • U.S. District Court, District of Minnesota • U.S. District Court, Colorado • U.S. District Court, Northern District of Illinois • U.S. District Court, Southern District of New York • U.S. District Court, Eastern District of New York


• Minnesota State Bar Association • Federal Bar Association • Public Justice

MICHAEL H. PEARSON

Michael H. Pearson is a Partner and civil litigator in the firm’s Los Angeles office, focusing on complex litigation, class actions, and consumer protection. Mr. Pearson has extensive experience in representing clients in a variety of contexts. He has served as a member of the litigation team in multiple cases that resulted in class certification or a class-wide settlement, including cases that involved antitrust, business litigation, complex financial products, high-technology products, consumer safety, and false and misleading advertising. Specifically, he was instrumental in managing the review of tens of millions of documents and drafting pleadings in In Re Credit Default Swaps Antitrust Litigation, which was settled for $1.86 billion, plus injunctive relief.

Mr. Pearson received his Bachelor of Science degree from Tulane University in 2008, majoring in Finance with an Energy Specialization. He received his Juris Doctorate from Loyola Law School Los Angeles in 2011. Mr. Pearson is an active member in a number of legal organizations, including the American, Los Angeles County and San Fernando Valley Bar



965601.1 19

Associations, Consumer Attorneys of California, the Consumer Attorneys Association of Los Angeles and the Association of Business Trial Lawyers.

Mr. Pearson’s success has earned him recognition by his peers as a Super Lawyers Rising Star (representing the top 2.5% of lawyers in Southern California age 40 or younger or in practice for 10 years or less) in 2017, 2018, 2019, and 2020.

Current Cases: • City of Oakland v. The Oakland Raiders, et al. (N.D. Cal.) • In re Broiler Chicken Antitrust Litigation (N.D. Ill.) • In re Pork Antitrust Litigation (D. Minn.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.)

Education:

• Loyola Law School Los Angeles, Los Angeles, California – J.D. – 2011 • Tulane University, New Orleans, Louisiana – B.S., magna cum laude – 2008

Bar Admissions:



• American Bar Association • Association of Business Trial Lawyers • Consumer Attorneys Association of Los Angeles • Consumer Attorneys of California • Los Angeles County Bar Association • San Fernando Valley Bar Association

BENJAMIN E. SHIFTAN

Benjamin E. Shiftan is a Partner in the firm’s San Francisco office. Since joining the firm in 2014, Mr. Shiftan has focused on complex class action litigation, including antitrust, insurance, wage and hour, product defect, and consumer protection cases. In 2019, Mr. Shiftan received an award from the American Antitrust Institute for “Outstanding Antitrust Litigation Achievement in Private Law Practice” in connection with his and PSW’s work on the groundbreaking In re: NCAA Athletic Grant-in-Aid Cap Antitrust Litigation (N.D. Cal. Case No. 14-md-2541-CW). The damages portion of the case settled for $208 million dollars, while the injunctive relief phase of the case ended with a 9-0 victory in front of the Supreme Court of the United States.



965601.1 20

Prior to joining the firm, Mr. Shiftan litigated complex bad faith insurance cases for a national law firm. Before that, Mr. Shiftan served as a law clerk to the Honorable Peter G. Sheridan, United States District Court for the District of New Jersey, and worked for a mid-sized firm in San Diego.

Mr. Shiftan graduated from the University of San Diego School of Law in 2009. While in law school, he served as Lead Articles Editor of the San Diego International Law Journal and competed as a National Team Member on the Moot Court Board. Mr. Shiftan won the school's Paul A. McLennon, Sr. Honors Moot Court Competition. At graduation, he was one of ten students inducted into the Order of the Barristers. Mr. Shiftan graduated from the University of Virginia in 2006.

Current Cases: • In re Pork Antitrust Litigation (D. Minn.) • Senne, et al. v. Office of the Commissioner of Baseball, et al. (N.D. Cal.) • North American Soccer League, LLC v. United States Soccer Federation, Inc., and Major

League Soccer, L.L.C. (E.D.N.Y.) Education:

• University of San Diego School of Law, San Diego, CA – J.D. – 2009 • University of Virginia, Charlottesville, VA – B.A. – 2006

Bar Admissions:



• San Francisco County Bar Association • American Bar Association



965601.1 21

TRIAL COUNSEL

THOMAS J. NOLAN

Thomas J. Nolan is Trial Counsel (Of Counsel) in the Sherman Oaks office of Pearson, Simon & Warshaw, LLP.

Mr. Nolan is widely recognized as one of the nation’s leading trial attorneys, and has extensive civil and criminal trial experience representing corporations and individuals in complex litigation in state and federal courts.

Mr. Nolan is a former federal prosecutor and served as Chief of Fraud and Special Prosecutions in the Los Angeles United States Attorney’s Office. He has been a member of the defense bar since 1979.

Mr. Nolan has represented both corporate plaintiffs and defendants across a wide range of complex civil litigation matters including class actions; a wide variety of contract disputes, including a three-month jury trial against 63 insurance carriers; unfair business practices and consumer fraud; as well as antitrust and intellectual property issues. Mr. Nolan is also recognized as a leading lawyer for “first of their kind” trials. His diverse experience was cited by media reports on his arrival at Latham, such as this Bloomberg-BNA Law article.

Mr. Nolan has represented corporations and individuals in criminal DOJ prosecutions and SEC enforcement matters and in internal investigations involving FCPA allegations, securities fraud, money laundering, RICO, healthcare fraud, and insider trading violations.

He leverages extensive trial experience including winning jury verdicts of more than $1 billion for his clients and defeating claims exceeding $15 billion asserted against clients.

Notable Cases: • Lead trial counsel for CashCall in defeating more than $275 million in restitution and

monetary claims sought by the CFPB. • Served as lead trial counsel representing UBS Real Estate Securities Inc. in a closely

watched three-week bench trial conducted in the US District Court, Southern District of New York.*

• Served as lead trial counsel representing the home mortgage division of a major bank against class action claims of racial discrimination in mortgage lending*

• Defended Peter Morton in securing a unanimous jury verdict awarding zero damages in a case alleging fraud, breach of fiduciary duty and invasion of privacy*

• Represented the founders of Skype Technologies S.A., with a consortium of private equity and venture capital firms led by Silver Lake, in the $2.8 billion acquisition of Skype from eBay Inc.*

• Represented Tyco International Ltd. in a litigation in the US District Court for the Southern District of New York brought by holders of $2.7 billion of notes issued by Tyco.*


https://bol.bna.com/latham-hires-top-skadden-litigator-in-l-a/


965601.1 22

• Served as lead trial counsel representing the consortium of underwriters of WorldCom Securities in securing a settlement on the eve of jury selection in one of the largest securities class action cases in history.*

• Represented Litton Industries in a high-profile monopoly antitrust lawsuit against Honeywell, Inc. in the US District Court for the Central District of California.*

*Represents experience from previous law firms.

Accolades: Mr. Nolan has served in numerous honorary positions and received numerous accolades over his extensive career, including:

• American College of Trial Lawyers – Fellow • International Academy of Trial Lawyers – Fellow • Loyola Marymount University – Board of Regents • Loyola University School of Law at Los Angeles – Board of Directors • Loyola University School of Law at Los Angeles – Champion of Justice Award • Beverly Hills Bar Association – Excellence in Advocacy Award • Association of Business Trial Lawyers – frequent lecturer • Federal Bar Association – frequent lecturer • California Bar Association – Pro Bono Lawyer of the Year • The Am Law Litigation Daily – Litigator of the Week

Mr. Nolan has been selected for inclusion in Chambers Global: The World’s Leading Lawyers for Business, and he is one of only 23 attorneys listed in the top tier of national trial attorneys by Chambers USA: America’s Leading Lawyers for Business, which also ranks him in its top tier for general commercial litigation. In addition, Mr. Nolan has been profiled for 12 different years as one of the Top 100 most influential lawyers in California and as one of the Top 30 Securities Litigators in California by the Daily Journal. He was named Best Lawyers’ 2015 Los Angeles Bet-the-Company Litigation Lawyer of the Year.

Education: • Loyola Law School – Los Angeles, California – J.D. – 1975 • Loyola Marymount University – Los Angeles, California – B.B.A. – 971

Bar Admissions: • California • Supreme Court of the United States • Ninth Circuit Court of Appeals • U.S. District Court, Central District of California • U.S. District Court, Eastern District of California • U.S. District Court, Northern District of California • U.S. District Court, Southern District of California • U.S. District Court, Southern District of New York



965601.1 23

OF COUNSEL

NEIL SWARTZBERG

Neil Swartzberg, Of Counsel to Pearson, Simon & Warshaw, LLP, has significant litigation and counseling experience, with a track record of providing advice and representation to individuals and companies. He has expertise in complex and commercial litigation, focusing on consumer protection, antitrust and securities laws, primarily in the class action context. Practicing in both federal and state courts, he has litigated price-fixing class actions, securities fraud suits and other consumer protection cases, as well as patent infringement, trade secret misappropriation and related intellectual property matters.

Mr. Swartzberg was a leading attorney in the direct purchaser plaintiff class action In re Static Random Access Memory (SRAM) Antitrust Litigation (N.D. Cal.). He was also actively involved in several other antitrust class actions, such as In re International Air Transportation Surcharge Antitrust Litigation (N.D. Cal.), Air Cargo Shipping Services Antitrust Litigation (E.D.N.Y.), In re Cathode Ray Tube (CRT) Antitrust Litigation (N.D. Cal.), and In re Optical Disk Drive (ODD) Antitrust Litigation (N.D. Cal.). In addition, he has represented patent owners and companies in infringement cases for patents covering video game controllers, Internet search functionality, secure mobile banking transactions and telecommunications switches.

His current cases include: direct purchaser antitrust class actions against the leading domestic producers of poultry (broiler chickens) and pork; several class actions on behalf students against colleges and universities seeking partial refunds of tuition and fees because of the schools closing their campuses and transitioning to online-only classes in the wake of COVID-19; an antitrust suit challenging the conduct of Major League Soccer and the United States Soccer Federation to exclude competition in men’s professional soccer; and, two consumer class actions against airlines who failed to provide proper refunds when they canceled passengers’ flights following COVID-19.

Current Cases:

• In re Broiler Chicken Antitrust Litigation (N.D. Ill.) • In re Pork Antitrust Litigation (D. Minn.) • Vakilzadeh v. The Trustees of California State University (Cal. Sup. Ct., Los Angeles) • North American Soccer League, LLC v. United States Soccer Federation, Inc. (E.D.N.Y) • Bombin v. Southwest Airlines Co. (E.D. Pa.) • Dusko v. Delta Air Lines, Inc. (N.D. Ga.)

Education:

• University of California, Davis, School of Law– J.D. – 2001 • State University of New York, Buffalo – M.A. – 1994 • Duke University – A.B. – 1991



965601.1 24

Bar Admissions:

• California • Ninth Circuit Court of Appeals • Federal Circuit Court of Appeals • U.S. District Court, Central District of California • U.S. District Court, Eastern District of California • U.S. District Court, Eastern District of Missouri • U.S. District Court, Western District of Pennsylvania

Publications and Presentations:

• The Hard Cell, Mobile banking and the Federal Circuit's "divided infringement" decisions, Feb. 2013, Intellectual Property magazine, with Robert D. Becker.


• American Bar Association

Languages:

• German (proficient)

ASSOCIATES

NAVEED ABAIE

Naveed Abaie is an associate in the firm’s Los Angeles office focusing on consumer protection, antitrust, and business litigation.

He graduated from the University of San Diego, School of Law in 2017. While at the University of San Diego, Mr. Abaie earned his J.D. with a concentration in Business and Corporate Law. Mr. Abaie received his Bachelor’s degree from the University of California, Berkeley Haas School of Business in 2012.

Current Cases: • In re Broiler Chicken Antitrust Litigation (N.D. Ill) • In re Pork Antitrust Litigation (D. Minn.)

Education:

• University of San Diego, California – J.D. – 2017 • University of California, Berkeley, California – B.A.– 2012



965601.1 25

Bar Admissions: • California


• Iranian American Bar Association MATTHEW A. PEARSON

Matthew A. Pearson is an associate in the firm’s Los Angeles office focusing on antitrust, consumer protection, copyright, and business litigation. Mr. Pearson has represented clients in a variety of different matters and works closely with clients, co-counsel, and opposing counsel on all aspects of litigation.

In 2019, Mr. Pearson received the award for Outstanding Antitrust Litigation Achievement in Private Law Practice by the American Antitrust Institute for his work in the In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust Litigation (N.D. Cal.) trial, which took place in September of 2018 and resulted in a verdict in Plaintiffs’ favor. Additionally, in 2019, Mr. Pearson was selected by his peers as a Super Lawyer (representing the top 5% of practicing lawyers in Southern California).

Mr. Pearson received his Bachelor of Science degree from the University of Arizona in 2010, majoring in Business Management. He received his Juris Doctorate from Whittier Law School in 2013. Mr. Pearson is an active member in a number of legal organizations, including the American Bar Association, American Association for Justice, Association of Business Trial Lawyers, Consumer Attorneys Association of Los Angeles, Consumer Attorneys of California, and the Los Angeles County Bar Association.

Current Cases:

• In re Pork Antitrust Litigation (D. Minn.) • Greg Kihn, et al. v. Bill Graham Archives, LLC, et al. (N.D. Cal.) • In re KIND LLC “Healthy and All Natural” Litigation (S.D.N.Y.) • In re National Collegiate Athletic Association Athletic Grant-in-Aid Cap Antitrust

Litigation (N.D. Cal.) • North American Soccer League, LLC v. United States Soccer Federation, Inc., and

Major League Soccer, L.L.C. (E.D.N.Y.) • In Re Cattle Antitrust Litigation (D. Minn.)

Education:

• Whittier Law School, California – J.D. – 2013 • University of Arizona: Eller College of Management – B.S.– 2010



965601.1 26

Bar Admissions: • California • Ninth Circuit Court of Appeals • U.S. District Court, Central District of California • U.S. District Court, Eastern District of California • U.S. District Court, Northern District of California • U.S. District Court, Southern District of California


• American Bar Association • American Association for Justice • Association of Business Trial Lawyers • Consumer Attorneys Association of Los Angeles • Consumer Attorneys of California • Los Angeles County Bar Association

BRIAN S. PAFUNDI

Brian S. Pafundi is an associate in the firm’s Minneapolis office focusing on antitrust and consumer class actions.

Mr. Pafundi graduated from University of Florida Levin College of Law in 2010. After law school he worked as an Assistant Public Defender for the State of Minnesota where he handled a full and diverse caseload including felony trials.

Mr. Pafundi received his B.A. in Political Science in 2005 and a Master of Arts degree in Mass Communications in 2009, both from the University of Florida.

Current Case: • In re Pork Antitrust Litigation (D. Minn.)

Education:

• University of Florida Levin College of Law – J.D. – 2010 • University of Florida College of Journalism and Communications – M.A. – 2009 • University of Florida College of Liberal Arts and Science – B.A. – 2005

Bar Admission: • Minnesota

ALEXANDER P. WINDING

Alexander P. Winding is an associate in the firm’s San Francisco office focusing on consumer protection, antitrust, and business litigation.



965601.1 27

Mr. Winding received his Bachelor of Arts degree from the University of California, Berkeley in 2015, majoring in the Japanese language and graduating with honors. He received his Juris Doctorate from the University of California, Hastings College of Law in 2020.


Education:

• University of California, Hastings College of Law – J.D. – 2020 • University of California, Berkeley, California – B.A.– 2015

Bar Admission:

• California KYLE R. COSTELLO Kyle R. Costello is an associate in the firm’s Minneapolis office focusing on class actions, consumer protection, and complex litigation.

Mr. Costello, born and raised in New Jersey and graduated from Rutgers Law in 2010. He then began a career in contracts management for large corporations. In 2018, Kyle moved to Minnesota to transition into litigation. There he clerked for The Honorable Assistant Chief Judge Sarah Hennesy of the Seventh Judicial District of Minnesota. Subsequently he advocated for indigent clients as a Public Defender in Olmsted County, Minnesota. Kyle brings a wealth of corporate knowledge and trial experience to Pearson, Simon & Warshaw, LLP.


Education:

• Rutgers School of Law, New Jersey – 2010 • Manhattan College – 2007

Bar Admission:

• Minnesota

ADRIAN J. BUONANOCE

Adrian J. Buonanoce is an associate in the firm’s Los Angeles office, focusing on antitrust litigation.

Mr. Buonanoce received a Bachelor’s degree in Political Economy from the University of California, Berkeley in 2012. He earned his Juris Doctorate from the University of San Diego School of Law with a concentration in International Law in 2018.



965601.1 28


Education: • University of San Diego, California – J.D. – 2018 • University of California, Berkeley, California – B.A.– 2012

Bar Admissions: • California


EXHIBIT C


Tycko & Zavareei LLP 10880 Wilshire Blvd., Suite 1101 Los Angeles, CA 90024 510.254.6808

Tycko & Zavareei LLP 1828 L St. NW Suite 1000 Washington, DC 20036 202.973.0900

Tycko & Zavareei LLP 1970 Broadway Suite 1070 Oakland, CA 94612 510.254.6808

Firm Resume Jonathan Tycko and Hassan Zavareei founded Tycko & Zavareei LLP in 2002 when they left a

large national firm to form a private public interest law firm. Since then, a wide range of clients have trusted the firm with their most difficult problems. Those clients include individuals fighting for their rights, tenants’ associations battling to preserve decent and affordable housing, consumers seeking redress for unfair business practices, whistleblowers exposing fraud and corruption, and non-profit entities and businesses facing difficult litigation.

The firm’s practice focuses on complex litigation, with a particular emphasis on consumer and other types of class actions, and qui tam and False Claims Act litigation. In its class action practice, the firm represent consumers who have been victims of corporate wrongdoing. The firm’s attorneys bring a unique perspective to such litigation because many of them trained at major national defense firms where they obtained experience representing corporate defendants in such cases. This unique perspective enables the firm to anticipate and successfully counter the strategies commonly employed by corporate counsel defending class action litigation. Tycko & Zavareei LLP’s attorneys have successfully obtained class certification, been appointed class counsel, and obtained approval of class action settlements with common funds totaling over $500 million.

Tycko & Zavareei LLP’s nineteen attorneys graduated from some of the nation’s finest law schools, including Harvard Law School, Columbia Law School, Duke University School of Law, UC Berkeley School of Law, Georgetown Law, and the University of Michigan Law School. They have served in prestigious clerkships for federal and state trial and appellate judges and have worked for low- income clients through competitive public interest fellowships. The firm’s diversity makes it a leader amongst its peers, and the firm actively and successfully recruits attorneys who are women, people of color, and LGBTQ. To support its mission of litigating in the public interest, Tycko & Zavareei LLP offers a unique public interest fellowship for recent law graduates. Tycko & Zavareei LLP’s attorneys practice in state and federal courts across the nation.

Representative Data Privacy Cases Lundy v. Facebook, Inc. , No. 3:18-cv-06793 (N.D. Cal.). Tycko & Zavareei LLP, as lead counsel, represents Facebook users whose location data Facebook secretly tracked, after they changed their settings to prevent location tracking.

Lewis v. Idaho Central Credit Union , No. CV01-20-03733 (Idaho 4th Dist. Ct., Ada Cnty.). Hassan Zavareei served as co-lead counsel in these consolidated data breach cases, securing a $1.55 million common fund settlement that resulted in hundreds of dollars paid to each participating settlement class member

In re Ring LLC Privacy Litigation , No. 2:19-cv-10899 (C.D. Cal.). Hassan Zavareei represents over a dozen consumers who were harassed by hackers that broke into their Ring indoor security cameras, and was appointed Co-Lead Counsel for the proposed class of Ring purchasers.

In re Luxottica of America, Inc. Data Security Breach Litigation , No. 1:20-cv-00908 (S.D. Oh.). Hassan Zavareei serves as interim co-lead counsel in these consolidated data breach cases in which the personal information of hundreds of thousands of individuals was compromised.

In re US Fertility, LLC Data Security Litigation, No. 8:21-cv-299 (D. Md.). Hassan Zavareei serves as interim co-lead counsel in these consolidated data breach cases in which the personal information of hundreds of thousands of individuals was compromised.



Tycko & Zavareei LLP 1828 L St. NW Suite 1000 Washington, DC 20036 202.973.0900

Tycko & Zavareei LLP 1970 Broadway Suite 1070 Oakland, CA 94612 510.254.6808

Gupta v. Aeries Software, Inc. , No. 8:20-cv-00995 (C.D. Cal.). Tycko & Zavareei LLP represents a proposed class of consumers, mostly minors, whose personal information was stolen from a platform that housed information from school districts. Tycko & Zavareei LLP secured a $1.75 million common fund settlement that is now before the court for preliminary approval.

Other Representative Cases Vergara v. Uber Technologies, Inc., No. 1:15-cv-06972 (N.D. Ill.). Tycko & Zavareei LLP served as Co-Lead Counsel in this case under the Telephone Consumer Protection Act, in which the firm obtained a class settlement of $20 million .

In re Fifth Third Early Access Cash Advance Litigation, No. 1:12-cv-00851 (S.D. Ohio). Tycko & Zavareei LLP was appointed Co-Lead Counsel in these consolidated payday lending cases, which are in discovery after a successful appeal before the Sixth Circuit.

Farrell v. Bank of America, N.A., No. 16-cv-000492 (S.D. Cal.). As Co-Lead Counsel, Tycko & Zavareei LLP obtained a settlement valued at $66.6 million plus injunctive relief valued at $1.2 billion.

In re TD Bank, N.A. Debit Card Overdraft Fee Litigation, No. 15-mn-02613 (D.S.C.). Tycko & Zavareei LLP serves on the Plaintiffs Executive Committee in this case challenging TD Bank’s overdraft fee practices. Tycko & Zavareei LLP assisted in obtaining a $70 million class settlement.

In re Higher One Account Marketing & Sales Practices Litigation, No. 12-md-02407 (D. Conn.). As Lead Counsel, Tycko & Zavareei LLP helped secure a $15 million common fund settlement with significant changes to business practices for illegal debit card fees.

Duval v. Citizens Financial Group, Inc., No. 10-cv-21080 (S.D. Fla.). Tycko & Zavareei LLP was appointed Class Counsel and obtained a common fund settlement of $137.5 million.

Lloyd v. Navy Federal Credit Union, No. 17-cv-1280 (S.D. Cal.). As Co-Lead Counsel, Tycko & Zavareei LLP helped secure a $24.5 million common fund settlement on behalf of a class of NFCU customers harmed by the credit union’s overdraft fee practices.

Morgan v. Apple, Inc., No. 17-cv-5277 (N.D. Cal.), Simmons v. Apple Inc., No. 17CV312251 (Sup. Ct. Ca., Santa Clara Cty.). Tycko & Zavareei LLP is currently serving as Lead Counsel in this class action challenging Apple’s deceptive marketing of Powerbeats headphones and secured a $9.75 million settlement for the class, which is pending preliminary approval.

Wallace v. Wells Fargo Bank, N.A., No. 17CV31775 (Sup. Ct. Ca., Santa Clara Cty.). Tycko & Zavareei LLP serve as Co-Lead Counsel in this case against Wells Fargo’s overdraft fee practices. Tycko & Zavareei LLP recently moved for preliminary approval of a $10.5 million common fund class settlement.

Roberts v. Capital One Financial Corporation, No. 16-cv-04841 (S.D.N.Y.). As Co-Lead Counsel, Tycko & Zavareei LLP helped secure a $17 million settlement on behalf of Capital One customers forced to pay excessive overdraft fees.

H awkins v. First Tennessee Bank , N.A., No. CT-0040851-11 (Cir. Ct. Shelby Cty. Tenn.). As Co-Lead Counsel, Tycko & Zavareei LLP helped obtain a class settlement of $16.75 million on behalf of bank customers harmed by First Tennessee’s predatory overdraft fees.

M asca ro v. TD Bank, N.A., No. 10-cv-21117 (S.D. Fla.). Tycko & Zavareei LLP was appointed Class Counsel and was instrumental in obtaining a $62 million common fund on behalf of the class.

Bodnar v. Bank of America, N.A., No. 14-cv-3224 (E.D. Pa.). Tycko & Zavareei LLP served as lead Counsel and obtained a $27.5 million class settlement and significant injunctive relief.

Gibbs v. TCV V, LP & Gibbs v. Rees , Nos. 19-cv-789 & 20-cv-717 (E.D. Va.). Tycko & Zavareei LLP was named class counsel in one of, if not, the largest unlawful tribal payday lending schemes. Thus far, class counsel has been able to obtain a settlement fund over $60 million as well as the cancellation of $380 million in loans.


Tycko & Zavareei LLP 1828 L St. NW, Suite 1000 Washington, DC 20036 202.973.0900

Tycko & Zavareei LLP 1970 Broadway, Suite 1070 Oakland, CA 94612 510.254.6808


Jonathan Tycko Partner 202.973.0900 [email protected]

In his 25 years of practice, Jonathan Tycko has represented a wide range of clients, including individuals, Fortune 500 companies, privately-held business, and non-profit associations, in both trial and appellate courts around the country. Although he continues to handle a variety of cases, his current practice is focused primarily on helping whistleblowers expose fraud and corruption through qui tam litigation under the False Claims Act and other similar whistleblower statutes. Mr. Tycko’s whistleblower clients have brought to light hundreds of millions of dollars in fraud in cases involving healthcare, government contracts, customs and import duties, banking and tax.

Prior to founding Tycko & Zavareei LLP in 2002, Mr. Tycko was with Gibson, Dunn & Crutcher LLP, one of the nation’s top law firms. He received his law degree in 1992 from Columbia University Law School, and earned a B.A. degree, with honors, in 1989 from The Johns Hopkins University. After graduating from law school, Mr. Tycko served for two years as law clerk to Judge Alexander Harvey, II, of the United States District Court for the District of Maryland.

In addition to his private practice, Mr. Tycko is an active participant in other law-related and community activities. He currently serves on the Conference Committee of the Taxpayers Against Fraud Education Fund, charged with planning the premier annual conference of whistleblower attorneys and their counterparts at the United States Department of Justice and other government agencies. He has taught as an Adjunct Professor at the George Washington University Law School. He is a former member and Chairperson of the Rules of Professional Conduct Review Committee of the District of Columbia Bar, where he helped draft the ethics rules governing members of the bar. And Mr. Tycko is a member of the Board of Trustees of Studio Theatre, one of the D.C. area’s top non-profit theaters.

Mr. Tycko is admitted to practice before the courts of the District of Columbia, Maryland and New York, as well as before numerous federal courts, including the Supreme Court, the Circuit Courts for the D.C. Circuit, Third Circuit, Fourth Circuit, Fifth Circuit, Seventh Circuit, Ninth Circuit, Eleventh Circuit and Federal Circuit, the District Courts for the District of Columbia and District of Maryland, the Southern District of New York, the Northern District of New York, the Western District of New York, and the Court of Federal Claims.

Education

Columbia University Law School, 1992

The Johns Hopkins University, 1989, with Honors

Bar Admissions

District of Columbia Maryland New York Supreme Court of the United States

Memberships

American Association for Justice (AAJ) Public Justice Taxpayers Against Fraud Education Fund (TAFEF)

Awards

Stone Scholar (all three years), Columbia Law School Thomas E. Dewey Prize for Best Brief, Harlan Fiske Stone Moot Court Competition, Columbia Law School Award of Litigation Excellence, CARECEN-The Central American Resource Center Super Lawyers, 2012-current Member of the D.C. Bar Leadership Academy





Hassan A. Zavareei Partner 202.973.0900 [email protected]

Mr. Zavareei has devoted the last eighteen years to recovering hundreds of millions of dollars on behalf of consumers and workers. He has served in leadership roles in dozens of class action cases and has been appointed Class Counsel on behalf of numerous litigation and settlement classes. An accomplished and experienced attorney, Mr. Zavareei has litigated in state and federal courts across the nation in a wide range of practice areas; tried several cases to verdict; and successfully argued numerous appeals, including in the D.C. Circuit, the Fourth Circuit, and the Fifth Circuit.

After graduating from UC Berkeley School of Law, Mr. Zavareei joined the Washington, D.C. office of Gibson, Dunn & Crutcher LLP. There, he managed the defense of a nationwide class action brought against a major insurance carrier, along with other complex civil matters. In 2002, Mr. Zavareei founded Tycko & Zavareei LLP with his partner Jonathan Tycko.

Mr. Zavareei has served as lead counsel or co-counsel in dozens of class actions involving deceptive business practices, defective products, and/or privacy. He has been appointed to leadership roles in multiple cases. As Lead Counsel in an MDL against a financial services company that provided predatory debit cards to college students, Mr. Zavareei spearheaded a fifteen-million-dollar recovery for class members. He is currently serving as Co-Lead Counsel in consolidated proceedings against Fifth Third Bank, and on the Plaintiffs’ Executive Committee in MDL litigation against TD Bank. As Co-Lead Counsel in Farrell v. Bank of America, a case challenging Bank of America’s punitive overdraft fees, Mr. Zavareei secured a class settlement valued at $66.6 million in cash and debt relief, together with injunctive relief forcing the bank to change a practice that will save millions of low-income consumers approximately $1.2 billion in overdraft fees. In his Order granting final approval, Judge Lorenz of the U.S. District Court for the Southern District of California described the outcome as a “remarkable” accomplishment achieved through “tenacity and great skill.”

Education

UC Berkeley School of Law, 1995, Order of the Coif Duke University, 1990, cum laude

Bar Admissions

California District of Columbia Maryland Supreme Court of the United States

Memberships

Public Justice, Board Member American Association for Justice

Awards

Washington Lawyers Committee, Outstanding Achievement Award Super Lawyer Lawdragon 500

Presentations & Publications

Witness Before the Subcommittee on the Constitution and Civil Justice, 115th Congress

Witness Before the Civil Rules Advisory Committee, 2018, 2019

Editor, Duke Law School Center for Judicial Studies, Guidance on New Rule 23 Class Action Settlement Provisions





Andrea R. Gold Partner 202.973.0900 [email protected]

Andrea Gold has spent her legal career advocating for consumers, employees, and whistleblowers. Ms. Gold has litigated numerous complex cases, including through trial. Her extensive litigation experience benefits the firm’s clients in both national class action cases as well as in qui tam whistleblower litigation.

She has served as trial counsel in two lengthy jury trials.

In her class action practice, Ms. Gold has successfully defended dispositive motions, navigated complex discovery, worked closely with leading experts, and obtained contested class certification. Her class action cases have involved, amongst other things, unlawful bank fees, product defects, violations of the Telephone Consumer Protection Act, and deceptive advertising and sales practices.

Ms. Gold also has significant civil rights experience. She has represented individuals and groups of employees in employment litigation, obtaining substantial recoveries for employees who have faced discrimination, harassment, and other wrongful conduct. In addition, Ms. Gold has appellate experience in both state and federal court.

Prior to joining Tycko & Zavareei LLP, Ms. Gold was a Skadden fellow. The Skadden Fellowship Foundation was created by Skadden, Arps, Slate, Meagher & Flom LLP, one of the nation’s top law firms, to support the work of new attorneys at public interest organizations around the country.

Ms. Gold earned her law degree from the University of Michigan Law School, where she was an associate editor of the Journal of Law Reform, co-President of the Law Students for Reproductive Choice, and a student attorney at the Family Law Project clinical program. Ms. Gold graduated with high distinction from the University of Michigan Ross School of Business in 2001, concentrating her studies in Finance and Marketing.

Education University of Michigan Law School, 2004 University of Michigan, Ross School of Business, 2001

Bar Admissions District of Columbia Illinois Maryland

Memberships American Association for Justice National Associate of Consumer Advocates National Employment Lawyers Association Public Justice Taxpayers Against Fraud Education Fund

Awards National Trial Lawyers, Top 100 Civil Plaintiff Lawyers, 2020 Super Lawyers, Rising Star Skadden Fellow, Skadden Arps Slate Meagher & Flom LLP, 2004-2006





Anna Haac Partner 202.973.0900 [email protected]

Anna C. Haac is a Partner in Tycko & Zavareei LLP’s Washington, D.C. office. She focuses her practice on consumer protection class actions and whistleblower litigation. Her prior experience at Covington & Burling LLP, one of the nation’s most prestigious defense-side law firms, gives her a unique advantage when representing plaintiffs against large companies in complex cases. Since arriving at Tycko & Zavareei LLP, Ms. Haac has represented consumers in a wide range of practice areas, including product liability, false labeling, deceptive and unfair trade practices, and predatory financial practices. Her whistleblower practice involves claims for fraud on federal and state governments across an equally broad spectrum of industries, including health care fraud, customs fraud, and government contracting fraud. Ms. Haac has helped secure multimillion-dollar relief on behalf of the classes and whistleblowers she represents. Ms. Haac also serves as the D.C. Co-Chair of the National Association of Consumer Advocates and as Co-Chair of the Antitrust and Consumer Law Section Steering Committee of the D.C. Bar. Ms. Haac earned her law degree cum laude from the University of Michigan Law School in 2006 and went on to clerk for the Honorable Catherine C. Blake of the United States District Court for the District of Maryland. Prior to law school, Ms. Haac graduated with a B.A. in political science with Highest Distinction from the Honors Program at the University of North Carolina at Chapel Hill. Ms. Haac is a member of the District of Columbia and Maryland state bars. She is also admitted to the United States Court of Appeals for the Second, Third, and Fourth Circuits and the United States District Courts for the District of Columbia, District of Maryland, and the Eastern District of Michigan, among others.

Education

University of Michigan Law School, 2006, cum laude

University of North Carolina at Chapel Hill, 2002, Highest Honors

Bar Admissions

District of Columbia Maryland

Memberships

Antitrust & Consumer Protection Section of District of Columbia Bar, Co-Chair

National Association of Consumer Advocates, District of Columbia Co-Chair

Awards

Super Lawyers, Rising Star, 2015


Discussion Leader, “Practical Ideas about Properly Framing the Issues and Educating the Court and Public in Filings Responding to Increasing Attacks on Class Action Settlements and Fees,” Invitation-Only Cambridge Forum on Plaintiffs’ Class Action Litigation (October 2020)





Annick M. Persinger Partner 510.254.6808 [email protected]

Annick M. Persinger leads Tycko & Zavareei LLP’s California office as California’s Managing Partner. While at Tycko & Zavareei LLP, Ms. Persinger has dedicated her practice to utilizing California’s prohibitions against unfair competition and false advertising to advocate for consumers. Ms. Persinger has taken on financial institutions, companies that take advantage of consumers with deceptive advertising, tech companies that disregard user privacy, companies that sell defective products, and mortgage loan servicers. Ms. Persinger also represents whistleblowers who expose their employer’s fraudulent practices.

Ms. Persinger graduated magna cum laude as a member of the Order of the Coif from the University of California, Hastings College of the Law in 2010. While in law school, Ms. Persinger served as a member of Hastings Women’s Law Journal, and authored two published articles. In 2008, Ms. Persinger received an award for Best Oral Argument in the first year moot court competition. In 2007, Ms. Persinger graduated cum laude from the University of California, San Diego with a B.A. in Sociology, and minors in Law & Society and Psychology.

Following law school, Ms. Persinger worked as a legal research attorney for Judge John E. Munter in Complex Litigation at the San Francisco Superior Court.

Ms. Persinger served as an elected board member of the Bay Area Lawyers for Individual Freedom (BALIF) from 2017 to 2019, and as Co-Chair of BALIF from 2018 to 2019. During her term on the BALIF Board of Directors, Ms. Persinger advocated for LGBTQI community members with intersectional identities, and promoted anti-racism and anti-genderism. Ms. Persinger now serves as a Steering Committee member for the Cambridge Forum on Plaintiffs’ Food Fraud Litigation.

Education

University of California Hastings College of Law, 2010, magna cum laude, Order of the Coif University of California San Diego, 2007, cum laude

Bar Admissions

California

Memberships

American Association for Justice

Plaintiffs’ Food Fraud Litigation, 2020 Steering Committee Member

Public Justice

Awards

Super Lawyer, Rising Star 2020 UC Hastings, Best Oral Argument 2008





Sabita J. Soneji Partner 510.254.6808 [email protected]

In almost 20 years of practice, Sabita J. Soneji has developed extensive experience in litigation and legal policy at both the federal and state level and a passion for fighting consumer fraud. Now a Partner in Tycko & Zavareei LLP’s Oakland office, she focuses on consumer protection class actions and whistleblower litigation. In addition to her success with novel Telephone Consumer Protection cases, False Claims Act cases involving insurance fraud, and deceptive and false advertising cases, Ms. Soneji serves in leadership on multi-district litigation against Juul, for its manufacture and marketing to youth of an addictive nicotine product. Ms. Soneji also successfully represents consumers harmed by massive data breaches and by corporate practices that collect and monetize user data without consent. She serves as head of the firm’s Privacy and Data Breach Group.

Ms. Soneji began that work during her time with the United States Department of Justice, as Senior Counsel to the Assistant Attorney General. In that role, she oversaw civil and criminal prosecution of various forms of financial fraud that arose in the wake of the 2008 recession. For that work, Ms. Soneji partnered with other federal agencies, state attorneys’ general, and consumer advocacy groups. Beyond that affirmative work, Ms. Soneji worked to defend various federal programs, including the Affordable Care Act in nationwide litigation.

Ms. Soneji has extensive civil litigation experience from her four years with international law firm, her work as an Assistant United States Attorney in the Northern District of California, and from serving as Deputy County Counsel for Santa Clara County, handling civil litigation on behalf of the County including regulatory, civil rights, and employment matters. She has successfully argued motions and conducted trials in both state and federal court and negotiated settlements in complex multi-party disputes.

Early in her career, Ms. Soneji clerked for the Honorable Gladys Kessler on the United States District Court for the District of Columbia s, during which she assisted the judge in overseeing the largest civil case in American history, United States v. Phillip Morris, et al., a civil RICO case brought against major tobacco manufacturers for fraud in the marketing, sale, and design of cigarettes. The opinion in that case paved the way for Congress to authorize FDA regulation of cigarettes.

Ms. Soneji is a graduate of the University of Houston, summa cum laude, with degrees in Math and Political Science, and Georgetown University Law Center, magna cum laude.

Education

Georgetown University Law Center, magna cum laude

University of Houston, summa cum laude

Bar Admissions

District of Columbia California

Memberships

American Association for Justice (AAJ) Public Justice Taxpayers Against Fraud Education Fund (TAFEF)

Awards

Attorney General’s Award 2014


NITA Trial Skills Faculty 2010-present





Kristen G. Simplicio Partner 202.973.0900 [email protected]

Kristen G. Simplicio has devoted her career to representing victims of false advertising and corporate fraud. Prior to joining Tycko & Zavareei LLP’s D.C. office in 2020, she spent ten years at a boutique class action firm in California. While there, she successfully litigated over a dozen false advertising cases against manufacturers of a variety of consumer products, including olive oil, flushable wipes, beverages, and chocolate. In connection with this work, she helped to obtain millions of dollars in refunds to consumers, as well as changed practices.

