IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
BACHMANN INC. f/k/a 1 SEO.COM INC, a
Pennsylvania Corporation; and LANCE
BACHMANN;

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Plaintiffs,
v.
1SEO DIGITAL AGENCY, LLC, a
Delaware limited liability company; 1SEO
HOLDINGS, LLC, a Delaware limited
liability company; SKYHARBOR, LLC d/b/a
SKYHARBOR CAPITAL PARTNERS;
JOHN SHOAF; and JOHN DOES 1 through
10.
Defendants.
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C.A. No. ___________________
INTRODUCTION
Plaintiffs Bachmann Inc. f/k/a 1 SEO.com Inc., (“Company”) and Lance Bachmann
(“Bachman”) (collectively “Plaintiffs”), by and through their undersigned attorneys, bring this
complaint against Defendants 1SEO Digital Agency, LLC (“Digital Agency”), 1SEO Holdings,
LLC (“Holding Company”), Skyharbor LLC d/b/a Skyharbor Capital Partners (“Skyharbor”), John
Shoaf (“Shoaf”), and John Does 1 through 10 (“Doe Defendants”) (collectively “Defendants”),
and hereby allege as follows:
PARTIES
1. Plaintiff Company is a Pennsylvania corporation with its principal place of business
in Bristol, Pennsylvania. On February 17, 2023, the Company sold substantially all of its assets to
Defendant Digital Agency.
2. Plaintiff Bachmann is a Citizen of Pennsylvania who resides and is domiciled in
Fort Washington, Pennsylvania. Plaintiff Bachmann is the founder and majority owner of Plaintiff
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Company. On February 17, 2023, as part of the sale of substantially all of the Company’s assets
to Defendant Digital Agency, Bachmann was made a member of the Digital Agency.
3. Defendant Digital Agency is a Delaware Limited Liability Company with no
Pennsylvania members. On February 17, 2023, the Digital Agency purchased substantially all of
the Plaintiff Company’s assets, partially in exchange Plaintiff Bachmann was made a member of
the Digital Agency.
4. Defendant Holding Company is a Delaware Limited Liability Company with no
Pennsylvania members. On July 26, 2023, Defendant Holding Company acquired Plaintiff
Bachmann and his family’s members units in Defendant Digital Agency and, upon information
and belief, is now the majority or sole member of the Digital Agency.
5. Defendant Skyharbor is a Wyoming Limited Liability Company with no
Pennsylvania members. Defendant Skyharbor financed Defendant Digital Agency’s acquisition of
substantially all of Plaintiff Company’s assets and Defendant Holding Company’s acquisition of
Plaintiff Bachmann’s units in the Digital Agency. Upon information and belief, Defendant
Skyharbor is now the majority or sole member of the Digital Agency and Holding Company.
6. Defendant Shoaf is a Citizen of Florida who resides and is domiciled in Maimi,
Florida. Shoaf is, and at all relevant times was, the Executive Chairman of Defendant Digital
Agency, Executive Chairman of Defendant Holding Company, and Managing Partner of
Defendant Skyharbor. Upon information and belief, Defendant Shoaf is the principal of the Digital
Agency, Holding Company, and Skyharbor.
7. The Doe Defendants are persons and/or entities that participated in and/or benefited
from the unlawful and actionable conduct alleged herein, but whose identities are presently
unknown.
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JURISDICTION AND VENUE
8. This Court has diversity jurisdiction under 28 U.S.C. § 1332 because Plaintiffs and
Defendants are citizens of different states, and the amount in controversy in this matter is greater
than $75,000.
9. Venue is proper in this district under 28 U.S. Code § 1391(2) because a substantial
part of the events or omissions giving rise to Plaintiffs occurred in this judicial district. Venue is
also properly in this District pursuant to Section 6(g) of the Purchase Agreement (defined below)
which requires that “[a]ny action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Note shall be brought exclusively in a Federal District Court or State
Court located in Wilmington, Delaware[.]”
FACTUAL BACKGROUND
10. Plaintiff Bachmann founded Plaintiff Company in 2009 and subsequently grew it
into one of the nation’s leading digital marketing companies.
11. On February 17, 2023, Plaintiff Company sold substantially all of its assets to
Defendant Digital Agency through an Asset Purchase Agreement (“Purchase Agreement”)
attached hereto as Exhibit A.
12. The Purchase Agreement defined Plaintiffs Company and Bachmann collectively
as Sellers. Exhibit A at 1.
13. Defendant Shoaf signed the Purchase Agreement on behalf of Defendant Digital
Agency. Exhibit A at 59.
14. During the negotiation of the Purchase Agreement, Defendant Shoaf acted on
behalf of Defendant Digital Agency by, inter alia, negotiating with Plaintiffs and agreeing to
essential deal terms.
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15. Under the Purchase Agreement, Plaintiff Sellers were promised both a Cash
Payment and Earnout Payment. Plaintiff Bachmann also received units in Defendant Digital
Agency. Exhibit A at § 1.3
16. The Earnout Amount was to be calculated over the twenty-four (24) month period
after the Closing Date (the “Earnout Measurement Period”), namely from February 17, 2023, to
February 17, 2025, and based upon EBITDA of assets Defendant Digital Agency acquired from
Plaintiff Company (the “Business”) during that period according to the below table. Exhibit A at
§ 1.4
17. Within twenty (20) days of the Earnout Measurement Period ending, Defendant
Digital Agency or its accountant was required to prepare and deliver to Plaintiff Company a report
(the “Earnout Report”) containing the financial statements of the Business for the Earnout
Measurement Period and setting forth Defendant Digital Agency’s calculation of the cumulative
EBITDA for the Earnout Measurement Period and the resulting Earnout Amount. Exhibit A at §
1.5.
18. Within 10 days of receiving the Earnout Report the Company was allowed to object
to the calculation of the cumulative EBITDA for the Earnout Measurement Period and the resulting
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Earnout Amount prepared by Buyer or Buyer’s Accountant, by delivering a detailed written
statement (the “Earnout Objections Statement”) describing the objections to Defendant Digital
Agency. Exhibit A at § 1.5.
19. The Purchase Agreement does not define the term EBITDA or provide for how a
dispute raised through an Earnout Objections Statement is to be specifically resolved.
20. The Purchase Agreement only contains a general venue selection clause that
requires all disputes between the Parties be brought exclusively in a Federal District Court for the
District of Delaware located in Wilmington, Delaware, or a Delaware State Court located in New
Castle County, Delaware. Exhibit A at § 9.10.
21. Nonetheless, prior to closing Defendant Shoaf promised Plaintiffs, including
Plaintiff Bachmann personally, that they would receive a properly calculated Earnout Payment in
exchange for Plaintiff Bachmann agreeing to sell Plaintiff Company’s assets to Defendant Digital
Agency.
22. After the Closing Date, a dispute arose over the calculation of the Cash Payment
also promised in the Purchase Agreement.
23. On July 26, 2023, this dispute was resolved through a Settlement and Redemption
Agreement (“Settlement Agreement”) attached hereto as Exhibit B..
24. Defendant Shoaf signed the Settlement Agreement on behalf of Defendants Digital
Agency and Defendant Holding Company. Exhibit B at 8.
25. During this dispute, Defendant Shoaf acted on behalf of Defendant Digital Agency
by, inter alia, negotiating with Plaintiffs and agreeing to essential deal terms that were
memorialized in the Settlement Agreement.
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26. Under this Settlement Agreement, Plaintiff Bachmann received a cash payment but
transferred his units in Defendant Digital Agency to Defendant Holding Company. Exhibit B at 1
¶ D.
27. On March 7, 2025, Defendant Digital Agency sent Plaintiff Company a three (3)
page document indicating an Earnout Amount of $0, but not providing full and complete financial
statements and information demonstrating how the purported EBITDA was calculated. A copy of
such document is attached hereto as Exhibit C.
28. On March 17, 2025, Plaintiff Company, through its counsel, sent Digital Holdings
an Earnout Objections Statement attached hereto to as Exhibit D.
29. Plaintiff Company objected to the fact it was unable to assess, let alone provide, a
detailed objection to Defendant Digital Agency’s method for calculating EBITDA because
Defendant Digital Agency did not provide any financial statements.
30. Plaintiff Company also objected to Defendant Digital Agency’s lack of good faith
and negligence in running the Business and demanded that Defendant Digital Agency pay the
maximum Earnout Amount of $3,000,000.
31. On April 11, 2025, the Parties tried to resolve this dispute through a teleconference
call.
32. During this teleconference, Defendant Shoaf acted on behalf of Defendant Digital
Agency by, inter alia, interacting directly with Plaintiffs.
33. On April 14, 2025, Defendant Holding Company and Digital Agency sent a ceaseand-desist letter, attached hereto as Exhibit E, to Plaintiff Bachmann’s counsel, demanding he stop
“threatening” to breach covenants contained within the Purchase and Settlement Agreements,
which they claim he did during the April 11, 2025, teleconference.
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34. On April 16, 2025, Plaintiff Bachmann, through counsel, responded with a letter,
attached hereto as Exhibit F, noting that he has not violated any such covenants and demanding to
review Defendant Digital Agency’s Balance Sheets, Income Statements (Profit and Loss), and
Statements of Cash Flow during the Earnout Measure Period.
35. To date, none of the Defendants have responded to Plaintiff Bachmann’s demand
to produce financial information as required in the Purchase Agreement, or paid Plaintiffs the
amounts owed under the Purchase Agreement.
36. Upon information and belief, Defendants Digital Agency, Holding Company,
Skyharbor, Shoaf, and John Does 1 through 10 are collectively engaged in gross fraud and
corporate mismanagement.
37. Defendants Holding Company, Skyharbor, Shoaf, and John Does 1 through 10 have
removed assets from Defendant Digital Agency and comingled those funds with their own to
manipulate the EBITDA of Defendant Digital Agency and deprive Plaintiffs of the Earnout
Payment they were promised under the Purchase Agreement and personally by Defendant Shoaf.
38. Defendant Shoaf has personally directed Defendant Digital Agency to withhold
financial statements from Plaintiff Company to conceal Defendants’ fraud.
39. Defendants Digital Agency, Holding Company, Skyharbor, and John Doe’s 1
through 10 knew of Defendant Shoaf’s conduct, and have actively participated and assisted in the
same.
40. At all relevant times, each Defendant, whether fictitiously named or otherwise, was
the agent, servant, or employee of the others, and was acting within the scope of such agency,
enterprise, relationship, services, or employment.
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COUNT I
BREACH OF CONTRACT – EARNOUT PAYMENT
(All Plaintiffs v. 1SEO Digital Agency, LLC)
41. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
42. In exchange for its assets, Defendant Digital Agency promised Plaintiffs,
collectively as Sellers, an Earnout Payment based upon the cumulative EBITDA of the Business
between February 17, 2023, and February 17, 2025.
43. Plaintiff Company conferred substantially all of its assets on Defendant Digital
Agency but to date has not received any Earnout Payment from Defendant Digital Agency.
44. To date, Defendant Digital Agency has not offered any explanation for its failure
to make an Earnout Payment or produced financial statements showing that cumulative EBITDA
of the Business between February 17, 2023, and February 17, 2025, supports an Earnout Payment
calculation of $0.
45. Defendant Digital Agency’s failure to make an Earnout Payment has deprived
Plaintiffs of a substantial amount of the consideration they were promised in exchange for Plaintiff
Company’s assets.
46. Plaintiffs are entitled to a full Earnout Payment based upon cumulative EBITDA of
the Business between February 17, 2023, and February 17, 2025, and as properly calculated
pursuant to Section 1.4 of the Purchase Agreement.
COUNT II
BREACH OF CONTRACT – EARNOUT REPORT
(All Plaintiffs v. 1SEO Digital Agency, LLC)
47. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
48. As part of the Purchase Agreement, Defendant Digital Agency promised Plaintiffs,
collectively as sellers, that within twenty days (20) of the Earnout Calculation Period ending on
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February 17, 2025 it would “prepare and deliver to the Company a report (the ‘Earnout Report’)
containing the financial statements of the Business for the Earnout Measurement Period and setting
forth Buyer’s calculation of the cumulative EBITDA for the Earnout Measurement Period and the
resulting Earnout Amount.” Exhibit A §– 1.5.
49. The document Plaintiff Company received from Defendant Digital Agency on
March 7, 2025, does not contain proper or complete financial statements or other documents
evidencing Defendant Digital Agency’s calculation of cumulative EBITDA for the Earnout
Calculation Period.
50. As a result of Defendant Digital Agency’s failure to provide such financial
statements, Plaintiffs have been unable to determine Defendant Digital Agency’s cumulative
EBITDA between February 17, 2023, and February 17, 2025, and, in turn, the amounts they are
owed under the Purchase Agreement.
51. Plaintiffs are entitled to a complete Earnout Report including financial statements
that show how Defendant Digital Agency calculated EBITDA for the period between February 17,
2023, and February 17, 2025, or the Earnout Payout.
COUNT III
BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING
(All Plaintiffs v. 1SEO Digital Agency, LLC)
52. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
53. Defendant Digital Agency’s arbitrary and unreasonable refusal to prepare and
deliver a proper and complete Earnout Report to Plaintiff Company and otherwise provide the
Company with access to financial statements showing cumulative EBITDA between February 17,
2023, and February 17, 2025, has deprived Plaintiffs of the benefits they bargained for in agreeing
to sell the Company’s assets to the Digital Agency.
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54. Defendant’s ongoing refusal to provide proper and complete financial statements
demonstrates ongoing bad faith and has damaged Plaintiffs.
55. Plaintiffs are entitled to good faith efforts in preparing an Earnout Report including
financial statements showing cumulative EBITDA between February 17, 2023, and February 17,
2025, and an Earnout Payment based on the same.
COUNT IV
TORTIOUS INTERFERENCE WITH A CONTRACT
(All Plaintiffs v. John Shoaf)
56. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
57. Through the Purchase Agreement, Plaintiffs, collectively as Sellers, and Defendant
Digital Agency entered into a contract whereby Plaintiffs agreed to sell Plaintiff Company’s assets
in partial exchange for receiving an Earnout Payment based upon EBITDA from those assets over
the period between February 17, 2023, and February 17, 2025.
58. Defendant Shoaf knew this contract existed because he signed it on behalf of
Defendant Digital Agency.
59. Nonetheless, Defendant Shoaf intentionally prevented Defendant Digital Agency
from making an Earnout Payment or even providing financial statements showing cumulative
EBITDA between February 17, 2023, and February 17, 2025, to Plaintiffs.
60. By also preventing Defendant Digital Agency from providing financial statements
showing how EBITDA was calculated between February 17, 2023, and February 17, 2025, to
Plaintiff Company, Defendant Shoaf has eliminated any justification for his interference with the
Purchase Agreement.
61. Defendant Shoaf’s actions were without justification and have resulted in Plaintiffs
not receiving the full benefit they were promised under the Purchase Agreement.
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62. In interfering with the Purchase Agreement, Defendant Shoaf acted with wanton
and willful disregard to the rights of Plaintiffs thereunder.
63. Plaintiffs are entitled to compensatory damages for this interference, including a
full and properly calculated Earnout Payment and delivery of an Earnout Report complete with
financial statements.
64. Plaintiffs are also entitled to reasonably proportionate punitive damages.
COUNT V
FRAUDULENT INDUCEMENT
(All Plaintiffs v. John Shoaf)
65. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
66. Defendant Shoaf represented to Plaintiffs generally, and Plaintiff Bachmann
personally, that Defendant Digital Agency would make an Earnout Payment based upon the
Business’ cumulative EBITDA for period between February 17, 2023, and February 17, 2025.
67. Defendant Shoaf knew that this representation was false, and that Defendant Digital
Agency never intended to make any Earnout Payment to Plaintiff or even provide Plaintiff
financial statements demonstrating cumulative EBITDA for the period between February 17, 2023,
and February 17, 2025.
68. Defendant Shoaf made this misrepresentation with the intent that Plaintiffs would
sell Plaintiff Company’s assets to Defendant Digital Agency without receiving the full
consideration they bargained for.
69. Plaintiffs reasonably relied upon Defendant Shoaf’s representation as the principal
of Defendant Digital Agency.
70. Plaintiffs received less than the consideration they were promised in exchange for
Plaintiff Company’s assets as a result of Defendant Shoaf’s misrepresentation.
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71. Defendant Shoaf’s fraud was gross, oppressive, and aggravated, and breached the
confidence of Plaintiff Bachmann.
72. Plaintiffs are entitled to compensatory damages in the form of a full and properly
calculated Earn Out Payment and delivery of an Earnout Report complete with financial
statements.
73. Plaintiffs are also entitled to reasonably proportionate punitive damages.
COUNT VI
INTENTIONAL FRAUDULENT TRANSFER
(All Plaintiffs v. All Defendants)
74. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
75. Defendants orchestrated transfers of tangible and intangible rights, property and
assets (“Transfers”) from Defendant Digital Agency to Defendants Holding Company, Skyharbor,
Shoaf, and/or John Doe 1 thorough 10 shell entities that they owned/controlled with actual intent
to hinder, delay or defraud Plaintiffs from recovering amounts due to them under the Purchase
Agreement.
76. The entities making the Transfers received less than reasonably equivalent value in
exchange for the Transfers and were insolvent when the Transfers were made, or became insolvent
as a result of the Transfers, and proceeded with the transactions described in this Complaint
knowing, in light of the Transfers, that one or more of the Defendants had or would have
insufficient assets to satisfy Defendant Digital Agency’s obligations to Plaintiffs under the
Purchase Agreement.
77. Plaintiffs are entitled to void all Transfers and to recover the value from any initial
transferee or the persons/entities for whose benefit such Transfers were made, and/or from any
subsequent transferees of such initial transferees.
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78. Plaintiffs are also entitled to an attachment, an injunction, a levy of execution
against the assets transferred or their proceeds, or any other relief the circumstances may require.
COUNT VII
AIDING AND ABETTING FRAUD
(All Plaintiffs v. All Defendants)
79. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
80. As set forth above, Defendants engaged in fraudulent conduct, by inducing
Plaintiffs to sell substantially all of Plaintiff Company’s assets in exchange for consideration that
Defendants never intended to be paid and transferring assets among and between each other to
prevent Plaintiffs from receiving the amounts owed to them under the Purchase Agreement.
81. Defendants knew about each other’s fraudulent conduct.
82. Defendants substantially assisted each other’s fraudulent conduct by refusing (and
continuing to refuse) Plaintiffs’ access to financial statements demonstrating the Business’
cumulative EBITDA for the period between February 17, 2023, and February 17, 2025, and
making and accepting transfers of asserts by and between one another.
83. Plaintiffs are entitled to relief from such fraud from all Defendants jointly and
severally.
COUNT VIII
CIVIL CONSPIRACY
(All Plaintiffs v. All Defendants)
84. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
85. As set forth above, Defendants, and each of them, acted in concert to support their
common purpose to harm Plaintiff.
86. Each Defendant committed at least one overt act in furtherance of such conspiracy.
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87. Each Defendant acted with the common intent to harm Plaintiffs and understood
that all other Defendants shared in that common purpose.
88. Defendants’ conduct was willful, wanton, malicious and oppressive.
89. Defendants’ unlawful conspiracy has directly, legally and proximately caused and
continue to cause Plaintiff harm as heretofore alleged.
90. Plaintiffs are entitled to relief for all damages arising from the conspiracy from all
Defendants jointly and severally.
COUNT IX
PIERCING THE CORPORATE VEIL
(All Plaintiffs v. All Defendants)

91. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
92. There exists, and at all times material hereto existed, a unity of interest in
ownership, such that any individuality and separateness between Defendant Digital Agency,
Defendant Holding Company, Defendant Skyharbor, and Defendant Shoaf, and Defendants John
Does 1 through 10, ceased and the business entity known as 1 SEO Digital Agency LLC, and
operated as the alter ego of Defendants Holding Company, Skyharbor, Shoaf, John Does 1 through
10, and of each other.
93. Defendant Shoaf operated Defendants Digital Agency, Holding Company,
Skyharbor, and John Does 1 through 10 as a single corporate combine without regard to or respect
for the corporate form or separateness.
94. Defendant Shoaf exercised dominion and control over Defendants Digital Agency,
Holding Company, Skyharbor, and John Does 1 thorough 10.
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95. Proceeds related to promises made by Defendant Digital Agency were paid by
Defendants Holding Company, Skyharbor, Shoaf, and John Does 1 through 10 resulting in the
routine commingling of personal and business funds without regard for separateness.
96. Therefore, each Defendant is liable for all torts committed by the others.
97. Plaintiffs are entitled to relief from each Defendant for all torts committed by any
other Defendant.
COUNT X
UNJUST ENRICHMENT / QUANTUM MERUIT
(All Plaintiffs v. All Defendants)
98. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
99. At Defendant Shoaf’s direction, Defendant Digital Agency has not paid amounts
promised to Plaintiffs under the Purchase Agreement and/or proceeds from the Business or assets
Plaintiffs sold to Digital Holdings were transferred to Defendants Holding Company, Skyharbor,
Shoaf, and/or John Does 1 through 10.
100. Defendants economically benefited from, and were unjustly enriched by, the
withholding and/or transferring of amounts owed to Plaintiffs under the Purchase Agreement.
101. The retention and use of said economic benefit by Defendants is fundamentally
unjust and contrary to equity jurisprudence.
102. Defendants are jointly and severally liable to Plaintiffs as prototypical alter egos
liable in such an amount that is determined to be due and owing.
103. There is no adequate remedy at law.
104. Plaintiffs are entitled to an order disgorging Defendants of all revenues and profits
from their scheme.
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COUNT XI
CONSTRUCTIVE TRUST
(All Plaintiffs v. All Defendants)
105. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
106. Defendants gained and asserted title to property and have ownership of assets and
money due to their alleged fraudulent conduct, as outlined above.
107. Defendants owed a duty to pay Plaintiffs the amount promised under the Purchase
Agreement and not to siphon assets.
108. As outlined above, Defendants wrongfully retained proceeds and were unjustly
enriched.
109. Defendants are jointly and severally liable to Plaintiffs as prototypical alter egos
liable in such an amount that is determined to be due and owing.
110. There is no adequate remedy at law.
111. Plaintiffs are entitled to an order disgorging Defendants of all revenues and profits
from their scheme.
COUNT XII
APPOINTMENT OF A RECEIVER
(All Plaintiffs v. 1SEO Digital Agency LLC and 1SEO Holdings LLC)
112. Plaintiffs reallege and incorporate the paragraphs above as if fully set forth herein.
113. As outlined above, Defendants are engaged in fraud, gross mismanagement and/or
positive misconduct by its members, officers, director and duly authorized agents and
representatives.
114. It is believed that Defendants Skyharbor, Shoaf, and/or John Does 1 through 10 are
using Defendants Digital Agency and Holding Company, both Delaware entities, to engage in
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fraud and gross misconduct as outlined above and to prevent Plaintiffs from receiving the amounts
owed to them under the Purchase Agreement.
115. Without Court intervention, a Delaware entity and its members, officers, and
directors can continue to carry on fraudulent activities, all to the detriment of their other members
and creditors.
116. Given the nature of the Defendants’ fraud, the disregard for corporate formalities
and the indications that the Defendants are using/can be using a Delaware entity to perpetuate
further actionable conduct, there are extreme circumstances showing imminent danger of great
loss which cannot otherwise be prevented.
117. Plaintiffs are entitled to the appointment of a receiver.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs Bachmann Inc. and Lance Bachman respectfully request this
Court to grant the following relief:
A. Enter a monetary judgment in favor of Plaintiffs and against Defendants including
compensatory and punitive damages together with pre and post judgment interest;
B. Order Defendant Digital Agency to prepare and deliver an Earnout Report complete
with financial statements demonstrating how EBITDA was calculated for the period between
February 17, 2023, and February 17, 2025;
C. Void all Transfers and recover their value from any initial/subsequent transferee or the
entities for whose benefit such Transfers were made;
D. Grant an attachment, an injunction, a levy of execution against the assets transferred or
their proceeds, or any other relief the circumstances may require;
D. Order the disgorgement of all revenues and profits Defendant earned or received from
their fraudulent scheme;
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E. Appoint a receiver for 1SEO Digital Agency LLC and 1 SEO Holdings LLC; and,
F. Grant such other and further relief as this Honorable Court may deem just and proper
under the circumstances.
Dated: May 1, 2025 FOX ROTHSCHILD LLP
/s/ Kasey H. DeSantis
Kasey H. DeSantis (No. 5882)
1201 North Market Street, Suite 1200
Wilmington, DE 19801
Phone (302) 654-7444/Fax (302) 656-8920
kdesantis@foxrothschild.com
Colin D. Dougherty (Pro hac vice forthcoming)
980 Jolly Road, Suite 110
P.O. Box 3001
Blue Bell, PA 19422
cdougherty@foxrothschild.com
Attorneys for Plaintiffs
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EXHIBIT “A”
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 1 of 258 PageID #: 19
ASSET PURCHASE AGREEMENT
by and among
1SEO DIGITAL AGENCY, LLC,
1SEO.COM INC.,
and
LANCE BACHMANN
Dated February 14, 2023
Execution Version
Execution Version
ASSET PURCHASE AGREEMENT
by and among
1SEO DIGITAL AGENCY, LLC,
1SEO.COM INC.,
and
LANCE BACHMANN
Dated February 17, 2023
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 2 of 258 PageID #: 20
TABLE OF CONTENTS
Page
– i –
ARTICLE 1 BASIC TRANSACTION……………………………………………………………………………… 1
1.1 Purchase and Sale of Assets……………………………………………………………………….. 1
1.2 Assumption of Liabilities…………………………………………………………………………… 1
1.3 Purchase Price………………………………………………………………………………………….. 1
1.4 Calculation of Earnout Amount………………………………………………………………….. 2
1.5 Determination of Earnout Amount ……………………………………………………………… 2
1.6 Estimated Cash Payment……………………………………………………………………………. 2
1.7 Subscription Agreement…………………………………………………………………………….. 3
1.8 Payment and Delivery of Purchase Price……………………………………………………… 3
1.9 Cash Payment Determination …………………………………………………………………….. 4
1.10 Calculations……………………………………………………………………………………………… 4
1.11 Allocation………………………………………………………………………………………………… 4
1.12 Non-Assignable Assets……………………………………………………………………………… 5
1.13 Consent of the Shareholder………………………………………………………………………… 5
1.14 Closing ……………………………………………………………………………………………………. 5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF BUYER……………………………… 5
2.1 Organization of Buyer……………………………………………………………………………….. 5
2.2 Authorization of Transaction ……………………………………………………………………… 5
2.3 Non-contravention ……………………………………………………………………………………. 6
2.4 Brokers’ Fees…………………………………………………………………………………………… 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES CONCERNING THE
COMPANY………………………………………………………………………………………………… 6
3.1 Organization, Qualification, and Power……………………………………………………….. 6
3.2 Authorization of Transaction ……………………………………………………………………… 7
3.3 Capitalization and Subsidiaries…………………………………………………………………… 7
3.4 Non-contravention ……………………………………………………………………………………. 7
3.5 Brokers’ Fees…………………………………………………………………………………………… 8
3.6 Assets……………………………………………………………………………………………………… 8
3.7 Financial Statements; Interim Conduct………………………………………………………… 8
3.8 Undisclosed Liabilities…………………………………………………………………………….. 11
3.9 Legal Compliance …………………………………………………………………………………… 11
3.10 Tax Matters……………………………………………………………………………………………. 12
3.11 Real Property …………………………………………………………………………………………. 14
3.12 Intellectual Property………………………………………………………………………………… 15
3.13 Contracts……………………………………………………………………………………………….. 18
3.14 Insurance ……………………………………………………………………………………………….. 20
3.15 General Litigation and Professional Liability……………………………………………… 21
3.16 Employees……………………………………………………………………………………………… 21
3.17 Employee Benefits………………………………………………………………………………….. 23
3.18 Debt………………………………………………………………………………………………………. 26
3.19 Environmental, Health, and Safety Matters………………………………………………… 26
3.20 Certain Business Relationships with the Company ……………………………………… 27
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 3 of 258 PageID #: 21
TABLE OF CONTENTS
(continued)
Page
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3.21 Customers and Suppliers………………………………………………………………………….. 27
3.22 Restrictions on Business Activities……………………………………………………………. 28
3.23 Warranties……………………………………………………………………………………………… 28
3.24 Disclosure ……………………………………………………………………………………………… 29
ARTICLE 4 COVENANTS ………………………………………………………………………………………….. 29
4.1 General………………………………………………………………………………………………….. 29
4.2 Litigation Support …………………………………………………………………………………… 29
4.3 Transition ………………………………………………………………………………………………. 30
4.4 Confidentiality ……………………………………………………………………………………….. 30
4.5 Covenant Not to Compete………………………………………………………………………… 30
4.6 Covenant Not to Solicit……………………………………………………………………………. 30
4.7 Enforcement…………………………………………………………………………………………… 31
4.8 Hired Employees…………………………………………………………………………………….. 31
4.9 Accounts Receivable……………………………………………………………………………….. 32
4.10 Change of Name …………………………………………………………………………………….. 32
4.11 Bulk Sales Laws……………………………………………………………………………………… 32
ARTICLE 5 CLOSING DELIVERIES …………………………………………………………………………… 32
5.1 Closing Deliveries of Sellers ……………………………………………………………………. 32
5.2 Closing Deliveries of Buyer……………………………………………………………………… 34
ARTICLE 6 REMEDIES FOR BREACHES OF THIS AGREEMENT ……………………………… 34
6.1 Indemnification by Sellers……………………………………………………………………….. 34
6.2 Indemnification by Buyer ………………………………………………………………………… 35
6.3 Survival and Time Limitations …………………………………………………………………. 35
6.4 Limitation on Indemnification by Sellers; Payments by Sellers…………………….. 35
6.5 Limitations on Indemnification by Buyer…………………………………………………… 36
6.6 Third-Party Claims………………………………………………………………………………….. 37
6.7 Other Indemnification Matters………………………………………………………………….. 38
6.8 Setoff…………………………………………………………………………………………………….. 38
ARTICLE 7 TAX MATTERS……………………………………………………………………………………….. 38
7.1 Tax Indemnification………………………………………………………………………………… 38
7.2 Cooperation on Tax Matters…………………………………………………………………….. 39
7.3 Certain Taxes…………………………………………………………………………………………. 39
ARTICLE 8 DEFINITIONS………………………………………………………………………………………….. 39
ARTICLE 9 MISCELLANEOUS ………………………………………………………………………………….. 54
9.1 Press Releases and Public Announcements; Post-Closing Promotion of
Company by Shareholder…………………………………………………………………………. 54
9.2 No Third-Party Beneficiaries……………………………………………………………………. 54
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9.3 Entire Agreement……………………………………………………………………………………. 54
9.4 Succession and Assignment……………………………………………………………………… 54
9.5 Counterparts…………………………………………………………………………………………… 55
9.6 Headings ……………………………………………………………………………………………….. 55
9.7 Notices………………………………………………………………………………………………….. 55
9.8 Governing Law ………………………………………………………………………………………. 56
9.9 Waiver of Jury Trial………………………………………………………………………………… 56
9.10 Exclusive Venue …………………………………………………………………………………….. 56
9.11 Amendments and Waivers……………………………………………………………………….. 57
9.12 Injunctive Relief……………………………………………………………………………………… 57
9.13 Severability ……………………………………………………………………………………………. 57
9.14 Expenses ……………………………………………………………………………………………….. 57
9.15 Construction…………………………………………………………………………………………… 57
9.16 Incorporation of Schedules and Disclosure Schedule…………………………………… 57
9.17 Confidentiality ……………………………………………………………………………………….. 58
9.18 Schedules………………………………………………………………………………………………. 58
EXHIBITS AND SCHEDULES
Disclosure Schedule — Exceptions to Representations and Warranties
Exhibit A — Subscription Agreement
Exhibit B — Subordinated Promissory Note
Schedule 1.4 — Earnout Calculation
Schedule 1.10 — Working Capital Calculation Methodology
Schedule 1.11 — Allocation Schedule
Schedule 1.12 — Non-Assignable Assets
Schedule 4.8 — Hired Employees
Schedule 5.1(d) — Indebtedness Paid at Closing
Schedule 5.1(e) — Third Party Consents Under Contracts and Permits
Schedule 6.1(a)(iv) — Specific Indemnities
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TABLE OF CONTENTS
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Page
Schedule 8(a) — Assumed Employee Obligations
Schedule 8(b) — Excluded Liabilities
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Schedule 8(a) — Assumed Employee Obligations
Schedule 8(b) — Excluded Liabilities
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into on February
17, 2023, by and among 1SEO Digital Agency, LLC, a Delaware limited liability company
(“Buyer”), 1SEO.com Inc., a Pennsylvania corporation (the “Company”), and Lance Bachmann
(“Shareholder”, and collectively with the Company, the “Sellers”, and each individually, a
“Seller”). Buyer, the Company and the Shareholder may be referred to collectively herein as the
“Parties” and individually as a “Party.”
RECITALS
WHEREAS, the Company is engaged in the Business;
WHEREAS, the Company desires to sell and assign to Buyer, and Buyer desires to
purchase and assume from the Company, substantially all of the assets and certain expressly
specified liabilities of the Business, subject to the terms and conditions set forth herein;
WHEREAS, a portion of the purchase price payable by Buyer to the Company shall be
placed in escrow by Buyer, the release of which shall be contingent upon certain events and
conditions, all as set forth in this Agreement and the Escrow Agreement; and
WHEREAS, the Shareholder owns all of the outstanding equity of the Company and is
intimately familiar with the operation of the Company and will receive substantial economic
benefits from the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
BASIC TRANSACTION
1.1 Purchase and Sale of Assets. In accordance with the terms and upon the conditions
of this Agreement, at the Closing, the Company shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase from the Company, free and clear of all Liens, all right, title and
interest in and to the Acquired Assets.
1.2 Assumption of Liabilities. In accordance with the terms and upon the conditions
of this Agreement, at the Closing, Buyer shall assume all of the Assumed Liabilities. Buyer shall
not assume, and shall not have any responsibility with respect to, the Excluded Liabilities.
1.3 Purchase Price. The aggregate purchase price for the Acquired Assets (the
“Purchase Price”) shall consist of:
(a) the Cash Payment, subject to adjustment as provided in this ARTICLE 1;
plus
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(b) the Earnout Amount, to the extent earned and payable, to the Company in
accordance with Section 1.4 and Section 1.5; plus
(c) One Million Three Hundred Thousand Dollars ($1,300,000) (the
“Indemnification Escrow Amount”) to the escrow account established pursuant to the terms and
conditions of the Escrow Agreement, to the extent ultimately distributed in accordance with the
Escrow Agreement; plus
(d) Four Hundred Thousand Dollars ($400,000) (the “Working Capital Escrow
Amount”, and, together with the Indemnification Escrow Amount, the “Escrow Amount”), to the
extent ultimately distributed in accordance with the Escrow Agreement; plus
(e) the Rollover Equity with an aggregate value of One Million Four Hundred
Thousand Dollars ($1,400,000) (the “Rollover Amount”); plus
(f) the assumption of the Assumed Liabilities.
1.4 Calculation of Earnout Amount. The Earnout Amount shall be calculated in
accordance with Schedule 1.4 over the twenty four (24) month period after the Closing Date (the
“Earnout Measurement Period”), which earnout shall not exceed $3,000,000 in the aggregate and,
to the extent earned, shall be converted to a subordinated promissory note (with quarterly payments
of the over the following twelve months) (“Earnout Note”), in the form attached hereto as Exhibit
B, at such time, or, if disputed by the Company, within ten (10) days of final resolution of the
disputed amount.
1.5 Determination of Earnout Amount. Within twenty (20) days after the Earnout
Measurement Period ends, Buyer, or Buyer’s Accountant, shall prepare and deliver to the
Company a report (the “Earnout Report”) containing the financial statements of the Business for
the Earnout Measurement Period and setting forth Buyer’s calculation of the cumulative EBITDA
for the Earnout Measurement Period and the resulting Earnout Amount. If the Company has any
objections to the calculation of the cumulative EBITDA for the Earnout Measurement Period and
the resulting Earnout Amount prepared by Buyer or Buyer’s Accountant, then the Company will
deliver a detailed written statement (the “Earnout Objections Statement”) describing the objections
to Buyer within ten (10) days after Buyer’s or Buyer’s Accountant’s delivery of the Earnout
Report. If the Company fails to deliver an Earnout Objections Statement within such ten (10) day
period, then the calculation of the cumulative EBITDA for the Earnout Measurement Period and
the resulting Earnout Amount set forth in the Earnout Report shall become final and binding on
the Parties.
1.6 Estimated Cash Payment. At least five (5) Business Days prior to the date hereof,
the Company shall have delivered to Buyer (a) a certificate signed by an officer of the Company
setting forth the Company’s best estimate of the Cash Amount, Debt Amount, Transaction
Expenses Amount, Working Capital, Working Capital Surplus, if any, or Working Capital Deficit,
if any, in each case as of the Closing Date and, based on such estimate, the determination of the
estimated Cash Payment in accordance with the formula set forth in the definition of ‘Cash
Payment’ (the “Estimated Cash Payment”), and (b) all records and work papers necessary to
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compute and verify the information set forth in such certificate, all of which must be reasonably
acceptable to Buyer.
1.7 Subscription Agreement. The Company shall deliver to Buyer the Subscription
Agreement subscribing for the Rollover Equity in the form attached hereto as Exhibit A (the
“Subscription Agreement”).
1.8 Payment and Delivery of Purchase Price.
(a) Closing Payments. At the Closing, Buyer shall:
(i) pay the Estimated Cash Payment to the Company;
(ii) pay the Debt Amount, if any, pursuant to the payoff letters delivered
by the Company to Buyer pursuant to Section 5.1(d);
(iii) deliver the Escrow Amount to the Escrow Agent for deposit into
the escrow account to be held by Escrow Agent in accordance with the terms of this Agreement
and the Escrow Agreement;
(iv) issue to the Company the Rollover Units; and
(v) pay the Transaction Expenses Amount pursuant to the direction of
the Company.
(b) Cash Payment Adjustment. Within five (5) Business Days after the Cash
Payment becomes final and binding in accordance with Section 1.9:
(i) if the Final Cash Payment exceeds the Estimated Cash Payment,
then such excess shall be paid by Buyer to the Company in cash; or
(ii) if the Estimated Cash Payment exceeds the Final Cash Payment,
then such excess shall be paid by the Sellers, jointly and severally, to Buyer in cash.
(c) Payments. All payments to the Company pursuant this Section 1.8 shall be
made by wire transfer of immediately available funds to accounts designated by the Company in
writing. All cash payments to Buyer pursuant to Section 1.8(b)(ii) shall be made by wire transfer
of immediately available funds to an account designated by Buyer in writing.
(d) Withholding. The Parties, the Escrow Agent and any other applicable
withholding agent will be entitled to deduct and withhold from any amounts payable pursuant to
or as contemplated by this Agreement or the Escrow Agreement any Taxes or other amounts
required under the Code or any applicable Law to be deducted and withheld, and, to the extent that
any amounts are so deducted or withheld, such amounts will be treated for all purposes of this
Agreement as having been paid to the Person in respect of which such deduction and withholding
was made. Notwithstanding anything to the contrary herein, any compensatory amounts subject
to payroll reporting and withholding that are payable pursuant to or as contemplated by this
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Agreement or the Escrow Agreement shall be payable in accordance with the applicable payroll
procedures of the Company.
1.9 Cash Payment Determination. Within one hundred twenty (120) days after the
Closing Date, Buyer shall prepare and deliver to the Company a statement setting forth Buyer’s
calculation of the Cash Amount, Debt Amount, Transaction Expenses Amount, Working Capital,
Working Capital Surplus, if any, and Working Capital Deficit, if any, in each case as of the Closing
Date and, based on such calculations, its determination of the amount of the appropriate Cash
Payment (the “Closing Statement”). If the Company has any objections to the Closing Statement
prepared by Buyer, then the Company will deliver a detailed written statement (the “Objections
Statement”) describing (a) which items on the Closing Statement have not been prepared in
accordance with this Agreement, (b) the basis for the Company’s disagreement with the
calculation of such items, and (c) the Company’s proposed dollar amount for each item in dispute
and the calculation used by the Company to support the same, to Buyer within thirty (30) days
after delivery of the Closing Statement. If the Company fails to deliver an Objections Statement
within such thirty (30) day period, then the Closing Statement shall become final and binding on
all Parties. The Company shall be deemed to have agreed with all amounts and items contained
or reflected in the Closing Statement to the extent such amounts or items are not disputed in the
Objections Statement. If the Company delivers an Objections Statement within such thirty (30)
day period, then the Company and Buyer will use commercially reasonable efforts to resolve any
such disputes, but if a final resolution is not obtained within thirty (30) days after the Company
has submitted any Objections Statements, any remaining matters which are in dispute will be
resolved by an impartial nationally or regionally recognized firm of independent certified public
accountants, other than Sellers’ accountants or Buyer’s accountants, appointed by mutual
agreement of Buyer and Sellers, or, if Buyer and Sellers cannot agree, Buyer will appoint one
accountant, Sellers will appoint one accountant, and those two accountants will select an
accountant to settle such dispute in accordance with this Section (in each case, the “Accountant”).
The Accountant will prepare and deliver a written report to Buyer and the Company and will
submit a proposed resolution of such unresolved disputes promptly, but in any event within thirty
(30) days after the dispute is submitted to the Accountant. Absent manifest error, the Accountant’s
determination of such unresolved disputes will be final and binding upon all Parties; provided,
however, that no such determination shall be any more favorable to Buyer than is set forth in the
Closing Statement or any more favorable to the Company than is proposed in the Objections
Statement. The costs, expenses and fees of the Accountant shall be borne by the Company, on the
one hand, and by Buyer, on the other hand, based upon the percentage that the amount actually
contested but not awarded to the Company or Buyer, respectively, bears to the aggregate amount
actually contested by the Company and Buyer. The final Closing Statement, however determined
pursuant to this Section 1.9, will produce the Working Capital Surplus, if any, or the Working
Capital Deficit, if any, the final Debt Amount, the final Cash Amount and the final Transaction
Expenses Amount to be used to determine the final Cash Payment (the “Final Cash Payment”).
1.10 Calculations. All calculations of Working Capital under this Agreement, whether
estimates or otherwise, shall be determined in accordance with the methodology set forth on
Schedule 1.10.
1.11 Allocation. The Parties agree to allocate the Purchase Price (and all other
capitalizable costs) among the Acquired Assets for tax purposes in accordance with the
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methodology set forth on the allocation schedule attached hereto as Schedule 1.11 (the “Allocation
Schedule”). The Parties agree to file all income Tax Returns (including IRS Form 8594) in a
manner consistent with the Allocation Schedule and to not take any position for income Tax
purposes that is inconsistent with the Allocation Schedule unless required to do so by applicable
Law.
1.12 Non-Assignable Assets. Nothing in this Agreement, nor the consummation of the
transactions contemplated hereby, shall be construed as an attempt or agreement to assign or
transfer any Acquired Asset (including any Contract) to Buyer which by its terms or by Law (a) is
non-assignable without a consent, (b) would result in any increase in any payment or change any
term, (c) would give rise to any amendment, termination, cancellation or acceleration of any right
or obligation or to a loss of benefit, or (d) grant any repayment or repurchase right to any person
(a “Non-Assignable Asset”), unless and until a consent reasonably acceptable to Buyer shall have
been obtained. Schedule 1.12 sets forth a list of each Non-Assignable Asset. The Company shall
obtain, and Buyer agrees to reasonably cooperate with the Company in its efforts to obtain, the
consents of each such third party to the assignment or transfer of the Non-assignable Assets to
Buyer or its designated Affiliates in all cases in which such consent is required for the valid and
enforceable assignment or transfer thereof to Buyer. If such consent is not obtained, Buyer may
elect, to the extent permitted by applicable Law and by the terms of the applicable Non-Assignable
Asset, to have such Non-Assignable Asset held, as of and from the Closing, by the Company for
the benefit and burden of Buyer and, in such event, the covenants and obligations thereunder shall
be fully performed by Buyer on the Company’s behalf and all rights and liabilities existing
thereunder shall be for Buyer’s account. For the avoidance of doubt, the designation of an asset
as a Non-Assignable Asset does not render it an Excluded Asset.
1.13 Consent of the Shareholder. The Shareholder in executing this Agreement
consents, in his respective capacity as the sole shareholder of the Company, to the transactions
contemplated hereby, and waives notice of any meeting in connection therewith.
1.14 Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place electronically by the mutual exchange of facsimile or portable
document format (.PDF) signatures on the date of this Agreement (the “Closing Date”). All
transactions contemplated herein to occur on and as of the Closing Date shall be deemed to have
occurred simultaneously and to be effective as of 12:01 a.m. local time on such date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers that the statements contained in this ARTICLE 2
with respect to Buyer are correct and complete as of the Closing Date.
2.1 Organization of Buyer. Buyer is a limited liability company duly formed, validly
existing and in good standing under the Laws of the State of Delaware.
2.2 Authorization of Transaction. Buyer has full limited liability company power and
authority to execute and deliver this Agreement and to perform Buyer’s obligations hereunder.
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Buyer has full limited liability company power and authority to execute and deliver the Ancillary
Agreements to which Buyer is a party and to perform Buyer’s obligations thereunder. The
execution and delivery by Buyer of this Agreement and the Ancillary Agreements to which Buyer
is a party and the performance by Buyer of the transactions contemplated hereby and thereby have
been duly approved by all requisite limited liability company action of Buyer. Assuming the due
authorization, execution and delivery of this Agreement and the Ancillary Agreements by the other
parties thereto, this Agreement and each Ancillary Agreement to which Buyer is a party constitute
the valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with
their terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors generally and by the availability
of equitable remedies. Except as required to comply with applicable federal and state securities
Laws, Buyer is not required to give any notice to, make any filing with, or obtain any Consent of
any Governmental Body or any other Person in order to consummate the transactions contemplated
by this Agreement or the Ancillary Agreements to which Buyer is a party.
2.3 Non-contravention. Neither the execution and the delivery of this Agreement nor
the Ancillary Agreements to which Buyer is a party, nor the consummation of the transactions
contemplated hereby and thereby, will (a) violate or conflict with any Law or Order to which Buyer
is subject, (b) violate any provision of the Organizational Documents of Buyer or (c) conflict with,
result in a breach of, constitute a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice or Consent under any
Contract to which Buyer is a party or by which it is bound or to which any of its assets is subject.
2.4 Brokers’ Fees. Buyer does not have any obligation to pay any fees or commissions
to any broker, finder or agent with respect to the transactions contemplated by this Agreement for
which the Company or the Shareholder could become liable or obligated.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
The Company and the Shareholder, jointly and severally, represent and warrant to Buyer
that the statements contained in this ARTICLE 3 are correct and complete as of the Closing Date,
except as set forth in the corresponding section of the Disclosure Schedule.
3.1 Organization, Qualification, and Power. The Company is a corporation duly
formed, validly existing and in good standing under the Laws of the State of Pennsylvania.
Section 3.1(a) of the Disclosure Schedule sets forth each state or other jurisdiction in which the
Company is licensed or qualified to do business. The Company is duly authorized to conduct its
business and is in good standing under the Laws of each jurisdiction where such qualification is
required. The Company has full corporate power and authority and all Permits necessary to carry
on the Business and to own, lease and use the properties owned, leased and used by the Company.
Section 3.1(b) of the Disclosure Schedule lists the members of the board of directors and officers
of the Company. Sellers have delivered to Buyer correct and complete copies of the Organizational
Documents, the minute book and equity interest record books for the Company, each of which is
correct and complete. The Company is not in default under or in violation of any provision of its
Organizational Documents.
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3.2 Authorization of Transaction. Each Seller has full power authority and legal
capacity (including, in the case of the Company, full corporate power and authority) to execute
and deliver this Agreement and the Ancillary Agreements to which it is a party and to perform its
obligations hereunder and thereunder. The execution and delivery by each Seller of this
Agreement and the Ancillary Agreements to which each Seller is a party and the performance by
each Seller of the transactions contemplated hereby and thereby have been duly approved by all
requisite action. Assuming the due authorization, execution and delivery of this Agreement and
the Ancillary Agreements by the other parties thereto, this Agreement and each Ancillary
Agreement to which a Seller is a party constitute the valid and legally binding obligation of such
Seller, as applicable, enforceable against such Seller in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors generally and by the availability of equitable remedies. Except as set forth
on Section 3.2 of the Disclosure Schedule, no Seller is required to give any notice to, make any
filing with, or obtain any Consent of any Governmental Body or any other Person in order to
consummate the transactions contemplated by this Agreement or the Ancillary Agreements to
which such Seller is a party.
3.3 Capitalization and Subsidiaries. All of the Company Securities are owned solely,
beneficially and of record by the Shareholder. The Company Securities represent one hundred
percent (100%) of the outstanding equity or other ownership interests in the Company. All of the
Company Securities have been duly authorized, are validly issued, fully paid, and non-assessable
and have been issued without violation of any preemptive right or other right to purchase. The
Shareholder owns all of the Company Securities free and clear of all Liens, except as set forth on
Section 3.3 of the Disclosure Schedule. There are no other equity or other ownership interests in
the Company or outstanding securities convertible or exchangeable into equity or other ownership
interests of the Company, and there are no options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, calls, puts, rights of first refusal or other Contracts that could
require the Company to issue, sell or otherwise cause to become outstanding or to acquire,
repurchase or redeem equity or other ownership interests in the Company. There are no
outstanding or authorized equity appreciation, phantom equity, profit participation or similar rights
with respect to the Company. There are no voting trusts, proxies or other Contracts with respect
to the voting of the equity or other ownership interests of the Company. Upon the Closing, the
Acquired Assets will be delivered to Buyer free and clear of all Liens (other than any Liens which
may result from any actions taken by Buyer or Permitted Liens), Buyer will have good and
marketable title to the Acquired Assets, and Buyer will be the sole owner, beneficially and of
record, of one hundred percent (100%) of the Acquired Assets. The Company does not have, and
since the date of its formation has not had, any Subsidiaries.
3.4 Non-contravention. Neither the execution and the delivery of this Agreement nor
the Ancillary Agreements, nor the consummation of the transactions contemplated hereby or
thereby, will (i) violate or conflict with any Law or Order to which a Seller is subject, (ii) violate
or conflict with any provision of the Organizational Documents of the Company, or (iii) except as
set forth on Section 3.4 of the Disclosure Schedule, conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice, Consent or payment under any Contract or Permit to
which a Seller is a party or by which a Seller is bound or to which any such Seller’s assets are
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subject (or result in the imposition of any Lien upon any such Seller’s assets, including the
Company Securities).
3.5 Brokers’ Fees. Except as set forth in Section 3.5 of the Disclosure Schedule, no
Seller has any liability or obligation to pay any fees or commissions to any broker, finder or agent
with respect to the transactions contemplated by this Agreement or any Ancillary Agreement.
3.6 Assets.
(a) The Company has good and marketable title to, or a valid leasehold interest
or license in, the properties and assets (tangible and intangible) used by the Company, located on
the Company’s premises or shown on the Most Recent Balance Sheet or acquired after the date
thereof (other than inventory sold in the Ordinary Course of Business), free and clear of all Liens,
except for Permitted Liens and as set forth on Section 3.6 of the Disclosure Schedule. The
Acquired Assets are all the assets, properties and rights used or held for use by the Company in
the operation of the Business or necessary to operate the Business, consistent with past practice.
Neither the Company nor the Business uses or shares any assets owned by any Affiliate of the
Company or any Affiliate of the Shareholder. The Acquired Assets include all of the operating
assets of the Company except for the Excluded Assets.
(b) (i) all or substantially all of the expense addbacks to the profit and loss
statements that were proposed by the Seller to the Buyer were for personal expenses of the Seller
or its Affiliates and were not expenses of the Business or Company expenses incurred in the
ordinary course of business; (ii) all or substantially all of the amounts booked as equity
distributions from the balance sheets (in the Financial Statements) were for the benefit of the Seller
or its Affiliates and were not payments of expenses of the Business or Company expenses incurred
in the ordinary course of business; and (iii) neither the Sellers nor any Affiliates have made
payment to the Company’s vendors in exchange for providing services to the Business or Company
in the ordinary course of business.
(c) The Acquired Assets are free from material defects (patent and latent), have
been maintained in accordance with normal industry practice, are in good operating condition and
repair (subject to normal wear and tear) and are suitable for the purposes for which they are
presently used.
3.7 Financial Statements; Interim Conduct.
(a) Attached to Section 3.7(a)(i) of the Disclosure Schedule are correct and
complete copies of the following consolidated financial statements of the Company (collectively,
the “Financial Statements”): (i) internally prepared balance sheets, profit and loss, and cash flow
statements for the period of January 1 through December 31, for each of the years 2020 – 2022
and (ii) internally prepared fiscal year-to-date balance sheets, profit and loss statements, and cash
flow statements for the period ended January 31, 2023 (the “Most Recent Fiscal Month End”, and
such financial statements, the “Most Recent Financial Statements”). Except as set forth in Section
3.7(a)(ii) of the Disclosure Schedule, the Financial Statements are correct and complete and
consistent with the books and records of the Company (which are in turn correct and complete),
have been prepared in accordance with the accounting principles, policies, procedures,
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methodologies, classifications and judgements historically used by the Company (applied on a
consistent basis throughout the periods indicated), and present fairly in all respects the financial
condition, results of operation, changes in equity and cash flow of the Company as of and for their
respective dates and for the periods then ending, consistently applied; provided, however, that the
Most Recent Financial Statements are subject to normal, recurring year-end adjustments and lack
notes required by GAAP (none of which will be material individually or in the aggregate).
(b) Since December 31, 2021, the Business has been conducted in the Ordinary
Course of Business, and there has not been any Material Adverse Change and no event has
occurred which could reasonably be expected to result in a Material Adverse Change. Without
limiting the generality of the foregoing, except as set forth on Section 3.7(b) of the Disclosure
Schedule, since December 31, 2021, the Company has not:
(i) sold, leased, transferred or assigned any assets or property (tangible
or intangible) with a value in excess of $10,000, other than sales of inventory in the Ordinary
Course of Business;
(ii) experienced any damage, destruction or loss (whether or not covered
by insurance) to its assets or property (tangible or intangible) in excess of $10,000, in any
individual instance, or more than $25,000 in the aggregate;
(iii) received notice from any Person regarding the acceleration,
termination, modification or cancelation of a Contract, which, if in existence on the date hereof,
would be required to be listed on Section 3.13 of the Disclosure Schedule;
(iv) issued, created, incurred, guaranteed or assumed any Debt;
(v) forgave, canceled, compromised, waived or released any Debt owed
to it or any right or claim;
(vi) issued, sold or otherwise disposed of any of its equity or other
ownership interests, or granted any options, warrants or other rights to acquire (including upon
conversion, exchange or exercise) any of its equity or other ownership interests or declared, set
aside, made or paid any dividend or distribution with respect to its equity or other ownership
interests or redeemed, purchased or otherwise acquired any equity or other ownership interest or
amended or made any change to any of its Organizational Documents or made any other payment
to the Shareholder;
(vii) granted any increase in salary or bonus or otherwise increased the
compensation or benefits payable or provided to any manager, officer, employee, consultant,
advisor or agent, except wage or salary increases set forth on Section 3.7(b)(vii) of the Disclosure
Schedule;
(viii) except as set forth in Section 3.7(b)(viii) of the Disclosure Schedule,
engaged in any promotional, sales or discount or other activity that has or could reasonably be
expected to have the effect of accelerating sales prior to the Closing that would otherwise be
expected to occur subsequent to the Closing; Section 3.7(b)(viii) of the Disclosure Schedule also
includes a list of all prepaid customers and associated deferred revenue as of January 31, 2023;
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(ix) made any commitment outside of the Ordinary Course of Business
or in excess of $10,000 in the aggregate for capital expenditures to be paid after the Closing or
failed to incur capital expenditures in accordance with its capital expense budget;
(x) instituted any material change in the conduct of its business or any
material change in its accounting practices or methods, cash management practices or method of
purchase, sale, lease, management, marketing or operation;
(xi) taken or omitted to take any action which could be reasonably
anticipated to have a Material Adverse Effect;
(xii) made, changed or rescinded any Tax election, settled or
compromised any Tax liability, amended any Tax Return or took any position on any Tax Return,
took any action, omitted to take any action or entered into any other transaction that would have
the effect of materially increasing the Tax liability or materially reducing any Tax assets of the
Company or Buyer in respect of any taxable period ending after the Closing Date;
(xiii) collected its accounts receivable or paid any accrued liabilities or
accounts payable or prepaid any expenses or other items, in each case other than in the Ordinary
Course of Business;
(xiv) entered into any transaction with any Affiliate; and
(xv) agreed or committed to any of the foregoing.
(c) All notes and accounts receivable reflected on the Most Recent Financial
Statements, and all accounts receivable of the Company generated since the Most Recent Fiscal
Month End (the “Receivables”), constitute bona fide receivables resulting from the sale of
inventory, services or other obligations in favor of the Company as to which full performance has
been fully rendered, and are valid and enforceable claims. All of the accounts receivable of the
Company as of the Closing Date will be current and collectible, except to the extent any contractual
allowances and reserve for bad debts are reflected in the final calculation of Working Capital. The
Receivables are not subject to any pending or threatened defense, counterclaim, right of offset,
returns, allowances or credits, except to the extent reserved against the accounts receivable. The
reserves against the accounts receivable for returns, allowances, chargebacks and bad debts are
commercially reasonable and have been determined in accordance with GAAP, consistently
applied in accordance with past custom and practice.
(d) The accounts payable of the Company reflected on the Most Recent
Financial Statements arose from bona fide transactions in the Ordinary Course of Business, and
all such accounts payable have either been paid, are not yet due and payable in the Ordinary Course
of Business or are being contested by the Company in good faith.
(e) The inventory of the Company (i) does not include any items that are
obsolete or of a quantity or quality not usable or salable in the Ordinary Course of Business and
(ii) includes only items sold by the Company in the Ordinary Course of Business. The inventory
disposed of subsequent to the date of the Most Recent Fiscal Year End has been disposed of only
in the Ordinary Course of Business. No inventory of the Company is held on a consignment basis.
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The quantities of each item of inventory of the Company (whether raw materials, work-in-process
or finished goods) are not excessive, but are reasonable in the present circumstances of the
Company.
3.8 Undisclosed Liabilities. The Company does not have any, and there is no basis for
any, liability (whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or
to become due), except for liabilities that (a) are accrued or reserved against in the Most Recent
Financial Statements, (b) were incurred subsequent to the Most Recent Fiscal Month End in the
Ordinary Course of Business, or (c) are liabilities and obligations pursuant to any Contract listed
on Section 3.13 of the Disclosure Schedule or not required by the terms of Section 3.13 to be listed
on Section 3.13 of the Disclosure Schedule, in either case which arose in the Ordinary Course of
Business and did not result from any default, tort, breach of contract or breach of warranty.
3.9 Legal Compliance.
(a) The Company and its Affiliates have complied and are in compliance with
all applicable Laws (including Privacy Laws) and Orders, and no Proceeding has been filed or
commenced or, to the Knowledge of Sellers, threatened against the Company alleging any failure
to so comply. Since January 1, 2019, the Company has not received any notice or communication
alleging any non-compliance of the foregoing, except as set forth on Section 3.9(a) of the
Disclosure Schedule.
(b) The Company is complying and has complied at all times with all applicable
Laws and all internal or publicly posted policies, notices, and statements concerning the collection,
use, processing, storage, transfer, and security of personal information (or similar term such as
“personally identifiable information” or “sensitive personal information”) as defined by applicable
Laws (collectively, the “Privacy Laws”) in the conduct of the Business. In the past five (5) years,
neither the Company nor any of its subcontractors has (a) experienced any actual, alleged, or
suspected data breach (or similar term such as “breach of security of the system”) or other security
incident as defined by the Privacy Laws involving personal information in its possession or control
or (b) been subject to or received any notice of any audit, investigation, complaint, or other
Proceeding by any Governmental Body or other Person concerning the Company’s or its
subcontractors’ collection, use, processing, storage, transfer, or protection of personal information
or actual, alleged, or suspected violation of any Privacy Laws concerning privacy, data security,
or data breach notification, in each case in connection with the conduct of the Business, and there
are no facts or circumstances that could reasonably be expected to give rise to any such Proceeding.
(c) Section 3.9(c) of the Disclosure Schedule sets forth a correct and complete
list and description of all Permits held by the Company. Such Permits (i) constitute all Permits
necessary for the operation of the Business and (ii) are in full force and effect. No Proceeding is
pending or, to the Knowledge of Sellers, threatened to revoke or limit any Permit and no violations
have been alleged in respect of any Permit.
(d) Neither the Company, nor any of its directors, officers, managers, agents,
employees or any other Persons acting on their behalf has (i) made any illegal payment or provided
any unlawful compensation or gifts to any officer or employee of any Governmental Body, or any
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employee, customer or supplier of the Company, or (ii) accepted or received any unlawful
contributions, payments, expenditures or gifts; and no Proceeding has been filed or commenced
alleging any such payments, contributions, expenditures or gifts.
(e) There has not been in the past three (3) years, and as of the date hereof there
are not, any internal investigations or inquiries being conducted by the Company or, to the
Knowledge of Sellers, any third party or Governmental Body concerning any conflict of interest,
self-dealing, fraudulent or deceptive conduct or other misfeasance or malfeasance issues.
3.10 Tax Matters.
(a) The Sellers have timely filed with the appropriate taxing authorities all Tax
Returns required to be filed with respect to the Company, the Business and the Acquired Assets.
All such Tax Returns are true, correct and complete and prepared in accordance with applicable
Laws. All Taxes required to be paid by the Company (whether or not shown on any Tax Return)
or with respect to the Business and the Acquired Assets have been paid or are reflected as reserves
on the Most Recent Financial Statements. Each Tax election made by or on behalf of the Company
has been timely and properly made. The Company is not currently the beneficiary of any extension
of time within which to file any Tax Return or pay any Tax. There are no Liens for Taxes (other
than Permitted Liens) upon the equity interests or any of the assets (including the Acquired Assets)
of the Company.
(b) The unpaid Taxes of the Company (i) did not, as of the Most Recent Fiscal
Month End, exceed the reserve for Tax liabilities (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth on the face of the
Most Recent Financial Statements (rather than in any notes thereto) and (ii) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in accordance with the past
custom and practice of the Company in filing its Tax Returns.
(c) No deficiency or proposed adjustment for any amount of Tax has been
proposed, asserted or assessed by any taxing authority against the Company (including with
respect to the Business or the Acquired Assets) that has not been paid, settled or otherwise
resolved. There is no Proceeding or audit now pending, proposed or, to the Knowledge of Sellers,
threatened against the Company (including with respect to the Business or the Acquired Assets)
or concerning the Company (including with respect to the Business or the Acquired Assets) with
respect to any Taxes. The Company has not been notified by any taxing authority that any issues
have been raised with respect to any Tax Return. There has not been, within the past five (5)
calendar years, an examination or written notice of potential examination in respect of Taxes of
the Company (including with respect to the Business or the Acquired Assets) by any taxing
authority.
(d) All Taxes that are required to be withheld or collected by the Company,
including, but not limited to, Taxes arising as a result of payments (or amounts allocable) to foreign
persons or to employees, agents, contractors or members of the Company, have been duly withheld
and collected and, to the extent required, have been properly paid or deposited (or, in circumstances
where such Taxes have not yet become due and payable, have been set aside in segregated accounts
to be paid to the proper Governmental Body) as required by applicable Laws, and all required
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information returns with respect to any such amounts have been correctly prepared and timely filed
to the extent such return were required to have been filed on or before the Closing Date.
(e) No claim has ever been made by any taxing authority in a jurisdiction where
the Company does not file Tax Returns that they are or may be subject to taxation by that
jurisdiction.
(f) The Company is not party to any Tax allocation, sharing, indemnity, or
reimbursement agreement or arrangement.
(g) The Company will not be required to include any item of income or exclude
any deduction or loss from taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any (i) “closing agreement” as described in Code Section 7121 (or
any corresponding or similar provision of state, local or foreign Income Tax law) executed on or
prior to the Closing Date, (ii) intercompany transaction or excess loss account described in
Treasury Regulations under Code Section 1502 (or any corresponding or similar provision or
administrative rule of federal, state, local or foreign income Tax Law) existing on the Closing
Date, (iii) installment sale or open-transaction disposition made on or prior to the Closing Date,
(iv) prepaid amount received or deferred revenue accrued on or prior to the Closing Date, (v)
election pursuant to Code Section 108(i) (or any corresponding or similar provision of state, local
or foreign Tax law), or (vi) any change in method of accounting or use of an improper method of
accounting for a taxable period ending on or prior to the Closing Date.
(h) Section 3.10(h) of the Disclosure Schedule lists all Tax Returns filed by the
Company for Tax periods ended on or after December 31, 2018, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently are the subject of audit. The
Company has not waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to the payment of any Tax or any Tax assessment or deficiency.
(i) None of the Company’s assets are a “section 197(f)(9) intangible” (as
defined in Treas. Reg. § 1.197-2(h)(1)(i) and assuming for this purpose that the transition period
ends on August 10, 1993).
(j) The Company (i) has not been a member of an affiliated, consolidated,
unitary or similar group, and (ii) has no liability for the Taxes of any Person under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a
transferee or successor, by Contract or otherwise, except for Contracts and agreements entered into
in the Ordinary Course of Business the primary subject matter of which is not Taxes.
(k) The Company (i) is not a party to and has not participated in any “reportable
transaction” within the meaning of Section 6707A of the Code and Section 1.6011-4(b) of the
Treasury Regulations, (ii) does not have a permanent establishment (within the meaning of an
applicable Tax treaty) or otherwise have an office or fixed place of business in a country other than
the country in which it is organized, (iii) has not been subject to adjustment under Section 482 of
the Code (including any similar provision of state, local, or foreign Tax law), and (iv) has not
requested or received any Tax ruling, transfer pricing agreement closing agreement or similar
agreement that would have continuing effect after the Closing Date.
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(l) The Company has not, in the past five (5) years, been either a “distributing
corporation” or a “controlled corporation” within the meaning of Section 355(a)(1)(A) of the Code,
or been included in group of corporations filing a federal consolidated income tax return with a
corporation which was, during such period, either a “distributing corporation” or a “controlled
corporation” within the meaning of Section 355(a)(1)(A) of the Code.
(m) Section 3.10(m) of the Disclosure Schedule contains a list of each loan or
other financial assistance under the CARES Act or the Paycheck Protection Program and Health
Care Enhancement Act (P.L. 116-139) the Company has applied for or received (each, a “Covid19 Assistance Subsidy”). As of the Closing Date, each such Covid-19 Assistance Subsidy has
been forgiven. The Company was eligible to make such application and receive each such Covid19 Assistance Subsidy, and has complied with all applicable conditions, including any applicable
conditions to maintain eligibility for any available loan forgiveness, with respect to each such
Covid-19 Assistance Subsidy. Except as set forth in Section 3.10(m) of the Disclosure Schedule,
the Company has not elected to defer any Taxes pursuant to the CARES Act. Except as set forth
in Section 3.10(m) of the Disclosure Schedule, the Company has not received any Employee
Retention Credit (“ERCs”) pursuant to the CARES Act and, with respect to any ERCs that may
have been received (or cash or credits against Taxes that may have been received in connection
therewith), the Company is and was entitled to receive all such ERCs, cash and related credits in
connection therewith in accordance with applicable Laws.
3.11 Real Property.
(a) The Company does not currently and has never owned any real property.
(b) Section 3.11(b) of the Disclosure Schedule sets forth the address of each
parcel of Leased Real Property, and a true and complete list of all Leases for each parcel of Leased
Real Property. The Company has no oral Leases. The Company has made available to Buyer a
true and complete copy of each Lease. Each Lease has not been amended or modified except as
set forth in Section 3.11(b) of the Disclosure Schedule.
(c) Subject to the respective terms and conditions in the Leases, the Company
is, as applicable, the sole legal and equitable owner of the leasehold interest in the Leased Real
Property and possesses good and marketable, indefeasible title thereto, free and clear of all Liens
(other than Permitted Liens and except as set forth on Section 3.6 of the Disclosure Schedule).
The Company enjoys peaceful and undisturbed possession of the Leased Real Property and have
paid all rent due and payable under each Lease. Except as set forth on Section 3.11(b) of the
Disclosure Schedule or Section 3.13(c) of the Disclosure Schedule, the Company has not
subleased, assigned or otherwise granted to any Person the right to use or occupy such Leased Real
Property or any portion thereof. Neither the whole nor any portion of any Leased Real Property,
has been damaged or destroyed by fire or other casualty.
(d) To the Knowledge of Sellers, with respect to each parcel of Leased Real
Property: (i) there are no pending or threatened condemnation Proceedings, suits or administrative
actions relating to any such parcel or other matters affecting adversely the current use, occupancy
or value thereof; (ii) the ownership and operation of the Leased Real Property in the manner in
which it is now owned and operated comply with all zoning, building, use, safety or other similar
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Laws; (iii) all Improvements on any such parcel are in good operating condition, ordinary wear
and tear excepted, are supplied with utilities and other services necessary for the operation of the
Business as currently conducted at such facilities and safe for their current occupancy and use; (iv)
neither the Company nor the Shareholder has received any notice of any special Tax, levy or
assessment for benefits or betterments that affect any parcel of Leased Real Property and no such
special Taxes, levies or assessments are pending or contemplated; (v) there are no Contracts
granting to any third party or parties the right of use or occupancy of any such parcel, and there
are no third parties (other than the Company) in possession of any such parcel; and (vi) each such
parcel abuts on and has adequate direct vehicular access to a public road and there is no pending
or threatened termination of such access. The Leased Real Property comprises all of the real
property used or intended to be used in the Business, and the Company is not a party to any
Contract or option to purchase any real property or any portion thereof or interest therein.
(e) Except as set forth on Section 3.11(e) of the Disclosure Schedule, with
respect to each Lease, the transaction contemplated by this Agreement will not result in a breach
of or default under such Lease, and will not otherwise cause such Lease to cease to be in full force
and effect on identical terms following the Closing Date. No default or event of default by either
the Company, or to the Knowledge of Sellers, any from any landlord, lessor, licensor, sublandlord,
or prime landlord under each such Lease (each of the foregoing, as applicable, a “Landlord”)
presently exists under any Lease. The Company has not received written notice of default under
any Lease and no event has occurred that, with the giving of notice or the passage of time, or both,
would constitute an event of default under any Lease by the Company or, to the Knowledge of
Sellers, any Landlord thereunder.
3.12 Intellectual Property.
(a) The Company owns and possesses or has the right to use pursuant to a valid
and enforceable written Contract, all Intellectual Property necessary for the operation of the
Business.
(b) Section 3.12(b)(i) of the Disclosure Schedule identifies all registered or
pending applications for Intellectual Property owned by the Company (specifying the jurisdiction
in which such item has been issued, registered or filed and the applicable issuance, grant,
registration or serial number(s) and related dates, as applicable) (“Registered IP”). No Registered
IP is currently subject to any opposition or cancellation proceeding and, to the Knowledge of
Sellers, no such proceedings are threatened. Section 3.12(b)(ii) of the Disclosure Schedule
identifies all material (a) Trademarks, (b) Copyrights, (c) Software, (d) Proprietary Information,
(e) social media accounts, and (f) domain names from which the Company currently derives any
revenue or which is used by the Company in connection with the Business. Section 3.12(b)(iii) of
the Disclosure Schedule identifies all Intellectual Property Agreements. The Company has
delivered to Buyer correct and complete copies of all such Intellectual Property registrations,
applications and Intellectual Property Agreements. There are no outstanding deadlines that will
expire within six (6) months of the Closing for any registrations or applications for any Intellectual
Property owned, used or held for use in the operation or conduct of the Business or necessary to
permit the Company to conduct the Business as currently conducted and as proposed to be
conducted. The Company has all right, title and interest in and to, free and clear of any Lien,
license, or other restriction or limitation regarding use, and has the sole and exclusive right to use
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(and its Affiliates and the Shareholder do not have and do not claim to have any individual right
to use) all the Intellectual Property required to be disclosed on Sections 3.12(b)(i), 3.12(b)(ii) and
3.12(b)(iii) of the Disclosure Schedule (subject to the applicable license agreements listed in
Section 3.12(b)(iii) of the Disclosure Schedule), and such Intellectual Property is not subject to
any outstanding Order restricting the use or licensing thereof by the Company, and the Company
has not received any written claim challenging the validity or effectiveness of such Intellectual
Property, and such Intellectual Property is valid and enforceable. Each item of Intellectual
Property owned or used by the Company immediately prior to the Closing will be owned or
available for use, respectively, by Buyer immediately subsequent to the Closing on identical terms
and conditions as owned or used by the Company immediately prior to the Closing.
(c) The Company, the operation of the Business, and the Company’s
Intellectual Property has not and is not currently infringing, misappropriating, or otherwise
violating the Intellectual Property of any Person. The Company has not received any notice from
any third party as to any potential infringement, misappropriation, or other violation by the
Company, the operation of the Business, or the Company’s Intellectual Property of any third
party’s Intellectual Property, including any invitation to take a license or any take-down notice.
To the Knowledge of Sellers, no Person has or is infringing, misappropriating or otherwise
violating any Intellectual Property owned by the Company. The Company has not received any
claim challenging the validity or effectiveness of such Intellectual Property and such Intellectual
Property is valid and enforceable.
(d) The Company owns and possesses or has the right to use, pursuant to a valid
and enforceable written Intellectual Property Agreement, all Software used by the Company in the
operation of the Business.
(e) All Intellectual Property owned by or developed by and/or for the Company
was (i) developed by (A) former and current employees of the Company within the scope of their
employment who have entered into valid and enforceable written agreements with the Company
that presently assigned all exclusive ownership of all right, title and interest in and to any
Intellectual Property developed by or for the Company; or (B) independent contractors who have
entered into valid and enforceable written agreements with the Company that presently assigned
all exclusive ownership of all right, title and interest in and to any Intellectual Property developed
by or for the Company; or (ii) acquired in connection with acquisitions in which exclusive
ownership of all right, title and interest in and to any Intellectual Property required to be disclosed
on Sections 3.12(b)(i), 3.12(b)(ii) and 3.12(b)(iii) of the Disclosure Schedule was conveyed to the
Company pursuant to an appropriate, valid, and enforceable present assignment and the Company
obtained appropriate representations, warranties and indemnities from the transferring party
relating to the title to such applicable Intellectual Property. Except as set forth on Schedule 3.12(e)
of the Disclosure Schedule, the Company has no obligation to pay royalties or similar fees to any
employee or any other Person for the development, use, manufacture, sale or exploitation of any
Intellectual Property required to be disclosed on Sections 3.12(b)(i), 3.12(b)(ii) and 3.12(b)(iii) of
the Disclosure Schedule or any products or services that incorporate or use any such Intellectual
Property. No employee or independent contractor of the Company has entered into any agreement,
contract, obligation, promise or undertaking (whether written or oral and whether express or
implied) that restricts or limits in any way the scope of the Intellectual Property or requires the
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employee or independent contractor to transfer, assign or disclose information concerning the
Intellectual Property to anyone other than the Company.
(f) To the Knowledge of Sellers, no third party has gained material
unauthorized access to any trade secret of or under the custody or control of the Company. The
Company has taken all necessary steps and precautions to protect and preserve the confidentiality
of all Proprietary Information, and all use, disclosure or appropriation thereof by or to any third
party has been pursuant to the terms of an Intellectual Property Agreement between such third
party and the Company. The Company has complied in all material respects with all of its
confidentiality obligations under each Contract to which the Company is a party. To the
Knowledge of Sellers, no material Proprietary Information is part of the public knowledge or
literature or has been used, divulged, or appropriated either for the benefit of any Person (other
than the Company) or to the detriment of the Company.
(g) The Company is not and has never been a member or promoter of, or
contributor to, any industry standards body or similar organization that could require or obligate
the Company to grant or offer to any other Person any license or right to any Intellectual Property
owned or used by the Company.
(h) Except as set forth on Section 3.12(h) of the Disclosure Schedule, (i) no
Company Software or other products or services distributed, sold or offered in connection with the
Business or the operations of the Company (collectively, “Company Products”) or Software used
in the business of the Company contains, uses or requires use of any Software licensed pursuant
to a Public Software License and (ii) none of the Company Products, Company Software or other
Software used in the Business is covered by or subject to the requirements of any Public Software
License and used in a manner that would require the Company to distribute, disclose, license,
release, escrow or otherwise make available any source code included in the Company Software
or Company Products to or for any Person.
(i) Except as set forth on Section 3.12(i)(i) of the Disclosure Schedule, no
Software that is a third party component is governed by a requirement that any other licensee of
the Software be permitted to modify, make derivative works of, or reverse-engineer such Software,
and the Company has not received any written requests from any Person for disclosure of source
code included in the Company Software. Section 3.12(i)(ii) of the Disclosure Schedule sets forth
a list of all Software subject to any Public Software License distributed by or integrated into the
Company Software or any Company Product. There are no material defects in any of the Company
Software or Company Products that would prevent the Company Software or Company Products
from performing in accordance with its applicable documentation. There are no viruses, worms,
Trojan horses or similar disabling codes or programs designed to permit or cause unauthorized
access to or disrupt, disable or harm in any manner any the Company Software or Company
Products (provided that for these purposes, mechanisms designed to limit functionality of Software
which has not been licensed or paid for shall not be deemed to be disabling code).
(j) The source code and object code for all Company Software contains clear
and accurate annotations and programmer’s comments, and otherwise has been documented in a
professional manner that is both: (i) consistent with customary code annotation conventions and
best practices in the software industry; and (ii) sufficient to independently enable a programmer of
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reasonable skill and competence to understand, analyze, and interpret program logic, correct errors
and improve, enhance, modify and support the Company Software.
(k) The Company Software is not subject to any transfer, assignment, source
code escrow agreement, reversion, site, equipment, or other operational limitations. The Company
has not granted any other current, future or conditional rights, licenses or interests in or to the
source code used or included in any such Software.
(l) The Systems are in good working condition and adequate in all material
respects for the operations of the Company to continue in the Ordinary Course of Business in the
manner it is currently being conducted and as currently contemplated to be conducted in the future.
The Company has taken commercially reasonable measures to (i) protect the integrity of the
Systems, including any data stored or contained therein or transmitted thereby, and (ii) maintain
commercially reasonable and industry standard data security, disaster recovery, and business
continuity plans, procedures, systems and facilities. For the past three (3) years there has not been
(1) any material failure, outage or other adverse event with respect to the Systems that has not been
remedied in all material respects or (2) any material security breaches relating to, or violations of
any security policy regarding, or any unauthorized access of, any Systems, including any data or
information stored or contained therein or used in the Business. The Company makes back-up
copies of data and information critical to the conduct of its business at least once every day and
conducts periodic tests to ensure the effectiveness of such back-up systems.
(m) The Company and the operation of the Business is, and at all times in the
past has been, in compliance with all applicable Data Security Requirements, and the Company
has in place adequate internal policies, procedures and systems to comply in all respects with the
applicable Data Security Requirements. The Company has not received, nor been subject to, any
written notice, complaint, investigation, inquiry or enforcement proceedings from any Person
(including any Governmental Body) alleging non-compliance with the applicable Data Security
Requirements or claiming compensation in respect of non-compliance with the applicable Data
Security Requirements, and no such investigation, inquiry or proceedings are pending or, to the
Knowledge of Sellers, threatened, and, to the Knowledge of Sellers, there are no circumstances
likely to give rise to any such complaint, investigation, inquiry or proceedings.
(n) To the Knowledge of Sellers, no governmental resources or funding, grants,
or funding from third parties was used in the development of any Company Intellectual Property.
3.13 Contracts.
(a) Section 3.13(a) of the Disclosure Schedule lists the following Contracts to
which the Company is a party:
(i) each Contract with any customer or client or supplier of the
Company that is required to be listed on Section 3.21 of the Disclosure Schedule;
(ii) each lease, rental or occupancy agreement, license, installment and
conditional sale agreement, and other Contract affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal property (except personal property
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leases and installment and conditional sales agreements having aggregate payments of less than
$10,000 and with terms of less than one year);
(iii) each joint venture, partnership or Contract involving a sharing of
profits, losses, costs or liabilities with any other Person;
(iv) each Contract containing any covenant that purports to restrict the
business activity of the Company or limit the freedom of the Company to engage in any line of
business or to compete with any Person;
(v) each Contract that contains provisions granting any rights of first
refusal, rights of first negotiation, most favored nations or similar rights to any Person;
(vi) each Contract relating to any acquisition or disposition of a business
or equity interests of a Person;
(vii) each Contract for the purchase, sale or license of any assets of the
Company, other than in the Ordinary Course of Business, and each Contract granting an option or
preferential rights to purchase, sell or license any assets of the Company;
(viii) each Contract in which a Governmental Body is a counterparty;
(ix) each Contract related to professional services, management services
or administrative services;
(x) each power of attorney;
(xi) each Contract related to Debt;
(xii) each Contract providing for the payment of any cash or other
compensation or benefits in connection with the transactions contemplated by this Agreement;
(xiii) each Contract with any labor union or any bonus, pension, profit
sharing, retirement or any other form of deferred compensation plan or practice, whether formal
or informal, or any severance agreement or arrangement;
(xiv) each Contract under which the Company has advanced or loaned
any amounts to any other Person;
(xv) each franchise, vendor or service center agreement;
(xvi) each Contract with the Shareholder, or any Affiliate of the Company
or the Shareholder;
(xvii) any settlement agreement;
(xviii) each employment or consulting Contract or other Contract with any
of its officers, managers, partners, members, independent contractors, consultants, or employees;
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(xix) each Intellectual Property Agreement, including any agreement for
the payment of royalties to any third party;
(xx) each confidentiality agreement and non-disclosure agreement to
which the Company is a party and is still in effect;
(xxi) each Contract with a referral partner (“Referral Partner”) pursuant
to which the Company is obligated to pay a portion of revenue with respect to clients referred by
the referral partner to the Company (“Referral Partner Agreements”);
(xxii) each Contract with a third party affiliates pursuant to which the
Company is obligated to pay a commission to such third party for sending the Company inbound
marketing leads (“Commission Agreements”);
(xxiii) each Contract which purports to be binding on Affiliates of the
Company that has an annual value in excess of $20,000; and
(xxiv) any other agreement material to the Company whether or not entered
into in the Ordinary Course of Business.
(b) The Company has delivered to Buyer a correct and complete copy of each
written Material Contract, together with all amendments, exhibits, attachments, waivers or other
changes thereto. Section 3.13(b) of the Disclosure Schedule contains an accurate and complete
description of all material terms of all oral Material Contracts (if any).
(c) Each Material Contract is legal, valid, binding, enforceable, in full force and
effect and will continue to be legal, valid, binding and enforceable on identical terms following
the Closing Date. Except as specifically disclosed and described in Section 3.13(c) of the
Disclosure Schedule, (i) no Material Contract has been breached or cancelled by the Company or,
to the Knowledge of Sellers, any other party thereto, (ii) the Company has performed all
obligations under such Material Contracts required to be performed by the Company, (iii) there is
no event which, upon giving of notice or lapse of time or both, would constitute a breach or default
under any such Material Contract or would permit the termination, modification or acceleration of
such Material Contract, and (iv) the Company has not assigned, delegated or otherwise transferred
to any Person any of its rights, title or interest under any such Material Contract. As of the Closing
Date, except as set forth in the calculation of Working Capital for purposes of the Closing Date,
there are no outstanding payment obligations to any Referral Partner under any of the Referral
Partner Agreements or third party affiliates under the Commission Agreements.
3.14 Insurance.
(a) Section 3.14(a) of the Disclosure Schedule sets forth the following
information with respect to each insurance policy (including policies providing property, casualty,
liability, director & officer, professional liability, and workers’ compensation coverage and bond
and surety arrangements) with respect to which the Company is a party, a named insured, or
otherwise the beneficiary of coverage (collectively, the “Company Insurance Agreements”):
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(i) the name of the insurer, the name of the policyholder, and the name
of each covered insured;
(ii) the policy number and the period of coverage; and
(iii) a description of any retroactive premium adjustments or other
material loss-sharing arrangements.
(b) There is no claim by the Company or any other Person pending under any
such policies and bonds as to which coverage has been questioned, denied or disputed. All
premiums payable under all such policies and bonds have been paid. There are no threatened
terminations of, or material premium increases with respect to, any of such policies or bonds.
Section 3.14(b) of the Disclosure Schedule sets forth a list of all claims made under the Company
Insurance Agreements, or under any other insurance policy, bond or agreement covering the
Company or its operations since December 31, 2018. Since December 31, 2018, the Company has
maintained insurance policies with coverage and policy limits that are substantially similar to the
coverage and policy limits provided by the Company Insurance Agreements.
3.15 General Litigation and Professional Liability.
(a) Except as set forth in Section 3.15(a) of the Disclosure Schedule, there are
no (and during the last five (5) years, there have not been any) legal complaints, Proceedings,
Orders, or investigations pending or, to the Knowledge of Sellers, threatened or anticipated relating
to or affecting the Company or the Business in any material respect. There is no outstanding Order
to which the Company or the Business is subject. The Company is fully insured with respect to
each of the matters set forth on Section 3.15(a) of the Disclosure Schedule.
(b) No Seller is engaged in or a party to or, to the Knowledge of Sellers,
threatened with any legal complaint, charge, Proceeding, Order or other process or procedure for
settling disputes or disagreements with respect to the Company or the transactions contemplated
by this Agreement, and no Seller has received written or, to the Knowledge of Sellers, oral notice
of a claim or dispute that is reasonably likely to result in any such complaint, charge, Proceeding,
Order or other process or procedure for settling disputes or disagreements with respect to the
Company or the transactions contemplated by this Agreement.
3.16 Employees.
(a) Section 3.16(a) of the Disclosure Schedule sets forth a complete and correct
list of all current employees of the Company, which list includes all employees or individuals used
in the Business (no individual used in the Business is employed by an Affiliate of the Company or
the Shareholder), including employees on temporary leave of absence (including family medical
leave, military leave, temporary disability and sick leave), showing for each: (i) name, (ii) hire
date, (iii) current job title, (iv) current job assignment, (v) accrued but unused vacation, paid time
off, and sick leave, (vi) full-time or part-time status, (vii) hourly or salary status, (viii) exempt or
non-exempt status, (ix) leave status (i.e., military, medical, disability, workers’ compensation or
otherwise) and the date such employee became inactive as well as the expected return to work
date, (x) actual base salary, bonus, commission or other remuneration paid during 2022, and (xi)
2023 base salary level and 2023 target bonus and there has not been any increase in such
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compensation, bonus, incentive, or service award or any grant of any severance or termination pay
or any other increase in benefits or any commitment to do any of the foregoing since January 1,
2023. The employees set forth in Section 3.16(a) of the Disclosure Schedule are all the employees
necessary to operate the Business, consistent with past practice. No Affiliate of the Company, the
Shareholder or any of their Affiliates employs any Person who provides services to the Company
and there are no shared employees.
(b) Section 3.16(b) of the Disclosure Schedule sets forth a complete and correct
list of all independent contractors or consultants of the Company, including for each: (i) his or her
start date, (ii) whether he or she is contracted in his or her individual status or with a corporation
or other entity, (iii) type of services to be provided, including any exclusivity of such services, (iv)
anticipated completion date, and (v) hourly or per diem rate or other form of pay of such contractor.
(c) The Company has provided Buyer with complete and correct copies of (i)
all existing severance, accrued vacation or other leave agreement, policies or retiree benefits of
any such officer, employee or consultant, (ii) all employee trade secret, non-compete, nondisclosure and invention assignment agreements, and (iii) all manuals and handbooks applicable
to any current or former manager, officer, employee or consultant of the Company. Except as set
forth on Section 3.16(c)(i) of the Disclosure Schedule, the employment or consulting arrangement
of each manager, officer, employee or consultant of the Company are, subject to applicable Laws
involving the wrongful termination of employees, terminable at will (without the imposition of
penalties or damages) by the Company, and the Company does not have any severance obligations
if any such manager officer, employee or consultant is terminated. Except as set forth on Section
3.16(c)(ii) of the Disclosure Schedule, to the Knowledge of Sellers, no executive or key employee
of the Company or any group of employees of the Company has any plans to terminate
employment with the Company.
(d) The Company has not experienced (nor, to the Knowledge of Sellers, have
they been threatened with) any strike, slow down, work stoppage or material grievance, claim of
unfair labor practices, or other collective bargaining dispute within the past three (3) years. The
Company has not committed any material unfair labor practice. Sellers have no Knowledge of
any organizational effort presently being made or threatened by or on behalf of any labor union
with respect to employees of the Company. The Company has paid in full to all of its employees
and independent contractors all wages, salaries, overtime, commissions, bonuses, benefits and
other compensation due and payable to such employees and independent contractors for services
performed prior to the Closing Date, and there are no outstanding agreements, understandings, or
commitments of the Company regarding any additional wages, salaries, overtime, commissions,
bonuses, benefits, or other compensation.
(e) The Company is, and has at all times been, in compliance in all material
respects with all Laws relating to the employment of labor, including all such Laws relating to
wages and hours (including compliance with Laws relating to minimum wage and overtime pay,
meal and rest periods, travel time, off-the-clock work, on-call pay, and piece rate pay), the WARN
Act and similar state laws, collective bargaining, equal opportunity, discrimination and
harassment, retaliation, whistleblowing, safety and health and workers’ compensation,
engagement of independent contractors (including the classification of individuals as employees
or independent contractors), government contracting (including compliance with all Orders,
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background and exclusion screening requirements, government submissions and affirmative action
plans), immigration control and naturalization, drug testing, data privacy, background checks,
termination pay, vacation pay or other paid time off, paid sick leave, fringe benefits,
unemployment insurance and the withholding and payment of income and employment taxes any
similar Tax. The Company has no unsatisfied payment of any salary, wage, overtime pay, benefit,
bonus, vacation pay or other paid time off, sick leave, insurance, employment tax or similar
liability of the Company for any employee, independent contractor, director or other person or
entity allocable to services performed on or prior to the Closing Date. There has been no “mass
layoff” or “plant closing” as defined by the WARN Act or any similar layoff or closing as defined
by any Law with respect to the Company.
(f) The Company is, and has at all times been, in compliance with all applicable
Laws pertaining to employment and employment practices to the extent they relate to employees,
volunteers, interns, consultants and independent contractors, including but not limited to all Laws
relating to the classification of individuals as an employee, non-employee, or an independent
contractor. All individuals who have performed services for the Company have been properly
classified as exempt or non-exempt under the Fair Labor Standards Act and all similar Laws. All
individuals characterized and treated by the Company as independent contractors or consultants
are properly treated as independent contractors under all applicable Laws. There are no filed or
threatened inquiries, audits or actions by any Governmental Body or arbitrator concerning such
classifications, without limitation, any charge, investigation, or claim relating to wages, hours,
overtime compensation, unfair labor practices, discrimination, harassment, retaliation, wrongful
termination, defamation, breach of contract, tortious interference, working conditions, workers’
compensation, unemployment insurance, employee classification, or any other employment or
joint employer related matter arising under any applicable law.
(g) The Company is, and has at all times been, in compliance with and has
complied with all immigration laws. The Company has completed and maintained in their files
Form I-9 with respect to each of their employees. The Company has been, and are, in compliance
with all requirements applicable to government contractors and subcontractors. The Company has
performed E-Verify screens for all employees, and has performed exclusion screens for all
employees, independent contractors, and consultants. In the past three (3) years, the Company has
not received any written notice from any governmental authority that any of their employees has
a name or Social Security Number that does not match the name or Social Security Number
maintained by such governmental authority. All employees of the Company working in the United
States are legally authorized to work in the United States.
(h) All individuals who have performed services for the Company or who
otherwise have claims for compensation from the Company have been properly classified as an
employee or an independent contractor pursuant to all applicable Laws, including, but not limited
to, the Code and ERISA.
3.17 Employee Benefits.
(a) Section 3.17(a) of the Disclosure Schedule lists each Employee Benefit Plan
that the Company or any ERISA Affiliate maintains, or to which the Company or an ERISA
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Affiliate contributes or has any obligation to contribute, or with respect to which the Company or
an ERISA Affiliate has any liabilities.
(i) Each such Employee Benefit Plan (and each related trust, insurance
Contract, or fund) has been maintained, funded and administered in accordance with the terms of
such Employee Benefit Plan and complies in form and in operation in all respects with the
applicable requirements of ERISA, the Code, the Patient Protection and Affordable Care Act (as
amended by the Health Care and Education Reconciliation Act of 2010), and other applicable
Laws. There exists no condition or set of circumstances with respect to any Employee Benefit
Plan which has resulted in or which could reasonably be expected to result in any material liability,
penalties, or Taxes to the Company or any of its ERISA Affiliates under ERISA, the Code, the
Patient Protection and Affordable Care Act (as amended by the Health Care and Education
Reconciliation Act of 2010), or other applicable Law.
(ii) All required reports and descriptions (including Form 5500 annual
reports, summary annual reports, and summary plan descriptions) have been timely filed and/or
distributed in accordance with the applicable requirements of ERISA and the Code with respect to
each such Employee Benefit Plan. The requirements of COBRA have been met in all material
respects with respect to each such Employee Benefit Plan that is an Employee Welfare Benefit
Plan subject to COBRA.
(iii) All contributions (including all employer contributions and
employee salary reduction contributions) that are due have been made within the time periods
prescribed by ERISA and the Code to each such Employee Benefit Plan that is an Employee
Pension Benefit Plan and all contributions for any period ending on or before the Closing Date
which are not yet due have been made to each such Employee Pension Benefit Plan or accrued in
accordance with the past custom and practice of the Company. All premiums or other payments
for all periods ending on or before the Closing Date have been paid with respect to each such
Employee Benefit Plan that is an Employee Welfare Benefit Plan.
(iv) Each such Employee Benefit Plan which is intended to meet the
requirements of a “qualified plan” under Code §401(a) is so qualified and has received a
determination from the Internal Revenue Service that such Employee Benefit Plan is so qualified,
and nothing has occurred since the date of such determination that could adversely affect the
qualified status of any such Employee Benefit Plan.
(v) Each such Employee Benefit Plan which is intended to be qualified
under Section 401(a) of the Code and each trust forming a part thereof has been timely amended
within the applicable Remedial Amendment Period (as that term is defined in Code Section 401(b))
and in accordance with applicable procedures set forth in Revenue Procedure 2005-66. All master,
prototype and volume submitter plans which are part of any Employee Benefit Plan were submitted
to the IRS for an opinion or advisory letter within the applicable Remedial Amendment Period, set
forth in Revenue Procedure 2005-66.
(vi) There have been no Prohibited Transactions with respect to any such
Employee Benefit Plan. No Fiduciary has any liability for breach of fiduciary duty or any other
action or failure to act or comply in connection with any such Employee Benefit Plan. No
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Proceeding with respect to any such Employee Benefit Plan (other than routine claims for benefits)
is pending or, to the Knowledge of the Company, threatened. No Proceeding or claim has been
brought or is pending or, to the Knowledge of Sellers, is threatened, involving any Employee
Benefit Plan, including audits or investigations by any Governmental Body (except for individual
claims for benefits payable in the normal operation of the Employee Benefit Plans).
(vii) The Company has made available to Buyer correct and complete
copies of the plan documents and summary plan descriptions, the three (3) most recent
determination letter received from the Internal Revenue Service, the most recent annual report
(Form 5500, with all applicable attachments), all discrimination testing results for the three (3)
most recently completed plan years for each Employee Benefit Plan subject to such requirement
or such shorter time period as may be applicable, and all related trust agreements, insurance
Contracts, and other funding arrangements which implement each such Employee Benefit Plan.
(b) Neither the Company nor any ERISA Affiliate contributes to, has any
obligation to contribute to, or has any liability under or with respect to any Employee Pension
Benefit Plan that is a “defined benefit plan” (as defined in ERISA §3(35)), a Multiemployer Plan,
an employee benefit plan subject to Section 413(c) of the Code a “multiple employer welfare
arrangement” within the meaning of Section 3(40) of ERISA, or a “welfare benefit trust” or
“voluntary employees beneficiary association” within the meaning of Code Sections 419, 419A,
or 501(a)(9).
(c) Section 3.17(c) of the Disclosure Schedule lists each written agreement,
contract, or other arrangement, whether or not an Employee Benefit Plan (collectively, the “Plan”),
to which the Company is a party that is a “nonqualified deferred compensation plan” subject to
Code Section 409A. Each such Plan complies in all material respects with the requirements of
Code Section 409A and any Internal Revenue Service guidance issued thereunder.
(d) With respect to any taxable period for which the statute of limitations on
assessments has not closed, the Company has not made any payments that, or has been a party to
any Contract that pursuant to its terms, (i) resulted or would result, individually or in the aggregate,
in the payment of any “excess parachute payment” within the meaning of Code Section 280G, (ii)
resulted or would result, separately or in the aggregate, in the imposition of an excise Tax under
Code Section 4999 (or any corresponding provisions of state, local or foreign Tax law), or (iii)
could result in it making any payment that will be required to be included in gross income under
Code Section 409A(a)(1)(A).
(e) On and after January 1, 2015, the Company and its ERISA Affiliates were
not at any time “applicable large employers” as defined under Section 4980H of the Code.
(f) The Company is not part of a “controlled group” of corporations and is not
under common control with any other Person which is required to be treated as a single employer
under Sections 414(b), (c), (m) or (o) of the Code, or Section 3(5) or 4001(b)(1) of ERISA, or the
regulations promulgated thereunder.
(g) The Company does not sponsor, maintain or contribute to, nor is it required
to sponsor, maintain or contribute to, nor does it have any liability with respect to, any arrangement