In addition to her product labeling work, Ms. Simplicio has represented plaintiffs in a wide variety of areas. For example, she was the lead associate on RICO case on behalf of small business owners against 18 defendants in the credit card processing industry. In connection with that case, she obtained a preliminary injunction halting an illegal $10 million debt collection scheme, and later, helped to secure refunds and changed practices for the victims. She has also represented victims of other debt collectors, as well as those harmed by unlawful background and credit reporting, including a pro bono matter performed in conjunction with the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area. Ms. Simplicio also worked on a lawsuit against government agencies, which were charging unconstitutional fines and fees in connection with toll collection.

Ms. Simplicio graduated cum laude from American University, Washington College of Law in 2007. She holds a bachelor’s degree from McGill University. She began her legal career at the United States Department of Labor, where she advised on regulations pertaining to group health insurance plans. Before and during law school, Ms. Simplicio worked for other plaintiffs’ law firms.

Ms. Simplicio serves as the D.C. Co-Chair of the National Association of Consumer Advocates. She is admitted to practice in California and the District of Columbia.

Education

American University, Washington College of Law, 2007, cum laude McGill University, 1999

Bar Admissions

California District of Columbia

Memberships

National Association of Consumer Advocates American Association for Justice





Renée Brooker Partner 202.417.3664 [email protected]

Bringing 30 years of practice, knowledge, and expertise as a former prosecutor in a senior leadership position at the United States Department of Justice, Renée Brooker is now representing whistleblowers. While at the Department of Justice for over two decades, Ms. Brooker was responsible for billions of dollars in recoveries under whistleblower laws. As an accomplished and experienced attorney, Ms. Brooker has advised and represented whistleblowers under the False Claims Act (FCA), the Anti-Kickback Statute and Stark Law, FIRREA (bank fraud, mail, and wire fraud), the Financial Institutions Anti-Fraud Enforcement Act (FIAFE), and the Whistleblower Programs of the SEC, the CFTC, and the IRS.

As Assistant Director within the Civil Division of the United States Department of Justice, Ms. Brooker was responsible for sizeable recoveries and successful judgments under the False Claims Act, FIRREA, and civil RICO in almost every industry: pharmaceutical, health care, defense, financial services, government procurement, small business, insurance, tobacco products, and higher education.

Ms. Brooker received her law degree in 1990 from Georgetown University Law Center, and a B.S. degree in 1987 from Temple University. After graduating from Georgetown, Ms. Brooker served as a Law Clerk to Judge Noël Kramer in the District of Columbia for one year before joining the United States Department of Education as an attorney. Ms. Brooker was hired as part of the enforcement response to Congressional investigations of fraud in federal student aid programs affecting consumers and taxpayers. Prior to joining Tycko & Zavareei LLP in 2020, Ms. Brooker worked at another prominent whistleblower firm where she advised and represented whistleblowers while expanding the firm’s whistleblower practice. Ms. Brooker also served as a member of the United States Department of Justice-appointed Independent Corporate Compliance Monitor and Auditor for Volkswagen under its Plea Agreement and Consent Decree with the United States Department of Justice.

Education

Georgetown University Law Center, J.D. Temple University, B.S.

Bar Admissions

District of Columbia Pennsylvania

Memberships

Taxpayers Against Fraud Education Fund (TAFEF) Board Member, Federal Bar Association Qui Tam Section National Employment Lawyers Association (NELA)

Awards

Department of Justice Commendation Award for recovering billions of dollars under the Big Lender Initiative, 2016 Council of the Inspectors General on Integrity and Efficiency Award for Excellence for $1.2 billion False Claims Act settlement with Wells Fargo, 2016 Department of Justice Award for “a record of outstanding actions and accomplishments,” 2015 Attorney General’s Award for Fraud Prevention, 2011 Department of Justice Award for prosecuting Big Tobacco under RICO, 2005






Eva Gunasekera Partner 202.417.3655 [email protected]

Bringing 16 years of complex litigation experience practice, Eva Gunasekera, the former Senior Counsel for Health Care Fraud at the United States Department of Justice, is now representing whistleblowers. Ms. Gunasekera has spent the better part of her career enforcing the False Claims Act and the Stark and Anti-Kickback laws.

Highly strategic, Ms. Gunasekera has many notable successes under her belt, sizeable recoveries under the False Claims Act, and has held companies accountable for fraudulent conduct that harmed important government programs such as Medicare and Medicaid. With deep health care fraud expertise, she has investigated, litigated, and settled cases involving all federal health care programs (Medicare, Medicaid, TRICARE, FEHB). Ms. Gunasekera is an expert on analyzing complex health care data sets, including Medicare and Medicaid payment data and trends, to identify potentially fraudulent practices. She has enforced anti-fraud laws and represented whistleblowers across industries: pharmaceutical manufacturers, health care providers, hospitals, physicians, physician groups, laboratories, managed care, pharmacies, hospice and nursing home providers, financial institutions, government suppliers, automotive, small businesses, and defense contractors. Many of her investigations involved parallel criminal proceedings and compliance and whistleblower programs of health care organizations, including those subjected to Corporate Integrity Agreements and oversight by Independent Review Organizations, as required by the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).

After graduating with her Master’s in Public Administration from Ohio University, and from Georgetown University Law Center, Ms. Gunasekera practiced law at two international law firms. She acted as second chair during administrative trials and handled complex commercial litigation. Ms. Gunasekera also played a significant role on the team that represented the Enron Creditors Recovery Corp in the bankruptcy proceeding, successfully returning billions of dollars to creditors in the wake of the Enron scandal. Further, Ms. Gunasekera represented clients in pro bono matters, including the successful defense of an individual seeking asylum and as guardian ad litem for three children.

Education

Georgetown University Law Center, J.D., 2004 Ohio University, M.A., 2001 Ohio University, B.A, 2000

Bar Admissions

District of Columbia

Ohio

Memberships

Taxpayers Against Fraud Education Fund (TAFEF) Federal Bar Association Qui Tam Section Public Justice


“Whistleblower Rewards 101” – Scottsdale (Arizona) Bar Association (March 9, 2021)

“Should the False Claims Act be Amended to Define Falsity?” - Federal Bar Association, Qui Tam Section (February 17, 2021)

Law review article: False Claims Act, the opioid crisis, whistleblowing, Emory University Law School, February 26, 2019





Mark A. Clifford Associate 202.973.0900 [email protected]

Mr. Clifford zealously represents plaintiffs in class action litigation challenging corporate greed and practices that place profits over people. He is actively litigating cases against financial institutions, big tobacco, and the insurance industry over fraudulent, unfair, and unlawful conduct that has harmed millions of consumers. He also is litigating a number of data breach cases, in which the personal information of millions of innocent victims was stolen due to the lax security practices of major corporations. In addition to his consumer protection practice, Mr. Clifford represents whistleblowers who come forward with information about fraud on government programs. Prior to joining Tycko & Zavareei LLP in 2019, Mr. Clifford was an Associate in the Washington, D.C. office of Covington & Burling LLP, one of the nation’s top defense-side firms. He uses his knowledge of how the other side operates to advance the interests of clients harmed by corporate wrongdoing. During his time at Covington, Mr. Clifford represented corporations in complex litigation and government investigations, including matters involving whistleblower allegations in the healthcare and technology industries. He also maintained an active pro bono practice, representing indigent defendants in immigration and criminal matters. Mr. Clifford graduated magna cum laude from Georgetown University Law Center in 2015. While in law school, he was an Executive Editor of the Georgetown Law Journal. Following law school, Mr. Clifford clerked for the Honorable Catherine C. Blake of the United States District Court for the District of Maryland. Prior to law school, he worked on several political campaigns following his graduation with Honors from the University of Georgia in 2009 with a Bachelor of Arts in International Affairs and a Master of Public Administration. Mr. Clifford is admitted to practice law in the District of Columbia, Maryland, the United States District Court for the District of Maryland, and the United States Court of Appeals for the Fourth Circuit.

Education

Georgetown University Law Center, 2015, magna cum laude University of Georgia, 2009

Bar Admissions

District of Columbia Maryland

Memberships

American Constitution Society LGBT Bar Association of the District of Columbia Public Justice

Awards

Medina S. and John M. Vasily Endowed Scholarship (GULC)

Law Center Scholar (GULC)

CALI Award – Contracts (GULC)


Georgetown Law Journal, Executive Editor (2014 – 2015)

Co-Author, “The LGBT Community” in Divide, Develop, and Rule: Human Rights Violations in Ethiopia, UW College of Law (2018)





Dia Rasinariu Associate 202.973.0900 [email protected]

Dia Rasinariu graduated cum laude from Harvard Law School in 2016. While in law school, Ms. Rasinariu served as an Executive Editor of the Harvard Law Review. She was also a member of HLS Lambda. Following law school, Ms. Rasinariu clerked for the Honorable Diana Gribbon Motz on the United States Court of Appeals for the Fourth Circuit. Ms. Rasinariu earned her Bachelor of Arts, with distinction, from Cornell University in 2011, with majors in Government and in Economics.

Prior to joining Tycko & Zavareei LLP in 2021, Ms. Rasinariu was a litigation associate in the Washington, D.C. office of Jones Day. Ms. Rasinariu maintained an active pro bono practice, representing clients on civil rights, asylum, and domestic violence matters.

Ms. Rasinariu is a member of the District of Columbia and Illinois state bars. She is also admitted to practice before the United States District Court for the District of Maryland and the United States Courts of Appeals for the Fourth and Sixth Circuits.

Education

Harvard Law School, 2016, cum laude Cornell University, 2011, with Distinction

Bar Admissions

Illinois District of Columbia

Memberships

Public Justice

Awards

Super Lawyers, Rising Star 2020





Allison W. Parr Associate 202.973.0900 [email protected]

Prior to joining Tycko & Zavareei LLP in 2021, Allison W. Parr was an associate in the Washington, D.C. office of Mayer Brown LLP, where she represented corporations in complex commercial litigation, including cases involving unfair competition and false advertising claims. Previously, Ms. Parr was a litigation associate in the New York office of Kramer Levin Naftalis & Frankel LLP, where she maintained an active pro bono practice in LGBTQ civil rights.

Ms. Parr graduated from the Georgetown University Law Center in 2018, where she served as the Articles and Notes Editor for the Food and Drug Law Journal. During law school, Ms. Parr externed for the Commercial Litigation Branch, Fraud Section of the Department of Justice, where she assisted with cases involving allegations of fraud against the government. Ms. Parr received her Bachelor of Music from the Peabody Institute of the Johns Hopkins University in 2013.

Ms. Parr is admitted to practice in New York and the District of Columbia.

Education

Georgetown University Law Center, 2018 John Hopkins University, 2013, with High Honors

Bar Admissions

New York District of Columbia

Memberships

Public Justice


Agribusiness and Antibiotics: A Market-Based Solution, 73 Food & Drug L.J. 338 (2018)





Glenn Chappell Associate 202.973.0900 [email protected]

Glenn Chappell is an associate in the Washington, D.C. office. Prior to joining Tycko & Zavareei LLP, he was an associate in the Washington, D.C. office of Gibson, Dunn & Crutcher LLP, one of the nation’s most prestigious defense-side firms. During his time at Gibson Dunn, Mr. Chappell represented corporations in complex litigation at the trial and appellate levels, including the United States Supreme Court. He also maintained an active pro bono practice that focused on police and sentencing reform.

Mr. Chappell graduated summa cum laude from Duke University School of Law in 2017, where he served as Managing Editor of the Duke Law Journal and Senior Research Editor of the Duke Law & Technology Review. While in law school, he dedicated more than 450 hours to pro bono work.

After graduating law school, Mr. Chappell clerked for the Honorable Gerald Bard Tjoflat of the United States Court of Appeals for the Eleventh Circuit and the Honorable Anthony J. Trenga of the United States District Court for the Eastern District of Virginia. Before law school, he worked as a manager in the manufacturing industry. He graduated with honors from Saint Leo University, earning a Bachelor of Arts in Business Administration. His legal scholarship has appeared in multiple publications, including the Duke Law Journal and the University of Richmond Law Review.

Education

Duke University School of Law, 2017, summa cum laude, Order of the Coif Saint Leo University, 2011, cum laude

Bar Admissions

District of Columbia Virginia

Memberships

Order of the Coif

Virginia Equality Bar Association

American Constitution Society

Virginia Bar Association

Publications

The Historical Case for Constitutional “Concepts”, 53 UNIVERSITY OF RICHMOND LAW REVIEW 373 (2019) Health Care’s Other “Big Deal”: Direct Primary Care Regulation in Contemporary American Health Law, 66 DUKE LAW JOURNAL 1331 (2017) Seeking Rights, Not Rent: How Litigation Finance Can Help Break Copyright’s Precedent Gridlock, 15 DUKE LAW & TECHNOLOGY REVIEW 269 (2017)





Lauren Kuhlik Associate 202.973.0900 [email protected]

Prior to joining Tycko & Zavareei LLP in 2021, Lauren Kuhlik was a fellow at the National Prison Project of the American Civil Liberties Union, where she engaged in litigation and other advocacy to stop unconstitutional and illegal practices by prison and jail administrators and ICE. She focused on improving conditions of confinement for pregnant and postpartum people, as well as fighting to eliminate the inhumane practice of solitary confinement. During the COVID-19 crisis, Ms. Kuhlik maintained an extensive habeas practice seeking to secure the release of detained individuals with medical vulnerabilities.

Ms. Kuhlik graduated cum laude from Harvard Law School in 2017. She also received a Masters in Public Health from the Harvard T.H. Chan School of Public Health in 2017. Following law school, Ms. Kuhlik clerked for the Honorable Stephen Glickman of the District of Columbia Court of Appeals. She has published articles regarding the treatment of pregnant incarcerated people in the Harvard Law and Policy Review and the Harvard Civil Rights-Civil Liberties Law Review. Ms. Kuhlik has also published about gender and incarceration in USA Today and Ms. Magazine, among others.

Education Harvard Law School, 2017, cum laude Harvard T.H. Chan School of Public Health, M.P.H., 2017 Wesleyan University, BA in Philosophy with Honors, 2011

Bar Admissions District of Columbia Virginia (inactive)

Memberships Public Justice

Publications & Presentations National Abortion Federation Annual Meeting (2021) Pregnancy, Systematic Disregard and Degradation, and Carceral Institutions, Harvard Law & Policy Review (2020) Harvard Law & Policy Review Fall Symposium (2019) Society of Family Planning Annual Meeting (2019) George Mason University Law School Civil Rights Law Journal Symposium (2019) Pregnancy Behind Bars: The Constitutional Argument for Reproductive Healthcare Access in Prison, Harvard Civil Rights & Civil Liberties Law Review (2017)





David Jochnowitz Associate 202-417-3671 [email protected]

David Jochnowitz is an associate in the Washington, DC office, where he represents whistleblowers. Prior to joining Tycko & Zavareei LLP in 2021, David clerked for Magistrate Judge Peggy Kuo of the United States District Court for the Eastern District of New York. Before that, he worked at a law firm that exclusively represented whistleblowers under the federal and state False Claims Acts and the whistleblower programs of the SEC, CFTC, and IRS. His practice spanned diverse industries, with clients including physicians, nurses, billing specialists, sales reps, defense contractors, investment analysts, securities and commodities traders, and C-suite executives.

David graduated from Harvard Law School in 2013. While in law school, he was a member of the University’s Greenhouse Gas Reduction Committee and the recruitment and training director for Project No One Leaves, which worked with tenants and homeowners affected by foreclosure. Prior to law school, he was a Peace Corps volunteer in Malawi, and he continues to serve on the boards of two non-profits dedicated to improving lives in and building cultural connections with Malawi. He graduated magna cum laude from Brooklyn College in 2007 with a Bachelor of Arts in economics.

Education

Harvard Law School, 2013 City University of New York Brooklyn College, 2007, magna cum laude

Bar Admissions

New York District of Columbia

Memberships

Taxpayers Against Fraud





Elvia M. Lopez Associate 510.254.6808 [email protected]

Elvia M. Lopez focuses her practice on representing consumers and victims of fraud. Before joining Tycko & Zavareei LLP, Elvia clerked for the Honorable Daniel E. Winfree of the Alaska Supreme Court and the Honorable Haywood S. Gilliam, Jr. of the United States District Court for the Northern District of California.

Elvia earned her Juris Doctorate from the University of California, Berkeley School of Law, as well as a concurrent master’s degree in Social Innovation and Entrepreneurship from the London School of Economics and Political Science. She graduated summa cum laude from the University of California, Los Angeles.

While in law school, Elvia interned at the Department of Justice, the Berkeley Law International Human Rights Clinic, the Berkeley Law New Business Practicum Clinic, and the Corporate Sustainability Program at the Pontificia Universidad Católica de Chile. She also participated in the Berkeley La Raza Law Journal, the California Asylum Representation Project, and the South Texas Pro Bono Asylum Representation Project. Among her achievements, Elvia received the Berkeley Law Fellowship, the Cruz Reynoso Fellowship, and academic distinctions as the first and second-highest ranking student in writing-intensive courses.

Throughout her studies, Elvia gained varied experience improving business practices, from organizing and representing employees to working with C-suite executives of the largest Latin American multinational companies to implement sustainable practices. She continues to focus on driving corporate accountability through her litigation practice.

Education

University of California, Berkeley School of Law, 2019 The London School of Economics and Political Science, 2018 University of California, Los Angeles, 2014, summa cum laude

Bar Admissions

California

Memberships

Public Justice

Awards

Berkeley Law Certificate of Specialization in International Law Berkeley Law Jurisprudence Award in Environmental Justice Berkeley Law Prosser Prize in Comparative Law


“Creando Valor Compartido,” Programa de Sostenibilidad Corporativia, Pontificia Universidad Católica de Chile (March 2019)

“Implementing Sustainability: The Role of Inside Counsel,” International Seminar for General Counsel, Lima, Peru (March 2019)





David W. Lawler Of Counsel 202.973.0900 [email protected]

Mr. Lawler joined Tycko & Zavareei LLP in January 2012. He has over twenty years of commercial litigation experience, including an expertise in eDiscovery and complex case management. At the firm Mr. Lawler has represented consumers in a numerous practice areas, including product liability, false labeling, deceptive and unfair trade practices, and antitrust class actions litigation.

Before joining Tycko & Zavareei LLP, Mr. Lawler was an associate in the litigation departments at McKenna & Cuneo LLP and Swidler Berlin Shereff Friedman LLP.

Among Mr. Lawler’s career achievements include the co-drafting of appellate briefs which resulted in rare reversal and entry of judgment in favor of client, US Court of Appeals for the Fourth Circuit.

Mr. Lawler is a member of the District of Columbia Bar, as well as numerous federal courts.

Education

Creighton University School of Law, 1997

University of California, Berkeley School of Law, 1989

Bar Admissions


Memberships

American Association for Justice Public Justice





F. Peter Silva II Of Counsel 202.973.0900 [email protected]

Peter Silva is a zealous advocate for consumers, workers, and individuals whose rights have been violated by the government, employers, and financial institutions. Over the last decade, Peter has successfully represented clients in civil rights, consumer protection, and foreclosure defense cases in negotiations, mediations, arbitrations, and at trial in state and federal courts and before various administrative agencies.

Prior to joining Tycko & Zavareei LLP, Peter represented individuals and small businesses as a Partner with Gowen Silva & Winograd, PLLC. Peter’s work on behalf of Maryland, D.C., and Virginia homeowners has prevented dozens of foreclosures through loan modifications, settlements, and litigation. Peter not only defends foreclosures, but countersues for violations of state and federal lending and servicing laws. Peter has successful brought and defended lawsuits against America’s biggest banks and mortgage servicers including Wells Fargo, Bank of America, U.S. Bank, Fannie Mae, Freddie Mac, Mr. Cooper/Nationstar Mortgage, Bayview Loan Servicing, and Ocwen Loan Servicing. Through aggressive litigation and creative settlement solutions, Peter has obtained millions of dollars in damages and savings for his clients including principal and interest reductions, write-downs, and deficiency waivers. Peter’s extensive knowledge of the foreclosure and loan modification processes, mortgage servicing industry and applicable state and federal laws including the Real Estate Settlement Procedures Act (RESPA) and Truth-in-Lending (TILA) allows him to provide clients with upfront and straightforward assessments of their options so that they can make an informed decision.

Peter has worked with local, state, and federal governments and non-profit entities to strengthen legal protections of consumers. Peter is a member of the National Association of Consumer Advocates.

At the beginning of his legal career, Peter worked extensively in the civil rights field as an attorney fellow for the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and a law clerk with the Equal Employment Opportunity Commission and the civil rights interest group, People for the American Way.

Education

University of Miami, School of Law, 2010 San Diego State University, 2007

Bar Admissions

Virginia District of Columbia Maryland

Memberships National Association of Consumer Advocates


“The Tactical Deployment of Regulation X: Loss Mitigation in Judicial, Quasi-Judicial, and Non-judicial States,” National Association of Consumer Advocates (February 11, 2021)

“Foreclosures: What You Don’t Know Will Hurt You!” National Association for the Advancement of Colored People





Victoria Hoekstra Staff Attorney 510.254.6808 [email protected]

Victoria Hoekstra is highly skilled in e-Discovery. She was hired by Tycko & Zavareei LLP in 2018 to help with a custom’s fraud case and later became a staff attorney. Currently she is working on a class action against Juul for marketing e-cigarettes to youth.

Victoria began her legal career at Paul, Hastings in Los Angeles. She moved to a small law firm and later became in-house counsel at an art store where she also ran an art education program. Victoria worked on many matters in these positions including business transactions, intellectual property rights and litigation involving accountant’s malpractice, deceptive business practices, securities fraud and Elder Abuse.

In recent time, Victoria has worked on many e-Discovery projects related to large scale litigation and regulatory reviews by the DOJ, FTC, SEC, FDA and the DEA. Projects have involved breach of contract, personal injury, antitrust investigations (mergers and anti-competitive violations), anti-kickback violations, intellectual property, stock transactions, breaches of fiduciary duty and general fraud including fraudulent marketing related to the sale of opioids. Industries include pharmaceuticals, healthcare, ride-sharing platforms, telecommunications, retail, manufacturing, education, publishing, digital advertising, software development and implementation, data contracts, banking, insurance and government contracts. Victoria has also worked on compliance projects related to reviews by the DOJ and she had a long-term project answering search warrants, court orders and subpoenas related to Google products. In this capacity, Victoria helped law enforcement investigate critical crimes, but was also attentive to privacy laws.

Victoria is a Certified Public Accountant and prior to law school she worked as an auditor for a large CPA firm. Victoria was also a sole proprietor of an Internet bookstore for many years.

Victoria received a B.S. in Economics from University of California, Los Angeles. She received her Juris Doctorate from the University of California, Berkeley School of Law and she attended Oxford University (Christ Church) in England as a visiting scholar studying Philosophy.

Education

University of California, Berkeley School of Law, J.D., 1988 University of California Los Angeles College of Law, B.S. Economics, 1982

Bar Admissions

California

Memberships

Public Justice

CPA, California Public Accountancy





Leora N. Friedman Fellow 202.417.3669 [email protected]

Leora Friedman received her J.D. from Georgetown University Law Center in 2020. At Georgetown Law, Leora obtained diverse legal experience through experiential courses led by the O’Neill Institute for National and Global Health Law and by the Institute for Constitutional Advocacy and Protection. In addition, she authored papers proposing new legal frameworks for addressing the negative health impacts of electronic cigarettes and improving pandemic preparedness through writing-intensive coursework. During law school, Leora also served as an intern for the Department of Justice’s Office of Vaccine Litigation and its Consumer Protection Branch. She was an Executive Editor for the Georgetown Environmental Law Review, which published her note “Recommending Judicial Reconstruction of Title VI to Curb Environmental Racism: A Recklessness-Based Theory of Discriminatory Intent.” Previously, Leora was the Rockefeller Foundation’s Princeton Project 55 Fellow from 2014-2015 and, thereafter, aided international health advocacy campaigns at Global Health Strategies. She graduated from Princeton University with an A.B. in Politics in 2014.

Education

Georgetown University Law Center, 2020 Princeton University, 2014

Bar Admissions


Memberships

Public Justice

Executive Editor, Georgetown Environmental Law Review, 2019–2020

Publications

Recommending Judicial Reconstruction of Title VI to Curb Environmental Racism: A Recklessness-Based Theory of Discriminatory Intent, 32 GEO. ENV’T L. REV. 421 (2020)





Jaclyn S. Tayabji Fellow 202.973.0900 [email protected]

Jaclyn Tayabji is the 2021-2023 Public Interest Fellow at Tycko & Zavareei LLP. Jaclyn received her J.D. magna cum laude from Boston University School of Law in 2021. While in law school, Jaclyn embraced experiential learning opportunities and consistently utilized her legal skills to promote the public interest. Jaclyn completed a legal internship in the Consumer Protection Division of the Massachusetts Attorney General’s Office and a judicial externship with the Honorable Vickie L. Henry on the Massachusetts Appeals Court. As a Student Attorney in the Access to Justice Civil Litigation Clinic, Jaclyn represented low-income clients in various civil disputes, including defending tenants in summary process evictions and facilitating discovery production in a federal employment discrimination case.

In law school, Jaclyn served as an Editor for the Boston University Law Review and was elected to leadership positions in the Middle Eastern & South Asian Law Students Association, the International Law Society, and the Public Interest Project. Jaclyn was also selected to serve on the Public Interest Committee alongside fellow students, faculty, and staff to review the policies and programs related to public service offerings at Boston University School of Law and to advocate for institutional resources.

Jaclyn received her B.A. in International Studies and African Studies from Emory University in 2016. Prior to law school, Jaclyn served with the Peace Corps in Malawi and subsequently worked as a Recovery Coach through the inaugural AmeriCorps-Police Assisted Addiction & Recovery Initiative program.

Education

Boston University School of Law, 2021, magna cum laude Emory University, 2016

Bar Admissions


Memberships

Public Justice

Awards

Public Interest Scholar, Boston University School of Law Sylvia Beinecke Robinson Award, Boston University School of Law Paul J. Liacos Scholar, Boston University School of Law G. Joseph Tauro Distinguished Scholar, Boston University School of Law Deans Award (Torts), Boston University School of Law


Rehabilitation Under the Rehabilitation Act: The Case for Medication-Assisted Treatment in Federal Correctional Facilities, 101 B.U. L. REV. ONLINE 79 (2021) Boston University Law Review, Editor


EXHIBIT D


1

Michael Singley

The Edwards Law Group

1. My name is Michael Singley. I am a member in good standing of the State Bar of Texas.

I am a partner at Edwards Law Group, and have been with the firm for 5 years.

2. I serve as co-counsel for the named Plaintiffs and the putative class of plaintiffs in this

class action.

3. I graduated from Stanford University in 1991, and subsequently in 1995, I graduated from

the University of Texas School of Law. After graduating law school, I worked as a briefing

attorney for the Honorable Mack Kidd of the Texas Court of Appeals for the Third District,

in Austin for a year between 1995 and 1996.

4. I was admitted to the Texas State Bar in 1995, and I am admitted to practice law in all four

of the state’s federal districts, the United States Court of Appeals for the Fifth Circuit, and

the United States Supreme Court. I was also admitted to the Oklahoma State Bar in 2012.

5. I have been in the private practice of law in Austin, Texas, for over 20 years—first as a

defense attorney with Clark, Thomas & Winters and Brobeck Phleger & Harrison from

1996-2002; on behalf of plaintiffs with the firm of Mundy & Singley, LLP from 2002-

2012; and as a sole practitioner with The Singley Law Firm, PLLC from 2012-2017. In

2017, I joined Edwards Law Group.

6. My legal practice consists primarily of personal injury, including wrongful death, complex

products liability, and mass tort cases, as well as civil rights cases and class action cases.

Cases I have represented plaintiffs in include the asbestos, Fen-Phen, and firearm

litigations, and other complex civil cases, including trials and all areas of pretrial work,

involving complex expert work and legal issues.

7. Over the years in which I have been a plaintiff’s lawyer, I have handled numerous complex

cases, particularly in the area of asbestos cancer mass-tort litigation, including participation

in the State of Texas multidistrict litigation for asbestos. In addition to trial and workup of

all phases of asbestos cancer cases, Singley has argued and prevailed on many types of

complex motion practice before the asbestos multidistrict court for all asbestos proceedings

in Texas and has consistently achieved significant confidential results in asbestos cancer

cases.

8. I have also regularly handled federal civil rights cases. In a highly complex civil rights

police shooting case, I prevailed on a interlocutory appeal to the Fifth Circuit affirming the

denial of a summary judgment based on official and qualified immunity invoked by the

Officer Defendants, among other issues. Meadours v. Ermel, 483 F.3d 417 (5th Cir. 2007).

9. In a multi-defendant asbestos cancer case in Oklahoma, I prevailed on an interlocutory

appeal to reverse the trial court’s grant of summary judgement based on the statute of


2

repose, involving a high degree of legal and factual complexity. Olsen v. Oklahoma Gas &

Elec. Co., 288 P.3d 940 (Okla. App. 2012).

10. I also argued an appeal of a wrongful death case with significantly complex legal issues to

the Waco Court of Appeals and the Texas Supreme Court. See Kirwan v. City of Waco,249

S.W.3d 544 (Tex. App.—Waco 2008), reversed by City of Waco v. Kirwan, 298 S.W.3d

618 (Tex. 2009). I have been lead counsel in numerous wrongful death and other complex

cases, most of which were multi-party, multi-defendant cases, and has achieved significant

results in the vast majority. I have successfully prosecuted complex claims and achieved

significant confidential results against major national law firms and Fortune 500

companies, particularly in the asbestos cancer mass tort cases.

11. As a partner at Edwards Law Group, I have devoted significant time to work on class action

cases. This includes work in all phases of three significant class actions against agencies

of the State of Texas in which our firm served as lead counsel or co-lead counsel, and in

which I was appointed as class counsel after the cases resolved with settlements approved

by courts in the Southern and Western District of Texas: Cole v. Collier, No. 4:14-cv-1698

(S.D. Tex. 2018); Roppolo v. Linthicum, No. 2:19-CV-262 (S.D. Tex. 2021); Coleman v.

Young, No. 1:20-CV-00847-RP (W.D. Tex. 2021).


EXHIBIT 3


IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

LAREDO DIVISION

§ In re: § Chapter 11 § VOLUSION, LLC1 § Case No. 20-50082 (DRJ) § Debtor. § § ORDER CONFIRMING THE DEBTOR’S COMBINED PLAN OF REORGANIZATION

AND APPROVING ON A FINAL BASIS THE DISCLOSURE STATEMENT OF VOLUSION, LLC PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

The above-captioned Debtor having:

a. commenced on July 27, 2020 (the “Petition Date”), this chapter 11 case (the “Chapter 11 Case”) by filing a voluntary petition in the United States Bankruptcy Court for the Southern District of Texas (the “Court”) for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”);

b. continued to operate its business and manage its properties as debtor in possession in accordance with sections 1107(a) and 1108 of the Bankruptcy Code;

c. filed, on November 3, 2020, the Combined Plan of Reorganization and Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code (as amended, the “Disclosure Statement,” “Plan and Disclosure Statement” or “Plan”) [Docket No. 103], a copy of which is attached hereto as Exhibit A2 as amended, supplemented, or otherwise modified from time to time;

d. obtained, on November 3, 2020, entry of the Order (I) Conditionally Approving the Adequacy of the Disclosure Statement; (II) Approving the Solicitation and Notice Procedures with Respect to Confirmation of the Debtor’s Proposed Plan of Reorganization; (III) Approving the Form of Ballots, and Notices in Connection Therewith; (IV) Scheduling Certain Dates with Respect Thereto; and (V) Granting Related Relief (the “Disclosure Statement Order”) [Docket No. 108], which conditionally approved the Plan and Disclosure Statement for the Debtor, the solicitation procedures (the “Solicitation Procedures”), and the related notices, forms, and ballots (collectively, the “Solicitation Packages”);

e. caused the Solicitation Packages, the Notice of Hearing to Consider (A) the Adequacy of the Debtor’s Disclosure Statement and (B) Confirmation of the

1 The Debtor in this Chapter 11 Case, along with the last four digits of the Debtor’s federal tax identification number,

is: Volusion, LLC (9037). The Debtor’s service address is 1835A Kramer Lane, Suite 100, Austin, TX 78758. 2 Capitalized terms not defined herein shall have the meanings ascribed to them in the Plan.

ENTERED 11/20/2020

Case 20-50082 Document 128 Filed in TXSB on 11/20/20 Page 1 of 100Case 1:20-cv-00761-LY Document 39-3 Filed 04/12/22 Page 2 of 101

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Debtor’s Chapter 11 Plan of Reorganization, and the deadline for objecting to confirmation of the Plan to be distributed beginning on or about November 4, 2020 through November 5, 2020, in accordance with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedures (the “Bankruptcy Rules”), the Disclosure Statement Order, and the Solicitation Procedures, as evidenced by, among other things, the Declaration of Kendra Gradney Regarding Service of Solicitation Materials (the “Declaration of Service”) [Docket No. 117]; and

f. filed, on November 19, 2020, the Declaration of Kendra Gradney Regarding Voting and Tabulation of Ballots Cast on the Combined Plan of Reorganization and Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code (the “Final Voting Report”) [Docket No. 116].

This Court having:

a. entered the Disclosure Statement Order conditionally approving the Disclosure Statement on November 3, 2020;

b. set November 18, 2020, at 5:00 p.m. (prevailing Central Time) as the deadline for voting on the Plan;

c. set November 18, 2020, at 5:00 p.m. (prevailing Central Time) as the deadline for filing objections in opposition to the Disclosure Statement and Plan (the “Plan Objection Deadline”);

d. set November 20, 2020, at 10:00 a.m. (prevailing Central Time) as the date and time for the commencement of the hearing on final approval of the Disclosure Statement and the Confirmation Hearing on the Plan (the “Confirmation Hearing”) in accordance with Bankruptcy Rules 3017 and 3018 and sections 1126, 1128, and 1129 of the Bankruptcy Code;

e. reviewed the Plan, Disclosure Statement, the Final Voting Report, and all pleadings, exhibits, declarations, affidavits, statements, responses, and comments regarding the Disclosure Statement and confirmation of the Plan, including all objections, statements, and reservations of rights filed by parties in interest on the docket of this Chapter 11 Case;

f. held the Confirmation Hearing;

g. heard the statements and arguments made by counsel in respect of confirmation of the Plan and final approval of the Disclosure Statement;

h. considered all oral representations, live testimony, written direct testimony, exhibits, documents, filings and other evidence presented at the Confirmation Hearing;

i. made rulings on the record at the Confirmation Hearing held on November 20, 2020;


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j. overruled any and all objections to the Disclosure Statement, the Plan, and to confirmation of the Plan, except as otherwise stated or indicated on the record, and all statements and reservations of rights not consensually resolved or withdrawn unless otherwise indicated; and

k. taken judicial notice of all papers and pleadings filed in this Chapter 11 Case.

NOW, THEREFORE, this Court having found that notice of the Confirmation Hearing and

the opportunity for any party in interest to object to confirmation of the Plan and final approval of

the Disclosure Statement have been adequate and appropriate as to all parties affected or to be

affected by the Disclosure Statement and Plan and the transactions contemplated thereby, and the

Bankruptcy Court having considered the record in this Chapter 11 Case, the Final Voting Report,

the compromises and settlements embodied in and contemplated by the Plan, the arguments

regarding confirmation of the Plan, the evidence regarding confirmation of the Plan, and the

Confirmation Hearing having been held on November 20, 2020; and after due deliberation, and

based upon the additional findings of fact and conclusions of law on the record pursuant to

Bankruptcy Rule 7052, which are incorporated herein, it is HEREBY DETERMINED, FOUND,

ADJUDGED, DECREED, AND HELD THAT:

A. Jurisdiction and Venue

2. Venue in this Court was proper as of the Petition Date and continues to be proper

under 28 U.S.C. §§ 1408 and 1409. Confirmation of the Plan is a core proceeding under 28 U.S.C.

§ 157(b)(2). This Court has subject matter jurisdiction over this matter under 28 U.S.C. § 1334.

This Court has exclusive jurisdiction to determine whether the Plan complies with the applicable

provisions of the Bankruptcy Code and should be confirmed and to enter a final order with respect

thereto.


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B. Commencement of this Chapter 11 Case

3. On the Petition Date, the Debtor commenced this Chapter 11 Case. The Debtor has

operated its business and managed its properties as a debtor in possession pursuant to §§ 1107(a)

and 1108 of the Bankruptcy Code. No request for the appointment of a trustee or examiner has

been made in this Chapter 11 Case.

C. Burden of Proof—Confirmation of the Plan

4. The Debtor, as a proponent of the Plan, has met its burden of proving the applicable

elements of §§ 1129(a) and 1129(b) of the Bankruptcy Code by a preponderance of the evidence,

which is the applicable evidentiary standard for confirmation of the Plan. In addition, and to the

extent applicable, the Plan is confirmable under a clear and convincing evidentiary standard.

D. Notice

5. As evidenced by the Declaration of Service and the Final Voting Report, the Debtor

provided due, adequate, and sufficient notice of the Plan, the Disclosure Statement, the

Confirmation Hearing, and all of the other materials distributed by the Debtor in connection with

the confirmation of the Plan in compliance with the Bankruptcy Rules, including Bankruptcy Rules

2002(b), 3017, 3019, 3020(b), the Bankruptcy Local Rules of the United States Bankruptcy Court

for the Southern District of Texas (the “Bankruptcy Local Rules”), and the procedures set forth in

the Disclosure Statement Order. The Debtor provided due, adequate, and sufficient notice of the

Plan Objection Deadline, the Confirmation Hearing, and any applicable bar dates and hearings

described in the Disclosure Statement Order in compliance with the Bankruptcy Code, the

Bankruptcy Rules, the Bankruptcy Local Rules, and the Disclosure Statement Order.

E. Voting

6. Votes to accept and reject the Plan have been solicited and tabulated fairly, in good

faith, and in a manner consistent with the Bankruptcy Code, the Federal Rules of Bankruptcy


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Procedure, and the orders of this Court. Class 2, Class 3, Class 5, Class 7 and Class 8 are

unimpaired, presumed to accept, and not entitled to vote on the Plan. Class 1, Class 4 and Class 6

are impaired under the Plan and are entitled to vote on the Plan (the “Voting Classes”). All Voting

Classes voted to accept the Plan. [See Docket No. 116].

F. Approval of Disclosure Statement and Confirmation of the Plan

7. The Disclosure Statement is APPROVED on a final basis under Bankruptcy Code

§ 1125, and all objections, statements, and reservations of rights with respect to the Disclosure

Statement are overruled.

8. The Plan, a copy of which is attached hereto as Exhibit A, is CONFIRMED

pursuant to § 1129 of the Bankruptcy Code. The terms of the Plan are incorporated by reference

into, and are an integral part of, this Confirmation Order.

9. Any resolution or disposition of objections to confirmation of the Plan explained

or otherwise ruled upon by this Court on the record at the Confirmation Hearing is hereby

incorporated by reference. All parties have had a full and fair opportunity to be heard on all issues

raised by objections to confirmation of the Plan or approval of the Disclosure Statement. Any and

all objections to the confirmation of the Plan or approval of the Disclosure Statement that have not

been withdrawn or resolved as of the entry of this Confirmation Order are hereby overruled on

their merits. All withdrawn objections are deemed withdrawn with prejudice.

10. The exhibits to the Plan are integral to the Plan and are approved by the Bankruptcy

Court, and the Debtor is authorized and directed to take all actions required or appropriate under

the Plan and in all documents related to the Plan and the transactions contemplated thereby,

including, for the avoidance of doubt, the transactions described more fully in Article VII of the

Plan.


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11. The terms of the Plan and any exhibits thereto are incorporated herein by reference,

and are an integral part of this Confirmation Order. The terms of the Plan, all exhibits thereto, and

all other relevant and necessary documents shall be effective and binding as of the Plan Effective

Date (unless different date(s) is/are specified in the applicable foregoing documents, in which case

the applicable terms shall be effective and binding on such date(s)) on the Debtor and any holder

of a Claim or Interest, whether or not the Claim or Interest is impaired under the Plan and whether

or not the holder of such Claim or Interest has accepted the Plan and any other party in interest.

The failure to specifically include or refer to any particular article, section, or provision of the Plan,

the exhibits thereto, or any related document in this Confirmation Order does not diminish or

impair the effectiveness or enforceability of such article, section, or provision.

12. The compromises and settlements set forth in the Plan (including exhibits thereto)

are approved, and will be effective immediately and binding on all parties in interest on the

Effective Date (unless different date(s) is/are specified in the applicable foregoing documents, in

which case the applicable terms shall be effective and binding on such date(s)).

13. On the Effective Date (unless different date(s) is/are specified in the applicable

foregoing documents, in which case the applicable terms shall be effective and binding on such

date(s)), the Debtor is authorized to consummate the Plan and the transactions contemplated

thereby, including the distributions of cash and payment of fees contemplated thereby.

G. Assumption, Assignment and Rejection of Executory Contracts and Unexpired Leases

14. Pursuant to Article IX of the Plan, each of the Debtor’s executory contracts and

unexpired leases not previously assumed or rejected pursuant to an order of the Bankruptcy Court

shall be deemed assumed as of the Effective Date in accordance with the provisions and

requirements of §§ 365 and 1123 of the Bankruptcy Code, except for any executory contract or


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unexpired lease (1) that is the subject of a separate motion or notice to assume or reject filed by

the Debtor and pending as of the Confirmation Hearing or (2) that previously expired or terminated

pursuant to its own terms.

15. Except as otherwise previously approved by an order of the Bankruptcy Court,

entry of this Confirmation Order shall constitute an order, pursuant to §§ 365 and 1123 of the

Bankruptcy Code, approving the assumptions and assignments, and the rejections of such

executory contracts and unexpired leases as set forth in the preceding paragraph. Unless otherwise

indicated herein, assumptions and assignments, and rejections, of executory contracts and

unexpired leases pursuant to this Plan shall be effective as of the Effective Date.

16. To the maximum extent permitted by law, to the extent any provision (including,

without limitation, any “change of control” provision) in any executory contract or unexpired lease

assumed pursuant to the Plan restricts or prevents, or purports to restrict or prevent, or is breached

or deemed breached by, the assumption of such executory contract or unexpired lease, then such

provision is hereby deemed modified such that the assumption and assignment contemplated by

the Plan shall not entitle the counterparty thereto to terminate such executory contract or unexpired

lease or to exercise any other default-related rights with respect thereto, except for asserting and

pursuing payment of a Cure Cost consistent with the Plan. Notwithstanding anything to the

contrary in the Plan, the Debtor reserves the right to alter, amend, modify, or supplement the Plan

prior to the Effective Date on no less than three days’ notice to any counterparty to an executory

contract or unexpired lease affected thereby.

17. With respect to any executory contract or unexpired lease assumed by the Debtor,

any Cure Cost amount shall be satisfied, pursuant to § 365(b)(1) of the Bankruptcy Code, by

payment of the Allowed Amount of such Cure Cost in Cash on the Effective Date, subject to the


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limitations described below, or on such other terms as the parties to any particular executory

contract or unexpired lease may otherwise agree. In the event of a dispute regarding: (1) the

Allowed Amount of any Cure Cost; (2) the ability of the Debtor or Reorganized Debtor, as

applicable, to provide “adequate assurance of future performance” (within the meaning of § 365

of the Bankruptcy Code) under the executory contract or unexpired lease to be assumed; or (3) any

other matter pertaining to assumption, no payments on account of the Cure Cost shall be made

until such dispute is resolved by a Final Order.

18. Payment of an Allowed Cure Cost upon the assumption and assignment of any

executory contract or unexpired lease pursuant to the Plan shall result in the full release and

satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of

provisions restricting the change in control or ownership interest composition or other bankruptcy-

related defaults, under such executory contract or unexpired lease occurring at any time prior to

the effective date of the assumption and assignment.

19. All Claims arising from the rejection of executory contracts or unexpired leases

must be filed with Court and served upon the Debtor’s counsel within thirty (30) days after the

date of entry of an order of the Bankruptcy Court (including this Confirmation Order) approving

such rejection. Any Claim arising from the rejection of executory contracts or unexpired leases

that becomes an Allowed Claim is classified and shall be treated as a Class 5 General Unsecured

Claim. Holders of Claims arising from the rejection of executory contracts and unexpired

leases that are required to file but with respect to which no proof of Claim is timely filed will

be forever barred from asserting a Claim against the Debtor, the Reorganized Debtor, the

Estate or the property of any of the foregoing, unless otherwise expressly allowed by the

Bankruptcy Court.


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H. Releases by the Debtor

20. The following release by the Debtor in Section XI.D of the Plan is approved:

Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on and after the Effective Date, each Released Party is deemed released and discharged by the Debtor, the Reorganized Debtor, and its Estate from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims asserted on behalf of the Debtor, that the Debtor, the Reorganized Debtor, or the Estate (as applicable) would have been legally entitled to assert in its own right or on behalf of the holder of any Claim against, or Interest in, the Debtor or that any holder of any Claim against, or Interest in, the Debtor could have asserted on behalf of the Debtor, based on or relating to, or in any manner arising from, in whole or in part: the Debtor (including the management, governance, ownership, or operation thereof), any securities issued by the Debtor and the ownership thereof, the Debtor’s restructuring efforts, any Avoidance Actions (but excluding Avoidance Actions brought as counterclaims or defenses to Claims asserted against the Debtor), the filing, administration and prosecution of the Chapter 11 Case, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Forbearance Agreement and any contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection with the Disclosure Statement, the Plan, the Forbearance Agreement, the Chapter 11 Case, the filing, administration, and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date.

Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party under the Plan, or any document, instrument, or agreement (including the Forbearance Agreement) executed to implement the Plan or the Restructuring or (b) any individual from any claim or Causes of Action related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Debtor’s release, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Court’s finding that the Debtor’s release is: (a) in exchange for the good and valuable consideration provided by the Released Parties, including, without limitation, the Released Parties’ contributions to


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facilitating the Restructuring and implementing the Plan; (b) a good faith settlement and compromise of the Claims released by the Debtor; (c) in the best interests of the Debtor and all holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to the Debtor, the Reorganized Debtor, or the Debtor’s Estate asserting any Claim or Cause of Action released pursuant to the Debtor’s release.

I. Releases by the Releasing Parties

21. The following release by the Releasing Parties in Section XI.E of the Plan is

approved:

Notwithstanding anything contained in the Plan to the contrary, as of the Effective Date, each Releasing Party is deemed to have released and discharged each of the Debtor, Reorganized Debtor, and each other Released Party from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtor, the Reorganized Debtor, or the Estate (as applicable), that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtor (including the management, governance, ownership or operation thereof), any securities issued by the Debtor and the ownership thereof, the Debtor’s restructuring efforts, any Avoidance Actions (but excluding Avoidance Actions brought as counterclaims or defenses to Claims asserted against the Debtor), the Chapter 11 Case, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Forbearance Agreement, or any contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection with the Disclosure Statement, the Plan, the Forbearance Agreement, the Chapter 11 Case, the filing, administration and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party or Entity, including the Debtor and the Reorganized Debtor, under the Plan or any document, instrument, or agreement (including the Forbearance Agreement) executed to implement the Plan or (b) any individual from any claim or Causes of Action related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence.


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Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Releases, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Court’s finding that the Releases are: (a) consensual; (b) essential to the confirmation of the Plan; (c) given in exchange for the good and valuable consideration provided by the Released Parties; (d) a good faith settlement and compromise of the Claims released; (e) in the best interests of the Debtor and its Estate; (f) fair, equitable, and reasonable; (g) given and made after due notice and opportunity for hearing; and (h) a bar to any of the Releasing Parties asserting any Claim or Cause of Action.

J. Discharge of the Debtor

22. The following discharge of the Debtor in Section XI.F of the Plan is approved:

Pursuant to § 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan or the Confirmation Order, the distributions, rights, and treatment that are provided in the Plan shall be in complete satisfaction, discharge, and release, effective as of the Effective Date, of all Claims, Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtor or any of its assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by employees/representatives of the Debtor prior to the Effective Date or that arise from a termination of employment, termination of retention of a professional or quasi-professional, or a termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in §§ 502(g), 502(h), or 502(i) of the Bankruptcy Code, in this Chapter 11 Case whether or not: (a) a Proof of Claim or Interest based upon such debt, right, Claim, or Interest is filed or deemed filed pursuant to § 501 of the Bankruptcy Code; (b) a Claim or Interest based upon such Claim, debt, right, or Interest is Allowed pursuant to § 502 of the Bankruptcy Code; or (c) the holder of such a Claim or Interest has accepted the Plan. Subject to the terms of the Plan and the Confirmation Order, any default by the Debtor with respect to any Claim or Interest that existed immediately prior to or on account of the filing of this Chapter 11 Case shall be deemed satisfied on the Effective Date. Subject to the terms of the Plan, the Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtor, its Estate, the Reorganized Debtor and all successors thereto. As provided in § 524 of the Bankruptcy Code, subject to the terms of the Plan, such discharge shall void any judgment against the Debtor, its Estate, the Reorganized Debtor or any successors thereto at any time obtained to the extent it relates to a Claim or Interest discharged,


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and operates as an injunction against the prosecution of any action against the Reorganized Debtor or its property and assets to the extent it relates to a discharged Claim or Interest.

K. Exculpation

23. The following exculpation of the Exculpated Parties in Section XI.C of the Plan is

approved:

Except as otherwise specifically provided in the Plan, no Exculpated Party shall have or incur liability for and each Exculpated Party is hereby released and exculpated from any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the filing, administration and prosecution of the Chapter 11 Case, the formulation, preparation, dissemination, negotiation, filing of the Disclosure Statement, the Plan, the Forbearance Agreement, or any contract, instrument, release, or other agreement or document created or entered into in connection with the Disclosure Statement, the Plan, the Chapter 11 Case, the filing, administration and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, except for claims related to any act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Exculpated Party shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.

The Exculpated Parties have, and upon confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.

L. Injunction

24. The following injunction in Section XI.B of the Plan is approved:

The entry of the Confirmation Order will operate as a general resolution with prejudice, as of the Effective Date, of all pending legal proceedings, if any, against the Debtor, the Reorganized Debtor and their assets and properties and any proceedings not yet instituted against the Debtor, the Reorganized Debtor or their assets and properties, except as otherwise provided in the Plan. Except as otherwise


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expressly provided in the Plan or the Confirmation Order, all Persons who have held, hold, or may hold Claims against the Debtor or its assets and properties are permanently enjoined on and after the Effective Date from (a) commencing or continuing in any manner any action or other proceeding of any kind against the Debtor or the Reorganized Debtor, or their assets and properties, with respect to any such Claim, (b) the enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree or order with respect to any such Claim against the Debtor or the Reorganized Debtor, or their assets and properties, (c) creating, perfecting, or enforcing any encumbrance of any kind against the Debtor or the Reorganized Debtor, or their assets and properties, with respect to such Claim, (d) asserting any right of subrogation of any kind against any obligation due to the Debtor or the Reorganized Debtor, or the property of the Debtor, the Estate or the Reorganized Debtor with respect to any such Claim and (e) asserting any right of setoff or recoupment against the Debtor, the Estate or the Reorganized Debtor except as specifically permitted by § 553 of the Bankruptcy Code. Unless otherwise provided in the Plan or by order of the Bankruptcy Court, all injunctions or automatic stays provided for in these cases pursuant to § 105, if any, or § 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date will remain in full force and effect until the Effective Date.

Upon entry of the Confirmation Order, all Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, principals, and direct and indirect Affiliates shall be enjoined from taking any actions to interfere with the implementation or consummation of the Plan. Each Holder of an Allowed Claim or Allowed Interest, as applicable, by accepting, or being eligible to accept, distributions under or Reinstatement of such Claim or Interest, as applicable, pursuant to the Plan, shall be deemed to have consented to the injunction provisions set forth in this Plan.

M. Implementation of Other Necessary Documents and Agreements

25. The Debtor or Reorganized Debtor, as applicable, is authorized, without further

notice to, or action, order or approval of this Court or any other Person, to execute and deliver all

agreements, documents, instruments and certificates relating to such documents and agreements

and to perform their obligations thereunder, including, without limitation, to pay all fees, costs and

expenses thereunder in accordance with the Plan. The terms and conditions of such documents

and agreements are reaffirmed or approved, as applicable, and shall, upon completion of

documentation and execution, be valid, binding and enforceable.


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N. No Action Required

26. Under § 1142(b) of the Bankruptcy Code and applicable nonbankruptcy law, no

action of the managers or members of the Debtor is required to authorize the Debtor to enter into,

execute, deliver, file, adopt, amend, restate, consummate, or effectuate, as the case may be, the

Plan and any contract, instrument, or other document to be executed, delivered, adopted, or

amended in connection with the implementation of the Plan.

O. Enforceability of Plan Documents

27. Pursuant to the provisions of this Confirmation Order and §§ 1123(a) and 1142(a)

of the Bankruptcy Code, the Plan, the Disclosure Statement, this Confirmation Order, and all

implementing Plan documents (collectively, the “Plan Documents”) shall apply and be enforceable

notwithstanding any otherwise applicable bankruptcy law.

P. Preservation of Claims and Rights

28. Except as provided in the Plan or in any contract, instrument, release or other

agreement entered into or delivered in connection with the Plan, in accordance with § 1123(b) of

the Bankruptcy Code, the Reorganized Debtor will retain and may enforce any Claims, demands,

Rights of Action and Causes of Action that the Estate may hold against any Person to the extent

not released under the Plan, this Confirmation Order, or otherwise, including the Avoidance

Actions. The Reorganized Debtor may pursue any such retained Claims, demands, Rights of

Action or Causes of Action, as appropriate, in accordance with the best interests of the Reorganized

Debtor. The non-disclosure or non-discussion of any particular Claim, demand, Right of Action

or Cause of Action is not and shall not be construed as a settlement, compromise, waiver, or release

of any such Claim, demand, Right of Action or Cause of Action. The Debtor intends to preserve

all such Claims, demands, Rights of Action and Causes of Action as Avoidance Actions.


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Q. Waiver of 14-Day Stay

29. Notwithstanding Bankruptcy Rule 3020(e), the terms and conditions of this

Confirmation Order will be effective and enforceable immediately upon its entry, and not subject

to any stay.

Signed:

DAVID R. JONES UNITED STATES BANKRUPTCY JUDGE

Signed: ____________________________________ DAVID R. JONES UNITED STATES BANKRUPTCY JUDGE

November 20, 2020.


Exhibit A to the Confirmation Order

Plan



LAREDO DIVISION

) In re: ) Chapter 11 ) VOLUSION, LLC1 ) Case No. 20-50082 (DRJ) )

Debtor. ) )

COMBINED PLAN OF REORGANIZATION AND DISCLOSURE STATEMENT OF VOLUSION, LLC

PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE


is: Volusion, LLC (9037). The Debtor’s service address is 1835A Kramer Lane, Suite 100, Austin, TX 78758.

Matthew D. Cavenaugh (TX Bar No. 24062656) Jennifer F. Wertz (TX Bar No. 24072822) JACKSON WALKER L.L.P. 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: [email protected] Email: [email protected] COUNSEL FOR THE DEBTOR AND DEBTOR IN POSSESSION

26953734v.14


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TABLE OF CONTENTS

ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME .................... 5

A. Defined Terms ................................................................................................................................................. 5 B. Rules of Interpretation and Computation of Time ......................................................................................... 12

ARTICLE II ADMINISTRATIVE AND PRIORITY CLAIMS ................................................................................. 12

A. Administrative Claims ................................................................................................................................... 12 B. Final Fee Applications and Payment of Professional Fee Claims ................................................................. 13 C. Allocation and Estimation of Professional Fees and Expenses ..................................................................... 13 D. Post-Confirmation Date Fees and Expenses .................................................................................................. 13 E. Priority Tax Claims ....................................................................................................................................... 13 F. Statutory Fees ................................................................................................................................................ 13

ARTICLE III DEBTOR’S HISTORY AND THE BANKRUPTCY CASE ............................................................... 14

A. The Debtor’s History ..................................................................................................................................... 14 B. Liabilities and Claims of the Debtor ............................................................................................................. 15 C. The Bankruptcy Case .................................................................................................................................... 16 D. Main Bankruptcy Events ............................................................................................................................... 17

ARTICLE IV CLASSIFICATION OF CLAIMS AND INTERESTS ........................................................................ 18

ARTICLE V IMPAIRMENT OF CLASSES AND RESOLUTION OF CLAIM CONTROVERSIES ..................... 18

A. Impaired Classes ........................................................................................................................................... 18 B. Unimpaired Classes ....................................................................................................................................... 19 C. Controversy Concerning Classification, Impairment or Voting Rights ......................................................... 19

ARTICLE VI CLASSIFICATION AND TREATMENT OF CLAIMS ..................................................................... 19

A. Treatment of Impaired Classes ...................................................................................................................... 19 B. Treatment of Unimpaired Classes ................................................................................................................. 21

ARTICLE VII PROVISIONS FOR IMPLEMENTATION OF THE PLAN .............................................................. 22

A. General Settlement of Claims, Interests, and Causes of Action .................................................................... 22 B. Closing .......................................................................................................................................................... 22 C. Employee and Retiree Benefits ..................................................................................................................... 22 D. Funding of the Case ....................................................................................................................................... 22 E. Forbearance Agreement ................................................................................................................................ 22 F. Continuation of Operations of the Debtor ..................................................................................................... 23 G. Vesting of Assets ........................................................................................................................................... 23 H. Continued Corporate Existence ..................................................................................................................... 23 I. Retention of Investment Banker .................................................................................................................... 24 J. Sale of the Debtor’s Assets ........................................................................................................................... 24 K. Ad Valorem Taxes ......................................................................................................................................... 24 L. General Powers of the Reorganized Debtor .................................................................................................. 24

ARTICLE VIII CLAIM/INTEREST OBJECTION PROCEDURES, TREATMENT OF DISPUTED CLAIMS/INTERESTS AND PROCEDURES FOR ASSERTING CLAIMS ............................... 25

A. Objection Process .......................................................................................................................................... 25 B. Filing of Claims and Causes of Action .......................................................................................................... 26 C. Disallowance of Late Filed Proofs of Claim ................................................................................................. 26 D. Provisions Governing Distributions .............................................................................................................. 26

ARTICLE IX EXECUTORY CONTRACTS AND UNEXPIRED LEASES ............................................................. 26

A. Executory Contracts and Unexpired Leases .................................................................................................. 26 B. Assumed Executory Contracts and Unexpired Leases .................................................................................. 26


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C. Claims Based on Rejection of Executory Contracts or Unexpired Leases .................................................... 27 D. Indemnification ............................................................................................................................................. 27 E. Insurance Policies .......................................................................................................................................... 27 F. Reservation of Rights .................................................................................................................................... 28

ARTICLE X EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS .......................................... 28

A. Impaired Classes to Vote ............................................................................................................................... 28 B. Acceptance by Class ...................................................................................................................................... 28 C. Reservation of Cramdown Rights ................................................................................................................. 28

ARTICLE XI SETTLEMENT, RELEASE, INJUNCTION AND EFFECT OF CONFIRMATION ......................... 28

A. Legally Binding Effect .................................................................................................................................. 28 B. Injunction ...................................................................................................................................................... 28 C. Exculpation. .................................................................................................................................................. 29 D. Releases by the Debtor. ................................................................................................................................. 29 E. Releases by the Releasing Parties. ................................................................................................................. 30 F. Discharge of the Debtor ................................................................................................................................ 31 G. Continuation of Anti-Discrimination Provisions of the Bankruptcy Code .................................................... 31 H. Preservation of Claims and Rights ................................................................................................................ 31

ARTICLE XII CONFIRMATION OF THE PLAN .................................................................................................... 32

A. Confirmation Hearing ................................................................................................................................... 32 B. Statutory Requirements for Confirmation of the Plan ................................................................................... 32 C. Cramdown ..................................................................................................................................................... 34 D. Conditions Precedent to Effective Date......................................................................................................... 35 E. Annulment of Plan if Conditions Not Waived or Satisfied ........................................................................... 35 F. Retention of Jurisdiction by Bankruptcy Court ............................................................................................. 35

ARTICLE XIII NOTICE PROVISIONS .................................................................................................................... 36

A. Notices ........................................................................................................................................................... 36 B. Limitation on Notice ..................................................................................................................................... 37

ARTICLE XIV COMPROMISES AND SETTLEMENTS ........................................................................................ 37

A. Effect of Confirmation Order ........................................................................................................................ 37

ARTICLE XV MISCELLANEOUS PROVISIONS ................................................................................................... 37

A. Bar Date for Administrative Claims .............................................................................................................. 37 B. Objections to Administrative Claims ............................................................................................................ 38 C. Payment of Professional Claims .................................................................................................................... 38 D. Payment of United States Trustee Fees ......................................................................................................... 38 E. Employee Benefits Plans ............................................................................................................................... 38 F. Satisfaction of Liabilities ............................................................................................................................... 38 G. Compliance with Tax Requirements ............................................................................................................. 38 H. Amendment of the Plan ................................................................................................................................. 38 I. Timing of Distributions ................................................................................................................................. 38 J. Enforcement of Subordination Agreements/Settlement Agreements ............................................................ 39 K. Filing of Documents in Public Records ......................................................................................................... 39 L. Right to Seek Further Orders ......................................................................................................................... 39 M. Regulatory Approvals ................................................................................................................................... 39 N. Withdrawal of Plan ........................................................................................................................................ 39 O. Due Authorization by Creditors .................................................................................................................... 39 P. Filing of Additional Documentation ............................................................................................................. 39 Q. Implementation .............................................................................................................................................. 39 R. Substantial Consummation ............................................................................................................................ 40 S. Further Effect of Confirmation ...................................................................................................................... 40 T. Reservation of Claims ................................................................................................................................... 40


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U. Dates .............................................................................................................................................................. 40 V. Governing Law .............................................................................................................................................. 40 W. Conflict .......................................................................................................................................................... 40 X. Severability ................................................................................................................................................... 40 Y. Setoffs ........................................................................................................................................................... 40 Z. Further Action ............................................................................................................................................... 41 AA. Other Considerations ..................................................................................................................................... 41 BB. Feasibility of the Plan .................................................................................................................................... 41 CC. Alternative Plans of Reorganizations ............................................................................................................ 41 DD. Liquidation under Chapter 7 .......................................................................................................................... 41 EE. Risk Factors ................................................................................................................................................... 41 FF. Taxation ......................................................................................................................................................... 42

ARTICLE XVI CAUSES OF ACTION ...................................................................................................................... 43

A. Preferences .................................................................................................................................................... 43 B. Fraudulent Transfers ..................................................................................................................................... 43

ARTICLE XVII VOTING PROCEDURES AND REQUIREMENTS ....................................................................... 44

A. Ballots and Voting Deadline ......................................................................................................................... 44 B. Creditors Entitled to Vote .............................................................................................................................. 44 C. Voting Procedures ......................................................................................................................................... 45 D. Vote Required for Class Acceptance ............................................................................................................. 45 E. Cramdown and Withdrawal of the Plan ........................................................................................................ 45

ARTICLE XVIII CONCLUSION, RECOMMENDATION, AND CONFIRMATION REQUEST .......................... 45


TABLE OF EXHIBITS

Exhibit A Forbearance Agreement

Exhibit B [SEALED]2 Sale Milestones

Exhibit C October Monthly Operating Report

2 Exhibit B will be filed under seal, to protect the integrity of the Sale process to be undertaken by the Reorganized

Debtor.


INTRODUCTION AND DISCLAIMERS

Volusion, LLC (the “Debtor”), in the above-captioned case proposes the following Combined Plan of Reorganization and Disclosure Statement of the Debtor Pursuant to Chapter 11 of the Bankruptcy Code (this “Disclosure Statement,” “Plan and Disclosure Statement” or “Plan”) for the resolution of the outstanding claims against and equity interests in the Debtor. The Debtor is the proponent of this Plan within the meaning of section 1129 of the Bankruptcy Code. Other agreements and documents supplement this Plan and have been or will be filed with the Bankruptcy Court. Such supplemental agreements and documents are referenced in this Plan and Disclosure Statement and will be available for review.

This Plan and Disclosure Statement references certain events, statutory provisions, and documents related to the Plan and Disclosure Statement that may be attached and are incorporated by reference. Although the Debtor believes that such information is fair and accurate, this information is qualified in its entirety to the extent that it does not set forth the entire text of such documents or statutory provisions or every detail of such events. The information contained herein or attached hereto is made only as of the date of this Plan and Disclosure Statement. There can be no assurances that the statements contained herein will be correct at any time after this date.

This Plan and Disclosure Statement has been prepared in accordance with sections 1123 and 1125 of the Bankruptcy Code and Bankruptcy Rule 3016 and not necessarily in accordance with federal or state securities laws or other nonbankruptcy laws. This Plan and Disclosure Statement has not been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”), any state securities commission or any securities exchange or association, nor has the SEC, any state securities commission or any securities exchange or association passed upon the accuracy or adequacy of the statements contained herein. No other governmental or other regulatory agency approvals have been obtained as of the date of the mailing or e-mailing of this Plan and Disclosure Statement.

The Debtor submits this Plan and Disclosure Statement, as may be amended from time to time, under § 1125 of the Bankruptcy Code and Rule 3016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) to all of the Debtor’s known Creditors and Interest Holders entitled to vote on the Plan.

The purpose of this Plan and Disclosure Statement is to provide adequate information to enable Creditors and Interest Holders who are entitled to vote on the Plan to arrive at a reasonably informed decision in exercising their respective right to vote on the Plan. All section references in this Plan and Disclosure Statement are to the Bankruptcy Code unless otherwise indicated.

Every effort has been made to inform Creditors and Interest Holders how various aspects of the Plan affect their respective positions. If any questions arise, the Debtor urges you to contact the Debtor’s counsel. The Debtor’s counsel will attempt to resolve your questions. You are also encouraged to consult with your own counsel. The counsel for the Debtor is likewise available to answer any questions that your counsel may have regarding this Plan and Disclosure Statement.

In preparing this Plan and Disclosure Statement, the Debtor relied on financial data derived from its books and records or that was otherwise made available to it at the time of such preparation and on various assumptions regarding the Debtor’s business. Although the Debtor believes that such financial information fairly reflects the financial condition of the Debtor as of the date hereof and that the assumptions regarding future events reflect reasonable business judgments, no representations or warranties are made as to the accuracy of the financial information contained herein or assumptions regarding the Debtor’s business and its future results and operations. Except where specifically noted, the financial information contained in this Plan and Disclosure Statement and in its Exhibits has not been audited by a certified public accountant and has not been prepared in accordance with generally accepted accounting principles in the United States or any other jurisdiction.

This Plan and Disclosure Statement does not constitute, and may not be construed as, an admission of fact, liability, stipulation or waiver. The Debtor may object to claims after the Confirmation Date or Effective Date of the Plan irrespective of whether this Plan and Disclosure Statement identifies any such objections to Claims.


2

The Debtor is making the statements and providing the financial information contained in this Plan and Disclosure Statement as of the date hereof, unless otherwise specifically noted. Although the Debtor may subsequently update the information in this Plan and Disclosure Statement, the Debtor has no affirmative duty to do so, and expressly disclaims any duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Holders of Claims and Interests reviewing this Plan and Disclosure Statement should not infer that, at the time of their review, the facts set forth herein have not changed since this Plan and Disclosure Statement was filed. Information contained herein is subject to completion or amendment. The Debtor reserves the right to file an amended plan and disclosure statement.

Confirmation and effectiveness of the Plan are subject to certain material conditions precedent described in Article XII. There is no assurance that the Plan will be confirmed or, if confirmed, that such material conditions precedent will be satisfied or waived. You are encouraged to read this Plan and Disclosure Statement in its entirety, including, but not limited to Section XV.EE entitled “Risk Factors,” before submitting your ballot to vote to accept or reject the Plan.

The Debtor has not authorized any entity to give any information about or concerning the Plan and Disclosure Statement other than that which is contained in this Plan and Disclosure Statement. The Debtor has not authorized any representations concerning the Debtor or the value of its property other than as set forth in this Plan and Disclosure Statement.

If the Plan is confirmed by the Bankruptcy Court and the Effective Date occurs, all holders of Claims and Interests (including those holders of Claims or Interests who are not entitled to vote on the Plan) will be bound by the terms of the Plan and any transactions contemplated thereby.

The contents of this Plan and Disclosure Statement should not be construed as legal, business or tax advice. Each Creditor or holder of an Interest should consult his, her, or its own legal counsel and accountant as to legal, tax and other matters concerning his, her, or its Claim or Interest. This Plan and Disclosure Statement may not be relied upon for any purpose other than to determine how to vote on the Plan or object to confirmation of the Plan.

Nothing contained herein shall constitute an admission of any fact or liability by any party or be deemed evidence of the tax or other legal effects of the Plan on the Plan proponents or on holders of Claims or Interests.

THE SOLICITATION

This Plan and Disclosure Statement is submitted by the Debtor to be used in connection with the solicitation of votes on the Plan describing the terms of the reorganization of the Debtor.

The Debtor requested that the Bankruptcy Court hold a hearing on approval of this Plan and Disclosure Statement to determine whether this Plan and Disclosure Statement contains “adequate information” in accordance with § 1125.1 Pursuant to § 1125(a)(1), “adequate information” is defined as “information of a kind, and in sufficient detail, as far as reasonably practicable in light of the nature and history of the Debtors and the condition of the Debtors’ books and records … that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant Class to make an informed judgment about the plan ….” All holders of Claims and Interests are encouraged to read and carefully consider this Plan and Disclosure Statement in its entirety before voting to accept or reject the Plan.

In making a decision to accept or reject the Plan, each holder of a Claim or Interest must rely on its own examination of the Debtor as described in this Plan and Disclosure Statement, including the merits and risks involved; thus, this Plan and Disclosure Statement shall not be construed to be providing any legal, business, financial or tax advice. Each holder of a Claim or Interest should consult with his, her, or its own legal, business, financial and tax advisors as to any such matters concerning the solicitation, the Plan and Disclosure Statement, or the transactions contemplated thereby. Additionally, confirmation and consummation of the Plan are subject to conditions precedent that could lead to delays in consummation of the Plan. There can be no assurance that each of the conditions precedent

1 All citations to “§” reference the applicable section of the Bankruptcy Code.


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will be satisfied or waived or that the Plan will be consummated. Even after the Effective Date, distributions under the Plan may be subject to delay so that Disputed Claims can be resolved.

The Debtor supports confirmation of the Plan and recommends all holders of Claims entitled to vote on the Plan to vote to accept the Plan.

The Confirmation Hearing to consider the final approval of the Plan and Disclosure Statement and confirmation of the Plan has been set for November 20, 2020, at 10:00 a.m. Central Time.

Objections to the final approval of the Plan and Disclosure Statement or objections to confirmation of the Plan must be in writing and must be filed with the Clerk of the Bankruptcy Court and served on counsel for the Debtor to ensure receipt on or before 5:00 p.m. Central Time, on November 18, 2020. Bankruptcy Rule 3007 governs the form of any such objection.

ANSWERS TO COMMONLY ASKED QUESTIONS

What is chapter 11 Bankruptcy?

Chapter 11 is the principal reorganization chapter of the Bankruptcy Code that allows financially distressed businesses to reorganize their debts or to liquidate their assets in a controlled fashion. The commencement of a chapter 11 case creates an “estate” containing all of the legal and equitable interests of the debtor in property as of the date the bankruptcy case is filed. During a chapter 11 bankruptcy case, the debtor remains in possession of its assets unless the Court orders the appointment of a trustee. No trustee has been appointed in the Debtor’s case. The Plan is being proposed by the Debtor. The Debtor proposes a plan of reorganization in an effort to minimize the overall administrative costs associated with this bankruptcy case and maximize value to Creditors and Interest Holders.

How do I determine how my claim or interest is classified?

To determine the classification of your Claim or Interest, you must determine the nature of your Claim or Interest. Under the Plan, Claims and Interests are classified into a series of Classes. The pertinent Articles and Sections of the Plan and Disclosure Statement disclose, among other things, the treatment that each Class of Claims or Interests will receive if the Plan is confirmed.

How do I determine what I am likely to recover on account of my Claim or Interest?

After you determine the classification of your Claim or Interest, you can determine the likelihood and range of potential recovery with respect to your Claim or Interest by referring generally to the classification and treatment of Claims in Article IV, Article V and Article VI.

What is necessary to confirm the Plan?

Under applicable provisions of the Bankruptcy Code, confirmation of the Plan requires that, among other things, at least one class of impaired Claims or Interests vote to accept the Plan. Acceptance by a class of claims or interests means that at least two-thirds in the total dollar amount and more than one-half in number of the allowed Claims or Interests actually voting in the class vote in favor of the Plan. Because only those claims or interests who vote on a plan will be counted for purposes of determining acceptance or rejection of a plan by an impaired class, a plan can be approved with the affirmative vote of members of an impaired class who own less than two-thirds in amount and one-half in number of the claims/interests. Besides acceptance of the Plan by each class of impaired creditors or interests, a bankruptcy court also must find that the Plan meets a number of statutory tests before it may confirm the Plan. These requirements and statutory tests generally are designed to protect the interests of holders of impaired claims or interests who do not vote to accept the Plan but who will nonetheless be bound by the Plan’s provisions if the bankruptcy court confirms the Plan.

If one or more classes vote to reject the Plan, the Debtor may still request that the bankruptcy court confirm the Plan under § 1129(b) of the Bankruptcy Code. To confirm a plan not accepted by all classes, the Plan proponent must


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demonstrate that the plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired under, and that has not accepted, the plan. This method of confirming a plan is commonly called a “cramdown.” In addition to the statutory requirements imposed by the Bankruptcy Code, the plan itself also provides for certain conditions that must be satisfied as conditions to confirmation.

Is there a Committee in this case?

No. The Office of the United States Trustee was unable to form an official committee of unsecured creditors in this case.

When is the deadline for returning my ballot?

The Bankruptcy Court has directed that, to be counted for voting purposes, your ballot must be received by the Debtor’s counsel not later than November 18, 2020 at 5:00 p.m. Central Time.

It is important that all impaired Creditors and Interest Holders vote on the Plan. The Debtor believes that the Plan provides the best possible recovery to Creditors and Interest Holders. The Debtor therefore believes that acceptance of the Plan is in the best interest of Creditors and Interest Holders and recommends that all impaired Creditors and Interest Holders vote to accept the Plan.

If you would like to obtain copies of this Plan and Disclosure Statement or any of the documents attached or referenced herein, or have questions about the solicitation and voting process or this Chapter 11 Case generally, please contact counsel for the Debtor, Jennifer Wertz, by either e-mail at [email protected] or telephone at 512-236-2247.

OVERVIEW OF PLAN

An overview of the Plan is set forth below. This overview is qualified in its entirety by reference to the specific provisions of the Plan and Disclosure Statement. If the Court confirms the Plan and, in the absence of any applicable stay, all other conditions set forth herein are satisfied, the Plan will take effect on the Effective Date.

The Debtor’s plan to reorganize involves the Debtor reaching agreements with KSCO, a Warrant and Equity Interest Holder, Sproles, a holder of Unsecured Convertible Notes, and the Main Street Parties, whose claims are secured by liens on substantially all of the Debtor’s assets, and whom are also Warrant and Equity Interest Holders and holders of Unsecured Convertible Notes, to provide for retention of those liens and repayment from operations of the Debtor and ultimately a sale of the Debtor or a refinancing of the Debtor’s debt. Unsecured Creditors, other than Unsecured Convertible Note holders, will be paid in full in the regular course of business.

As of the Effective Date of the Plan, the Reorganized Debtor will be responsible for all payments and distributions to be made under the Plan to the holders of Allowed Claims, together with any payments that become due under any executory contract or unexpired lease assumed by the Debtor. Each executory contract and unexpired lease to which the Debtor is a party shall be deemed assumed unless the Debtor expressly rejects a particular executory contract or lease pursuant to the Plan or before the Effective Date.


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ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME

A. Defined Terms

Capitalized terms used in this Plan and Disclosure Statement have the meanings set forth in this Section I.A. Any term that is not otherwise defined herein, but that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning given to that term in the Bankruptcy Code or the Bankruptcy Rules.

1. Administrative Claim. Any cost or expense of administration of the Chapter 11 Case incurred on or before the Effective Date entitled to priority under § 507(a)(2) and allowed under § 503(b) of the Bankruptcy Code, including without limitation, any actual and necessary expenses of preserving the Debtor’s estate, including wages, salaries or commissions for services rendered after the commencement of the Chapter 11 Case, certain taxes, fines and penalties, any actual and necessary post-petition expenses of operating the Debtor’s business, certain post-petition indebtedness or obligations incurred by or assessed against the Debtor in connection with the conduct of its business, or for the acquisition or lease of property, or for providing services to the Debtor, including all allowances of compensation or reimbursement of expenses to the extent allowed by the Bankruptcy Court under the Bankruptcy Code, and any fees or charges assessed against the Debtor’s Estate under chapter 123, title 28, United States Code.

2. Administrative Claim Bar Date. The last day to file an application for allowance of an Administrative Claim (other than quarterly U.S. Trustee fees) shall be 15 calendar days after the Effective Date unless otherwise established by a Final Order.