that provides medical, health, life or other welfare benefits for present or future terminated or
retired employees, or their spouses or dependents, other than as required by Part 6 of Subtitle B of
Title I of ERISA, COBRA, or any comparable state Law.
(h) Neither the Company, nor any ERISA Affiliate, has sponsored, maintained,
contributed to, nor has been required to sponsor, maintain, participate in or contribute to, nor do
any of them have or ever had any liability with respect to, any employee benefit plan, program, or
other arrangement providing compensation or benefits to any employee or former employee (or
any dependent thereof) which is subject to the Laws of any jurisdiction outside of the United States.
(i) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated by this Agreement, could (either alone or in
conjunction with any other event) (i) give rise to any additional service credits under any Employee
Benefit Plan sponsored or maintained by the Company (or under which the Company has any
actual or potential liability); (ii) entitle any current or former director, officer, employee,
independent contractor or consultant of any of the Company to severance pay or, any increase in
severance pay or any other payment; (iii) accelerate the time of payment, funding or vesting, or
increase the amount of compensation (including stock or equity-based compensation) due to any
such individual; (iv) limit or restrict the right of the Company to merge, amend or terminate any
Employee Benefit Plan; (v) increase the amount payable under or result in any other material
obligation pursuant to any Employee Benefit Plan.
3.18 Debt. Except as set forth on Section 3.18 of the Disclosure Schedule, the Company
does not have any Debt and is not liable for any Debt of any other Person.
3.19 Environmental, Health, and Safety Matters. The Company is and for the prior five
(5) years has been in material compliance with all Environmental, Health, and Safety
Requirements. The Company has obtained and is and for the prior five (5) years has been in
compliance with all Permits and other authorizations that are required pursuant to Environmental,
Health, and Safety Requirements for the occupation of the Leased Real Property and the operation
of the business of the Company and each such Permit is in full force and effect and there is no
action pending or threatened to revoke, terminate, cancel or modify any Permits required pursuant
to Environmental, Health, and Safety Requirements. A list of all such Permits is set forth on
Section 3.19 of the Disclosure Schedule. The Company has not received any notice, suit,
complaint, citation, demand, order, report or other communication regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements, or any liabilities or potential
liabilities arising under Environmental, Health, and Safety Requirements. The Company has not
entered into any consent order, consent decree, settlement agreement or other similar agreement
with any Government Body that imposes ongoing or outstanding obligations under any
Environmental, Health, and Safety Requirement on the Company, the Leased Real Property, or the
Acquired Assets. No Leased Real Property contains any (a) underground storage tanks currently,
nor contained any underground storage tanks in the past or (b) friable or damaged asbestos
containing materials that must be removed or abated to comply with Environmental, Health, and
Safety Requirements. The Company has not treated, stored, disposed of, arranged for or permitted
the disposal of, transported, handled, released or exposed any Person to any substance, including
without limitation any Hazardous Substance, or owned or operated any property or facility (and
no such property or facility is contaminated by any such substance) either in violation of any
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Environmental, Health, and Safety Requirement or in a manner that could result in any liability
under any Environmental, Health, and Safety Requirement. The Company has provided to Buyer
copies of all environmental audits, health and safety audits, Phase I environmental site
assessments, Phase II environmental site assessments or investigations, soil and/or groundwater
reports, environmental compliance assessments and other material environmental documents in
the possession, custody or control of any Seller relating to any property currently or formerly
owned, leased, or operated by any Seller or its or his or her Affiliates or any non-compliance by
any Seller or its or his or her Affiliates with any Environmental, Health, and Safety Requirement.
3.20 Certain Business Relationships with the Company. Except as set forth on
Section 3.20 of the Disclosure Schedule, neither the Shareholder, nor any director, officer or
manager of the Company nor any of the Affiliates of any of the foregoing (other than the
Company):
(a) owns, directly or indirectly, any stock or other ownership interest or
investment in any Person that is engaged in the Business or is a competitor, supplier, customer,
lessor or lessee of the Company; provided, however, that the foregoing representation shall be
deemed not to be made as to the ownership of not more than one percent (1%) of the securities of
any such Person that has securities registered pursuant to Section 13 or Section 15 of the Securities
Exchange Act;
(b) has any claim against or owes any amount to, or is owed any amount by,
the Company;
(c) has any interest in or owns any assets, properties or rights used in the
conduct of the Business;
(d) is a party to any Contract to which the Company is a party or which
otherwise benefits the Business; or
(e) has received from or furnished to the Company any goods or services since
the Most Recent Fiscal Year End, or is involved in any business relationship with the Company.
3.21 Customers and Suppliers.
(a) Section 3.21 of the Disclosure Schedule sets forth a correct and complete
list of the ten (10) largest customers (by revenue earned) of the Business on an accrual basis, and
the ten (10) largest suppliers (by dollar spent) of products or services to the Business, and the ten
(10) largest Referral Partners (by dollar commission paid), in each case during calendar years 2021
and 2022. Section 3.21 of the Disclosure Schedule also sets forth, for each such customer and
supplier, the aggregate payments from and to such Person by the Business during each such
periods. There are no outstanding disputes with any of such suppliers or customers. Finally,
Section 3.21 of the Disclosure Schedule sets forth a comprehensive list of all the Company’s
customers for the years 2021-2022 and all shared customers between the Company and Shock I.T.,
LLC and the amount of 2022 revenue earned by each of the Company and Shock I.T., LLC with
respect to such shared customers, respectively.
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(b) Since January 1, 2020, none of the customers listed on Section 3.21 of the
Disclosure Schedule has indicated that it shall stop, materially decrease the rate of, or materially
change the pricing of, buying products or services from the Business or otherwise materially
change the terms of its relationship with the Business. No Seller has any reason to believe that
any customer listed on Section 3.21 of the Disclosure Schedule will stop, materially decrease the
rate of, or materially change the pricing of, buying products or services from the Business or
otherwise materially change the terms of its relationship with the Business after, or as a result of,
the consummation of any transactions contemplated by this Agreement or that any such customer
is threatened with bankruptcy or insolvency. To the Knowledge of Sellers, there is no fact,
condition or event which would adversely affect the relationship of the Business with any such
customer.
(c) Since January 1, 2020, none of the suppliers listed on Section 3.21 of the
Disclosure Schedule has indicated that it shall stop, materially decrease the rate of, or materially
change the pricing of, supplying materials, products or services to the Business, or otherwise
materially change the terms of its relationship with the Business. No Seller has any reason to
believe that any supplier listed on Section 3.21 of the Disclosure Schedule will stop, materially
decrease the rate of, or materially change the pricing of, supplying products or services to the
Business or otherwise materially change the terms of its relationship with the Business after, or as
a result of, the consummation of any transactions contemplated by this Agreement or that any such
supplier is threatened with bankruptcy or insolvency. To the Knowledge of Sellers, there is no
fact, condition or event which would adversely affect the relationship of the Business with any
such supplier.
3.22 Restrictions on Business Activities. Except as set forth on Section 3.22 of the
Disclosure Schedule, there is no Contract, Order, or other instrument binding upon any Seller or
the current or former officers, managers, employees or independent contractors of the Company
which restricts or prohibits the Company from competing with any other Person, from engaging
in any business or from conducting activities in any geographic area, or which otherwise restricts
or prohibits the conduct of the business of the Company.
3.23 Warranties. Each product or service provided, sold, leased, or delivered by the
Company is and has been provided, sold, leased, or delivered in conformity with all applicable
contractual commitments and all express and implied warranties, and the Company has no liability
(and there is no basis for any present or future action, suit, Proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rise to any liability) for
replacement or repair thereof or other damages, liability or obligations in connection therewith, in
excess of the reserve for warranty claims set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company. Section 3.23 of the Disclosure
Schedule includes copies of the standard terms and conditions of service, sale or lease for the
Company (containing applicable guaranty, warranty, and indemnity provisions). No product or
service sold, leased, or delivered by the Company is subject to any material guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale or lease set forth in
Section 3.23 of the Disclosure Schedule, except for any guaranty, warranty or other indemnity that
is imposed by Law.
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3.24 Disclosure. Neither this Agreement nor any agreement, attachment, schedule,
exhibit, certificate or other statement delivered pursuant to this Agreement or in connection with
the transactions contemplated hereby includes any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements and information contained herein or
therein, not misleading. No Seller has Knowledge of any information necessary to enable a
prospective purchaser of the Acquired Assets or the Business to make an informed decision with
respect to the purchase of such Acquired Assets or Business that has not been expressly disclosed
herein. Buyer has been provided full and complete copies of all documents referred to on the
Disclosure Schedule.
ARTICLE 4
COVENANTS
The Parties agree as follows with respect to the period following the Closing.
4.1 General. In case at any time after the Closing any further action is necessary to
carry out the purposes of this Agreement, each of the Parties shall take such further action
(including the execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under ARTICLE 6 below). For five (5)
years following the Closing, Sellers shall retain and grant to Buyer and its representatives, at
Buyer’s request, access to and the rights to make copies of those records and documents related to
the business of the Company and the Acquired Assets or offer to make them available before the
destruction of such records and documents. Sellers shall timely pay and fully discharge all
amounts owed to employees, all Taxes or amounts withheld from employees, all sales Taxes, all
obligations to customers and suppliers and all other liabilities and obligations of the Company,
except in each case to the extent such items are Assumed Liabilities and included as current
liabilities in the final calculation of Working Capital. In addition, in order to facilitate an orderly
transition, the Shareholder shall provide, and shall cause Jolin Bachmann to provide, without
additional consideration, such transition services reasonably requested by the Company after the
Closing for a period of up to three (3) months (the “Transition Services”). The Shareholder and
Jolin Bachmann shall be permitted to retain their respective offices at the Company for a period of
three (3) months after the Closing (which may be terminated at any time in the reasonable
discretion of the Buyer), subject to entering into any reasonable agreements requested by the
Buyer. Moreover, post-Closing, neither the Shareholder nor Jolin Bachmann shall take any action
to bind the Company, direct or allocate work to the Company’s employees, or represent that
her/she has the authority to do so.
4.2 Litigation Support. In the event and for so long as Buyer or its Affiliates is actively
contesting or defending against any Proceeding in connection with any fact, situation,
circumstance, action, failure to act or transaction that occurred on or prior to the Closing Date
involving the Acquired Assets, Business or Assumed Liabilities, Sellers shall cooperate with
Buyer or its Affiliate (as the case may be) and its or their counsel in the contest or defense and
provide such testimony and access to Sellers’ books and records as shall be necessary in connection
with the contest or defense, all at the sole cost and expense of Buyer (unless Buyer is entitled to
indemnification therefor under ARTICLE 6 below).
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4.3 Transition. Each Seller shall not take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, customer, supplier, or other business associate
of the Company from maintaining the same business relationships with Buyer and its Affiliates
after the Closing as it maintained with the Company prior to the Closing.
4.4 Confidentiality. Each Seller shall not disclose or use any Confidential Information,
except that, if and as long as such Seller is an employee (as applicable) of Buyer or its Affiliates
after the Closing, then such Seller may use the Confidential Information in the ordinary course of
his or her employment on behalf of Buyer or its Affiliates so long as such use is in compliance
with all policies and agreements applicable to such Seller. Upon termination of his or her
employment, such Seller shall deliver promptly to Buyer or destroy, at the request and option of
Buyer, all tangible embodiments (and all copies) of the Confidential Information that are in his or
her possession. If any Seller is requested or required pursuant to written or oral question or request
for information or documents in any Proceeding, interrogatory, subpoena, civil investigation
demand or similar process to disclose any Confidential Information, then such Seller shall notify
Buyer promptly of the request or requirement so that Buyer may seek an appropriate protective
order or waive compliance with the provisions of this Section 4.4. If, in the absence of a protective
order or the receipt of a waiver hereunder, any Seller is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for contempt, then such
Seller may disclose the Confidential Information to the tribunal; provided, however, that such
Seller shall use his or its best efforts to obtain, at the request of Buyer, an order or other assurance
that confidential treatment will be accorded to such portion of the Confidential Information
required to be disclosed as Buyer shall designate. The foregoing provisions shall not apply to any
Confidential Information that is generally available to the public immediately prior to the time of
disclosure unless such Confidential Information is so available due to the actions of such Seller.
4.5 Covenant Not to Compete. During the Restricted Period, each Seller shall not,
directly or indirectly, in any manner (whether on his or its own account, or as an owner, operator,
manager, consultant, officer, director, employee, investor, agent, representative or otherwise),
anywhere in the Applicable Area, engage in the Business or any business that competes directly
or indirectly with the Business, or own any interest in, manage, control, provide financing to,
participate in (whether as an owner, operator, manager, consultant, officer, director, employee,
investor, agent, representative or otherwise), or consult with or render services for any Person that
is engaged in the Business that is directly or indirectly in competition with the Buyer or the
Business; provided, however, that no owner of less than one percent (1%) of the outstanding equity
of any publicly traded Person shall be deemed to engage solely by reason thereof in the Business.
Notwithstanding the foregoing, this Section shall not prevent the Shareholder or any of his
Affiliates from owning or operating in the home services industry (e.g., HVAC, plumbing, etc.),
so long as marketing services are not being provided. Notwithstanding anything in this Section to
the contrary, the Shareholder shall be permitted to provide general advice (without receiving
compensation) for any marketing-related matters to any of his Affiliates.
4.6 Covenant Not to Solicit. During the Restricted Period, each Seller shall not,
directly or indirectly, in any manner (whether on his or its own account, or as an owner, operator,
manager, consultant, officer, director, employee, investor, agent, representative or otherwise),
(a) call upon, solicit or provide services to any Customer with the intent of selling or attempting
to sell any products or services similar to those offered by the Business, (b) hire or engage, or
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recruit, solicit or otherwise attempt to employ or engage, or enter into any business relationship
with, any Person currently or formerly employed by, or providing consulting services to, Buyer,
or induce or attempt to induce any Person to leave such employment or consulting arrangement,
or (c) in any way interfere with the relationship between Buyer or its Affiliates and any employee,
consultant, Customer, sales representative, broker, supplier, licensee or other business relation (or
any prospective Customer, supplier, licensee or other business relation) of Buyer or its Affiliates
(including, without limitation, by making any negative or disparaging statements or
communications regarding Buyer or its Affiliates or any of their operations, officers, managers,
employees, independent contractors or investors).
4.7 Enforcement. If the final judgment of a court of competent jurisdiction declares
that any term or provision of Sections 4.4, 4.5 or 4.6 is invalid or unenforceable, then the Parties
agree that the court making the determination of invalidity or unenforceability shall have the power
to reduce the scope, duration or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closer to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after the expiration of
the time within which the judgment may be appealed. In the event of litigation involving
Sections 4.4, 4.5 or 4.6, the non-prevailing Party shall reimburse the prevailing Party for all costs
and expenses, including reasonable attorneys’ fees and expenses, incurred in connection with any
such litigation, including any appeal therefrom. The existence of any claim or cause of action by
any Seller against Buyer or its Affiliates, whether predicated on this Agreement or otherwise, will
not constitute a defense to the enforcement by Buyer of the provisions of Sections 4.4, 4.5 or 4.6,
which sections will be enforceable by Buyer notwithstanding the existence of any breach by Buyer.
Notwithstanding the foregoing, each Seller will be prohibited from pursuing such claims or causes
of action against Buyer. In addition, in the event of a breach or violation by a Seller of Section 4.5,
the Restricted Period will be tolled until such breach or violation has been duly cured.
4.8 Hired Employees. As of the Closing, Buyer or an Affiliate of Buyer is extending
an offer of at-will employment, which may be conditioned upon the execution of Buyer’s or such
Affiliate’s standard written employment terms, to each employee listed on Schedule 4.8, with such
employees who accept the offer of at-will employment extended by Buyer or its Affiliates upon
the Closing Date being the “Hired Employees” and Schedule 4.8 also includes a list of any
individuals (i) current providing services to the Company or (ii) have provided services to the
Company within the past two (2) years, who are employed by an Affiliate but are not among the
Hired Employees (“Excluded Employees”). The offer of at-will employment extended by Buyer
or such Affiliate to a Hired Employee shall be for a position that is substantially comparable to the
position held by such employee as of the Closing Date, with substantially comparable
compensation and with access to benefits that are generally available to comparable employees of
Buyer or such Affiliate. Buyer shall, and shall cause such Affiliate to, provide each Hired
Employee with full credit for all purposes relating to their employment and benefits, including any
purposes under any Employee Benefit Plans of Buyer and for pre-Closing service as recognized
by the Company. The Company shall be liable for any severance, separation or similar liabilities,
if any, that are payable to any employees of the Company (other than any such liabilities that
become payable by Buyer or such Affiliate to any Hired Employees after the Closing, including,
but not limited to, for Assumed Employee Obligations; provided, however, that all stay incentives,
bonuses or similar payments to Hired Employees shall be the sole obligation and responsibility of
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the Company (subject to prior written approval by Buyer) pursuant to this Section 4.8). The
Shareholder shall, or shall cause his Affiliates to, make available for participation the Employee
Benefit Plans for the Hired Employees post-Closing.
4.9 Accounts Receivable. Effective on the Business Day following the Closing Date,
Buyer shall (and, if required, each Seller shall fully cooperate by executing any additional
documents or instruments and providing any other consent or acknowledgement required by the
relevant third party payor) cause all payments made by electronic funds transfer (“EFT”) to be
modified or transferred such that all payments of the Assumed Accounts Receivable on that date
and thereafter are made to a designated account of Buyer. Any EFT funds transfers in respect of
Assumed Accounts Receivable that are received by the Company on or after the Closing Date shall
promptly, but in any event within two (2) Business Days, be paid over to Buyer. Any checks
received in respect of the Assumed Accounts Receivable by the Company on or after the Closing
Date shall be for the account of Buyer and shall be forwarded to the chief executive officer of
Buyer at the address set forth herein promptly after receipt, but in any event within two (2)
Business Days thereafter.
4.10 Change of Name; Post-Closing Filings. Within five (5) Business Days following
the Closing Date, the Company shall, and the Shareholder shall cause the Company to, amend its
Organizational Documents, and will file such documents as are necessary to reflect the change of
the name of the Company in the Company’s state of formation and the other jurisdictions where
the Company is qualified to do business as a foreign Person. From and after the date of filing such
documents, the Company shall not, and the Shareholder shall cause the Company and Shock I.T.,
LLC not to, adopt any name that is confusingly similar to, or a derivation of, “1SEO.com Inc.” or
“1SEO”. In addition, the Shareholder shall cause 1SEO Technologies, Inc. to make all necessary
filings, after the Closing, with respect to the Fictitious Names, that are necessary or advisable to
effectuate the transfer of the Fictitious Names pursuant to this Agreement.
4.11 Bulk Sales Laws. The Parties hereby waive compliance with the provisions of any
bulk sales, bulk transfer or similar Law of any jurisdiction that may otherwise be applicable with
respect to the sale of any or all of the Acquired Assets to Buyer; it being understood that any
liabilities arising out of the failure of Sellers to comply with the requirements and provisions of
any bulk sales, bulk transfer or similar Law of any jurisdiction which would not otherwise
constitute Assumed Liabilities shall be treated as Excluded Liabilities. Sellers shall indemnify,
defend and hold Buyer and its Affiliates harmless for, from, and against any liability resulting from
such waiver.
ARTICLE 5
CLOSING DELIVERIES
5.1 Closing Deliveries of Sellers. At or prior to the Closing, Sellers shall deliver or
cause to be delivered to Buyer:
(a) a certificate from a duly authorized officer of the Company, dated as of the
Closing Date, attaching and certifying the (i) Organizational Documents of the Company, (ii)
resolutions of the board of directors of the Company and the shareholders, authorizing the
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execution and delivery by the Company of this Agreement and the Ancillary Agreements to which
the Company is a party and the consummation of the transactions contemplated hereby and
thereby, (iii) the incumbency and signatures of the Persons signing this Agreement and the
Ancillary Agreements to which the Company is a party, and (iv) good standing certificates for the
Company from its jurisdiction of formation and each jurisdiction in which the Company is
qualified to do business;
(b) a counterpart signature page to the Bill of Sale signed by the Company;
(c) all documentation necessary to obtain releases of all Liens (other than the
Permitted Liens), including appropriate UCC termination statements;
(d) payoff and release letters from the holders of the Debt set forth on Schedule
5.1(d) that (i) reflect the amounts required in order to pay in full such Debt and (ii) provide that,
upon payment in full of the amounts indicated, all Liens with respect to the assets of the Company
shall be terminated and of no further force and effect, together with UCC-3 termination statements
with respect to the financing statements filed against the assets of the Company by the holders of
such Liens;
(e) any Consent or Order required to be obtained or made in connection with
the execution and delivery of this Agreement or the performance of the transactions contemplated
herein and any Consent required under any Contract or Permit set forth on Schedule 5.1(e);
(f) a Lease Assignment for each Lease;
(g) a duly completed and properly executed IRS Form W-9 dated as of the
Closing Date from each of the Sellers;
(h) an offer letter and restrictive covenants agreement with Catrina Bachmann
in a form mutually agreed upon by Buyer and Catrina Bachmann (the “Bachmann Letter”);
(i) restrictive covenant agreement with Jolin Bachmann in form and substance
satisfactory to Buyer (collectively, the “Covenant Agreement”);
(j) a counterpart signature page to the Escrow Agreement signed by the
Company;
(k) a counterpart signature page to the Domain Name Assignment signed by the
Company;
(l) [Reserved];
(m) [Reserved];
(n) [Reserved];
(o) the Subscription Agreement executed by the Company, including the
execution of a joinder agreement in connection with the Rollover Equity; and
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(p) all other instruments and documents required by this Agreement to be
delivered by the Company or the Shareholder to Buyer, and such other instruments and documents
which Buyer or its counsel may reasonably request to effectuate the transactions contemplated
hereby.
All such agreements, documents and other items shall be in form and substance satisfactory
to Buyer.
5.2 Closing Deliveries of Buyer. At or prior to the Closing, Buyer shall deliver or cause
to be delivered to Sellers, as applicable:
(a) a certificate from a duly authorized officer of Buyer, dated as of the Closing
Date, attaching and certifying (i) the authorizing resolutions of Buyer, and (iii) the incumbency
and signatures of the Persons signing this Agreement and the other Ancillary Agreements to which
Buyer is a party;
(b) counterpart signature pages, signed by Buyer (or an Affiliate of Buyer), to:
(i) the Bill of Sale;
(ii) a Lease Assignment for each Lease;
(iii) the Bachmann Letter;
(iv) the Escrow Agreement;
(v) the Domain Name Assignment; and
(vi) the Subscription Agreement.
(c) all other instruments and documents required by this Agreement to be
delivered by Buyer to Sellers, and such other instruments and documents which Sellers or their
counsel may reasonably request to effectuate the transactions contemplated hereby.
(d) All such agreements, documents and other items shall be in form and
substance satisfactory to the Company.
ARTICLE 6
REMEDIES FOR BREACHES OF THIS AGREEMENT
6.1 Indemnification by Sellers.
(a) Subject to the terms and conditions of this ARTICLE 6, the Company and
the Shareholder, jointly and severally, shall indemnify, defend and hold harmless Buyer and each
of its Affiliates, and its successors and assigns (the “Buyer Indemnitees”) from and against the
entirety of any Adverse Consequences that any Buyer Indemnitee may suffer or incur (including
any Adverse Consequences they may suffer or incur after the end of any applicable survival period,
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provided that an indemnification claim with respect to such Adverse Consequence is made
pursuant to this ARTICLE 6 prior to the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by (i) any breach or inaccuracy of any
representation or warranty made in ARTICLE 3 or in any Ancillary Agreement; (ii) any breach of
any covenant or agreement of a Seller in this Agreement or in any Ancillary Agreement; (iii)
Indemnified Taxes, or (iv) the specific matters listed on Schedule 6.1(a)(iv).
(b) The Company and the Shareholder, jointly and severally, shall pay and
otherwise fully satisfy and discharge all Excluded Liabilities, and shall indemnify, defend and hold
all Buyer Indemnitees harmless from and against, and shall reimburse all Buyer Indemnitees for,
all Adverse Consequences that any Buyer Indemnitee may suffer or incur in connection with any
Excluded Liabilities.
6.2 Indemnification by Buyer. Subject to the terms and conditions of this ARTICLE
6, Buyer shall indemnify, defend and hold harmless the Company, the Shareholder, their respective
Affiliates, and their respective successors and assigns (the “Seller Indemnitees”) from and against
the entirety of any Adverse Consequences they may suffer or incur (including any Adverse
Consequences they may suffer or incur after the end of any applicable survival period, provided
that an indemnification claim with respect to such Adverse Consequence is made pursuant to this
ARTICLE 6 prior to the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by (a) any breach or inaccuracy of any representation or
warranty made by Buyer in ARTICLE 2 or in any Ancillary Agreement, or (b) any breach of any
covenant or agreement of Buyer in this Agreement or in any Ancillary Agreement.
6.3 Survival and Time Limitations. All representations, warranties, covenants and
agreements of the Parties in this Agreement or any other certificate or document delivered pursuant
to this Agreement will survive the Closing. Neither the Company nor the Shareholder will have
liability with respect to any claim under Section 6.1(a)(i) unless Buyer notifies the Company of
such a claim on or before the twenty-four (24) month anniversary of the Closing Date; provided,
however, that any claim relating to any representation or warranty made in Section 3.1
(Organization, Qualification, and Power), Section 3.2 (Authorization of Transaction), Section 3.3
(Capitalization and Subsidiaries), Section 3.5 (Brokers’ Fees), Section 3.6 (Assets), Section 3.7
(Financial Statements), Section 3.9 (Legal Compliance), and Section 3.10 (Tax Matters), Section
3.12 (Intellectual Property), Section 3.17 (Employee Benefits), and Section 3.19 (Environmental,
Health and Safety matters) may be made at any time without limitation (collectively, the
representations and warranties described above are referred to as the “Excluded Representations”)
and any claim related to intentional or fraudulent breaches of the representations and warranties
may be made at any time without limitation. Buyer will have no liability with respect to any claim
for any breach or inaccuracy of any representation or warranty in this Agreement unless the
Company notifies Buyer of such a claim on or before the twenty-four (24) month anniversary of
the Closing Date; provided, however, that any claim relating to any representation made in Section
2.1 (Organization of Buyer), Section 2.2 (Authorization of Transaction), and Section 2.4 (Brokers’
Fees) may be made at any time without limitation. If Buyer or the Company, as applicable,
provides proper notice of a claim within the applicable time period set forth above, then liability
for such claim will continue until such claim is resolved.
6.4 Limitation on Indemnification by Sellers; Payments by Sellers.
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(a) With respect to the matters described in Section 6.1(a)(i), neither the
Company nor the Shareholder will have liability with respect to such matters until Buyer
Indemnitees have suffered aggregate Adverse Consequences by reason of all such breaches in
excess of $60,000 (the “Threshold”), after which point the Company and the Shareholder will be
obligated to indemnify Buyer Indemnitees from and against all Adverse Consequences from and
including the first dollar; provided, that the foregoing limitations shall not apply in respect of any
Adverse Consequences relating to (i) breaches of the Excluded Representations or (ii) any
intentional misrepresentation or fraud.
(b) With respect to the matters described in Section 6.1(a)(i), the aggregate
maximum liability of Sellers shall be $7,000,000 (the “Cap”); provided, that the foregoing
limitations shall not apply in respect of any Adverse Consequences relating to (i) breaches of the
Excluded Representations or (ii) any intentional misrepresentation or fraud.
(c) With respect to the matters described in Section 6.1(a)(i) relating to breach
of any Excluded Representation, the aggregate maximum liability of the Sellers shall be the
Purchase Price paid to the Company pursuant to the transactions contemplated by this Agreement.
(d) The Parties hereto acknowledge and agree that, to the extent any
indemnification payment is required to be made by the Shareholder or the Company pursuant to
Section 6.1(a)(i) (other than for Excluded Representations and any intentional misrepresentation
or fraud), such amounts will first be satisfied from the Indemnification Escrow Amount to the
extent then available.
(e) From and after the Closing, any Adverse Consequences resulting from a
breach of Sellers’ representations and warranties for which a Buyer Indemnitee is entitled to
indemnification pursuant to the terms of this Agreement shall be satisfied (i) first, to the extent
such Adverse Consequences exceed the Threshold, from the Indemnification Escrow Amount
pursuant to the terms of the Escrow Agreement, and (ii) second, to the extent such Adverse
Consequences exceed the Indemnification Escrow Amount, by the Sellers, jointly and severally,
in an amount not to exceed the Cap, except for claims in connection with intentional
misrepresentation or fraud, for which the aggregate maximum liability of the Sellers shall be the
Purchase Price paid to the Company.
(f) Notwithstanding anything to the contrary herein, the Company and the
Shareholder shall only be required to indemnify a Buyer Indemnitee for Adverse Consequences
that are in excess of any applicable insurance proceeds actually received by such Buyer Indemnitee
in connection with such Adverse Consequences (net of any reasonable costs and expenses actually
incurred by such Buyer Indemnitee in collecting such proceeds, including any increase in
insurance premiums).
6.5 Limitations on Indemnification by Buyer.
(a) With respect to the matters described in Section 6.2(a), Buyer will have no
liability with respect to such matters until Seller Indemnitees have suffered Adverse Consequences
by reason of all such breaches in excess of the Threshold, after which point Buyer will be obligated
to indemnify Seller Indemnitees from and against all Adverse Consequences from and including
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the first dollar; provided, that the foregoing limitations shall not apply in respect of any Adverse
Consequences relating to (i) breaches of any representation made in Section 2.1 (Organization of
Buyer), Section 2.2 (Authorization of Transaction), and Section 2.4 (Brokers’ Fees) or (ii) any
intentional misrepresentation or fraud.
(b) With respect to the matters described in Section 6.2(a), the aggregate
maximum liability of Buyer shall be the Cap; provided, that the foregoing limitation shall not apply
in respect of any Adverse Consequences relating to (i) breaches of any representation made in
Section 2.1 (Organization of Buyer), Section 2.2 (Authorization of Transaction), and Section 2.4
(Brokers’ Fees) or (ii) any intentional misrepresentation or fraud.
6.6 Third-Party Claims.
(a) If a third party initiates a claim, demand, dispute, lawsuit or arbitration
(a “Third-Party Claim”) against any Person (the “Indemnified Party”) with respect to any matter
that the Indemnified Party might make a claim for indemnification against any Party (the
“Indemnifying Party”) under this ARTICLE 6, then the Indemnified Party must promptly notify
the Indemnifying Party in writing of the existence of such Third-Party Claim and must deliver
copies of any documents served on the Indemnified Party with respect to the Third-Party Claim;
provided, however, that any failure on the part of an Indemnified Party to so notify an
Indemnifying Party shall not limit any of the obligations of the Indemnifying Party under this
ARTICLE 6 (except to the extent such failure materially prejudices the defense of such
proceeding).
(b) Upon receipt of the notice described in Section 6.6(a), the Indemnifying
Party will have the right to defend the Indemnified Party against the Third-Party Claim with
counsel reasonably satisfactory to the Indemnified Party, provided, that (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen (15) days after the Indemnified Party has
given notice of the Third-Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the Third-Party Claim, (ii)
the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources to defend against
the Third-Party Claim and fulfill its indemnification obligations hereunder, (iii) the Third-Party
Claim involves only money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third-Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a precedential custom or practice
adverse to the continuing business interests or the reputation of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third-Party Claim actively and diligently. The
Indemnifying Party will keep the Indemnified Party apprised of all material developments,
including settlement offers, with respect to the Third-Party Claim and permit the Indemnified Party
to participate in the defense of the Third-Party Claim. So long as the Indemnifying Party is
conducting the defense of the Third-Party Claim in accordance with this Section 6.6(b), the
Indemnifying Party will not be responsible for any attorneys’ fees or other expenses incurred by
the Indemnified Party regarding the defense of the Third-Party Claim.
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(c) In the event that any of the conditions under Section 6.6(b) is or becomes
unsatisfied, however, (i) the Indemnified Party may defend against, and consent to the entry of any
judgment on or enter into any settlement with respect to, the Third-Party Claim in any manner it
may reasonably deem appropriate subject to the commercially reasonable approval of the
Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed, (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs
of defending against the Third-Party Claim (including reasonable attorneys’ fees and expenses),
and (iii) the Indemnifying Parties will remain responsible for any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused
by the Third-Party Claim to the fullest extent provided in this ARTICLE 6.
(d) Except in circumstances described in Section 6.6(c), neither the
Indemnified Party nor the Indemnifying Party will consent to the entry of any judgment or enter
into any settlement with respect to the Third-Party Claim without the prior written consent of the
other party, which consent will not be unreasonably withheld or delayed.
6.7 Other Indemnification Matters. All indemnification payments under this
Agreement will be deemed adjustments to the Cash Payment for Tax purposes, unless otherwise
required by Law. For purposes of determining whether there has been any misrepresentation or
breach of a representation or warranty, and for purposes of determining the amount of Adverse
Consequences resulting therefrom, all qualifications or exceptions in any representation or
warranty relating to or referring to the terms “material”, “materiality”, “in all material respects”,
“Material Adverse Effect” or any similar term or phrase shall be disregarded, it being the
understanding of the Parties that for purposes of determining liability under this ARTICLE 6, the
representations and warranties of the Parties contained in this Agreement shall be read as if such
terms and phrases were not included in them.
6.8 Setoff. If any Buyer Indemnitee makes a claim for indemnification in accordance
with this ARTICLE 6 in an amount in excess of the then-remaining Indemnification Escrow
Amount available for distribution, then Buyer shall be entitled, but is not obligated, to recover any
Adverse Consequences due from the Company or the Shareholder under this Agreement by setting
off such amounts against any amounts payable to the Company or the Shareholder, including the
Earnout Amount and/or Earnout Note. The exercise of such right of set off by Buyer, whether or
not ultimately determined to be justified, will not constitute a breach of this Agreement. Neither
the exercise nor the failure to exercise such right of set off will constitute an election of remedies
or limit Buyer in any manner in the enforcement of any other remedies that may be available to it.
ARTICLE 7
TAX MATTERS
The following provisions will govern the allocation of responsibility as between Buyer and
Sellers for certain tax matters following the Closing Date:
7.1 Tax Indemnification. In addition to the indemnification provisions of ARTICLE 6,
except to the extent such Taxes are reflected as a liability for purposes of calculating Working
Capital on the Closing Statement, the Company and the Shareholder shall be liable for, and shall
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jointly and severally indemnify, defend and hold Buyer Indemnitees harmless from all Taxes of
the Company and the Shareholder.
7.2 Cooperation on Tax Matters.
(a) Each Party shall cooperate, as and to the extent reasonably requested by the
other Party, in connection with the filing and preparation of Tax Returns and any Proceeding
related thereto. Such cooperation will include the retention and (upon the other Party’s request)
the provision of records and information that are reasonably relevant to any such Proceeding and
making employees available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Parties shall retain all books and records
with respect to Tax matters pertinent to the Company relating to any Tax period beginning before
the Closing Date until thirty (30) days after the expiration of the statute or period of limitations of
the respective Tax periods.
(b) The Sellers shall promptly notify the Buyer in writing upon receipt by the
Sellers of notice of any pending or threatened Tax audits or assessments relating to the income,
properties or operations of the Sellers that reasonably may be expected to relate to or give rise to
a Lien on the Acquired Assets or the Business. Each of the Buyer and the Sellers shall promptly
notify the other in writing upon receipt of notice of any pending or threatened Tax audit or
assessment challenging the Final Purchase Price Allocation.
7.3 Certain Taxes. All transfer (including real estate transfer), documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and interest) incurred
in connection with this Agreement or the transactions contemplated hereby will be paid fifty
percent (50%) by the Company (or the Shareholder on behalf of the Company), and fifty percent
(50%) by Buyer, when due, and the Company shall file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp, registration and
other Taxes and fees, and, if required by applicable Law, Buyer will join in the execution of any
such Tax Returns and other documentation.
ARTICLE 8
DEFINITIONS
“Accountant” has the meaning set forth in Section 1.9 above.
“Acquired Assets” means all right, title, and interest in and to all of the assets of the
Company, including but not limited to:
(a) all fixtures and leasehold improvements;
(b) fixed assets, machinery, equipment, vehicles, supplies, furniture, inventory, and
tangible personal property;
(c) all Intellectual Property and other general intangibles of the Company (including the
fictitious/trade names 1SEO Technologies, Inc and 1SEO Technologies; 1SEO IT Support and
Digital Agency; 1SEO Tech, and 1SEO IT Support (collectively, the “Fictitious Names”);
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telephone numbers, domain names, social media (including the “In the Den” podcast and YouTube
channel) and third-party website profiles, website and marketing collateral content, reputation,
Company data and information systems, and the internet addresses (including IPv4 and IPv6
addresses registered to the Company) and e-mail addresses of employees of the Company;
(d) all Contracts, including all rights and benefits under any Contract, personal property
lease, real property lease, purchase option, customer order, purchase order, plan, instrument,
document, commitment, arrangement, undertaking or authorization of the Company, and any note,
indenture, Lien, or guaranty made for the benefit of the Company;
(e) all Assumed Accounts Receivable and undeposited funds to the extent not collected
prior to the Closing and notes receivables;
(f) all refunds, prepayments, prepaid expenses, or other deferred items, including those
arising under any Contract;
(g) any units, membership interests, options, warrants, convertible securities or any other
securities or equity interests held by the Company;
(h) all rights, causes of action, choses in action, rights of recovery, rights of set off, rights
of recoupment, and claims, counterclaims, credits, rights and interests, rights to indemnification
or similar rights, known or unknown, matured or unmatured, assumed or contingent, against third
parties;
(i) all logs, client lists, books of insurance business, expiration lists, customer and supplier
lists, customer relationships, drawings, and specifications, creative materials, business and
financial records and files (other than original corporate records, equity registers and minute
books), correspondence, advertising, promotional, and marketing materials and supplier
information, studies, reports, employee files, data and books of account, payroll, personnel and
medical records, Tax Returns (and related workpapers and supporting documentation) and all other
Tax files and records, and other recorded material whether printed or computerized;
(j) all rights under warranties (express or implied), indemnities and all similar rights against
third parties;
(k) all Permits relating to operation of the Business by the Company;
(l) all rights and benefits under all insurance policies (except as related to Employee
Benefit Plans);
(m) all computer programs (including any licenses to such items licensed by the Company),
subject to the terms of applicable software agreements;
(n) all intangible rights and goodwill of the Company;
(o) all security or other deposits relating to any of the foregoing;
(p) the three (3) Toyota Scion X8s utilized by the Company’s sales force; and
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(q) all other tangible and intangible assets, wherever located;
provided, however, in each case, that the Acquired Assets shall not include the Excluded
Assets. To the extent any assets or property owned by the Shareholder or an Affiliate of any Seller
are necessary or advisable to the continued conduct of the Business (other than the Excluded
Assets), they shall be included within the defined term “Acquired Assets” for purposes hereof if
they would have been so included had they been owned by the Company, and the Sellers shall
cause the Shareholder or the affiliates of any other Seller to convey such assets and property to
Buyer, free and clear of all Liens, other than Permitted Liens, for no additional consideration.
“Adverse Consequences” means all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, Orders, dues, penalties, fines, costs, amounts paid in
settlement, liabilities, obligations, Taxes, Liens, losses, damages, deficiencies, costs of
investigation, court costs, and other expenses (including interest, penalties and reasonable
attorneys’ fees and expenses, whether in connection with Third-Party Claims or claims among the
Parties related to the enforcement of the provisions of this Agreement).
“Affiliate” means, with respect to the Person to which it refers,
(a) a Person that directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, such Person,
(b) any officer, director, manager or equityholder of such Person,
(c) any parent, sibling, descendant or spouse of such Person or of any of the Persons
referred to in clauses (a) and (b), and
(d) any corporation, limited liability company, general or limited partnership, trust,
association or other business or investment entity that directly or indirectly, through one or more
intermediaries controls, is controlled by or is under common control with any of the foregoing
individuals. For purposes of this definition, the term “control” of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning set forth in the preface above.
“Allocation ” has the meaning set forth in Section 1.11 above.
“Ancillary Agreements” means all of the agreements and instruments being executed and
delivered pursuant to this Agreement.
“Applicable Area” means (a) North America, but if such area is determined by judicial
action to be too broad, then it means (b) any state within the United States of America in which
the Company engaged in Business prior to the Closing Date.
“Assumed Accounts Payable” means amounts related to the provision of services that are
included as account payables on the books of the Company, that are payable to Persons other than
the Shareholder or Affiliates of the Company, which arose in the ordinary course of business, and
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only to the extent accrued for and included as a current liability in the final calculation of the
Working Capital.
“Assumed Accounts Receivable” means all amounts owed to the Company from any of its
customers or clients arising from the provision of services to such customers or clients by the
Company whether said amounts are billed or unbilled or recorded on the books of the Company
to the extent that such amounts owed are less than sixty (60) days outstanding. For purposes
hereof, all Assumed Accounts Receivable are deemed to arise immediately upon the provision of
such services by the Company to a customer or client.
“Assumed Employee Obligations” means (a) the amount of any accrued, but unpaid,
regular salaries, commissions and bonuses payable to the applicable Hired Employees, (b) accrued
payroll taxes, and (c) the amount of any accrued, but unpaid, paid time off applicable to each Hired
Employee, in each case, but only to the extent accrued for and included as a current liability in the
final calculation of the Working Capital, with such amounts being as set forth on Schedule 8(a).
“Assumed Liabilities” means (a) Assumed Accounts Payable, (b) Assumed Employee
Obligations, and (c) all obligations of the Company under the Contracts listed on Section 3.13(a)
of the Disclosure Schedule, which arise after the Closing, either (i) to furnish goods, services, and
other non-Cash benefits to another party, solely to the extent such obligation is required to be
performed after the Closing or (ii) to pay for goods, services, and other non-Cash benefits that
another party will furnish to it, solely to the extent such obligation is required to be performed after
the Closing, but, for the avoidance of doubt, not obligations for any breach or violation of such
Contracts that occurred prior to the Closing; provided, however, that the Assumed Liabilities shall
not include the Excluded Liabilities.
“Bachmann Letter” has the meaning set forth in Section 5.1(h) above.
“Bill of Sale” means that certain Assignment, Bill of Sale and Assumption of Liabilities
Agreement dated as of the date hereof by and between the Company and Buyer.
“Business” means the business of providing search engine optimization (“SEO”), search
engine marketing (“SEM”), digital marketing services, and all other services provided by the
Company.
“Business Day” means any day that is not a Saturday, Sunday or any other day on which
banks are required or authorized by Law to be closed in Wilmington, Delaware.
“Buyer” has the meaning set forth in the preface above.
“Buyer Indemnitees” has the meaning set forth in Section 6.1(a) above.
“Cap” has the meaning set forth in Section 6.4(b) above.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub. L.
116-136), as amended, and any administrative or other guidance published with respect thereto by
any Governmental Entity (including IRS Notices 2020-22 and 2020-65), or any other Law or
executive order or executive memorandum (including the Memorandum on Deferring Payroll Tax
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Obligations in Light of the Ongoing COVID-19 Disaster, dated August 8, 2020) intended to
address the consequences of COVID-19 (in each case, including any comparable provisions of
state, local or non-U.S. Law and including any related or similar orders or declarations from any
Governmental Entity), all as amended.
“Cash” means the aggregate amount of cash and cash equivalents of the Company on a
consolidated basis as determined in accordance with GAAP, consistently applied; provided, that
if such aggregate amount of cash and cash equivalents is a negative number, then it shall include
the amount of all fees, penalties or interest related to such negative amount of Cash.
“Cash Amount” means the aggregate amount of Cash as of the Closing Date.
“Cash Payment” means the amount equal to (a) Sixteen Million Dollars ($16,000,000),
plus (b) the Cash Amount, plus (c) the Working Capital Surplus, if any, minus (d) the Working
Capital Deficit, if any, minus (e) the Debt Amount, minus (f) the Transaction Expenses Amount,
minus (g) the Escrow Amount, minus (h) $3,000,000, which represents the aggregate potential
Earnout Amount, minus (i) the Rollover Amount.
“Closing” has the meaning set forth in Section 1.14 above.
“Closing Date” has the meaning set forth in Section 1.14 above.
“Closing Statement” has the meaning set forth in Section 1.9 above.
“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code
§4980B and of any similar state Law.
“Code” means the Internal Revenue Code of 1986, as amended, and any applicable rules
and regulations thereunder, and any successor to such statute, rules or regulations.
“Commission Agreements” has the meaning set forth in Section 3.13(a)(xxii) above.
“Company” has the meaning set forth in the preface above.
“Company Insurance Agreements” has the meaning set forth in Section 3.14(a) above.
“Company Products” has the meaning set forth in Section 3.12(h) above.
“Company Securities” means all of the issued and outstanding equity of the Company.
“Company Software” means Software developed by or for the Company.
“Confidential Information” means any information concerning the business and affairs of
the Company or the Business not already generally available to the public.
“Consent” means, with respect to any Person, any consent, approval, authorization,
permission or waiver of, or registration, declaration or other action or filing with or exemption by
such Person.
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“Contract” means any oral or written contract, obligation, understanding, commitment,
lease, license, purchase order, bid or other agreement.
“Copyrights” has the meaning set forth in the definition of Intellectual Property below.
“Covid-19 Assistance Subsidy” has the meaning set forth in Section 3.10(m) above.
“Covenant Agreement” has the meaning set forth in Section 5.1(i) above.
“Customer” means any Person who (a) purchased products or services from the Company
(or its predecessors) during the four (4) years prior to the Closing Date, (b) was called upon or
solicited by the Company (or its predecessors) during such four (4) year period, or (c) was a
distributor, sales representative, agent or broker for the Company during such four (4) year period.
“Data Security Requirements” means, collectively, all of the following to the extent related
to the collection, use, processing, storage, protection, transfer or disposition of data, or otherwise
relating to privacy, data protection and security, anti-spam, security breach notification
requirements applicable to the Company: (a) all applicable Laws, including any legislation
currently in force in any jurisdiction worldwide concerning the protection or processing of personal
data, such as the Children’s Online Privacy Protection Act (COPPA), the Computer Fraud and
Abuse Act (CFAA), the California Consumer Privacy Act (CCPA), the Telephone Consumer
Protection Act (TCPA), and the Data Protection Act 2018, the General Data Protection Regulation
(EU) 2016/679), the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI
2426/2003) and any legislation which implements the European Union’s Directive 95/46/EC and
the Privacy and Electronic Communications Directive (2002/58/EC), each as amended, or which
implements any other current legal act of the European Union or the United Kingdom concerning
the protection and processing of personal data, as applicable; (b) the Company’s own rules,
policies and procedures; (c) industry standards applicable to the industry in which the Company
operates, such as the Payment Card Industry (PCI) Data Security Standards; and (d) all contractual
commitments of the Company.
“Debt” means any (a) obligations relating to indebtedness for borrowed money, (b)
obligations evidenced by bonds, notes, debentures or similar instruments, (c) obligations in respect
of capitalized leases (calculated in accordance with GAAP), (d) the principal or face amount of
banker’s acceptances, surety bonds, performance bonds or letters of credit (in each case whether
or not drawn), (e) obligations for the deferred purchase price of property or services, including,
without limitation, the maximum potential amount payable with respect to earnouts, purchase price
adjustments or other payments related to acquisitions (other than current accounts payable to
suppliers and similar accrued liabilities incurred in the Ordinary Course of Business, paid in a
manner consistent with industry practice and reflected as a current liability in the final calculation
of Working Capital), (f) obligations under any existing interest rate, commodity or other swap,
hedge or financial derivative agreement entered into by the Company prior to Closing, (g) OffBalance Sheet Financing of the Company in existence immediately prior to the Closing, (h) other
long term or non-ordinary course liabilities (i) any unpaid income Tax or any liabilities or
obligations resulting from the Company’s deferral of any employment and payroll taxes pursuant
to the CARES Act, (j) indebtedness or obligations of the types referred to in the preceding clauses
(a) through (i) of any other Person secured by any Lien on any assets of the Company, even though
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the Company has not assumed or otherwise become liable for the payment thereof, and (k)
obligations in the nature of guarantees of obligations of the type described in clauses (a) through
(g) above of any other Person, in each case together with all accrued interest thereon and any
applicable prepayment, redemption, breakage, make-whole or other premiums, fees or penalties.
“Debt Amount” means all Debt of the Company (on a consolidated basis) as of the Closing
Date, plus, without duplication, any amounts required to fully pay or otherwise satisfy all such
Debt (including, but not limited to, any prepayment premium or penalty, breakage costs, accrued
interest and costs and expenses).
“Designated Courts” has the meaning set forth in Section 9.10 below.
“Disclosure Schedule” means the disclosure schedule delivered by the Shareholder and/or
the Company to Buyer on the date hereof.
“Domain Name Assignment” means that certain Domain Name Assignment dated as of the
date hereof between the Company and Buyer.
“ERCs” has the meaning set forth in Section 3.10(m) above.
“Earnout Amount” means any amount paid by Buyer to the Company pursuant to
Section 1.5 above.
“Earnout Measurement Period” has the meaning specified in Section 1.4 above.
“Earnout Note” has the meaning specified in Section 1.4 above.
“Earnout Objections Statement” has the meaning specified in Section 1.5 above.
“Earnout Report” has the meaning specified in Section 1.5 above.
“EFT” has the meaning set forth in Section 4.9 above.
“Employee Benefit Plan” means any (a) qualified or nonqualified Employee Pension
Benefit Plan or deferred compensation or retirement plan, fund, program, or arrangement, (b)
Employee Welfare Benefit Plan, (c) “employee benefit plan” (as such term is defined in ERISA
§3(3)), (d) equity-based plan, program, or arrangement (including any equity option, equity
purchase, equity ownership, equity appreciation, phantom equity, or restricted equity plan), or (e)
other retirement, severance, bonus, profit-sharing, incentive, health, medical, surgical, hospital,
indemnity, welfare, sickness, accident, disability, death, apprenticeship, training, day care,
scholarship, tuition reimbursement, education, adoption assistance, prepaid legal services,
termination, unemployment, vacation or other paid time off, change in control, or other similar
plan, fund, program, or arrangement, whether written or unwritten, that is sponsored, maintained,
or contributed to, or required to be maintained or contributed to, by the Company or any ERISA
Affiliate for the benefit of any present or former officers, employees, agents, managers, directors,
consultants, or independent contractors of the Company or an ERISA Affiliate.
“Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2).
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“Employee Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).
“Environmental, Health, and Safety Requirements” means all Laws and Orders concerning
public health and safety, worker and occupational health and safety, natural resources and pollution
or protection of the environment, including all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, recycling, discharge, release, threatened release, control, or cleanup of any Hazardous
Substances.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any Person that, together with the Company, would be treated as
a single employer under Section 414 of the Code or Section 4001 of ERISA and the regulations
thereunder.
“Escrow Agent” means SRS Acquiom.
“Escrow Agreement” means that certain Escrow Agreement dated as of the date hereof
among the Escrow Agent, the Company and Buyer.
“Escrow Amount” has the meaning set forth in Section 1.3(d) above.
“Estimated Cash Payment” has the meaning set forth in Section 1.6 above.
“Excluded Assets” means (a) Cash, (b) the corporate articles of incorporation, bylaws,
qualifications to conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer, and other identification numbers, seals, minute books,
equity transfer books, blank equity interest certificates, and other documents relating to the
formation, maintenance, and existence of the Company as a corporation, (c) any shares, options,
warrants, convertible securities or any other equity interests of the Company, (d) all rights of the
Company or the Shareholder under this Agreement, (e) any assets of, or specifically relating to,
any Employee Benefit Plans of the Company, (f) except as provided in the last sentence of the
definition of “Acquired Assets”, assets owned by the Shareholder or his other Affiliates, even if
historically run through the Company’s financials and bank accounts, (g) any recoveries by the
Company for counterclaims in connection with the My Phillie Wireless Litigation (as defined on
Schedule 6.1(a)(iv)); (h) any ERC proceeds of the Company with respect to ERCs filed prior to
the Closing with respect to pre-Closing periods; and (i) the Order Form and Use of Services by
and between the Company and Lever, Inc. dated November 11, 2022.
“Excluded Liabilities” means any liability or obligation of the Company or the Shareholder
or for which Buyer is alleged to be liable, that is not an Assumed Liability, including but not
limited to, (a) any severance obligations to employees, officers, executives, and management of
the Company; (b) all liabilities for any present or former employees, officers, directors, retirees,
independent contractors or consultants of the Company, including, without limitation, any
liabilities associated with any claims for wages or other benefits, bonuses, accrued vacation,
workers’ compensation, severance, retention, termination or other payments and all accrued
payroll or other ordinary course expenses that are not Assumed Employee Obligations; (c) any
liability or obligation of the Company or any of its ERISA Affiliates under their Employee Benefit
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Plans; (d) all liabilities arising out of, in respect of or in connection with the failure by the Company
or any of its Affiliates to comply with any Law or Order; (e) all liabilities in respect of any pending
or threatened claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of
violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil,
criminal, administrative, regulatory or otherwise, whether at law or in equity arising out of, relating
to or otherwise in respect of the operation of the Business or the Acquired Assets; (f) any Debt of
the Company; (g) all liabilities in respect of operations of the Business or Acquired Assets prior
to the Closing or relating to products or services delivered, performed, or sold prior to the Closing;
(h) any liability to the Shareholder; (i) all Transaction Expenses; (j) any obligation of the Company
to indemnify or hold harmless any current or former manager or officer of the Company; (k) any
refunds, overpayments or other similar amounts payable to a Governmental Body or any other
Person; (l) any liability or obligation related to any Excluded Asset; (m) all accounts payable that
do not constitute Assumed Accounts Payable; (n) any liability or obligation of the Company or the
Shareholder for Taxes (including Taxes with respect to the Acquired Assets), including income,
transfer, sales, use, and other Taxes (including bulk sales taxes) arising in connection with the
consummation of the transactions contemplated hereby, as well as any prorated Taxes for the