3. Agent. Main Street, as Administrative Agent and Collateral Agent under the Loan Documents (as defined therein).

4. Allowed. Any Claim (i) which has been scheduled by the Debtor pursuant to Bankruptcy Rule 1007 and (a) is not scheduled as disputed, contingent or unliquidated, (b) as to which no Proof of Claim has been filed and (c) as to which no objection to such scheduled Claim has been filed; (ii) as to which a timely Proof of Claim has been filed as of the Bar Date and no objection thereto has been made; (iii) that has been allowed by a Final Order, (iv) that is allowed, compromised, settled, or otherwise resolved pursuant to the terms of the Plan. The Debtor or Reorganized Debtor may deem any Unimpaired Claim to be Allowed.

5. Allowed Administrative Claim. An Administrative Claim to the extent it is or becomes an Allowed Claim.

6. Allowed Amount. The amount of an Allowed Claim.

7. Allowed General Unsecured Claim. A General Unsecured Claim to the extent it is or becomes an Allowed Claim.

8. Allowed Interest. Any Equity Interest on the record date that has not been disallowed pursuant to the terms of the Plan or a Final Order of the Bankruptcy Court. Any Interest that is allowed solely for purposes of voting to accept or reject this Plan pursuant to an order of the Bankruptcy Court shall not be deemed to be an Allowed Interest for purposes of Distributions under this Plan.

9. Allowed Priority Non-Tax Claim. A Priority Non-Tax Claim to the extent it is or becomes an Allowed Claim.

10. Allowed Priority Tax Claim. Any Claim, to the extent such Claim is an Allowed Claim and entitled to priority in payment under § 507(a)(8) of the Bankruptcy Code. Allowed Priority Tax Claims shall be determined as of the Petition Date and paid pursuant to Section II.E.

11. Allowed Secured Claim. A Secured Claim of a Creditor to the extent such Claim is an Allowed Claim, and the Lien securing such Claim has not become an Avoided Lien.


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12. Avoidance Action. Any and all rights, claims and causes of action arising under §§ 506(c), 510, 542, 543, 544, 545, 547, 548, 549, 550, 551, 552(b), 553 or 724 of the Bankruptcy Code or similar rights, claims and causes of action under applicable state law.

13. Avoided Lien. A Lien to the extent it has been set aside, invalidated, or otherwise avoided pursuant to an Avoidance Action.

14. Bankruptcy Code. Title 11 of the United States Code, as in effect on the Confirmation Date.

15. Bankruptcy Court. The unit of the United States District Court for the Southern District of Texas, Laredo Division, having jurisdiction over this Chapter 11 Case, or in the event such Court ceases to exercise jurisdiction over this Chapter 11 Case, such court or adjunct thereof that exercises jurisdiction over this Chapter 11 Case in lieu of the United States Bankruptcy Court for the Southern District of Texas, Laredo Division, and any appellate or other court that is competent to exercise jurisdiction over the confirmation of this Plan.

16. Bankruptcy Rules. The Federal Rules of Bankruptcy Procedure, as amended, and the Bankruptcy Local Rules for the Southern District of Texas, as applicable to this Chapter 11 Case, each as in effect on the date of the event described herein.

17. Bar Date. November 30, 2020.

18. Board. The Debtor’s Board of Managers, consisting of: (i) Jeremy Rosenthal, (ii) Troy Pike, and (iii) Curt Lindeman.

19. Business Day. Any day other than a Saturday, Sunday or any other day on which commercial banks in Laredo, Texas are required or authorized to close by law or executive order.

20. Cash. Legal tender of the United States of America, denominated in U.S. dollars, and equivalents thereof.

21. Cause of Action. Any claim or cause of action, legal or equitable, now owned or hereafter acquired by the Debtor, whether arising under contract or tort, federal or state law, including but not limited to Avoidance Actions, whether commenced prior or subsequent to the Petition Date.

22. Chapter 11 Case. Case No. 20-50082 (DRJ) filed under chapter 11 of the Bankruptcy Code by the Debtor and pending before the Bankruptcy Court.

23. Claim. Any (i) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

24. Claimant. A person asserting a Claim against the Debtor, its property, or the Estate.

25. Class. A category of holders of Claims or Interests pursuant to section 1122(a) of the Bankruptcy Code.

26. Collateral. Any property or interest in property of the Estate subject to a Lien that is not subject to avoidance under the Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable state law.

27. Company Agreement. The Debtor’s Second Amended and Restated Limited Liability Company Agreement, dated November 23, 2016, as amended, restated or amended and restated from time to time.

28. Confirmation Date. The date upon which the Bankruptcy Court enters the Confirmation Order.


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29. Confirmation Hearing. The hearing to be conducted by the Bankruptcy Court to determine whether to approve the Plan.

30. Confirmation Order. The order of the Bankruptcy Court approving and confirming the Plan in accordance with the provisions of chapter 11 of the Bankruptcy Code.

31. Conway. Conway MacKenzie Management Services, LLC, as restructuring professional to the Debtor.

32. Creditor. Any person that holds a Claim against the Debtor that arose or is deemed to have arisen on or before the Petition Date, including an Allowed Claim against the Debtor’s Estate of a kind specified in §§ 502(g), 502(h) or 502(i) of the Bankruptcy Code.

33. CRO. Timothy B. Stallkamp, the Chief Restructuring Officer of the Debtor.

34. Cure Costs. The amount necessary to cure all defaults under any executory contract or any unexpired lease to which the Debtor is a party and to compensate the non-debtor party for any actual pecuniary loss resulting from such defaults in order to assume and assign the executory contract or unexpired lease under §§ 365(a) and 365(f) of the Bankruptcy Code.

35. D&O Liability Insurance Policies. All insurance policies (including any “tail policy”) of the Debtor for current or former directors’, managers’, officers’, and/or employees’ liability.

36. Debtor. Volusion, LLC, a Delaware limited liability company.

37. Debtor in Possession. The Debtor in its capacity as a debtor in possession pursuant to §§ 1107 and 1108 of the Bankruptcy Code.

38. Deficiency Claim. The amount by which an Allowed Secured Claim exceeds the value of any Collateral securing such Claim as may be determined by the Bankruptcy Court in accordance with § 506(a) of the Bankruptcy Code. A Deficiency Claim is a General Unsecured Claim.

39. Disputed Claim. A Claim against the Debtor as to which an objection has been filed on or before the deadline for objecting to a Claim and which objection has not been withdrawn, settled or otherwise resolved by Final Order.

40. Distribution Date. The date, occurring as soon as practicable after the Effective Date, on which distributions are made pursuant to the terms of the Plan to holders of Allowed Claims; provided, however, that should such Allowed Claims be paid in the ordinary course of business, the Distribution Date shall be the date such Allowed Claim becomes payable under the terms of any contract or agreement or applicable non-bankruptcy law.

41. Distribution. The Cash and other property required by the Plan to be distributed to the holders of Allowed Claims and Allowed Interests.

42. Effective Date. The first Business Day after (i) the date the Confirmation Order becomes a Final Order; and (ii) all conditions specified in Section XII.D hereof have been satisfied or waived.

43. Employee Benefit Plans. Any employment, compensation, welfare, healthcare, bonus, incentive compensation, sick leave and other leave, vacation pay, expense, reimbursement, dependent care, retirement, savings, deferred compensation, supplemental pension, retention, workers compensation, life insurance, disability, dependent care, dependent healthcare, education, severance or other compensation or benefit plan, agreement or arrangement for the benefit of the current or former directors, officers or employees (whether salaried or hourly, active or retired) of the Debtor.


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44. Equity Interest Holder or Interest Holder. Equity Interest Holder or Interest Holder shall have the meaning ascribed to “equity security holder” in § 101(17) of the Bankruptcy Code.

45. Equity Interest or Interest. Equity Interest or Interest shall have the meaning ascribed to “equity security” in § 101(16) of the Bankruptcy Code.

46. Estate. The estate created upon the filing by the Debtor of this Chapter 11 Case pursuant to § 541 of the Bankruptcy Code, together with all rights, claims and interests pertaining thereto.

47. Exculpated Party. Individually and collectively, the Released Parties and the Professionals.

48. Existing Defaults. Various Events of Default (as defined in the Loan Documents) under the Loan Documents that have occurred and are continuing under the Loan Documents, all of which are set forth on Exhibit A attached to the Forbearance Agreement.

49. Final Order. An order or judgment which has not been reversed, vacated or stayed and as to which (a) the time to appeal, petition for certiorari or move for new trial, reargument or rehearing has expired and to which no appeal, petition for certiorari or other proceedings for a new trial, re-argument or rehearing shall then be pending, or (b) if an appeal, writ of certiorari, new trial, re-argument or rehearing thereof has been sought, such order or judgment of the Bankruptcy Court shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied or a new trial, re-argument or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari or move for a new trial, re-argument or rehearing shall have expired.

50. Forbearance. Forbearance has the meaning set forth in Section VII.E.

51. Forbearance Agreement. The Forbearance Agreement with respect to the Loan Documents, entered into by the Debtor and/or the Reorganized Debtor, as applicable, KSCO, the Main Street Parties and the Agent, as of the Effective Date, in the form and substance of Exhibit A hereto.

52. Forbearance Event of Default. The Debtor’s, the Reorganized Debtor’s or KSCO’s failure to comply with the terms of the Forbearance Agreement or the Plan or the occurrence of any Event of Default (as defined in the Loan Documents) (other than the Existing Defaults) pursuant to the Loan Documents.

53. General Unsecured Claim. A Claim other than a Secured Claim, an Administrative Claim, a Priority Claim, or a Subordinated Claim.

54. Governmental Unit. The term Governmental Unit shall have the meaning assigned in the Bankruptcy Code.

55. HMS. Collectively, HMS Income and HMS Equity.

56. HMS Equity. MSC Equity Holding, LLC f/k/a HMS Equity Holding, LLC, a Delaware limited liability company.

57. HMS Income. HMS Income Fund, Inc., a Maryland corporation.

58. Indemnification Obligations. The Debtor’s indemnification provisions in place, whether in the Debtor’s certificate of incorporation, Company Agreement, Board resolutions, management or indemnification agreements, employment contracts, or otherwise, for the current and former directors, officers, managers, employees, attorneys, other professionals, and agents of the Debtor and such current and former directors’, officers’, and managers’ respective affiliates.

59. Interest. Any equity security (as defined in section 101(16) of the Bankruptcy Code) in the Debtor, including options, warrants, rights, restricted stock awards, performance share awards, performance share units, stock-


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settled restricted stock units, cash-settled restricted stock units or other securities or agreements to acquire the common stock, preferred stock, limited liability company interests, or other equity, ownership or profits interests of the Debtor (whether or not arising under or in connection with any employment agreement, separation agreement or employee incentive plan or program of the Debtor as of the Petition Date).

60. Investment Banker. The investment banking firm D.A. Davidson & Co., which the Debtor engaged on September 25, 2020.

61. KSCO. KSCO Holdings, Inc., a Texas corporation.

62. Lien. A charge against or interest in property to secure payment of a debt or performance of an obligation which has not been avoided or invalidated under any provision of the Bankruptcy Code or other applicable law.

63. Loan Documents. The Amended and Restated Loan Agreement by and among the Debtor, Secured Lenders, and Agent, dated November 23, 2016 (as amended, supplemented or restated from time to time), together with the documents, instruments, certificates, and agreements executed and delivered in connection therewith. All details and references provided herein with respect to the Loan Documents and the transactions by and among the Debtor and the Main Street Parties are summaries only and the terms of the Loan Documents control and shall continue to control, except to the extent modified by the Plan and the Forbearance Agreement.

64. Main Street. Main Street Capital Corporation, a Maryland corporation, in all of its capacities, including as Administrative Agent, Collateral Agent and Lender.

65. Main Street Entities. Collectively, Main Street and Main Street Equity.

66. Main Street Equity. Main Street Equity Interests, Inc., a Delaware corporation.

67. Main Street Parties. Collectively, Main Street Entities and HMS.

68. Main Street Secured Claim. The secured claim of Main Street, as Agent for itself and HMS Income, in the amount of not less than $28,906,048.20 in unpaid principal as of October 30, 2020, plus accrued and unpaid interest, fees, costs, expenses and other obligations, including, without limitation, reasonable and documented attorney’s fees, Agent’s fees, other professional fees and disbursements and other obligations arising and payable, consist of not less than $1,723,854.63 as of October 30, 2020, under or in connection with the Loan Documents. The Main Street Secured Claim is secured by liens on substantially all of the Debtor’s assets, existing or acquired.

69. NOL. NOL has the meaning set forth in Section XV.FF.

70. Employee Options. The 9,182,403 options authorized pursuant to the 2015 Unit Option Plan of the Debtor. Of the authorized Employee Options, 6,916,236 units have been granted and 2,360 of such granted units have been exercised. 2,263,807 units of authorized Employee Options have not been granted and remain available.

71. Other Secured Claim. Any Secured Claim against the Debtor, other than the Main Street Secured Claim.

72. Other Priority Claim. Any Claim other than an Administrative Claim or a Priority Tax Claim entitled to priority in right of payment under section 507(a) of the Bankruptcy Code.

73. Priority Claim. Any Claim to the extent entitled to priority in payment under § 507(a) of the Bankruptcy Code.

74. Person. An individual, a corporation, a partnership, an association, a joint stock company, a joint venture, an estate, a trust, an unincorporated association or organization, a Governmental Unit or any agency or subdivision thereof or any other entity.


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75. Petition Date. July 27, 2020, the date on which the Debtor filed the voluntary chapter 11 petition commencing this Chapter 11 Case.

76. (i) Plan and Disclosure Statement, (ii) Plan, or (iii) Disclosure Statement. This Combined Plan of Reorganization and Disclosure Statement of the Debtor Pursuant to Chapter 11 of the Bankruptcy Code, as it may be amended or modified from time to time.

77. Pledge Agreement. That certain Pledge Agreement, dated as of January 26, 2015, as amended, supplemented or restated from time to time, by KSCO for the benefit of the Main Street Parties.

78. Priority Non-Tax Claim. Any Claim (other than an Administrative Claim or a Priority Tax Claim) to the extent entitled to priority in payment under § 507(a) of the Bankruptcy Code including, but not limited to, (i) Claims of an employee of the Debtor for wages, salaries, or commissions, including vacation, severance or sick leave pay, earned within 180 days prior to the Petition Date (to the extent of $13,650 per employee) as set forth in § 507(a)(4) of the Bankruptcy Code; (ii) Claims for contribution to an employee benefit plan as set forth in § 507(a)(5) of the Bankruptcy Code; (iii) Claims for deposits of up to $3,025 placed by individuals with the Debtor as set forth in § 507(a)(7) of the Bankruptcy Code; (iv) Claims based upon any commitment by the Debtor to a Federal depository institutions regulatory agency to maintain the capital of an insured depository institution as set forth in § 507(a)(9); and (v) Claims for death or personal injury resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the Debtor was intoxicated from using alcohol, a drug or another substance as set forth in § 507(a)(10).

79. Priority Tax Claim. Any Claim entitled to priority in payment under § 507(a)(8) of the Bankruptcy Code. A Claim based upon an assessed ad valorem tax that is secured by a statutory lien on property that was administered during this Chapter 11 Case is a Secured Claim to the extent of the value of the property administered. Otherwise, such Claim is a General Unsecured Claim.

80. Professional Fee Claims. Administrative Claims for Professional Fees from the Petition Date through the Confirmation Date.

81. Professional Fees. All fees, costs and expenses incurred in this Chapter 11 Case by any professional person (within the meaning of §§ 327, 328 or 1103 of the Bankruptcy Code or otherwise) and awarded by Final Order of the Bankruptcy Court pursuant to §§ 330 or 503(b) or any other provision of the Bankruptcy Code and any professional fees, costs and expenses which have been allowed pursuant to this Plan or by Final Order of the Bankruptcy Court.

82. Professionals. Any Court-approved professional Person, including lawyers, accountants, financial advisors, investment bankers, interim managers and restructuring advisors, employed by the Debtor in this Chapter 11 Case at any time before the Effective Date.

83. Proof of Claim. A proof of claim filed against the Debtor in the Chapter 11 Case by the applicable Bar Date.

84. Released Party. Each of the following, solely in its capacity as such: (a) the Debtor; (b) the Reorganized Debtor; (c) the Board, consisting of Jeremy Rosenthal, Troy Pike and Curt Lindeman; (d) KSCO, (e) Kevin Sproles, and with respect to each of the foregoing parties in clauses (a) through (d), each of such party’s current (as of the Effective Date) directors, officers, members, employees, partners, managers, general partners, limited partners, managing members, independent contractors, agents, representatives, principals, professionals, consultants, financial advisors, attorneys, accountants, investment bankers, advisory board members, investment advisors, and other professionals, and solely in such capacities to or for the entities in clauses (a) through (d); and (f) the Main Street Parties, and with respect to each of the parties in clause (f), each of such party’s current and former predecessors, successors, participants, affiliates (regardless of whether such interests are held directly or indirectly), assigns, subsidiaries, direct and indirect equity holders or beneficiaries, funds, portfolio companies, and management companies, current and former directors, officers, members, employees, partners, managers, general partners, limited partners, managing members, independent contractors, agents, representatives, principals, professionals, consultants,


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financial advisors, attorneys, accountants, investment bankers, advisory board members, investment advisors, and other professionals.

85. Releasing Parties. Each of the following, solely in its capacity as such: (a) KSCO and Kevin Sproles, and with respect to the foregoing parties in clause (a), such party’s current (as of the Effective Date) directors, officers, members, employees, partners, managers, general partners, limited partners, managing members, independent contractors, agents, representatives, principals, professionals, consultants, financial advisors, attorneys, accountants, investment bankers, advisory board members, investment advisors, and other professionals, and solely in such capacities to or for the entity in clause (a); and (b) the Main Street Parties, and with respect to the foregoing clause (b), each of such party’s current and former predecessors, successors, participants, affiliates (regardless of whether such interests are held directly or indirectly), assigns, subsidiaries, direct and indirect equity holders or beneficiaries, funds, portfolio companies, and management companies, current and former directors, officers, members, employees, partners, managers, general partners, limited partners, managing members, independent contractors, agents, representatives, principals, professionals, consultants, financial advisors, attorneys, accountants, investment bankers, advisory board members, investment advisors, and other professionals.

86. Reorganized Debtor. As of the Effective Date of the Plan, the Debtor as reorganized under the terms of the Plan.

87. Right of Action. Includes (a) any avoidance, recovery, subordination or other action of the Debtor, the Estate or the Reorganized Debtor, (b) any Cause of Action of the Debtor, the Estate or the Reorganized Debtor, (c) any objection or other challenge to a Claim, and (d) any objection or other challenge to an Interest.

88. Sale. Sale has the meaning set forth in Section VII.J.

89. Schedules. The Debtor’s Schedules of Assets and Liabilities, as may be amended or supplemented, and filed with the Bankruptcy Court in accordance with § 521(a)(1) of the Bankruptcy Code.

90. Secured Claim. A Claim to the extent of the value, as may be determined by the Bankruptcy Court pursuant to § 506(a) of the Bankruptcy Code, of any interest in property of any Debtor’s Estate securing such Claim, or any Claim to the extent that it is subject to setoff under § 553 of the Bankruptcy Code. To the extent that the value of such interest is less than the amount of the Claim which has the benefit of such security, such Claim is a Deficiency Claim.

91. Secured Lenders. Collectively, Main Street and HMS Income.

92. Secured Note. That certain senior secured note dated January 26, 2015, as amended, supplemented and restated as of November 23, 2016, and as amended May 16, 2018, in the principal amount of $30 million.

93. Sproles. Kevin Sproles, an individual.

94. Subordinated Claim. An Unsecured Claim that is subordinated pursuant to 11 U.S.C. § 510 or other applicable non-bankruptcy law pursuant to Final Order.

95. Unsecured Claim. A Claim not secured by a charge, mortgage or lien against or interest in property of the Estate, including but not limited to any Deficiency Claim and any claim for damages resulting from the rejection of an executory contract or lease.

96. Unsecured Convertible Notes. Collectively, the (a) three Unsecured Convertible Promissory Notes each dated May 16, 2018, by and between the Debtor and (i) Sproles, (ii) Main Street Equity and (iii) HMS Equity, and (b) three Unsecured Convertible Promissory Notes each dated March 22, 2019, by and between the Debtor and (i) Sproles, (ii) Main Street Equity and (iii) HMS Equity.


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97. Warrants. Collectively, the warrants issued by the Debtor in the quantity listed and held by the following entities: (a) 500,000.0 warrants held by KSCO; (b) 1,831,355.2 warrants held by Main Street; and (c) 784,866.8 warrants held by HMS Equity.

B. Rules of Interpretation and Computation of Time

1. Rules of Interpretation

For purposes of this Plan and Disclosure Statement, unless otherwise provided herein: (a) whenever it is appropriate from the context, each term, whether stated in the singular or the plural, includes both the singular and the plural; (b) any reference in this Plan and Disclosure Statement to a contract, instrument, release or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions; (c) any reference in this Plan and Disclosure Statement to an existing document or Exhibit filed or to be filed means such document or Exhibit, as it may have been or may be amended, modified or supplemented pursuant to this Plan and Disclosure Statement, the Confirmation Order or otherwise; (d) any reference to an entity as a holder of a Claim or Interest includes that entity’s successors, assigns and affiliates; (e) all references to Sections, Articles and Exhibits are references to Sections, Articles and Exhibits of or to this Plan and Disclosure Statement; (f) the words “herein,” “hereunder” and “hereto” refer to this Plan and Disclosure Statement in its entirety rather than to a particular portion of this Plan and Disclosure Statement; (g) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of this Plan and Disclosure Statement; (h) subject to the provisions of any contract, articles or certificates of incorporation, company agreements, bylaws, codes of regulation, similar constituent documents, instrument, release or other agreement or document entered into or delivered in connection with this Plan and Disclosure Statement, the rights and obligations arising under this Plan and Disclosure Statement shall be governed by, and construed and enforced in accordance with, federal law, including the Bankruptcy Code and the Bankruptcy Rules; and (i) the rules of construction set forth in section 102 of the Bankruptcy Code (other than subsection (5) thereof) shall apply to the extent not inconsistent with any other provision of this Section I.B.l.

2. Computation of Time

In computing any period of time prescribed or allowed by this Plan and Disclosure Statement, the provisions of Bankruptcy Rule 9006(a) shall apply.

3. Controlling Document

In the event of any inconsistency among this Plan and Disclosure Statement and any exhibit or schedule hereto, the provisions of this Plan and Disclosure Statement shall govern. In the event of any inconsistency among this Plan and Disclosure Statement and any document or agreement filed and the Confirmation Order, the Confirmation Order shall control.

ARTICLE II ADMINISTRATIVE AND PRIORITY CLAIMS

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Fee Claims, Priority Tax Claims, and Other Priority Claims have not been classified and thus are excluded from the Classes of Claims and Interests set forth in Article IV of this Plan.

A. Administrative Claims

Except with respect to the Professional Fee Claims and Claims for fees and expenses pursuant to section 1930 of chapter 123 of title 28 of the United States Code, and except to the extent that a holder of an Allowed Administrative Claim and the Debtor agree to less favorable treatment for such holder, or such holder has been paid by the Debtor on account of such Allowed Administrative Claim prior to the Effective Date, each holder of such an Allowed Administrative Claim will receive in full and final satisfaction of its Allowed Administrative Claim an amount of Cash equal to the amount of such Allowed Administrative Claim in accordance with the following: (1) if


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an Administrative Claim is Allowed on or prior to the Effective Date, on the Effective Date or as soon as reasonably practicable thereafter (or, if not then due, when such Allowed Administrative Claim is due or as soon as reasonably practicable thereafter); (2) if such Administrative Claim is not Allowed as of the Effective Date, no later than 30 calendar days after the date on which the Reorganized Debtor Allows such Allowed Administrative Claim or the date on which an order Allowing such Administrative Claim becomes a Final Order, or as soon as reasonably practicable thereafter, as applicable; (3) if such Allowed Administrative Claim is based on liabilities incurred by the Debtor in the ordinary course of its business after the Petition Date, in accordance with the terms and conditions of the particular transaction giving rise to such Allowed Administrative Claim without any further action by the holder of such Allowed Administrative Claim; (4) at such time and upon such terms as may be agreed upon by such holder and the Debtor or the Reorganized Debtor, as applicable; or (5) at such time and upon such terms as set forth in an order of the Bankruptcy Court.

Holders of Administrative Claims that are required to file and serve a request for payment of such Administrative Claims by the Administrative Claims Bar Date that do not file and serve such a request by the Administrative Claims Bar Date shall be forever barred, stopped, and enjoined from asserting such Administrative Claims against the Debtor or the Reorganized Debtor, and such Administrative Claims shall be deemed compromised, settled, and released as of the Effective Date.

B. Final Fee Applications and Payment of Professional Fee Claims

All final requests for payment of Professional Fee Claims incurred during the period from the Petition Date through the Confirmation Date shall be filed no later than 15 calendar days after the Effective Date. All such final requests will be subject to approval by the Bankruptcy Court after notice and a hearing in accordance with the procedures established by the Bankruptcy Code, Bankruptcy Rules, and prior orders of the Bankruptcy Court, and once approved by the Bankruptcy Court, shall be promptly paid up to the full Allowed Amount.

C. Allocation and Estimation of Professional Fees and Expenses

Professionals shall reasonably estimate their unpaid Professional Fee Claims and other unpaid fees and expenses incurred before and as of the Confirmation Date, and shall deliver such estimate to the Debtor by the earlier of (a) five Business Days after the Confirmation Date and (b) two Business Days prior to the Effective Date; provided that such estimate shall not be considered an admission with respect to the fees and expenses of such Professional and such Professionals are not bound to any extent by the estimates. If a Professional does not provide an estimate, the Debtor may estimate the unbilled fees and expenses of such Professional.

D. Post-Confirmation Date Fees and Expenses

Except as otherwise specifically provided in this Plan, from and after the Confirmation Date, the Debtor will, in the ordinary course of business and without any further notice to or action, order, or approval of the Bankruptcy Court, pay in Cash the reasonable and documented legal, professional, or other fees and expenses incurred by the Debtor. Upon the Confirmation Date, any requirement that Professionals and ordinary course Professionals comply with sections 327 through 331 and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Debtor may employ and pay any Professionals in the ordinary course of business without any further notice to or action, order, or approval of the Bankruptcy Court.

E. Priority Tax Claims

Except to the extent that a holder of an Allowed Priority Tax Claim and the Debtor agree to a less favorable treatment for such holder, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each holder of such Allowed Priority Tax Claim shall be treated in accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code beginning on the Effective Date and, for the avoidance of doubt, holders of Allowed Priority Tax Claims will receive interest on such Allowed Priority Tax Claims after the Effective Date in accordance with sections 511 and 1129(a)(9)(C) of the Bankruptcy Code.

F. Statutory Fees


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All fees due and payable pursuant to section 1930 of title 28 of the United States Code prior to the Effective Date shall be timely paid by the Debtor. On and after the Effective Date, the Reorganized Debtor shall timely pay any and all such fees when due and payable, and shall file with the Bankruptcy Court quarterly reports in a form reasonably acceptable to the U.S. Trustee. The Debtor shall remain obligated to pay such quarterly fees to the U.S. Trustee until the earliest of the Debtor’s case being closed, dismissed, or converted to a case under chapter 7 of the Bankruptcy Code.

ARTICLE III DEBTOR’S HISTORY AND THE BANKRUPTCY CASE

A. The Debtor’s History

1. Debtor’s Pre-petition Business

The Debtor is a SaaS software developer based in Austin, Texas. The Debtor focuses on creating customer websites and e-commerce platforms for clients, concentrated in the small and mid-sized business segments. The Debtor serves approximately 14,000 customers across a variety of industries such as apparel, sporting goods, and specialty retailers. The Debtor’s annual revenue approximates $40 million, and the Debtor has approximately 160 employees.

The Debtor was originally founded in 1999 as a sole proprietorship. In 2002, the Debtor was incorporated as “Blue Lift Corporation” in California. Subsequently in 2002, the Debtor changed its name to “Website Designers 2000 Inc.” In 2003 the Debtor changed its name to “Volusion, Inc.” In 2010, the Debtor reincorporated in Delaware pursuant to a merger. In 2015, Volusion, Inc. converted from a Delaware corporation to the Delaware limited liability company that it operates under today, Volusion, LLC.

In 2015, the Debtor formed Volusion Limited, its subsidiary organized in the United Kingdom, in an effort to expand sales and marketing. Since 2017, Volusion Limited has been dormant, with no operations. Volusion Limited will be terminated and dissolved pursuant to the Plan.

In October 2016, the Debtor consummated an asset sale, pursuant to which it sold its Mozu business (which developed, marketed and sold the Mozu enterprise e-commerce platform) for approximately $6 million.

2. Debtor’s Business Overview

The Debtor’s in-house agency, known as Studio, provides a one stop shop for its clients: a store builder, ecommerce software and a marketing hub, all in one. Studio provides marketing services, site design services, optimization with quick wins, and credit card processing assistance.

Marketing Services. The Debtor provides the marketing expertise needed to accelerate a client’s business. Studio helps clients identify the best marketing tactics for driving new customers to their websites. Through social media engagement, advertising and reporting, Studio will identify and engage a client’s target audience, building a brand’s reach and creating a loyal following. Studio increases a client’s revenue by attracting customer traffic and turning such traffic into sales. Studio has successfully helped grow over 5,000 businesses.

Site Design Services. The Debtor offers unique design experiences for its clients, from ready-to-install free and premium themes to fully styled storefronts. The design themes are designed by experts and easily customizable for clients. Studio has professional and experienced designers and specialized ecommerce experts with extensive platform knowledge. Studio experts have successfully designed the sites and brands of more than 15,000 entrepreneurs.

Optimize with Quick Wins. The Debtor offers analytical and operational services. The Debtor’s team utilizes services, including graphic design, tracking codes, and expert marketing strategy to set clients up for success. The Debtor offers Google analytics training, Facebook Pixel tracking, website homepage optimization services, and image ad asset creation to optimize a client’s success.


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Credit Card Processing. Through its credit card processing service, Volusion Payments, the Debtor assists clients in accepting credit card payments at the industry’s most affordable rates. Volusion Payments is designed to fully complement a client’s online store, allowing a client to receive funds faster while promoting its customer confidence.

3. Debtor’s Capital Structure

Main Street and HMS Income are the Debtor’s primary Secured Lenders. On January 26, 2015, the Secured Lenders provided the Debtor with a senior secured term loan pursuant to the Loan Documents in the amount of $25 million, which principal amount was increased to $30 million in 2018. In addition, affiliates of the Secured Lenders provided a $20 million direct equity investment for growth capital to fund the research and development, capitalized software costs and sales and marketing efforts associated with the development and implementation of the Debtor’s Mozu platform. On January 26, 2020, the outstanding Secured Note matured.

In addition to Main Street, the Debtor has approximately 200 other Creditors, which consist of trade debt and Payroll Protection Program funding. Total other liabilities are estimated at approximately $9.5 million.

B. Liabilities and Claims of the Debtor

1. Debtor’s Financial Information

The Debtor is required to file monthly operating reports with the Bankruptcy Court which reflect current financial information and are publicly available for inspection at the office of the Clerk of the Court. Attached hereto as Exhibit C is a copy of the latest monthly operating report filed by the Debtor.

2. Debtor’s Executory Contracts

The Debtor is a party to certain equipment leases and executory contracts. The Debtor’s executory contracts will either be assumed or rejected on the Effective Date of the Plan.

3. Liabilities and Claims Against the Debtor

The Schedules contain a detailed listing of Creditors, together with the estimated amounts of Claims. Creditors and Interest Holders are referred to the Debtor’s Schedules. The Debtor’s respective Schedules generally organize Creditors into three general groupings: (i) secured, (ii) priority, and (iii) unsecured. Additional Proofs of Claims may be filed in the Chapter 11 Case. The last day to file a Proof of Claim is November 30, 2020.

4. Secured Claims

Pursuant to the Bankruptcy Code, Claims which are secured by a lien or other security interest may be categorized into a secured and an unsecured component. In general, Claims are Secured Claims to the extent of the value of the collateral that secures the Claims and they are Unsecured Claims to the extent of any deficiency in the value of the collateral.

The Debtor is party to the Loan Documents, dated November 23, 2016, as amended, supplemented and restated. As of October 30, 2020, the Secured Lenders’ claim consists of not less than (i) $28,906,048.20 in unpaid principal, plus (ii) accrued and unpaid interest, fees, costs, expenses and other obligations, including, without limitation, reasonable and documented attorney’s fees, Agent’s fees, other professional fees and disbursements and other obligations arising and payable, of not less than $1,723,854.63. The Loan Documents provide the Secured Lenders with a security interest in substantially all of the Debtor’s assets, existing or acquired. On January 26, 2020, the outstanding term loan with the Secured Lenders matured.

5. Priority Claims


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The Debtor’s Schedules reflect no known past due Priority Claims. No Proofs of Claim have yet been filed asserting a Priority Claim. Priority Claims will be paid as they come due.

6. Unsecured Claims

The Debtor’s Schedule F which is based on the Debtor’s books and records reflects undisputed unsecured claims of $9,426,774.72. Additional claims may be filed. The Debtor expects to file at least some objections to Proofs of Claims. Should additional or amended Proofs of Claim be filed, the Debtor will review such claims and may file additional objections. The Debtor is unable to predict the outcome of any anticipated claim objections that may be filed.

The Debtor issued (a) three Unsecured Convertible Promissory Notes, each dated May 16, 2018, by and between the Debtor and (i) Sproles, (ii) Main Street Equity and (iii) HMS Equity, and (b) three Unsecured Convertible Promissory Notes each dated March 22, 2019, by and between the Debtor and (i) Sproles, (ii) Main Street Equity and (iii) HMS Equity. As of October 30, 2020, the total amount owed on account of the Unsecured Convertible Promissory Notes, inclusive of accrued and unpaid interest, is approximately $5,891,780.82.

7. Deadline to File Proofs of Claim

November 30, 2020 is the deadline for Proofs of Claim.

The sole right of the Debtor and/or the Reorganized Debtor (whether existing or formed under the plan) to object to any claim filed in this case is expressly reserved. The inclusion of a claim or claims within this Plan and Disclosure Statement is not an admission regarding the validity or allowance of any claim. You should not assume that a vote for or against the plan will have any affect of the status of your claim. If anyone suggests that the status of your claim may be affected by your vote, you should report such incident to counsel for the Debtor immediately as any such suggestion may violate Title 18.

C. The Bankruptcy Case

1. Events Leading to the Chapter 11 Case

The Debtor’s restructuring efforts began in 2019 with a reassessment of its cost structure and the implementation of cost reduction initiatives. Such restructuring efforts included headcount reductions, reductions in operating expenses, migration to the Google Cloud Platform, changes in marketing strategy, and other cost reduction efforts.

In June 2020, the Board of Managers of the Debtor was replaced and reconstituted with a new slate of Managers by the Main Street Parties, pursuant to their rights under, inter alia, the Pledge Agreement.

The reconstituted Board continued and amplified the Debtor’s restructuring efforts. On June 8, 2020, Conway MacKenzie Management Services, LLC (Conway) was engaged as a restructuring professional to the Debtor. On June 24, 2020, Timothy B. Stallkamp was appointed as Chief Restructuring Officer (CRO) of the Debtor. An Order approving the Conway retention was entered by the Court on September 24, 2020 [Docket No. 95].

Despite the restructuring efforts of the Debtor, the reconstituted Board and CRO did not receive sufficient collaboration or cooperation from certain members of then (pre-petition) existing management. It became increasingly more difficult for the Board to fulfill its duties and take the steps necessary to maintain the value of the Debtor. The Debtor was faced with disengaged and disobedient officers and Secured Lenders who had already exercised remedies with regards to its matured loan facility. As a result, the Debtor filed this Chapter 11 Case to prevent a foreclosure from occurring and to effectuate a restructuring, which will leave the Debtor’s balance sheet strong and allow the Debtor to effectively address its matured loan facility and prevent further exercise of remedies by the Secured Lenders. The filing of this Chapter 11 Case has provided the Debtor with the breathing room necessary to work out its restructuring and ensure ongoing vitality and consistency in banking and vendor relationships. Under the Plan, all


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disputes among (a) the Main Street Parties and the Debtor, and (b) the Main Street Parties, KSCO, Sproles and the Debtor, are resolved.

On September 25, 2020, the Debtor retained the Investment Banker, with the consent of the Main Street Parties and KSCO, to render financial advisory and investment banking services to the Debtor.2

D. Main Bankruptcy Events

1. First Day Pleadings

On and shortly after the Petition Date, along with its voluntary petition for relief under chapter 11 of the Bankruptcy Code, the Debtor filed several motions designed to facilitate the administration of the Chapter 11 Case and minimize disruption to the Debtor’s operations, by, among other things, easing the strain on the Debtor’s relationships with employees, vendors, and customers following the commencement of the Chapter 11 Case.

Cash Collateral Motion: Debtor’s Emergency Motion for Authority to Use Cash Collateral and Granting Adequate Protection to Prepetition Secured Parties [Docket No. 4]. On August 13, 2020, the Court entered a final order on the Cash Collateral Motion [Docket No. 58].

Independent Managers Motion: Debtor’s Motion for Entry of an Order (I) Authorizing the Appointment of Independent Managers Effective as of the Petition Date; (II) Directing the Debtor to Maintain the Independent Managers; (III) Authorizing the Payment of Manager Fees; and (IV) Authorizing the Debtor’s Performance of its Obligations to Each of the Independent Managers Pursuant to the Company Agreement [Docket No. 5]. On August 27, 2020, the Court entered a final order on the Independent Managers Motion [Docket No. 81].

Schedules and SOFA Extension Motion: Debtors’ Emergency Motion for Entry of an Order (I) Extending the Time to File Schedules of (A) Assets and Liabilities, (B) Schedules of Current Income and Expenditures, (C) Schedules of Executory Contracts and Unexpired Leases, and (D) Statements of Financial Affairs, and (II) Granting Related Relief [Docket No. 13]. On August 3, 2020, the Court entered a final order on the Schedules and SOFA Extension Motion [Docket No. 19].

Complex Case Procedures Motion: Debtor’s Emergency Motion to Apply Complex Case Procedures to Chapter 11 Case [Docket No. 14]. On August 3, 2020, the Court entered a final order on the Complex Case Procedures Motion [Docket No. 20].

Wages Motion: Debtors’ Emergency Motion for Entry of an Order Authorizing the Debtor to (I) Pay Prepetition Wages, Salaries, Other Compensation, and Reimbursable Expenses and (II) Continue Employee Benefits Programs [Docket No. 15]. On August 3, 2020, the Court entered a final order on the Wages Motion [Docket No. 24].

Taxes Motion: Debtors’ Emergency Motion for Entry of an Order Authorizing the Payment of Taxes and Fees [Docket No. 34]. On August 11, 2020, the Court entered a final order on the Taxes Motion [Docket No. 47].

Utilities Motion: Debtors’ Emergency Motion for Entry of an Order (I) Approving the Debtors’ Proposed Adequate Assurance of Payment for Future Utility Services, (II) Prohibiting Utility Providers from Altering, Refusing, or Discontinuing Services, and (III) Approving the Debtor’s

2 The Investment Banker was retained by the Debtor with the support of the Main Street Parties and KSCO. Since the Investment Banker will perform a majority of its work and will not be compensated until after the Effective Date, the Debtor has not submitted a retention application for the Investment Banker.


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Proposed Procedures for Resolving Adequate Assurance Requests [Docket No. 35]. On August 11, 2020, the Court entered a final order on the Utilities Motion [Docket No. 48].

Cash Management Motion: Debtors’ Emergency Motion for Entry for Interim Order Authorizing the Debtor to Continue to Operate its Cash Management System and Maintain Existing Bank Accounts [Docket No. 45]. On September 18, 2020, the Court entered a final order on the Cash Management Motion [Docket No. 91].

2. Retention of Professionals

On August 26, 2020 the Debtor filed the Application of Debtor in Possession to Employ Jackson Walker LLP as Counsel for the Debtor [Docket No 74]. An order approving such application was entered on September 24, 2020 [Docket No. 94].

On August 26, 2020 the Debtor filed the Debtor’s Application for Authority to (I) Retain and Employ Conway Mackenzie Management Services, LLC; (II) Designate Timothy B. Stallkamp to Serve as Chief Restructuring Officer; and (III) Provide Additional Personnel For Debtor [Docket No. 75]. An order approving such application was entered on September 24, 2020 [Docket No. 95].

3. The Bar Date

Monday, November 30, 2020 has been established as the deadline for Proofs of Claim.

ARTICLE IV CLASSIFICATION OF CLAIMS AND INTERESTS

The Claims against and Interests in the Debtor are classified as follows:

Class Claim or Interest Description Status Voting Rights 1 Main Street Secured Claim Comprised of the Main Street Secured

Claim. Impaired Entitled to Vote

2 Other Secured Claims Comprised of all Other Secured Claims. Unimpaired Deemed to Accept 3 Priority Non-Tax Claims Comprised of all Allowed Priority Non-

Tax Claims. Unimpaired Deemed to Accept

4 Unsecured Convertible Notes Comprised of Claims arising out of the Unsecured Convertible Notes.

Impaired Entitled to Vote

5 General Unsecured Claims Comprised of all Allowed General Unsecured Claims.

Unimpaired Deemed to Accept

6 Equity Interests Comprised of all Allowed Equity Interests in the Debtor.

Impaired Entitled to Vote

7 Existing Employee Options Comprised of all Allowed Employee Options in the Debtor.


8 Existing Warrants Comprised of all Allowed Warrants in the Debtor.


ARTICLE V IMPAIRMENT OF CLASSES AND RESOLUTION OF CLAIM CONTROVERSIES

A. Impaired Classes

Only holders of Claims that are in impaired Classes may vote on the Plan. The following Classes of Claims and Interests are impaired under the Plan:

1. Class 1 – Main Street Secured Claim. 2. Class 4 – Unsecured Convertible Notes.


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3. Class 6 – Equity Interests.

B. Unimpaired Classes

Holders of Claims that are in unimpaired Classes are deemed to have accepted the proposed Plan and are not entitled to vote on the Plan. The following Classes of Claims are not impaired under the Plan:

1. Class 2 – Other Secured Claims. 2. Class 3 – Priority Non-Tax Claims. 3. Class 5 – General Unsecured Claims. 4. Class 7 – Existing Employee Options. 5. Class 8 – Existing Warrants.

C. Controversy Concerning Classification, Impairment or Voting Rights

In the event a controversy or dispute should arise involving issues related to the classification, impairment or voting rights of any Creditor or Interest Holder under the Plan, prior to the Confirmation Date, the Bankruptcy Court may, after notice and a hearing, determine such controversy. Without limiting the foregoing, the Bankruptcy Court may estimate for voting purposes the amount of any contingent or unliquidated Claim, the fixing or liquidation of which, as the case may be, would unduly delay the administration of the Chapter 11 Case. In addition, the Bankruptcy Court may in accordance with § 506(b) of the Bankruptcy Code conduct valuation hearings to determine the Allowed Amount of any Secured Claim.

ARTICLE VI CLASSIFICATION AND TREATMENT OF CLAIMS

A. Treatment of Impaired Classes

1. Class 1 – Main Street Secured Claim. Pursuant to a compromise reached between the Debtor and the Main Street Parties, as embodied in this Plan and the Forbearance Agreement, the Main Street Secured Claim shall be paid as follows:

(a) On the Effective Date, the Main Street Secured Claim shall be Allowed in the amount of $28,906,048.203 in unpaid principal, plus all accrued and unpaid interest, fees, costs, expenses and other obligations, including, without limitation, reasonable and documented attorney’s fees, Agent’s fees, other professional fees and disbursements and other obligations arising and payable pursuant to the Loan Documents.

(b) Pursuant to the Forbearance Agreement, commencing on the Effective Date and continuing through and including the Forbearance Termination Date (as defined in the Forbearance Agreement), the Main Street Secured Claim shall accrue interest at the non-Default Rate (as defined in the Loan Documents); provided, however, upon the occurrence of a Forbearance Event of Default, the Main Street Secured Claim shall accrue interest at the Default Rate.

(c) Commencing on the Forbearance Termination Date (including, for the avoidance of doubt, as a result of a Forbearance Event of Default) and continuing thereafter until the Main Street Secured Claim is indefeasibly paid or otherwise satisfied in full by virtue of the exercise by the Main Street Parties of their rights and remedies under the Loan Documents (including, without limitation, their right to foreclose on all collateral pledged to the Main Street Parties to secure the Debtor’s obligations to the Main Street Parties under the Loan Documents), the Main Street Secured Claim shall accrue interest at the Default Rate.

3 Amount includes the principal balance of the Main Street Secured Claim as of the Effective Date.


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(d) On the Effective Date, the Debtor or Reorganized Debtor, as applicable, shall make, via wire transfer, a one-time payment to the Agent in an amount equal to all then accrued and unpaid interest, fees and costs due and owing to the Main Street Parties under the Loan Documents.

(e) Commencing on the Effective Date and continuing thereafter until the Forbearance Termination Date, the Debtor shall make monthly payments of interest only at the non-Default Rate to the Agent; provided, however, that upon the occurrence of a Forbearance Event of Default, the monthly interest payment to the Agent shall be calculated at the Default Rate.

(f) If at the time of a monthly interest payment due date under the Loan Documents, the Debtor’s cash balance is less than:

(i) $3 million, then the Debtor will make a cash payment to the Agent equal to 50% of the monthly interest payment then due. The remaining 50% the then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Main Street Secured Claim and accrue interest in accordance with the Forbearance Agreement.

(ii) $2.5 million, then the Debtor will make a cash payment to the Agent equal to 25% of the monthly interest payment then due. The remaining 75% of the then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Main Street Secured Claim and accrue interest in accordance with the Forbearance Agreement.

(iii) $2.0 million, then the Debtor will not be required to make a cash payment to the Agent and the entire amount of then then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Main Street Secured Claim and accrue interest in accordance with the Forbearance Agreement.

(g) Should the Reorganized Debtor default in any provision of this Plan or the Forbearance Agreement, the Reorganized Debtor shall have ten (10) calendar days to cure such default, if curable, after written notification by the Agent. If such default is not cured or is incurable, the Main Street Parties may exercise any or all of their contractual or state law rights and remedies without an election of remedies, including without limitation its right of foreclosure.

2. Class 4 – Unsecured Convertible Notes. Amounts payable with respect to the Unsecured Convertible Notes shall be repaid, together with all accrued and unpaid interest and all other amounts due or that may become due thereunder, from the net proceeds of a Sale pro rata pursuant to the Company Agreement, after the indefeasible payment in full of the then balance due and owing pursuant to the Main Street Secured Claim and the Forbearance Agreement. For the avoidance of doubt, the Unsecured Convertible Notes will not be paid in accordance with the treatment of Allowed General Unsecured Claims.

3. Class 6 – Equity Interests. Subject to the occurrence of a Forbearance Event of Default, as of the Effective Date and until the Forbearance Termination Date, each Equity Interest Holder shall retain its respective Equity Interest in the Debtor in the following percentages:

Equity Interest Holder Units %4

KSCO 52,631,580.0 73.20%

Main Street Equity 4,876,669.7 6.78%

HMS Equity 2,090,001.3 2.91%

4 Chart represents percentages on a fully-diluted basis. The (i) outstanding Warrants and (ii) unexercised Employee Options are included in the chart only for illustrative purposes to show percentages on a fully-diluted basis.


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Main Street (warrants) 1,831,355.2 2.55%

HMS Equity (warrants) 784,866.8 1.09%

KSCO (warrants) 500,000.0 0.70%

Employee Options 9,182,403.05 12.77%

B. Treatment of Unimpaired Classes

The Unimpaired Classes will be treated as follows:

1. Class 2 – Other Secured Claims.

In the sole discretion of the Reorganized Debtor, each holder of an Other Secured Claim shall receive (a) Cash equal to the full amount of the Allowed Claim, (b) reinstatement of such holder’s Claim, (c) the return or abandonment of the Collateral securing such Claim to such holder, with the consent of the Agent, or (d) such other treatment as may otherwise be agreed to by such holder and the Debtor (with the consent of the Agent).

2. Class 3 – Priority Non-Tax Claims.

Each holder of a Priority Non-Tax Claim will be paid in Cash and in full on the later of (i) the Distribution Date, (ii) the date on which such Claim becomes an Allowed Claim; or (iii) such other date as the Reorganized Debtor and the holder of the Allowed Priority Non-Tax Claim shall agree.

3. Class 5 – General Unsecured Claims.

On or as soon as practicable after the later to occur of: (i) the Effective Date and (ii) the date such claim becomes due in the ordinary course of business, each holder of an Allowed General Unsecured Clam shall receive (x) payment in full in Cash on account of such Allowed General Unsecured Claim, (y) such other treatment as would render such General Unsecured Claim unimpaired, or (z) such other treatment as may otherwise be agreed to by such holder and the Debtor (with the consent of the Agent).

4. Class 7 – Existing Employee Options.

The Employee Options authorized to employees of the Debtor prior to the Petition Date shall remain in full force and effect after the Effective Date as follows:

Units

Employee Options 9,182,403.06

5. Class 8 – Existing Warrants.

All outstanding Warrants shall remain in full force and effect after the Effective Date as follows:

Holder Units

5 The total number of authorized Employee Options is 9,182,403 units. Of the authorized Employee Options, 6,916,236 units have been granted and 2,360 of such granted units have been exercised. 2,263,807 units of authorized Employee Options have not been granted and remain available.

6 The total number of authorized Employee Options is 9,182,403 units. Of the authorized Employee Options, 6,916,236 units have been granted and 2,360 of such granted units have been exercised. 2,263,807 units of authorized Employee Options have not been granted and remain available.


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Main Street (warrants) 1,831,355.2

HMS Equity (warrants) 784,866.8

KSCO (warrants) 500,000.0

ARTICLE VII

PROVISIONS FOR IMPLEMENTATION OF THE PLAN

A. General Settlement of Claims, Interests, and Causes of Action

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under this Plan, upon the Effective Date, the provisions of this Plan shall constitute a good faith compromise and settlement of all Allowed Claims, Interests, Causes of Action, other than those reserved in Article XVI, and controversies released, settled, compromised, discharged, satisfied, or otherwise resolved pursuant to this Plan. This Plan shall be deemed a motion, proposed by the Debtor to approve the good-faith compromise and settlement of all Allowed Claims, Interests, Causes of Action, other than those reserved in Article XVI, and controversies pursuant to Bankruptcy Rule 9019, and the entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise and settlement of all such Allowed Claims, Interests, Causes of Action, other than those reserved in Article XVI, and controversies, as well as a finding by the Bankruptcy Court that such compromise and settlement is in the best interests of the Debtor, its Estate, and holders of Allowed Claims and Interests and is fair, equitable, reasonable, and in the best interest of the Debtor and its Estate.

B. Closing

On the Effective Date, all property of the Estate shall be revested in the Reorganized Debtor free and clear of all liens, claims, interests and encumbrances pursuant to 11 U.S.C. § 363(f) and 11 U.S.C. § 1123(a)(5) to the maximum extent allowed by law; save and except the Liens securing (i) the Secured Note and (ii) ad valorem taxes.

C. Employee and Retiree Benefits

Unless otherwise provided herein, all employee wages and Employee Benefit Plans in place as of the Effective Date with the Debtor shall be assumed by the Reorganized Debtor and shall remain in place as of the Effective Date, and the Reorganized Debtor will continue to honor such agreements, arrangements, programs, and plans. For the avoidance of doubt, pursuant to section 1129(a)(13) of the Bankruptcy Code, from and after the Effective Date, all retiree benefits (as such term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.

D. Funding of the Case

Through the Effective Date, the Chapter 11 Case shall be funded with the Debtor’s cash on hand. The Debtor will continue using prepetition collateral and cash collateral pursuant to the terms of the Final Cash Collateral Order [Docket No. 58].

E. Forbearance Agreement

On the Effective Date, the Reorganized Debtor, KSCO, the Secured Lenders and the Agent will enter into the Forbearance Agreement, with respect to the Loan Documents, consisting of the following general terms7:

1. The Secured Lenders shall agree to forbear, from the Effective Date until the earlier to occur of (a) 5:00 p.m. Central Time on June 30, 2021, and (b) the date the Forbearance Agreement otherwise terminates pursuant to the terms and conditions set forth therein, from exercising their rights and remedies

7 Exhibit B hereto contains additional terms to the Forbearance Agreement and the Plan that will be filed under seal, to protect the integrity of the Sale process to be undertaken by the Reorganized Debtor.


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under the Loan Documents or otherwise at law or in equity against the Loan Parties arising as a result of the Existing Defaults (the “Forbearance”).

2. The Reorganized Debtor shall make monthly payments of interest only to the Agent as more particularly set forth in Section VI.A.1.

3. The Debtor shall provide financial reporting to the Secured Lenders (i) as required by the Loan Documents and (ii) as may otherwise be reasonably requested by the Secured Lenders. Such financial reporting provided to the Secured Lenders shall also contemporaneously be provided by the Reorganized Debtor to KSCO.

4. Sale milestones (in connection with the Sale) as proposed by the Investment Banker and agreed to by the Debtor, the Main Street Parties and KSCO. The terms of said sale milestones are as provided in Exhibit B filed under seal to avoid chilling the sale prices or otherwise interfering with such process.

The Forbearance Agreement shall also include the Secured Lenders’ and the Agent’s agreement to forbear from the exercise of their rights and remedies against KSCO, subject to KSCO’s compliance with the terms of the Plan and the Forbearance Agreement and provided no Forbearance Event of Default occurs under the Forbearance Agreement.

F. Continuation of Operations of the Debtor

The Debtor’s current Board of Managers, consisting of: (i) Jeremy Rosenthal, (ii) Troy Pike, and (iii) Curt Lindeman, shall have sole and exclusive control over the Debtor’s governance, both prior to the Effective Date and through the Forbearance Termination Date.

KSCO acknowledges and agrees that both prior to and after the Effective Date, the Main Street Parties shall have an irrevocable right to vote all of KSCO’s units in the Debtor by virtue of the Main Street Parties’ exercise of their rights and remedies under the Pledge Agreement, including, without limitation, with respect to the approval or rejection of a Sale. The Agent and KSCO, shall each have rights of observers to the Board, without compensation, through the Forbearance Termination Date, subject to the terms of the applicable binding agreements governing such observer rights between the Debtor and the Agent and KSCO, respectively.

From and after the Effective Date of the Plan, the Reorganized Debtor is authorized to take such actions as are necessary to continue all operations.

G. Vesting of Assets

Except as otherwise provided herein or in any agreement, instrument, or other document incorporated herein, on the Effective Date, all property in the Debtor’s Estate, all Causes of Action, and any property acquired by the Debtor under this Plan shall vest in the Reorganized Debtor, free and clear of all Liens, Claims, charges, or other encumbrances other than the Liens of the Agent and the Secured Lenders and such other Liens or other encumbrances as may be permitted thereby. On and after the Effective Date, except as otherwise provided herein, the Reorganized Debtor may operate its business and may use, acquire, or dispose of property and pursue, compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

H. Continued Corporate Existence

Except as otherwise provided herein or any agreement, instrument, or other document incorporated herein, on the Effective Date, or as otherwise may be agreed between the Debtor and the Secured Lenders, the Debtor shall continue to exist on and after the Effective Date as a limited liability company with all the powers of a limited liability company pursuant to the applicable law in the jurisdiction in which the Debtor is formed and pursuant to the certificate of incorporation and Company Agreement in effect on the Effective Date, except to the extent such certificate of incorporation or Company Agreement is amended by this Plan or otherwise, and to the extent any such document is


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amended, such document is deemed to be amended pursuant to this Plan and requires no further action or approval (other than any requisite filings required under applicable state or federal law).

I. Retention of Investment Banker

On September 25, 2020, the Debtor retained the Investment Banker to market the Reorganized Debtor for sale, both prior to the Effective Date and through the Forbearance Termination Date. The Board has sole control over the direction and efforts of the Investment Banker. Notwithstanding the foregoing, the Agent and/or KSCO may, as observers to the Board, provide input to the Board on such efforts of the Investment Banker. The Investment Banker’s efforts will be consistent with this Plan and the Forbearance Agreement.

J. Sale of the Debtor’s Assets

The Investment Banker was engaged by the Debtor to market the Debtor for sale on a cash free, debt free basis (a “Sale”). It is intended that the Investment Banker market substantially all assets of the Reorganized Debtor for sale as an ongoing concern once the Debtor has emerged from bankruptcy.

K. Ad Valorem Taxes

Any ad valorem taxes will be paid by the Reorganized Debtor as the taxes become due and payable in the ordinary course of the Reorganized Debtor’s business.

L. General Powers of the Reorganized Debtor

Subject to any express limitations, the Reorganized Debtor, shall have all of the rights, powers and privileges set forth in the Plan and the Confirmation Order. The Reorganized Debtor is authorized and shall have the obligation to take all such actions as in its judgment are necessary and appropriate to effectuate the purposes of the Plan, including but not limited to the following:

1. Make all Distributions contemplated under the Plan.

2. Take actions consistent with maintaining the value of the Reorganized Debtor’s assets and operate its business in a lawful manner as it deems appropriate.

3. Administer the resolution, settlement and payment of Claims and Equity Interests and the distributions to the holders of Allowed Claims and Allowed Equity Interests in accordance with the Plan.

4. Enter into any agreement required by or consistent with the Plan and perform all of the obligations required of the Reorganized Debtor under the Plan.

5. Abandon any of the assets of the Reorganized Debtor if the Reorganized Debtor concludes that such assets are of no benefit to the Creditors or Interest Holders.

6. Participate in or initiate any proceeding before the Bankruptcy Court or any other court of appropriate jurisdiction and participate as a party or otherwise in any administrative, arbitrative or other non-judicial proceeding and litigate claims, including without limitation all state and federal causes of action or any other litigation which constitutes an asset of the Estate/Reorganized Debtor and pursue settlement or judgment for such actions.

7. Participate as a party-in-interest in any proceeding before the Bankruptcy Court involving this Chapter 11 Case.

8. Take actions and exercise remedies against any entity that owes money to the Debtor/Estate/Reorganized Debtor, including without limitation, the remedies available under any deed of trust, security agreement, promissory note, bond, guarantee or other instrument or document; make


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compromises regarding any deed of trust, security agreement, promissory note, bond, guarantee or other instrument or document; and, declare or waive defaults regarding any deed of trust, security agreement, promissory note, bond, guarantee or other instrument or document.

9. Select and employ such professionals, agents or employees as the Reorganized Debtor deems necessary to assist in the administration of the affairs of the Reorganized Debtor and compensate such persons.

10. Hold any unclaimed distribution or payment to the holder of an Allowed Claim in accordance with the Plan.

11. Propose any amendment, modification or supplement to the Plan or the Reorganized Debtor’s governance documents.

12. Receive, conserve and manage the assets of the Reorganized Debtor and sell, pursuant to 11 U.S.C. § 363(f), 11 U.S.C. § 1123(a)(5) and/or the Plan, or otherwise dispose of such assets for a price and upon such terms and conditions as the Reorganized Debtor deems most beneficial to the Creditors and Interest Holders and execute such deeds, bills of sale, assignments and other instruments in connection therewith without the necessity of an order from the Court.

13. Open and maintain bank accounts.

14. Pay all taxes, make all tax withholdings and file tax returns and tax information returns and make tax elections.

15. Pay all lawful expenses, debts, charges and liabilities of the Reorganized Debtor.

16. Enforce all provisions of the Plan and the Forbearance Agreement.

17. Protect, perfect and defend the title to any of the assets of the Reorganized Debtor and enforce any bonds, mortgages or other obligations or liens owned by the Reorganized Debtor.

18. Carry insurance coverage in such types and amounts as the Reorganized Debtor deems advisable or otherwise required to be carried under the Secured Note.

19. Establish such reserves for taxes, assessments and other expenses of the Reorganized Debtor as may be necessary and appropriate for the proper operation of matters incident to the affairs of the reorganized Debtor and its obligations under the Plan.

20. Exercise such other powers and duties as are necessary or appropriate in the Reorganized Debtor’s discretion to accomplish the purposes of the Plan.

ARTICLE VIII CLAIM/INTEREST OBJECTION PROCEDURES, TREATMENT OF DISPUTED

CLAIMS/INTERESTS AND PROCEDURES FOR ASSERTING CLAIMS

A. Objection Process

The Reorganized Debtor shall have the sole right to object to the allowance of any Claims or Equity Interests provided for under the Plan. The Reorganized Debtor shall have the authority to compromise, settle or otherwise resolve all objections without approval of the Bankruptcy Court. Unless otherwise ordered by the Bankruptcy Court, the Reorganized Debtor shall file and serve all objections to Claims and Equity Interests no later than (i) 90 calendar days after the later of (a) the Effective Date; or (b) the date on which a Proof of Claim, proof of interest or request for payment is filed with the Bankruptcy Court or (ii) such other date as may be approved by the Bankruptcy Court after notice and hearing.


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B. Filing of Claims and Causes of Action

The Reorganized Debtor shall have the exclusive right to file and prosecute any Claims and Causes of Action, including all derivative Causes of Action. The Reorganized Debtor shall have the authority to compromise, settle or otherwise resolve all Claims and Causes of Action without approval of the Bankruptcy Court.

C. Disallowance of Late Filed Proofs of Claim

Except as otherwise provided in the Plan, any Proof of Claim filed by the holder of such Claim after the Bar Date is hereby disallowed and forever barred, without further Order of the Bankruptcy Court.

D. Provisions Governing Distributions

1. Record Date for Claims and Equity Interests. The record date for Distributions to Allowed Claims and Allowed Equity Interests under the Plan shall be the Confirmation Date. For purposes of Distributions to holders of Allowed Claims, the Reorganized Debtor shall rely on the claims docket maintained by the Clerk for Proofs of Claim filed in this Chapter 11 Case except to the extent a notice of transfer of Claim or Interest has been filed with the Court prior to the record date pursuant to Bankruptcy Rule 3001.

2. Delivery of Distributions to Holders of Allowed Claims. Subject to Bankruptcy Rule 9010, Distributions to holders of Allowed Claims will be made at the address of each such holder as set forth on the Proofs of Claim filed by such holders, or at the last known address of such holder if no Proof of Claim is filed, unless the holder of the Allowed Claim has otherwise notified the Reorganized Debtor in writing of a change of address, prior to the Effective Date. If any holder’s Distribution is returned as undeliverable, it will be treated in accordance with Section VIII.D.4.

3. Delivery of Distributions to Holders of Allowed Equity Interests. Distributions to holders of Allowed Equity Interests, to the extent they are entitled to distributions under the Plan, will be made at the address of the registered holder of each such Equity Interest as set forth in the Debtor’s records. If any holder’s distribution is returned as undeliverable, no further distributions to such holder will be made unless and until the Reorganized Debtor is notified in writing of such holder’s then current address.

4. Unclaimed Distributions. The Reorganized Debtor shall file a Notice of Distribution within ten Business Days of the date on which Distributions are made under the Plan. All claims for undeliverable Distributions must be made no later than the 75th calendar day following the date that the Notice of Distribution is filed. After such date, all unclaimed Distributions will revert to the Reorganized Debtor and the remaining Claim or Equity Interest of any holder with respect to such Distribution will be discharged and forever barred.

5. Uncashed Checks. Checks issued in respect of Allowed Claims and/or Equity Interests will be null and void if not negotiated within 90 calendar days after the date of issuance thereof. Distributions with respect to such un-negotiated checks will revert to the Reorganized Debtor and the remaining Claim or Equity Interest of any holder with respect to such Distribution will be discharged and forever barred.

ARTICLE IX EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Executory Contracts and Unexpired Leases

The Debtor reserves the right to reject certain executory contracts and unexpired leases prior to the Effective Date, subject to the consent of the Agent. All executory contracts and unexpired leases not expressly rejected will be deemed assumed pursuant to the Plan.

B. Assumed Executory Contracts and Unexpired Leases


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Each executory contract and unexpired lease that is assumed will include (a) all amendments, modifications, supplements, restatements, or other agreements made directly or indirectly by any agreement, instrument, or other document that in any manner affect such executory contract or unexpired lease; and (b) with respect to any executory contract or unexpired lease that relates to the use, ability to acquire, or occupancy of real property, all executory contracts or unexpired leases and other rights appurtenant to the property, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, usufructs, reciprocal easement agreements, vaults, tunnel or bridge agreements or franchises, and any other equity interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements have been rejected pursuant to an order of the Bankruptcy Court or are the subject of a motion to reject filed on or before the Confirmation Date. Amendments, modifications, supplements, and restatements to prepetition executory contracts and unexpired leases that have been executed by the Debtor during this Chapter 11 Case shall not be deemed to alter the prepetition nature of the executory contract or unexpired lease, or the validity, priority, or amount of any Claims that may arise in connection therewith.

C. Claims Based on Rejection of Executory Contracts or Unexpired Leases

Damages arising from the rejection of an executory contract or unexpired lease shall be a General Unsecured Claim against the Debtor unless subordinated under applicable law. Any Claim for damages arising from the rejection of an executory contract or unexpired lease must be asserted in a Proof of Claim filed with the Bankruptcy Court no later than 20 calendar days following the latter of: (a) the date of entry of an order of the Bankruptcy Court approving such rejection, or (b) the Effective Date of the Plan. Any Claims not filed within such times shall be discharged and forever barred. The Reorganized Debtor shall mail or e-mail a notice to all known affected parties of the Debtor’s rejection of executory contracts and unexpired leases, which shall include the deadline for asserting claims for damages arising from the rejection of such executory contracts and unexpired leases.

D. Indemnification

On and as of the Effective Date, the Indemnification Obligations will be assumed, irrevocable with respect to any claims relating to acts or omissions occurring at or prior to the Effective Date, and will survive the effectiveness of the Plan. The Debtor shall provide for the indemnification, defense, reimbursement, exculpation, and/or limitation of liability of, and advancement of fees and expenses to the Debtor’s and the Reorganized Debtor’s directors, officers, employees, or agents that were employed by, or serving on the Board, including but not limited to, Jeremy Rosenthal, Troy Pike and Curt Lindeman, as of the Effective Date, to the fullest extent permitted by law and at least to the same extent as the organizational documents of the Debtor on the Effective Date, against any Claims or Causes of Action whether direct or derivative, liquidated or unliquidated, fixed or contingent, disputed or undisputed, matured or unmatured, known or unknown, foreseen or unforeseen, asserted or unasserted, and, notwithstanding anything in the Plan to the contrary, the Reorganized Debtor will not amend and/or restate its organizational documents before or after the Effective Date to terminate or adversely affect the Reorganized Debtor’s obligations to provide such indemnification rights or such directors’, officers’, employees’, or agents’ indemnification rights with respect to any claims relating to acts or omissions occurring at or prior to the Effective Date. Nothing in this provision is intended to limit or prohibit the Reorganized Debtor’s right to challenge, dispute or otherwise address any claim of or for indemnification.

E. Insurance Policies

Notwithstanding anything herein to the contrary, all of the Debtor’s insurance policies and any agreements, documents, or instruments relating thereto, are treated as and deemed to be Executory Contracts under the Plan. On the Effective Date, pursuant to section 365(a) of the Bankruptcy Code, the Debtor shall be deemed to have assumed all insurance policies and any agreements, documents, and instruments related thereto, including all D&O Liability Insurance Policies (including tail coverage liability insurance). Entry of the Confirmation Order will constitute the Bankruptcy Court’s approval of the Reorganized Debtor’s assumption of all such insurance policies, including the D&O Liability Insurance Policies. Notwithstanding anything to the contrary contained herein, confirmation of the Plan shall not discharge, impair, or otherwise modify any indemnity obligations assumed by the foregoing assumption of insurance policies, including the D&O Liability Insurance Policies, and each such indemnity obligation will be deemed and treated as an Executory Contract that has been assumed by the Reorganized Debtor under the Plan as to which no Proof of Claim or Claim for Cure Costs need be filed, and shall survive the Effective Date.


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F. Reservation of Rights

Nothing contained in the Plan shall constitute an admission by the Debtor that any such contract or lease is in fact an executory contract or unexpired lease or that the Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Reorganized Debtor shall have 30 calendar days following entry of a Final Order resolving such dispute to alter its treatment of such contract or lease.

ARTICLE X EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS

A. Impaired Classes to Vote

Each impaired Class of Claims and Equity Interests shall be entitled to vote separately to accept or reject the Plan. A holder of a Disputed Claim which has not been temporarily allowed for purposes of voting on the Plan may vote only such Disputed Claim in an amount equal to the portion, if any, of such Claim or Equity Interest shown as fixed, liquidated and undisputed in the Debtor’s Schedules and is not the subject of a subsequently filed objection as to such fixed, liquidated and undisputed amount.

B. Acceptance by Class

A class shall have accepted the Plan if the Plan is accepted by at least two-thirds (2/3) in amount and more than one-half (1/2) in number of the Allowed Claims or Equity Interests of such class that have voted to accept or reject the Plan.

C. Reservation of Cramdown Rights

In the event that any impaired class shall fail to accept this Plan in accordance with § 1129(a) of the Bankruptcy Code, the Debtor reserves the right to request the Bankruptcy Court to confirm the Plan in accordance with the provisions of § 1129(b) of the Bankruptcy Code.

ARTICLE XI SETTLEMENT, RELEASE, INJUNCTION AND EFFECT OF CONFIRMATION

A. Legally Binding Effect

The provisions of the Plan shall bind all Creditors and Interest Holders, whether or not they accept the Plan. On and after the Effective Date, all holders of Claims and Equity Interests shall be precluded and enjoined from asserting any Claim (i) against the Debtor, the Reorganized Debtor or its assets and properties based on any transaction or other activity of any kind that occurred prior to the Effective Date except as permitted under the Plan; and (ii) any derivative claims, including claims against third parties asserting alter ego claims, fraudulent transfer claims or any other type of successor liability.

B. Injunction

The entry of the Confirmation Order will operate as a general resolution with prejudice, as of the Effective Date, of all pending legal proceedings, if any, against the Debtor, the Reorganized Debtor and their assets and properties and any proceedings not yet instituted against the Debtor, the Reorganized Debtor or their assets and properties, except as otherwise provided in the Plan. Except as otherwise expressly provided in the Plan or the Confirmation Order, all Persons who have held, hold, or may hold Claims against the Debtor or its assets and properties are permanently enjoined on and after the Effective Date from (a) commencing or continuing in any manner any action or other proceeding of any kind against the Debtor or the Reorganized Debtor, or their assets and properties, with respect to any such Claim, (b) the enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree or order with respect to any such Claim against the Debtor or the Reorganized Debtor, or their assets and properties, (c) creating,


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perfecting, or enforcing any encumbrance of any kind against the Debtor or the Reorganized Debtor, or their assets and properties, with respect to such Claim, (d) asserting any right of subrogation of any kind against any obligation due to the Debtor or the Reorganized Debtor, or the property of the Debtor, the Estate or the Reorganized Debtor with respect to any such Claim and (e) asserting any right of setoff or recoupment against the Debtor, the Estate or the Reorganized Debtor except as specifically permitted by § 553 of the Bankruptcy Code. Unless otherwise provided in the Plan or by order of the Bankruptcy Court, all injunctions or automatic stays provided for in these cases pursuant to § 105, if any, or § 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date will remain in full force and effect until the Effective Date.

Upon entry of the Confirmation Order, all Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, principals, and direct and indirect Affiliates shall be enjoined from taking any actions to interfere with the implementation or consummation of the Plan. Each Holder of an Allowed Claim or Allowed Interest, as applicable, by accepting, or being eligible to accept, distributions under or Reinstatement of such Claim or Interest, as applicable, pursuant to the Plan, shall be deemed to have consented to the injunction provisions set forth in this Plan.

C. Exculpation

Except as otherwise specifically provided in the Plan, no Exculpated Party shall have or incur liability for and each Exculpated Party is hereby released and exculpated from any Cause of Action for any claim related to any act or omission in connection with, relating to, or arising out of, the filing, administration and prosecution of the Chapter 11 Case, the formulation, preparation, dissemination, negotiation, filing of the Disclosure Statement, the Plan, the Forbearance Agreement, or any contract, instrument, release, or other agreement or document created or entered into in connection with the Disclosure Statement, the Plan, the Chapter 11 Case, the filing, administration and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date, except for claims related to any act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Exculpated Party shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.

The Exculpated Parties have, and upon confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.

D. Releases by the Debtor

Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on and after the Effective Date, each Released Party is deemed released and discharged by the Debtor, the Reorganized Debtor, and its Estate from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims asserted on behalf of the Debtor, that the Debtor, the Reorganized Debtor, or the Estate (as applicable) would have been legally entitled to assert in its own right or on behalf of the holder of any Claim against, or Interest in, the Debtor or that any holder of any Claim against, or Interest in, the Debtor could have asserted on behalf of the Debtor, based on or relating to, or in any manner arising from, in whole or in part: the Debtor (including the management, governance, ownership, or operation thereof), any securities issued by the Debtor and the ownership thereof, the Debtor’s restructuring efforts, any Avoidance Actions (but excluding Avoidance Actions brought as counterclaims or defenses to Claims asserted against the Debtor), the filing, administration and prosecution of the Chapter 11 Case, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Forbearance Agreement and any contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in


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connection with the Disclosure Statement, the Plan, the Forbearance Agreement, the Chapter 11 Case, the filing, administration and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date.

Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party under the Plan, or any document, instrument, or agreement (including the Forbearance Agreement) executed to implement the Plan or the Restructuring or (b) any individual from any claim or Causes of Action related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Debtor’s release, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Court’s finding that the Debtor’s release is: (a) in exchange for the good and valuable consideration provided by the Released Parties, including, without limitation, the Released Parties’ contributions to facilitating the Restructuring and implementing the Plan; (b) a good faith settlement and compromise of the Claims released by the Debtor; (c) in the best interests of the Debtor and all holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to the Debtor, the Reorganized Debtor, or the Debtor’s Estate asserting any Claim or Cause of Action released pursuant to the Debtor’s release.

E. Releases by the Releasing Parties

Notwithstanding anything contained in the Plan to the contrary, as of the Effective Date, each Releasing Party is deemed to have released and discharged each of the Debtor, Reorganized Debtor, and each other Released Party from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtor, the Reorganized Debtor, or the Estate (as applicable), that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtor (including the management, governance, ownership or operation thereof), any securities issued by the Debtor and the ownership thereof, the Debtor’s restructuring efforts, any Avoidance Actions (but excluding Avoidance Actions brought as counterclaims or defenses to Claims asserted against the Debtor), the Chapter 11 Case, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Forbearance Agreement, or any contract, instrument, release, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract, instrument, document or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection with the Disclosure Statement, the Plan, the Forbearance Agreement, the Chapter 11 Case, the filing, administration and prosecution of the Chapter 11 Case, the pursuit of confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date. Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party or Entity, including the Debtor and the Reorganized Debtor, under the Plan or any document, instrument, or agreement (including the Forbearance Agreement) executed to implement the Plan or (b) any individual from any claim or Causes of Action related to an act or omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Releases, which includes by reference each of the related provisions and definitions contained herein, and, further, shall constitute the Bankruptcy Court’s finding that the Releases are: (a) consensual; (b) essential to the confirmation of the Plan; (c) given in exchange for the good and valuable consideration provided by the Released Parties; (d) a good faith settlement and compromise of the Claims released; (e) in the best interests of the Debtor and its Estate; (f) fair, equitable, and reasonable; (g) given and made after due notice and opportunity for hearing; and (h) a bar to any of the Releasing Parties asserting any Claim or Cause of Action.


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F. Discharge of the Debtor

Pursuant to § 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan or the Confirmation Order, the distributions, rights, and treatment that are provided in the Plan shall be in complete satisfaction, discharge, and release, effective as of the Effective Date, of all Claims, Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtor or any of its assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by employees/representatives of the Debtor prior to the Effective Date or that arise from a termination of employment, termination of retention of a professional or quasi-professional, or a termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in §§ 502(g), 502(h), or 502(i) of the Bankruptcy Code, in this Chapter 11 Case whether or not: (a) a Proof of Claim or Interest based upon such debt, right, Claim, or Interest is filed or deemed filed pursuant to § 501 of the Bankruptcy Code; (b) a Claim or Interest based upon such Claim, debt, right, or Interest is Allowed pursuant to § 502 of the Bankruptcy Code; or (c) the holder of such a Claim or Interest has accepted the Plan. Subject to the terms of the Plan and the Confirmation Order, any default by the Debtor with respect to any Claim or Interest that existed immediately prior to or on account of the filing of this Chapter 11 Case shall be deemed satisfied on the Effective Date. Subject to the terms of the Plan, the Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtor, its Estate, the Reorganized Debtor and all successors thereto. As provided in § 524 of the Bankruptcy Code, subject to the terms of the Plan, such discharge shall void any judgment against the Debtor, its Estate, the Reorganized Debtor or any successors thereto at any time obtained to the extent it relates to a Claim or Interest discharged, and operates as an injunction against the prosecution of any action against the Reorganized Debtor or its property and assets to the extent it relates to a discharged Claim or Interest.