portion of any straddle period ending on the Closing Date (determined in accordance with Section
7.4(b)) and any Taxes otherwise imposed on the Acquired Assets or with respect to the Business
for any taxable period or portion thereof ending on or before the Closing Date and any Taxes that
are the responsibility of the Sellers pursuant to Section 7.3; (o) all Liabilities related to the
Shareholder personally or related in any manner to his other businesses, even if historically run
through the Company’s financials, credit cards, payroll and bank accounts; (p) any liability
associated with the Fictitious Names; (q) any liability under the Lease that arises after the Closing
and the execution of the Lease Assignment; and (r) any liability or obligation set forth on Schedule
8(b), in each case: (i) including, without limitation, any of the foregoing arising from matters
disclosed to Buyer or its Affiliates or otherwise referenced in this Agreement, and whether any
related claim arises before or after the Closing and (ii) whether such matters are known or
unknown, contingent or otherwise, whether accrued, liquidated, matured or unmatured.
“Excluded Representations” has the meaning set forth in Section 6.3 above.
“Fiduciary” has the meaning set forth in ERISA §3(21).
“Final Cash Payment” has the meaning set forth in Section 1.9 above.
“Financial Statements” has the meaning set forth in Section 3.7(a) above.
“GAAP” means generally accepted accounting principles in effect from time to time in the
United States as set forth in pronouncements of the Financial Accounting Standards Board (and
its predecessors) and the American Institute of Certified Public Accountants.
“Governmental Body” means any foreign or domestic federal, state or local government or
quasi-governmental authority or any department, agency, subdivision, court or other tribunal of
any of the foregoing.
“Hazardous Substances” means (a) petroleum or petroleum products, byproducts,
flammable materials, explosives, radioactive materials, radon gas, lead-based paint, asbestos in
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any form, urea formaldehyde foam insulation, polychlorinated biphenyls (PCBs), transformers or
other equipment that contain dielectric fluid containing PCBs, toxic mold or fungus of any kind or
species, materials, or wastes, chemical substances, or mixtures, pesticides, noise, or radiation, (b)
any chemicals or other materials or substances which are defined as or included in the definition
of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” “toxic
pollutants,” “contaminants,” “solid waste,” “pollutants,” or words of similar import under any
applicable Environmental, Health, and Safety Requirements, and (c) any other chemical, material
or substance exposure to which is prohibited, limited or regulated under any applicable
Environmental, Health, and Safety Requirements.
“Hired Employees” has the meaning set forth in Section 4.8 above.
“Illustrative Calculation” has he meaning set forth in Schedule 1.10 below.
“Improvements” means all buildings, structures, fixtures, building systems and equipment,
and all components thereof (including the roof, foundation and structural elements), included in
the Leased Real Property.
“Indemnification Escrow Amount” has the meaning set forth in Section 1.3(c) above.
Subject to this Agreement and the Escrow Agreement, the Indemnification Escrow Amount shall
be held in escrow for a period of twenty four (24) months after the Closing Date.
“Indemnified Party” has the meaning set forth in Section 6.6(a) above.
“Indemnified Taxes” means, except to the extent included in Debt or reflected as a liability
for purposes of calculating Working Capital on the Closing Statement, (a) all Taxes (or the nonpayment thereof) of the Company for any pre-Closing Tax period, (b) any and all Taxes of any
member of an affiliated consolidated, combined or unitary group of which the Company (or any
predecessor thereof) is or was a member on or prior to the Closing Date, including pursuant to
Treasury Regulations Section 1.1502-6 or any analogous or similar state, local or foreign Law, (c)
any and all Taxes of any Person imposed on the Company as a transferee or successor, by Contract
or pursuant to any Law, which Taxes are imposed on the Company as a result of an event or
transaction occurring on or prior to the Closing Date, (d) all Taxes imposed on or incurred by any
Seller, (e) all Taxes included in the definition of Excluded Liabilities, and (f) all amounts
(including Taxes) with respect to any ERCs claimed or received by the Sellers.
“Indemnifying Party” has the meaning set forth in Section 6.6(a) above.
“Intellectual Property” means all intellectual property and other similar proprietary rights,
whether registered or unregistered, including all of the following in any jurisdiction throughout
the world: (a) all inventions and discovery inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents, patent applications,
and counterparts claiming priority therefrom, and related patent disclosures, together with all
reissuances, continuations, continuations-in-part, divisions, extensions, and reexaminations
thereof and all rights associated with any of the foregoing (together, the “Patents”), (b) all
trademarks, service marks, trade dress, logos, slogans, trade names, corporate and business names,
and other source or business identifiers, and Internet domain names, including any registration for
any Domain Name and right with respect to any Internet address (including IPv4 and IPv6
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addresses), together with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications, registrations, and renewals in
connection therewith (together, the “Trademarks”), (c) all copyrights and works of authorship, and
other copyrightable works, whether or not copyrightable, and whether published or unpublished,
including software code, translations, documentation, marketing and training materials, user
interface designs, compilations, and databases, and all applications, registrations, and renewals in
connection therewith, and all derivative works, adaptions, compilations, and combinations of the
foregoing (together, the “Copyrights”), (d) all trade secrets and other confidential and proprietary
business information and other information that derives economic value from not being generally
known (including ideas, research and development, know-how, formulas, compositions, processes
and techniques, technical data and information, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans and proposals)
(together, the “Proprietary Information”), (e) all Software, and (f) all other proprietary rights.
“Intellectual Property Agreements” means (a) any Contract for the development of any
Intellectual Property by any third party for, with or on behalf of the Company, and (b) all licenses,
sublicenses and other agreements whereby (i) the Company is authorized to use or access any
Intellectual Property (other than for off-the-shelf commercially available Software, freeware, or
Open Source Software, in each case, that do not require payment of any recurring license fees,
subscription fees, or any recurring support and maintenance and which have not been customized
in any material way) or (ii) the Company licenses or otherwise authorizes a third party to use or
access any Company Intellectual Property.
“Knowledge” means (a) in the case of an individual, the actual or constructive knowledge
of such individual, upon reasonable inquiry, and (b) in the case of the Company, the actual or
constructive knowledge of the Shareholder and Catrina Bachmann, Jolin Bachmann, BJ Bergey,
and William Rossell upon reasonable inquiry.
“Landlord” has the meaning set forth in Section 3.11(e).
“Law” means any foreign or domestic federal, state or local law, statute, code, ordinance,
regulation, rule, consent agreement, constitution or treaty of any Governmental Body, including
common law.
“Lease Assignment(s)” means for each Lease, an agreement providing for: (a) the
assignment and assumption of the rights and obligations of the Company under such Lease which
arise or occur after the Closing Date, together with all security or other deposits held by the
Company thereunder; (b) for any Lease requiring Consent from any Landlord in connection with
the transaction contemplated by this Agreement, written approval from such Landlord of the
assignment and assumption of rights and other terms contemplated pursuant to such Lease
Assignment; (c) any amendments to such Lease acceptable to Buyer and any applicable Landlord;
and (d) written verification from the applicable Landlord under such Lease as to (i) the required
security or other rental deposit under such Lease, (ii) the amount of such deposit currently held by
the applicable Landlord under such Lease, (iii) defaults, if any, by the Company under such Lease,
and (iv) such other matters as Buyer may reasonably request; in a form reasonably acceptable to
Buyer and to be executed by the Company, Buyer, and such applicable Landlord.
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“Leased Real Property” means all leasehold or subleasehold estates and other rights to use
or occupy any land, buildings, structures, Improvements, fixtures or other interest in real property
held by the Company.
“Leases” means all written or oral leases, subleases, licenses, concessions and other
agreements, including all amendments, extensions, renewals, guaranties, and other agreements
with respect thereto, pursuant to which the Company holds any Leased Real Property.
“Lien” means any lien, mortgage, pledge, encumbrance, charge, security interest, adverse
claim, liability, interest, charge, preference, priority, proxy, transfer restriction (other than
restrictions under the Securities Act and state securities laws), encroachment, Tax, order,
community property interest, equitable interest, option, warrant, right of first refusal, easement,
profit, license, servitude, right of way, covenant or zoning restriction.
“Material Adverse Effect” or “Material Adverse Change” means any event, change,
development, or effect that, individually or in the aggregate, will or could reasonably be expected
to have a materially adverse effect on (a) the business, operations, condition (financial or
otherwise), value of the Acquired Assets (including intangible assets), liabilities, prospects,
operating results, value, employee, customer or supplier relations, or financial condition of the
Company or (b) the ability of the Company or the Shareholder to timely consummate the
transactions contemplated by this Agreement.
“Material Contracts” means, collectively, the Contracts required to be listed in
Section 3.13(a) of the Disclosure Schedule, the Leases, the Intellectual Property Agreements and
the Company Insurance Agreements.
“Most Recent Balance Sheet” means the balance sheet contained within the Most Recent
Financial Statements.
“Most Recent Financial Statements” has the meaning set forth in Section 3.7(a) above.
“Most Recent Fiscal Month End” has the meaning set forth in Section 3.7(a) above.
“Most Recent Fiscal Year End” means December 31, 2022.
“Multiemployer Plan” has the meaning set forth in ERISA §3(37).
“Non-Assignable Asset” has the meaning set forth in Section 1.12 above.
“Objections Statement” has the meaning set forth in Section 1.9 above.
“Off-Balance Sheet Financing” means (a) any liability of the Company under any sale and
leaseback transactions which does not create a liability on the consolidated balance sheet of the
Company and (b) any liability of the Company under any synthetic lease, Tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product where the transaction
is considered indebtedness for borrowed money for federal income Tax purposes but is classified
as an operating lease in accordance with GAAP for financial reporting purposes.
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“Open Source” means any software or other material that is made generally available to
the public, under “open source” licenses (including but not limited to the GNU General Public
License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL),
BSD, the Apache License or any similar license arrangement) and without requiring the payment
of any fees or royalties.
“Order” means any order, award, decision, injunction, judgment, ruling, decree, charge,
writ, subpoena or verdict entered, issued, made or rendered by any Governmental Body or
arbitrator.
“Ordinary Course of Business” means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and frequency).
“Organizational Documents” means (a) any certificate or articles of incorporation, bylaws,
shareholders’ agreements, certificate or articles of organization, limited liability company
agreements or operating agreements, (b) any documents comparable to those described in clause
(a) as may be applicable pursuant to any Law and (c) any amendment or modification to any of
the foregoing.
“Party” or “Parties” has the meaning set forth in the preface above.
“Patents” has the meaning set forth in the definition of Intellectual Property above.
“Permit” means any license, import license, export license, franchise, Consent, permit,
certificate, certificate of occupancy or Order issued by any Person.
“Permitted Lien” means any (a) liens for Taxes not yet due or payable or for Taxes that the
Company are contesting in good faith through appropriate proceedings in a timely manner, in each
case, for which adequate reserves have been established and shown on the Most Recent Balance
Sheet, (b) liens of landlords, carriers, warehousemen, workmen, repairmen, mechanics,
materialmen and similar liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money, (c) restrictions, easements, covenants, reservations,
rights of way or other similar matters of title to the Leased Real Property of record, and (d) zoning
ordinances, restrictions, prohibitions and other requirements imposed by any Governmental Body,
all of which do not materially interfere with the conduct of the business of the Company.
“Person” means any individual, corporation, partnership, limited liability company, firm,
joint venture, association, joint-stock company, trust, unincorporated organization, Governmental
Body or other entity.
“Plan” has the meaning set forth in Section 3.17(c).
“Privacy Laws” has the meaning set forth in Section 3.9(b) above.
“Proceeding” means any action, audit, lawsuit, litigation, investigation or arbitration (in
each case, whether civil, criminal or administrative) pending by or before any Governmental Body
or arbitrator.
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“Prohibited Transaction” has the meaning set forth in ERISA §406 and Code §4975.
“Proprietary Information” has the meaning set forth in the definition of Intellectual
Property above.
“Public Software Licenses” means any license for Software pursuant to which: (a) such
Software is made generally available to the public without requiring payment of fees or royalties;
or (b) any derivative of such Software is or may be required to be disclosed or licensed on the same
terms as such license.
“Purchase Price” has the meaning set forth in Section 1.3 above.
“Receivables” has the meaning set forth in Section 3.7(c) above.
“Referral Partner” has the meaning set forth in Section 3.13(a)(xxi) above.
“Referral Partner Agreements” has the meaning set forth in Section 3.13(a)(xxi) above.
“Registered IP” has the meaning set forth in Section 3.12(b) above.
“Restricted Period” means a period of five (5) years following the Closing.
“Rollover Amount” has the meaning set forth in Section 1.3(e) above.
“Rollover Equity” means the limited liability company interests in 1SEO Holdings, LLC
issued to the Company pursuant to terms set forth in the Subscription Agreement, with an
aggregate fair market value equal to the Rollover Amount.
“Securities Act” means the Securities Act of 1933, as amended, and any applicable rules
and regulations thereunder, and any successor to such statute, rules or regulations.
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, and
any applicable rules and regulations thereunder, and any successor to such statute, rules or
regulations.
“Seller” or “Sellers” has the meaning set forth in the preface above.
“Seller Indemnitees” has the meaning set forth in Section 6.2 above.
“Shareholder” has the meaning set forth in the preface above.
“Software” means computer software programs (and all enhancements, versions, releases,
and updates thereto), including software compilations, software tool sets, compilers, higher level
or “proprietary” languages and all related programming and user documentation, whether in source
code, object code, executable code, or human readable form, or any translation or modification
thereof that substantially preserves its original identity.
“Sublease” has the meaning set forth in Section 5.1(n) above.
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“Subscription Agreement” has the meaning set forth in Section1.7 above.
“Systems” means all computers, software, databases, hardware, firmware, middleware,
servers, workstations, routers, hubs, switches, circuits, networks, databases, data communications
and telecommunication lines and all other information technology systems and equipment
(including communications equipment, terminals, and hook-ups that interface with third-party
software or systems), including any outsourced systems and processes reasonably within the
Company’s control, that are owned, licensed, leased or otherwise used or relied on by the
Company.
“Tax” or “Taxes” means and includes (a) any federal, state, local and foreign net income,
alternative or add-on minimum, estimated, gross income, gross receipts, sales, use, ad valorem,
value added, transfer, franchise, capital profits, lease, service, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, abandoned property or
escheat, environmental or windfall profit tax, customs duty or other tax, governmental fee or other
like assessment or charge, (b) any interest, fines, penalties, assessments, deficiencies or additions
thereto, or incurred in connection with or in lieu of any items described herein or any related
contest or dispute, (c) and any liability for Taxes of another Person incurred or borne by virtue of
the application of Treasury Regulation Section 1.1502-6 (or any similar or corresponding provision
of state, local or foreign Law), as a transferee or successor, by Contract or otherwise.
“Tax Return” means any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
“Third-Party Claim” has the meaning set forth in Section 6.6(a) above.
“Threshold” has the meaning set forth in Section 6.4(a) above.
“Trademarks” has the meaning set forth in the definition of Intellectual Property above.
“Transaction Expenses” means any and all (a) legal, accounting, tax, financial advisory,
environmental consultants and other professional or transaction related costs, fees and expenses
incurred by the Company or the Shareholder in connection with this Agreement or in investigating,
pursuing or completing the transactions contemplated hereby (including any amounts owed to any
consultants, auditors, accountants, attorneys, brokers or investment bankers), (b) payments,
bonuses or severance which become due or are otherwise required to be made as a result of or in
connection with the Closing, and (c) payroll, employment or other Taxes, if any, required to be
paid by Buyer (on behalf of the Company) with respect to the amounts payable pursuant to this
Agreement or the amounts described in clause (a) and (b).
“Transaction Expenses Amount” means an amount equal to all Transaction Expenses that
have not been paid prior to the Closing Date, whether or not the Company has been billed for such
expenses.
“Working Capital” shall be calculated in accordance with the methodology set forth on
Schedule 1.10.
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“Working Capital Deficit” means the amount by which the Working Capital as of the
Closing Date is less than $180,000.
“Working Capital Escrow Amount” has the meaning set forth in Section 1.3(d) above.
Subject to this Agreement and the Escrow Agreement, the Working Capital Escrow Amount shall
be held in escrow for a period of six (6) months after the Closing Date.
“Working Capital Surplus” means the amount by which the Working Capital as of the
Closing Date is greater than $180,000.
ARTICLE 9
MISCELLANEOUS
9.1 Press Releases and Public Announcements; Post-Closing Promotion of Company
by Shareholder. Each Seller shall not issue any press release or make any public announcement
relating to the subject matter of this Agreement without the prior written approval of Buyer;
provided, however, that any Party may make any public disclosure it believes in good faith is
required by applicable Law (in which case the disclosing Party will use its reasonable best efforts
to advise the other Parties prior to making the disclosure). Notwithstanding the foregoing, the
Buyer hereby consents to allow the Shareholder to refer to himself as the ‘founder’ of the Company
and a ‘partial owner’ of the Company after the Closing and to allow the Shareholder to positively
and truthfully promote and portray the Company during speaking engagements at conferences;
provided, however, that the Shareholder shall always convey that he does not have the actual or
apparent authority to bind the Company; provided, further, that the Parties agree that they shall
work cooperatively and in good faith on any public perception matters if any conflicts of interest
arise from confusion with the Company’s sales prospects, customer, vendors, or employees or if
the Shareholder’s association with the Company is otherwise not in the Company’s best interests.
9.2 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors and permitted
assigns.
9.3 Entire Agreement. This Agreement (including the documents referred to herein)
and the Ancillary Agreements constitute the entire agreement among the Parties and supersedes
any prior understandings, agreements, or representations by or among the Parties, written or oral,
to the extent they relate in any way to the subject matter hereof.
9.4 Succession and Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other Parties; provided, however, that Buyer may (a)
assign any or all of its rights and interests hereunder to one or more of its Affiliates and designate
one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases
Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder),
(b) assign its rights under this Agreement for collateral security purposes to any lenders providing
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financing to Buyer or any of its Affiliates, or (c) assign its rights under this Agreement to any
Person that acquires Buyer or any of its assets.
9.5 Counterparts. This Agreement may be executed in one or more counterparts
(including by means of facsimile or portable document format (.PDF)), each of which shall be
deemed an original but all of which together will constitute one and the same instrument.
9.6 Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
9.7 Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given (a) when delivered personally to the recipient, (b) when sent
by electronic mail or facsimile, on the date of transmission to such recipient, (c) one (1) Business
Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or
(d) four (4) Business Days after being mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:
If to the
Shareholder or the
Company:
Lance Bachmann
6202 Sheaff Lane
Fort Washington, PA 19034
E-mail: lance@digitallion.com
Copy to: W. Patrick Scott
Obermayer Rebmann Maxwell & Hippel LLP
Centre Square West
1500 Market Street | Suite 3400
Philadelphia, PA 19102-2101
E-mail: Patrick.Scott@obermayer.com
If to Buyer:
1 SEO Digital Agency, LLC
92 SW 3rd Ste, #2003
Miami, FL 33130
Attention: John Shoaf
E-mail: john.shoaf@skyharbor.co
Copy to: Raam S. Jani
Baker & Hostetler LLP
One North Wacker Drive, Suite 4500
Chicago, Illinois 60606
Facsimile: (312) 416-6201
E-mail: rjani@bakerlaw.com
Any Party may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
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9.8 Governing Law. This Agreement and any claim, controversy or dispute arising out
of or related to this Agreement, any of the transactions contemplated hereby, the relationship of
the Parties, and/or the interpretation and enforcement of the rights and duties of the Parties,
whether arising in contract, tort, equity or otherwise, shall be governed by and construed in
accordance with the domestic Laws of the State of Delaware (including in respect of the statute of
limitations or other limitations period applicable to any such claim, controversy or dispute),
without giving effect to any choice or conflict of Law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of Delaware.
9.9 Waiver of Jury Trial. EACH OF THE PARTIES WAIVES THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OR RELATED TO THIS AGREEMENT IN ANY ACTION, PROCEEDING
OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE
PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
9.10 Exclusive Venue. THE PARTIES AGREE THAT ALL DISPUTES, LEGAL
ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT MUST BE BROUGHT EXCLUSIVELY IN A FEDERAL DISTRICT COURT
FOR THE DISTRICT OF DELAWARE LOCATED IN WILMINGTON, DELAWARE OR A
DELAWARE STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE
(COLLECTIVELY THE “DESIGNATED COURTS”). EACH PARTY HEREBY CONSENTS
AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE DESIGNATED COURTS.
NO LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY OTHER FORUM. EACH PARTY HEREBY IRREVOCABLY
WAIVES ALL CLAIMS OF IMMUNITY FROM JURISDICTION AND ANY OBJECTION
WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUIT, ACTION OR PROCEEDING IN ANY DESIGNATED COURT, INCLUDING
ANY RIGHT TO OBJECT ON THE BASIS THAT ANY DISPUTE, ACTION, SUIT OR
PROCEEDING BROUGHT IN THE DESIGNATED COURTS HAS BEEN BROUGHT IN AN
IMPROPER OR INCONVENIENT FORUM OR VENUE. EACH OF THE PARTIES ALSO
AGREES THAT DELIVERY OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT TO
A PARTY IN COMPLIANCE WITH SECTION 9.7 OF THIS AGREEMENT SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING IN A
DESIGNATED COURT WITH RESPECT TO ANY MATTERS TO WHICH THE PARTIES
HAVE SUBMITTED TO JURISDICTION AS SET FORTH ABOVE.
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9.11 Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by each of the Parties hereto. No
waiver by any Party of any provision of this Agreement or any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the
same shall be in writing and signed by the Party making such waiver nor shall such waiver be
deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.
9.12 Injunctive Relief. Each Seller hereby agrees that, in the event of breach of this
Agreement, damages would be difficult, if not impossible, to ascertain, that irreparable damage
would occur in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached, and that the character, periods
and geographical area and the scope of the restrictions on each Seller’s activities in Sections 4.4,
4.5 and 4.6 are fair and reasonably required for the protection of Buyer and its Affiliates. It is
accordingly agreed that, in addition to and without limiting any other remedy or right it may have,
Buyer shall be entitled to an injunction or other equitable relief in any court of competent
jurisdiction, without any necessity of proving damages or any requirement for the posting of a
bond or other security, enjoining any such breach (including a breach of Sections 4.4, 4.5 or 4.6),
and enforcing specifically the terms and provisions. Each Seller hereby waives any and all
defenses he, she or it may have on the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief.
9.13 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
9.14 Expenses. Except as otherwise expressly provided in this Agreement, each Party
will bear its own costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby; provided, that all Transaction
Expenses incurred by any Seller in connection with this Agreement shall be paid by the
Shareholder.
9.15 Construction. The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any Law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise. The word
“including” shall mean including without limitation.
9.16 Incorporation of Schedules and Disclosure Schedule. The Disclosure Schedule and
other schedules and exhibits identified in this Agreement are incorporated herein by reference and
made a part hereof.
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9.17 Confidentiality. Each Seller shall treat and hold as confidential all of the terms and
conditions of the transactions contemplated by this Agreement and the other Ancillary
Agreements, including, without limitation, the Purchase Price and each of its components;
provided, however, that a Seller may disclose such information to its legal counsel, accountants,
financial planners and/or other advisors on an as-needed basis so long as any such Person is bound
by a confidentiality obligation with respect thereto.
9.18 Schedules. Nothing in the schedules hereto shall be deemed adequate to disclose
an exception to a representation or warranty made herein unless the schedule identifies the
exception with reasonable particularity and describes the relevant facts in reasonable detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to a representation
or warranty made herein (unless the representation or warranty has to do with the existence of the
document or other item itself). The Parties intend that each representation, warranty, and covenant
contained herein shall have independent significance. If any Party has breached any
representation, warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not detract from or mitigate
the fact that the Party is in breach of the first representation, warranty, or covenant.
[Remainder of Page Intentionally Left Blank]
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[Signature Page to Asset Purchase Agreement]
The Parties have executed this Agreement as of the date first above written.
BUYER:
1SEO DIGITAL AGENCY, LLC
By:
Name: John Shoaf
Title: Authorized Representative
COMPANY:
1SEO.COM INC.
By:
Name: Lance Bachmann
Title: President
SHAREHOLDER:
Lance Bachmann, individually
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[Signature Page to Asset Purchase Agreement]
The Parties have executed this Agreement as of the date first above written.
BUYER:
1SEO DIGITAL AGENCY, LLC
By:
Name: John Shoaf
Title: Authorized Representative
COMPANY:
1SEO.COM INC.
By:
Name: Lance Bachmann
Title: President
SHAREHOLDER:
Lance Bachmann, individually
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DISCLOSURE SCHEDULE
Exceptions to Representations and Warranties
[See attached. ]
DISCLOSURE SCHEDULE
Exceptions to Representations and Warranties
[See attached.]
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 67 of 258 PageID #: 85
EXECUTION COPY
DISCLOSURE SCHEDULE
This Disclosure Schedule (this “Disclosure Schedule”) is made pursuant to that certain
Asset Purchase Agreement dated February 17, 2023 (the “Agreement”), by and among 1SEO
DIGITAL AGENCY, LLC, a Delaware limited liability company (“Buyer”), 1SEO.COM INC., a
Pennsylvania corporation (the “Company”), and Lance Bachmann (the “Shareholder”, and
together with the Company, collectively, the “Sellers”, and each individually, a “Seller”).
This Disclosure Schedule is arranged in sections and subsections corresponding to the
numbered and lettered sections and subsections contained in the Agreement. This Disclosure
Schedule is intended to be construed as an integrated document, and each section of this Disclosure
Schedule should be read in conjunction with the other sections of this Disclosure Schedule. In the
event a section or subsection of this Disclosure Schedule referenced in the Agreement is not listed
or referenced herein, such section or subsection of this Disclosure Schedule may be considered
blank.
Any information disclosed herein under the heading of a particular section or subsection
of the Agreement shall constitute an exception and/or disclosure for purposes of each other section
or subsection of this Disclosure Schedule for which the applicability of the disclosure to such other
section or subsection is reasonably and readily apparent on its face and for which the information
provided in the disclosure is sufficient for purposes of such other section or subsection.
The headings contained in this Disclosure Schedule are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Disclosure Schedule. The
attachments referenced in this Disclosure Schedule form an integral part of this Disclosure
Schedule and are incorporated by reference for all purposes as if set forth fully herein. Nothing in
this Disclosure Schedule is intended to expand the scope of any representation or warranty of the
Company or the Shareholder contained in the Agreement.
Capitalized terms used in this Disclosure Schedule that are not defined herein have the
meanings given them in the Agreement. No information contained in this Disclosure Schedule
shall be deemed to be an admission to any third party of any matter whatsoever (including, without
limitation, any violation of law or breach of contract).
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EXECUTION COPY
Schedule 3.1
Organization, Qualification and Power
(a) Pennsylvania
(b) Lance Bachmann is the sole director and the President, Secretary, and Treasurer of
the Company. There are no other officers of the Company.
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Schedule 3.2
Authorization of Transaction
The following Contracts/Permits require notice of a change of control (which, by definition,
includes the sale of assets or sale of some or all of the business) of the Company:
1. Service Order by and between the Company and Rackspace US, Inc. dated March 29,
2018.
2. Terms of Service by and between the Company and WP Engine updated July 20, 2021.
The following Contracts/Permits require prior Consent before assignment to Buyer:
1. Merchant Payment Service by and between the Company and Intuit Payments Inc.,
undated.
2. The Lease (as defined in Schedule 3.11(b)).
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Schedule 3.3
Capitalization and Subsidiaries
1. None.
EXECUTION COPY
Schedule 3.3
Capitalization and Subsidiaries
1. None.
EXECUTION COPY
Schedule 3.3
Capitalization and Subsidiaries
1. None.
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Schedule 3.4
Non-Contravention
1. None.
EXECUTION COPY
Schedule 3.4
Non-Contravention
1. None.
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Schedule 3.4
Non-Contravention
1. None.
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Schedule 3.5
Brokers’ Fees
1. Exclusive Listing Agreement between the Company and Barney, Inc. dated August
10, 2022.
EXECUTION COPY
Schedule 3.5
Brokers’ Fees
1. Exclusive Listing Agreement between the Company and Barney, Inc. dated August
10, 2022.
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Schedule 3.6
Assets
The following have liens on the Company’s business assets:
1. The Merchant Payment Service Contract by and between Intuit Payments Inc. and
the Company (security interest granted in limited accounts of the Company to secure obligations
to Intuit).
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Schedule 3.7(a)(i)
Financial Statements
2020
1SEO.Com
Profit and Loss
January – December 2020
Total
Income
Commission Income 1,047.93
Sales 8,249,481.69
Refunds -113,598.75
Total Sales
$
8,135,882.94
Sales of Product Income -1,000.00
Sales-Recognized Deferred -28,442.50
Total Income
$
8,107,488.37
Cost of Goods Sold
Subcontracted Services 73,990.35
Tools 770,635.74
Total Cost of Goods Sold
$
844,626.09
Gross Profit
$
7,262,862.28
Expenses
Advertising & Marketing Expense 507,135.03
Business Promotion 11,500.00
Total Advertising & Marketing
Expense
$
518,635.03
Amortization 3,583.33
Automobile Expense 13,314.53
Bad Debt Expense 46,726.67
Bank Service & Credit Card Fees 245,923.33
Charitable Contribution 2,215.00
Depreciation Expense 312,888.91
Dues and Subscriptions 1,561.95
Employee Benefits -41,968.19
Dental Expense 4,185.23
Health Insurance 240,295.34
Total Employee Benefits
$
202,512.38
Employee Meals 109,807.55
Entertainment 18,551.58
Insurance Expense 52,834.63
Interest Expense 15,617.59
1SEO.Com
Balance Sheet
As of December 31, 2020
Total
ASSETS
Current Assets
Bank Accounts
1seo.com 0.00
Centric 103,307.88
Checking-Citizens 100,135.95
TD Bank 02/27/2019 946,968.29
Total Bank Accounts
$
1,150,412.1
2
Accounts Receivable
Accounts Receivable 345,198.75
Total Accounts Receivable
$
345,198.75
Other Current Assets
Due from Red Dawg 0.00
Employee Advance 0.00
ERC Receivable 325,968.00
Officer Advance-LB 636,249.82
Pre-Paid Tax 0.00
Prepaid Expense 0.00
Receivable – Ex employee 0.00
Undeposited Funds 79,907.50
Total Other Current Assets
$
1,042,125.3
2
Total Current Assets
$
2,537,736.1
9
Fixed Assets
Accumulated Depreciation -749,480.90
Automobile 489,410.53
Furniture and Fixtures 75,826.75
Leasehold Improvement 25,527.00
Office Equipment 207,472.26
Total Fixed Assets
$
48,755.64
Other Assets
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Marketing Expense 483,754.14
Agency Referral Fee 166,443.25
Total Marketing Expense
$
650,197.39
Meals 50% 60,387.04
Office expenses and supplies 152,983.95
Payroll Expense 122,921.93
401k Contribution 66,458.47
ERC Wage Reduction -325,968.00
Officer Payroll 340,493.07
Payroll Expense – Accounting 22,081.92
Payroll Expense – Admin 49,630.41
Payroll Expense – Content 401,834.54
Payroll Expense – CRM 376,672.99
Payroll Expense – Development 408,584.87
Payroll Expense – Graphic Design 90,816.99
Payroll Expense – HR 73,501.12
Payroll Expense – In House 63,319.29
Payroll Expense – Management 881,871.19
Payroll Expense – Operations 181,759.84
Payroll Expense – PPC 216,554.30
Payroll Expense – Sales 378,589.11
Payroll Expense – SEO 169,486.39
Payroll Expense – Social 188,872.74
Payroll Expense – Trainer 3,563.31
Payroll Expense – Uncategorized 22,291.00
Payroll Expense – Video 30,581.26
Total Payroll Expense
$
3,763,916.74
Payroll Service Expense 21,452.57
Payroll Tax Expense 45,441.33
Payroll Tax Expense – Accounting 2,026.93
Payroll Tax Expense – Admin 3,986.57
Payroll Tax Expense – Content 33,270.60
Payroll Tax Expense – CRM 30,237.37
Payroll Tax Expense –
Development 34,070.20
Payroll Tax Expense – Graphic D 7,695.83
Payroll Tax Expense – HR 5,030.68
Payroll Tax Expense – In House 5,833.15
Payroll Tax Expense – Management 57,149.73
Payroll Tax Expense – Officer 5,536.53
Payroll Tax Expense – Operation 14,028.30
Payroll Tax Expense – PPC 16,754.09
Payroll Tax Expense – Sales 25,735.96
Advance-Bachmann 0.00
Advance-JSL Real Estate 0.00
Goodwill 10,444.51
Intangibles 42,749.99
Security Deposit 6,800.00
Total Other Assets
$
59,994.50
TOTAL ASSETS
$
2,646,486.3
3
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Credit Cards
Amex Black 03/10/2020 4,842.98
Amex Gold 03/10/2020 56,000.00
Amex Platinum 03/10/2020 0.00
Amex Plum 03/10/2020 11,922.72
Credit Card (5) at American Exp 0.00
Credit Card (7) at American Exp 0.00
Total Credit Cards
$
72,765.70
Other Current Liabilities
401k Liability 0.00
Accrued Expenses 0.00
Accrued Payroll 0.00
Citizens Line of Credit 240,381.04
Deferred Advertising 572,042.57
Deferred Income 987,958.50
Due to Comcast PSM Holding 0.00
Due to Shock IT 480.00
Garnishments 0.00
Loan M&T – Mercedes 15,963.00
Loan Payable-Centric 0.00
Loan Payable-Centric PPP Funds 0.00
Loan Payable-GM Financial 0.00
Loan WF – GMC Sierra 14,642.16
LSTB 467.20
Payroll Tax Liabilities 0.00
Salary Exchange 0.00
Total Other Current Liabilities
$
1,831,934.4
7
Total Current Liabilities
$
1,904,700.1
7
Long-Term Liabilities
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Payroll Tax Expense – SEO 15,691.17
Payroll Tax Expense – Social 17,578.51
Payroll Tax Expense – Trainer 254.42
Payroll Tax Expense –
Uncategorized 1,296.80
Payroll Tax Expense – Video 3,358.71
Total Payroll Tax Expense
$
324,976.88
Professional Fees 120,995.39
Legal Expense 2,137.32
Total Professional Fees
$
123,132.71
Rent Expense 192,697.20
Repairs and Maintenance 95.00
Taxes 247.65
Telephone & Internet costs 16,577.16
Travel Expense 170,399.58
Uniforms 274.35
Utilities 8,198.83
Total Expenses
$
7,029,709.53
Net Operating Income
$
233,152.75
Other Income
Other Income 55,868.89
Total Other Income
$
55,868.89
Other Expenses
Ask My Accountant 0.00
Gain-Loss on Sale of Equipment -72,450.90
Political Donation 5,000.00
Total Other Expenses
-$
67,450.90
Net Other Income
$
123,319.79
Net Income
$
356,472.54
EIDL Loan 150,000.00
Loan M&T Bank – Mercedes 111,980.54
Loan Payable TD Bank – Lincoln Nav 45,772.17
Loan Payable-Chrysler Toyota 16,652.75
Loan Payable Centric – Jeep 36,175.93
Loan Wells Fargo – GMC Sierra 53,900.33
Toyota Loan 1 0.00
Toyota Loan 2 0.00
Toyota Loan 3 0.00
Toyota Loan 4 0.00
Total Long-Term Liabilities
$
414,481.72
Total Liabilities
$
2,319,181.8
9
Equity
AAA Bachmann 0.00
AAA Zeitland 0.00
Capital Stock 500.00
Distributions 0.00
Distribution-LB -439,284.01
Distribution-Lance Tax 0.00
Total Distribution-LB
-$
439,284.01
Distributions-Sz -268,439.09
Distributions-Sam Tax 0.00
Total Distributions-Sz
-$
268,439.09
Total Distributions
-$
707,723.10
EIDL Advance 10,000.00
Members Equity 6,655.00
PPP Loan Forgiveness 661,400.00
Retained Earnings 0.00
Net Income 356,472.54
Total Equity
$
327,304.44
TOTAL LIABILITIES AND EQUITY
$
2,646,486.3
3
2021
1SEO.Com
Profit and Loss
January – December 2021
Total
Income
1SEO.Com
Balance Sheet
As of December 31, 2021
Total
ASSETS
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 77 of 258 PageID #: 95
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Sales 9,788,875.91
Refunds -175,139.68
Total Sales
$
9,613,736.23
Sales-Recognized Deferred 55,378.73
Total Income
$
9,669,114.96
Cost of Goods Sold
Media Purchased for Clients 8,292.80
Subcontracted Services 12,334.00
Tools 753,204.57
Adobe 3,056.42
Apex 1,410.00
Bright Local 6,000.00
Call Rail 18,554.19
Customer Lobby 9,521.75
Email Marketing 5,306.00
EzTexting 2,014.00
Fat Joe 962.93
G-Suite 4,696.60
Hubspot 8,156.70
Intercom 803.43
Lever 843.58
Linkedin -243.11
Podium 7,331.56
Rackspace 3,023.94
SEM Rush 11,872.00
ShutterStock 1,975.50
SpyFu 1,998.00
Tap Clicks 15,501.00
WP Engine 15,477.04
Wrike 9,158.40
Zoom 2,881.83
Zyra Chat 3,000.00
Total Tools
$
886,506.33
Total Cost of Goods Sold
$
907,133.13
Gross Profit
$
8,761,981.83
Expenses
Advertising & Marketing Expense 44,921.12
Business Promotion 500.00
Facebook (Gambler) 2,487.05
Total Advertising & Marketing
Expense
$
47,908.17
Amortization 4,333.34
Current Assets
Bank Accounts
1seo.com 0.00
Centric 22,335.67
Checking-Citizens 1,001.61
TD Bank 02/27/2019
1,567,465.0
0
Total Bank Accounts
$
1,590,802.2
8
Accounts Receivable
Accounts Receivable 590,463.45
Total Accounts Receivable
$
590,463.45
Other Current Assets
Due from Red Dawg 0.00
Employee Advance 0.00
ERC Receivable
1,126,866.0
0
Officer Advance-LB 636,249.82
Pre-Paid Tax 0.00
Prepaid Expense 3,675.00
Receivable – Ex employee 0.00
Undeposited Funds 23,430.00
Total Other Current Assets
$
1,790,220.8
2
Total Current Assets
$
3,971,486.5
5
Fixed Assets
Accumulated Depreciation -816,499.64
Automobile 504,341.72
Furniture and Fixtures 80,173.80
Leasehold Improvement 25,527.00
Office Equipment 228,290.68
Total Fixed Assets
$
21,833.56
Other Assets
Advance-Bachmann 0.00
Advance-JSL Real Estate 0.00
Goodwill 9,111.17
Intangibles 39,749.99
Security Deposit 6,800.00
Total Other Assets
$
55,661.16
TOTAL ASSETS
$
4,048,981.2
7
LIABILITIES AND EQUITY
Liabilities
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 78 of 258 PageID #: 96
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Automobile Expense 3,130.00
Bad Debt Expense 140,838.27
Bank Service & Credit Card Fees 303,509.58
Charitable Contribution 14,000.00
Computer and Internet Expenses 2,117.79
Depreciation Expense 208,194.74
Dues and Subscriptions 739.00
Employee Benefits -99,958.09
Dental Expense 15,581.22
Health Insurance 240,957.54
Short Term Disability 1,050.82
Total Employee Benefits
$
157,631.49
Employee Meals 119,094.33
Groceries 5,075.44
Total Employee Meals
$
124,169.77
Insurance Expense 46,447.53
Auto 4,000.00
Total Insurance Expense
$
50,447.53
Interest Expense 24,251.77
Marketing Expense 252,205.60
Agency Referral Fee 187,621.50
Billboards 14,544.01
Clutch 5,885.00
Conferences 13,515.00
Content- Tools/Book 62,872.50
Facebook 9,369.37
Promotional Materials 1,050.76
Total Marketing Expense
$
547,063.74
Meals 50% 13,577.68
Office expenses and supplies 93,075.11
Payroll Expense 109,019.32
401k Contribution 84,970.11
ERC Wage Reduction -800,898.00
Officer Payroll 591,458.30
Payroll Expense – Accounting 17,201.90
Payroll Expense – Admin 51,236.65
Payroll Expense – Content 345,459.70
Payroll Expense – CRM 481,109.20
Payroll Expense – Development 413,664.05
Payroll Expense – Graphic Design 41,753.71
Payroll Expense – HR 113,469.23
Payroll Expense – In House 130,619.59
Current Liabilities
Credit Cards
Amex Black 03/10/2020 40,363.13
Amex Gold 03/10/2020 0.00
Amex Platinum 03/10/2020 0.00
Amex Plum 03/10/2020 16,801.28
Credit Card (5) at American Exp 0.00
Credit Card (7) at American Exp 0.00
Total Credit Cards
$
57,164.41
Other Current Liabilities
401k Liability 0.00
Accrued Expenses 0.00
Accrued Payroll 122,173.06
Citizens Line of Credit 306,799.76
Deferred Advertising 0.00
Deferred Income
1,285,711.0
0
Due to Comcast PSM Holding 0.00
Due to Shock IT 800.00
Garnishments 0.00
Loan M&T – Mercedes 0.00
Loan Payable-Centric 0.00
Loan Payable-Centric PPP Funds 0.00
Loan Payable-GM Financial 0.00
Loan WF – GMC Sierra 0.00
LSTB 479.20
Payroll Tax Liabilities 0.00
Salary Exchange 0.00
Total Other Current Liabilities
$
1,715,963.0
2
Total Current Liabilities
$
1,773,127.4
3
Long-Term Liabilities
EIDL Loan 500,000.00
Loan M&T Bank – Mercedes 109,855.75
Loan Payable TD Bank – Lincoln Nav 88,871.81
Loan Payable- Volvo 50,295.92
Loan Payable-Chrysler Toyota 0.00
Loan Payable Centric – Jeep 0.00
Loan Wells Fargo – GMC Sierra 53,069.18
Toyota Loan 1 0.00
Toyota Loan 2 0.00
Toyota Loan 3 0.00
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Payroll Expense – Management 808,886.38
Payroll Expense – Operations 250,889.90
Payroll Expense – PPC 275,681.62
Payroll Expense – Sales 607,541.47
Payroll Expense – SEO 190,081.61
Payroll Expense – Social 252,018.15
Payroll Expense – Uncategorized 0.00
Payroll Expense – Video 93,539.29
Total Payroll Expense
$
4,057,702.18
Payroll Service Expense 25,135.13
Payroll Tax Expense 20,717.83
Payroll Tax Expense – Accounting 1,873.32
Payroll Tax Expense – Admin 4,541.63
Payroll Tax Expense – Content 34,880.55
Payroll Tax Expense – CRM 41,752.11
Payroll Tax Expense –
Development 35,615.00
Payroll Tax Expense – Graphic D 3,559.55
Payroll Tax Expense – HR 9,298.62
Payroll Tax Expense – In House 11,944.38
Payroll Tax Expense – Management 60,843.18
Payroll Tax Expense – Officer 13,945.72
Payroll Tax Expense – Operation 24,977.91
Payroll Tax Expense – PPC 25,085.29
Payroll Tax Expense – Sales 43,432.48
Payroll Tax Expense – SEO 18,735.74
Payroll Tax Expense – Social 23,976.69
Payroll Tax Expense – Video 9,137.45
Total Payroll Tax Expense
$
384,317.45
Professional Fees 58,731.60
401(k) Management Fees 1,142.00
Accountant 1,421.20
Legal Expense 35,461.00
Total Professional Fees
$
96,755.80
Rent Expense 200,216.64
Taxes 55.42
Telephone & Internet costs 9,137.59
Travel Expense 249,202.21
Flights 12,608.06
Gas 3,941.56
Hotels 12,220.87
Parking 187.00
Taxi’s 13,409.13
Toyota Loan 4 0.00
Total Long-Term Liabilities
$
802,092.66
Total Liabilities
$
2,575,220.0
9
Equity
AAA Bachmann 0.00
AAA Zeitland 0.00
Capital Stock 500.00
Distributions 0.00
Distribution-LB 0.00
Distribution-Lance Tax 0.00
Total Distribution-LB
$
0.00
Distributions-Sz 0.00
Distributions-Sam Tax 0.00
Total Distributions-Sz
$
0.00
Total Distributions
$
0.00
EIDL Advance 0.00
Members Equity -913,423.02
PPP Loan Forgiveness 0.00
Retained Earnings 346,395.18
Net Income
2,040,289.0
2
Total Equity
$
1,473,761.1
8
TOTAL LIABILITIES AND EQUITY
$
4,048,981.2
7
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Tolls 2,669.59
Total Travel Expense
$
294,238.42
Total Expenses
$
6,802,546.61
Net Operating Income
$
1,959,435.22
Other Income
Other Income 6,694.86
Total Other Income
$
6,694.86
Other Expenses
Gain-Loss on Sale of Equipment -74,158.94
Total Other Expenses
-$
74,158.94
Net Other Income
$
80,853.80
Net Income
$
2,040,289.02
2022
1SEO.Com
Profit and Loss
January – December 2021
Total
Income
Sales 13,924,639.83
Refunds -193,905.09
Total Sales
$
13,730,734.74
Sales of Product Income
Sales-Recognized Deferred -1,109,647.00
Uncategorized Income 700.20
Total Income
$
12,621,787.94
Cost of Goods Sold
Media Purchased for Clients
Subcontracted Services 82,719.30
Tools 158,977.58
Adobe 25,469.88
Apex 9,065.00
Birdseye 36,531.84
Bright Local 6,000.00
Call Rail 148,882.86
Contemporary Staffing Solutions 26,069.38
Customer Lobby 28,809.00
Email Marketing 193.98
EzTexting 522.58
1SEO.Com
Balance Sheet
As of December 31, 2022
ASSETS
Current Assets
Bank Accounts
1seo.com 0.00
Centric 10,399.51
Checking-Citizens 528.40
TD Bank 02/27/2019
3,265,224.4
8
Truist 377.73
Total Bank Accounts
$
3,276,530.1
2
Accounts Receivable
Accounts Receivable 860,533.33
Total Accounts Receivable
$
860,533.33
Other Current Assets
Due from Red Dawg 0.00
Employee Advance 0.00
ERC Receivable
1,126,866.0
0
Exchange 0.00
Officer Advance-LB 0.00
Pre-Paid Tax 0.00
Prepaid Expense 19,849.00
Prepaid Insurance 0.00
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Fat Joe 5,398.99
G-Suite 35,739.45
Hubspot 33,056.10
Intercom
Lease Web 7,147.29
Lever 10,122.20
Linkedin 15,540.44
Opteo 15,999.00
Podium 103,340.37
PROPOSIFY 3,558.17
Rackspace 19,291.26
Salesforce 35,221.16
SEM Rush 50,880.00
ShutterStock 11,936.74
SpyFu 11,988.00
Tap Clicks 73,235.00
Teramind 4,958.94
Vidyard 21,920.16
WP Engine 75,009.96
Wrike 43,132.11
Zoom 15,026.85
Zyra Chat 47,085.26
Total Tools
$
1,080,109.55
Total Cost of Goods Sold
$
1,162,828.85
Gross Profit
$
11,458,959.09
Expenses
Advertising & Marketing Expense 310,597.84
AdWords (Gambler) 1,186.01
Business Promotion 4,250.00
Facebook (Gambler) -13,157.91
Total Advertising & Marketing
Expense
$
302,875.94
Amortization 4,333.32
Automobile Expense
Bad Debt Expense 129,458.00
Bank Service & Credit Card Fees 364,698.40
Charitable Contribution 2,132.50
Computer and Internet Expenses 1,184.68
Depreciation Expense 93,598.34
Dues and Subscriptions
Employee Benefits -163,975.36
Dental Expense 22,159.85
Health Insurance 319,645.70
Receivable – Ex employee 0.00
Shared Asset 0.00
Shared Asset Tax 0.00
Undeposited Funds 58,300.00
Total Other Current Assets
$
1,205,015.0
0
Total Current Assets
$
5,342,078.4
5
Fixed Assets
Accumulated Depreciation -816,585.68
Automobile 532,468.53
Furniture and Fixtures 90,899.63
Leasehold Improvement 25,527.00
Office Equipment 262,218.43
Total Fixed Assets
$
94,527.91
Other Assets
Advance-Bachmann 0.00
Advance-JSL Real Estate 0.00
Goodwill 7,777.85
Intangibles 36,749.99
Security Deposit 0.00
Total Other Assets
$
44,527.84
TOTAL ASSETS
$
5,481,134.2
0
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 12,237.06
Total Accounts Payable
$
12,237.06
Credit Cards
Amex Black 03/10/2020 5,173.27
Amex Gold 03/10/2020 -197.80
Amex Platinum 03/10/2020 0.00
Amex Plum 03/10/2020 5,144.40
Credit Card(5) at American Exp 0.00
Credit Card(7) at American Exp 0.00
Total Credit Cards
$
10,119.87
Other Current Liabilities
401k Liability 0.00
Accrued Expenses 0.00
Accrued Payroll 121,125.68
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100
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Life AD&D 6,332.51
Short Term Disability 533.20
Total Employee Benefits
$
184,695.90
Employee Meals 148,833.71
Groceries 37,486.89
Total Employee Meals
$
186,320.60
Entertainment
Google Adwords 28,517.48
Insurance Expense 30,818.79
401(k) Bond 272.00
Auto 17,509.00
Total Insurance Expense
$
48,599.79
Interest Expense 91,684.52
Marketing Expense 43,450.73
Agency Referral Fee 522,398.86
Billboards 63,282.76
Bing 6,048.07
Clutch
Conferences 227,697.24
Content- Tools/Book 32,924.29
Facebook 46,995.10
Promotional Materials 66,266.20
Total Marketing Expense
$
1,009,063.25
Meals 50%
Office expenses and supplies 114,420.57
Payroll Expense -99,453.97
401k Contribution 90,033.95
ERC Wage Reduction
Officer Payroll 117,000.00
Payroll Expense – Accounting 192.31
Payroll Expense – Admin 68,268.30
Payroll Expense – Bonus 46,580.85
Payroll Expense – Content 429,721.83
Payroll Expense – CRM 843,297.59
Payroll Expense – Development 522,569.37
Payroll Expense – Graphic Desig 67,131.84
Payroll Expense – HR 122,715.47
Payroll Expense – In House 104,759.53
Payroll Expense – Management Te 754,113.00
Payroll Expense – Nexstar 239,276.22
Payroll Expense – Operations 252,750.19
Payroll Expense – PPC 345,034.51
Citizens Line of Credit 0.00
Deferred Advertising 39,600.00
Deferred Income
2,395,358.0
0
Due to Comcast PSM Holding 0.00
Due to Shock IT 0.00
Garnishments 0.00
Loan M&T – Mercedes 0.00
Loan Payable-Centric 0.00
Loan Payable-Centric PPP Funds 0.00
Loan Payable-GM Financial 0.00
Loan WF – GMC Sierra 0.00
LSTB 1,715.20
Payroll Tax Liabilities 0.00
Salary Exchange 0.00
Total Other Current Liabilities
$
2,557,798.8
8
Total Current Liabilities
$
2,580,155.8
1
Long-Term Liabilities
EIDL Loan
2,079,558.3
7
Loan M&T Bank – Mercedes 89,170.10
Loan Payable – 2022 GMC 76,403.35
Loan Payable TD Bank – Lincoln
Nav 67,559.70
Loan Payable- Volvo 38,934.49
Loan Payable-Chrysler Toyota 0.00
Loan Payble Centric – Jeep 0.00
Loan Wells Fargo – GMC Sierra 0.00
Toyota Loan 1 0.00
Toyota Loan 2 0.00
Toyota Loan 3 0.00
Toyota Loan 4 0.00
Total Long-Term Liabilities
$
2,351,626.0
1
Total Liabilities
$
4,931,781.8
2
Equity
AAA Bachmann 0.00
AAA Zeitland 0.00
Capital Stock 500.00
Distributions 0.00
Distribution-LB
–
2,455,736.0
7
Distribution-Lance Tax -423,889.60
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 83 of 258 PageID #:
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EXECUTION COPY
Payroll Expense – Sales 965,735.30
Payroll Expense – SEO 269,355.21
Payroll Expense – Social 336,146.89
Payroll Expense – Trainer
Payroll Expense – Uncategorized
Payroll Expense – Video 160,689.32
Total Payroll Expense
$
5,635,917.71
Payroll Service Expense 33,145.23
Payroll Tax Expense -22,559.76
Payroll Tax Expense – Accountin 25.85
Payroll Tax Expense – Admin 5,759.25
Payroll Tax Expense – Content 37,659.67
Payroll Tax Expense – CRM 69,923.32
Payroll Tax Expense – Developme 44,205.18
Payroll Tax Expense – Graphic D 4,340.05
Payroll Tax Expense – HR 10,288.55
Payroll Tax Expense – In House 8,910.69
Payroll Tax Expense – Managemen 56,287.13
Payroll Tax Expense – Nexstar 18,473.67
Payroll Tax Expense – Officer 9,274.14
Payroll Tax Expense – Operation 21,920.69
Payroll Tax Expense – PPC 32,025.70
Payroll Tax Expense – Sales 62,548.95
Payroll Tax Expense – SEO 36,505.47
Payroll TAx Expense – Social 30,660.42
Payroll Tax Expense – Trainer
Payroll Tax Expense – Uncategor
Payroll TAx Expense – Video 13,600.99
Total Payroll Tax Expense
$
439,849.96
Professional Fees 7,319.17
401(k) Management Fees 6,386.22
Accountant 24,717.60
Barney 50,000.00
Legal Expense 91,209.90
Recruiting Fees 55,390.00
Total Professional Fees
$
235,022.89
Rent Expense 186,289.91
Repairs and Maintenance
Taxes
Telephone & Internet costs 12,657.01
Travel Expense 31,466.44
Flights 176,399.19
Total Distribution-LB
-$
2,879,625.6
7
Distributions-Sz 0.00
Distributions-Sam Tax 0.00
Total Distributions-Sz
$
0.00
Total Distributions
-$
2,879,625.6
7
EIDL Advance 0.00
Members Equity
1,126,866.0
0
PPP Loan Forgiveness 0.00
Retained Earnings 346,395.18
Net Income
1,955,216.8
7
Total Equity
$
549,352.38
TOTAL LIABILITIES AND EQUITY
$
5,481,134.2
0
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 84 of 258 PageID #:
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EXECUTION COPY
Gas 25,721.42
Hotels 99,445.93
Parking 5,001.45
Taxi’s 49,355.08
Tolls 13,050.80
Total Travel Expense
$
400,440.31
Uniforms 11,692.32
Utilities 751.24
Total Expenses
$
9,517,349.87
Net Operating Income
$
1,941,609.22
Other Income
Other Income 13,607.65
Total Other Income
$
13,607.65
Other Expenses
Ask My Accountant 0.00
Gain-Loss on Sale of Equipment
Political Donation
Total Other Expenses
$
0.00
Net Other Income
$
13,607.65
Net Income
$
1,955,216.87
2023
1SEO.Com
Profit and Loss
As of January 31, 2023
Total
Income
Sales 1,275,240.00
Refunds -7,156.63
Total Sales
$
1,268,083.37
Total Income
$
1,268,083.37
Cost of Goods Sold
Tools 11,474.90
Adobe 2,410.13
Apex 610.00
Birdseye 10,252.32
Call Rail 10,847.81
EzTexting 64.66
G-Suite 3,266.29
1SEO.Com
Balance Sheet
As of January 31, 2023
Total
ASSETS
Current Assets
Bank Accounts
1seo.com 0.00
Centric 37,782.30
Checking-Citizens 1,459.03
TD Bank 02/27/2019
2,753,864.7
9
Truist 500.00
Total Bank Accounts
$
2,793,606.1
2
Accounts Receivable
Accounts Receivable 620,501.27
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 85 of 258 PageID #:
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EXECUTION COPY
Lease Web 674.95
Lever 843.58
Linkedin 962.82
Podium 12,401.05
PROPOSIFY 3,847.80
Rackspace 1,682.63
Salesforce 13,407.06
SEM Rush 4,240.00
ShutterStock 457.92
SpyFu 999.00
Tap Clicks 9,451.00
Teramind 1,040.00
Vidyard 6,902.19
WP Engine 6,056.00
Zoom 1,655.53
Zyra Chat 3,238.21
Total Tools
$
106,785.85
Total Cost of Goods Sold
$
106,785.85
Gross Profit
$
1,161,297.52
Expenses
Advertising & Marketing Expense 500.00
Bad Debt Expense 21,781.00
Bank Service & Credit Card Fees 40,448.01
Charitable Contribution 20,000.00
Employee Benefits -15,486.72
Health Insurance 36,439.11
Total Employee Benefits
$
20,952.39
Employee Meals 6,748.41
Groceries 2,828.01
Total Employee Meals
$
9,576.42
Entertainment 22,385.61
Google Adwords 32,137.93
Insurance Expense 4,000.00
Marketing Expense 2,244.14
Agency Referral Fee 71,268.75
Conferences 16,055.65
Content- Tools/Book 2,227.50
Facebook 1,800.00
Promotional Materials 7,566.14
Total Marketing Expense
$
101,162.18
Office expenses and supplies 3,823.91
Total Accounts Receivable
$
620,501.27
Other Current Assets
Due from Red Dawg 0.00
Employee Advance 0.00
ERC Receivable
1,126,866.0
0
Exchange 0.00
Officer Advance-LB 636,249.82
Pre-Paid Tax 0.00
Prepaid Expense 19,849.00
Prepaid Insurance 4,075.92
Receivable – Ex employee 0.00
Shared Asset 3,194.61
Shared Asset Tax 108.08
Undeposited Funds 877,979.08
Total Other Current Assets
$
2,668,322.5
1
Total Current Assets
$
6,082,429.9
0
Fixed Assets
Accumulated Depreciation -814,887.20
Automobile 532,468.53
Furniture and Fixtures 87,590.16
Leasehold Improvement 25,527.00
Office Equipment 265,527.90
Total Fixed Assets
$
96,226.39
Other Assets
Advance-Bachmann 0.00
Advance-JSL Real Estate 0.00
Goodwill 7,777.85
Intangibles 36,749.99
Security Deposit 0.00
Total Other Assets
$
44,527.84
TOTAL ASSETS
$
6,223,184.1
3
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 7,500.00
Total Accounts Payable
$
7,500.00
Credit Cards
Amex Black 03/10/2020 48,217.93
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 86 of 258 PageID #:
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EXECUTION COPY
Payroll Expense
401k Contribution 1,188.09
Officer Payroll 6,750.00
Payroll Expense – Admin 4,039.46
Payroll Expense – Content 24,999.63
Payroll Expense – CRM 61,195.64
Payroll Expense – Development 35,596.20
Payroll Expense – Graphic
Design 3,173.07
Payroll Expense – HR 6,184.62
Payroll Expense – In House 6,490.38
Payroll Expense – Management 51,972.55
Payroll Expense – Nexstar 31,889.81
Payroll Expense – Operations 10,101.93
Payroll Expense – PPC 21,305.32
Payroll Expense – Sales 105,904.12
Payroll Expense – SEO 26,681.73
Payroll Expense – Social 22,887.44
Payroll Expense – Video 7,826.92
Total Payroll Expense
$
428,186.91
Payroll Service Expense 2,534.23
Payroll Tax Expense 21,774.98
Payroll Tax Expense – Admin 504.21
Payroll Tax Expense – Content 3,055.39
Payroll Tax Expense – CRM 7,811.89
Payroll Tax Expense –
Development 4,300.20
Payroll Tax Expense – Graphic D 386.88
Payroll Tax Expense – HR 1,257.92
Payroll Tax Expense – In House 787.75
Payroll Tax Expense –
Management 5,610.76
Payroll Tax Expense – Nexstar 3,906.04
Payroll Tax Expense – Officer 824.96
Payroll Tax Expense – Operation 1,242.20
Payroll Tax Expense – PPC 2,417.73
Payroll Tax Expense – Sales 10,297.67
Payroll Tax Expense – SEO 3,290.62
Payroll TAx Expense – Social 2,816.90
Payroll TAx Expense – Video 909.96
Total Payroll Tax Expense
$
71,196.06
Professional Fees
401(k) Management Fees 600.00
Barney 10,000.00
Amex Gold 03/10/2020 -197.80
Amex Platinum 03/10/2020 950.73
Amex Plum 03/10/2020 14,442.33
Credit Card (5) at American Exp 0.00
Credit Card (7) at American Exp 0.00
Total Credit Cards
$
63,413.19
Other Current Liabilities
401k Liability 0.00
Accrued Expenses 0.00
Accrued Payroll 0.00
Citizens Line of Credit 0.00
Deferred Advertising 39,600.00
Deferred Income
2,395,358.0
0
Due to Comcast PSM Holding 0.00
Due to Shock IT 0.00
Garnishments 0.00
Loan M&T – Mercedes 0.00
Loan Payable-Centric 0.00
Loan Payable-Centric PPP Funds 0.00
Loan Payable-GM Financial 0.00
Loan WF – GMC Sierra 0.00
LSTB 1,029.20
Payroll Tax Liabilities 0.00
Salary Exchange 0.00
SBA loan -10,000.00
Total Other Current Liabilities
$
2,425,987.2
0
Total Current Liabilities
$
2,496,900.3
9
Long-Term Liabilities
EIDL Loan
2,000,000.0
0
Loan M&T Bank – Mercedes 88,945.75
Loan Payable – 2022 GMC 71,114.81
Loan Payable TD Bank – Lincoln Nav 64,871.81
Loan Payable- Volvo 38,105.92
Loan Payable-Chrysler Toyota 0.00
Loan Payable Centric – Jeep 0.00
Loan Wells Fargo – GMC Sierra 0.00
Toyota Loan 1 0.00
Toyota Loan 2 0.00
Toyota Loan 3 0.00
Toyota Loan 4 0.00
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 87 of 258 PageID #:
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EXECUTION COPY
Legal Expense 162.30
Recruiting Fees 15,190.00
Total Professional Fees
$
25,952.30
Rent Expense 17,998.32
Telephone & Internet costs 1,236.75
Travel Expense 7,363.48
Flights 248.96
Gas 1,627.07
Hotels 2,815.83
Parking 17.00
Taxi’s 319.30
Tolls 734.58
Total Travel Expense
$
13,126.22
Uniforms 3,155.47
Total Expenses
$
840,153.71
Net Operating Income
$
321,143.81
Other Income
Other Income 900.71
Total Other Income
$
900.71
Net Other Income
$
900.71
Net Income
$
322,044.52
Total Long-Term Liabilities
$
2,263,038.2
9
Total Liabilities
$
4,759,938.6
8
Equity
AAA Bachmann 0.00
AAA Zeitland 0.00
Capital Stock 500.00
Distributions -57.09
Distribution-LB
–
1,970,340.4
9
Distribution-Lance Tax -423,889.60
Total Distribution-LB
–
$2,394,230.
09
Distributions-Sz 0.00
Distributions-Sam Tax 0.00
Total Distributions-Sz
$
0.00
Total Distributions
–
$2,394,287.
18
EIDL Advance 0.00
Members Equity
3,188,592.9
3
PPP Loan Forgiveness 0.00
Retained Earnings 346,395.18
Net Income 322,044.52
Total Equity
$
1,463,245.4
5
TOTAL LIABILITIES AND EQUITY
$
6,223,184.1
3
Cash Flow Statements 2020-2022
Jan – Dec
2020
Jan – Dec
2021
Jan – Sep,
2022
OPERATING ACTIVITIES
Net Income 30,504.54 1,239,391.02 1,141,157.37
Adjustments to reconcile Net Income to Net Cash provided by
operations:
Accounts Receivable 25,771.91 -245,264.70 252,829.29
Due from Red Dawg
Employee Advance
Officer Advance-LB -496,249.82
Prepaid Expense -3,675.00 3,675.00
Prepaid Insurance -4,075.92
Shared Asset -3,194.61
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 88 of 258 PageID #:
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EXECUTION COPY
Shared Asset Tax -108.08
Accounts Payable -25,425.17
Amex Black 03/10/2020 -36,689.51 35,520.15 -25,346.06
Amex Gold 03/10/2020 48,000.00 -56,000.00 -511.52
Amex Platinum 03/10/2020 0.00 0.00 2,215.28
Amex Plum 03/10/2020 -13,880.52 4,878.56 -8,944.01
Credit Card Black (5) at Ameri (deleted)
Credit Card Black 06/03/2018 (deleted)
Credit Card Gold 06/03/2018 (deleted)
Credit Card(4) at Amex Black (deleted)
Credit Card(6) at Amex Gold (deleted)
401k Liability 0.00
Accrued Expenses
Accrued Payroll -222,256.00 122,173.06 59,235.84
Citizens Line of Credit 101,381.04 66,418.72 -306,799.76
Deferred Advertising 336,762.00 -572,042.57 59,400.00
Deferred Income 28,442.50 297,752.50 -77,816.74
Due to Shock IT 480.00 320.00 0.00
Garnishments -0.07 0.00
Loan M&T – Mercedes 15,963.00 -15,963.00
Loan Payable-Centric -38,724.88
Loan Payable-GM Financial -61,032.40
Loan Payble – Infiniti-2 (deleted)
Loan WF – GMC Sierra 14,642.16 -14,642.16
LSTB -124.80 12.00 126.00
Total Adjustments to reconcile Net Income to Net Cash provided by
operations:
-$
297,515.39
-$
380,512.44
-$
74,740.46
Net cash provided by operating activities
-$
267,010.85 $ 858,878.58 $1,066,416.91
INVESTING ACTIVITIES
Accumulated Depreciation 151,611.06 67,018.74 20,364.10
Automobile -86,037.43 -14,931.19 -93,114.81
Furniture and Fixtures -4,347.05 -7,416.36
Office Equipment -36,067.49 -20,818.42 -14,559.55
Advance-Bachmann 238,997.00
Advance-JSL Real Estate
Goodwill 1,333.32 1,333.34 933.33
Intangibles -42,749.99 3,000.00 2,100.00
Security Deposit 4,706.29
Net cash provided by investing activities $ 231,792.76 $ 31,255.42
-$
91,693.29
FINANCING ACTIVITIES
EIDL Loan 150,000.00 350,000.00 1,500,000.00
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 89 of 258 PageID #:
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EXECUTION COPY
Loan M&T Bank – Mercedes 111,980.54 -2,124.79 -16,910.00
Loan Payable – 2022 GMC 81,114.81
Loan Payable TD Bank – Lincoln Nav -15,544.28 43,099.64 -18,000.00
Loan Payable- Volvo 50,295.92 -8,190.00
Loan Payable-Chrysler Toyota -5,657.45 -16,652.75
Loan Payble Centric – Jeep 36,175.93 -36,175.93
Loan Wells Fargo – GMC Sierra 53,900.33 -831.15 -11,520.00
Toyota Loan 1 -1,605.88
Toyota Loan 2
Toyota Loan 3 -1,623.22
Toyota Loan 4 -1,623.44
AAA Bachmann 47,320.07
AAA Zeitland 11,000.00
Distributions:Distribution-LB -1,286.06 439,284.01 -1,485,346.57
Distributions:Distribution-LB:Distribution-Lance Tax 165,558.00 0.00 -323,889.60
Distributions:Distributions-Sz -107,761.29 268,439.09
Distributions:Distributions-Sz:Distributions-Sam Tax 40,388.00 0.00
EIDL Advance 10,000.00 -10,000.00
Members Equity -862,939.63 -1,276,550.56
PPP Loan Forgiveness 661,400.00 -661,400.00
Retained Earnings 346,395.18
Net cash provided by financing activities $ 289,681.62
-$
506,221.34
-$
282,741.36
Net cash increase for period $ 254,463.53 $ 383,912.66 $ 691,982.26
Cash at beginning of period 975,856.09 1,230,319.62 1,614,232.28
Cash at end of period $1,230,319.62 $1,614,232.28 $2,306,214.54
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 90 of 258 PageID #:
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Section 3.7(a)(ii) — Inconsistencies
1. None.
EXECUTION COPY
Section 3.7(a)(ii) — Inconsistencies
1. None.
EXECUTION COPY
Section 3.7(a)(ii) – Inconsistencies
1. None.
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 91 of 258 PageID #:
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Schedule 3.7(b)
Absence of Certain Changes
(i) None.
(ii) None.
(iii) None.
(iv) See Schedule 3.7(a)(i)
(v) None.
(vi) None.
(vii)
SALARY CHANGES
Employee Name
Effective
on Rate Rate Type Frequency
Amount
Changed %Changed Entry Date Reason
Bachmann, Catrina J 8/20/2022 158,637.96 Salaried Biweekly 25,000.04 18.71 8/11/2022 Other
Bachmann, Catrina J 1/8/2022 133,637.92 Salaried Biweekly 25,000.04 23.01 1/11/2022 Other
Bergey, William R 1/1/2022 90,000.04 Salaried Biweekly 9,000.16 11.11 1/7/2022 Other
Bradt, Joshua Daniel 10/1/2022 42,000.14 Salaried Biweekly 2,000.18 5.0 9/22/2022 Other
Fisher, Elliott Robert 1/23/2023 70,000.06 Salaried Biweekly -70,000.06 -50.0 1/23/2023 Other
Lavery, Meghan 8/6/2022 75,000.12 Salaried Biweekly 20,000.24 36.36 7/26/2022 Other
McNichol, Joshua 4/4/2022 55,000.14 Salaried Biweekly 0.26 0 4/21/2022 Other
Thiele, Micheila LaRae 8/6/2022 45,000.02 Salaried Biweekly -780 -1.7 7/26/2022 Other
Thiele, Micheila LaRae 8/6/2022 45,780.02 Salaried Biweekly 5,780.06 14.45 7/26/2022 Other
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 92 of 258 PageID #:
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(viii)
DEFERRED REVENUE
2022 Deferrals
Client Invoice
Date
Invoice
Amount
Period Monthly 1/31 2/28 3/31 4/30 5/31 6/30 7/31 8/31 9/30 10/3 11/3 12/3
Medtrainer 1/3/2022
48,300
Feb ’22-
Jan ’23
4,025
48,300