G. Continuation of Anti-Discrimination Provisions of the Bankruptcy Code

A Governmental Unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, or discriminate with respect to such a grant against, the Debtor, the Reorganized Debtor, or another Person with whom the Debtor has been or is associated or affiliated, solely because of the commencement, continuation, or termination of the case or because of any provision of the Plan or the legal effect of the Plan, and the Confirmation Order will constitute an express injunction against any such discriminatory treatment by a Governmental Unit. Moreover, a Governmental Unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to the Debtor or the Reorganized Debtor based upon any requirement that the Debtor or the Reorganized Debtor place a bond or other surety obligation with such Governmental Unit as a condition of receipt of such a license, permit, charter, franchise, or other similar grant to the Debtor or the Reorganized Debtor. All licenses, permits, charters, franchises, or other similar grants to the Debtor are hereby transferred and assigned on the Effective Date (which transfer and assignment is without the assumption of any liabilities arising prior to the Effective Date which liabilities arise out of such license, permit, charter, franchise or similar grant) to the Reorganized Debtor without the need for further application or approval by any Governmental Unit.

H. Preservation of Claims and Rights

Confirmation of the Plan effects no settlement, compromise, waiver or release of any Claim, Cause of Action, Right of Action or claim for relief unless the Plan or the Confirmation Order specifically and unambiguously so provides. The non-disclosure or non-discussion of any particular Claim, Cause of Action, Right of Action or claim for relief is not and shall not be construed as a settlement, compromise, waiver, or release of any such Claim, Cause of Action, Right of Action or claim for relief.

The Reorganized Debtor reserves any and all Claims and rights against any and all third parties, whether such Claims and rights arose before, on or after the Petition Date, the Confirmation Date, the Effective Date, the record date and/or any Distribution Date, including, without limitation, any and all Causes of Action, Rights of Action and/or Claims for relief that the Debtor or the Reorganized Debtor may have against (i) any


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insurer and/or insurance policies in which either the Debtor and/or its current or former personnel have an insurable or other interest in or right to make a claim against, any other of the Debtor’s insurers; or (ii) any recipient of a transfer by the Debtor occurring either before or during this Chapter 11 Case. The entry of the Confirmation Order shall not constitute res judicata or otherwise bar, estop or inhibit any actions by the Reorganized Debtor relating to any Claims, Causes of Action or Rights of Action referred to in this Article XI, or otherwise. The Reorganized Debtor shall constitute the representative of the Estate for purposes of retaining, asserting and/or enforcing Rights of Action under § 1123(b)(3)(B) of the Bankruptcy Code. On the Effective Date, the Reorganized Debtor shall be substituted as a party of record in all pending litigation brought by or against the Debtor without need for further order of the Bankruptcy Court.

ARTICLE XII CONFIRMATION OF THE PLAN

A. Confirmation Hearing

Section 1128(a) requires the Bankruptcy Court, after notice, to hold a hearing on confirmation of the Plan (the Confirmation Hearing). The Confirmation Hearing has been scheduled before the Honorable David R. Jones, Chief United States Bankruptcy Judge, on November 20, 2020 at 10:00 a.m. Central Time. The Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court without further notice except an announcement made at the Confirmation Hearing or any adjournment thereof.

Section 1128(b) provides that any party in interest may object to confirmation of the Plan. However, an impaired Creditor, who votes to accept the Plan, may not have standing to object to the Plan. Objections to confirmation of the Plan are governed by Bankruptcy Rule 9014 and any applicable Local Rules of the Bankruptcy Court. The deadline for filing objections to confirmation of the Plan is November 18, 2020 at 5:00 p.m. Central Time. Objections to confirmation must be filed with the Clerk of Court.

UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY FILED AND SERVED, IT WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.

B. Statutory Requirements for Confirmation of the Plan

At the Confirmation Hearing, the Bankruptcy Court will determine whether the Bankruptcy Code’s requirements for confirmation of the Plan have been satisfied, in which event the Bankruptcy Court will enter an order confirming the Plan. As set forth in § 1129 of the Bankruptcy Code, these requirements are as follows:

1. The Plan complies with the applicable provisions of the Bankruptcy Code.

2. The proponent of the Plan complies with the applicable provisions of the Bankruptcy Code.

3. The Plan has been proposed in good faith and not by any means forbidden by law.

4. Any payment made or to be made by the Plan proponent, or by a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in, or in connection with the case, or in connection with the Plan and incident to the case, has been approved by, or is subject to the approval of, the Bankruptcy Court as reasonable.

5. The proponent of the Plan has disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the Plan, as a director, officer, or voting trustee of the Debtor, or a successor to the Debtor under the Plan; and the appointment to, or continuance in, such office of such individual, is consistent with the interests of Creditors and with public policy; and the proponent of the Plan has disclosed the identity of any insider that will be employed or retained by the Debtor, and the nature of any compensation for such insider.


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6. Any governmental regulatory commission with jurisdiction, after confirmation of the Plan, over the rates of the Debtor, has approved any rate change provided for in the Plan, or such rate change is expressly conditioned on such approval.

7. With respect to each class of impaired claims or equity interests:

(a) each holder of a claim or interest of such class:

(i) has accepted the Plan; or

(ii) will receive or retain under the Plan on account of such claim or interest property of a value, as of the effective date of the Plan, that is not less than the amount that such holder would so receive or retain if the Debtor were liquidated under Chapter 7 of the Bankruptcy Code on such date; or

(b) if § 1111(b)(2) of the Bankruptcy Code applies to the claims of such class, the holder of a claim of such class will receive or retain under the Plan on account of such claim property of a value, as of the effective date of the Plan, that is not less than the value of such holder’s interest in the estate’s interest in the property that secured such claims.

8. With respect to each Class of claims or interests:

(a) such Class has accepted the Plan; or

(b) such Class is not impaired under the Plan.

9. Except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the Plan provides that:

(a) with respect to a claim of a kind specified in § 507(a)(1) or § 507(a)(2) of the Bankruptcy Code, on the effective date of the Plan, the holder of such claim will receive on account of such claim cash equal to the allowed amount of such claim;

(b) with respect to a class of claims of a kind specified in §§ 507(a)(3), 507(a)(4), 507(a)(5) or 507(a)(6) of the Bankruptcy Code, each holder of a claim of such class will receive:

(i) if such class has accepted the Plan, deferred cash payments of a value, as of the effective date of the Plan, equal to the allowed amount of such claim; or

(ii) if such class has not accepted the Plan, cash on the effective date of the Plan equal to the allowed amount of such claim; and

(c) with respect to a claim of a kind specified in § 507(a)(8) of the Bankruptcy Code, the holder of a claim will receive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the Plan, equal to the allowed amount of such claim.

10. If a class is impaired under the Plan, at least one class of claims that is impaired has accepted the Plan, determined without including any acceptance of the Plan by any insider.

11. Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Plan proponent or any successor to the Plan proponent under the Plan, unless such liquidation or reorganization is proposed in the Plan.


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The Debtor believes that the Plan satisfies all the statutory requirements of Chapter 11 of the Bankruptcy Code, that the Debtor has complied or will have complied with all of the requirements of Chapter 11, and that the proposal of the Plan is made in good faith.

The Debtor further believe that the holders of all Claims impaired under the Plan will receive payments or distributions under the Plan having a present value as of the Effective Date in amounts not less than the amounts likely to be received by such holders if the Debtor were liquidated in a case under Chapter 7 of the Bankruptcy Code.

Finally, the Debtor does not believe that the confirmation of the Plan will likely be followed by the need for further financial reorganization of the Debtor.

C. Cramdown

In the event that any impaired class of Claims does not accept the Plan, the Bankruptcy Court may still confirm the Plan if, as to each impaired class which has not accepted the Plan, the Plan does not discriminate unfairly and is “fair and equitable.” A plan of reorganization does not discriminate unfairly within the meaning of the Bankruptcy Code if no class receives more than it is legally entitled to receive for its claims or equity interests.

“Fair and equitable” has different meanings with respect to the treatment of secured and unsecured claims. As set forth in § 1129(b)(2) of the Bankruptcy Code, those meanings are as follows:

1. With respect to a class of secured claims, the Plan provides:

(a) (i) that the holders of such claims retain the liens securing such claims, whether the property subject to such liens is retained by the Plan proponent or transferred to another entity, to the extent of the allowed amount of such claims; and

(ii) that each holder of a claim of such class receives on account of such claim deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the Plan, of at least the value of such holder’s interest in the estate’s interest in such property;

(b) for the sale, subject to § 363(k) of the Bankruptcy Code, of any property that is subject to the Liens securing such claims, free and clear of such liens, with such liens to attach to the proceeds of such sale, and the treatment of such liens on proceeds under clause (a) and (b) of this subsection; or

(c) for the realization by such holders of the indubitable equivalent of such claims.

2. With respect to a class of unsecured claims, the Plan provides:

(a) that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the Plan, equal to the allowed amount of such claim; or

(b) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the Plan on account of such junior claim or interest any property.

3. With respect to a class of interests, the Plan provides:

(a) that each holder of an interest of such class receive or retain on account of such interest property of a value, as of the effective date of the Plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; or


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(b) the holder of any interest that is junior to the interests of such class will not receive or retain under the Plan on account of such junior interest any property.

The Bankruptcy Court will determine at the Confirmation Hearing whether the Plan is fair and equitable with respect to, and does not discriminate unfairly against, any rejecting impaired class of Claims. The Debtor believes that the Bankruptcy Court will find these requirements satisfactory and will confirm the Plan.

D. Conditions Precedent to Effective Date

The following are conditions precedent to the occurrence of the Effective Date, which may be waived in writing by agreement of the Debtor, the Agent, and KSCO:

1. the Confirmation Order, in a form and in substance reasonably satisfactory to the Debtor, the Agent, and KSCO shall have been entered by the Bankruptcy Court;

2. the form of all documents necessary or appropriate to give effect to the transactions contemplated under this Plan, if any, have been approved and executed;

3. all required consents, approvals, and authorizations, including Bankruptcy Court approval, if any, have been obtained and in full force and effect and shall not be subject to unfulfilled conditions;

4. there shall be no stay of the Confirmation Order in effect;

5. the final version of the Plan, the Forbearance Agreement, and all other documents contained in any supplement to the Plan, including any exhibits, schedules, amendments, modifications, or supplements thereto or other documents contained therein shall have been executed or filed, as applicable; and

6. all other actions, documents and agreements necessary to implement the Plan shall have been effected or executed.

The Effective Date is the day selected by the Debtor that is no earlier than the first Business Day after (i) the date the Confirmation Order becomes a Final Order; and (ii) all conditions precedent specified above have been satisfied or waived.

E. Annulment of Plan if Conditions Not Waived or Satisfied

The Debtor reserves the right to waive any of the conditions precedent to the Effective Date, with the consent of the Agent and KSCO. If any of the conditions precedent are not waived, and are not satisfied within the specified time periods or can no longer occur, the Confirmation Order will be annulled and the Debtor and all parties in interest will return to the status quo ante immediately before the entry of the Confirmation Order.

F. Retention of Jurisdiction by Bankruptcy Court

The Bankruptcy Court shall retain and have exclusive jurisdiction over this Chapter 11 Case to the maximum extent provided by law for the following purposes following the Confirmation Date: (a) to determine any and all objections to the allowance and classification of Claims or Interests; (b) to determine the validity and priority of any Lien; (c) to determine the Allowed Amount of any Claim, whether secured or unsecured; (d) to allow any and all applications for allowances of compensation and reimbursement of expenses payable from the Estate; (e) to determine any and all applications or motions pending before the Court on the Effective Date of the Plan, including without limitation any motions for the rejection, assumption or assumption and assignment of any executory contract or unexpired lease; (f) to consider and approve any modification of the Plan, remedy any defect or omission or reconcile any inconsistency in the Plan, or any order of the Court, including the Confirmation Order; (g) to hear and determine all controversies, suits and disputes that may arise in connection with the interpretation, enforcement or consummation of the Plan, the Confirmation Order, any transactions or payments contemplated hereby or any agreement, instrument


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or other document governing or related to any of the foregoing; (h) to consider and act on the compromise and settlement of any claim or cause of action by or against the Debtor; (i) to issue orders in aid of execution and implementation of the Plan and the Confirmation Order, to the extent authorized by 11 U.S.C. § 1142 or provided by the terms of the Plan; (j) to hear and determine matters concerning federal, state or local taxes in accordance with §§ 346, 505 or 1146 of the Bankruptcy Code, and (k) to consider any Cause of Action asserted by the Debtor, including any claim for offset, set off, recoupment.

In no event shall the provisions of the Plan be deemed to confer in the Bankruptcy Court jurisdiction greater than that established by the provisions of 28 U.S.C. §§ 157 and 1334.

ARTICLE XIII NOTICE PROVISIONS

A. Notices

All notices, requests, elections or demands in connection with this Plan, including any change of address of any Creditor or Interest Holder for the purposes of receiving Distributions under the Plan and to avoid forfeiting the same pursuant to this Plan, shall be in writing and shall be delivered personally, by facsimile, overnight courier or first class mail. Such notice shall be deemed to have been given when received or, if mailed by first class mail, five Business Days after the date of mailing, or if by overnight courier, the next Business Day following the date of mailing. Notices required to be sent to the following parties under this Plan shall be addressed to:

1. To the Debtor/Reorganized Debtor:

Volusion, LLC 1835A Kramer Lane, Suite 100 Austin, TX 78758 Attention: Troy Pike E-mail: [email protected] with a copy, which shall not constitute notice, to: Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Attention: Matthew D. Cavenaugh

Jennifer F. Wertz Email: [email protected]

[email protected]

2. To the Agent and/or the Secured Lenders:

Main Street Capital Corporation 1300 Post Oak Blvd, 8th Floor Houston, TX 77056 Attention: Jesse E. Morris E-mail: [email protected] with a copy, which shall not constitute notice, to: Cole Schotz P.C. 301 Commerce Street, Suite 1700 Fort Worth, TX 76102 Attention: Michael D. Warner E-mail: [email protected]


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B. Limitation on Notice

The Debtor/Reorganized Debtor shall give the following notice with regard to the following matters, which notice shall be deemed to be good and sufficient notice of such matters with no requirement for any additional or further notice:

1. Notice of Entry of Confirmation Order

Notice of the Effective Date shall be sufficient if mailed or e-mailed to all known holders of Claims and Equity Interests (which have not become Disallowed as of the date of mailing). Such notice shall be mailed or e-mailed within five Business Days of the Effective Date.

Post Confirmation Date Service. From and after the date the Confirmation Order becomes a Final Order, notices of appearances and demands for service of process filed with the Court prior to such date shall no longer be effective. No further notices (other than notice of entry of the Confirmation Order) shall be required to be sent to any entities or Persons, except those Persons specified in the Plan, the Office of the U.S. Trustee and any Creditor or Interest Holder who files a renewed request for service of pleadings and whose Claim has not been fully satisfied.

2. General Notice To Creditors

All notices and requests to Creditors or Interest Holders of any Class shall be sent to them at the addresses or e-mail addresses set forth on the Proofs of Claim or, if no Proof of Claim was filed, to their last known address or e-mail address as reflected in the Debtor’s records. Any Creditor or Interest Holder may designate in writing any other address for purposes of this Article XIII, which designation shall be effective upon receipt by the Reorganized Debtor.

ARTICLE XIV COMPROMISES AND SETTLEMENTS

A. Effect of Confirmation Order

Pursuant to Bankruptcy Rule 9019, and in consideration for the classification, distribution and other benefits provided under the Plan, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims, Interests and controversies resolved pursuant to the Plan, including, without limitation, all Claims arising prior to the Effective Date, whether known or unknown, foreseen or unforeseen, asserted or unasserted, arising out of, relating to or in connection with the business or affairs of, or transactions with, the Debtor. The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of each of the foregoing compromises or settlements, and all other compromises and settlements provided for in the Plan, and the Bankruptcy Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtor, the Estate, Creditors and other parties in interest, and are fair, equitable and within the range of reasonableness.

ARTICLE XV MISCELLANEOUS PROVISIONS

A. Bar Date for Administrative Claims

No Administrative Claim, other than Professional Fees and United States Trustee fees and administrative claims for the actual cost of goods and services provided to the Debtor in the ordinary course of business, will be paid unless the holder of such Administrative Claim files an application for payment of such Administrative Claim on or before the Administrative Claim Bar Date. Upon the filing of any application for payment, the entity seeking payment of an Administrative Claim shall provide notice by United States Mail in accordance with the Bankruptcy Rules. Any Administrative Claim, other than Professional Fees, United States Trustee fees and administrative claims for the actual cost of goods and services provided to the Debtor in the ordinary course of business, not filed in accordance with the Plan shall be barred and the Debtor and the Reorganized Debtor shall have no liability for payment of any such Administrative Claim, without further order of the Bankruptcy Court.


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B. Objections to Administrative Claims

Objections to Applications for payment of Administrative Claims may be filed by any party in interest. In order to be considered, such objections must be filed on or before the 21st calendar day following the date on which the application was filed. Any objections will be determined by the Bankruptcy Court.

C. Payment of Professional Claims

Each holder of a Professional Fee Claim shall be paid in respect of such Professional Fee Claim in Cash, in full, on the Effective Date, or, if such Claim has not been approved by the Bankruptcy Court on or before the Effective Date, promptly after Bankruptcy Court approval of the Professional Fee Claim by a Final Order. Final fee applications for any Professional Fee Claim that has not been approved as of the Effective Date shall be filed within 45 calendar days of the Effective Date and such applications and objections thereto (if any) shall be filed in accordance with and comply in all respects with the Bankruptcy Code, the Bankruptcy Rules, and the applicable Local Rules. The failure to file an application by the foregoing deadline shall constitute a waiver of all such Professional Fee Claim, without further order of the Bankruptcy Court.

D. Payment of United States Trustee Fees

Within 30 calendar days of the date that such payments are due, the Reorganized Debtor shall pay all amounts owing to the United States Trustee as fees and costs imposed in connection with this Chapter 11 Case.

E. Employee Benefits Plans

Any Employee Benefit Plans maintained by the Debtor shall be continued by the Reorganized Debtor in accordance with applicable law.

F. Satisfaction of Liabilities

The rights afforded in the Plan and the treatment of all Claims and Interests herein shall be in exchange for and in complete satisfaction and release of all Claims and Interests of any nature whatsoever against the Debtor or its Estate, assets, properties, or interests in property. Neither the Debtor nor the Reorganized Debtor shall be responsible for any pre-Effective Date obligations of the Debtor, except pursuant to the terms of the Plan.

G. Compliance with Tax Requirements

In connection with each distribution with respect to which the filing of an information return (such as an Internal Revenue Service Form 1099 or 1042) or withholding is required, the Reorganized Debtor shall file such information return with the Internal Revenue Service and provide any required statements in connection therewith to the recipients of such distribution or effect any such withholding and deposit all moneys so withheld as required by law. With respect to any Person from whom a tax identification number, certified tax identification number or other tax information required by law to avoid withholding has not been received by the Reorganized Debtor within 30 calendar days from the date of such request, the Reorganized Debtor may, at its option, withhold the amount required and distribute the balance to such Person or decline to make such distribution until the information is received.

H. Amendment of the Plan

The Plan may be amended or modified by the Debtor with the consent of the Agent and KSCO before, or by the Reorganized Debtor after the Effective Date, as provided in § 1127 of the Bankruptcy Code.

I. Timing of Distributions

When a provision of the Plan requires that a payment shall be made on a certain date, such payment may be made (i) at any time prior to the date on which such payment is due; (ii) in more frequent intervals than set forth in such provision of the Plan; or (iii) not more than 14 calendar days after the date any such payment is due.


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Notwithstanding the foregoing and unless specifically set forth to the contrary in the Plan, no payment shall be considered late or otherwise result in a default unless the Reorganized Debtor has failed to make the payment after the passage of 30 calendar days following the receipt by the Reorganized Debtor of a written notice advising that a payment has not been received in accordance with the times set forth in this Section XV.I.

J. Enforcement of Subordination Agreements/Settlement Agreements

Any written (i) subordination agreement between holders of Allowed Claims; and (ii) settlements approved by the Bankruptcy Court during this Chapter 11 Case will be honored according to their terms for the purposes of distribution under the Plan.

K. Filing of Documents in Public Records

Pursuant to § 1146 of the Bankruptcy Code, the issuance, transfer or exchange of a security or the making of an instrument of transfer under this Plan (including without limitation the filing of any mortgage, deed of trust, security agreement, uniform commercial code financing statement or other similar document) shall not be taxed under any law imposing a stamp tax or similar tax. All state or local governmental officials or agents are hereby directed to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

L. Right to Seek Further Orders

The Reorganized Debtor, if and to the extent necessary, will seek such orders, judgments, injunctions, regulatory approvals, and rulings that may be required to carry out and further the intentions and purposes, and give full effect to the provisions, of the Plan.

M. Regulatory Approvals

As the Plan is not intended to modify or supplant any regulatory authority over the Debtor or the Reorganized Debtor, all regulatory approvals required in connection with the Plan will be sought and obtained.

N. Withdrawal of Plan

The Debtor reserves the right to withdraw the Plan at any time prior to the Confirmation Date. If the Debtor withdraws the Plan prior to the Confirmation Date, or if the Confirmation Date or the Effective Date does not occur, then the Plan shall be deemed null and void. In such event, nothing contained herein shall be deemed to constitute an admission, waiver or release of any Claims by or against the Debtor, the Estate or any other person, or to prejudice in any manner the rights of the Debtor, the Estate or any person in any further proceedings involving the Debtor.

O. Due Authorization by Creditors

Each and every Creditor who elects to participate in the Distributions provided for herein (i) warrants that it is authorized to accept in consideration of its Claim against the Debtor the Distributions provided for in the Plan; (ii) states that there are no outstanding commitments, agreements, or understandings, express or implied, that may or can in any way defeat or modify the rights conveyed or obligations undertaken by it under the Plan; and (iii) indemnifies and holds harmless the Reorganized Debtor and their professionals and representatives with respect to such Distributions.

P. Filing of Additional Documentation

On or before the Effective Date, the Debtor may file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan.

Q. Implementation


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The Debtor and the Reorganized Debtor shall be authorized to perform all reasonable, necessary and authorized acts to consummate the terms and conditions of the Plan.

R. Substantial Consummation

On the Effective Date, the Plan shall be deemed to be substantially consummated under Bankruptcy Code §§ 1101 and 1127(b).

S. Further Effect of Confirmation

Confirmation of the Plan effects no settlement, compromise, waiver or release of any Claim or Cause of Action unless the Plan or the Confirmation Order specifically so provides. The non-disclosure or non-discussion of any particular Claim or Cause of Action is not and shall not be construed as a settlement, compromise, waiver, or release of any such Claim or Cause of Action.

T. Reservation of Claims

The Debtor and the Reorganized Debtor reserve any and all claims and rights against any and all third parties, whether such claims and rights arose before, on or after the Petition Date, the Confirmation Date, the Effective Date, the record date and/or any Distribution Date, including, without limitation, any and all Claims and Causes of Action for relief that the Debtor, the Reorganized Debtor or the Reorganized Debtor may have against any director, officer, any insurer under any insurance policy, or any other person or entity. The entry of the Confirmation Order shall not constitute res judicata or otherwise bar, estop or inhibit any actions by the Debtor or the Reorganized Debtor relating to any Claims or Causes of Action.

U. Dates

The provisions of Bankruptcy Rule 9006 shall govern the calculation of any dates or deadlines referenced in the Plan.

V. Governing Law

Except to the extent that the Bankruptcy Code or Bankruptcy Rules are applicable, the rights and obligations arising under the Plan shall be governed by, and construed and enforced in accordance with, the laws of the State of Texas, without giving effect to any conflicts of law principles.

W. Conflict

Except as otherwise provided in this Plan, to the extent the Plan is inconsistent with the Confirmation Order and/or any agreement entered into between the Debtor and any third party, the Plan controls any such agreements and the Confirmation Order (and any other orders of the Bankruptcy Court) controls the Plan.

X. Severability

The provisions of this Plan shall not be severable unless such severance is agreed to by the Debtor and such severance would constitute a permissible modification of this Plan pursuant to § 1127 of the Bankruptcy Code.

Y. Setoffs

The Reorganized Debtor may, but shall not be required to, set off against any Claims and the payments or Distributions to be made pursuant to the Plan in respect of such Claims, any and all debts, liabilities and claims of every type and nature whatsoever that the Estate or the Reorganized Debtor may have against the holder of any Claim, but neither the failure to do so nor the Allowance of any such Claims, whether pursuant to the Plan or otherwise, shall constitute a waiver or release by the Reorganized Debtor of any such claims they may have against such holder of any Claim, and all such claims shall be reserved for and retained by the Reorganized Debtor.


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Z. Further Action

Nothing contained in the Plan shall prevent the Reorganized Debtor from taking such actions as may be necessary to consummate the Plan, even though such actions may not specifically be provided for within the Plan.

AA. Other Considerations

The Plan affords holders of Claims the potential for the greatest realization on the Debtor’s assets and, therefore, is in the best interests of such holders. If the Plan is not confirmed, however, the theoretical alternatives include: (a) continuation of the Chapter 11 Case; (b) alternative plans of reorganization/liquidation; (c) liquidation of the Debtor under Chapter 7 of the Bankruptcy Code; and (d) dismissal of the Chapter 11 Case.

BB. Feasibility of the Plan

Pursuant to the Plan, the Debtor proposes to restructure its indebtedness to the Secured Lenders and provide for payment to unsecured Creditors. Therefore, the Plan is feasible.

CC. Alternative Plans of Reorganizations

If the Plan is not confirmed, another party in interest in the case could attempt to formulate and propose a different plan or plans. Such plans might, theoretically, involve some other form of reorganization or liquidation of the Debtor’s property. Any alternative plans, however, would likely result in additional administrative expenses to the Estate and would provide little or no benefit. The Plan proposed by the Debtor is straightforward, meets the requirements of § 1129 and provides the best outcome for Creditors.

DD. Liquidation under Chapter 7

The Debtor does not believe that the case should be converted to Chapter 7. Conversion to Chapter 7 would result in the loss of the going concern value of the Debtor as well as the additional administrative expenses attributable to statutory trustee fees and professional fees for the trustee’s professionals. In a Chapter 7 liquidation, the Debtor believes that the Secured Lenders would be permitted to foreclose on its security interest and that no payments would be made to other Creditors other than the ad valorem taxing authorities. To the contrary, under the Plan, all secured Creditors should be paid in full, and funds will be available for the payment of administrative, priority and other unsecured claims. This is an estimate only and constitutes the Debtor’s best estimation based upon the data currently available.

EE. Risk Factors

Both failure to achieve confirmation of the Plan, and consummation of the Plan, are subject to certain risks. The effectiveness of the Plan is contingent on execution of documents acceptable to the Main Street Parties and KSCO. A number of factors can impact the satisfaction of the conditions precedent to the Effective Date, including factors that are outside of the Debtor’s control. While the Debtor believes that the conditions precedent will be accomplished, there is always some risk involved in the type of transaction that is contemplated.

In addition, there are certain risks inherent in the administration process under the Bankruptcy Code. If certain standards set forth in the Bankruptcy Code are not met, the Bankruptcy Court will not confirm the Plan even if Creditors and Interest holders accept the Plan. Although the Debtor believes that the Plan meets such standards, there can be no assurance that the Bankruptcy Court will reach the same conclusion. If the Bankruptcy Court were to determine that such requirements were not met, it could require the Debtor to resolicit acceptances, which could delay and/or jeopardize confirmation of the Plan. The Debtor believes that the solicitation of votes on the Plan will comply with § 1126(b) and that the Bankruptcy Court will confirm the Plan. The Debtor cannot, however, provide assurance that modifications of the Plan will not be required to obtain confirmation of the Plan, or that such modifications will not require a resolicitation of acceptances.


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FF. Taxation

1. Introduction

The following discussion summarizes certain federal income tax consequences of the transactions described herein. This discussion is for informational purposes only and does not constitute tax advice. This summary is based upon the Internal Revenue Code and the Treasury Regulations promulgated thereunder, including judicial authority and current administrative rulings and practice as of the date of this Plan and Disclosure Statement and will not be updated for subsequent tax or factual developments. Neither the impact on foreign holders of claims and equity interests nor the tax consequences of these transactions under state and local law is discussed. Also, special tax considerations not discussed herein may be applicable to certain classes of taxpayers, such as financial institutions, broker-dealers, insurance companies, mutual funds, regulated investment companies, real estate investment trusts, trusts, S corporations, dealers and traders in securities and currencies, partnerships and other entities classified as partnerships for federal tax purposes and tax-exempt organizations. Furthermore, due to the complexity of the transactions contemplated in the Plan, and the unsettled status of many of the tax issues involved, the tax consequences described below are subject to significant uncertainties including subsequent legislative and other tax changes. No opinion of counsel has been obtained and no ruling has been requested from the Internal Revenue Service on these or any other tax issues. There can be no assurance that the Internal Revenue Service will not challenge any or all of the tax consequences of the Plan, or that such a challenge, if asserted, would not be sustained. HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN THE DEBTOR ARE THEREFORE URGED TO CONSULT WITH THEIR TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE TRANSACTIONS DESCRIBED HEREIN.

2. Tax Consequences to the Debtor

As of December 31, 2019, the Debtor had no federal net operating loss (“NOL”) carryforwards, federal tax credit carryforwards, nor state NOL and tax credit carryforwards. The Debtor had no interest expense deductions that have been deferred under Section 163(j) of the Tax Code.

The transactions contemplated in the Plan are not expected to give rise to any gain or loss to the Debtor. The

Debtor’s tax attributes generally will, subject to the rules of sections 382 and 383 of the Tax Code survive the restructuring process and potentially be usable by the Reorganized Debtor going forward.

3. Tax Consequences to Creditors

In General. The federal income tax consequences of the implementation of the Plan to a holder of a Claim will depend, among other things, on: (a) whether its Claim constitutes a debt or security for federal income tax purposes, (b) whether the Claimant receives consideration in more than one tax year, (c) whether the Claimant is a resident of the United States, (d) whether all the consideration by the Claimant is deemed to be received by that Claimant as part of an integrated transaction, (e) whether the Claimant utilizes the accrual or cash method of accounting for tax purposes, and (f) whether the holder has previously taken a bad debt deduction or worthless security deduction with respect to the Claim.

Gain or Loss on Exchange. Generally, a holder of an Allowed Claim will realize a gain or loss on the exchange under the Plan of his Allowed Claim for cash and other property in an amount equal to the difference between (i) the sum of the amount of any cash and the fair market value on the date of the exchange of any other property received by the holder (other than any consideration attributable to accrued but unpaid interest on the Allowed Claim), and (ii) the adjusted basis of the Allowed Claim exchanged therefore (other than basis attributable to accrued but unpaid interest previously included in the holder’s taxable income). Any gain recognized generally will be a capital gain (except to the extent the gain is attributable to accrued but unpaid interest or accrued market discount, as described below) if the Claim was a capital asset in the hand of an exchanging holder, and such gain would be a long-term capital gain if the holder’s holding period for the Claim surrendered exceeded one year at the time of the exchange.


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The tax treatment of an Allowed Claim for accrued unpaid interest will depend on the Claimant’s tax basis in such Claim, which primarily depends on whether the Claimant has previously recognized income for the accrual of such interest and/or recognized a loss with respect to same. Any such holders should consult with its tax advisor regarding the tax treatment of any such accrued unpaid interest.

4. Information Reporting and Backup Withholding

Under the backup withholding rules of the Internal Revenue Code, holders of Claims may be subject to backup withholding with respect to payments made pursuant to the Plan unless such holder (i) is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact, or (ii) provides a correct taxpayer identification number and certifies under penalties of perjury that the taxpayer identification number is correct and that the holder is not subject to backup withholding because of a failure to report all dividends and interest income. Any amount withheld under these rules will be credited against the holder’s federal income tax liability. Holders of Claims may be required to establish exemption from backup withholding or to make arrangements with respect to the payment of backup withholding.

5. Importance of Obtaining Professional Assistance

THE FOREGOING IS INTENDED TO BE A SUMMARY ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE FEDERAL, STATE, AND FOREIGN TAX CONSEQUENCES OF THE PLAN ARE COMPLEX AND, IN MANY AREAS, UNCERTAIN. TO COMPLY WITH TREASURY DEPARTMENT CIRCULAR 230, YOU ARE HEREBY NOTIFIED THAT (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN THIS DISCLOSURE STATEMENT, THE PLAN OR ANY RELATED MATERIALS, IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY YOU, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; AND (B) ANY SUCH DISCUSSIONS ARE BEING USED ONLY IN CONNECTION WITH SATISFYING THE REQUIREMENTS IMPOSED UNDER THE BANKRUPTCY CODE FOR DISCLOSURE STATEMENTS, AND (C) YOU SHOULD SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR WITH RESPECT TO YOUR FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES BASED ON YOUR PARTICULAR CIRCUMSTANCES.

ARTICLE XVI CAUSES OF ACTION

A. Preferences

Under the Bankruptcy Code, the Debtor may recover certain preferential transfers of property, including cash, made while insolvent during the 90 calendar days immediately prior to the filing of its bankruptcy petition with respect to pre-existing debts, to the extent the transferee received more than it would have in respect of the pre-existing debt had the Debtor been liquidated under Chapter 7 of the Bankruptcy Code. In the case of “insiders,” the Bankruptcy Code provides for a one-year preference period. There are certain defenses to such recoveries. Transfers made in the ordinary course of the Debtor’s and transferee’s business according to the ordinary business terms in respect of debts less than 90 calendar days before the filing of a bankruptcy are not recoverable. Additionally, if the transferee extended credit subsequent to the transfer (and prior to the commencement of the bankruptcy case), such extension of credit may constitute a defense to recovery, to the extent of any new value, against an otherwise recoverable transfer of property. If a transfer is recovered by the Debtor, the transferee has an Unsecured Claim to the extent of the recovery. The Reorganized Debtor reserves the right to bring preferential transfer claims.

B. Fraudulent Transfers

Under the Bankruptcy Code and various state laws, the Debtor may recover certain transfers of property, including the grant of a security interest in property, made while insolvent or which rendered the Debtor insolvent. The Reorganized Debtor reserves the right to bring fraudulent conveyance claims.


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The Debtor conducted an analysis of potential recoveries under Chapter 5 of the Bankruptcy Code and Texas law. The Debtor concluded that potential claims do exist with regards to certain former professionals, quasi-professionals, consultants, employees and a contractor. A list of the known payments are set forth in the Debtor’s statements of financial affairs, which are incorporated herein. The failure to schedule a payment in the Schedules is not to be deemed to be a waiver of any Cause of Action to recover such payment. The recipients of these payments are advised that if they received a voidable transfer, they may be sued whether or not they vote to accept the Plan. All avoidance actions and rights pursuant to §§ 506(c), 510, 542, 543, 544, 545, 547, 548, 549, 550, 551, 552(b), 553 and 724 of the Bankruptcy Code and all causes of action under state, federal or other applicable law shall be retained and may be prosecuted or settled by the Reorganized Debtor in its sole discretion.

ARTICLE XVII VOTING PROCEDURES AND REQUIREMENTS

A. Ballots and Voting Deadline

A ballot to be used to vote to accept or reject the Plan is enclosed. A Creditor who is voting must (1) carefully review the ballot and instructions thereon, (2) complete and execute the ballot indicating the Creditor’s vote to either accept or reject the Plan, and (3) return the executed ballot to the address indicated thereon by the deadline specified by the Bankruptcy Court.

The Bankruptcy Court has directed that, to be counted for voting purposes, ballots for the acceptance or rejection of the Plan must be received by the Debtor no later than November 18, 2020, at 5:00 p.m. Central Time.

If you hold an impaired Claim against the Debtor return your ballot to:

Jackson Walker LLP 1401 McKinney Street, Suite 1900 Houston, TX 77010 Attention: Jennifer F. Wertz Phone: 512-236-2247 Fax: 512-391-2147 Email: [email protected]

TO BE COUNTED, YOUR BALLOT MUST BE RECEIVED NO LATER THAN

NOVEMBER 18, 2020, AT 5:00 P.M. CENTRAL TIME.

B. Creditors Entitled to Vote

Any (i) Creditor whose Claim is impaired and (ii) Interest Holder whose Interest is impaired under the Plan is entitled to vote, if either (1) the Debtor has scheduled its Claim on its Statement of Liabilities and such Claim is not scheduled as disputed, contingent or unliquidated, or (2) such Creditor has filed a Proof of Claim on or before the last date set by the Bankruptcy Court for filing Proofs of Claim and no objection has been filed to such Claim.

Holders of Disputed Claims are not entitled to vote on the Plan. Any Claim to which an objection has been filed and remains pending, is not entitled to vote unless the Bankruptcy Court, upon motion by the Creditor who holds a Disputed Claim, temporarily allows the Claim in an amount that it deems proper for accepting or rejecting the Plan. Any such motion must be heard and determined by the Bankruptcy Court before the date established by the Bankruptcy Court as the final date to vote on the Plan. In addition, a vote may be disregarded if the Bankruptcy Court determines that the acceptance or rejection of the Plan by the Creditor was not solicited or obtained in good faith or according to the provisions of the Bankruptcy Code.

Classes of Claims that are not impaired are deemed to have accepted a plan of reorganization pursuant to § 1126(f) and, therefore, are not entitled to vote on a plan. Pursuant to § 1126, only classes of claims or interests that are “impaired” are entitled to vote on a plan of reorganization. Generally, a claim is impaired if the plan of reorganization alters the legal, equitable, or contractual rights to which the holder of such claim is otherwise entitled.


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C. Voting Procedures

Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, revocation, or withdrawal of ballots will be determined by the Debtor, in its sole discretion, and the Debtor’s determination will be final and binding. The Debtor also reserves the right to reject any ballot not in proper form, the acceptance of which would, in the opinion of the Debtor or its counsel, be unlawful. The Debtor further reserves the right to waive any defects or irregularities or conditions or delivery as to any particular ballot. The interpretation by the Debtor of the provisions of this Plan and Disclosure Statement and the ballots will be final and binding on all parties in interest unless otherwise directed by the Bankruptcy Court. Unless waived, any defects or irregularities concerning deliveries of ballots must be cured within such time as the Debtor (or the Bankruptcy Court) determine. Neither the Debtor nor any other Person will be under any duty to provide notification of defects or irregularities with respect to deliveries of ballots nor will any of them incur any liability for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of ballots will not be deemed to have been made and will be invalidated unless or until all defects and irregularities have been timely cured or waived.

D. Vote Required for Class Acceptance

The Bankruptcy Code defines acceptance of a chapter 11 plan by a class of Claims as the acceptance by holders of at least two-thirds (2/3) in dollar amount and more than one-half in number of the allowed Claims of the class actually voting to accept or reject the proposed plan. The Bankruptcy Code defines acceptance of a chapter 11 plan by a class of Interests as the acceptance by holders of at least two-thirds (2/3) in amount of the allowed Interests in the class actually voting to accept or reject the proposed plan.

E. Cramdown and Withdrawal of the Plan

If the Plan is not accepted by all Classes of impaired Creditors, the Debtor reserves the right to withdraw the Plan. If the Plan is accepted by one or more Classes of impaired Creditors of the Debtor, the Debtor reserve the right to request the Bankruptcy Court to approve the Plan under 11 U.S.C. § 1129(b).

ARTICLE XVIII CONCLUSION, RECOMMENDATION, AND CONFIRMATION REQUEST

The Debtor believes that confirmation of the Plan is desirable and in the best interests of all holders of Claims and Interests. The Debtor therefore urges you to vote to accept the Plan and to evidence such acceptance by returning your ballot so it will be received by the deadline.

The Debtor requests confirmation of this Plan pursuant to section 1129 of the Bankruptcy Code.

Dated: November 19, 2020

Respectfully submitted, Volusion, LLC By: /s/ Troy Pike Name: Troy Pike Title: Interim Chief Executive Officer


Exhibits

Exhibit A Forbearance Agreement Exhibit B Sale Milestones Exhibit C October Monthly Operating Report


Exhibit A Forbearance Agreement

[attached]


SECOND FORBEARANCE AGREEMENT

THIS SECOND FORBEARANCE AGREEMENT (hereinafter, this “Agreement”) is made as of [*], 2020, by and among Volusion, LLC, a Delaware limited liability company (the “Company”), and each of the Company’s Subsidiaries (other than Excluded Subsidiaries) party to the Loan Agreement (defined below) (together with the Company, each a “Borrower” and collectively, the “Borrower”), KSCO Holdings, Inc., a Texas corporation (“KSCO” and together with Borrower, the “Loan Parties”), the financial institutions party to the Loan Agreement as Lenders (each a “Lender” and collectively, the “Lenders”), and Main Street Capital Corporation, as Administrative Agent and Collateral Agent for itself and the Lenders (in such capacity, the “Agent”). The Loan Parties, the Lenders, and the Agent may hereafter be referred to individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, the Borrower entered into that certain Amended and Restated Loan

Agreement, dated November 23, 2016, among the Borrower, the Lenders, and the Agent (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”);

WHEREAS, prior to July 22, 2020, the Lenders and the Agent alleged that certain Events of Default under the Loan Agreement have occurred and are continuing, including, without limitation, the Borrower’s failure to pay the Principal Debt on the Maturity Date (collectively, the “Initial Defaults”), and the Lenders, through the Agent, have exercised certain, but not all, of their rights and remedies under the Loan Documents as a result thereof;

WHEREAS, on July 22, 2020, the Borrower, the Lenders, and the Agent entered into that certain forbearance letter agreement (the “First Forbearance Agreement”) pursuant to which the Lenders agreed to forbear from any further exercise of their rights and remedies solely against Borrower as a result of the Initial Defaults pursuant to the terms thereof;

WHEREAS, on July 27, 2020, the Company commenced a Chapter 11 Case in the United States Bankruptcy Court for the Southern District of Texas, Laredo Division (the “Bankruptcy Case”), assigned case number 20-50082 (DRJ), captioned In Re: Volusion, LLC;

WHEREAS, various Events of Default under the Loan Agreement have occurred and are continuing under the Loan Agreement, all of which are set forth on Exhibit “A” attached hereto (collectively, the “Existing Defaults”); and

WHEREAS, the Parties have agreed to support a Plan of Reorganization (the “Plan”) for the Borrower; and subject to such Plan becoming effective on the Effective Date (as such term is defined in the Plan) the Parties hereto have agreed to enter into concurrent with the Effective Date this Agreement pursuant to which the Borrower has requested that the Lenders and the Agent forbear from any further exercise of their rights and remedies under the Loan Documents as a result of the Existing Defaults, and the Lenders and the Agent are willing to forbear from any further exercise of their rights and remedies with respect to the Existing Defaults, on the terms specifically set forth herein and for the consideration set forth herein.


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NOW, THEREFORE, in consideration of the premises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

ARTICLE I

Definitions

1.01 Capitalized terms used in this Agreement, to the extent not otherwise defined herein, shall have the same meaning as in the Loan Agreement or the Plan, as applicable.

ARTICLE II

Existing Defaults 2.01 Existing Defaults. The Loan Parties hereby acknowledge, confirm and agree that (a) each Existing Default has occurred and is continuing, (b) each Existing Default constitutes a Default under and as defined in the Loan Agreement, and (c) as a result of such Existing Defaults, the Agent and Lenders are entitled to exercise their rights and remedies pursuant to and subject to the terms and conditions of the Loan Documents subject to the Bankruptcy Case. The Loan Parties, and by their acceptance hereof, the Agent and the Lenders, acknowledge and agree that as of the date hereof they have no knowledge of any Default other than the Existing Defaults and the continuation of the Forbearance shall be governed by the terms hereof, including the terms set forth in Section 5.02 and Section 5.03 with respect to the termination thereof upon the occurrence of certain events and the documents referenced herein.

ARTICLE III

Forbearance; Certain Agreements

3.01 In reliance upon the representations, warranties and covenants of the Loan Parties contained in this Agreement and subject to the terms and conditions of this Agreement and any document or instrument executed in connection herewith, the Agent and Lenders hereby agree to forbear, from the date hereof until the earlier to occur of (a) 5:00 p.m. (Central time) on June 30, 2021, and (b) the date this Agreement otherwise terminates pursuant to the terms and conditions set forth herein (the “Forbearance Termination Date”), from exercising their rights and remedies under the Loan Documents or otherwise at law or in equity against the Loan Parties arising as a result of the Existing Defaults (the “Forbearance”).

3.02 In addition to the Agent and the Lenders’ agreement to forbear from the exercise of their rights and remedies against the Borrower until the Forbearance Termination Date pursuant to Sections 3.01 above, subject to the terms and conditions of this Agreement (including, without limitation, Sections 5.02 and 5.03 hereof) and any document or instrument executed in connection herewith, the Agent and the Lenders also agree to forbear from the exercise of their rights and remedies against KSCO under the Loan Documents to which it is a party or otherwise at law or in equity until the Forbearance Termination Date, subject to KSCO’s compliance with the terms of this Agreement and the Plan.

3.03 Nothing contained in this Agreement shall be construed as a waiver or forgiveness by the Agent or Lenders, or as a cure of, (x) the Existing Defaults, (y) any other Default under and as


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defined in the Loan Agreement or (z) any Forbearance Event of Default (as defined herein) under this Agreement, in each instance whether now existing or hereafter occurring, as against or with respect to the Loan Parties. The Forbearance shall terminate on the Forbearance Termination Date, and at any time from and after the Forbearance Termination Date, the Agent and Lenders shall be entitled to exercise their rights and remedies under this Agreement and the Loan Documents without notice, except as provided herein, so long as any Existing Default or any other Default or Forbearance Event of Default shall be continuing. Except as limited and/or modified by this Agreement, the Plan, and by the documents executed in connection herewith, the Loan Documents shall be deemed to be in full force and effect during the period of this Agreement, and all provisions of the Loan Documents relating to the rights and remedies of all parties thereto shall continue to be in effect until such time as all Obligations have been finally paid in full in cash.

ARTICLE IV

Other Agreements

4.01 Confirmation of Existing Indebtedness and Ratification of Loan Documents.

(a) The Loan Parties hereby unconditionally acknowledge and confirm that, as of the date hereof, Borrower is in default under the Loan Documents as set forth above and that the Borrower is absolutely and unconditionally liable and indebted to the Lender for all existing and future indebtedness evidenced by the Loan Documents, without claim, counterclaim, right of recoupment, defense or set-off of any kind or nature whatsoever, which indebtedness, as of the date hereof, is in the amount of [$_________].

(b) The Loan Parties unconditionally ratify, confirm and reaffirm, in all

respects and without condition, all of the terms, covenants and conditions set forth in the Loan Documents and hereby acknowledge, confirm, and agree that the Loan Parties remain unconditionally liable to Lenders in accordance with the respective terms, covenants and conditions of such instruments, agreements and documents and that the Agent has and shall continue to have valid, enforceable and perfected first-priority liens upon and security interests in all of the collateral heretofore granted to the Agent, for the benefit of the Lenders, pursuant to the Loan Documents or otherwise granted to or held by the Agent, for the benefit of the Lender, and that the same shall continue to secure the Obligations as the same may be modified by the terms of this Agreement and the Plan.

(c) Neither this Agreement nor any other agreement entered into in connection herewith or pursuant to the terms hereof shall be deemed or construed to be a compromise, satisfaction, reinstatement, accord and satisfaction, novation, or release of any of the Loan Documents or any obligations of any Obligor thereunder, or a waiver by Lender of any of its rights under the Loan Documents or at law or in equity. (d) Lender has no further obligation to advance any additional moneys under the Loan Documents. (e) Except as specifically provided herein, neither this Agreement nor any other agreement executed in connection herewith or pursuant to the terms hereof, nor any actions taken pursuant


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to this Agreement or such other agreement shall be deemed to cure the Existing Defaults, or to be a waiver by Lender of the Existing Defaults, or of any rights or remedies in connection therewith or with respect thereto, it being the intention of the parties hereto that the obligations of the Loan Parties with respect to the Loan Documents are and shall remain in full force and effect. (f) All liens, security interests, rights, and remedies granted to Lender in the Loan Documents are hereby renewed, confirmed, and continued, and shall also secure the performance by Obligors of their obligations hereunder. (g) If at any time a payment or payments made by Borrower on any part of the Obligations are subsequently invalidated, declared to be fraudulent or preferential, and are set aside or are required to be repaid to a trustee, receiver, or any other person or entity under the Bankruptcy Code or any state or federal law, common law or equitable cause, then to the extent of such payment or payments, the Obligations intended to be satisfied shall be revived and continued in full force and effect as if such payment or payments had not been made.

4.02 Interest. During the period commencing on the date hereof and ending on the Forbearance Termination Date (the “Forbearance Period”), all outstanding Obligations shall accrue interest at the non-Default Rate under the Loan Documents, all of which shall be due and owing in full at the expiration of the Forbearance Period; provided, however, upon the occurrence of a Forbearance Event of Default, interest will accrue at the Default Rate. Commencing on the Forbearance Maturity Date (including, for the avoidance of doubt, as a result of a Forbearance Event of Default), and continuing thereafter until the Obligations are indefeasibly paid or otherwise satisfied in full by virtue of the exercise by Agent and/or the Lenders of their rights and remedies under the Loan Documents including, without limitation, their right to foreclose on all collateral pledged to the Agent and the Lenders to secure the Borrower’ obligations to the Agent and the Lenders under the Loan Documents (or the peaceful surrender thereof by Borrower, guarantor and/or pledgor under the Loan Documents), the Loan shall accrue interest at the Default Rate.

4.03 Monthly Interest Payments.

(a) If at the time of a monthly interest payment due date under the Loan

Documents, the Company’s cash balance is less than $3,000,000, then the Company will make a cash payment to the Agent and the Lenders equal to fifty percent (50%) of the monthly interest payment then due. The remaining fifty percent (50%) of the then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Loan and accrue interest in accordance with Section 4.02 above.

(b) If at the time of a monthly interest payment due date under the Loan

Documents, the Company’s cash balance is less than $2,500,000, then the Company will make a cash payment to the Agent and the Lenders equal to twenty-five percent (25%) of the monthly interest payment then due. The remaining seventy-five percent (75%) of the then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Loan and accrue interest in accordance with Section 4.02 above.

(c) If at the time of a monthly interest payment due date under the Loan


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Documents, the Company’s cash balance is less than $2,000,000, then the Company will not be required to make a cash payment to the Agent and the Lenders and the entire amount of then then due monthly interest payment will be accrued and added to the then outstanding principal balance of the Loan and accrue interest in accordance with Section 4.02 above.

ARTICLE V

Conditions Precedent and Additional Covenants

5.01 Conditions to Effectiveness. Notwithstanding anything herein to the contrary, the Forbearance shall be effective upon the Parties having executed and delivered this Agreement, and the Effective Date of the Plan.

5.02 Failure to Comply; Default. If Borrower or KSCO fails to comply with the terms of this Agreement or the Plan or should there occur any Default (other than the Existing Defaults) pursuant to the Loan Documents, such occurrence shall be considered an event of default hereunder (a “Forbearance Event of Default”). The occurrence of a Forbearance Event of Default shall entitle Lender, without further notice or demand, to terminate the Forbearance and pursue all of the rights and remedies set forth in the Loan Documents as well as those rights that are available to Lender at law or in equity, or pursuant to the Plan.

5.03 Covenants Upon Which Continuing Effectiveness of Forbearance is Conditioned. Unless each of the following covenants shall be and shall continue to be fully satisfied, at the Lenders’ option, the Forbearance shall terminate (each covenant being separate and independent of each other covenant, such that the satisfaction of any one or more, or the waiver of satisfaction by the Lenders of any one or more, shall not affect the absolute obligation of Borrower to satisfy each separate covenant):

(a) No breach, default (excluding the Existing Defaults), or failure to perform

under this Agreement shall occur and be continuing. (b) No Forbearance Event of Default shall occur or be continuing. (c) No Material Adverse Event shall occur and be continuing.

(d) The representations and warranties contained in this Agreement shall be

true and correct in all material respects. (e) The Borrower shall continue to operate its businesses in their ordinary

course consistent with past practice and the terms of the Plan unless otherwise consented to by the Agent and the Lenders.

(f) The Borrower and KSCO shall comply with all of the terms and

provisions of the Plan. (g) Except with respect to the Existing Defaults or as otherwise stated herein,

the Borrower shall comply with all of the terms and provisions of the Loan Documents.


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5.04 Failure of Covenant/Condition. The termination by the Lenders of the Forbearance pursuant to Section 5.02 or Section 5.03 above shall release the Agent and the Lenders from any obligation arising hereunder and shall entitle the Agent and the Lenders to exercise any and all of their rights and remedies available under the Loan Documents. Following the date that the Forbearance shall become effective, the failure of the Borrower to satisfy or continue to satisfy any covenant or other condition in this Agreement shall constitute a Default under and as defined in the Loan Agreement and a default under this Agreement, and upon such occurrence and continuance, the Agent and Lenders shall be entitled to terminate the Forbearance and to exercise any and all of their rights and remedies under the Loan Documents or at law or in equity.

ARTICLE VI

No Waiver

6.01 Subject to the Forbearance hereunder, nothing contained herein shall be construed as a waiver by the Agent or any Lender of any covenant or provision of the Loan Agreement, the other Loan Documents, this Agreement, or of any other contract or instrument between Borrower or KSCO, on the one hand, and the Agent or any Lender, on the other hand, and the failure by the Agent or any Lender at any time or times hereafter to require strict performance by Borrower or KSCO of any provision thereof shall not waive, affect or diminish any right of the Agent or such Lender to thereafter demand strict compliance therewith. Subject to the Forbearance hereunder, the Agent and each Lender hereby reserves all rights granted under the Loan Agreement, the other Loan Documents, this Agreement and any other contract or instrument between Borrower and/or KSCO, on the one hand, and the Agent and Lenders, on the other hand. This Agreement is not to be construed as a cure, waiver or forgiveness of any Existing Default or of any other Default under and as defined in the Loan Agreement now existing or hereafter arising.

ARTICLE VII

Ratifications, Representations and Warranties

7.01 Ratifications. For the period during which the Forbearance is effective, the terms and provisions set forth in this Agreement and the Plan shall modify and supersede all inconsistent terms and provisions set forth in the Loan Documents, and except as expressly modified and superseded by this Agreement and the Plan, the terms and provisions of the Loan Documents are ratified and confirmed and shall continue in full force and effect. The Loan Parties hereby agree that the Loan Agreement, as amended hereby, and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.

7.02 Representations and Warranties. Each of the Loan Parties hereby represents and warrants to the Agent and the Lenders that (a) the execution, delivery and performance of this Agreement, the Plan, and any and all other Loan Documents executed and/or delivered in connection herewith and therewith have been authorized by all requisite limited partnership, limited liability company or corporate action, as applicable, and will not violate the organizational documents or governing documents of such party; and (b) each of the Loan Parties at the Agent’s or any Lender’s request, shall promptly execute or cause to be executed and shall deliver to the Agent and the Lenders any and all reasonably requested documents, instruments and agreements deemed necessary by the Agent or any Lender to give effect to or


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carry out the terms or intent of this Agreement and the Plan.

7.03 Power and Authority. Subject to the Pledge Agreement, KSCO hereby represents and warrants that Sproles has full power and authority to cause KSCO to comply with the terms of this Agreement and the Plan.

ARTICLE VIII

Miscellaneous Provisions

8.01 Legal Fees/Costs. All legal fees and other charges and costs incurred by Agent and the Lenders following the occurrence of a Forbearance Event of Default shall be added to the principal balance of the Loan and shall bear interest at the Default Rate.

8.02 Acceptance of Payments. Any and all payments delivered to Lender by or on behalf of the Borrower, whether or not required hereunder, whether partial or full payments, and whether or not a Default under and as defined in the Loan Agreement or a Forbearance Event of Default has occurred, may nevertheless be accepted by Lender without prejudice to its rights and remedies hereunder or under the Loan Documents.

8.03 No Impairment of Collateral. Nothing herein contained shall impair any rights of the Agent and/or the Lenders with respect to any Collateral heretofore, now or hereafter pledged to the Agent and/or the Lenders as security for the Obligations.

8.04 Survival of Representations and Warranties. The representations and warranties made in this Agreement, including, without limitation, any document furnished in connection with this Agreement, shall survive the execution and delivery of this Agreement, and no investigation by the Agent or any Lender, or any closing shall affect such representations and warranties or the right of the Agent and Lenders to rely upon them.

8.05 Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

8.06 Successors and Assigns; No Third Party Beneficiaries. This Agreement is binding upon and shall inure to the benefit of each party hereto and their respective successors and assigns, provided that neither the Borrower nor KSCO may assign or transfer any of their rights or obligations hereunder without the prior written consent of the Agent and each Lender. Except as expressly provided in the preceding sentence, neither this Agreement nor any of the provisions hereof shall inure to the benefit of any Person other than the parties hereto.

8.07 Counterparts. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart to this Agreement by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart to this Agreement.


8

8.08 Effect of Waiver. No consent or waiver, express or implied, by the Agent or any Lender to or for any breach of or deviation from any covenant or condition by Borrower or KSCO shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or duty.

8.09 Headings. The headings, captions, and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

8.10 Applicable Law. This Agreement and any other Loan Documents executed pursuant hereto shall be deemed to have been made and to be performable in and shall be governed by and construed in accordance with the laws of the State of Texas. Each of the Parties hereby submits to the sole and exclusive jurisdiction of the Bankruptcy Court in any action or proceeding arising out of relating to this Agreement and agrees that all claims in respect of the action or proceeding shall be heard and determined in any such Court.

8.11 Final Agreement. This Agreement and the Loan Documents represent the entire agreement of the Parties with respect to the subject matter hereof on the date this Agreement is executed. This Agreement and the Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the Parties. There are no unwritten oral agreements between the Parties. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement signed by each Party hereto.

8.12 RELEASE. EACH OF THE LOAN PARTIES HEREBY ACKNOWLEDGES THAT IT, HE OR SHE, AS APPLICABLE, HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “LOAN” OR ANY “OBLIGATIONS” (AS DEFINED IN THE LOAN AGREEMENT) OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR ANY LENDER. EACH OF THE LOAN PARTIES HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE LENDERS, AND THEIR RESPECTIVE PREDECESSORS, AGENTS, ADVISORS, EMPLOYEES, SUCCESSORS AND ASSIGNS (THE “RELEASEES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND OBLIGATIONS WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY (“CLAIMS”), ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AGREEMENT IS EXECUTED, WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE AGAINST ANY OF THE RELEASEES, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING IN CONNECTION WITH THIS AGREEMENT OR THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER


9

THE LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION 8.12 SHALL SURVIVE TERMINATION OF THE FORBEARANCE PERIOD AND TERMINATION OF THIS AGREEMENT.

8.13 COVENANT NOT TO SUE. EACH OF THE LOAN PARTIES HEREBY ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY, COVENANTS AND AGREES WITH AND IN FAVOR OF EACH RELEASEE THAT IT, HE OR SHE, AS APPLICABLE, WILL NOT SUE (AT LAW, IN EQUITY, IN ANY REGULATORY PROCEEDING OR OTHERWISE) ANY RELEASEE ON THE BASIS OF ANY CLAIM RELEASED, REMISED AND DISCHARGED BY SUCH PARTY PURSUANT TO SECTION 8.12 ABOVE. IF ANY SUCH PARTY VIOLATES THE FOREGOING COVENANT, SUCH PARTY, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, AND ITS PRESENT AND FORMER SHAREHOLDERS, AFFILIATES, SUBSIDIARIES, DIVISIONS, PREDECESSORS, DIRECTORS, OFFICERS, ATTORNEYS, EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES, AGREES TO PAY, IN ADDITION TO SUCH OTHER DAMAGES AS ANY RELEASEE MAY SUSTAIN AS A RESULT OF SUCH VIOLATION, ALL ATTORNEYS' FEES AND COSTS INCURRED BY ANY RELEASEE AS A RESULT OF SUCH VIOLATION. THE PROVISIONS OF THIS SECTION 8.13 SHALL SURVIVE TERMINATION OF THE FORBEARANCE PERIOD AND TERMINATION OF THIS AGREEMENT.

8.14 Reviewed by Attorneys. Each of the Loan Parties hereby represents and warrants to the Agent and the Lenders that it, he or she, as applicable, (a) understands fully the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (b) has been afforded an opportunity to discuss this Agreement with, and have this Agreement reviewed by, such attorneys and other persons as such party may wish, and (c) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge and agree that neither this Agreement nor the other documents executed pursuant hereto shall be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.

8.15 Loan Document. This Agreement shall be deemed to constitute a Loan Document for all purposes and in all respects.

8.16 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

[signature pages follow]


IN WITNESS WHEREOF, the parties have caused this Second Forbearance Agreement to be duly executed as of the date first written above.

Volusion, LLC,

a Delaware limited liability company

By: ___________________

Name:

Title:

Main Street Capital Corporation,

a Maryland corporation, as Agent and Lender

By: ___________________

Name:

Title:

HMS Income Fund, Inc., a Maryland corporation

By: ___________________

Name:

Title:

KSCO Holdings, Inc.

By: __________________

Name: Kevin Sproles

Title:


Exhibit “A”

Existing Defaults

Capitalized terms used in this Exhibit A, to the extent not otherwise defined herein, shall have the same meaning as in the Loan Agreement.

1. All Section references in this Section 1 are cross references to the Loan Agreement.

a. Section 11.1 (Payment Obligations) i. Failure to pay the Principal Debt on the Maturity Date; and

ii. Failure to pay scheduled interest payments within 3 Business Days of the due

date for the months of April 2020, May 2020, June 2020, July 2020, August 2020, September 2020, and October 2020.

b. Section 11.2 (Covenants)

i. Breach of the covenants set forth in Section 8.14(b) of the Loan Agreement in regards to Borrower’s failure to give the Lender Representatives notice of the meeting of the Board held late within the first quarter of 2020 and failure to provide to the Lender Representatives the notices, documents and information furnished to the Board Members in connection with such Board meeting, including copies of the minutes of such meeting at the time such minutes were furnished to the Board Members.

ii. Breach of the covenants set forth in Section 8.1 of the Loan Agreement with respect to (a) the delivery to Lender of reviewed financial statements for the Borrower’s fiscal year ending December 31, 2019 and (b) the delivery of internally-certified unaudited financial statements within 30 days of the last day of March 2020 and April 2020 (Section 8.1(b)).

iii. Breach of the covenant set forth in Section 9.22 of the Loan Agreement with respect to the establishment of new bank accounts without the execution and delivery of Deposit Account Control Agreements relating to such accounts and the subsequent diversion of funds into such new bank accounts.

2. All defaults set forth in that certain letter agreement from Main Street Capital Corporation to Volusion, LLC, dated March 7, 2020, are hereby incorporated by reference.


Exhibit B Sale Milestones

[filed under seal]


Exhibit C October Monthly Operating Report

[attached]


United States Bankruptcy Court

Southern and Western District of Texas

Laredo Division

MOR‐1

Petition Date: 7/27/2020

Case Name: Volusion, LLC Case Number: 20‐50082

Monthly Operating Report Summary for Month of October 2020

Filing Date to July

31, 2020

Month of August

2020

Month of

September 2020

Month of October

2020

Revenues (MOR‐6) 2,586,344$ 2,875,414$ 3,013,357$ 2,863,585$

Income Before Int, Depreciation, Tax (MOR‐6) (1) 1,390,628 152,828 407,239 288,580

Net Income (Loss) (MOR‐6) (1) 1,028,571 (209,362) 55,206 (70,933)

Payments to Insiders (MOR‐9) ‐ 108,575 131,227 112,168

Payments to Professionals (MOR‐9) ‐ ‐ ‐ ‐

Total Disbursements (MOR‐8) 22,728$ 1,897,471$ 2,934,615$ 2,833,393$

Are all accounts receivable being collected within terms? Yes No

Are all post‐petition liabilities, including taxes, being paid within terms? (2) Yes No

Have any pre‐petition liabilities been paid? Yes No

If so, describe:_________________________________________________________________

Are all funds received being deposited into DIP bank accounts? (3) Yes No

Were any assets disposed of outside the normal course of business? Yes No

If so, describe:_________________________________________________________________

Are all U.S. Trustee Quarter Fee Payments current? Yes No

What is the status of your Plan of Reorganization?____________________________________

______________________________________________________________________________

Required Insurance Maintained as of Signature Date Exp Date

Casualty 11/1/2021 Yes No

Liability 11/1/2021 Yes No

Vehicle 11/1/2021 Yes No

Worker's 11/1/2021 Yes No

Other 11/1/2021 Yes No

Attorney Name: Jennifer Wertz

Firm: Jackson Walker LLP

Address: 100 Congress Ave

Address: Suite 1100

City, State, Zip: Austin, TX, 78701

Telephone: 512‐236‐2247

Signed___________________________________

(Original Signature)

Title_____________________________________

Notes:

I certify under penalty of perjury that the following complete Monthly Operating Report (MOR), consisting of MOR‐1

through MOR‐9 plus attachments, is true and correct.

(2) All undisputed post‐petition liabilities, including taxes, are being paid within terms. There are a few open invoices that are subject to active conversations between the Debtor and the

vendor that are on hold and have not yet been paid.

(3) Funds are being deposited into the Debtor's accounts located at Frost Bank and Silicon Valley Bank. Silicon Valley Bank accounts have been designated as Debtor In Possession

accounts. The US Trustee is in contact with Frost Bank regarding making this designation to the Frost Bank accounts.

(1) A fee estimate was trued up for the month of September 2020 after filing of the MOR; this adjustment resulted in an increase to net income for the month in the amount of $38,000.

No further adjustments were made to prior periods.

Pre‐petition taxes and wages payable have been paid per Court orders received.

N/A

The Debtor filed its Plan of Reorganization

on November 2, 2020 with a confirmation hearing scheduled for November 20,2020.

Chief Restructuring Officer

1

Case 20-50082 Document 118 Filed in TXSB on 11/19/20 Page 1 of 9Case 20-50082 Document 128 Filed in TXSB on 11/20/20 Page 82 of 100Case 1:20-cv-00761-LY Document 39-3 Filed 04/12/22 Page 83 of 101



Laredo Division

MOR‐2


Comparative Balance Sheet

Assets

As of Filing Date

July 27, 2020

As of

July 31, 2020

As of

August 31, 2020

As of

September 30, 2020

As of

October 30, 2020

Current Assets

Cash 7,615,181$ 7,870,554$ 8,713,559$ 9,655,721$ 9,593,822$

Accounts Receivable Net 256,233 340,387 674,527 234,609 390,778

Inventory: Lower of Cost or Market ‐ ‐ ‐ ‐ ‐

Prepaid Expenses 992,907 873,580 798,644 773,245 747,205

Investments ‐ ‐ ‐ ‐ ‐

Deposits & Other Current Assets 235,908 612,352 622,762 486,723 437,146

Total Current Assets 9,100,230 9,696,873 10,809,492 11,150,297 11,168,950

Property, Plant & Equipment @ Cost 13,073,033 13,072,759 13,072,759 13,072,759 13,072,759

Less Accumulated Depreciation (12,237,077) (12,275,671) (12,314,231) (12,352,721) (12,388,223)

Net Book Value of Property, Plant & Equipment 835,957 797,088 758,528 720,038 684,536

Other Assets: ‐

1. Tax Deposits ‐ ‐ ‐ ‐ ‐

2. Investments in Subs 2 2 2 2 2

3. Intangibles 107,870 107,870 107,870 107,870 107,870

4. Deposits, Prepaids, Other 855,234 897,172 897,170 694,294 694,294

Total Assets 10,899,292$ 11,499,004$ 12,573,062$ 12,672,501$ 12,655,652$

2




Laredo Division

MOR‐3


Comparative Balance Sheet

Liabilities & Owner's Equity

As of Filing Date

July 27, 2020

As of

July 31, 2020

As of

August 31, 2020

As of

September 30, 2020

As of

October 30, 2020

Liabilities:

Post‐Petition Liabilities (MOR‐4) ‐$ 1,864,168$ 3,279,223$ 3,371,281$ 3,431,063$

Pre‐Petition Liabilities:

Notes Payable‐Secured 30,281,896 30,281,896 30,281,896 30,281,896 30,281,896

Priority Debt 128,017 128,017 87,024 39,199 33,502

Federal Income Tax ‐ ‐ ‐ ‐ ‐

FICA / Withholding / Deductions 90,644 90,644 ‐ ‐ ‐

Unsecured Debt 9,662,768 9,662,768 9,662,768 9,662,768 9,662,768

Other 2,416,382 2,416,382 2,416,382 2,416,382 2,416,382

Total Pre‐Petition Liabilities 42,579,707 42,579,707 42,448,070 42,400,245 42,394,548

Total Liabilities 42,579,707 44,443,874 45,727,294 45,771,526 45,825,611

Owner's Equity (Deficit):

Preferred Stock ‐ ‐ ‐ ‐ ‐

Common Stock 28,823,781 28,977,058 29,129,990 29,282,922 29,435,854

Additional Paid‐In Capital 732,132 732,132 732,132 732,132 732,132

Warrants 1,530,878 1,530,878 1,530,878 1,530,878 1,530,878

Retained Earnings: Filing Date (62,767,206) (62,767,206) (62,767,206) (62,767,206) (62,767,206)

Retained Earnings: Post Filing Date ‐ (1,417,733) (1,780,026) (1,877,752) (2,101,617)

Total Owner's Equity (Net Worth) (31,680,415) (32,944,870) (33,154,232) (33,099,026) (33,169,959)

Total Liabilities & Owner's Equity 10,899,292$ 11,499,004$ 12,573,062$ 12,672,501$ 12,655,652$

3




Laredo Division

MOR‐4


Schedule of Post‐Petition Liabilities

Trade Accounts Payable

As of

July 31, 2020

As of

August 31, 2020

As of

September 30, 2020

As of

October 30, 2020

Tax Payable

Federal Payroll Taxes 6,062$ 124,536$ ‐$ 3,586$

State Payroll & Sales 5,455 62,537 66,191 54,853

Ad Valorem Taxes ‐ ‐ ‐ ‐

Other Taxes 5,258 15,318 10,396 16,866

Total Taxes Payable 16,775 202,391 76,586 75,305

Secured Debt Post‐Petition ‐ ‐ ‐ ‐

Accrued Interest Payable 36,936 135,430 224,691 323,186

Accrued Professional Fees ‐ 332,888 587,775 693,056

Other Accrued Liabilities

1. Payroll 234,908 603,487 218,547 199,825

2. Trade Accounts 261,599 607,687 703,492 683,058

3. Deferred Revenue & Costs, Other 1,313,950 1,397,340 1,560,190 1,456,634

Total Post‐Petition Liabilities (MOR‐3) 1,864,168$ 3,279,223$ 3,371,281$ 3,431,063$

Note: Post‐petition liabilities are increasing due to the timing of payments, disputes and month‐end. Payments

continue to be made within terms and in accordance with bankruptcy guidelines.

4




Laredo Division

MOR‐5


Aging of Post‐Petition Liabilities

Month of October 2020

Days Total Trade Accounts Fed Taxes State Taxes

Ad‐Valorem,

Other Taxes Other

0‐30 3,397,767$ 649,763$ 3,586$ 54,853$ 16,866$ 2,672,700$

31‐60 1,262 1,262 ‐ ‐ ‐ ‐

61‐90 17,265 17,265 ‐ ‐ ‐ ‐

91+ 14,769 14,769 ‐ ‐ ‐ ‐

Total 3,431,063$ 683,058$ 3,586$ 54,853$ 16,866$ 2,672,700$

Aging of Accounts Receivable


Days Total Trade Accounts Fed Taxes State Taxes

Ad‐Valorem,

Other Taxes Other

0‐30 390,778$ 390,778$ ‐$ ‐$ ‐$ ‐$

31‐60 ‐ ‐ ‐ ‐ ‐ ‐

61‐90 ‐ ‐ ‐ ‐ ‐ ‐

91+ ‐ ‐ ‐ ‐ ‐ ‐

Total 390,778$ 390,778$ ‐$ ‐$ ‐$ ‐$

Note: Post‐petition liabilities are increasing due to the timing of payments, disputes and month‐end. Payments

continue to be made within terms and in accordance with bankruptcy guidelines.

5




Laredo Division

MOR‐6


Statement of Income (Loss)

Filing Date to July

31, 2020

Month of

August 2020

Month of

September 2020

Month of October

2020 Filing to Date

Revenue (MOR‐1) $2,586,344 $2,875,414 $3,013,357 $2,863,585 $11,338,700

Total Cost of Revenue 812,970 876,928 881,402 882,719 3,454,020

Gross Profit 1,773,374 1,998,486 2,131,955 1,980,866 7,884,680

Operating Expenses

Selling & Marketing 40,687 376,902 358,372 304,661 1,080,621

General & Administrative 308,824 1,055,383 980,230 1,086,175 3,430,612

Insiders Compensation 33,236 80,485 131,227 106,168 351,116

Professionals Fees ‐ 332,888 254,887 195,281 783,056

Other (Income) / Expense ‐ ‐ ‐ ‐ ‐

Total Operating Expenses 382,746 1,845,658 1,724,715 1,692,285 5,645,405

Income Before Int, Depr/Tax (MOR‐1) 1,390,628 152,828 407,239 288,580 2,239,276

Interest Expense 320,223 320,223 309,893 320,223 1,270,562

Depreciation 38,594 38,560 38,491 35,502 151,147

Other (Income) Expense (442) ‐ ‐ ‐ (442)

Other Items 3,681 3,407 3,650 3,789 14,527

Total Int, Depr & Other Items 362,056 362,190 352,033 359,514 1,435,794

Net Income Before Taxes 1,028,571 (209,362) 55,206 (70,933) 803,482

Federal Income Taxes ‐ ‐ ‐ ‐ ‐

Net Income (Loss) (MOR‐1) 1,028,571$ (209,362)$ 55,206$ (70,933)$ 803,482$

Note: A fee estimate was trued up for the month of September 2020 after filing of the MOR; this adjustment resulted in an increase to net income for the month in the amount of

$38,000. No further adjustments were made to prior periods.

6




Laredo Division

MOR‐7


Cash Receipts and Disbursements

Cash Receipts and Disbursements

Filing Date to July

31, 2020

Month of August

2020

Month of

September 2020

Month of October

2020 Filing to Date

1. Cash ‐ Beginning of Month 7,615,181$ 7,870,554$ 8,713,559$ 9,655,721$ 7,615,181$

Receipts:

2. Cash Sales ‐ ‐ ‐ ‐ ‐

3. Collection of Accounts Receivable 278,099 2,733,079 3,457,298 2,766,063 9,234,538

4. Loans & Advances ‐ ‐ ‐ ‐ ‐

5. Sale of Assets ‐ ‐ ‐ ‐ ‐

6. Other 2 7,398 419,479 5,431 432,310

Total Receipts 278,101 2,740,476 3,876,777 2,771,494 9,666,848

Disbursements:

7. Net Payroll ‐ 860,294 1,163,148 921,587 2,945,029

8. Payroll Taxes Paid 7,916 281,258 427,470 311,923 1,028,567

9. Sales, Use and Other Taxes Paid ‐ 40,993 52,651 71,678 165,321

10. Secured / Rental / Leases ‐ 71,720 77,633 77,686 227,039

11. Utilities ‐ 35,515 19,074 19,429 74,018

12. Insurance ‐ ‐ ‐ 2,836 2,836

13. Inventory Purchases ‐ ‐ ‐ ‐ ‐

14. Vehicle Expenses ‐ ‐ ‐ ‐ ‐

15. Travel & Entertainment ‐ ‐ ‐ ‐ ‐

16. Repairs, Maintenance & Supplies ‐ ‐ ‐ ‐

17. Administrative & Selling 14,812 305,275 785,905 1,051,867 2,157,860

18. Other ‐ Ordinary Course Consulting Fees ‐ ‐ 35,000 22,665 57,665

18. Other ‐ Adequate Protection (Interest) ‐ 187,755 187,755 188,085 563,596

18. Other ‐ Employee Benefits ‐ 102,660 173,979 137,238 413,877

Total Disbursements from Operations 22,728 1,885,471 2,922,615 2,804,993 7,635,807

19. Professionals Fees ‐ ‐ ‐ ‐ ‐

20. U.S. Trustee Fees ‐ ‐ ‐ 10,400 10,400

21. Other Reorganization Expenses ‐ Board Fees ‐ 12,000 12,000 18,000 42,000

Total Disbursements 22,728 1,897,471 2,934,615 2,833,393 7,688,207

22. Net Cash Flow 255,373 843,005 942,162 (61,899) 1,978,641

23. Cash ‐ End of Month 7,870,554$ 8,713,559$ 9,655,721$ 9,593,822$ 9,593,822$

7




Laredo Division

MOR‐8


Cash Account Reconciliation


Bank Name: Frost Bank Frost Bank Frost Bank Frost Bank

Silicon Valley

Bank

Silicon Valley

Bank

Silicon Valley

Bank

Silicon Valley

Bank

Silicon Valley

Bank

Texas Security

Bank

Texas Security

Bank Total

Account Number: ‐1768 ‐1911 ‐1776 ‐2144 ‐0909 ‐1447 ‐3995 ‐4003 ‐0811 ‐380 ‐956

Account Type:

Operating

Account

Merchant

Account Payroll Account

Deposit

Account

Dev Test

Account

MP Merchant

Account

Merchant

Account

Operating

Account MMA Collateral

Commercial

Checking

Account

Money Market

Account

Bank Balance 8,089,920$ 401,992$ 396,969$ 631,164$ 232$ 20,032$ 750$ 141,726$ 25,000$ 20,000$ 51$ 9,727,835$

Deposit in Transit ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Outstanding Checks (133,687) ‐ ‐ ‐ ‐ ‐ ‐ (326) ‐ ‐ ‐ (134,013)

Adjusted Bank Balance 7,956,232 401,992 396,969 631,164 232 20,032 750 141,400 25,000 20,000 51 9,593,822

Beginning Cash ‐ Per Books 6,975,093 943,328 325,247 577,111 63 20,032 802 768,974 25,000 20,000 71 9,655,721

Receipts ‐ 2,438,434 5,431 54,086 ‐ ‐ ‐ 273,543 0 ‐ ‐ 2,771,494

Transfers Between Accounts 2,579,742 (2,979,742) 1,300,000 ‐ 200 ‐ ‐ (900,200) (0) ‐ ‐ (0)

Checks / Other Disbursements (1,598,602) (28) (1,233,709) (33) (31) ‐ (52) (917) ‐ ‐ (20) (2,833,393)

Ending Cash ‐ Per Books 7,956,232$ 401,992$ 396,969$ 631,164$ 232$ 20,032$ 750$ 141,400$ 25,000$ 20,000$ 51$ 9,593,822$

8




Laredo Division

MOR‐9


Payments to Insiders

Insiders: Name Position / Comp Type

Filing Date to

July 31, 2020

Month of

August 2020

Month of

September 2020

Month of

October 2020

1. Bardia Dejban Former CEO / Payroll ‐$ 13,667$ ‐$ ‐$

2. Curt Lindeman Independent Manager / Manager Fee ‐ 6,000 6,000 12,000

3. Eric Sproles Founder's Relative (Solutions Engineer) / Payroll ‐ 5,436 8,154 5,436

4. Jeremy Rosenthal Independent Manager / Manager Fee ‐ 6,000 6,000 6,000

5. Kevin Sproles Founder and Former Chairman of the Board of Managers / Payroll ‐ 14,423 ‐ 14,683

6. Randon Kelly Vice President of Finance / Payroll ‐ 24,971 37,457 24,971

7. Roxanne Sproles Founder's Relative (Accounting Manager) / Payroll ‐ 5,078 7,616 5,078

8. Troy Pike Interim Chief Executive Officer / Manager Fee ‐ 33,000 66,000 44,000

Total Insiders (MOR‐1) ‐$ 108,575$ 131,227$ 112,168$

Payments to Professionals

Professionals: Name Order Date

Filing Date to

July 31, 2020

Month of

August 2020

Month of

September 2020

Month of

October 2020

1. Conway MacKenzie 9/24/2020 ‐$ ‐$ ‐$ ‐$

2. Jackson Walker 9/24/2020 ‐ ‐ ‐ ‐

Total Professionals (MOR‐1) ‐$ ‐$ ‐$ ‐$

Note: Monthly manager fees for Curt Lindeman in October 2020 represent two months of payment due to timing of payment.