44,275

40,250

36,225

32,200

28,175

24,150

20,125

16,100

12,075

8,050

4,025
Lawnscapeetc.c
om
1/3/2022
40,800
Feb ’22-
Jan ’23
3,400
40,800

37,400

34,000

30,600

27,200

23,800

20,400

17,000

13,600

10,200

6,800

3,400
Fence USA 1/14/202
2

28,800
Feb ’22-
Jan ’23
2,400
28,800

26,400

24,000

21,600

19,200

16,800

14,400

12,000

9,600

7,200

4,800

2,400
At-Mar Glass 1/3/2022
25,800
Feb ’22-
Jan ’23
2,150
25,800

23,650

21,500

19,350

17,200

15,050

12,900

10,750

8,600

6,450

4,300

2,150

143,700
11,975
143,700

131,725

119,750

107,775

95,800

83,825

71,850

59,875

47,900

35,925

23,950

11,975
Flat River
Electric
8/12/202
2

29,250
Aug
’22-
Sept ’23
2,438
–

26,813

24,375

21,938

19,500

17,063
Gambler 8/3/2022
114,200
Sept
’22-
June ’23
11,420
–

114,200

102,780

91,360

79,940

68,520
Johnson &
Johnson Heating
and Air
7/18/202
2

28,800
Sept
’22-Aug
’23
2,400
–

28,800

28,800

26,400

24,000

21,600

19,200
Peaden Air
Conditioning
11/30/20
22

145,200
Jan ’23
– Nov
’23
13,200
–

145,200

145,200
A Plus Garage
Door
11/9/202
2

38,400
Dec ’22
– Nov
’23
3,200
–

38,400

35,200
Best Pro
Services
11/9/202
2

33,600
Dec ’22
– Nov
’23
2,800
–

33,600

30,800
Christmas Light
Installers
12/20/20
22

8,100
Jan ’23
– June
’23
1,350
8,100
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 93 of 258 PageID #:
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EXECUTION COPY
Art Plastic
Surgeons
12/19/20
22

2,700
Jan ’23
– June
’23

450

2,700
2022 Annual
Billings in
advance (Dec
’21)
12/24/20
21

625,757
Jan ’22-
Dec ’22
52,146
573,611

521,464

469,318

417,171

365,025

312,879

260,732

208,586

156,439

104,293

52,146
–
2021 Annual
Billings in
advance
12/24/20
20

418,450
Jan ’21-
Dec ’21
34,871
* 2022 Annual
Billings in
advance (Nov
’21)
11/24/20
21

212,640
Jan ’22-
Dec ’22
2023 Annual
Billings in
advance (Dec
’22)
12/24/20
22

1,054,21
3
Jan ’23-
Dec ’23

1,054,21
3
Current
Monthly
Billings in
advance
12/24/20
22

1,002,38
8
Jan ’23
659,954

659,954

690,000

690,000

690,000

739,137

775,000

835,000

850,000

875,000

973,000

1,002,38
8
Liability
account
Balance per
QBO

1,377,26
5

1,313,14
3

1,279,06
8

1,214,94
6

1,150,82
5

1,135,84
0

1,136,38
2

1,273,27
3

1,207,89
4

1,152,51
5

1,387,33
6
$
2,395,35
8
(ix) None.
(x) None.
(xi) None.
(xii) None.
(xiii) None.
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(xiv) The Company has an ongoing Sublease Agreement with its Affiliate, Shock I.T., LLC (f/k/a 1SEO Technologies, Inc.),
for office space in its leased portion of that facility located at 1414 Radcliffe Street, Suite 301, Bristol, PA 19007 (the “Sublease”).
(xv) None.
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Schedule 3.9(a)
Legal Compliance
1. None.
EXECUTION COPY
Schedule 3.9(a)
Legal Compliance
1. None.
EXECUTION COPY
Schedule 3.9(a)
Legal Compliance
1. None.
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Schedule 3.9(c)
Company Permits

1. None (the Company has no Permits).
EXECUTION COPY
Schedule 3.9(c)
Company Permits
1. None (the Company has no Permits).
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Schedule 3.10(h)
Tax Returns
1. Tax returns consist of:
a. Federal Tax Returns
i. 2017-2021; Federal Tax Returns.
ii. 2017; IRS e-file Signature Authorization for Form 1120S; Form 8879-S.
iii. 2017; U.S. Income Tax Return for an S Corporation; 1120S.
iv. 2017; Costs of Goods Sold; 1125-A.
v. 2017; Compensation of Officers; 1125-E.
vi. 2017; Depreciation and Amortization; 4562.
vii. 2018; IRS e-file Signature Authorization for Form 1120S; Form 8879-S.
viii. 2018; U.S. Income Tax Return for an S Corporation; 1120S.
ix. 2018; Costs of Goods Sold; 1125-A.
x. 2018; Compensation of Officers; 1125-E.
xi. 2018; Depreciation and Amortization; 4562.
xii. 2018; Sales of Business Property; 4797.
xiii. 2019; IRS e-file Signature Authorization for Form 1120S; Form 8879-S.
xiv. 2019; U.S. Income Tax Return for an S Corporation; 1120S.
xv. 2019; Costs of Goods Sold; 1125-A.
xvi. 2019; Compensation of Officers; 1125-E.
xvii. 2019; Depreciation and Amortization; 4562.
xviii. 2019; Causalities and Thefts; 4684.
xix. 2019; Sales of Business Property; 4797.
xx. 2020; IRS e-file Signature Authorization for Form 1120S; Form 8879-S.
xxi. 2020; U.S. Income Tax Return for an S Corporation; 1120S.
xxii. 2020; Costs of Goods Sold; 1125-A.
xxiii. 2020; Compensation of Officers; 1125-E.
xxiv. 2020; Depreciation and Amortization; 4562.
xxv. 2020; Sales of Business Property; 4797.
xxvi. 2021; IRS e-file Signature Authorization for Form 1120S; Form 8879-S.
xxvii. 2021; U.S. Income Tax Return for an S Corporation; 1120S.
xxviii. 2021; Costs of Goods Sold; 1125-A.
xxix. 2021; Compensation of Officers; 1125-E.
xxx. 2021; Depreciation and Amortization; 4562.
xxxi. 2021; Sales of Business Property; 4797.
b. State Tax Returns
i. 2017-2021; State (Pennsylvania) Tax Returns.
ii. 2017; PA Depreciation; PA-20S.
iii. 2017; PA Amortization; PA-65.
iv. 2018; PA Depreciation; PA-20S.
v. 2018; PA Amortization; PA-65.
vi. 2019; PA Depreciation; PA-20S.
vii. 2019; PA Amortization; PA-65.
viii. 2020; PA Depreciation; PA-20S.
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ix. 2020; PA Amortization; PA-65.
x. 2021; PA Depreciation; PA-20S.
xi. 2021; PA Amortization; PA-65.
2. None.
EXECUTION COPY
ix. 2020; PA Amortization; PA-65.
x. 2021; PA Depreciation; PA-20S.
xi. 2021; PA Amortization; PA-65.
2. None.
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Schedule 3.10(m)
Covid-19 Assistance Subsidy
1. List of all loans or grants awarded to mitigate Covid – 19 impacts, any loan forgiveness,
and any tax credits received (PPP, EIDL, Employee Retention Tax Credit].
a. The EIDL Loan; and
b. The Loan Agreement by and between Centric Bank and Seller in connection with
a Payment Protection Program (“PPP”) loan to Seller. This PPP Loan was forgiven
in full on January 25, 2021.
2. Employee Retention Credit: The Company is seeking an Employee Retention Credit
using Alliantgroup, a national tax consulting firm. The Employee Retention Credit will
remain with the Company as an excluded asset at Closing.
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Schedule 3.11(b)
Leased Real Property
1. The Company has no oral Leases.
2. Primary Lease: The Company, as tenant, leases from Hudson Bristol, LLC (as successorin-interest to Red River View, LLC), as landlord (“Landlord”), approximately 14,131
square feet of office space located on the third floor of that certain building having an
address of 1414 Radcliff Street, Bristol, PA 19007 (the “Premises”), pursuant to that certain
Agreement of Lease dated February 4, 2015, as amended by that certain First Amendment
to Lease Agreement dated August __, 2016 (sic), as further amended by that certain Second
Amendment to Lease Agreement dated October 10, 2017, as further amended by that
certain Third Amendment to Lease Agreement dated September 1, 2018, and as further
amended by that certain Fourth Amendment to Lease Agreement executed by Landlord
and the Company as of November 9, 2021 (and erroneously dated to be effective as of
September 1, 2018) (collectively, the “Primary Lease”).
3. Sublease: SHOCK I.T., LLC (f/k/a 1SEO Technologies, Inc.) (“Subtenant”) subleases
from the Company a portion of the Premises, pursuant to that certain Sublease.
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Schedule 3.11(e)
Lease Defaults

1. None.
EXECUTION COPY
Schedule 3.11(e)
Lease Defaults

1. None.
EXECUTION COPY
Schedule 3.11(e)
Lease Defaults
1. None.
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Schedule 3.12(b)(i)
Registered IP
1. None (the Company has no Registered IP).
EXECUTION COPY
Schedule 3.12(b)(i)
Registered IP
1. None (the Company has no Registered IP).
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Schedule 3.12(b)(ii)
Trademarks, Copyrights, Software and Proprietary Information
(a) None.
(b) None.
(c)
• Company-owned Software:
• The website located at https://www.1seo.com
• Third-party software used by the Company:
1) Adobe
2) ADP
3) Apex Chat Service
4) Birdeye Link Building
5) Bright Local link Building
6) CallRail
7) Google Adwords
8) Google Analytics
9) G-Suite
10) Hubspot
11) Lease Web
12) Lever
13) LinkedIn
14) Opteo
15) Podium
16) Proposify
17) Quickbooks
18) Rackspace
19) Salesforce
20) SEMRush
21) Tapclicks
22) Teramind
23) Vidyard
24) WP Engine
25) Wrike/Basecamp
26) Zoom
27) ZyraChat
(d) Various Google sheets created by or for the Company.
(e)
• Website – https://www.1seo.com
• Facebook – https://www.facebook.com/1seodigitalagency/
• Instagram – https://instagram.com/1seodigital
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• Twitter – https://twitter.com/1SEODigital
• LinkedIn – https://www.linkedin.com/company/1seo-com
• TikTok – https://www.tiktok.com/@1seodigital
(f)
DOMAIN NAMES
Active Inactive Clients & Misc.
1SEO.COM 1brand1image.com 101mobilityphiladelphia.com
1seoecomm.com 1brandadvantage.com 1800waterdamagecentralhouston.com
1seoecommerce.co
m 1brandand1image.com 800gambler.com
1seohvac.com 1brandpro.com 888cremations.com
1seolawyer.com 1i1b.com algcleanouts.com
1seolawyers.com 1image1brand.com algdumpsters.com
1seolegal.com 1imageand1brand.com algportablepotties.com
the1conference.co
m (404) 1MOBILEAPPS.COM algportablepotty.com
1QRCODES.COM algportapotties.com
1SEMAGENCY.COM allabaughconstructionllc.com
1SEMFIRM.COM americaswarriorclass.com
1seo.dev anthonylandscapesanddesign.com
1seo.tech b2ba.biz
1seo.technology BACHMANNZEITLINAGENCY.COM
1seo.vip benfranklinplumbingdoylestown.com
1seo2go.com BFACTORGROUP.COM
1SEOAGENCY.COM billheeneysr.com
1seochat.com BOATINSURANCEAVERAGECOST.COM
1SEOCOMPLAINTS.COM boylehasgot2go.com
1seocreative.com BRIANMCGUANE.COM
1seocrm.com broussardsairconditioningandheating.com
1SEODA.COM BRYANMCWAYNE.COM
1seodental.com BUCKSCOUNTYBENEFITS.COM
1SEODEV.COM BUCKSCOUNTYPLUMBINGSUPPLY.COM
1SEODIGITALAGENCY.C
OM bullfrogplumbinganddrain.com
1seofamily.com ccgnjconference.com
1SEOFIRM.COM
COPRORATECATERINGNORTHAMPTONVALLEYCO
UNTRYCLUB.COM
1SEOMOBILE.COM CRTHOMPSONROOFER.COM
1seoplasticsurgery.com DAVIDGOODMANSCAM.COM
1seoplumbers.com debbiesfriendsfund.com
1seoplumbing.com derrickmagia.com
1seorestaurants.com dillingheating.com
1SEOREVIEWS.COM drowsii.com
1seotech.com earlscleaners.net
1seotechcrm.com eat-philly.com
1seotechnologies.com gimbeleyeassociates.net
1seotechnology.com gogreenlawnservicespa.com
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1seotogo.com
GOLFNORTHAMPTONVALLEYCOUNTRYCLUB.CO
M
1seotraditional.com hertzhomeremodeling.com
1SOCIALNETWORKING.
COM JANDBCARPETSERVICE.COM
1traditional.com JAROSPIZZA.COM
247it.com johnandbethhenson.com
bestdigitalmarketers.com johnhensonnj.com
digitalagencyservices.com johnhensonpa.com
elitedigitalmarketers.com johnhensonpoconos.com
INTERNETMARKETINGF
IRM.COM ketler4congress.com
itandnetworking.com ketlerforcongress.com
lion-logic.com ketlerpa13thdistrict.com
lions-logic.com kevinglasson.com
lionsdenshow.com kirkpatrickpowergenerators.com
lionsreporting.com LILLISFORJUDGE.COM
LOCALINTERNETRAFFI
C.COM markaskandera.com
LOCALINTERNETTRAFF
IC.COM markskandera.com
LOCALINTERNETTRAFF
IC.NET MATTHEWJMALINOWSKI.COM
LOCALTRAF.COM mattrusling.net
shockadvertising.com mayerslandscapingpros.com
shockdigital.com michelleglasson.com
shockdigitalagency.com mprolandscaping.com
shocktraditional.com newageair.net
WEBLOCALTRAFFIC.CO
M onehourheatandairpa.com
WEBLOCALTRAFFIC.NE
T onehourheatingandairpa.com
bachmanndigitalagency.com onehourheatingpa.com
PARTSGEEKRATINGS.COM
PARTSGEEKREVIEWS.COM
patriotair.net
phillysfinestroof.com
poochcareplus.net
RDHOMEINTERIORS.COM
RENTHOMEPHILADELPHIA.COM
ROSANNCOZZA.COM
russianhulk.com
sj-roofing.com
sympathytrays.com
thewiredr.com
thewiredrs.com
tjmartinelectrical.com
tjmartininc.net
tjmartinroofing.com
tommartinbuckscounty.com
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vincenzospainting.com
votebillheeney.com
brand2image.com
brandtoimage.com
bumpertobumpernow.com
BUYWEEDOILS.COM
BUYWEEDTIPS.COM
BUYWEEDWEBSITE.COM
ELECTRICALCONTRACTORSMONTGOMERYCOUNT
Y.COM
EMERGENCYAIRBERKS.COM
EMERGENCYAIRBUCKS.COM
EMERGENCYAIRCOMPANY.COM
EMERGENCYAIRDELAWARE.COM
EMERGENCYAIRMONTGOMERY.COM
EMERGENCYAIRREADING.COM
EMERGENCYHEATINGBERKS.COM
EMERGENCYHEATINGBUCKS.COM
EMERGENCYHEATINGCOMPANY.COM
EMERGENCYHEATINGDELAWARE.COM
EMERGENCYHEATINGMONTGOMERY.COM
EMERGENCYHEATINGREADING.COM
firestormmarketing.com
feliceduprey.com
GOOGLEMAPCOMPANY.COM
GOOGLEMAPSSTORE.COM
GRADYOS.COM
INSURANCECOMPANIESINPHILADELPHIA.COM
incitebrand.com
LETEMKNOWWHODADDYIS.COM
LINKREMOVAL.COMPANY
LITDEVELOPMENTS.COM
MOBILEAPPSDEVELOPMENTCOMPANIES.COM
MOBILEMESSAGINGSITE.COM
MONTCOHEATINGANDAIR.COM
MONTGOMERYCOUNTYAIRCONDITIONINGANDHE
ATING.COM
OUTREACH.COMPANY
pa13goppac.com
PAYPERCLICKMANAGEMENTSERVICES.COM
PHILADELPHIALIFEINSURANCECOMPANY.COM
philly-eat.com
phillyfuneral.com
phillyfunerals.com
PHILLYPARTY2U.COM
QRCODESCOMPANYS.COM
SEO-HOPCOMPLAINTS.COM
SEO-HOPREVIEWS.COM
SEOHOP.NET
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SEOHOPCOMPLAINTS.COM
SEOHOPREVIEWS.COM
servicepupsdumpster.com
servicepupsdumpsters.com
SHINDAKITCHEN.COM
SHINDAKITCHEN.INFO
totheclose.com
WEBSITEDESIGNBERKSCOUNTY.COM
WEBSITEDESIGNCOMPANYBERKSCOUNTY.COM
WEBSITEDESIGNCOMPANYBUCKSCOUNTY.COM
WEBSITEDESIGNCOMPANYMONTGOMERYCOUNT
Y.COM
WEBSITEDESIGNCOMPANYPHILADELPHIAPA.COM
WEBSITEDESIGNDELAWARECOUNTY.COM
WEBSITEDESIGNPHILADELPHIAPA.COM
WEBSITEREDESIGNPHILADELPHIA.COM
WEDDINGSNORTHAMPTONVALLEYCOUNTRYCLU
B.COM
WEDDINGVENUESBUCKSCOUNTY.COM
WESBITEDESIGNMONTGOMERYCOUNTY.COM
AUTOINSURANCEINPHILADELPHIA.COM
artifacttavern.com
beth-henson.com
bethhensonnj.com
bethhensonpa.com
bethhensonpoconos.com
DOMAIN NAMES REMAINING WITH SELLER POST-CLOSING
FOC Lance
alancherrycontractors.com adam-bachmann.com
alancherryexteriors.com adambachmann.life
alancherryhomeservice.com attackmatclub.com
alancherryhomeservices.com BACHMANNAGENCY.COM
alancherryroofingandsiding.com bachmanncompanies.com
alancherrysidingandroofing.com bachmannenterprises.com
alancherrysidingroofing.com bachmannlfg.com
cherrycontractors.com davidallenbachmann.com
cherryexteriors.com digital-lion.com
cherryhomeservice.com digitallion.com
cherryhomeservices.com digitallionofficial.com
cherryroofingandsiding.com digitallionsden.com
cherryroofsandhome.com emilybachmann.com
cherrysidingandroofing.com emsartifacttavern.com
dillingelectric.com emsphilly.com
dillingheatingpa.com emsplacebar.com
dillinghvac.com emsplacephiladelphia.com
dillingplumbing.com emsplacephilly.com
dillingservices.com emsplacepub.com
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hauntyourhomenc.com emsplacetavern.com
rathgebpainting.com fredbachmann.com
rpainting.com gregbachmann.com
matthewrathgebpainting.com gregdavidbachmann.com
paintingpups.com greggybachmann.com
LANCEBACHMAN.COM
LANCEBACHMANN.COM
LANCEBACHMANNSCAM.COM
lancebachmannswife.com
lancedavidbachmann.com
lbachmann.com
lbachmanninc.com
ljbachmann.com
mprwrestling.com
phillylion.com
thedigitallionsden.com
therealdigitallion.com
totalwrestlingclub.com
andrewbachmann.com
andrewryanbachmann.com
Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 109 of 258 PageID #:
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Schedule 3.12(b)(iii)
Intellectual Property Agreements
1. The third-party software agreements set forth above in Section 3.12(b)(ii)(c).
2. None.
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Schedule 3.12(e)
Royalties
1. None.
EXECUTION COPY
Schedule 3.12(e)
Royalties
1. None.
EXECUTION COPY
Schedule 3.12(e)
Royalties
1. None.
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Schedule 3.12(h)
Software Subject to Public Software Licenses

1. None.
EXECUTION COPY
Schedule 3.12(h)
Software Subject to Public Software Licenses
1. None.
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Schedule 3.12(i)(i)
Rights to Software
1. None.
EXECUTION COPY
Schedule 3.12(i)(i)
Rights to Software
1. None.
EXECUTION COPY
Schedule 3.12(i)(i)
Rights to Software
1. None.
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Schedule 3.12(i)(ii)
List of

Public Software Licenses
1. None.
EXECUTION COPY
Schedule 3.12(i)(ii)
List of Public Software Licenses
1. None.
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Schedule 3.13(a)
Contracts
(i)
a. Each of the Customers set forth on Schedule 3.21 have entered into a Digital
Marketing Agreement with the Company on that certain 1SEO.com Inc. Form
Digital Marketing Agreement attached hereto as Exhibit 1 to Schedule 3.13(a)(i).
b. Purchase Order between the Company and Salesforce.com Inc. dated March 28,
2022.
c. Purchase Order between the Company and Wrike, Inc. dated January 22, 2022.
d. Annual Commitment Addendum between the Company and CallRail Inc. dated
September 12, 2022.
e. Purchase Order between the Company and Buildscale Inc. d/b/a Vidyard dated
September 9, 2022 (unsigned).
f. Terms of Service by and between the Company and WP Engine updated July 20,
2021.
g. The Benefit Plans set forth below in Schedule 3.17(a).
h. The Referral Partner Agreements set forth below in Schedule 3.13(a)(xxii).
(ii) The Primary Lease.
The Sublease.
(iii) None.
(iv) None.
(v) None.
(vi) None.
(vii) None.
(viii) The EIDL Loan.
(ix) Accountant: Zinman & Company.
Legal: Obermayer Rebmann Maxwell & Hippel LLP.
Broker: Barney, Inc.
(x) None.
(xi) The EIDL Loan.
(xii) Exclusive Listing Agreement, dated August 10, 2022, by and between the
Company and Barney, Inc.
(xiii) The Benefit Plans set forth on Schedule 3.17(a).
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(xiv) None.
(xv) None.
(xvi) The Sublease.
(xvii) None.
(xviii)
a. Each employee of the Company is required to execute a “Non-Disclosure and
Non-Solicitation and Non-Competition Agreement for Employees of 1SEO.com”
(collectively, the “Employee Non-Compete Agreements”). Each of the
Company’s current or former employees has executed Employee Non-Compete
Agreements.
b. Strategic Partner Agreement by and between Nexstar, Inc. and the Company
dated January 5, 2018.
(xix) None.
(xx) The Employee Non-Compete Agreements.
(xxi)
a. Digital Agency Referral Program Agreement by and between The Big Picture
Consulting and the Company dated August 25, 2022.
b. Digital Agency Referral Program Agreement by and between Blue Water Media
LLC and the Company, undated.
c. Digital Agency Referral Program Agreement by and between Canna Business
Services and the Company, undated.
d. Referral and Cooperation Agreement by and between CEO Warrior, LLC and the
Company, undated.
e. Digital Agency Referral Program Agreement by and between Full Throttle Wraps
and the Company, undated.
f. Marketing Services Agreement by and between HSF Buyer’s Group, LLC and the
Company dated April 1, 2022.
g. Digital Agency Referral Program Agreement by and between Jackie Calkins and
the Company, undated.
h. Digital Agency Referral Program Agreement by and between E Squared and the
Company, undated.
i. Digital Agency Referral Program Agreement by and between Ecotek Soft Wash
and the Company, undated.
j. Digital Agency Referral Program Agreement by and between Kickcharge
Creative and the Company, undated.
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k. Digital Agency Referral Program Agreement by and between Premis Marketing
Group and the Company, undated.
l. Digital Agency Referral Program Agreement by and between NTIH, LLC and the
Company, undated.
m. Digital Agency Referral Program Agreement by and between Staci Bonner and
the Company, undated.
n. Digital Agency Referral Program Agreement by and between Flywheel Coaching
Group and the Company, undated.
o. Digital Agency Referral Program Agreement by and between Home Service
Expert and the Company, undated.
p. Digital Agency Referral Program Agreement by and Tom Eldred and the
Company, undated.
q. Digital Agency Referral Program Agreement by and between Karla Hurley and
the Company, undated.
r. Digital Agency Referral Program Agreement by and between The Perlini Group,
LLC and the Company, undated.
s. Digital Agency Referral Program Agreement by and between Rancour Ventures
and the Company, undated.
t. Digital Agency Referral Program Agreement by and between Tom Gerasio and
the Company, undated.
u. Digital Agency Referral Program Agreement by and between James A. DuBois
and the Company, undated.
v. Digital Agency Referral Program Agreement by and between Viper Digital LLC
and the Company dated March 9, 2021.
w. Digital Agency Referral Program Agreement by and between PowerCommunities
LLC and the Company, undated.
x. Digital Agency Referral Program Agreement by and between Online Trading
Academy Philadelphia and the Company, undated.
y. Digital Agency Referral Program Agreement by and between BMJ Enterprises
and the Company, undated.
z. Digital Agency Referral Program Agreement by and between OBXcoin and the
Company, undated.
aa. Digital Agency Referral Program Agreement by and between Steen Outdoor
Advertising and the Company, undated.
bb. Digital Agency Referral Program Agreement by and between Counterpoise LLC
and the Company, undated.
cc. Digital Agency Referral Program Agreement by and between Telcoholdings Inc
and the Company, undated.
dd. Digital Agency Referral Program Agreement by and between Mainstreet Ventures
LLC and the Company, undated.
ee. Digital Agency Referral Program Agreement by and between Digital Creative and
the Company, undated.
ff. Digital Agency Referral Program Agreement by and between Jeen B. Rossell and
the Company, undated.
gg. Digital Agency Referral Program Agreement by and between Kimberly Robinson
and the Company, undated.
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hh. Digital Agency Referral Program Agreement by and between Jenna
Communications and the Company, undated.
ii. Digital Agency Referral Program Agreement by and between Bhava
Communications and the Company, undated.
jj. Webteam Agreement by and between SEOversite, a division of Yellow
Telescope, LLC and the Company dated January 2015.
(xxii) None.
(xxiii) None.
(xxiv) None.
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Exhibit 1 to Schedule 3.13(a)(i)
Form

Digital Marketing Agreement
1. See attached.
EXECUTION COPY
Exhibit 1 to Schedule 3.13(a)(i)
Form Digital Marketing Agreement
1. See attached.
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Statement of Confidentiality
This agreement and supporting materials contain confidential and proprietary business information of 1SEO.com Digital Agency. These materials may
be printed or photocopied for use in evaluating the Statement of Work, but are not to be shared with other parties.
DIGITAL
MARKET