9



LAREDO DIVISION

In re:

VOLUSION, LLC1

Debtor.

) ) ) ) ) ) )

Chapter 11

Case No. 20-50082 (DRJ)

NOTICE TO CONTRACT COUNTERPARTIES OF ASSUMPTION, OR ASSUMPTION

AND ASSIGNMENT, OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

PLEASE TAKE NOTICE THAT on November 3, 2020, the United States Bankruptcy Court for the Southern District of Texas (the “Court”) entered the Order Approving Debtor’s Emergency Motion for Entry of an Order (I) Conditionally Approving the Adequacy of the Disclosure Statement; (II) Approving the Solicitation and Notice Procedures with Respect to Confirmation of the Debtor’s Proposed Plan of Reorganization; (III) Approving the Form of Ballots, and Notices in Connection Therewith; (IV) Scheduling Certain Dates with Respect Thereto; and (V) Granting Related Relief [Docket No. 108] (the “Disclosure Statement Order”) (a) authorizing Volusion, LLC, as debtor and debtor in possession (the “Debtor”), to solicit votes on the Combined Plan of Reorganization and Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code (as may be modified, amended, or supplemented from time to time and including all exhibits and supplements, the “Disclosure Statement,” “Plan and Disclosure Statement” or “Plan”); (b) conditionally approving the Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code; (c) approving the solicitation materials and documents to be included in the solicitation packages (the “Solicitation Packages”); and (d) approving procedures for soliciting, receiving, and tabulating votes on the Plan and for filing objections to the Plan.2

The Combined Hearing will commence on November 20, 2020, at 10:00 a.m., prevailing Central Time, before the Honorable David R. Jones, Chief United States Bankruptcy Judge, in the United States Bankruptcy Court for the Southern District of Texas.

The Debtor hereby files the attached Schedule of Assumed Executory Contracts and Unexpired Leases (the “Assumption Schedule”) with the Court as part of the Plan. The Debtor or the Reorganized Debtor, as applicable, reserves the right to add to or remove an Executory Contract or Unexpired Lease from the Schedule of Assumed Executory Contracts and Unexpired Leases and move it to the Schedule of Rejected Executory Contracts and Unexpired Leases until the later of (a) the date by which objections to the proposed



2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Plan, Disclosure Statement, or Disclosure Statement Order, as applicable.


2

assumption must be filed or (b) if an objection is filed, prior to the date of a decision by the Bankruptcy Court with respect to that objection.

You are receiving this notice because the Debtor’s records reflect that you are a party to an Executory Contract(s) or Unexpired Lease(s) that is listed on the Assumption Schedule. You are advised to carefully review the information contained in this notice and the related provisions of the Plan, including the Assumption Schedule.3

Bankruptcy Code section 365(b)(1) requires a chapter 11 debtor to cure, or provide adequate assurance that it will promptly cure, any defaults under executory contracts and unexpired leases at the time of assumption. Accordingly, the Debtor has conducted a thorough review of its books and records and has determined the amounts required to cure defaults, if any, under the assumed Executory Contact(s) and Unexpired Lease(s), which amounts are listed in the Assumption Schedule. Please note that if no amount is stated for a particular Executory Contract or Unexpired Lease, the Debtor believes that there is no cure amount outstanding for such contract or lease.

If you object to the proposed assumption or assumption and assignment or if you disagree with the proposed Cure Claim, you must file an objection with the Bankruptcy Court and serve it no later than December 4, 2020 at 5:00 p.m., prevailing Central Time (the “Cure Objection Deadline”). Any objection must (a) be in writing; (b) conform to the Bankruptcy Rules, the Bankruptcy Local Rules, and any orders of the Court; (c) set forth the name and address of the objector and the nature and amount of Cure Claims held or asserted by the objector against the Debtor’s Estate or property; (d) state with particularity the legal and factual basis for the objection and, if practicable, a proposed modification that would resolve such objection; and (e) be filed with the Court and served upon the following parties so as to be actually received on or before the Cure Objection Deadline: (i) Jackson Walker LLP, 1401 McKinney Street, Suite 1900, Houston, Texas 77010, Attn.: Jennifer Wertz ([email protected]); (ii) counsel to the Secured Lenders, Cole Schotz P.C., Attn: Michael D. Warner ([email protected]); and (iii) each of the entities listed on the most recently filed Master Service List, which is available electronically (a) at no charge by requesting a copy from the Debtor’s counsel by emailing Jennifer Wertz ([email protected]) or calling Jennifer Wertz at 512-236-2247; or (b) for a fee via PACER at https://ecf.txsb.uscourts.gov/ (account required).

PLEASE TAKE FURTHER NOTICE THAT if no objection to (a) the Cure Claim(s) or (b) the proposed assumption or assumption and assignment of any Executory Contract or Unexpired Lease to which you are a counterparty is filed by the Cure Objection Deadline, then (i) you will be deemed to have stipulated that the Cure Claim as determined by the Debtor is correct, (ii) you will be forever barred, estopped, and enjoined from asserting any additional Cure Claim under the proposed assigned Executory Contract or Unexpired Lease, and (iii) you will be

3 Neither the exclusion nor inclusion of any Executory Contract or Unexpired Lease on the Assumption Schedule,

nor anything contained in the Plan, the Plan Supplement, or the Debtor’s schedule of assets and liabilities, shall constitute an admission by the Debtor that any such contract or lease is in fact an Executory Contract or Unexpired Lease capable of assumption, that the Debtor or Reorganized Debtor has any liability thereunder, or that such Executory Contract or Unexpired Lease is necessarily a binding and enforceable agreement. Further, the Debtor or Reorganized Debtor, as applicable, expressly reserves the right to (a) add to or remove any Executory Contract or Unexpired Lease from the Assumption Schedule and reject such Executory Contract or Unexpired Lease pursuant to the terms of the Plan, at any time through the Effective Date and (b) dispute any Cure Claim asserted in connection with assumption of any Executory Contract or Unexpired Lease.


3

forever barred, estopped, and enjoined from objecting to any assumption or assumption and assignment of the Executory Contract or Unexpired Lease to which you are a counterparty.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the date that the Debtor assumes such Executory Contract or Unexpired Lease. Any Proofs of Claim filed with respect to an Executory Contract or Unexpired Lease that has been assumed shall be deemed disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court.

On the Effective Date, except as otherwise provided in the Plan, all Executory Contracts or Unexpired Leases will be deemed assumed, in accordance with the provisions and requirements of Bankruptcy Code §§ 365 and 1123, other than: (1) those that are identified on the Schedule of Rejected Executory Contracts and Unexpired Leases; (2) those that have previously been rejected by a Final Order; (3) those that are the subject of a motion to reject an Executory Contract or Unexpired Lease that is pending on the Confirmation Date; or (4) those that are subject to a motion to reject an Executory Contract or Unexpired Lease pursuant to which the requested effective date of such rejection is after the Effective Date.

Please review the Plan and Disclosure Statement for details regarding the possible assumption, assumption and assignment, and rejection of executory contracts and unexpired leases. You may wish to seek legal advice concerning the Plan and the Plan’s treatment of your executory contract or unexpired lease.

November 19, 2020 /s/ Jennifer F. Wertz Matthew D. Cavenaugh (TX Bar No. 24062656) Jennifer F. Wertz (TX Bar No. 24072822)

JACKSON WALKER LLP 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: [email protected] Email: [email protected] COUNSEL FOR THE DEBTOR AND

DEBTOR IN POSSESSION


4

Certificate of Service

I certify that on the 19th day of November 2020, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas, and via email to the affected parties on the attached list.

/s/ Jennifer F. Wertz Jennifer F. Wertz


5

Schedule 6

List of Assumed Contracts or Unexpired Leases

Counterparty Description of Contract/Unexpired

Lease

Counterparty Address

Cure

AKF3 Kramer, LLC Lease Agreement Between PR Braker, LLC, as Landlord, and Volusion, Inc., as Tenant, as amended pursuant to the First Amendment to Lease Agreement dated February 14, 2017, and pursuant to the Rental Deferral Agreement dated June 11, 2020 (the “Facility Lease”).

AK4 Kramer, LLC c/o Deborah M. Perry Munsch Hardt Kopf & Harr, P.C. 500 N. Akard Street, Suite 3800 Dallas, Texas 75201-6659 and

Beth M. Brownstein Arent Fox 1301 Avenue of the Americas New York, New York 10019

$35,817.87

Precourt Sports Ventures, LLC

Sublease Agreement entered into effective as of December 17, 2019 (the “Facility Sublease”).

Attn: Andy Loughnane President, Austin FC 1835-A Kramer Lane, Suite 600 Austin, Texas 78758

$0

Impact Tech, Inc. Referral and Affiliate Program Platform and Related Services agreement dated as of January 2, 2020.

223 E. De La Guerra Santa Barbara, CA 93101

$13,997.53



LAREDO DIVISION

In re:

VOLUSION, LLC1

Debtor.

) ) ) ) ) ) )

Chapter 11

Case No. 20-50082 (DRJ)

NOTICE TO CONTRACT COUNTERPARTIES OF REJECTION

OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

PLEASE TAKE NOTICE THAT on November 3, 2020, the United States Bankruptcy Court for the Southern District of Texas (the “Court”) entered the Order Approving Debtor’s Emergency Motion for Entry of an Order (I) Conditionally Approving the Adequacy of the Disclosure Statement; (II) Approving the Solicitation and Notice Procedures with Respect to Confirmation of the Debtor’s Proposed Plan of Reorganization; (III) Approving the Form of Ballots, and Notices in Connection Therewith; (IV) Scheduling Certain Dates with Respect Thereto; and (V) Granting Related Relief [Docket No. 108] (the “Disclosure Statement Order”) (a) authorizing Volusion, LLC, as debtor and debtor in possession (the “Debtor”), to solicit votes on the Combined Plan of Reorganization and Disclosure Statement of Volusion, LLC Pursuant to Chapter 11 of the Bankruptcy Code (as may be modified, amended, or supplemented from time to time and including all exhibits and supplements, the “Disclosure Statement,” “Plan and Disclosure Statement” or “Plan”); (b) conditionally approving the Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code; (c) approving the solicitation materials and documents to be included in the solicitation packages (the “Solicitation Packages”); and (d) approving procedures for soliciting, receiving, and tabulating votes on the Plan and for filing objections to the Plan.2

The Combined Hearing will commence on November 20, 2020, at 10:00 a.m., prevailing Central Time, before the Honorable David R. Jones, Chief United States Bankruptcy Judge, in the United States Bankruptcy Court for the Southern District of Texas.

The Debtor filed the Schedule of Rejected Executory Contracts and Unexpired Leases (the “Rejection Schedule”) with the Court as part of the Plan. The Debtor or the Reorganized Debtor, as applicable, reserves the right to add to or remove an Executory Contract or Unexpired Lease from the Schedule of Rejected Executory Contracts and Unexpired Leases and move it to the Schedule of Assumed Executory Contracts and Unexpired Leases until the later of (a) the date by which objections to the proposed rejection



2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Plan, Disclosure Statement, or Disclosure Statement Order, as applicable.


2

must be filed or (b) if an objection is filed, prior to the date of a decision by the Bankruptcy Court with respect to that objection.

You are receiving this notice because the Debtor’s records reflect that you are a party to an Executory Contract(s) or Unexpired Lease(s) that is listed on the Rejection Schedule. You are advised to carefully review the information contained in this notice and the related provisions of the Plan, including the Rejection Schedule.

Any objection to the Debtor’s decision to reject the Executory Contract or Unexpired Lease must (a) be in writing; (b) conform to the Bankruptcy Rules, the Bankruptcy Local Rules, and any orders of the Court; (c) set forth the name and address of the objector and the nature and amount of Claims held or asserted by the objector against the Debtor’s Estate or property; (d) state, with particularity, the legal and factual basis for the objection and, if practicable, a proposed modification that would resolve such objection; and (e) be filed with the Court and served upon the following parties so as to be actually received no later than December 4, 2020 at 5:00 p.m., prevailing Central Time (the “Objection Deadline”): (i) Jackson Walker LLP, 1401 McKinney Street, Suite 1900, Houston, Texas 77010, Attn.: Jennifer Wertz ([email protected]); (ii) counsel to the Secured Lenders, Cole Schotz P.C., Attn: Michael D. Warner ([email protected]); and (iv) each of the entities listed on the most recently filed Master Service List, which is available electronically (a) at no charge by requesting a copy from the Debtor’s counsel by emailing Jennifer Wertz ([email protected]) or calling Jennifer Wertz at 512-236-2247; or (b) for a fee via PACER at https://ecf.txsb.uscourts.gov/ (account required).

PLEASE TAKE FURTHER NOTICE THAT if you do not object to the proposed rejection of any Executory Contract or Unexpired Lease to which you are a counterparty by the Objection Deadline, then you will be forever barred, estopped, and enjoined from asserting a future objection with regard to any Executory Contract or Unexpired Lease to which you are a counterparty.

On the Effective Date, except as otherwise provided in the Plan, all Executory Contracts or Unexpired Leases will be deemed assumed, in accordance with the provisions and requirements of Bankruptcy Code §§ 365 and 1123, other than: (1) those that are identified on the Schedule of Rejected Executory Contracts and Unexpired Leases; (2) those that have previously been rejected by a Final Order; (3) those that are the subject of a motion to reject an Executory Contract or Unexpired Lease that is pending on the Confirmation Date; or (4) those that are subject to a motion to reject an Executory Contract or Unexpired Lease pursuant to which the requested effective date of such rejection is after the Effective Date.

If the Debtor rejects an Executory Contract(s) or Unexpired Lease(s) to which you are a counterparty, you may be entitled to an Unsecured Claim for which a Proof of Claim must be filed. Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, must be filed with the Bankruptcy Court within 30 calendar days after the date of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection. Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not filed within such time will be automatically disallowed, forever barred from assertion, and shall not be enforceable against the Debtor, its Estate, or property of the foregoing parties without the need for any objection by the Debtor, or further notice to, or action, order, or approval of the Bankruptcy Court. Claims arising from the rejection of the Debtor’s Executory Contracts or Unexpired Leases shall be classified as General Unsecured Claims under the Plan.


3

Please review the Plan and Disclosure Statement for details regarding the possible assumption, assumption and assignment, and rejection of executory contracts and unexpired leases. You may wish to seek legal advice concerning the Plan and the Plan’s treatment of your executory contract or unexpired lease.

November 19, 2020 /s/ Jennifer F. Wertz Matthew D. Cavenaugh (TX Bar No. 24062656) Jennifer F. Wertz (TX Bar No. 24072822)

JACKSON WALKER LLP 1401 McKinney Street, Suite 1900 Houston, Texas 77010 Telephone: (713) 752-4200 Facsimile: (713) 752-4221 Email: [email protected] Email: [email protected] COUNSEL FOR THE DEBTOR AND

DEBTOR IN POSSESSION


Certificate of Service

I certify that on the 19th day of November 2020, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas, and via email to the affected parties on the attached list.

/s/ Jennifer F. Wertz Jennifer F. Wertz


List of Rejected Executory Contracts

Counterparty Description of Contract Counterparty Address Rejection Date

Austin Business Journal Provides for advertising and marketing services

504 Lavaca Street, Suite 1008 Austin, TX 78701 [email protected]

November 20, 2020

AppsFlyer Ltd. Provides for a marketing analytics tool

100 1st Street, 25th Floor San Francisco, CA 94105 [email protected]

November 20, 2020


EXHIBIT 4



AUSTIN DIVISION

JULIO LOPEZ and MICHAEL OROS,

On Behalf of Themselves and All Others Similarly Situated,

Plaintiffs,

v.

VOLUSION, LLC,

Defendant.

Case No.: 1:20-cv-00761-LY

DECLARATION OF JUSTIN R. HUGHES OF KROLL SETTLEMENT ADMINISTRATION LLC, IN SUPPORT OF PRELIMINARY APPROVAL

I, Justin R. Hughes declare as follows:

1. I am a Senior Director of Kroll Settlement Administration LLC (“Kroll”). I am

over twenty-one years of age and am authorized to make this declaration on behalf of Kroll and

myself. The following statements are based on my personal knowledge and information provided

by other experienced Kroll employees working under my supervision. This declaration is being

filed in support of preliminary approval.

2. Kroll has extensive experience in class action matters, having provided services in

class action settlements involving antitrust, securities fraud, labor and employment, consumer, and

government enforcement matters. Kroll has provided class action services in over 3,000

settlements varying in size and complexity over the past 45 years. During the past 45 years, Kroll

has distributed hundreds of millions of notices and billions of dollars in settlement funds or

judgment proceeds to class members and claimants.


2

3. Kroll is prepared to provide a full complement of notification services for this case,

including email notice and mailed notice, along with other administrative duties including creating

a website to inform Class Members,1 management and review of claims, having information

available via a toll-free number, and should the Court approve the settlement, payments to class

members.

4. It is Kroll’s understanding that it will be provided with a list of all parties affected

by the proposed settlement in connection with the above refenced action (the “Class List”) that is

to contain a combination of Class Member names, mailing addresses, and email addresses. Kroll

will review all data, deduplicate and format for use, then upload into a dedicated database to

maintain individual records for each class member in this matter.

Direct Notice

5. In preparation for the dissemination of Notice, Kroll has worked with the parties to

finalize the language for the Email and Postcard Notice so that they provide information regarding

the settlement, deadlines to act, and Class Member rights in plain language and are easy to read.

Kroll will prepare a file with all Class List email addresses it was provided and upload the file to

an email campaign platform. Attached as Exhibit B and C to the Settlement Agreement are the

formatted Postcard Notice and Email Notice, respectively.

6. The wording of the Email Notice will be composed so as not to trigger spam filters

into identifying it as potential spam and to maximize deliverability. The Email template, which

will include a proposed subject line that invites the recipient to open it, will be sent via email to

the parties for review. Upon approval of the subject line and email layout as prepared by Kroll for

the Parties, the Email Notice campaign will begin as directed in the proposed Class Action

Settlement Agreement and Release in connection with the above referenced matter (hereinafter,

the “Settlement Agreement’).

1 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Settlement Agreement.


3

7. As the Email Notice campaign takes place, Kroll will track and monitor emails that

are not delivered. Kroll will attempt to re-send hard and/or soft bounced emails in an effort to

deliver as many emails as possible. At the conclusion of the email campaign, Kroll will provide a

report of the email delivery status of each record. Kroll will report to the parties the number of

records that had a successful notice delivery and a count for the records that delivery failed. Kroll

will also update its administration database with the appropriate status of the email campaign.

8. If the Email Notice was not reported as undeliverable, no further action will be

taken with respect to the record.

9. If an attempted delivery to an email address is noted as a failed delivery, Kroll will

mail a Postcard Notice to the Class Member via First Class Mail.

10. As noted above, Kroll is also to receive physical addresses for individuals on the

Class List and Postcard Notice will be sent to anyone who did not have an email address or whose

email bounced. The Postcard Notice will be substantially the same as the Email Notice.

11. In preparation for the Postcard Notice mailing, Kroll will run the addresses on the

Class List through the Unites States Postal Service’s (USPS) National Change of Address (NCOA)

database. The NCOA process will provide updated addresses for Class Members who have

submitted a change of address with the USPS in the last 48 months, and the process will also

standardize the address for mailing. Kroll will then prepare a mail file of Class Members that are

to receive the Postcard Notice via First Class Mail.

12. As required, Postcard Notices returned by the USPS with a forwarding address will

be re-mailed to the updated addresses provided by the USPS.

13. Postcard Notices returned by the USPS as undeliverable-as-addressed will be sent

through an advanced address search process in an effort to find a more current address for the

record. If an updated address is obtained through this process, Kroll will re-mail the Postcard

Notice to the updated address.


4

Long Form Notice

14. In preparation for the dissemination of Notice, Kroll has worked with the parties to

finalize the language for the Long Form Notice so that it provides information regarding the

settlement, deadlines to act, and Class Member rights in plain language and are easy to read. Kroll

will post the Long Form Notice to the Settlement Website so that it can be reviewed and

downloaded by Class Members. Attached as Exhibit D to the Settlement Agreement is the

formatted Long Form Notice. Kroll will also mail the Long Form Notice to Class Members on

request.

Toll-Free Settlement Telephone Number

15. As required under the Settlement, Kroll will set up a toll-free number. Class

Members will be able to call the toll-free number to obtain basic information about the case via an

Interactive Voice Response system which will be available 24 hours a day and 7 days a week. The

toll-free number will be live prior to the Notice program beginning.

Settlement Website

16. As required under the Settlement, Kroll will set up a Settlement Website. Class

Members will be able to access the Website to obtain information about the Settlement at

www.VolusionPrivacyClassAction.com. The Website will contain a homepage, frequently asked

questions and their answers, an important documents page, a contact page, and an online portal for

online claim submissions. The Settlement Website will be live prior to the Notice program

beginning and will be updated as the case progresses as requested by counsel or the Court.

Dedicated Post Office Box

17. Kroll has procured a dedicated Post Office Box (“PO Box”) for the Settlement. All

mail will be monitored and handled timely. The PO Box number will be included on all Notices

sent out, noted on the IVR, and on the contact page on the Settlement website.


5

Other Settlement Administration Duties

18. Kroll is also responsible for receipt and logging, and weekly reporting to Class

Counsel of all written Requests for Exclusion from the Settlement. These requests will be mailed

to the PO Box dedicated for communications on this Settlement.

19. Kroll participated in the preparation of the Claim Form, which is attached as Exhibit

A to the Settlement Agreement. Kroll will receive and process claims submitted through the

Settlement Website or by mail. Kroll will process the claim submissions and review the validity

and completeness of each in order to determine eligibility. Kroll will also perform duplicate claim

searches to ensure that only one claim is submitted by each Class Member.

20. Kroll will compile all information and determination on the claims process as well

as its other duties and report to the Parties and the Court the outcome of its efforts.

21. As required under the Settlement, Kroll will issue all monetary payments to

Settlement Class Members who make valid Claims by check or electronic payment. Each Class

Member will have 90 days from the date of issuance to negotiate the check. For any check or

electronic payment that remains uncashed as of 90 days after issuance, Kroll will make reasonable

efforts to reach out to the Class Member to reissue the check.

I certify the foregoing statements are true and correct under penalty of perjury under the

laws of the United States. Executed this 12th day of April 2022 in Oakland, California.

______________________________________

Justin R. Hughes


Justin.Hughes

Justin's Signature

EXHIBIT 5


1


AUSTIN DIVISION

JULIO LOPEZ and MICHAEL OROS,

On Behalf of Themselves and All Others Similarly Situated,

Plaintiffs,

v.

VOLUSION, LLC,

Defendant.

Case No.: 1:20-cv-00761-LY

ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AGREEMENT AND CONDITIONALLY CERTIFYING

CLASS FOR SETTLEMENT PURPOSES ONLY

WHEREAS, on July 17, 2020, Plaintiff Lopez and Plaintiff Michael Oros filed a Class

Action Complaint in this Court on July 17, 2020, asserting claims against Defendant Volusion,

LLC related to the Data Security Incident.1

WHEREAS, on July 27, 2020, Volusion filed its Bankruptcy Case, whereupon an

automatic stay of this Litigation went into place pursuant to 11 U.S.C. § 362(a).

WHEREAS, on August 10, 2020, this Court entered its Order staying the Litigation.

1 Capitalized terms shall have the same meaning as those assigned to them in the Settlement Agreement.


2

WHEREAS, on November 20, 2020, the Bankruptcy Court entered its Confirmation Order,

confirming, as modified therein, the Plan. The Effective Date of the Plan occurred on January 19,

2021.

WHEREAS, on June 2, 2021, the Bankruptcy Court entered its Order allowing Plaintiffs

to pursue the Litigation provided that any recovery awarded shall be limited to any available

insurance proceeds covering the Reorganized Debtor (i.e., Volusion).

WHEREAS, on August 18, 2021, this Court lifted the stay in the Litigation, and Volusion

was ordered to file an answer to Plaintiffs’ Class Action Complaint on or before September 13,

2021.

WHEREAS, on September 13, 2021, Volusion filed its Motion to Dismiss. Plaintiffs filed

their Response in Opposition to Volusion’s Motion to Dismiss on October 11, 2021, and Volusion

filed its Reply in Support of its Motion to Dismiss on November 11, 2021.

WHEREAS, Plaintiffs, individually and on behalf of themselves and the proposed Class,

and Volusion have entered into a Settlement resolving the Litigation, as set forth in the Parties’

Settlement Agreement, subject to Court approval.

WHEREAS, Plaintiffs filed Plaintiffs’ Unopposed Motion for Preliminary Approval of

Class Action Settlement, Preliminary Certification, and Approval of Notice Plan on April 12, 2022

(“Motion”).

WHEREAS, the Litigation was settled subject to the Court’s approval as a result of arm’s-

length negotiations, investigation, and informal discovery sufficient to permit counsel and the

Court to act knowingly, and counsel are experienced in similar litigation.

WHEREAS, Plaintiffs, the proposed Class Representatives, have moved the Court for

entry of an order preliminarily approving the Settlement, conditionally certifying the Class for


3

settlement purposes only, and approving the form and method of notice upon the terms and

conditions set forth in the Settlement Agreement, together with all exhibits thereto.

WHEREAS, the Court having considered the Settlement Agreement, together with all

exhibits thereto and records in this case, and for good cause appearing, hereby orders as follows:

I. CONDITIONAL CERTIFICATION OF THE CLASS

1. Plaintiffs’ Motion (Dkt. No. __) is GRANTED.

2. Having made the findings set forth below, the Court conditionally certifies the

following nationwide Class for settlement purposes only:

All persons to whom Volusion sent its Notice of Data Incident dated on or about April 21, 2020, advising that on or about October 8, 2019, Volusion learned that personal information of some customers of Volusion’s merchant clients may have been improperly exposed as a result of malware placed on Volusion’s e-commerce platform. 3. Excluded from the Class is any judge presiding over this matter and any members

of their first-degree relatives, judicial staff, the officers and directors of Volusion and its customers

who were impacted by the Data Security Incident, Class Counsel and their first-degree relatives,

and persons who timely and validly request exclusion from the Class.

4. For settlement purposes only, with respect to the Class, the Court preliminary finds

the prerequisites for a class action pursuant to Federal Rule of Civil Procedure 23 have been met,

in that: (a) the Class is so numerous that joinder of all individual Class members in a single

proceeding is impracticable; (b) questions of law and fact common to all Class members

predominate over any potential individual questions; (c) Plaintiffs’ claims are typical of the claims

of the Class; (d) Plaintiffs and proposed Class Counsel will fairly and adequately represent the

interests of the Class; and (e) a class action is the superior method to fairly and efficiently

adjudicate this controversy.


4

5. The Court hereby appoints Plaintiffs as the Class Representatives for the Class.

6. The Court hereby appoints Michael Singley, Edwards Law Group, Austin, Texas;

Melissa S. Weiner, Pearson, Simon & Warshaw, LLP, Minneapolis, Minnesota; Jonathan M.

Streisfeld, Kopelowitz Ostrow Ferguson Weiselberg and Gilbert, Fort Lauderdale, Florida; and

Hassan A. Zavareei, Tycko & Zavareei LLP, Washington D.C. as Class Counsel.

II. PRELIMINARY APPROVAL

7. The terms of the Settlement, including its proposed releases, are preliminarily

approved as within the range of fair, reasonable, and adequate, and are sufficient to warrant

providing Class Notice of the Settlement to the Class, and are subject to further and final

consideration at the Final Approval Hearing provided for below. In making this determination, the

Court considered the fact that the Settlement is the product of arm’s-length negotiations conducted

by experienced and knowledgeable counsel, the current posture of the Litigation, the benefits of

the Settlement to the Class, and the risk and benefits of continuing litigation to the Parties and the

Class.

8. As provided for in the Settlement Agreement, if the Court does not grant final

approval of the Settlement or if the Settlement Agreement is terminated or cancelled in accordance

with its terms, then the Settlement, and the conditional certification of the Class for settlement

purposes only provided for herein, will be vacated and the Litigation shall proceed as though the

Class had never been conditionally certified for settlement purposes only, with no admission of

liability or merit as to any issue, and no prejudice or impact as to any party’s position on the issue

of class certification or any other issue in the case.

III. NOTICE OF THE SETTLEMENT TO THE CLASS

9. The Court appoints Kroll Settlement Administration as the Settlement


5

Administrator. The responsibilities of the Settlement Administrator are set forth in the Settlement

Agreement.

10. The Court has considered the Class Notice provisions of the Settlement Agreement,

and the Postcard Notice, Email Notice, and Long Form Notice, attached as Exhibits B, C, and D,

respectively, of the Settlement Agreement, as well as the Declaration of Justin R. Hughes of Kroll

Settlement Administration LLC, In Support Of Preliminary Approval filed concurrently with the

Motion. The Court finds that the Class Notice is the best notice practicable under the

circumstances, constitutes due and sufficient notice of the Settlement and this Order to all persons

entitled thereto, and is in full compliance with applicable law and due process. The Court approves

as to form and content the Postcard Notice, Email Notice, and Long Form Notice attached as

Exhibits B, C, and D to the Settlement. The Court orders the Settlement Administrator to

commence the Class Notice following entry of this Order in accordance with the terms of the


11. The Court approves as to form and content the Claim Form attached as Exhibit A

to the Settlement Agreement.

12. Class Members who qualify for and wish to submit a Claim Form under the

Settlement Agreement shall do so in accordance with the requirements and procedures of the

Settlement Agreement and the Claim Form under which they are entitled to seek relief. The Claims

Deadline is 90 days after the Class Notice Date. All Class Members who fail to submit a claim in

accordance with the requirements and procedures of the Settlement Agreement and respective

Claim Form shall be forever barred from receiving any such benefit but will in all other respects

be subject to and bound by the provisions of the Settlement Agreement and the Releases contained

therein.


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IV. REQUESTS FOR EXCLUSION FROM THE CLASS

13. Any Class Member may make a Request for Exclusion by mailing or delivering

such request in writing to the Settlement Administrator at the address set forth in the Class Notice.

The written notice must clearly manifest an intent to be excluded from the Class. To be effective,

a Request for Exclusion must be postmarked or delivered by the Request for Exclusion Deadline

(i.e., not later than 90 days after the Class Notice Date). The Request for Exclusion shall (i) state

the Class Member’s full name and current address, and (ii) clearly state his or her desire to be

excluded from the Settlement and from the Class. Failure to comply with these requirements and

to timely submit the Request for Exclusion will result in the Class Member being bound by the

terms of the Settlement Agreement.

14. Any Class Member who submits a timely Request for Exclusion may not file an

objection to the Settlement Agreement and shall be deemed to have waived any rights or benefits

under this Settlement Agreement.

15. Persons falling within the definition of the Class who do not timely and validly

submit a Request for Exclusion shall be bound by the terms of the Settlement Agreement, including

its Releases, and all orders entered by the Court in connection therewith.

V. OBJECTIONS AND NOTICES OF INTENTION TO APPEAR

16. Each Class Member who wishes to be heard orally at the Final Approval Hearing,

or who wishes for any objection to be considered, must file a written notice of objection by the

Objection Deadline (i.e., within 90 days from the Class Notice Date).

17. To state a valid objection to the Settlement, the written objection must include (i)

the name of the proceedings; (ii) the Class Member’s full name, current mailing address, current

e-mail address, e-mail address which received the Notice of Data Incident from Volusion, and


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telephone number; (iii) a statement of the specific grounds for the objection, as well as any

documents supporting the objection; (iv) a statement as to whether the objection applies only to

the objector, to a specific subset of the class, or to the entire class; (v) the identity of any attorneys

representing the objector; (vi) a statement regarding whether the Class Member (or his/her

attorney) intends to appear at the Final Approval Hearing; and (vii) the signature of the Class

Member or the Class Member’s attorney. To be timely, the Class Member making the objection

must file the objection with the Court by mailing it to the Clerk of the United States District Court

for the Western District of Texas, Austin Division, at the address where filings are accepted by the

Clerk, on or before the Objection Deadline, and mail the objection to the Settlement Administrator

(who shall forward it to Class Counsel and Defense Counsel), postmarked on or before the

Objection Deadline.

18. Any objecting Class Member may appear, in person or by counsel, at the Final

Approval Hearing held by the Court, to show cause why the proposed Settlement should not be

approved as fair, adequate, and reasonable, or object to any petitions for reasonable attorneys’ fees,

Service Awards, and reimbursement of reasonable litigation costs and expenses. Any objecting

Class Member intending to appear, in person or by counsel, at the Final Approval Hearing must

file with the Clerk of the Court and mail to the Settlement Administrator (who shall forward it to

Class Counsel and Defense Counsel) a Notice of Intention to Appear at the Final Approval Hearing

by the Objection Deadline. The Notice of Intention to Appear must include copies of any papers,

exhibits, or other evidence that the objecting Class Member (or his/her counsel) will present to the

Court in connection with the Final Approval Hearing.

19. Any Class Member who does not provide a Notice of Intention to Appear in

complete accordance with specifications set forth in the Class Notice may be barred from speaking


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or otherwise presenting any views at the Final Approval Hearing, but the Court will still consider

the objection filed by that Class Member.

20. Unless otherwise ordered by the Court upon a showing of good cause, objectors

who fail to properly or timely file their objections, along with the required information and

documentation set forth above, or to serve them as provided above, may not be heard during the

Final Approval Hearing, their objections may be waived, and their objections may not be

considered by the Court.

VI. THE FINAL FAIRNESS HEARING

21. The Court will hold a Final Approval Hearing on ______________, at ____ p.m.,

at the United States Courthouse, Austin Division, 501 West Fifth Street, Suite 1100, Austin, Texas

78701, to consider: (a) whether certification of the Class for settlement purposes only should be

confirmed; (b) whether the Settlement should be approved as fair, reasonable, adequate and in the

best interests of the Class; (c) the application by Class Counsel for an award of attorneys’ fees,

costs and expenses as provided for under the Settlement Agreement; (d) the application for

Plaintiffs’ Service Awards as provided for under the Settlement Agreement; (e) whether the release

of Released Claims as set forth in the Settlement Agreement should be provided; (f) whether the

Court should enter the final order and judgment; and (g) ruling upon such other matters as the

Court may deem just and appropriate. The Final Approval Hearing may, from time to time and

without further notice to Class Members, be continued or adjourned by order of the Court.

22. No later than 30 days before the Exclusion Deadline and Objection Deadline,

Plaintiffs shall file their Motion for Final Approval of Class Action Settlement Agreement and for

Award of Attorney’s Fees, Costs and Class Representatives’ Service Award (“Motion for Final

Approval”). No later than 7 days prior to the Final Approval Hearing, Plaintiffs shall file their


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Reply Brief in Support of Motion for Final Approval, including as needed to respond to any valid

and timely objections.

23. The related time periods for events preceding the Final Approval Hearing are as

follows:

Event Timing Volusion provides the Settlement Administrator with a list of Class Members

10 days after Preliminary Approval

Class Notice will be mailed to the Class (Class Notice Date)


Plaintiffs shall file their Motion for Final Approval of Class Action Settlement Agreement and for Award of Attorneys’ Fees, Costs and Class Representatives’ Service Awards (“Motion for Final Approval”)


Last Day to Object or Opt Out (Objection Deadline and Request for Exclusion Deadline)

90 days after the Class Notice Date

Reply Papers in Support of Final Approval 7 days prior to Final Approval Hearing Final Approval Hearing To be Set by Court

24. The existing stay of the Litigation, see Dkt. No. 36, shall remain in effect pending

the Court’s ruling on final approval. Any action brought by a Class Member concerning a Released

Claim shall be stayed pending final approval of the Settlement.

VII. OTHER PROVISIONS

25. Class Members are preliminarily enjoined from bringing any new alleged class

actions asserting any Released Claims or maintaining any existing action to assert any Released

Claims.

It is so ORDERED.

SIGNED this ____ day of ________, 2022.

____________________________ LEE YEAKEL UNITED STATES DISTRICT JUDGE