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None. EXECUTION COPY Schedule 3.13(b) Oral Contracts 1. None. EXECUTION COPY Schedule 3.13(b) Oral Contracts 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 141 of 258 PageID #: 159 EXECUTION COPY Schedule 3.13(c) Contract Deficiencies 1. None. EXECUTION COPY Schedule 3.13(c) Contract Deficiencies 1. None. EXECUTION COPY Schedule 3.13(c) Contract Deficiencies 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 142 of 258 PageID #: 160 Schedule 3.14(a) EXECUTION COPY Insurance Insurer Policyholder Cover Insured Policy Number Period of Coverage Retroactive Loss Sharing Arrangements CHUBB 1SEO.COM BOP D52777549 07/28/2022-07/28/2023 [NA 1,000 DEDUCT CHUBB 1SEO.COM EPLI 82518275 07/28/2022-07/28/2023 [NA 15,000 RETENTION CHUBB 1SEO.COM WORK COMP (23) 7176-91-21 07/28/2022-07/28/2023 [NA NA CHUBB 1SEO.COM UMBRELLA 095542323 07/28/2022-07/28/2023 [NA NA PROGRESSIVE |1SEO.COM COMM AUTO D52777549 11/30/2022-05/30/2023 [NA 1,000 DEDUCT CHUBB 1SEO.COM CYBER D52777550 07/28/2022-07/28/2023 [NA 10,000 RETENTION EXECUTION COPY Schedule 3.14(a) Insurance Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 143 of 258 PageID #: 161 EXECUTION COPY Schedule 3.14(b) Claims CHUB S&S BUSINESS LOSS RUN Agency Name: STREET ROAD INSURANCE & TAGS Current As of Date: 01/23/2023 Insured Name: 1SEO.COM N of Loss Years Requested: 5 Loss Run Summary: Policy # Policy Term Policy Type No of Loss & Expense Losses Paid Expenses Paid Losses & Recovery Total Claims/Occurrences _Reserves Exp Paid Incurred 64206886 07/28/2020 – 07/28/2021 UMBRELLA tt) $0 $o $o $0 $0 $0 64206886 07/28/2021 – 07/28/2022 UMBRELLA tt) $0 $0 $o $0 $0 $0 64206886 07/28/2022 – 07/28/2023 UMBRELLA 0 $0 $0 $o $0 $0 $0 71769121 07/28/2018 – 07/28/2019 WORK COMP i) $0 $0 $o $0 $0 $0 71769121 07/28/2019 – 07/28/2020 WORK COMP 0 $0 $o $o $0 $0 $0 71769121 07/28/2020 – 07/28/2021 WORK COMP 0 $0 $0 $o $o $0 $0 71769121 07/28/2021 – 07/28/2022 WORK COMP tt) $0 $o $o $0 $0 $0 71769121 07/28/2022 – 07/28/2023 WORK COMP oO $0 $o $o $0 $0 $0 82518275 07/28/2018 – 07/28/2019 EPL FFP3 1 $0 $o $28,110 $28,110 $0 $28,110 82518275 07/28/2019 – 07/28/2020 EPL FFP3 ty) $0 $o $o $0 $0 $0 82518275 07/28/2020 – 07/28/2021 EPL FFP3 0 $0 $o $o $0 $0 $0 82518275 07/28/2021 – 07/28/2022 EPLFFP3 it) $0 $o $o $0 $0 $0 82518275 07/28/2022 – 07/28/2023 EPL FFP3 0 $0 $o $o $0 $0 $0 052777549 07/28/2018 – 07/28/2019 MOD BOP i) $0 $o $o $0 $0 $0 052777549 07/28/2019 – 07/28/2020 MOD BOP tt) $0 $0 $0 $0 $0 $0 052777549 07/28/2020 – 07/28/2021 MOD BOP 1 $0 $0 $o $o $0 $0 052777549 07/28/2021 – 07/28/2022 MOD BOP tt) $0 $o $o $0 $0 $0 052777549 07/28/2022 – 07/28/2023 MOD BOP 0 $0 $o so $0 $0 $0 052777550 07/28/2018 – 07/28/2019 CYBL DIGIT tt) $0 $o $o $0 $0 $0 052777550 07/28/2019 – 07/28/2020 CYBL DIGIT te) $0 $0 $o $0 $0 $0 052777550 07/28/2020 – 07/28/2021 CYBL DIGIT 1 $0 $2,824 $32 $2,856 $0 $2,856 052777550 07/28/2021 – 07/28/2022 CYBL DIGIT it) $0 $0 $o $0 $0 $0 052777550 07/28/2022 – 07/28/2023. CYBL DIGIT 0 $0 $o $0 $0 $0 Totals: 3 $0 $2,824 $28,142 $30,966 $0 $30,966 CHUB S&S BUSINESS LOSS RUN Agency Name: STREET ROAD INSURANCE & TAGS Current As of Date: 01/23/2023 Insured Name: 1SEO.COM Number of Loss Years Requested: 5 Loss Run Detail: Policy # Losses and Claim Reference # Losses Paid Expenses Paid Claim/Occurrence # Policy Term Claim Status Loss Date Reported Date Loss Reserve Expenses Paid Deductible Amount Claimant # Policy Type Claim Type Loss Location Close Date Expense Reserve Recovery Total Incurred 82518275 KY19K2446004 07/28/2018 – 07/28/2019 Closed 06/19/2019 06/27/2019 $0 $0 $28,110 001 EPL FFP3 PA 10/08/2020 $0 $28,110 $o $0 $28,110 Claimant Name: Richard Mcllvaine Loss Description: Complaint for counts of Title VII violations, Reverse Race Discrimination, and Pennsylvania Human Relations Act. Writing Company: D52777549 KY20K3031765 07/28/2020 – 07/28/2021 Closed 12/09/2020 12/15/2020 $0 $0 $0 001 MOD BOP PA 04/20/2021 $0 $0 $0 $0 $o Claimant Name: Villainarts, Inc. Loss Description: Insured was served lawsuit papers. Claimant is stating contract has not been fulfilled. Writing Company: D52777550 KY21K202377X 07/28/2020 – 07/28/2021 Closed 01/08/2021 01/11/2021 $0 $2,824 $2,856 001 CYBL DIGIT PA 10/14/2021 $0 $32 $o $0 $2,856 Claimant Name: 01/08/2020 Cyber Incident Loss Description: reported that they had been contracted by a third party to provide web material for a conference, The third party later terminated the contract with the insured. The third party has since claimed the insured is not fulfilling the contract despite it being terminated. Writing Company: EXECUTION COPY Schedule 3.14(b) Claims Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 144 of 258 PageID #: 162 EXECUTION COPY Schedule 3.15(a) General Litigation and Professional Liability 1. 1SEO COM Inc v. Nicholas Quirk (Bucks County Common Pleas #2018-06290). Settled March 23, 2020. 2. 1SEO.com, Inc. v. SEO Locale et al. (U.S. District Court, Eastern District of Pennsylvania, No. 19-cv-1472-GEKP). Settled March 2020. 3. 1SEO.com, Inc. v My Phillie Wireless (Philadelphia County C.C.P., June Term 2022, No. 882). Ongoing. 4. My Phillie Wireless v. 1SEO (Philadelphia County C.C.P., October Term 2022, No. 2151). Ongoing. 5. Villainarts, Inc. et al. v. 1SEO.com, Inc. et al. (Philadelphia County C.C.P., November Term 2020, No. 01238). Settled September 27, 2021. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 145 of 258 PageID #: 163 EXECUTION COPY Schedule 3.16(a) Employees Employee Name Job Title Date of Hire Employment Status Location Accrued Vacation/Sick Time (PTO) Full Time/Part Time Hourly/Salary Exempt or Non Exempt 2022 Remuneration 2023 Base Salary and Target Bonus Allison Alexandroff/Kandel Web Developer 11/2/2015 Active Bristol 200 hours Full Time Salary Non Exempt $64,231.00 $65,000.00 Michael Antinore Executive Director Active Full Time Salary Damian Arizini SEO Strategist 11/1/2021 Active Bristol 120 hours Full Time Salary Non Exempt $43,777.00 $50,000.00 Emily Baatz – Bachmann 2/17/2014 Active Bristol N/A Full Time Salary Exempt $176,800.00 $176,800.00 Catrina Bachmann CEO 9/3/2012 Active Bristol N/A Full Time Salary Exempt $176,811.00 $158,638.00 plus bonuses Jolin Bachmann CFO 4/19/2009 Active Bristol N/A Full Time Salary Exempt $222,250.00 $187,250.00 plus bonuses Lance Bachmann Founder 9/13/2010 Active Bristol N/A Full Time Salary Exempt $135,496.00 $117,000.00 Michael Bachurski UX Specialist 11/7/2022 Active Bristol 120 hours Full Time Salary Non Exempt $7,692.00 $50,000.00 Avans Beaubrun PPC Specialist 9/27/2021 Active Bristol 120 hours Full Time Salary Non Exempt $46,346.00 $60,000.00 Clinton Bell SEO Specialist 9/8/2020 Active Bristol 160 hours Full Time Salary Non Exempt $44,593.00 $47,000.00 Bobby Ben-Gal Creative Director Active William Bergey, Jr. COO 7/15/2013 Active Bristol 200 hours Full Time Salary Exempt $93,539.00 $95,000.00 David Biddle Videographer Active Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 146 of 258 PageID #: 164 EXECUTION COPY Joshua Bradt Web Developer 9/21/2020 Active Remote 160 hours Full Time Salary Non Exempt $40,662.00 $42,000.00 Thomas Butler, Jr. Head of Talent & Culture 3/19/2018 Active Bristol 200 hours Full Time Salary Exempt $113,824.00 $75,000.00 plus commission Paul Carbone, Jr. Digital Marketing Sales Representative 6/14/2021 Active Bristol 120 hours Full Time Salary Non Exempt $69,832.00 $75,000.00 Stephen Carrozzino In-House Email Marketing Specialist 7/1/2022 Active Bristol 120 hours Full Time Salary Non Exempt $27,538.00 $40,000.00 Francesca Caulder Paid Social Media Specialist 1/31/2022 Active Bristol 120 hours Full Time Salary Non Exempt $39,288.00 $45,000.00 Denise Christiansen CRM 4/18/2022 Active Bristol 120 hours Full Time Salary Non Exempt $52,619.00 $78,000.00 plus bonuses Vanessa Collado Web Developer 4/20/2020 Active Bristol 160 hours Full Time Salary Non Exempt $58,446.00 $60,000.00 Kurtcia Collazo Jr. CRM 4/18/2022 Active Bristol 120 hours Full Time Salary Non Exempt $33,490.00 $55,000.00 Finn Conte Content Writer 11/8/2021 Active Bristol 120 hours Full Time Salary Non Exempt $40,840.00 $45,000.00 Stephanie Cosma CRM 11/21/2022 Active Bristol 120 hours Full Time Salary Non Exempt $4,231.00 $55,000.00 Gavin D’Amico Intern 7/5/2022 Active Bristol N/A Varies Hourly Non Exempt $7,301.00 John De Lancey, III Content Editor 10/26/2020 Active Bristol 160 hours Full Time Salary Non Exempt $42,754.00 $47,500.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 147 of 258 PageID #: 165 EXECUTION COPY Michael DeMarco Graphic Designer 1/29/2018 Active Bristol 200 hours Full Time Salary Non Exempt $53,000.00 $55,000.00 Christopher Dennis Director of Web Development 1/4/2021 No longer with the Company as of Closing Bristol 120 hours Full Time Salary Non Exempt $73,131.00 $75,000.00 Nicole Diviny Jr. Paid Social Media Specialist 11/22/2021 Active Bristol 120 hours Full Time Salary Non Exempt $35,000.00 $35,000.00 Michael Doane jr. CRM 3/14/2022 Active Bristol 120 hours Full Time Salary Non Exempt $42,141.00 $45,000.00 Kathy Donohue Director of Onboarding 3/8/2021 Active Bristol 120 hours Full Time Salary Non Exempt $68,862.00 $75,000.00 plus bonuses David Drew Jr. Digital Marketing Specialist 10/24/2022 Active Bristol 120 hours Full Time Salary Non Exempt $9,308.00 $55,000.00 Joshua Dziewa Digital Marketing Sales Representative 6/14/2021 Active Bristol 120 hours Full Time Salary Exempt $166,281.00 $40,000.00 plus commission Brian Emery Executive Director 1/3/2023 Active Bristol Accrue monthly 1st year 13.4 hours Full Time Salary Non Exempt N/A $80,000.00 Elliot Fisher QA Developer Active Lexie Flynn Video Intern 1/31/2022 Active Bristol 120 hours Full Time Salary Non Exempt $37,205.00 $45,000.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 148 of 258 PageID #: 166 EXECUTION COPY Daniel Fox Web Developer 10/28/2019 Active Bristol 160 hours Full Time Salary Non Exempt $62,227.00 $70,000.00 Joshua Gefter SDR – Sales Development Representative 6/20/2022 Active Bristol 120 hours Full Time Salary Non Exempt $18,173.00 $35,000.00 Austin Gonella Client Relations Manager 7/12/2021 Active Bristol 120 hours Full Time Salary Non Exempt $57,502.00 $56,000.00 Robert Grau Digital Marketing Specialist 4/11/2022 Active Bristol 120 hours Full Time Salary Exempt $43,846.00 $50,000.00 plus commission Ryan Halfpenny CRM 7/18/2022 Active Bristol 120 hours Full Time Salary Non Exempt $25,221.00 $55,000.00 Lawren Harris Paid Search Specialist 1/3/2023 Active Bristol Accrue monthly 1st year 13.4 hours Full Time Salary Non Exempt N/A $60,000.00 Kayla Johnson Paid Advertising Social Media Specialist 2/21/2022 No longer with the Company as of Closing Bristol 120 hours Full Time Salary Non Exempt $37,904.00 $45,000.00 Shelli Jordan In-House Events & Tradeshow Coordinator 2/14/2022 Active Bristol 120 hours Full Time Salary Non Exempt $63,462.00 $75,000.00 Leah Kahwadjian Web Developer 6/29/2020 Active Bristol 160 hours Full Time Salary Non Exempt $62,765.00 $65,000.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 149 of 258 PageID #: 167 EXECUTION COPY Matthew Keller Digital Marketing Specialist 1/3/2023 Active Bristol Accrue monthly 1st year 13.4 hours Full Time Salary Non Exempt N/A $42,500.00 Christopher Kirk Paid Search Specialist 8/16/2021 Active Bristol 120 hours Full Time Salary Non Exempt $74,791.00 $75,000.00 plus bonuses Matthew Krimmel Content Writer 11/21/2022 Active Bristol 120 hours Full Time Salary Non Exempt $4,808.00 $50,000.00 Catharine Lautenbacher Paid Social Media Specialist 8/15/2022 Active Bristol 120 hours Full Time Salary Non Exempt $17,539.00 $48,000.00 Meghan Lavery Client Relations Manager 9/13/2021 Active Bristol 120 hours Full Time Salary Exempt $90,371.00 $75,000.00 plus bonuses Amelia Lord CRM 10/3/2022 Active Bristol 120 hours Full Time Salary Non Exempt $11,423.00 $55,000.00 Daniel Matthews Content Writer 5/1/2020 Active Bristol 160 hours Full Time Salary Non Exempt $43,077.00 $45,000.00 Sam Maugans 10/29/2018 No longer with the Company as of Closing Remote 200 hours Full Time Salary Non Exempt $59,324.00 $67,480.00 Colin McAndrew Sr. PPC Specialist 2/17/2020 Active Bristol 160 hours Full Time Salary Non Exempt $59,846.00 $60,000.00 Brian McDevitt Content Editor 9/9/2019 Active Bristol 160 hours Full Time Salary Non Exempt $46,746.00 $50,000.00 Amanda McDonald Client Relations Manager 1/4/2021 Active Bristol 120 hours Full Time Salary N Non Exempt on $73,535.00 $55,000.00 plus bonuses Joshua McNichol Web Developer 4/18/2022 Active Bristol 120 hours Full Time Salary Non Exempt $37,654.00 $55,000.00 Mary Moyer CRM 9/21/2021 Active Bristol 120 hours Full Time Salary Non Exempt $69,202.00 $74,500.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 150 of 258 PageID #: 168 EXECUTION COPY Bernard Ollila, IV VP of Special Operations 9/29/2015 Active Bristol 200 hours Full Time Salary Exempt $201,550.00 $60,000.00 plus commission Melanie Pang Paid Social Media Specialist 1/4/2021 Active Bristol 160 hours Full Time Salary Non Exempt $49,615.00 $60,000.00 Cecile Parages/Trusa Web Developer 4/24/2020 Active Bristol 160 hours Full Time Salary Non Exempt $59,750.00 $65,000.00 Patrick Parker Web Developer 7/11/2022 Active Bristol 120 hours Full Time Salary Non Exempt $27,692.00 $60,000.00 Akhil Paul Sr. Digital Marketing Strategist 10/10/2022 Active Bristol 120 hours Full Time Salary Non Exempt $13,750.00 $65,000.00 Jeremy Pedro Content Intern 3/14/2022 Active Bristol 120 hours Full Time Salary Non Exempt $26,126.00 $35,000.00 Christine Pepper Client Relations Manager 10/10/2016 Active Bristol 200 hours Full Time Salary Non Exempt $54,087.00 $55,000.00 plus bonuses Ashley Perez Operations Administrator 9/27/2021 Active Bristol 120 hours Full Time Salary Non Exempt $46,177.00 $50,000.00 Daniel Petruccio Junior CRM 2/14/2022 Active Bristol 120 hours Full Time Salary Non Exempt $40,701.00 $45,000.00 Kejsi Prifti Content Editor 9/16/2019 Active Remote 160 hours Full Time Salary Non Exempt $52,905.00 $65,000.00 Jennifer Prue Office Manager 8/1/2016 Active Bristol 200 hours Full Time Salary Non Exempt $67,923.00 $70,000.00 Brittany Rawcliffe Creative Director 3/13/2017 Active Bristol 200 hours Full Time Salary Non Exempt $72,923.00 $72,500.00 Madison Rodak Content Writer 9/7/2021 Active Bristol 120 hours Full Time Salary Non Exempt $35,471.00 $36,750.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 151 of 258 PageID #: 169 EXECUTION COPY William Rossell Chief Sales Officer 4/28/2015 Active Bristol N/A Full Time Salary Exempt $210,723.00 $148,723.00 plus bonuses Heather Sadorf VP of Staff Development 5/26/2014 Active Bristol 200 hours Full Time Salary Exempt $84,772.00 $86,000.00 Frank Santaguida Web Developer 12/5/2022 Active Bristol 120 hours Full Time Salary Non Exempt $3,462.00 $60,000.00 Alberto Santiago Videographer 2/3/2021 Active Bristol 120 hours Full Time Salary Non Exempt $64,431.00 $65,000.00 Marcela Sarceno Jr. PPC Specialist 3/7/2022 Active Bristol 120 hours Full Time Salary Non Exempt $34,208.00 $50,000.00 Nicholas Scheld Digital Marketing Representative 4/20/2020 Active Bristol 160 hours Full Time Salary Exempt $100,790.00 $57,500.00 plus comission Samira Scott Cameron Paid Social Media Specialist 1/18/2021 Active Bristol 120 hours Full Time Salary Non Exempt $69,115.00 $75,000.00 Nicole Seifert Client Account Executive 7/12/2021 Active Bristol 120 hours Full Time Salary Non Exempt $67,755.00 $55,000.00 plus bonuses Abu Shaab PPC Specialist 8/29/2022 Active Bristol 120 hours Full Time Salary Non Exempt $22,885.00 $70,000.00 Christopher Shirlow Director of Content 2/19/2018 Active Bristol 200 hours Full Time Salary Non Exempt $74,150.00 $75,000.00 Ian Silver SEO Specialist 9/30/2022 Active Bristol 120 hours Full Time Salary Non Exempt $8,462.00 $55,000.00 Jill Speight Senior Digital Marketing Specialist 6/17/2019 Active Bristol 160 hours Full Time Salary Exempt $248,350.00 $59,000.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 152 of 258 PageID #: 170 EXECUTION COPY Steve Szydlik Executive Director 12/12/2022 Active Bristol 120 hours Full Time Salary Non Exempt $3,269.00 $85,000.00 Ashley Taylor Client Relationship Manager 12/12/2022 Active Bristol 120 hours Full Time Salary Non Exempt $2,308.00 $60,000.00 Micheila Thiele Content Writer 6/28/2021 Active Remote 120 hours Full Time Salary Non Exempt $41,923.00 $45,000.00 Samantha Thompson Talent Acquisition Sourcer 11/21/2022 Active Bristol 120 hours Full Time Salary Non Exempt $5,000.00 $52,000.00 William Tozzi, III CRM 11/14/2022 Active Bristol 120 hours Full Time Salary Non Exempt $7,500.00 $65,000.00 Angelina Twaddell Content Writer Active Alfaz Vahora Digital Marketing Specialist 1/3/2023 Active Bristol Accrue monthly 1st year 13.4 hours Full Time Salary Non Exempt N/A $45,000.00 Jack Vander Laan Content Writer 9/7/2021 Active Bristol 120 hours Full Time Salary Non Exempt $40,538.00 $42,000.00 Keenan Westcott Director of Social Media 7/16/2018 Active Bristol 200 hours Full Time Salary Non Exempt $69,769.00 $75,000.00 Samantha Weston Data Analyst Active Tyler Willis SEO Strategist 6/13/2022 No longer with the Company as of Closing Bristol 120 hours Full Time Salary Non Exempt $24,231.00 $45,000.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 153 of 258 PageID #: 171 EXECUTION COPY Schedule 3.16(b) Independent Contractors 1. Independent Contractor NameStart Date Individual v. Corporate Status Type of Services Provided Anticipated Completion Date Approximate Pay Rate Nexstar, Inc. 1/5/2018 Corporate Marketing N/A – Agreement renews on a yearly basis and may be terminated by either party with 30-days’ written notice. 10% for SEO and 5% for PPC, Social Media, Email Marketing, Web Development, and Videography of the gross revenues generated by the Company from all sales of the Company’s products or services to any and all Nexstar members. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 154 of 258 PageID #: 172 EXECUTION COPY Schedule 3.16(c)(1) At Will and Severance 1. None. EXECUTION COPY Schedule 3.16(c)(1) At Will and Severance 1. None. EXECUTION COPY Schedule 3.16(c)(i) At Will and Severance 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 155 of 258 PageID #: 173 EXECUTION COPY Schedule 3.16(c)(ii) Key Employee Termination 1. Jolin Bachmann will not continue as CFO of the Company after the Closing but will provide transition services pursuant to the Agreement. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 156 of 258 PageID #: 174 EXECUTION COPY Schedule 3.17(a) Employee Benefit Plans The following are the Benefit Plans the Company offers to its employees: 1. Health Insurance: Independence Blue Cross (“IBC”). a. Executive Plan: IBC. b. Employee Plan: IBC. 2. Dental Insurance: United Healthcare Services, Inc. (“United Healthcare”). 3. Vision Insurance: United Healthcare. 4. 401(k) Plan: 1SEO.com, Inc., 401(k) Plan. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 157 of 258 PageID #: 175 EXECUTION COPY Schedule 3.17(c) Deferred Compensation Plans 1. None. EXECUTION COPY Schedule 3.17(c) Deferred Compensation Plans 1. None. EXECUTION COPY Schedule 3.17(c) Deferred Compensation Plans 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 158 of 258 PageID #: 176 EXECUTION COPY Schedule 3.18 Debt 1. The EIDL Loan. EXECUTION COPY Schedule 3.18 Debt 1. The EIDL Loan. EXECUTION COPY Schedule 3.18 Debt 1. The EIDL Loan. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 159 of 258 PageID #: 177 EXECUTION COPY Schedule 3.19 Environmental, Health and Safety Matters 1. None. EXECUTION COPY Schedule 3.19 Environmental, Health and Safety Matters 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 160 of 258 PageID #: 178 EXECUTION COPY Schedule 3.20 Certain Business Relationships (a) Shareholder owns 50% of Shock I.T., LLC f/k/a 1 SEO Technologies, Inc. (b) None. (c) None. (d) None. (e) None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 161 of 258 PageID #: 179 EXECUTION COPY Schedule 3.21 Customers and Suppliers (a) Top Customers 2021 Top 10 Customers Customer Amount CCGNJ Council on Compulsive 193,157.00 Colonial Marble & Granite 292,080.00 Arlinghaus Plumbing Heating & Air 142,605.80 Magnolia Plumbing, Inc. 129,886.00 1SEO Technologies (Shock I.T.) 17,450.00 Limric Plumbing, Heating & Air 74,288.00 Union Roofing 73,164.00 Preferred Kitchen & Bath 73,109.40 Hamilton Dental Associates 72,600.00 AKPR Whipple Plumbing 68,800.00 2022 Top 10 Customers Customer Amount CCGNJ Council on Compulsive 236,400.00 Colonial Marble & Granite 296,884.00 Odyssey Behavioral Healthcare 177,573.80 Wesley Enhanced Living 162,098.00 Peaden Air Conditioning, Plumbing and Electrical 158,400.00 Keefe’s AC, Heating & Electrical 145,651.20 Arlinghaus Plumbing Heating & Air 120,181.15 IBC Global Inc 88,200.00 AP Plumbing 84,000.00 Flexible Circuits 78,510.00 2023 Top 10 Customers Customer Amount Colonial Marble & Granite 55,948.00 Handyside, Inc. 42,240.00 Kel Tren WaterCare 28,800.00 All About Garage Doors/SkyLift Garage Doors 28,600.00 Abtech Inc 21,600.00 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 162 of 258 PageID #: 180 EXECUTION COPY 1st Home & commercial 17,050.00 Scubadelphia 15,050.00 Odyssey Behavioral Healthcare 15,000.00 Wehrung’s 14,400.00 Radiant Plumbing & Air Conditioning 13,000.00 Top Vendors 2022-2023 Top 10 Vendors Vendor Amount Agency Referral Fees $522,398.86 Credit Card Fees $366,611.13 Google AdWords $322,199.86 Conferences $227,697.24 Rent Expense $186,289.91 Employee Benefits $184,695.90 Flights $176,399.19 Call Rail $148,882.86 Subcontracted Services $107,752.40 Podium $103,340.37 Top Referral Partners 2022 Top Referral Partners Referral Partner Amount Sosa Rossell $48,293.00 CEO Warrior LLC $39,410.00 Jacqueline Calkins $21,619.11 Blue Water Media, LLC $21,025.00 Thomas J. Hartnett $12,487.50 E Squared Breakthroughs LLC $10,980.00 Staci Morris-Bonner $6,960.00 Shared Customers with Shock I.T., LLC EROS Wholesale $8,267.34 Village Catering $9,549.77 Anjer Inc $4,121.68 Center City Emergency Dentist (CCED) $45,456.51 Joseph Bograd Real Estate $0.00 Five Star Remodeling Inc. $1,260.05 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 163 of 258 PageID #: 181 EXECUTION COPY Gallagher Tire Inc. (Tires 4 That) $2,369.10 CCGNJ Council on Compulsive Gambling NJ 800Gambler $36,169.18 Diversified Rack & Shelving Inc $48,011.14 Five Star Painting $0.00 Elmwood Park Zoo $85,464.07 W.F. Smith Heating & Air Conditioning $7,562.41 DMC Snow Removal $0.00 Munz Construction $11,981.62 Total $260,212.87 (b) None. (c) None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 164 of 258 PageID #: 182 EXECUTION COPY Schedule 3.22 Restrictions on Business Activities 1. None. EXECUTION COPY Schedule 3.22 Restrictions on Business Activities 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 165 of 258 PageID #: 183 EXECUTION COPY Section 3.23 Warranties 1. None. EXECUTION COPY Section 3.23 Warranties 1. None. EXECUTION COPY Section 3.23 Warranties 1. None. EXECUTION COPY Section 3.23 Warranties 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 166 of 258 PageID #: 184 EXHIBIT A Subscription Agreement [See attached. ] EXHIBIT A Subscription Agreement [See attached. ] EXHIBIT A Subscription Agreement [See attached.] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 167 of 258 PageID #: 185 SUBSCRIPTION AGREEMENT February 17, 2023 VIA EMAIL TO: john.shoaf@skyharbor.co To 1SEO Holdings, LLC: The undersigned understands that 1SEO Holdings, LLC, a limited liability company organized under the laws of the State of Delaware (together with any successor, the “Company”), shall issue and transfer units of the Company’s membership interests, designated as Series A Preferred Units (the “Series A Preferred Units”), at a purchase price of $1.00 per Series A Preferred Unit. Such transfer of Series A Preferred Units is being made for purposes of funding the Acquisitions (as defined below). The undersigned agrees with the Company as follows: 1. On the terms and subject to the conditions set forth in this Subscription Agreement (this “Agreement”), the undersigned hereby agrees to contribute a certain portion of the assets of 1SEO.com Inc., a Pennsylvania corporation (“1SEO”), in exchange for such Series A Preferred Units listed on the signature page hereto (using a reference value of $1.00 per Series A Preferred Unit) for the aggregate contribution amount listed on the signature page hereto (the “Contributed Capital”). The closing of the undersigned’s receipt of the Series A Preferred Units shall occur on or around February 17, 2023 (the “Closing Date”), with the amount of the undersigned’s Contributed Capital to be funded by a contribution of a certain portion of the assets of 1SEO as set forth in that certain Asset Purchase Agreement (the “Purchase Agreement”) by and among the undersigned, 1SEO Digital Agency, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“1SEO Digital Agency”), and the other parties thereto. 2. The undersigned understands that it is the intention of the Company to complete an acquisition, directly or indirectly, of substantially all of the assets of 1SEO (the “Acquisition”). The undersigned understands that, in connection with the Acquisition, the Company intends to (i) raise equity financing from investors and (ii) raise debt financing from Live Oak Bank (collectively, the “Financing”). 3. In connection with the undersigned’s receipt of the Series A Preferred Units, the undersigned acknowledges that it has reviewed the following information concerning the Company: a. the Certificate of Formation of the Company, a copy of which has been furnished to the undersigned; and b. the Amended and Restated Limited Liability Company Agreement of the Company to be effective as of the Closing Date attached as Exhibit A (the “LLC Agreement”). Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 168 of 258 PageID #: 186 In addition, (i) the undersigned had an opportunity to acquire additional information concerning the Company and its affairs from John Shoaf, the Managing Partner of the Company, and (ii) due to the undersigned’s ownership of and relationship to 1SEO and its assets, it is familiar with and has developed an understanding of the business and the financial condition, risks, properties, operations and prospects of 1SEO’s business. 4. As consideration for the issuance of the Series A Preferred Units, at the Closing Date the undersigned will (i) assign certain assets of 1SEO to the Company pursuant to the Purchase Agreement, (ii) provide the Company with an executed signature page to the LLC Agreement and (iii) complete and sign the accredited investor questionnaire. The undersigned understands and acknowledges that this Agreement may be terminated by the Company in its sole discretion if the undersigned does not perform its obligations under this Section 4. 5. The Company acknowledges and agrees that, contemporaneous with, or promptly following, the Closing Date, ownership interests in the undersigned have been or shall be transferred such that Catrina Bachmann, Jolin Bachmann and Bill Rossell each own approximately 12.5% of the equity interests in the undersigned. 6. The undersigned represents to the Company: a. It is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company and the Acquisition, and, by virtue of its ownership of 1SEO, it is aware of the financial condition of the assets of 1SEO and the business environment in which 1SEO operates, and it is able to reach an informed and knowledgeable decision to acquire the Series A Preferred Units. The undersigned understands that the Series A Preferred Units being purchased by it represent a speculative investment. The undersigned is purchasing the Series A Preferred Units for its own account for investment purposes only and not with a view to, or for the resale in connection with, any distribution thereof for the purposes of the Securities Act of 1933, as amended (the “Securities Act”). 7. The undersigned further understands and acknowledges the following: a. That the Series A Preferred Units have not been registered under the Securities Act by reason of a specific exemption therefrom which exemption may depend upon, among other things, the bona fide nature of its investment intent as expressed herein. b. That the Series A Preferred Units are “restricted securities” under applicable federal and state securities laws and must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. The undersigned further acknowledges and understands that the Company is under no obligation to register the Series A Preferred Units. In addition, the undersigned understands that any certificate evidencing the Series A Preferred Units will be imprinted with a legend which prohibits the transfer of the Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 169 of 258 PageID #: 187 Series A Preferred Units unless they are registered or such registration is not required in the opinion of counsel for the Company. c. That Rule 144, promulgated under the Securities Act, permits limited public resale of securities acquired in a non-public offering subject to the satisfaction of certain conditions. d. That if the Company is not in compliance with the current public information requirement of Rule 144 at the time the undersigned wishes to sell the Series A Preferred Units, the undersigned would be precluded from selling the Series A Preferred Units under Rule 144 even if the minimum holding period had been satisfied. e. That no public market now exists for the Series A Preferred Units, and that the Company has made no assurances that a public market will ever exist for the Series A Preferred Units. f. That: (i) if the undersigned is an individual, the undersigned resides in the state identified in the address for notice set forth on the signature page hereto; and (ii) if the undersigned is a partnership, corporation, limited liability company or other entity, the office or offices of the undersigned that constitute its principal place of business is identified in the address for notice set forth on the signature page hereto. 8. The Company represents to the undersigned that the following is true: a. The Company has been duly formed, is validly existing, and in good standing, with all requisite power and authority to execute, deliver and perform its obligations under this Agreement. b. The execution and delivery of this Agreement has been authorized by all necessary action on behalf of the Company, and this Agreement constitutes a valid and binding obligation of the Company, and is enforceable against the Company in accordance with its terms. c. The execution and delivery of this Agreement and the consummation of the transactions contemplated herein will not conflict with, or result in any violation of or default under, any provision of the LLC Agreement or other governing instrument applicable to the Company or under any material agreement or other instrument to which the Company is a party or by which the Company, or any of its property, is bound, or any permit, franchise, judgment, decree, statute, order, writ, rule or regulation applicable to the Company or its business or property. d. The Series A Preferred Units, when issued, sold and delivered in accordance with the terms of this Agreement and the Purchase Agreement to the undersigned will be duly and validly issued and will be free of restrictions on transfer, other than Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 170 of 258 PageID #: 188 restrictions on transfer under this Agreement, the LLC Agreement and applicable provisions of federal or state securities laws. e. Except for the rights set forth in Section 2 of this Agreement and the other subscription agreements executed on or about the date hereof by and between the Company and each of the Investors (as defined in the LLC Agreement) and taking into account any and all investments made previously or deemed to be made that are set forth on Schedule A of the LLC Agreement, as of the date of this Agreement, there are no outstanding equity interests in the Company, nor any options, warrants or other securities convertible into or exercisable or exchangeable for any such equity interests. f. The Company’s ownership listed on Schedule A to the LLC Agreement shall be true and correct in all respects as of the effective date of the LLC Agreement. 9. The certificates, if any, evidencing the Series A Preferred Units shall bear the following legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 10. All representations, warranties and covenants contained herein shall survive the execution and delivery of this Agreement and the sale and issuance of the Series A Preferred Units. 11. The undersigned agrees that it will keep confidential and will not disclose, divulge or misuse any confidential, proprietary or secret information which it may obtain from the Company pursuant to financial statements, reports and other materials provided to it by the Company (“Confidential Information”), unless such Confidential Information is known, or until such Confidential Information becomes known, to the public (other than as a result of its breach of this Section 11); provided, however, that it may disclose Confidential Information (a) to its attorneys, accountants, consultants, and other professionals to the extent necessary to enforce this Agreement or obtain their services in connection with monitoring its investment in the Company or (b) as may be required by law. It being understood and agreed that nothing set forth in this Agreement shall prevent the undersigned from making investments in entities which conduct businesses that are the same or similar to the business conducted by the Company, provided that there is no violation of this Section 11. This Agreement and the LLC Agreement, together with their respective exhibits, represent the entire agreement and understanding between the undersigned and the Company concerning the purchase of the Series A Preferred Units and supersedes and replaces any and all prior agreements and understandings. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 171 of 258 PageID #: 189 12. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware. 13. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 14. All notices and other communications hereunder shall be in writing and shall be deemed to be delivered if delivered in person, by fax, by mail or through electronic transmission (including e-mail), in each case, to the mailing address, fax number or e-mail address of the recipient set forth on the signature page to this Agreement, or to such other mailing address, fax number or e-mail address as such recipient shall provide to the Company or to the Members (as defined in the LLC Agreement), as applicable. [Signature Page Follows] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 172 of 258 PageID #: 190 [SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR 1SEO HOLDINGS, LLC] Executed as of the date set forth above. Number of Series A Preferred Units subscribed for: 1,400,000 Total contribution amount valued @ $1.00 per Series A Preferred Unit: 1,400,000 1SEO.COM INC. By: ________________________________ Name: Lance Bachmann Title: President EIN:________________________________ Address for notice: Mailing Address: Fax: E-Mail: 27-2120863 228 kasi circle warminster pa 18974 0080809809808 lbachmann@1seo.com Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 173 of 258 PageID #: 191 [SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR 1SEO HOLDINGS, LLC] The foregoing Subscription Agreement is hereby confirmed and accepted as of the date first above written. 1SEO HOLDINGS, LLC: By:____________________ Name: John Shoaf Title: Authorized Signatory Address for notice: 1SEO Holdings, LLC 92 SW 3rd St, Ste 2003, Miami, FL 33130 Attention: John Shoaf E-mail: john.shoaf@skyharbor.co Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 174 of 258 PageID #: 192 GS0NANV GNV GALVLSSY GSALINTT ALITIEVIT ANVdWOS INAWSSYSV LIGIHXA V GS0NANV GNV GALVLSSY GSALINTT ALITIEVIT ANVdWOS INAWSSYSV LIGIHXA V EXHIBIT A AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 175 of 258 PageID #: 193 1SEO Holdings, LLC Amended and Restated Limited Liability Company Agreement Dated as of February [__], 2023 1SEO Holdings, LLC Amended and Restated Limited Liability Company Agreement Dated as of February 17, 2023 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 176 of 258 PageID #: 194 ARTICLE 1 DEFINITIONS AND ORGANIZATION AND POWERS……………………………….. 1 1.01 Definitions……………………………………………………………………………………………….. 1 1.02 Organization…………………………………………………………………………………………….. 9 1.03 Purposes and Powers…………………………………………………………………………………. 9 1.04 Principal Place of Business………………………………………………………………………. 10 1.05 Fiscal Year; Taxable Year ……………………………………………………………………….. 10 1.06 Qualification in Other Jurisdictions…………………………………………………………… 11 1.07 Term……………………………………………………………………………………………………… 11 ARTICLE 2 MEMBERS ………………………………………………………………………………………………. 11 2.01 Members ……………………………………………………………………………………………….. 11 2.02 Units……………………………………………………………………………………………………… 11 2.03 Redemption……………………………………………………………………………………………. 13 2.04 Action by Members…………………………………………………………………………………. 14 2.05 Voting Rights…………………………………………………………………………………………. 14 2.06 Limitation of Liability of Members…………………………………………………………… 15 2.07 Authority……………………………………………………………………………………………….. 15 2.08 No Right to Withdraw……………………………………………………………………………… 15 2.09 Rights to Information………………………………………………………………………………. 16 2.10 No Appraisal Rights………………………………………………………………………………… 16 2.11 Compliance with Securities Laws and Other Laws and Obligations………………. 16 2.12 Reports………………………………………………………………………………………………….. 16 2.13 Inspection………………………………………………………………………………………………. 17 2.14 Admission of New Members……………………………………………………………………. 17 2.15 Confidentiality ……………………………………………………………………………………….. 18 ARTICLE 3 BOARD OF DIRECTORS …………………………………………………………………………. 18 3.01 Board Composition …………………………………………………………………………………. 18 3.02 Removal; Vacancies………………………………………………………………………………… 18 3.03 Board; General……………………………………………………………………………………….. 19 3.04 Limitation of Liability of Board ……………………………………………………………….. 19 3.05 Expenses ……………………………………………………………………………………………….. 20 3.06 Observer Rights ……………………………………………………………………………………… 20 ARTICLE 4 MANAGEMENT………………………………………………………………………………………. 20 4.01 Officers …………………………………………………………………………………………………. 20 4.02 Qualification ………………………………………………………………………………………….. 20 4.03 Reliance by Third Parties…………………………………………………………………………. 20 4.04 Compensation ………………………………………………………………………………………… 21 4.05 Limitation of Liability of Officers…………………………………………………………….. 21 4.06 Tax Matters……………………………………………………………………………………………. 21 ARTICLE 5 INDEMNIFICATION………………………………………………………………………………… 22 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 177 of 258 PageID #: 195 ii 5.01 Officer/Director Indemnification ………………………………………………………………. 22 5.02 Award of Indemnification………………………………………………………………………… 22 5.03 Successful Defense …………………………………………………………………………………. 22 5.04 Advance Payments………………………………………………………………………………….. 22 5.05 Insurance ……………………………………………………………………………………………….. 23 5.06 Employee Benefit Plan ……………………………………………………………………………. 23 5.07 Investor Indemnification………………………………………………………………………….. 23 5.08 Non-Exclusivity; Indemnification Agreements…………………………………………… 24 ARTICLE 6 CONFLICTS OF INTEREST……………………………………………………………………… 25 6.01 Transactions with Interested Persons…………………………………………………………. 25 6.02 Outside Businesses………………………………………………………………………………….. 25 ARTICLE 7 CAPITAL ACCOUNTS AND CAPITAL CONTRIBUTIONS ………………………. 26 7.01 Capital Accounts…………………………………………………………………………………….. 26 7.02 Capital Contributions by Members……………………………………………………………. 27 7.03 Preemptive Rights…………………………………………………………………………………… 27 ARTICLE 8 DISTRIBUTIONS AND ALLOCATIONS…………………………………………………… 29 8.01 Distribution of the LLC’s Funds……………………………………………………………….. 29 8.02 Distribution Upon Liquidation Events……………………………………………………….. 32 8.03 Distribution of Assets in Kind ………………………………………………………………….. 33 8.04 Withholding …………………………………………………………………………………………… 33 8.05 Allocations…………………………………………………………………………………………….. 34 ARTICLE 9 TRANSFERS OF INTERESTS…………………………………………………………………… 37 9.01 General Restrictions on Transfer ………………………………………………………………. 37 9.02 Permitted Transfers…………………………………………………………………………………. 37 9.03 Effect of Transfer……………………………………………………………………………………. 37 9.04 Right of First Refusal on Common Units and Class P Units…………………………. 38 9.05 Co-Sale Option on Common Units and Class P Units………………………………….. 40 9.06 Right of First Refusal on Series A Preferred Units………………………………………. 42 9.07 Co-Sale Option on Series A Preferred Units ………………………………………………. 44 9.08 Transfers of Interests by Officers ……………………………………………………………… 46 9.09 Drag Along Right……………………………………………………………………………………. 46 9.10 Tax Forms/Withholding…………………………………………………………………………… 48 9.11 Termination……………………………………………………………………………………………. 49 ARTICLE 10 DISSOLUTION, LIQUIDATION AND TERMINATION……………………………. 49 10.01 Dissolution …………………………………………………………………………………………….. 49 10.02 Notice of Dissolution ………………………………………………………………………………. 49 10.03 Liquidation…………………………………………………………………………………………….. 49 10.04 Certificate of Cancellation ……………………………………………………………………….. 49 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 178 of 258 PageID #: 196 iii 10.05 Payments to Terminating Member…………………………………………………………….. 49 ARTICLE 11 GENERAL PROVISIONS ……………………………………………………………………….. 51 11.01 Offset…………………………………………………………………………………………………….. 51 11.02 Notices ………………………………………………………………………………………………….. 51 11.03 Entire Agreement……………………………………………………………………………………. 51 11.04 Amendment or Modification…………………………………………………………………….. 51 11.05 Reorganization into Corporate Form …………………………………………………………. 51 11.06 Binding Effect………………………………………………………………………………………… 52 11.07 Governing Law; Severability……………………………………………………………………. 52 11.08 Further Assurances………………………………………………………………………………….. 52 11.09 Waiver of Certain Rights…………………………………………………………………………. 52 11.10 Interpretation………………………………………………………………………………………….. 52 11.11 Counterparts…………………………………………………………………………………………… 53 11.12 Third Party Beneficiaries…………………………………………………………………………. 53 11.13 Section 83(b) Elections……………………………………………………………………………. 53 11.14 Partnership Status……………………………………………………………………………………. 53 11.15 Section 83 Safe Harbor……………………………………………………………………………. 53 SCHEDULE A MEMBERS SCHEDULE B VESTING TERMS Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 179 of 258 PageID #: 197 AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF 1SEO HOLDINGS, LLC a Delaware limited liability company This Amended and Restated Limited Liability Company Agreement (this “Agreement”), is entered into as of February [__], 2023, by and among 1SEO Holdings, LLC (the “LLC”), and the Persons identified as the Members on Schedule A attached hereto (such Persons and their respective successors being hereinafter referred to each, individually, as a “Member” and, collectively, as the “Members”). WHEREAS, pursuant to the terms of those certain Subscription Agreements (the “Subscription Agreements”) effective as of the date hereof, by and among the LLC and certain Members (each, an “Investor” and collectively, the “Investors”), the Investors are acquiring Series A Preferred Units such that 7,000,000 Series A Preferred Units will be issued and outstanding as of the date hereof; WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, by and among 1SEO Digital Agency, LLC, a Delaware limited liability company and wholly owned subsidiary of the LLC (“1SEO Digital Agency”), 1SEO.com Inc., a Pennsylvania corporation (the “Company”) and the shareholders of the Company, the LLC is purchasing substantially all of the assets of the Company (the “Acquisition”); WHEREAS, the original sole member of the LLC entered into a Limited Liability Company Agreement dated as of January 31, 2023, as amended (the “Original LLC Agreement”); and WHEREAS, pursuant to and in connection with the Acquisition, the Members desire to amend and restate the Original LLC Agreement to create new classes of Units (as defined herein) and to confirm other provisions regarding the governance of the LLC, the conduct of the business and affairs of the LLC, and the relative rights and obligations of the Members. NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE 1 DEFINITIONS AND ORGANIZATION AND POWERS 1.01 Definitions. Terms not otherwise defined herein shall have the following meanings: (a) “Adjusted Capital Account” means, with respect to any Member, the balance in such Member’s Capital Account as of the end of the relevant Taxable Year after giving Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 180 of 258 PageID #: 198 2 effect to the following adjustments: (i) credit to such Capital Account any amounts that (A) such Member is obligated to contribute to the LLC upon liquidation of such Member’s interest in the LLC and (B) such Member is obligated to restore or deemed to be obligated to restore pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(l) and 1.704-2(i)(5); and (ii) debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1 (b)(2)(ii)(d)(4), (5) and (6). This definition of Adjusted Capital Account is intended to comply with the provisions of Section 1.704- 1(b)(2)(ii)(d) of the Treasury Regulations and will be interpreted consistently therewith. (b) An “Affiliate” of any Person means (i) a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the first mentioned Person and (ii) a liquidating trust formed by such Person or by a group including such Person. An Affiliate of a collective investment vehicle shall also include (x) any other collective investment vehicle that is managed or advised by the same Person or by an Affiliate of said Person and any members or partners of such investment vehicle and (y) any limited partner, member, stockholder or other equity holder of such collective investment vehicle. A Person shall be deemed to control another Person if such first Person possesses directly or indirectly the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, by contract or otherwise. (c) “Award Agreement” means any Incentive Unit Grant Agreement under the Equity Incentive Plan. (d) “Capital Contribution” means, with respect to any Member, the total amount of cash and the initial Gross Asset Value of property (other than cash) contributed to the capital of the LLC made by or on behalf of a Member, whether as an initial capital contribution or as an additional capital contribution. (e) “Catch-Up Amount” means the quotient of (i) the total amount distributed to Members holding Series A Preferred Units pursuant to Section 8.01(a)(i) of this Agreement, divided by (ii) the number of Series A Preferred Units. (f) “Class P Units” means the Class P Units of the LLC. (g) “Common Units” means the Common Units of the LLC. (h) “Depreciation” means, for each Taxable Year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Taxable Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Taxable Year, Depreciation will be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such Taxable Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Taxable Year is zero, Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 181 of 258 PageID #: 199 3 (i) “Expenses” means all expenses, including attorneys’ fees and disbursements, actually and reasonably incurred in defense of a proceeding or in seeking indemnification under Article 5, and except for proceedings by or in the right of the LLC or alleging that an Indemnified Party received an improper personal benefit, any judgments, awards, fines, penalties and reasonable amounts paid in settlement of a proceeding. (j) “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows: (i) the initial Gross Asset Value of any asset contributed by a Member to the LLC will be the fair market value of such asset as determined by the Board at the time it is accepted by the LLC, unreduced by any liability secured by such asset, as determined by the Board; (ii) the Gross Asset Values of all assets of the LLC may be adjusted to equal their respective fair market values, unreduced by any liabilities secured by such assets, as determined by the Board as of the following times, if the Board reasonably determines that such adjustment is necessary or appropriate to reflect the relative Unit ownership of the Members in the LLC: (A) the acquisition of additional Units by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the LLC to a Member of more than a de minimis amount of cash or property as consideration for Units; (C) the liquidation of the LLC within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); (D) the grant of a Unit in the LLC (other than a de minimis interest), including without limitation a grant of Units intended to be “profits interests” for U.S. federal income tax purposes, as consideration for the provision of services to or for the benefit of the LLC by an existing Member acting in a member capacity, or by a new Member acting in a Member capacity or in anticipation of becoming a Member of the LLC; and (E) at such other times as the Board shall reasonably determine necessary or advisable in order to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2; (iii) the Gross Asset Value of any asset of the LLC distributed to any Member will be adjusted to equal the fair market value of such asset, unreduced by any liability secured by such asset, on the date of distribution as determined by the Board; (iv) the Gross Asset Value of the LLC assets will be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Sections 734(b) or 743(b) of the Code but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704- 1(b)(2)(iv)(m) and paragraph (vi) of the definition of “Net Profit” and “Net Loss”; and (v) if the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (i), (ii) or (iv) of this definition, such Gross Asset Value will thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Profit and Net Loss. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 182 of 258 PageID #: 200 4 (k) “Indemnified Party” includes (i) a person serving as an Officer of the LLC or in a similar executive capacity appointed by the Board and exercising rights and duties delegated by the Board, (ii) a person serving at the request of the LLC as a director, manager, officer, employee or other agent of another organization, (iii) any person who formerly served in any of the foregoing capacities and (iv) the Directors and their Affiliates. (l) “IRS” means the U.S. Internal Revenue Service. (m) “LLC Minimum Gain” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase “partnership minimum gain.” (n) “Majority Interest” means the Members holding a majority of the then outstanding Series A Preferred Units and Vested Common Units, voting together as a single class. (o) “Member Minimum Gain” has the meaning of “partner nonrecourse debt minimum gain” set forth in Treasury Regulations Section 1.704-2(i)(2). (p) “Member Nonrecourse Debt” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(4) for the phrase “partner nonrecourse debt.” (q) “Member Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section 1.704-2(i) for the phrase “partner nonrecourse deductions.” (r) “Management Services Agreement” means that certain Management Services Agreement, dated as of the date hereof, between Skyharbor, LLC and 1SEO Digital Agency. (s) “Net Profit” or “Net Loss” means, for any Taxable Year or other period, an amount equal to the LLC’s taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(l) of the Code will be included in taxable income or loss), with the following adjustments: (i) any income of the LLC that is exempt from U.S. federal income tax and not otherwise taken into account in computing Net Profit or Net Loss will be added to such taxable income or loss; (ii) any expenditures of the LLC described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704- 1(b)(2)(iv)(i) of the Treasury Regulations and not otherwise taken into account in computing Net Profit or Net Loss will be subtracted from such taxable income or loss; (iii) in the event the Gross Asset Value of any asset of the LLC is adjusted pursuant to paragraph (ii) or (iii) of the definition of “Gross Asset Value,” the amount of such adjustment will be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profit or Net Loss; Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 183 of 258 PageID #: 201 5 (iv) gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for U.S. federal income tax purposes will be computed by reference to the Gross Asset Value of property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) in lieu of depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there will be taken into account Depreciation with respect to each asset of the LLC for such Taxable Year, computed in accordance with the definition of “Depreciation” above; (vi) to the extent an adjustment to the adjusted tax basis of any asset of the LLC pursuant to Sections 734(b) or 743(b) of the Code is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts as a result of a distribution other than in complete liquidation of a Member’s interest in the LLC, the amount of such adjustment will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and will be taken into account for purposes of computing Net Profit or Net Loss; and (vii) notwithstanding any other provision of this definition of Net Profit and Net Loss, any items that are specially allocated pursuant to Section 8.05(b) and Section 8.05(b)(ii) hereof shall not be taken into account in computing Net Profit or Net Loss. The amounts of the items of the LLC’s income, gain, loss or deduction available to be specially allocated pursuant to Section 8.05(b) and Section 8.05(b)(ii) hereof shall be determined by applying rules analogous to those set forth in this definition of Net Profit and Net Loss. (t) “Nonrecourse Deductions” has the meaning as set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c). (u) “Nonrecourse Liability” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2). (v) “Ownership Percentage” means, with respect to any Member, the quotient of (i) the sum of the number such Member’s (A) Series A Preferred Units, (B) Vested Common Units and (C) Vested Class P Units divided by (ii) the sum of all outstanding (A) Series A Preferred Units, (B) Vested Common Units and (C) Vested Class P Units. (w) “Person” means an individual, a corporation, a partnership, a joint venture, a trust, an unincorporated organization, a limited liability company, a government and any agency or political subdivision thereof. (x) “QPO” means the LLC’s (or the Successor Corporation’s) first underwritten public offering pursuant to an effective registration statement under the Securities Act, covering the offering and sale of Units or common stock in the Successor Corporation (i) at a price per Unit or share of common stock of not less than $4.00 (appropriately adjusted for splits, dividends, combinations, recapitalizations and the like of the Units or common stock), (ii) with respect to which the LLC or the Successor Corporation receives aggregate net proceeds attributable to sales Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 184 of 258 PageID #: 202 6 for the account of the LLC or the Successor Corporation (after deduction of underwriting discounts and commissions) of not less than $50,000,000, and (iii) with respect to which such Units or common stock are listed for trading on either the New York Stock Exchange or the NASDAQ National Market. (y) “Sale Event” means (i) a transaction or series of related transactions in which a Person, or a group of related Persons, acquires from the Members Units representing more than fifty percent (50%) of the outstanding voting power of the LLC or a Subsidiary (a “Unit Sale”), (ii) any merger, consolidation or reorganization of the LLC or a Subsidiary into or with another entity (except one in which the holders of Units of the LLC immediately prior to such merger or consolidation continue to hold at least a majority of the voting power of the Units or other capital stock of the surviving entity), or (iii) any sale, license, lease or transfer of all or substantially all of the assets of the LLC or all of its Subsidiaries. (z) “Series A Majority Interest” means the Members holding at least a majority of the then outstanding Series A Preferred Units. (aa) “Series A Preferred Units” means the Series A Preferred Units of the LLC. (bb) “Series A Preferred Unreturned Contributions” means, with respect to the Series A Preferred Units of a Member, as of the date of determination, the total Capital Contribution (as set forth in Schedule A) of such Member (and such Member’s predecessors in interest) with respect to such Series A Preferred Units less aggregate distributions to such Member pursuant to Section 8.01(a)(ii) in respect of such Series A Preferred Units from the applicable date of issuance until the applicable date of determination. (cc) “Series A Unpaid Preferred Return” means, with respect to the Series A Preferred Units of a Member for any period, an amount equal to 8% per annum (accruing daily and compounding annually) on the Series A Preferred Unreturned Contributions and any Series A Unpaid Preferred Return of each Member, less aggregate distributions to each such Member pursuant to Section 8.01(a)(i) in respect of such Series A Preferred Units from the applicable date of issuance until the applicable date of determination. (dd) “Successor Corporation” means the corporation, if any, which succeeds the LLC in connection with a QPO pursuant to the application of Section 11.05. (ee) “Transfer” means any direct or indirect transfer, donation, sale, assignment, pledge, hypothecation, grant of a security interest in or other disposal or attempted disposal of all or any portion of a security, any interest or rights in a security, or any rights under this Agreement. “Transferred” means the accomplishment of a Transfer, and “Transferee” means the recipient of a Transfer. (ff) “Units” means, collectively, the Series A Preferred Units, the Common Units and the Class P Units. (gg) “Unvested Class P Units” means Class P Units which are not yet vested pursuant to the vesting provisions set forth in the Equity Incentive Plan and the applicable Award Agreement thereunder. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 185 of 258 PageID #: 203 7 (hh) “Unvested Common Units” means Common Units which are not yet vested pursuant to the application of the vesting provisions set forth in Schedule B hereto. (ii) “Vested Class P Units” means Class P Units which are vested pursuant to the application of vesting provisions set forth in the Equity Incentive Plan and the applicable Award Agreement thereunder. (jj) “Vested Common Units” means Common Units which are vested pursuant to the application of the vesting provisions set forth in Schedule B hereto. Term Section Preamble Schedule B Schedule B 1.02 9.04(b) 9.06(b) 9.09(c) Preamble 2.02(e) 1.02 3.06 7.01(a) 7.02 Schedule B 1.02 2.12(a) 1.05 9.04(c) 9.04(a) 9.05(b) 9.05(b) 9.05(a) 9.05(a) 9.04(a) 9.04(c) 9.04(a) 9.04 Preamble 2.15 3.01 7.03(a) 2.02(d) 5.07(a) 4.01 Acquisition Acquisition Date Acquisition Units Act Additional Common Offer Notice Additional Preferred Offer Notice Agent Agreement Benchmark Amount Board Board Observer Capital Account Capital Contribution Cause Certificate Closing Date Code Common Acceptance Notice Common Buyer Common Co-Sale Acceptance Notice Common Co Sale Election Period Common Co-Sale Notice Common Co-Sale Option Common Offer Notice Common Option Period Common Rights Holders Common Transferring Member Company Confidential Information Directors Eligible Member Equity Incentive Plan Exchange Act Executive Officer Fiscal Year 1.05 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 186 of 258 PageID #: 204 8 Term Section 2.12(a) Schedule B 8.04(c) Preamble 3.01 5.07(a) 5.07(a) Preamble 11.15 8.02 Preamble 9.04(b) 9.04(b) 9.06(b) 9.06(b) Preamble 5.07(a) Preamble 9.10(a) Schedule B 9.04(a) 9.06(a) 4.01 Preamble 2.03(c)(ii) 4.06(a) Schedule B 9.02 7.03(b) 7.03(b) 7.03(a) 9.06(c) 9.06(a) 9.07(b) 9.07(b) 9.07(a) 9.07(a) 9.06(a) 9.06(c) 9.06(a) 9.06 2.03(a) 7.03(c) 9.04(d) GAAP Grant Date Imputed Underpayment Amount Investor Investor Directors Investor Indemnified Party Investor Indemnified Parties Investors IRS Notice Liquidation Event LLC LLC Common Acceptance Notice LLC Common Option Period LLC Preferred Acceptance Notice LLC Preferred Option Period LLC Losses Members Member’s Owner MOIC Offered Common Units Offered Preferred Units Officers Original LLC Agreement Participating Redeeming Holders Partnership Representative Performance Units Permitted Transferee Pre-Emptive Right Acceptance Election Period Pre-Emptive Right Acceptance Notice Pre-Emptive Right Notice Preferred Acceptance Notice Preferred Buyer Preferred Co-Sale Acceptance Notice Preferred Co-Sale Election Period Preferred Co-Sale Notice Preferred Co-Sale Option Preferred Offer Notice Preferred Option Period Preferred Rights Holders Preferred Transferring Member Preferred Unit Redemption Date Pro Rata Allotment Pro Rata Common Fraction Pro Rata Preferred Fraction 9.06(d) Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 187 of 258 PageID #: 205 9 Term Section Proposed Common Transaction 9.04 Proposed Preferred Transaction 9.06 Proposed Sale Event 9.09(b) Purchase Agreement Preamble Purchase Price 10.05(a) Redemption Notice 2.03(a) Redemption Acceptance Notice 2.03(c)(i) Redemption Offer 2.03(c) Redemption Offer Notice 2.03(c)(i) Remaining Common Units 9.04(b) Remaining Preferred Units 9.06(b) Revised Partnership Audit Provisions 4.06(e) Safe Harbor Election Securities Act 11.15 5.07(a) Selling Investors 9.09(a) Sponsor Indemnitors 5.08 Subscription Agreements Preamble Subsidiary 2.05(a) Tax Distribution 8.01(d) Tax Liability 8.01(d) Tax Rate 8.01(d) Taxable Year 1.05 Terminating Member 10.05 Treasury Regulations 7.01(a) Trigger Event Withholding Payment Schedule B 8.04(a) 1.02 Organization. The LLC has been formed by the filing of its Certificate of Formation (as the same may be amended, the “Certificate”) with the Delaware Secretary of State on January 31, 2023 pursuant to the Delaware Limited Liability Company Act (6 Del. C § 18-101, et seq.) (as amended from time to time, the “Act”). The registered agent and registered office of the LLC in Delaware shall initially be The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The Certificate of Formation may be restated by the Board of Directors of the LLC (the “Board”), as provided in the Act or amended by the Board with respect to the address of the registered office of the LLC in Delaware and the name and address of its registered agent in Delaware or to make corrections required by the Act. 1.03 Purposes and Powers. The principal business activity and purpose of the LLC shall initially be to acquire, indirectly through a wholly owned subsidiary formed in connection with the Acquisition, substantially all of the assets of the Company, which engages in the business of (a) providing search engine optimization, search engine marketing, digital marketing services, and all other services provided by the Company, and (b) providing any other services or products that the Company provides. The LLC shall have authority to engage in any other lawful business, purpose or activity permitted by the Act, and it shall possess and may exercise all of the powers and privileges granted by the Act or which may be exercised by any Person, together with any Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 188 of 258 PageID #: 206 10 powers incidental thereto, so far as such powers or privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the LLC, including without limitation the following powers: (a) to conduct its business and operations in any state, territory or possession of the United States or in any foreign country or jurisdiction; (b) to purchase, receive, take, lease or otherwise acquire, own, hold, improve, maintain, use or otherwise deal in and with, sell, convey, lease, exchange, transfer or otherwise dispose of, mortgage, pledge, encumber or create a security interest in all or any of its real or personal property, or any interest therein, wherever situated; (c) to borrow or lend money or obtain or extend credit and other financial accommodations, to invest and reinvest its funds in any type of security or obligation of or interest in any public, private or governmental entity, and to give and receive interests in real and personal property as security for the payment of funds so borrowed, loaned or invested; (d) to enter into contracts, including contracts of insurance, incur liabilities and give guaranties, whether or not such guaranties are in furtherance of the business and purposes of the LLC, including without limitation, guaranties of obligations of other persons who are interested in the LLC or in whom the LLC has an interest; (e) to appoint one or more managers of the LLC, to employ officers, employees, agents and other persons, to fix the compensation and define the duties and obligations of such personnel, to establish and carry out retirement, incentive and benefit plans for such personnel, and to indemnify such personnel to the extent permitted by this Agreement and the Act; (f) to institute, prosecute, and defend any legal action or arbitration proceeding involving the LLC, and to pay, adjust, compromise, settle, or refer to arbitration any claim by or against the LLC or any of its assets; and (g) to engage in any lawful act or activity which may be conducted by a limited liability company formed pursuant to the Act and to engage in all activities necessary pursuant or incidental to the foregoing. Notwithstanding anything contained herein to the contrary, nothing set forth herein shall be construed as authorizing the LLC to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Delaware. 1.04 Principal Place of Business. The principal office and place of business of the LLC shall be in or around Miami, Florida. The Board may change the principal office or place of business of the LLC at any time and may cause the LLC to establish other offices or places of business in various jurisdictions and appoint agents for service of process in such jurisdictions. 1.05 Fiscal Year; Taxable Year. The fiscal year of the LLC (the “Fiscal Year”) shall be the same as the taxable year (with respect to any Person, a “Taxable Year”) of the LLC. The “Taxable Year” of the LLC shall be the calendar year unless otherwise required under the Internal Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 189 of 258 PageID #: 207 11 Revenue Code of 1986, as amended (the “Code”) or designated by the Board consistent with the Code and Treasury Regulations. 1.06 Qualification in Other Jurisdictions. The Executive Officer(s) shall cause the LLC to be qualified or registered under applicable laws of any jurisdiction in which the LLC transacts business and shall be authorized to execute, deliver and file any certificates and documents necessary to effect such qualification or registration, including without limitation, the appointment of agents for service of process in such jurisdictions. 1.07 Term. The term of the LLC shall be perpetual from the date of the filing of the Certificate with the Secretary of State of the State of Delaware, unless the LLC is dissolved in accordance with the provisions of this Agreement. ARTICLE 2 MEMBERS 2.01 Members. The initial Members of the LLC and their addresses shall be listed on Schedule A and said schedule shall be amended from time to time to reflect the withdrawal of Members and the admission of additional Members pursuant to this Agreement. The Members shall constitute a single class or group of members of the LLC for all purposes of the Act, unless otherwise explicitly provided herein. The Executive Officer(s) shall notify the Members of changes in Schedule A which shall constitute the record list of the Members for all purposes of this Agreement and, subject to Section 2.09 below, the Executive Officer(s) shall provide a copy of Schedule A to any Member upon request. 2.02 Units. (a) In General. The Members shall have no equity interest in the LLC other than the interest conferred by this Agreement representing, with respect to any Member at any particular time, that Member’s Units. Every Member by virtue of having become a Member shall be held to have expressly assented and agreed to the terms hereof and to have become a party hereto. Ownership of a Unit by itself shall not entitle a member to any title in or to the whole or any part of the property of the LLC or right to call for a partition or division of the same or for an accounting. (b) Designation of Units. The LLC is authorized to have three (3) classes of Units, designated as Series A Preferred Units, Common Units and Class P Units. The LLC is authorized to issue up to the following number of Units: (i) 7,000,000 Series A Preferred Units, (ii) 2,333,333 Common Units and (iii) 1,037,037 Class P Units. Subject to Section 2.05(a) and Section 7.03, the Board has the exclusive authority to (x) issue Units and to authorize additional Units for issuance and (y) adopt the Equity Incentive Plan or similar plans to issue Class P Units to employees, directors or consultants of the LLC or any of its Subsidiaries pursuant to the terms of this Agreement (including Schedule B hereto). Any Common Units held by the Common Unit Holder or any Class P Units held by any other employees, directors or consultants of the LLC or any of its Subsidiaries shall initially be designated as either Unvested Common Units or Vested Common Units as more fully set forth on Schedule B hereto or Unvested Class P Units or Vested Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 190 of 258 PageID #: 208 12 Class P Units as set forth in the Equity Incentive Plan and the applicable Award Agreement thereunder and shall be subject to the vesting provisions set forth thereon or therein, as applicable. (c) Initial Capital Contribution. Each Investor and each other Member has made the initial Capital Contribution set forth opposite his, her or its name and as allocated among Units on Schedule A attached hereto. (d) No Reduction in Member’s Units. Except as otherwise provided in this Agreement (including Schedule B hereto), an equity incentive plan to be approved by the Board (the “Equity Incentive Plan”) or any Award Agreements thereunder, the number of Units held by a Member shall not be reduced without such Member’s consent. (e) Common Units; Class P Units. Unless otherwise designated by the Board, Common Units issued to the Common Unit Holder on the date hereof and Class P Units issued after the date hereof are intended to be “profits interests” for U.S. federal income tax purposes within the meaning of Revenue Procedure 93-27, I.R.B. 1993-24, and Revenue Procedure 2001- 43, I.R.B. 2001-34. The terms of such Common Units and Class P Units, including the right to participate in distributions under this Agreement, may be subject to such limitations and other requirements as the Board may determine is necessary or appropriate for such interests to so qualify as profits interests for U.S. federal income tax purposes. In furtherance of such intent, notwithstanding any provision in this Agreement to the contrary: (i) no items of income, gain, loss, deduction or credit shall be allocated to any Member in respect of such Member’s Common Units or Class P Units to the extent such items relate to any unrealized income, gain, loss, deduction or credit of the LLC as of the issuance date of such Common Units or Class P Units, as applicable; (ii) any distribution by the LLC to any Member in respect of such Member’s Common Units or Class P Units shall be limited to the minimum extent necessary to be consistent with the treatment of such Common Units or Class P Units, respectively, as a “profits interest” for U.S. federal income tax purposes; and (iii) such Common Units and Class P Units shall be subject to such additional terms and conditions as may be set forth in Schedule B hereto with respect to the Common Units or, with respect to the Class P Units, in the Equity Incentive Plan or such other equity incentive plan(s) that may be adopted by the Board. The Board (or its designee) shall set a benchmark amount with respect to each grant of Common Units or Class P Units (the “Benchmark Amount),” which shall normally represent the aggregate amount that would have been distributed to the holders of all of the Units pursuant to Article 8, if immediately prior to the issuance of such Common Units or Class P Units, as applicable, the LLC had sold its assets for their fair market value, paid its obligations (including, without limitation, any preference amounts) and liabilities (limited, in the case of nonrecourse liabilities, to the collateral securing or otherwise available to satisfy such liabilities) and distributed the net proceeds to its Members pursuant to Section 8.02. The Board (or its designee) shall, however, have the authority and discretion to establish any Benchmark Amount that is at least equal to the fair market value of the LLC or to adjust any previously established Benchmark Amount (including, but not limited to, as may be appropriate to account for subsequent capital investments in the LLC). The Board’s (or its designee’s) determination of the Benchmark Amount shall be final, binding and conclusive on the holders of Common Units and Class P Units for which the Benchmark Amount was determined, the other Members and the LLC. Each Benchmark Amount established with respect to any Common Units or Class P Units, as applicable, shall be set forth in the books and records of the LLC, which shall be updated from time to time to reflect any adjustments to the Benchmark Amount. Except as Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 191 of 258 PageID #: 209 13 required by any non-waivable provision of the Act, the Class P Units shall be non-voting. Each Award Agreement granting Class P Units will include an affirmative statement including language that such interests are intended to represent profits interests for U.S. federal income tax purposes in the LLC and that holders of such Class P Units shall only be entitled to receive a distribution thereunder if and only to the extent that the amounts distributed since the issuance of such Class P Units exceeds such Class P Unit’s Benchmark Amount. For the avoidance of doubt and in furtherance of the foregoing, any Member holding Common Units or Class P Units hereby acknowledges and agrees that such Member shall only be entitled to receive a distribution hereunder, (x) if such Common Units or Class P Units, as applicable, are Vested Common Units or Vested Class P Units, respectively, as of the date of the distribution (pursuant to the terms of the applicable grant of such Common Units or Class P Units) and (y) only to the extent that the distribution amount (taking into account any earlier distributions to which such unit was entitled) exceeds such Unit’s Benchmark Amount. Notwithstanding the foregoing, holders of Common Units and Class P Units shall be entitled to receive Tax Distributions pursuant to Section 8.01(d) to the extent they have a Tax Liability attributable to their Common Units or Class P Units, respectively. 2.03 Redemption. (a) At any one time any holder of Series A Preferred Units may elect to have all (but not less than all) of its outstanding Series A Preferred Units redeemed by the LLC. Any election pursuant to this Section 2.03(a) shall be made by written notice to the LLC (each such notice, the “Redemption Notice”) which notice shall be delivered at least ten (10) days prior to the elected redemption date (such date, the “Preferred Unit Redemption Date”). In such event, the LLC shall redeem the number of Series A Preferred Units set forth in the Redemption Notice out of funds legally available therefor, for an aggregate purchase price of $1.00, regardless of the number of Units redeemed. (b) Notwithstanding the redemption of any Units pursuant to Section 2.03(a), the redeemed holder of Units (i) shall not be relieved of any liability with respect to the redeemed Units existing as of, or arising or accruing on or after, the Preferred Unit Redemption Date and (ii) shall remain liable for its pro-rata share of any forgiveness of indebtedness income as provided by the Code, as amended, and the regulations promulgated thereunder for a period of two (2) years from the Preferred Unit Redemption Date. (c) The LLC may from time to time offer to redeem holders of Series A Preferred Units at a price determined by the Board as follows (such offer, a “Redemption Offer”): (i) The LLC shall provide a notice of the Redemption Offer (a “Redemption Offer Notice”) to all holders of Series A Preferred Units, and each holder of Series A Preferred Units shall have fifteen (15) days after receipt of the Redemption Offer Notice to respond to the LLC with its intent to be redeemed (a “Redemption Acceptance Notice”). In the event that a Redemption Acceptance Notice with respect to a holder of Series A Preferred Units is not received by the Company on or prior to the fifteenth (15th) day following the date on which the Redemption Offer Notice is provided, then such holder shall be deemed to have waived its right to participate in such Redemption Offer. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 192 of 258 PageID #: 210 14 (ii) Upon the LLC’s receipt of any Redemption Acceptance Notice from the participating Members (“Participating Redeeming Holders”), the Board shall determine the amount of available funds for such redemption and shall determine on a pro rata or other reasonably determined basis, the number of Series A Preferred Units to be redeemed in accordance with the Redemption Offer. (iii) A Redemption Offer may be withdrawn by the LLC at any time prior to the consummation of the redemption transaction. A Participating Redeeming Holder shall execute a standard form of redemption agreement provided by the LLC effective as of the date and time of the consummation of such redemption transaction. 2.04 Action by Members. No annual meeting of Members is required to be held. Any action required or permitted to be taken at any meeting of Members may be taken without a meeting if one or more written consents to such action shall be signed by the Members holding the amount of Units required to approve the action being taken. Such written consents shall be delivered to the Executive Officer(s) at the principal office of the LLC and, unless otherwise specified, shall be effective on the date when the first consent is so delivered. The Executive Officer(s) shall give prompt notice to all Members who did not consent to any action taken by written consent of Members without a meeting. 2.05 Voting Rights. Unless otherwise required by the Act or specified elsewhere in this Agreement, all actions, approvals and consents to be taken or given by the Members under the Act, this Agreement or otherwise shall require only the affirmative vote or the written consent of a Series A Majority Interest. Vested Common Unit holders will have voting rights with respect to matters voted on by all Members. (a) Notwithstanding anything to the contrary in this Agreement, the LLC shall not take and shall restrict its direct and indirect subsidiaries (“Subsidiary” or “Subsidiaries”) from taking any of the following actions directly or indirectly without the prior approval of a Series A Majority Interest: (i) amending or making changes to the LLC’s governing documents, including without limitation its operating agreement, adversely affecting the rights, privileges or preferences of the Series A Preferred Units, or the adoption of any new, or amendments to any existing, or changing the size, powers or composition of the Board; (ii) authorizing, incurring or issuing any equity interests with rights or preferences senior or pari passu with the Series A Preferred Units, or effecting an initial public offering; and (iii) declaring or paying any dividend or distribution, or the redemption (other than pursuant to Section 2.03 above and Section 10.05 below) or acquisition of any Units of the LLC, other than distributions pursuant to and in accordance with the terms hereof. (b) Notwithstanding anything to the contrary in this Agreement, the LLC shall not take and shall restrict its Subsidiaries from taking any of the following actions directly or indirectly without the prior approval of the Board: Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 193 of 258 PageID #: 211 15 (i) electing to amend or modify the Management Services Agreement, authorizing or effecting any business combination, acquisition, disposition of material assets, merger, consolidation or other Liquidation Event, or initiating any material litigation or related proceeding, or materially changing the nature of the business of the LLC or any of its Subsidiaries; (ii) authorizing or effecting any change to senior management or adopting or amending any equity or non-equity compensation plans or arrangements for senior management; (iii) executing, amending or modifying any material contract or agreement, with payments by the LLC or its Subsidiaries in excess of $150,000 individually, or in the aggregate, which amount may be increased by the Board in its discretion without requiring the prior consent of the Members; (iv) authorizing, incurring or issuing any debt (including guarantees or liens) or entering into any related agreements, including negative pledges; (v) entering into any material settlement or other decision with respect to any litigation, arbitration, mediation, investigation, administrative matter or similar proceeding (including any bankruptcy proceeding in which the LLC has an interest); and (vi) declaring or paying any dividend or distribution in accordance with Article 8 below. 2.06 Limitation of Liability of Members. Except as otherwise provided in the Act, no Member of the LLC shall be obligated personally for any debt, obligation or liability of the LLC or of any other Member, whether arising in contract, tort or otherwise, solely by reason of being a Member of the LLC. Except as otherwise provided in the Act, by law or expressly in this Agreement, no Member solely in his, her or its capacity as a Member of the LLC shall have any fiduciary or other duty to another Member with respect to the business and affairs of the LLC, and no Member shall be liable to the LLC or any other Member for acting in good faith reliance upon the provisions of this Agreement. No Member shall have any responsibility to restore any negative balance in its Capital Account (as defined in Section 7.01) or to contribute to or in respect of the liabilities or obligations of the LLC or return distributions made by the LLC except as required by the Act or other applicable law; provided, however, that Members are responsible for their failure to make required capital contributions under Section 7.02. The failure of the LLC to observe any formalities or requirements relating to the exercise of its powers or the management of its business or affairs under this Agreement or the Act shall not be grounds for making its Members, Directors, managers, or Officers responsible for any liability of the LLC. 2.07 Authority. Unless specifically authorized by the Board, a Member that is not also an Executive Officer shall not be an agent of the LLC or have any right, power or authority to act for or to bind the LLC or to undertake or assume any obligation or responsibility of the LLC or of any other Member. 2.08 No Right to Withdraw. Except as set forth in Article 9 with respect to Transfers of Units or as a result of a redemption of all Units held by a Member pursuant to Section 2.03(a) or Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 194 of 258 PageID #: 212 16 in accordance with Article 10, no Member shall have any right to resign or withdraw from the LLC without the consent of the Board and a Series A Majority Interest. No Member shall have any right to receive any distribution or the repayment of its Capital Contribution, except as provided in Article 8 and Article 10. 2.09 Rights to Information. In place of the rights afforded to Members pursuant to Section 18-305(a) of the Act and notwithstanding any other provision of this Agreement, a holder of Class P Units shall have only the right to such information regarding the LLC (including books, records, business, results of operation, condition (financial or otherwise)) that the Board determines, in its sole discretion, shall be provided or made available and shall not have the right to review or receive copies of the information set forth on Schedule A (except to the extent such information relates to such holder) or Schedule B hereto. All Members shall have the right to receive from the Executive Officer(s) upon request a copy of the Certificate and of this Agreement, as amended from time to time. Members other than the holders of Class P Units shall have the right to such other information regarding the LLC as is required by the Act, subject to reasonable conditions and standards established by the Board or Executive Officer(s) as permitted by the Act, which may include, without limitation, withholding of, or restrictions on, the use of Confidential Information. 2.10 No Appraisal Rights. No Member shall have any right to have its interest in the LLC appraised and paid out under the circumstances provided in Section 18-210 of the Act, or under any other circumstances. 2.11 Compliance with Securities Laws and Other Laws and Obligations. Each Member hereby represents and warrants to the LLC and acknowledges that (a) it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the LLC and making an informed investment decision with respect thereto, (b) it is able to bear the economic and financial risk of an investment in the LLC for an indefinite period of time and understands that it has no right to withdraw and have its interest repurchased by the LLC, (c) it is acquiring an interest in the LLC for investment only and not with a view to, or for resale in connection with, any distribution to the public or public offering thereof, (d) it understands that the equity interests in the LLC have not been registered under the securities laws of any jurisdiction and cannot be disposed of unless they are subsequently registered and/or qualified under applicable securities laws and the provisions of this Agreement have been complied with, and (e) if it is an entity, the execution, delivery and performance of this Agreement does not require it to obtain any consent or approval that has not been obtained and does not contravene or result in a default under any provision of any existing law or regulation applicable to it, any provision of its charter, by-laws or other governing documents (if applicable) or any agreement or instrument to which it is a party or by which it is bound. 2.12 Reports. (a) The LLC shall furnish to each Investor and each holder of Common Units, within one hundred twenty (120) days after the closing of the Acquisition (the “Closing Date”), a consolidated balance sheet of the LLC and its Subsidiaries as of the closing of the Acquisition (the “Closing Date”). Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 195 of 258 PageID #: 213 17 (b) The LLC shall furnish to each Investor, within one hundred and twenty (120) days after the end of each Fiscal Year, a consolidated balance sheet of the LLC and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, members’ equity and cash flows for the Fiscal Year then ended, prepared in accordance with generally accepted accounting principles (“GAAP”) and audited by a firm of independent public accountants of recognized regional standing selected by the Board. (c) The LLC shall furnish to each Investor, within forty-five (45) days after the end of each of the first three (3) quarters of each Fiscal Year, a consolidated balance sheet of the LLC and its Subsidiaries as of the end of such quarter and the related consolidated statements of income, members’ equity and cash flows for the fiscal quarter then ended, prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP). (d) The LLC shall furnish to each Investor, as soon as practicable, but in any event within forty-five (45) days following the end of each Fiscal Year, a budget for the applicable Fiscal Year, prepared on a quarterly basis, including balance sheets, income statements, and statements of cash flow for such quarters and, promptly after prepared, any other budgets or revised budgets prepared by the LLC. (e) The LLC shall furnish to each Investor, as soon as practicable, but in any event on or prior to April 10 following the end of each Fiscal Year (and no later than fifteen (15) days following delivery of any audited consolidated balance sheet prepared for the LLC and its Subsidiaries as of the end of such Fiscal Year), a Schedule K-1 (and any comparable foreign, state or local schedules or forms required by law to be provided). The LLC shall provide each Investor with its good faith estimate of the information that will be contained on such Schedule K-1 by February 28, unless the LLC delivers such K-1 on or prior to February 28. 2.13 Inspection. The LLC shall permit and cause each of its Subsidiaries to permit the Investors and such persons as such Investor may designate, at such Investor’s expense, to (a) visit and inspect any of the properties of the LLC and its Subsidiaries, examine their books and take copies and extracts therefrom, discuss the affairs, finances and accounts of the LLC and its Subsidiaries with their officers, employees and public accountants (and the LLC hereby authorizes said accountants to discuss with such Investor and such designees such affairs, finances and accounts), and (b) consult with the management of the LLC and its Subsidiaries as to their affairs, finances and accounts, in each case, all at reasonable times and upon reasonable notice during normal business hours; provided, however, that the LLC or its Subsidiaries shall not be obligated under this Section 2.13 to provide information (i) that the LLC or its Subsidiaries reasonably determines in good faith to be a trade secret or Confidential Information (unless covered by an enforceable confidentiality agreement, in form acceptable to the LLC or its Subsidiaries) or (ii) the disclosure of which would adversely affect the attorney-client privilege between the LLC or its Subsidiaries and its counsel. 2.14 Admission of New Members. The LLC, with the consent of the Board and subject to the rights of Members contained in this Agreement (including without limitation the rights contained in Section 2.05(a) and Section 7.03), is authorized to offer and sell, or cause to be offered and sold, additional Units and to exchange or cause to be exchanged additional Units for securities Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 196 of 258 PageID #: 214 18 or other property both in accordance with the provisions hereof and to admit additional persons to the LLC as Members who may participate in the profits, losses, distributions, allocations and capital contributions of the LLC upon such terms as are established by the Board, which may include the authorization and issuance of additional Units or the designation and issuance of new classes of units or the establishment of classes or groups of one or more Members having different relative rights, powers and duties, including without limitation, rights and powers that are superior to those of existing Members, or the right to vote as a separate class or group on specified matters, by amendment of this Agreement under Section 11.04. The Board may establish eligibility requirements for admission of a subscriber as a Member and refuse to admit any subscriber that fails to satisfy such eligibility requirements. New Members shall be admitted at the time when all conditions to their admission have been satisfied, as determined by the Board, and their identity and Units (including their Capital Contribution, if any), as applicable, have been established by amendment of Schedule A. 2.15 Confidentiality. As used herein, “Confidential Information” means all confidential or proprietary information about the LLC, its Subsidiaries or any of their respective Affiliates and businesses, including, without limitation, financial statements, reports, and this Agreement, and any confidential or proprietary information about the LLC, its Subsidiaries or any of their respective businesses to which a Member is provided access. Each Member agrees to use such Confidential Information solely for purposes reasonably related to such Member’s investment in the LLC, and to maintain all Confidential Information in the strictest confidence and not to disclose Confidential Information to any Person other than its fiduciaries, agents, investors, or advisors who are subject to obligations of confidentiality at least as restrictive with respect to disclosure and use as the provisions of this Section 2.15. Each Member also may disclose Confidential Information to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to such Member. A Member’s obligation hereunder shall not apply to any Confidential Information that becomes publicly available through no fault or act of the Member or the disclosure of which is required by a court or governmental authority or otherwise required by law. ARTICLE 3 BOARD OF DIRECTORS 3.01 Board Composition. The Board shall initially consist of up to five (5) persons (the “Directors”), who shall be elected by a Majority Interest. Each Member agrees that such Member will vote all of its Units at each election of Directors in favor of three (3) persons nominated by a Series A Majority Interest, who shall initially be John Shoaf, Catrina Bachmann, for so long as she remains an officer of 1SEO Digital Agency, and Jeffrey Strickler. To the extent that the Board establishes any committees or subcommittees of the Board, John Shoaf will have the right to serve on each such committee or subcommittee. Each Director shall be entitled to one vote. 3.02 Removal; Vacancies. Each Member agrees to vote all of its Units for the removal of any Director upon the request of the party then entitled to nominate such Director as set forth in Section 3.01 above, and for the election to the Board of a substitute designated by such party in accordance with the provisions hereof. Each Member further agrees to vote all of its Units in such manner as shall be necessary or appropriate to ensure that any vacancy on the Board occurring for any reason shall be filled only in accordance with the provisions of this Article 3. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 197 of 258 PageID #: 215 19 3.03 Board; General. (a) The Directors are deemed to be the managers of the LLC; provided, however, that any action to be taken by the Directors as managers of the LLC shall be taken by the Board only as provided herein and the Board itself shall have all of the rights, powers and obligations of a “manager” of the LLC as provided in the Act and as otherwise provided by law. The Directors may delegate (by meeting, e-mail and/or any other source of communication deemed appropriate by the Directors), and as set forth in this Agreement shall have delegated, any or all of such rights, powers and obligations to the Executive Officers (as defined in Section 4.01) of the LLC. (b) The Board may adopt such procedures as it may in good faith deem appropriate to make decisions regarding use or investment of the LLC’s capital, authorization of capital calls, budget of the LLC, the election of board seats of all portfolio companies in which the LLC invests, financings, dispositions of the LLC’s assets and other business of the LLC. The Board will meet at least quarterly, at mutually convenient times, to discuss such matters pertaining to the LLC as the Board may request. Unless otherwise required by the Act or specified elsewhere in this Agreement, all actions taken by the Board shall be taken by majority vote at a meeting of the Board or by written consent of a majority of the Directors at that time. The Board may grant consent via electronic mail if (i) such consent is unanimous and (ii) each electronic mail message is delivered to the Executive Chairman. Persons other than the Executive Chairman and Directors may attend meetings of the Board from time to time in the discretion of the Board on such terms as the Board may require. (c) Notice of any meeting of the Board shall be given to each Director by the Secretary, the Executive Chairman or one of the Directors calling the meeting. Notice shall be duly given to each Director (i) by giving notice to such Director in person or by telephone at least two (2) business days in advance of the meeting, (ii) by sending an e-mail, or facsimile transmission, or delivering written notice by hand, to such Director’s last known business or home address at least two (2) business days in advance of the meeting, or (iii) by mailing written notice to this last known business or home address at least five (5) days in advance of the meeting. A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting. Any Director attending a meeting shall be deemed to have waived notice of such meeting. (d) Directors or any members of any committee designated by the Board may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. 3.04 Limitation of Liability of Board. Except as otherwise provided in the Act, no Director of the LLC shall be obligated personally for any debt, obligation or liability of the LLC or of any other Member, whether arising in contract, tort or otherwise, solely by reason of being a Director. Except as otherwise provided in the Act, by law or expressly in this Agreement, no Director shall have any fiduciary or other duty to another Member with respect to the business and affairs of the LLC, and no Director shall be liable to the LLC or any other Member for acting in good faith reliance upon the provisions of this Agreement. No Director shall be personally liable Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 198 of 258 PageID #: 216 20 to the LLC or to its Members for acting in good faith reliance upon the provisions of this Agreement, or for breach of any fiduciary or other duty that does not involve (a) acts or omissions in bad faith or which involve intentional misconduct or a knowing violation of law or (b) a transaction from which the Director derived an improper personal benefit. The failure of the LLC to observe any formalities or requirements relating to the exercise of its powers or the management of its business or affairs under this Agreement or the Act shall not be grounds for making the Directors responsible for any liability of the LLC. 3.05 Expenses. Each Director serving on the Board, other than an Officer, employee or consultant may be compensated by the LLC, as determined by the Board, for his or her Board duties; provided, that, such compensation shall not exceed $15,000in the twelve (12) month period following the date hereof per applicable Director for his or her Board duties. For any one (1) year period following the one (1) year anniversary of the date hereof, the Board shall determine the annual compensation for each applicable Director for his or her duties during such one (1) year period. The LLC shall reimburse all Directors for travel and other reasonable expenses associated with Board responsibilities or any committee thereof. 3.06 Observer Rights. The Board may appoint one or more non-voting Board observers (each a “Board Observer”) who shall each receive the same materials provided to the Board for each meeting at substantially the same time as all Board members receive such materials. The Board may remove any Board Observer at any time in its sole discretion. Notwithstanding the foregoing, the Board reserves the right to withhold any information and to exclude any Board Observer from any meeting, portion thereof or Board materials if access to such information or attendance at such meeting could reasonably be expected to adversely affect the attorney-client privilege between the LLC and its counsel or result in disclosure of trade secrets or involves a discussion of any matters in which the excluded Board Observer is reasonably likely to have an adverse interest in any material respect. ARTICLE 4 MANAGEMENT 4.01 Officers. The business of the LLC shall be managed under the direction of the Board (and the Board shall be deemed to be the manager of the LLC as set forth in Section 3.02 hereof) who may exercise all the powers of the LLC, except as provided by law or this Agreement. The Board shall have the discretion to determine the duties of one or more of the following officers of the LLC: Executive Chairman, President, Vice President, Treasurer, Secretary, and any other Officers as determined by the Board (each individually an “Officer” and, collectively the “Officers”) and shall have the authority to delegate any or all of its duties as manager to certain of such Officers (the “Executive Officers” and each individually, an “Executive Officer”). The initial Executive Chairman and Vice President of the LLC shall be John Shoaf and Catrina Bachmann, respectively. 4.02 Qualification. The Officers may, but are not required to, be Members and shall hold office until their death, disability, resignation or removal. 4.03 Reliance by Third Parties. Any person dealing with the LLC, the Executive Officers or any Member may rely upon a certificate signed by any Executive Officer as to (a) the Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 199 of 258 PageID #: 217 21 identity of any Officer or Member, (b) any factual matters relevant to the affairs of the LLC; (c) the persons who are authorized to execute and deliver any document on behalf of the LLC; or (d) any action taken or omitted by the LLC, the Officers or any Member. 4.04 Compensation. The Officers shall receive such compensation for their services and benefits as may be approved from time to time, but no less than annually, by the Board. In addition, the Officers shall be entitled to reimbursement for reasonable out-of-pocket expenses incurred in managing and conducting the business and affairs of the LLC. 4.05 Limitation of Liability of Officers. No Officer shall be obligated personally for any debt, obligation or liability of the LLC or of any Member, whether arising in contract, tort or otherwise, solely by reason of being or acting as an Officer of the LLC. No Officer shall be personally liable to the LLC or to its Members for acting in good faith reliance upon the provisions of this Agreement, or for breach of any fiduciary or other duty that does not involve (a) a breach of the duty of loyalty to the LLC or its Members, (b) acts or omissions in bad faith or which involve intentional misconduct or a knowing violation of law; or (c) a transaction from which the Officer derived an improper personal benefit. 4.06 Tax Matters. (a) A Person designated by the Board shall serve as the “Partnership Representative” under Section 6223 of the Code. The Partnership Representative shall have all powers necessary and appropriate in connection therewith including, without limitation, overseeing and handling matters relating to the taxation of the LLC, and as the Partnership Representative, such Person shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Partnership Representative. The Partnership Representative shall be entitled to be reimbursed for all reasonable out-of-pocket expenses properly incurred in his, her or its capacity as Partnership Representative. (b) The Partnership Representative shall promptly advise the other Members upon receiving written notice of any audits or other actions by the IRS or other taxing authority with respect to the LLC. The Partnership Representative shall not take any action in connection with a tax audit, without approval of the Board. Notwithstanding the foregoing, the Board shall not make any decision related to material taxes that would have a disproportionately adverse impact on any Member as compared with the other Members. (c) The Partnership Representative may make all elections for U.S. federal income and all other tax purposes (including, without limitation, pursuant to Section 754 of the Code), subject to Section 8.05(c). (d) Income tax returns of the LLC shall be prepared in a timely manner by such certified public accountant(s) as the Partnership Representative shall retain at the expense of the LLC. (e) The Board is authorized to cause the Partnership Representative to make any election or other decision on behalf of the LLC or the Members that is provided or contemplated by Sections 6221-6241 of the Code as amended by Section 1101 of P.L. 114-74 (The Bipartisan Budget Act of 2015) or any amendment thereof, or regulations, notices or other Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 200 of 258 PageID #: 218 22 guidance issued thereunder (the “Revised Partnership Audit Provisions”), including an election the effect of which will be a legal imposition on one or more current or former partners or members to reflect IRS adjustments to income, gain, loss, deduction or credit in certain federal income tax returns of such partners or members and to pay associated federal income taxes, interest and penalties. The Members agree to provide such information as the Board may request in connection with the Revised Partnership Audit Provisions. ARTICLE 5 INDEMNIFICATION 5.01 Officer/Director Indemnification. Except as limited by law and subject to the provisions of this Article 5, the LLC shall indemnify each Indemnified Party against all expenses incurred by them in connection with any proceeding in which an Indemnified Party is involved as a result of serving in such capacity, except that no indemnification shall be provided for an Indemnified Party regarding any matter as to which it shall be finally determined (a) that said Indemnified Party did not act in good faith and in the reasonable belief that such Indemnified Party’s action was in the best interests of the LLC, or (b) with respect to a criminal matter, that said Indemnified Party had reasonable cause to believe that such Indemnified Party’s conduct was unlawful. Subject to the foregoing limitations, such indemnification may be provided by the LLC with respect to a proceeding in which it is claimed that an Indemnified Party received an improper personal benefit by reason of its position, regardless of whether the claim arises out of the Indemnified Party’s service in such capacity, except for matters as to which it is finally determined that an improper personal benefit was received by the Indemnified Party. 5.02 Award of Indemnification. An Indemnified Party may only be determined to be ineligible for indemnification if a determination is made by independent legal counsel appointed by the Board that indemnification of such Indemnified Party would be a violation of law or inconsistent with the provisions of Section 5.01. 5.03 Successful Defense. Notwithstanding any contrary provisions of this Article 5, to the extent an Indemnified Party has been successful, in whole or in part, on the merits in the defense of any proceeding in which it was involved by reason of its position as an Indemnified Party or as a result of serving in such capacity (including termination of investigative or other proceedings without a finding of fault on the part of the Indemnified Party), the Indemnified Party shall be indemnified by the LLC against all, or the pro rata portion to the extent partially successful, of the Expenses incurred by the Indemnified Party in connection therewith. 5.04 Advance Payments. Except as limited by law or the provisions of this Article 5, expenses incurred by an Indemnified Party in defending any proceeding, including a proceeding by or in the right of the LLC, shall be paid by the LLC to the Indemnified Party in advance of final disposition of the proceeding. The LLC may require that such Indemnified Party execute a written undertaking to repay the amount of any advance if the Indemnified Party is determined pursuant to this Article 5 or adjudicated to be ineligible for indemnification. Any such undertaking by an Indemnified Party shall be an unlimited general obligation of the Indemnified Party, shall not be secured and shall be accepted without regard to the LLC’s analysis of the financial ability of the Indemnified Party to make repayment. No advance payment of expenses shall be made if it is Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 201 of 258 PageID #: 219 23 determined pursuant to Section 5.02 on the basis of the circumstances known at the time (without further investigation) that the Indemnified Party is ineligible for indemnification. 5.05 Insurance. The LLC shall have power to purchase and maintain insurance on behalf of any Indemnified Party, agent or employee against any liability or cost incurred by such person in any such capacity or arising out of its status as such, whether or not the LLC would have power to indemnify against such liability or cost. The LLC shall purchase director and officer indemnification insurance in amounts and on terms satisfactory to the Board. 5.06 Employee Benefit Plan. If the LLC sponsors or undertakes any responsibility as a fiduciary with respect to an employee benefit plan, then for purposes of this Article 5 (a) the term Indemnified Party shall be deemed to include any Officer who serves at its request in any capacity with respect to said plan, (b) said Indemnified Party shall not be deemed to have failed to act in good faith or in the reasonable belief that its action was in the best interests of the LLC if said Indemnified Party acted in good faith and in the reasonable belief that its action was in the best interests of the participants or beneficiaries of said plan, and (c) expenses shall be deemed to include any taxes or penalties imposed upon said Indemnified Party with respect to said plan under applicable law. 5.07 Investor Indemnification. (a) Without limitation of any other provision of this Agreement or any agreement executed in connection herewith, the LLC agrees to defend, indemnify and hold each Investor, its respective Affiliates and direct and indirect partners (including partners of partners and equityholders and investors of partners), investors, equityholders, directors, managers, officers, employees and agents and each person who controls any of them within the meaning of Section 15 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 20 of the Exchange Act of 1934, as amended (the “Exchange Act”) (collectively, the “Investor Indemnified Parties” and, individually, an “Investor Indemnified Party”) harmless from and against any and all damages, liabilities, losses, taxes, fines, penalties, reasonable costs and expenses (including, without limitation, reasonable fees of a single counsel representing the Investor Indemnified Parties), as the same are incurred, of any kind or nature whatsoever (whether or not arising out of third party claims and including all amounts paid in investigation, defense or settlement of the foregoing) which may be sustained or suffered by any such Investor Indemnified Party (“Losses”), based upon, arising out of, or by reason of (i) any breach of any covenant or agreement made by the LLC in this Agreement, or (ii) any third party or governmental claims relating in any way to such Investor Indemnified Party’s status as a securityholder, creditor, director, agent, representative or controlling person of the LLC or otherwise relating to such Investor Indemnified Party’s involvement with the LLC (including, without limitation, any and all Losses under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, which relate directly or indirectly to the registration, purchase, sale or ownership of any securities of the LLC or to any fiduciary obligation owed with respect thereto), including, without limitation, in connection with any third party or governmental action or claim relating to any action taken or omitted to be taken or alleged to have been taken or omitted to have been taken by any Investor Indemnified Party as securityholder, director, agent, representative or controlling person of the LLC or otherwise, alleging so called control person liability or securities law liability; provided, however, that the LLC will not be liable to the extent that such Losses arise from and Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 202 of 258 PageID #: 220 24 are based on (A) an untrue statement or omission or alleged untrue statement or omission in a registration statement or prospectus which is made in reliance on and in conformity with written information furnished to the LLC by or on behalf of such Investor Indemnified Party, or (B) conduct by an Investor Indemnified Party which constitutes fraud or willful misconduct. (b) If the indemnification provided for in Section 5.07(a) above for any reason is held by a court of competent jurisdiction to be unavailable to an Investor Indemnified Party in respect of any Losses referred to therein, then the LLC, in lieu of indemnifying such Investor Indemnified Party thereunder, shall contribute to the amount paid or payable by such Investor Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the LLC and the Investors, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the LLC and the Investors in connection with the action or inaction which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the LLC and the Investors shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the LLC and the Investors and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (c) Each of the LLC and the Investors agrees that it would not be just and equitable if contribution pursuant to Section 5.07(b) were determined by pro rata or per capita allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. (d) An Investor Indemnified Party may only be determined to be ineligible for indemnification if a determination is made by independent legal counsel appointed by the Board that indemnification of such Investor Indemnified Party would be a violation of law or inconsistent with the provisions of Section 5.07(a). 5.08 Non-Exclusivity; Indemnification Agreements. The provisions of this Article 5 shall not be construed to limit the power of the LLC to indemnify its Members, Directors, Officers, employees or agents to the fullest extent permitted by law or to enter into specific agreements, commitments or arrangements for indemnification permitted by law. The absence of any express provision for indemnification herein shall not limit any right of indemnification existing independently of this Article 5. The LLC and each Director concurrently herewith shall enter into indemnification agreements in form and substance satisfactory to the Investors. The right of indemnification hereby provided shall not be exclusive of, and shall not affect, any other rights to which an Indemnified Party or an Investor Indemnified Party may be entitled at law, under other agreements or otherwise. Nothing contained in this Article 5 shall limit any lawful rights to indemnification existing independently of this Article 5. The LLC acknowledges that an indemnified party may have certain rights to indemnification, advancement of expenses and/or insurance provided by its fund sponsor or other Affiliates (collectively, the “Sponsor Indemnitors”). The LLC agrees that (a) it is the indemnitor of first resort (i.e., its obligations to the indemnified party are primary and any obligation of the Sponsor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such indemnified party are secondary), (b) it shall be required to advance the full amount of expenses Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 203 of 258 PageID #: 221 25 incurred by such indemnified party and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement, the LLC’s organizational documents, or any other agreement between the LLC and such indemnified party, without regard to any rights such indemnified party may have against the Sponsor Indemnitors, and (c) it irrevocably waives, relinquishes and releases the Sponsor Indemnitors from any and all claims against the Sponsor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The LLC further agrees that no advancement or payment by the Sponsor Indemnitors on behalf of such indemnified party with respect to any claim for which such indemnified party has sought indemnification from the LLC shall affect the foregoing and the Sponsor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such indemnified party against the LLC. The LLC and such indemnified party agree that the Sponsor Indemnitors are express third-party beneficiaries of the terms of this Section 5.08. ARTICLE 6 CONFLICTS OF INTEREST 6.01 Transactions with Interested Persons. Unless entered into in bad faith, no contract or transaction between the LLC and one or more of its Officers, Directors or Members, or between the LLC and any other Person in which one or more of its Officers, Directors or Members have a financial interest or are directors, partners, managers or officers, that satisfies the conditions below shall be voidable solely for this reason or solely because said Officer, Director or Member was present or participated in the authorization of such contract or transaction. No Officer, Director or Member interested in such contract or transaction, because of such interest, shall be considered to be in breach of this Agreement or liable to the LLC, any Officer, Director or Member, or any other Person for any loss or expense incurred by reason of such contract or transaction or shall be accountable for any gain or profit realized from such contract or transaction if: (a) the material facts as to the relationship or interest of said Officer, Director or Member and as to the contract or transaction were disclosed or known to the Directors or Members and the contract or transaction was authorized by the disinterested Members or Directors; and (b) the contract or transaction was fair to the LLC as of the time it was authorized, approved or ratified by the disinterested Members or Directors. 6.02 Outside Businesses. Any Member, including its owners, or Director, unless also an Officer or current or former employee or consultant of the LLC and 1SEO Digital Agency or its predecessors, may engage or have an interest in other business ventures which are similar to or competitive with the business of the LLC or its Subsidiaries, pursuit of such ventures, even if competitive, shall not be deemed wrongful or improper or give the LLC, its Officers or other Members any rights with respect thereto. No Member or Director, unless also an Officer or current or former employee of the LLC or its Subsidiaries, shall be obligated under this Agreement to present an investment opportunity to the LLC even if it is similar to or competitive with the business of the LLC, and such Member or Director shall have a right to take for its own account or recommend to others any such investment opportunity. Prior Board approval shall be required Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 204 of 258 PageID #: 222 26 for the involvement of any Officer or other current or former employee of the LLC or its Subsidiaries in any potentially competitive outside business activities. Notwithstanding anything herein to the contrary, neither the Executive Chairman nor any of its affiliated entities shall be subject to the limitation set forth in this Section 6.02. ARTICLE 7 CAPITAL ACCOUNTS AND CAPITAL CONTRIBUTIONS 7.01 Capital Accounts. (a) A separate capital account (a “Capital Account”) shall be maintained for each Member in accordance with Section 704(b) of the Code and Section 1.704-1(b)(2)(iv) of the U.S. Treasury Regulations (the “Treasury Regulations”), and this Section 7.01 shall be interpreted and applied in a manner consistent with said Section of the Treasury Regulations. The LLC will maintain Capital Accounts for each Member in accordance with the following provisions: (i) To each Member’s Capital Account there will be credited (A) the amount of money contributed by such Member to the LLC, (B) the initial Gross Asset Value of property contributed by such Member to the LLC, (C) such Member’s distributive share of Net Profit and any items in the nature of income or gain which are specially allocated to such Member pursuant to this Agreement, and (D) the amount of any liabilities of the LLC assumed by such Member or to which any property distributed to such Member is subject; and (ii) From each Member’s Capital Account there will be debited (A) the amount of money distributed to such Member pursuant to any provision of this Agreement, (B) the Gross Asset Value of any property distributed to such Member pursuant to any provision of this Agreement, (C) such Member’s distributive share of Net Loss and any items in the nature of expenses or losses which are specially allocated to such Member pursuant to this Agreement, and (D) the amount of any liabilities of such Member considered, under Section 752 of the Code, to be assumed by the LLC or to which any property contributed by such Member to the LLC is subject. (iii) In the event any interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest. (iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii) above, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Treasury Regulations. (v) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event that the Board shall determine it is prudent to modify the manner in which the Capital Accounts, or any additions thereto or subtractions therefrom, are computed in order to comply with such Treasury Regulations, the Board may make such modification, provided that it is not likely Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 205 of 258 PageID #: 223 27 to have a material effect on the amounts distributable to any Member pursuant to Article 8 hereof upon the dissolution of the LLC. (b) The LLC may (as determined by the Board) adjust the Capital Accounts of its Members to reflect revaluations of the LLC property whenever the adjustment would be permitted under Treasury Regulations Section 1.704-1(b)(2)(iv)(f). In the event that the Capital Accounts of the Members are so adjusted, (i) the adjustment shall be based on the fair market value of the LLC property, as determined by the Board, on the date of adjustment, (ii) the adjustment shall reflect the manner in which unrealized income, gain, loss, or deduction inherent in such property of the LLC (that has not been previously reflected in Capital Accounts) would be allocated among the Members if there were a taxable disposition of such property at fair market value on that date, (iii) the Capital Accounts of the Members shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss, as computed for book purposes, with respect to such property and (iv) the Members’ distributive shares of depreciation, depletion, amortization and gain or loss, as computed for tax purposes, with respect to such property shall be determined so as to take account of the variation between the adjusted tax basis and book value of such property in the same manner as under Section 704(c) of the Code. In the event that Code Section 704(c) applies to the LLC’s property, the Capital Accounts of the Members shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain and loss, as computed for book purposes, with respect to such property. The amount of all distributions to Members shall be determined pursuant to Article 8. 7.02 Capital Contributions by Members. Each Member holding Units shall be obligated to make contributions to the capital of the LLC, if any, up to the aggregate amount of such Member’s Capital Contribution specified opposite such Member’s name on Schedule A, which shall include such Member’s initial Capital Contribution. Capital Contributions may be paid in cash or property, in exchange for Common Units, Series A Preferred Units or as otherwise agreed by the Board. Except as set forth on Schedule A, no Member shall be entitled or required to make any contribution to the capital of the LLC; however, the LLC may borrow from its Members as well as from banks or other lending institutions to finance its working capital or the acquisition of assets upon such terms and conditions as shall be approved by the Board, and any borrowing from Members shall not be considered Capital Contributions or reflected in their Capital Accounts. In the event of additional Capital Contributions, Schedule A shall be amended to reflect such additional Capital Contributions. No Member shall be entitled to any interest or compensation with respect to such Member’s Capital Contribution or any services rendered on behalf of the LLC except as specifically provided in this Agreement or approved by the Board. No Member shall have any liability for the repayment of the Capital Contribution of any other Member and each Member shall look only to the assets to the LLC for return of such Member’s Capital Contribution. 7.03 Preemptive Rights. (a) Right to Participate in Certain Sales of Additional Securities. The LLC agrees that it will not sell or issue or agree to sell or issue: (a) any Units (which for purposes of this Section 7.03 shall include any economic or other interest in the LLC), (b) securities convertible into or exercisable or exchangeable for Units, (c) options, warrants or rights carrying any rights to purchase Units or (d) debt securities, notes or other indebtedness that are or may Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 206 of 258 PageID #: 224 28 become convertible into, exchangeable into or exercisable for Units, unless the LLC first submits a written notice to each Member holding Series A Preferred Units or Vested Common Units (each an “Eligible Member”) identifying the terms of the proposed sale (including price, number or aggregate principal amount of securities and all other material terms), and offers to each Eligible Member the opportunity to purchase its Pro Rata Allotment (as hereinafter defined) of the securities (subject to increase for overallotment if some Eligible Members do not fully exercise their rights) on terms and conditions, including price, not less favorable than those on which the LLC proposes to sell such securities to a third party or parties (a “Pre-Emptive Right Notice”). The LLC’s offer pursuant to this Section 7.03 shall remain open and irrevocable for a period of twenty (20) days following receipt by the Eligible Member of such written notice. (b) Eligible Member Acceptance. Each of the Eligible Members shall have the right to purchase its Pro Rata Allotment by giving written notice of such intent to participate (the “Pre-Emptive Right Acceptance Notice”) to the LLC within twenty (20) days after receipt by such Eligible Member of the Pre-Emptive Right Notice (the “Pre-Emptive Right Acceptance Election Period”). Each Pre-Emptive Right Acceptance Notice shall indicate the maximum number or amount, as applicable, of securities subject thereto which the Eligible Member wishes to buy, including the number or amount, as applicable, of securities it would buy if one or more other Eligible Members do not elect to participate in the sale on the terms and conditions stated in the Pre-Emptive Right Notice. (c) Calculation of Pro Rata Allotment. Each Eligible Member’s “Pro Rata Allotment” of such securities shall be based on the ratio which the number of Series A Preferred Units and Vested Common Units owned by such Eligible Member (including for each holder of Series A Preferred Units, as though such holder owned a pro-rata percentage of any Unvested Common Units which have been forfeited or cancelled as of such date based on each such holder’s relative holdings of Series A Preferred Units) bears to all of the issued and outstanding Series A Preferred Units and Vested Common Units held by all Eligible Members (including all Common Units forfeited or cancelled as of such date) as of the date of such written offer. If one or more Eligible Members do not elect to purchase their full respective Pro Rata Allotment, each of the electing Eligible Members may purchase such available shares of such Eligible Members’ allotments taking into account the maximum amount each is wishing to purchase on a pro rata basis, based upon the relative holdings of Series A Preferred Units and Vested Common Units of each of the electing Eligible Members in the case of over subscription. Unvested Common Units held by any Eligible Members shall be deemed outstanding for purposes of the calculation of Pro Rata Allotment hereunder. (d) Sale to Third Party. Any securities so offered that are not purchased by the Eligible Members pursuant to the offer set forth in Section 7.03(a) above, may be sold by the LLC, but only on terms and conditions not more favorable to the purchaser than those set forth in the notice to Eligible Members, at any time after five (5) days but within sixty (60) days following the termination of the above referenced twenty (20) day period, but may not be sold to any other Person or on terms and conditions, including price, that are more favorable to the purchaser than those set forth in such offer or after such sixty (60) day period without renewed compliance with this Section 7.03. If the LLC does not consummate the sale of any securities so offered within such sixty (60) day period, the right to purchase granted under this Section 7.03 shall be deemed Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 207 of 258 PageID #: 225 29 to be revived and such securities shall not be offered unless first reoffered to Eligible Members in accordance with this Section 7.03. (e) Exceptions to Pre-Emptive Rights. Notwithstanding the foregoing, the right to purchase granted under this Section 7.03 shall be inapplicable with respect to: (i) the issuance of Common Units or Class P Units (as appropriately adjusted for any split, combination, reorganization, recapitalization, reclassification, unit distribution, unit dividend or similar event) issued or issuable in connection with, or upon the exercise of, options or other awards granted or to be granted to employees, officers or directors of the LLC or its Subsidiaries pursuant to this Agreement (including Schedule B hereto) or the Equity Incentive Plan (if any), including Common Units or Class P Units issued in replacement of such Common Units or Class P Units repurchased or issuable upon the exercise of any options to purchase such Common Units or Class P Units in each case, to the extent permitted under this Agreement or the Equity Incentive Plan approved by the Board (if any); (ii) securities issued as a result of any split, dividend, reclassification or reorganization or similar event with respect to the Units; (iii) Common Units issued upon exchange of, or as a dividend on, the Series A Preferred Units; (iv) securities issued in connection with the LLC’s (or its successor’s) initial public offering, or (v) any securities for which a Series A Majority Interest waives such right on behalf of all Eligible Members. (f) Assignment of Rights. Subject to Article 9 hereof, each Eligible Member shall have the right to assign its rights under this Section 7.03 to any Permitted Transferee (as defined in Section 9.02) of such Eligible Member’s Units, and shall further have the right to assign and transfer such Eligible Member’s right to accept any particular offer under Section 7.03(a) hereof to any Affiliates of such Eligible Member, and any such Transferee shall be deemed within the definition of a “Member” for purposes of this Section 7.03. (g) Termination. The rights contained in this Section 7.03 shall terminate upon the consummation of a QPO. ARTICLE 8 DISTRIBUTIONS AND ALLOCATIONS 8.01 Distribution of the LLC’s Funds. (a) Distributions. Except as otherwise limited by the Act, or other provisions of this Article 8, all amounts which are determined by the Board to be available for distribution shall be distributed to the Members in the following order and priority: (i) first, to the Members holding Series A Preferred Units in proportion to their respective number of Series A Preferred Units, in an amount equal to the cumulative Series A Unpaid Preferred Return of all such Series A Preferred Units for all periods or portions thereof through the time of such distribution; (ii) second, to the Members holding Series A Preferred Units in proportion to their respective number of Series A Preferred Units, in an amount equal to the aggregate Series A Preferred Unreturned Contributions of all such Series A Preferred Units as of such time until repaid in full; Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 208 of 258 PageID #: 226 30 (iii) third, to the Members holding Vested Common Units in proportion to their respective number of Vested Common Units, in an amount equal to the product of (A) the aggregate number of Vested Common Units outstanding as of such time multiplied by (B) the Catch-Up Amount; (iv) thereafter, subject to any limitations attributable to one or more Benchmark Amounts described in Section 8.01(b) or the limitations set forth in Section 2.02(e), any remaining amounts to the Members holding Vested Common Units, Vested Class P Units and/or Series A Preferred Units, in proportion to their respective Ownership Percentage. For purposes of applying this Section 8.01(a)(iv), (A) (1) any amounts which would have been payable with respect to any Unvested Common Units if such Units were Vested Common Units shall be paid to the Members holding Series A Preferred Units, in proportion to their respective number of Series A Preferred Units and (2) any amounts which would have been payable with respect to any Unvested Class P Units if such Units were Vested Class P Units shall be paid to the Members holding Series A Preferred Units and Vested Common Units in proportion to the number of such Units held by such holders, (B) in the event that any issued Common Units are cancelled, forfeited or repurchased by the LLC, any amounts which would have been payable with respect to any such Common Units if such Common Units were not cancelled, forfeited or repurchased by the LLC shall be paid to the Members holding Series A Preferred Units in proportion to their respective number of Series A Preferred Units and (C) in the event that any issued Class P Units are cancelled, forfeited or repurchased by the LLC, any amounts which would have been payable with respect to any such Class P Units if such Class P Units were not cancelled, forfeited or repurchased by the LLC shall be paid to the Members holding Series A Preferred Units and Vested Common Units, in proportion to the number of such Units held by such holders. (b) Application of Benchmark Amount. Any Unit with an associated Benchmark Amount shall not be included for purposes of, and shall not participate in, distributions pursuant to Section 8.01(a) until an aggregate amount equal to the Benchmark Amount associated with such Unit has been distributed (after the issuance of such Unit) under Section 8.01(a), it being understood that, solely for the purposes of Section 8.01(a), such Unit shall not be considered to be issued or outstanding until such previous distributions have been made and, thereafter, such Unit shall be treated as issued and outstanding and shall participate in any remaining amounts to be distributed in accordance with Section 8.01(a). (c) Common Unit/Class P Unit Catch-Up. (i) In furtherance of the provisos set forth in Section 8.01(a)(iv), each of the Members hereby agrees and acknowledges that Unvested Common Units shall not entitle the holder thereof to any distributions, other than Tax Distributions as set forth in Section 8.01(d), with respect to any such Unvested Common Units until, and only if, such Units become Vested Common Units as set forth on Schedule B hereto. To the extent that Common Units are Unvested Common Units as of the date of a distribution, amounts otherwise payable to holders of such Unvested Common Units pursuant to Section 8.01(a)(iv) shall be paid to the holders of Series A Preferred Units ratably among such Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 209 of 258 PageID #: 227 31 Members who hold Series A Preferred Units based upon the relative number of Series A Preferred Units held by each such Member as of the date of such distribution. In the event any such Unvested Common Units become Vested Common Units, and the holders of such Unvested Common Units would have been entitled to a distribution (for the avoidance of doubt, excluding all Tax Distributions) had such Unvested Common Units been vested, then, following the vesting of any such Common Units, prior to making any further distributions under Section 8.01(a)(iv), the Board shall make a distribution from the amounts otherwise distributable to the holders of Series A Preferred Units and Vested Common Units to the Member(s) holding such newly Vested Common Units in an amount equal to (A) the portion of the distribution that such Member(s) would have received if their Unvested Common Units had been Vested Common Units as of the date of the prior distribution, plus (B) additional distributions to the Members then holding Vested Common Units in such proportions and amounts as determined by the Board to be necessary to cause aggregate distributions to such Members under Section 8.01(a)(iv) and this sentence to be in proportion to total outstanding Vested Common Units and Series A Preferred Units. For purposes of calculating amounts distributable to holders of newly Vested Common Units pursuant to this paragraph, all Common Units that have been cancelled, forfeited or repurchased by the LLC prior to any such distribution shall be treated as outstanding Series A Preferred Units (and not Common Units or Class P Units) solely for the purpose of Section 8.01(a)(iv) as of the date of determination of each such distribution. (ii) In furtherance of the provisos set forth in Section 8.01(a)(iv), each of the Members hereby agrees and acknowledges that Unvested Class P Units shall not entitle the holder thereof to any distributions, other than Tax Distributions as set forth in Section 8.01(d), with respect to any such Unvested Class P Units until, and only if, such Units become Vested Class P Units as set forth in the Equity Incentive Plan and the applicable Award Agreements thereunder. To the extent that amounts otherwise payable to holders of Vested Class P Units (whether such Class P Units are subject to time and/or performance based vesting) have been paid to the holders of Series A Preferred Units and/or Vested Common Units, then, following the vesting of any such Class P Units, prior to making any further distributions under Section 8.01(a)(iv), the Board shall make a subsequent distribution from the amounts otherwise distributable to the holders of Series A Preferred Units and Vested Common Units to the Member(s) holding such newly Vested Class P Units in an amount equal to (A) the portion of the distribution that such Member(s) would have received if their Unvested Class P Units were Vested Class P Units as of the date of the prior distribution, plus (B) additional distributions to the Members then holding Vested Class P Units in such proportions and amounts as determined by the Board to be necessary to cause aggregate distributions to such Members under Section 8.01(a)(iv) and this sentence to be in proportion to total outstanding Vested Class P Units, Vested Common Units and Series A Preferred Units. (iii) If distributions are to be made to both Vested Common Units and Vested Class P Units pursuant to the foregoing provisions of this Section 8.01(c), the Board shall apportion such distributions among the Vested Common Units, on the one hand, and the Vested Class P Units, on the other hand, pro-rata in accordance with the relative Ownership Percentages of the holders of such Units. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 210 of 258 PageID #: 228 32 (d) Tax Distributions. Except as otherwise limited by the Act, and subject to determination by the Board in its sole discretion that the LLC has available for funds, within ninety (90) days following the end of each calendar year (or such shorter period as is determined at any time by the Board in its sole discretion), the LLC shall distribute to each Member, with respect to each class of Units held by such Member, an amount (a “Tax Distribution”) equal to the Member’s Tax Liability (as defined below) in respect of such class of Units since the last date on which a Tax Distribution was made. A Member’s “Tax Liability” shall give effect to the class of Units then held by the applicable Member and shall be equal to the product of (i) the Tax Rate (as defined below) and (ii) the Member’s allocable share of the LLC’s net taxable income, if any, for the period since the last period for which a Tax Distribution was made (as determined under Code Section 703(a) but including separately stated items described in Code Section 702(a)) in respect of such class of Units; provided, that items of income, gain, loss and deduction attributable to the sale or exchange of all or substantially all of the assets of the LLC shall be excluded from such calculation. The “Tax Rate” shall mean, for any period, an assumed rate equal to the highest effective combined U.S. federal, state and local tax rate that is applicable, which may be equitably adjusted in the discretion of the Board to account for periods during which the Tax Rate changes. In the event a Member’s allocable share of the LLC’s net taxable income in respect of a class of Units for any period is negative, such negative amount shall be carried forward and taken into account for all purposes of this Section 8.01 (including application of this sentence) in determining such Member’s distributive share of the LLC’s net taxable income in respect of such class of Units in each subsequent period (whether or not in the same Taxable Year) until such negative amount is offset in full by positive net taxable income. Any Tax Distributions received by a Member in respect of such Member’s Series A Preferred Units, Common Units or Class P Units shall be considered advances of amounts otherwise distributable to such Member pursuant to Section 8.01(a)(iv) only. Nothing herein shall limit, or be deemed to limit, the making of Tax Distributions with respect to Unvested Common Units or Unvested Class P Units. (e) Distributions Limited. No Member shall be entitled to any distribution or payment with respect to its interest in the LLC upon the resignation or withdrawal of such Member except to the extent that the LLC exercises its option to purchase the interest of such Member under Section 10.05. Distributions may be limited and repayable as provided in the Act. (f) Erroneous Distributions. If the LLC has, pursuant to any clear and manifest accounting or similar error, paid any Member an amount in excess of the amount to which it is entitled pursuant to this Article 8, such Member will reimburse the LLC to the extent of such excess, without interest, within thirty (30) days after demand by the LLC. 8.02 Distribution Upon Liquidation Events. Upon any Sale Event, liquidation, dissolution or winding up, voluntary or involuntary, of the LLC (each such event, a “Liquidation Event”), amounts available upon such Liquidation Event, after payment of, or adequate provision for, the debts and obligations of the LLC, including the expenses of its liquidation and dissolution, the payment of any liabilities to its Officers or Members, if any, other than liabilities to Members for distributions shall be distributed and applied in the following priorities: (a) First, to fund reserves to the extent deemed appropriate by the Board for contingent, conditional, unmatured or other liabilities of the LLC not otherwise paid or provided for, provided that upon the expiration of such period of time as the Board shall deem advisable, Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 211 of 258 PageID #: 229 33 the balance of such reserves remaining after payment of such liabilities shall be distributed in the manner hereinafter set forth; and (b) Thereafter, as provided in Section 8.01(a), Section 8.01(b) and Section 8.01(c). 8.03 Distribution of Assets in Kind. No Member shall have the right to require any distribution of any assets of the LLC to be made in cash or in kind. If any assets of the LLC are distributed in kind, such assets shall be distributed pursuant to Section 8.01(a) on the basis of their fair market value as determined by the Board. Any Member entitled to any interest in such assets shall, unless otherwise determined by the Board, receive separate assets of the LLC, and not an interest as tenant-in-common with other Members so entitled in each asset being distributed. 8.04 Withholding. (a) The LLC is authorized to withhold from distributions to a Member, and to pay over to a U.S. federal, state or local government, any amounts required to be withheld pursuant to the Code or any provisions of any other U.S. federal, state or local law (a “Withholding Payment”). Any Withholding Payment will be treated as having been distributed to such Member pursuant to this Article 8 for all purposes of this Agreement, and will be offset against the amounts otherwise distributable to such Member. Each Member shall reimburse the LLC for any liability it may incur for the failure to properly withhold taxes in respect of such Member. Each Member hereby agrees that none of the LLC or the Board shall be liable for any excess taxes withheld in respect of a Member’s interest in the LLC and that, in the event of over-withholding, a Member’s sole recourse shall be to apply for a refund from the applicable governmental authority. Any refund of taxes previously withheld by a third-party shall be apportioned among the Members in a manner reasonably determined by the Board to offset the prior operation of this Section 8.04(a) in respect of such withheld taxes. In addition, if the LLC is obligated to pay any taxes (including penalties, interest and any addition to tax) to any governmental authority that are attributable to a Member’s transfer of an interest in the LLC, including, without limitation, on account of Sections 864 or 1446 of the Code, then (x) both such former Member and such former Member’s transferee(s) shall indemnify the LLC in full for the entire amount paid or payable, (y) the Board may offset future distributions to which such Member’s transferee(s) is otherwise entitled under this Agreement against such Person’s obligation to indemnify the LLC under this Section 8.04(a) and (z) such amounts shall be treated as a Withholding Payment pursuant to this Section 8.04(a) with respect to both such former Member and such former Member’s transferee(s), as applicable. (b) If it is anticipated that, at the due date of a Withholding Payment, the LLC’s withholding obligation, the Member’s share of cash distributions or other amount due is less than the amount of the withholding obligation, the Member with respect to which the withholding obligation applies shall pay to the LLC the amount of such shortfall within thirty (30) days after notice by the LLC. If a Member fails to make the required payment when due hereunder, and the LLC nevertheless pays the withholding, in addition to the LLC’s remedies for breach of this Agreement, the amount paid shall be deemed a recourse loan from the LLC to such Member bearing interest at a rate of 8% per annum, and the LLC shall apply all distributions or payments that would otherwise be made to such Member toward payment of the loan and interest, which Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 212 of 258 PageID #: 230 34 payments or distributions shall be applied first to interest and then to principal until the loan is repaid in full. (c) Any “imputed underpayment” within the meaning of Code Section 6225 or a similar provision of state or local law paid (or payable) by the LLC as a result of an adjustment with respect to any item of the LLC, including any interest or penalties with respect to any such adjustment and any cost or expenses incurred in connection thereto (collectively, an “Imputed Underpayment Amount”), shall be treated as if it were paid by the LLC as a Withholding Payment with respect to the appropriate Members. The Board shall reasonably determine the portion of an Imputed Underpayment Amount attributable to each Member or former Member. The portion of the Imputed Underpayment Amount that the Board attributes to a Member shall be treated as a Withholding Payment with respect to such Member. The portion of the Imputed Underpayment Amount that the Board attributes to a former Member of the LLC shall be treated as a Withholding Payment with respect to such former Member’s transferee(s) or assignee(s), as applicable. Imputed Underpayment Amounts treated as Withholding Payments also shall include any imputed underpayment within the meaning of Code Section 6225 or a similar provision of state or local law paid (or payable) by any entity treated as a partnership for U.S. federal income tax purposes in which the LLC holds (or has held) a direct or indirect interest other than through entities treated as corporations for U.S. federal income tax purposes to the extent that the LLC bears the economic burden of such amounts, whether by law or agreement. (d) Each Member agrees to indemnify and hold harmless the LLC and the Board from and against any and all liability with respect to Withholding Payments required on behalf of, or with respect to, such Member. A Member’s obligation to so indemnify shall survive the liquidation and dissolution of the LLC and/or unless otherwise agreed by the LLC, the Member’s withdrawal from the LLC or assignment of its interests and the LLC may pursue and enforce all rights and remedies it may have against each such Member under this Section 8.04. 8.05 Allocations. (a) Allocation of Net Profit and Net Loss. Subject to the other provisions of this Section 8.05, for purposes of adjusting the Capital Accounts of the Members, the Net Profit, Net Loss and, to the extent necessary, individual items of income, gain, loss, credit and deduction, for any Taxable Year shall be allocated among the Members in a manner such that the Adjusted Capital Account of each Member, immediately after making such allocation is, as nearly as possible, equal (proportionately) to the distributions that would be made to such Member pursuant to Section 8.02 if the LLC were dissolved, its affairs wound up and its assets sold for cash equal to their Gross Asset Value, all the LLC’s liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Gross Asset Value of the asset securing such liability), and the net assets of the LLC were distributed in accordance with Section 8.02 to the Members immediately after making such allocation, for this purpose treating all Unvested Common Units and Unvested Class P Units as Vested Common Units and Vested Class P Units, respectively. (b) Regulatory Allocations. Notwithstanding any other provision in this Agreement to the contrary, the following special allocations will be made in the following order: Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 213 of 258 PageID #: 231 35 (i) Minimum Gain Chargeback. If there is a net decrease in LLC Minimum Gain or Member Minimum Gain during any Taxable Year, each Member will be specially allocated items of the LLC’s income and gain for such Taxable Year (and, if necessary, subsequent Taxable Years) in an amount equal to such Member’s share of the net decrease in such LLC Minimum Gain or Member Minimum Gain, determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required to be allocated to the Members pursuant thereto. The items to be so allocated will be determined in accordance with Treasury Regulations Section 1.704-2. This provision is intended to comply with the minimum gain chargeback requirement in such section of the Treasury Regulations and will be interpreted consistently therewith. (ii) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) with respect to such Member’s Capital Account, items of the LLC’s income and gain will be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the deficit balance in the Adjusted Capital Account of such Member as quickly as possible; provided that, an allocation pursuant to this Section 8.05(b)(ii) will be made only if and to the extent that such Member would have an Adjusted Capital Account deficit after all other allocations provided for in this Section 8.05 have been tentatively made as if this Section 8.05(b)(ii) were not in this Agreement. This Section 8.05(b)(ii) is intended to constitute a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith. (iii) Certain Additional Adjustments. To the extent that an adjustment to the adjusted tax basis of any of the LLC’s assets pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of its interest in the LLC, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Members in accordance with their interests in the LLC in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Members to whom such distribution was made in the event that Treasury Regulations Section 1.704- 1(b)(2)(iv)(m)(4) applies. (iv) Nonrecourse Deductions. Any Nonrecourse Deductions for any Taxable Year or other period will be allocated among the Members in proportion to the number of Units held by them. (v) Member Nonrecourse Deductions. The Member Nonrecourse Deductions shall be allocated each year to the Member that bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.752-2) for the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 214 of 258 PageID #: 232 36 (vi) Curative Allocations. The allocations set forth in this Section 8.05(b) are intended to comply with certain requirements of Treasury Regulations under Section 704 of the Code. Notwithstanding any other provision of this Article 8 (other than this Section 8.05(b)), the regulatory allocations in this Section 8.05(b) will be taken into account in allocating other LLC items of income, gain, loss, deduction and expense among the Members so that, to the extent possible, the net amount of allocations of other LLC items and such regulatory allocations will be equal to the net amount that would have been allocated to the Members pursuant to this Article 8 if such regulatory allocations had not been made. (vii) Creditable Foreign Taxes. Any creditable foreign taxes within the meaning of Treasury Regulations Section 1.704-1(b)(4)(viii) will be allocated among the Members in proportion to the Members’ distributive shares of income to which the creditable foreign tax relates, pursuant to Treasury Regulations Section 1.704-1(b)(4)(viii). (c) Tax Allocations. Each item of income, gain, loss, deduction or credit for U.S. federal, state and local income tax purposes will be allocated among the Members in the same proportions as the corresponding “book” items are allocated pursuant to Sections 8.05(a) and Section 8.05(b), except as otherwise provided herein. The tax allocations made pursuant to this Section 8.05(c) will be solely for tax purposes and will not affect any Member’s Capital Account or share of non-tax allocations or distributions under this Agreement. In the case of contributed or revalued property, items of income, gain, loss, deduction and credit will be allocated solely for U.S. federal income tax purposes in a manner consistent with the requirements of Section 704(c) of the Code to take into account the difference between the fair market value of such property and its adjusted tax basis at the time of contribution or revaluation. The LLC may use any allowable method under Section 704(c) of the Code and the Treasury Regulations promulgated thereunder with respect to differences between tax basis and Gross Asset Value of assets, other than any asset contributed or deemed contributed by the Members in connection with the formation of the LLC. (d) Other Tax Provisions. (i) For any Taxable Year or other period during which any part of an interest in the LLC is transferred between the Members or to another person, the portion of the Net Profit, Net Loss and other items of income, gain, loss, deduction and credit that are allocable with respect to such part of an interest in the LLC shall be apportioned between the transferor and the transferee using any method allowed pursuant to Section 706 of the Code and the applicable Treasury Regulations as chosen by the Board. (ii) In the event that the Code or any Treasury Regulations require allocations of items of income, gain, loss, deduction or credit different from those set forth in this Section 8.05, the Board is hereby authorized to make new allocations in reliance on the Code and such Treasury Regulations, and no such new allocation shall give rise to any claim or cause of action by any Member. (iii) For purposes of determining a Member’s proportional share of the LLC’s “excess nonrecourse liabilities” within the meaning of Treasury Regulations Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 215 of 258 PageID #: 233 37 Section 1.752-3(a)(3), each Member’s interest in Net Profit shall be such Member’s respective interest in the LLC. ARTICLE 9 TRANSFERS OF INTERESTS 9.01 General Restrictions on Transfer. No Member may Transfer all or any part of its Units without first complying with the provisions of this Article 9 and, in the case of the Class P Units, the Equity Incentive Plan and the applicable Award Agreement; provided that, a Series A Majority Interest may waive the provisions of Sections 9.04, 9.05, 9.06 or 9.07 with regard to any Transfer. For the purpose of this Agreement, an indirect Transfer shall include any Transfer of Units to any other Person and then Transferring or permitting the Transfer by such other Person in whole or in part. 9.02 Permitted Transfers. Notwithstanding the provisions of this Article 9, a Member may Transfer all or a portion of such Member’s Units, without compliance with the terms of Sections 9.04, 9.05, 9.06 or 9.07, as applicable, provided that (i) the Member delivers prior written notice to the LLC of such Transfer and the Transferee, as a condition to such Transfer agrees in writing to be bound by the terms of this Agreement as a Member, (ii) such Transfer would not cause the LLC to be subject to taxation at the entity level for U.S. federal income tax purposes or cause material adverse tax consequences to the LLC or the Members, and (iii) with regard only to Transfers pursuant to subsection (a) below, the Transferee executes a proxy in favor of the transferor giving the transferor full right, power and authority to vote and otherwise control the Units being transferred, to any of the following Persons (each such Person, a “Permitted Transferee”): (a) with respect to a Member that is a natural person, during the lifetime of such Member a trust or other Person established for the primary benefit of that Member, or such Member’s immediate family, and controlled by such Member; (b) with respect to a Member that is not a natural person, another person or entity that is an Affiliate of such Member; or (c) with respect to a Member that is a natural person and following the death of such Member, to the beneficiary of a will, intestacy probate proceeding or similar proceeding or process with respect to such Member. 9.03 Effect of Transfer. If the Transferee is admitted as a Member or is already a Member, the Member Transferring its Units shall be relieved of liability with respect to the Transferred Units arising or accruing under this Agreement on or after the effective date of the Transfer, unless the transferor affirmatively assumes such liability; provided, however, that the transferor shall not be relieved of any liability for prior distributions unless the Transferee affirmatively assumes such liabilities. (a) Any Person who acquires in any manner Units or any part thereof in the LLC, whether or not such Person has accepted and assumed in writing the terms and provisions of this Agreement or been admitted as a Member, shall be deemed by the acquisition of such Units to have agreed to be subject to and bound by all of the provisions of this Agreement with respect Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 216 of 258 PageID #: 234 38 to such Units, including without limitation, the provisions hereof with respect to any subsequent Transfer of such Units. (b) The LLC, its Officers and Members shall be entitled to treat the record owner of Units in the LLC as the absolute owner thereof in all respects, and shall incur no liability for distributions of cash or other property made in good faith to such owner until such time as a written assignment of such Units has been received and accepted by the Board and recorded on the books of the LLC. The Board may refuse to accept and record an assignment until the end of the next successive monthly accounting period of the LLC. (c) Any Transfer in violation of any provisions of this Agreement shall be null and void and ineffective to Transfer any Units in the LLC and shall not be binding upon or be recognized by the LLC, and any such Transferee shall not be treated as or deemed to be a Member for any purpose. In the event that any Member shall at any time Transfer its Units in violation of any of the provisions of this Agreement, the LLC and the other Members, in addition to all rights and remedies at law and equity, shall have and be entitled to an order restraining or enjoining such transaction, it being expressly acknowledged and agreed that damages at law would be an inadequate remedy for a Transfer in violation of this Agreement. 9.04 Right of First Refusal on Common Units and Class P Units. In the event that any Member (other than the Investors) holding Common Units or Class P Units (each, a “Common Transferring Member”) receives a bona fide offer to purchase all or any portion of the Units held by such Member (a “Proposed Common Transaction”) from a Person other than a Permitted Transferee, such Transferring Member may, subject to the provisions of Sections 9.01, 9.02 and 9.05 hereof, Transfer such Units pursuant to and in accordance with the following provisions of this Section 9.04: (a) The Common Transferring Member shall cause the Proposed Common Transaction and all of the terms thereof to be reduced to writing and shall promptly notify the LLC and the holders of Series A Preferred Units and the holders of Vested Common Units (such holders, the “Common Rights Holders”) of such Common Transferring Member’s desire to effect the Proposed Common Transaction and otherwise comply with the provisions of this Section 9.04 and, if applicable, Section 9.05 (such notice, the “Common Offer Notice”). The Common Transferring Member’s Common Offer Notice shall constitute an irrevocable offer to sell all of the Units which are the subject of the Proposed Common Transaction (the “Offered Common Units”) to the LLC and the Common Rights Holders, on the basis described below, at a purchase price equal to the price contained in, and on the same terms and conditions of, the Proposed Common Transaction. The Common Offer Notice shall be accompanied by a true copy of the Proposed Common Transaction (which shall identify the proposed buyer (the “Common Buyer”) and all relevant information in connection therewith). (b) The LLC shall have the first option to purchase all or a portion of the Offered Common Units. At any time within twenty (20) days after receipt by the LLC of the Common Offer Notice (the “LLC Common Option Period”), the LLC may elect to accept the offer to purchase with respect to any or all of the Offered Common Units and shall give written notice of such election (the “LLC Common Acceptance Notice”) to the Common Transferring Member within the LLC Common Option Period, which notice shall indicate the number of Units that the Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 217 of 258 PageID #: 235 39 LLC is willing to purchase. The LLC Common Acceptance Notice shall constitute a valid, legally binding and enforceable agreement for the sale and purchase of the Units covered by the LLC Common Acceptance Notice. If the LLC accepts the offer to purchase all of the Offered Common Units, the closing for such purchase of the Offered Common Units by the LLC under this Section 9.04(b) shall take place within thirty (30) days following the expiration of the LLC Common Option Period, at the offices of the LLC or on such other date or at such other place as may be agreed to by the Common Transferring Member and the LLC. If the LLC fails to purchase all of the Offered Common Units by exercising its option under this Section 9.04(b) within the period provided, the Common Transferring Member shall so notify the Common Rights Holders promptly (the “Additional Common Offer Notice”), which Additional Common Offer Notice shall identify the Offered Common Units that the LLC has failed to purchase (the “Remaining Common Units”). The Remaining Common Units shall be subject to the options granted to the Common Rights Holders pursuant to Section 9.04(c) below. (c) If the LLC fails to purchase all of the Offered Common Units under Section 9.04(b) above, at any time within thirty (30) days after receipt by the Common Rights Holders of the Additional Common Offer Notice (the “Common Option Period”), each Common Rights Holder may elect to accept the offer to purchase with respect to any or all of the Remaining Common Units and shall give written notice of such election (the “Common Acceptance Notice”) to the Common Transferring Member, each Common Rights Holder and the LLC within the Common Option Period, which notice shall indicate the maximum number of Units that the Common Rights Holder is willing to purchase, including the number of Units it would purchase if one or more other Common Rights Holders do not elect to purchase their Pro Rata Common Fractions (as defined in paragraph (d) below). The Common Acceptance Notice shall constitute a valid, legally binding and enforceable agreement for the sale and purchase of the Units covered by the Common Acceptance Notice. The closing for any purchase of Units by the Common Rights Holders under this Section 9.04(c) (along with the purchase by the LLC of any Units under paragraph (b) above if the LLC is purchasing less than all of the Offered Common Units) shall take place within thirty (30) days following the expiration of Common Option Period, at the offices of the LLC or on such other date or at such other place as may be agreed to by the Common Transferring Member and such Common Rights Holders. The Common Transferring Member shall notify the Common Rights Holders promptly if any Common Rights Holder fails to offer to purchase all of its Pro Rata Common Fraction (as defined below). (d) Upon the expiration of the Common Option Period, the number of Units to be purchased by each Common Rights Holder shall be determined as follows: (i) first, there shall be allocated to each Common Rights Holder electing to purchase, a number of Units equal to the lesser of (A) the number of Units as to which such Common Rights Holder accepted as set forth in its respective Common Acceptance Notice or (B) such Common Rights Holder’s Pro Rata Common Fraction and (ii) second, the balance, if any, not allocated under clause (i) above, shall be allocated to those Common Rights Holders who within the Common Option Period delivered a Common Acceptance Notice that set forth a number of Units that exceeded their respective Pro Rata Common Fractions, in each case on a pro rata basis in proportion to the number of Units held by each such Common Rights Holder up to the amount of such excess. A Common Rights Holder’s “Pro Rata Common Fraction” shall be equal to the product obtained by multiplying the total number of Remaining Common Units by a fraction, the numerator of which is the total number of Series A Preferred Units and Vested Common Units owned by such Common Rights Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 218 of 258 PageID #: 236 40 Holder (including for each holder of Series A Preferred Units, as though such holder owned a prorata percentage of any Common Units which are unvested or have been forfeited or cancelled as of such date based on each such holder’s relative holdings of Series A Preferred Units), and the denominator of which is the total number of Series A Preferred Units and Vested Common Units held by all Common Rights Holders (including all Common Units which are unvested or have been forfeited or cancelled as of such date), in each case as of the date of the Common Offer Notice. (e) In the event that the price set forth in the Common Offer Notice is stated in consideration other than cash or cash equivalents, the Common Transferring Member, the LLC and the a Series A Majority Interest shall mutually determine the fair market value of such consideration, reasonably and in good faith, and the LLC and/or the Common Rights Holders, as the case may be, may effect their purchase under this Section 9.04 by payment of such fair market value in cash or cash equivalents. (f) In the event that the LLC and the Common Rights Holders do not elect to exercise the rights to purchase under this Section 9.04 with respect to all of the Units proposed to be sold, the Common Transferring Member may sell any such remaining Units to the Common Buyer on the terms and conditions set forth in the Common Offer Notice, subject to the provisions of Sections 9.03 and 9.05. Promptly after such Transfer, the Common Transferring Member shall notify the LLC, which in turn shall promptly notify all of the Common Rights Holders, of the consummation thereof and shall furnish such evidence of the completion and time of completion of the Transfer and of the terms thereof as may reasonably be requested by a Series A Majority Interest. Prior to the effectiveness of any Transfer to a Common Buyer hereunder, such Common Buyer shall have agreed in writing to be bound by this Agreement in the same manner as the transferor, and such Common Buyer shall have all of the rights and obligations hereunder as if such Common Buyer were a Member. If the Common Transferring Member’s sale to a Common Buyer is not consummated in accordance with the terms of the Proposed Common Transaction on or before sixty (60) calendar days after the latest of: (i) the expiration of the LLC Common Option Period, (ii) the expiration of the Common Option Period, (iii) the expiration of the Common CoSale Election Period set forth in Section 9.05(b) below, if applicable, and (iv) the satisfaction of all governmental approval or filing requirements, the Proposed Common Transaction shall be deemed to lapse, and any Transfers of Units pursuant to such Proposed Common Transaction shall be in violation of the provisions of this Agreement unless the Common Transferring Member sends a new Common Offer Notice and once again complies with the provisions of this Section 9.04 with respect to such Proposed Common Transaction. 9.05 Co-Sale Option on Common Units and Class P Units. In the event that the LLC and/or the Common Rights Holders do not exercise their rights under Section 9.04 with respect to all of the Units proposed to be so Transferred in connection with any Proposed Common Transaction, the Common Transferring Member may Transfer such Units only pursuant to and in accordance with the following provisions of this Section 9.05: (a) Co-Sale Notice. As soon as practicable following the expiration of the Common Option Period, and in no event later than five (5) days thereafter, the Common Transferring Member shall provide notice to each of the Common Rights Holders (the “Common Co-Sale Notice”) of its right to participate in the Proposed Common Transaction on a pro rata Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 219 of 258 PageID #: 237 41 basis with the Common Transferring Member (the “Common Co-Sale Option”). To the extent one or more Common Rights Holders exercise their Common Co-Sale Option in accordance with this Section 9.05, the number of Units that the Common Transferring Member may Transfer in the Proposed Common Transaction shall be correspondingly reduced. (b) Member Acceptance. Each of the Common Rights Holders shall have the right to exercise its Common Co-Sale Option by giving written notice of such intent to participate (the “Common Co-Sale Acceptance Notice”) to the Common Transferring Member within fifteen (15) days after receipt by such Common Rights Holder of the Common Co-Sale Notice (the “Common Co-Sale Election Period”). Each Common Co-Sale Acceptance Notice shall indicate the maximum number of Units subject thereto which such Common Rights Holder wishes to sell, including the number of Units it would sell if one or more other Common Rights Holders do not elect to participate in the sale on the terms and conditions stated in the Common Offer Notice. Any Common Rights Holder shall be permitted to sell to the relevant Common Buyer in connection with any exercise of the Common Co-Sale Option with respect to a sale of Units, Series A Preferred Units, Common Units or Class P Units at a price per Series A Preferred Unit, a price per Common Unit and a price per Class P Unit that reflects the rights, preferences and priorities of the Series A Preferred Units relative to the Common Units or Class P Units, as applicable. (c) Allocation of Units. Each Common Rights Holder shall have the right to sell a portion of its Units pursuant to the Proposed Common Transaction which is equal to or less than the product obtained by multiplying the total number of Units available for sale to the Common Buyer subject to the Proposed Common Transaction by a fraction, the numerator of which is the total number of Series A Preferred Units and Vested Common Units owned by such Common Rights Holder (including for each holder of Series A Preferred Units, as though such holder owned a pro-rata percentage of any Common Units forfeited or cancelled as of such date based on each such holder’s relative holdings of Series A Preferred Units) and the denominator of which is the total number of Series A Preferred Units and Vested Common Units held by all Common Rights Holders (including all Common Units forfeited or cancelled as of such date) and the Common Transferring Member, as of the date of the Common Offer Notice, subject to increase as hereinafter set forth. In the event any Common Rights Holder does not elect to sell the full amount of such Units which such Common Rights Holder is entitled to sell pursuant to this Section 9.05, then any Common Rights Holders who have elected to sell Units shall have the right to sell, on a pro-rata basis (based on the number of Units held by each such Common Rights Holder) with any other Common Rights Holders and up to the maximum number of Units stated in each such Common Rights Holder’s Common Co-Sale Acceptance Notice, any Units not elected to be sold by such other Common Rights Holder. (d) Co-Sale Closing. Within ten (10) calendar days after the end of the Common Co-Sale Election Period, the Common Transferring Member shall promptly notify each participating Common Rights Holder of the number of Units held by such Common Rights Holder that will be included in the sale and the date on which the Proposed Common Transaction will be consummated, which shall be no later than the later of (i) thirty (30) calendar days after the end of the Common Co-Sale Election Period and (ii) the satisfaction of any governmental approval or filing requirements, if any. Each participating Common Rights Holder may effect its participation in any Proposed Common Transaction hereunder by delivery to the Common Buyer, or to the Common Transferring Member for delivery to the Common Buyer, of one or more instruments or Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 220 of 258 PageID #: 238 42 certificates, properly endorsed for transfer, representing the Units it elects to sell pursuant thereto. At the time of consummation of the Proposed Common Transaction, the Common Buyer shall remit directly to each participating Common Rights Holder that portion of the sale proceeds to which the participating Common Rights Holder is entitled by reason of its participation with respect thereto. No Units may be purchased by the Common Buyer from the Common Transferring Member unless the Common Buyer simultaneously purchases from the participating Common Rights Holders all of the Units that they have elected to sell pursuant to this Section 9.05. (e) Liability of Members. No Common Rights Holder shall be required to make any representations or warranties or to provide any indemnities in connection therewith other than with respect to title to the Units being conveyed. (f) Sale to Third Party. Any Units held by a Common Transferring Member that are the subject of the Proposed Common Transaction and that the Common Transferring Member desires to Transfer following compliance with this Section 9.05, may be sold to the Common Buyer only during the period specified in Section 9.05(d) and only on terms no more favorable to the Common Transferring Member than those contained in the Common Offer Notice. Promptly after such Transfer, the Common Transferring Member shall notify the LLC, which in turn shall promptly notify all the Common Rights Holders, of the consummation thereof and shall furnish such evidence of the completion and time of completion of the Transfer and of the terms thereof as may reasonably be requested by a Series A Majority Interest. Prior to the effectiveness of any Transfer to a Common Buyer hereunder, such Common Buyer shall have joined this Agreement, and such Common Buyer shall have all the rights and obligations hereunder as if such Common Buyer were a Member. In the event that the Proposed Common Transaction is not consummated within the period required by this Section 9.05 or the Common Buyer fails timely to remit to each participating Common Rights Holder its respective portion of the sale proceeds, the Proposed Common Transaction shall be deemed to lapse, and any Transfer of Units pursuant to such Proposed Common Transaction shall be in violation of the provisions of this Agreement unless the Common Transferring Member sends a new Common Offer Notice and once again complies with the provisions of Sections 9.04 and 9.05 with respect to such Proposed Common Transaction. 9.06 Right of First Refusal on Series A Preferred Units. In the event that any Member holding Series A Preferred Units (a “Preferred Transferring Member”) receives a bona fide offer to purchase all or any portion of the Units held by such Investor (a “Proposed Preferred Transaction”) from a Person other than a Permitted Transferee, such Preferred Transferring Member may, subject to the provisions of Sections 9.01, 9.02 and 9.07 hereof, Transfer such Units pursuant to and in accordance with the following provisions of this Section 9.06: (a) The Preferred Transferring Member shall cause the Proposed Preferred Transaction and all of the terms thereof to be reduced to writing and shall promptly notify the LLC and each holder of Series A Preferred Units (the “Preferred Rights Holders”) of such Preferred Transferring Member’s desire to effect the Proposed Preferred Transaction and otherwise comply with the provisions of this Section 9.06 and, if applicable, Section 9.07 (such notice, the “Preferred Offer Notice”). The Preferred Transferring Member’s Preferred Offer Notice shall constitute an irrevocable offer to sell all of the Units which are the subject of the Proposed Preferred Transaction (the “Offered Preferred Units”) to the LLC and the Preferred Rights Holders, on the basis described Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 221 of 258 PageID #: 239 43 below, at a purchase price equal to the price contained in, and on the same terms and conditions of, the Proposed Preferred Transaction. The Preferred Offer Notice shall be accompanied by a true copy of the Proposed Preferred Transaction (which shall identify the proposed buyer (the “Preferred Buyer”) and all relevant information in connection therewith). (b) The LLC shall have the first option to purchase all or a portion of the Offered Preferred Units. At any time within twenty (20) days after receipt by the LLC of the Preferred Offer Notice (the “LLC Preferred Option Period”), the LLC may elect to accept the offer to purchase with respect to any or all of the Offered Preferred Units and shall give written notice of such election (the “LLC Preferred Acceptance Notice”) to the Preferred Transferring Member within the LLC Preferred Option Period, which notice shall indicate the number of Units that the LLC is willing to purchase. The LLC Preferred Acceptance Notice shall constitute a valid, legally binding and enforceable agreement for the sale and purchase of the Units covered by the LLC Preferred Acceptance Notice. If the LLC accepts the offer to purchase all of the Offered Preferred Units, the closing for such purchase of the Offered Preferred Units by the LLC under this Section 9.06(b) shall take place within thirty (30) days following the expiration of the LLC Preferred Option Period, at the offices of the LLC or on such other date or at such other place as may be agreed to by the Preferred Transferring Member and the LLC. If the LLC fails to purchase all of the Offered Preferred Units by exercising its option under this Section 9.06(b) within the period provided, the Preferred Transferring Member shall so notify the Preferred Rights Holders promptly (the “Additional Preferred Offer Notice”), which Additional Preferred Offer Notice shall identify the Offered Preferred Units that the LLC has failed to purchase (the “Remaining Preferred Units”). The Remaining Preferred Units shall be subject to the options granted to the Preferred Rights Holders pursuant to Section 9.06(c) below. (c) If the LLC fails to purchase all of the Offered Preferred Units under Section 9.06(b) above, at any time within thirty (30) days after receipt by the Preferred Rights Holders of the Additional Preferred Offer Notice (the “Preferred Option Period”), each Preferred Rights Holder may elect to accept the offer to purchase with respect to any or all of the Remaining Preferred Units and shall give written notice of such election (the “Preferred Acceptance Notice”) to the Preferred Transferring Member and each Preferred Rights Holder within the Preferred Option Period, which notice shall indicate the maximum number of Units that the Preferred Rights Holder is willing to purchase, including the number of Units it would purchase if one or more other Preferred Rights Holders do not elect to purchase their Pro Rata Preferred Fractions (as defined in paragraph (d) below). The Preferred Acceptance Notice shall constitute a valid, legally binding and enforceable agreement for the sale and purchase of the Units covered by the Preferred Acceptance Notice. The closing for any purchase of Units by the Preferred Rights Holders under this Section 9.06(c) (along with the purchase by the LLC of any Units under paragraph (b) above if the LLC is purchasing less than all of the Offered Preferred Units) shall take place within thirty (30) days following the expiration of Preferred Option Period, at the offices of the LLC or on such other date or at such other place as may be agreed to by the Preferred Transferring Member and such Preferred Rights Holders. The Preferred Transferring Member shall notify the Preferred Rights Holders promptly if any Preferred Rights Holder fails to offer to purchase all of its Pro Rata Preferred Fraction (as defined below). (d) Upon the expiration of the Preferred Option Period, the number of Units to be purchased by each Preferred Rights Holder shall be determined as follows: (i) first, there shall Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 222 of 258 PageID #: 240 44 be allocated to each Preferred Rights Holder electing to purchase, a number of Units equal to the lesser of (A) the number of Units as to which such Preferred Rights Holder accepted as set forth in its respective Preferred Acceptance Notice or (B) such Preferred Rights Holder’s Pro Rata Preferred Fraction and (ii) second, the balance, if any, not allocated under clause (i) above, shall be allocated to those Preferred Rights Holders who within the Preferred Option Period delivered a Preferred Acceptance Notice that set forth a number of Units that exceeded their respective Pro Rata Preferred Fractions, in each case on a pro rata basis in proportion to the number of Units held by each such Preferred Rights Holder up to the amount of such excess. A Preferred Rights Holder’s “Pro Rata Preferred Fraction” shall be equal to the product obtained by multiplying the total number of Remaining Preferred Units by a fraction, the numerator of which is the total number of Series A Preferred Units owned by such Preferred Rights Holder, and the denominator of which is the total number of Series A Preferred Units held by all Preferred Rights Holders in each case as of the date of the Preferred Offer Notice. (e) In the event that the price set forth in the Preferred Offer Notice is stated in consideration other than cash or cash equivalents, the Preferred Transferring Member, the LLC and a Series A Majority Interest shall mutually determine the fair market value of such consideration, reasonably and in good faith, and the LLC and/or Preferred Rights Holders, as the case may be, may affect their purchase under this Section 9.06 by payment of such fair market value in cash or cash equivalents. (f) In the event that the LLC and the Preferred Rights Holders do not elect to exercise the rights to purchase under this Section 9.06 with respect to all of the Units proposed to be sold, the Preferred Transferring Member may sell any such remaining Units to the Preferred Buyer on the terms and conditions set forth in the Preferred Offer Notice, subject to the provisions of Sections 9.03 and 9.07. Promptly after such Transfer, the Preferred Transferring Member shall notify the LLC, which in turn shall promptly notify all the Preferred Rights Holders, of the consummation thereof and shall furnish such evidence of the completion and time of completion of the Transfer and of the terms thereof as may reasonably be requested by a Series A Majority Interest. Prior to the effectiveness of any Transfer to a Preferred Buyer hereunder, such Preferred Buyer shall have agreed in writing to be bound by this Agreement in the same manner as the transferor, and such Preferred Buyer shall have all of the rights and obligations hereunder as if such Preferred Buyer were a Member. If the Preferred Transferring Member’s sale to a Preferred Buyer is not consummated in accordance with the terms of the Proposed Preferred Transaction on or before sixty (60) calendar days after the latest of: (i) the expiration of the LLC Preferred Option Period, (ii) the expiration of the Preferred Option Period, (iii) the expiration of the Preferred CoSale Election Period set forth in Section 9.07 below, if applicable, and (iv) the satisfaction of all governmental approval or filing requirements, the Proposed Preferred Transaction shall be deemed to lapse, and any Transfers of Units pursuant to such Proposed Preferred Transaction shall be in violation of the provisions of this Agreement unless the Preferred Transferring Member sends a new Preferred Offer Notice and once again complies with the provisions of this Section 9.06 with respect to such Proposed Preferred Transaction. 9.07 Co-Sale Option on Series A Preferred Units. In the event that the LLC and/or the Preferred Rights Holders do not exercise their rights under Section 9.06 with respect to all of the Units proposed to be so Transferred in connection with any Proposed Preferred Transaction, the Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 223 of 258 PageID #: 241 45 Preferred Transferring Member may Transfer such Units only pursuant to and in accordance with the following provisions of this Section 9.07: (a) Co-Sale Notice. As soon as practicable following the expiration of the Preferred Option Period, and in no event later than five (5) days thereafter, the Preferred Transferring Member shall provide notice to each of the Preferred Rights Holders (the “Preferred Co-Sale Notice”) of its right to participate in the Proposed Preferred Transaction on a pro rata basis with the Preferred Transferring Member (the “Preferred Co-Sale Option”). To the extent one or more Members exercise their Preferred Co-Sale Option in accordance with this Section 9.07, the number of Units that the Preferred Transferring Member may Transfer in the Proposed Preferred Transaction shall be correspondingly reduced. (b) Member Acceptance. Each of the Preferred Rights Holders shall have the right to exercise its Preferred Co-Sale Option by giving written notice of such intent to participate (the “Preferred Co-Sale Acceptance Notice”) to the Preferred Transferring Member within fifteen (15) days after receipt by such Preferred Rights Holder of the Preferred Co-Sale Notice (the “Preferred Co-Sale Election Period”). Each Preferred Co-Sale Acceptance Notice shall indicate the maximum number of Units subject thereto which such Preferred Rights Holder wishes to sell, including the number of Units it would sell if one or more other Preferred Rights Holders do not elect to participate in the sale on the terms and conditions stated in the Preferred Offer Notice. In connection with any proposed sale of Series A Preferred Units, each Preferred Rights Holder may only sell Series A Preferred Units. (c) Allocation of Units. Each Preferred Rights Holder shall have the right to sell a portion of its applicable Series A Preferred Units pursuant to the Proposed Preferred Transaction which is equal to or less than the product obtained by multiplying the total number of applicable Series A Preferred Units available for sale to the Preferred Buyer subject to the Proposed Preferred Transaction, by a fraction, the numerator of which is the total number of Series A Preferred Units owned by such Preferred Rights Holder, and the denominator of which is the total number of Series A Preferred Units held by all Preferred Rights Holders (including the Preferred Transferring Member), in each case as of the date of the Preferred Offer Notice. In the event any Preferred Rights Holder does not elect to sell the full amount of such Series A Preferred Units which such Member is entitled to sell pursuant to this Section 9.07, then any Preferred Rights Holders who have elected to sell Units shall have the right to sell, on a pro-rata basis (based on the number of applicable Series A Preferred Units held by each such Preferred Rights Holder) with any other Preferred Rights Holder and up to the maximum number of Units stated in each such Preferred Rights Holder’s Preferred Co-Sale Acceptance Notice, any Units not elected to be sold by such other Preferred Rights Holder. (d) Co-Sale Closing. Within ten (10) calendar days after the end of the Preferred Co-Sale Election Period, the Preferred Transferring Member shall promptly notify each participating Preferred Rights Holder of the number of Units held by such Preferred Rights Holder that will be included in the sale and the date on which the Proposed Preferred Transaction will be consummated, which shall be no later than the later of (i) thirty (30) calendar days after the end of the Preferred Co-Sale Election Period and (ii) the satisfaction of any governmental approval or filing requirements, if any. Each participating Preferred Rights Holder may effect its participation in any Proposed Preferred Transaction hereunder by delivery to the Preferred Buyer, or to the Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 224 of 258 PageID #: 242 46 Preferred Transferring Member for delivery to the Preferred Buyer, of one or more instruments or certificates, properly endorsed for transfer, representing the Units it elects to sell pursuant thereto. At the time of consummation of the Proposed Preferred Transaction, the Preferred Buyer shall remit directly to each participating Preferred Rights Holder that portion of the sale proceeds to which the participating Preferred Rights Holder is entitled by reason of its participation with respect thereto. No Units may be purchased by the Preferred Buyer from the Preferred Transferring Member unless the Preferred Buyer simultaneously purchases from the participating Preferred Rights Holders all of the Units that they have elected to sell pursuant to this Section 9.07. (e) Liability of Members. No Preferred Rights Holder shall be required to make any representations or warranties or to provide any indemnities in connection therewith other than with respect to title to the Units being conveyed. (f) Sale to Third Party. Any Units held by a Preferred Transferring Member that are the subject of the Proposed Preferred Transaction and that the Preferred Transferring Member desires to Transfer following compliance with this Section 9.07, may be sold to the Preferred Buyer only during the period specified in Section 9.07(d) and only on terms no more favorable to the Preferred Transferring Member than those contained in the Preferred Offer Notice. Promptly after such Transfer, the Preferred Transferring Member shall notify the LLC, which in turn shall promptly notify all the Members, of the consummation thereof and shall furnish such evidence of the completion and time of completion of the Transfer and of the terms thereof as may reasonably be requested by a Series A Majority Interest. Prior to the effectiveness of any Transfer to a Preferred Buyer hereunder, such Preferred Buyer shall have joined this Agreement, and such Preferred Buyer shall have all of the rights and obligations hereunder as if such Preferred Buyer were a Member. In the event that the Proposed Preferred Transaction is not consummated within the period required by this Section 9.07 or the Preferred Buyer fails timely to remit to each participating Member its respective portion of the sale proceeds, the Proposed Preferred Transaction shall be deemed to lapse, and any Transfer of Units pursuant to such Proposed Preferred Transaction shall be in violation of the provisions of this Agreement unless the Preferred Transferring Member sends a new Preferred Offer Notice and once again complies with the provisions of Sections 9.06 and 9.07 with respect to such Proposed Preferred Transaction. 9.08 Transfers of Interests by Officers. A Member who is also an Officer shall Transfer only the economic interests, rights, duties and obligations of the transferor in its capacity as a Member, and no Transferee shall obtain as a result of any such assignment any rights as an Officer. 9.09 Drag Along Right. (a) In the event the Series A Majority Interest (the “Selling Investors”) approves a Sale Event, each of the Members, including any of its successors as contemplated herein, hereby agrees, and shall be obligated to: (i) if such transaction requires Member approval, with respect to all Units that such Member owns or over which such Member otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Units in favor of, and adopt, such Sale Event and to vote in opposition to any and all other proposals that could delay or impair the ability of the LLC to consummate such Sale Event; Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 225 of 258 PageID #: 243 47 (ii) if such transaction is a Unit Sale, sell the same proportion of Units beneficially held by such Member as is being sold by the Selling Investors to the Person to whom the Selling Investors propose to sell their Units, and, on the same terms and conditions as the Selling Investors; provided that, the price per Unit shall reflect the relative preferences and priorities of the Series A Preferred Units and Common Units and Benchmark Amount of the Class P Units and, for the avoidance of doubt, the Benchmark Amount of the Common Units shall be considered a part of the preferences and priorities; (iii) to execute and deliver all related documentation and take such other action in support of the Sale Event as shall reasonably be requested by the LLC or the Selling Investors in order to carry out the terms and provisions of this Section 9.09, including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents; (iv) not deposit, and to cause their Affiliates to not deposit, except as provided in this Agreement, any Units of the LLC owned by such party or Affiliate in a voting trust or subject any Units to any arrangement or agreement with respect to the voting of such Units, unless specifically requested to do so by the acquirer in connection with the Sale Event; (v) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale Event; and (vi) if the consideration to be paid in exchange for the Units pursuant to this Section 9.09 includes any securities and due receipt thereof by any Member would require under applicable law (A) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (B) the provision to any Member of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the LLC may cause to be paid to any such Member in lieu thereof, against surrender of the Units which would have otherwise been sold by such Member, an amount in cash equal to the fair value (as determined in good faith by the LLC) of the securities which such Member would otherwise receive as of the date of the issuance of such securities in exchange for the Units. (b) Notwithstanding anything to the contrary set forth herein, a Member will not be required to comply with Section 9.09(a) in connection with any proposed Sale Event (the “Proposed Sale Event”), unless the following conditions are satisfied: (i) No Member (other than a Member who is then providing services to the LLC as an Officer, employee or consultant) shall be required to amend, extend or terminate any contractual or other relationship with the LLC, the acquirer or their respective Affiliates; and Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 226 of 258 PageID #: 244 48 (ii) if a Member is not an Officer, employee or consultant of the LLC, such Member shall not be required to agree to any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Proposed Sale Event; provided, however, that any such previously agreed to covenant shall continue in full force and effect pursuant to its terms. (c) By executing this Agreement, each Member hereby agrees that the failure by a Member to fulfill its obligations under this Section 9.09 following written notice and the failure to cure within five (5) days shall be deemed an event of default hereunder and upon any such event of default, such defaulting Member hereby (i) grants to the Selling Investors an irrevocable proxy coupled with an interest to vote its Units in accordance with its agreements contained in this Section 9.09, whether in a meeting of Members or any other means by which Members are required or requested to vote, consent, approve or otherwise take action or exercise any rights as a holder of Units or in their capacities as Members of the LLC, including a vote or other approval in favor of any Sale Event under this Section 9.09 if a Member vote is required or requested (whether by law or in accordance with this Agreement) to effect such Sale Event, and (ii) irrevocably appoints the Selling Investors as its agent and attorney-in-fact (the “Agent”) (with full power of substitution) to act with respect to its Units in accordance with its agreements contained in this Section 9.09, whether in a meeting of Members or any other means by which Members are required or requested to vote, consent, approve or otherwise take action or exercise any rights as a holder of Units or in their capacities as Members of the LLC, and to execute all consents, agreements, instruments and certificates and take all actions necessary or desirable to effectuate its agreements contained in this Section 9.09, including any Sale Event; provided, however, that such power-of-attorney and proxy shall automatically terminate in the event that the provisions of this Section 9.09 terminate (in accordance with the terms of this Agreement). Each such defaulting Member hereby grants to the Agent, pursuant to such proxy and power of attorney, full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such Agent, or such Agent’s substitute or substitutes, shall lawfully do or cause to be done by virtue of such proxy and power of attorney and the rights and powers herein granted. 9.10 Tax Forms/Withholding. Prior to the Transfer of any Units, the Members shall comply with the following: (a) if the Member who proposes to transfer any Units (or if such Member is a disregarded entity for U.S. federal income tax purposes, the first direct or indirect beneficial owner of such Member that is not a disregarded entity (the “Member’s Owner”)) is a “United States person” as defined in Section 7701(a)(30) of the Code, then such Member (or Member’s Owner, if applicable) shall complete and provide to both of the transferee and the LLC a duly executed affidavit in the form provided to such transferring Member by the LLC, certifying, under penalty of perjury, that the transferring Member (or Member’s Owner, if applicable) is not a foreign person, nonresident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate (as such terms are defined under the Code and applicable United States Treasury Regulations) and the transferring Member’s (or Member’s Owner’s, if applicable) United States taxpayer identification number; or Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 227 of 258 PageID #: 245 49 (b) if the Member who proposes to transfer any Units (or if such Member is a disregarded entity for U.S. federal income tax purposes, the Member’s Owner) is not a “United States person” as defined in Section 7701(a)(30) of the Code, then such transferor and transferee shall jointly provide to the LLC written proof reasonably satisfactory to the Board that any applicable withholding tax that may be imposed on such transfer (including pursuant to Sections 864 and 1446 of the Code) and any related tax returns or forms that are required to be filed, have been, or will be, timely paid and filed, as applicable. 9.11 Termination. The obligations under this Article 9 shall terminate upon the closing of a QPO. ARTICLE 10 DISSOLUTION, LIQUIDATION AND TERMINATION 10.01 Dissolution. The LLC shall dissolve and its affairs shall be wound up upon the first to occur of the following: (a) the approval of the Board and written consent of a Series A Majority Interest; (b) the entry of a decree of judicial dissolution under Section 18-802 of the Act; or (c) the consolidation or merger of the LLC in which it is not the resulting or surviving entity. 10.02 Notice of Dissolution. The Executive Officer(s) shall promptly notify the Members of the dissolution of the LLC. 10.03 Liquidation. Upon dissolution of the LLC, the Board shall act as its liquidating trustee or the Board may appoint one or more persons (who may or may not be Members) as liquidating trustee. The liquidating trustee shall proceed diligently to liquidate the LLC, to wind up its affairs and to make final distributions as provided in Section 8.02 and in the Act. The costs of dissolution and liquidation shall be an expense of the LLC. Until final distribution, the liquidating trustee may continue to operate the business and properties of the LLC with all of the power and authority of the Officers. As promptly as possible after dissolution and again after final liquidation, the liquidating trustee shall cause an accounting to be made by a firm of independent public accountants of the LLC’s assets, liabilities, operations and liquidating distributions to be given to the Members. 10.04 Certificate of Cancellation. Upon completion of the distribution of the LLC’s assets as provided herein, the LLC shall be terminated, and an Executive Officer (or such other person or persons as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State of the State of Delaware under the Act, cancel any other filings made pursuant to Article 1, and take such other actions as may be necessary to terminate the existence of the LLC. 10.05 Payments to Terminating Member. In the event that a Member withdraws from the LLC in violation of this Agreement (a “Terminating Member”), the LLC shall have the option to Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 228 of 258 PageID #: 246 50 purchase all or any part of the interest of the Terminating Member at a purchase price determined pursuant to paragraph (a) of this Section and upon the terms and conditions set forth below (unless otherwise agreed). The Terminating Member must give the LLC prompt notice of its withdrawal, and the option shall be exercisable in the LLC’s sole discretion by giving notice to the Terminating Member or its legal representative, at any time within ninety (90) days thereafter. Such notice shall state the price and terms of the LLC’s election to repurchase the interest of the Terminating Member, and the date set for the closing of the repurchase. (a) Unless the parties otherwise agree, the purchase price (the “Purchase Price”) to be paid to the Terminating Member shall be an amount equal to the amount such Terminating Member would receive with respect to the portion of the interest of the Terminating Member that the LLC has elected to repurchase if the LLC sold all of its assets for cash at current fair market value, as determined by the Board in its sole discretion, and applied the proceeds as provided in Section 8.02. The Purchase Price may be reduced by such damages as the Board (other than any Terminating Member) determines in its sole discretion have been or will be suffered by the LLC as a result of a termination due to the resignation of the Terminating Member. The parties to this Agreement agree that such determination of damages is final, conclusive and binding and such determination is not subject to appeal. (b) Payment of the Purchase Price may be made in the Board’s sole discretion (i) by check or by wire transfer to a bank account designated in writing by the Terminating Member, (ii) by delivery of a promissory note under which payments shall be made in equal annual installments over a period of five (5) years with interest at the applicable federal rate established by the IRS for the month in which the repurchase by the LLC is closed, which note shall be unsecured and subordinated to all debts and liabilities of the LLC, or (iii) by any combination of (i) and (ii). Amounts due shall be subject to offset as provided in Section 11.01. (c) The LLC shall have the right (to be exercised in the discretion of the Board) to assign all or part of its rights under an option which it has elected to exercise to another Member or a third party to be admitted as a new Member, provided that the assigned portion of the Purchase Price shall be payable by check or wire transfer and not by delivery of a note under paragraph (b). (d) Failure of the LLC to elect to purchase any interests of a Terminating Member under this Section 10.05 shall not affect the rights of the LLC to purchase the same interests under any other provision of this Agreement or any other agreement, and any Units not repurchased hereunder shall continue to be subject to all of the provisions of this Agreement. (e) Upon payment of the Purchase Price at the closing of a repurchase as provided above, (i) the Terminating Member shall cease to have any rights with respect to the Units being repurchased and (ii) if all of its Units are repurchased from a Terminating Member, such Terminating Member shall cease to be a Member of the LLC. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 229 of 258 PageID #: 247 51 ARTICLE 11 GENERAL PROVISIONS 11.01 Offset. Whenever the LLC is obligated to make a distribution or payment to any Member, any amounts due and owing from that Member to the LLC may be deducted from said distribution or before payment by the LLC. 11.02 Notices. Except as expressly set forth to the contrary in this Agreement, all notices, requests, or consents required or permitted to be given under this Agreement must be in writing and shall be deemed to have been given (a) three (3) days after the date mailed by registered or certified mail, addressed to the recipient, with return receipt requested, (b) upon delivery to the recipient in person or by courier, (c) upon receipt of a facsimile transmission by the recipient, or (d) upon receipt of electronic mail by the recipient. Such notices, requests and consents shall be given (i) to Members at their numbers or addresses on Schedule A, or such other numbers or address as a Member may specify by notice to the Executive Officer(s) or to all of the other Members, and (ii) to the LLC or the Executive Officer(s) at the address of the principal office of the LLC specified in Section 1.04. Whenever any notice is required to be given by law, the Certificate or this Agreement, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. 11.03 Entire Agreement. This Agreement, the documents expressly referred to herein, and related documents of even date herewith constitute the entire agreement of the Members, the Directors and the Executive Officer(s) relating to the LLC or to the subject matter hereof in any way, and supersedes all prior understandings, representations, contracts or agreements with respect to the LLC, whether oral or written. The Amended and Restated LLC Agreement is hereby superseded in its entirety and of no further force or effect. 11.04 Amendment or Modification. Except as otherwise specifically provided herein, this Agreement may be amended or modified from time to time only by a written instrument signed by a Series A Majority Interest; provided that, no amendment which, by its terms, adversely affects the holders of the Common Units and/or the Class P Units in a unique manner relative to the holders of the Series A Preferred Units shall be effective without the prior written consent of the holders of a majority of the Common Units or the Class P Units, as applicable; provided, further, that the authorization and issuance of any equity security of the LLC containing rights, preferences or priorities which are senior to the Common Units and/or Class P Units, as applicable, shall not be deemed an amendment of the rights, preferences or priorities of the Common Units and/or Class P Units for purposes of the foregoing, including, without limitation, any third party armslength debt or equity financing which does not amend the terms of Schedule B. 11.05 Reorganization into Corporate Form. Subject to Section 2.05(b), a Series A Majority Interest may, at any time and without the vote or consent of the other Members, effect a reorganization of the LLC in connection with an initial public offering, into a Successor Corporation by whatever means the Series A Majority Interest deems desirable; provided, however, that it shall be a condition precedent to such reorganization that in connection with such reorganization, (i) each Common Unit and Class P Unit shall each be converted into the number of shares of common stock of the Successor Corporation so that each Member’s relative percentage Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 230 of 258 PageID #: 248 52 ownership interest of the outstanding common stock of the Successor Corporation immediately after such reorganization is such Member’s relative percentage ownership interest of the outstanding Common Units and Class P Units in the LLC immediately prior to such reorganization (giving effect to all rights, preferences and priorities of the Series A Preferred Units contemplated herein) and (ii) each Series A Preferred Unit shall be converted into a number of fully paid and nonassessable shares of one or more classes of preferred stock of the Successor Corporation that have all the rights, preferences and priorities of the Series A Preferred Units contemplated herein and an aggregate value, with respect to each Member holding Series A Preferred Units, equal to such Member’s relative percentage ownership interest of the outstanding equity interests in the LLC immediately prior to such reorganization (giving effect to all rights, preferences and priorities of the Series A Preferred Units contemplated herein). In such case, all Members shall provide all necessary cooperation, including, without limitation, the execution of any documents or filings that may be required, and no Member shall have any voting rights or veto power over the decision by the Majority Interest to so reorganize. 11.06 Binding Effect. Subject to the restrictions on Transfers set forth in this Agreement, this Agreement is binding on and inures to the benefit of the parties and their respective heirs, legal representatives, successors and assigns. 11.07 Governing Law; Severability. This Agreement is governed by and shall be construed in accordance with the law of the State of Delaware, exclusive of its conflict-of-laws principles. In the event of a conflict between the provisions of this Agreement and any provision of the Certificate or the Act, the applicable provision of this Agreement shall control, to the extent permitted by law. If any provision of this Agreement or the application thereof to any person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision shall be enforced to the fullest extent permitted by law. 11.08 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions, as requested by the Executive Officer(s) or Directors. 11.09 Waiver of Certain Rights. Each Member irrevocably waives any right it may have to maintain any action for dissolution of the LLC or for partition of the property of the LLC. The failure of any Member to insist upon strict performance of a covenant hereunder or of any obligation hereunder, irrespective of the length of time for which such failure continues, shall not be a waiver of such Member’s right to demand strict compliance herewith in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation hereunder, shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation hereunder. 11.10 Interpretation. For the purposes of this Agreement, terms not defined in this Agreement shall be defined as provided in the Act; and all nouns, pronouns and verbs used in this Agreement shall be construed as masculine, feminine, neuter, singular, or plural, whichever shall be applicable. Titles or captions of Articles and Sections contained in this Agreement are inserted Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 231 of 258 PageID #: 249 53 as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof. 11.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 11.12 Third Party Beneficiaries. The provisions of this Agreement are not intended to be for the benefit of any creditor or other person to whom any debts or obligations are owed by, or who may have any claim against, the LLC or any of its Members, Directors or Officers, except for Members, Directors or Officers in their capacities as such. Notwithstanding any contrary provision of this Agreement, no such creditor or person shall obtain any rights under this Agreement or shall, by reason of this Agreement, be permitted to make any claim against the LLC or any Member, Director or Officer. 11.13 Section 83(b) Elections. Any Person who is issued Units (whether Common Units, Class P Units or otherwise) that are subject to a vesting arrangement shall make a timely election under Section 83(b) of the Code and in accordance with Treasury Regulations Section 1.83-2 with respect to such Units and shall provide the LLC a copy of such election within thirty (30) days after receiving such Units. 11.14 Partnership Status. Subject to Section 11.05, it is the intent of the Members that the LLC shall always be characterized as either a “partnership” or a “disregarded entity” for federal and state income tax purposes. Neither the LLC nor any Member shall make any election or take any other action inconsistent with such intent. This characterization, solely for such tax purposes, does not create or imply a general partnership among the Members for state law or any other purpose. 11.15 Section 83 Safe Harbor. Each Member authorizes and directs the LLC to elect to have the “Safe Harbor” described in the proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43 (the “IRS Notice”), including any similar safe harbor in any finalized Revenue Procedure, Revenue Ruling or Regulation, apply to any interest in the LLC issued or transferred to a service provider by the LLC on or after the effective date of such final pronouncement in connection with services provided to the LLC or any of its Subsidiaries. For purposes of making such Safe Harbor election, the Partnership Representative (or successor) is hereby designated as the “partner who has responsibility for Federal income tax reporting” by the LLC and, accordingly, execution of such Safe Harbor election by the Partnership Representative (or successor) constitutes execution of a “Safe Harbor Election” in accordance with the IRS Notice or any similar provision of any final pronouncement. The LLC and each Member hereby agree to comply with all requirements of any such Safe Harbor, including any requirement that a Member prepare and file all Federal income tax returns reporting the income tax effects of each Unit issued by the LLC in connection with services in a manner consistent with the requirements of the IRS Notice or other final pronouncement. A Member’s obligations to comply with the requirements Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 232 of 258 PageID #: 250 54 of this Section 11.15 shall survive such Member’s ceasing to be a Member of the LLC and the termination, dissolution, liquidation and winding up of the LLC. [Remainder of Page Intentionally Left Blank] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 233 of 258 PageID #: 251 [Signature Page to Amended and Restated Limited Liability Company Agreement of 1SEO Holdings, LLC] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. LLC: 1SEO HOLDINGS, LLC By: Name: Title: Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 234 of 258 PageID #: 252 [Signature Page to Amended and Restated Limited Liability Company Agreement of 1SEO Holdings, LLC] JOINDER TO THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT Executed as of February __, 2023. IN WITNESS WHEREOF, the undersigned hereby agrees to become a party to and bound by the terms of the Amended and Restated Limited Liability Company Agreement of 1SEO Holdings, LLC as a Member. PLEASE SIGN AND PRINT THE INVESTOR’S NAME BELOW IN THE EXACT MANNER IN WHICH THE INVESTOR WOULD LIKE THE INVESTOR’S NAME TO APPEAR ON SCHEDULE A TO THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF 1SEO HOLDINGS, LLC: [Print Legal Name of Investor] By: [Signature] Its: [Title] Address: Email: Phone: Fax: ______________________________ Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 235 of 258 PageID #: 253 Schedule A Page 1 Schedule A Members Name and Address Series A Total Capital Contribution Series A Preferred Units Common Units Class P Units Benchmark Amount Total Units TOTAL: Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 236 of 258 PageID #: 254 Schedule B Page 1 Schedule B Vesting Terms Allocation. Initial Allocation: John Shoaf, or his Affiliate, Benson Circle, LLC, (in either case, the “Common Unit Holder”) shall be issued the number of Common Units set forth opposite its name on Schedule A to the Agreement on the Acquisition Date (the “Grant Date”). All such Common Units shall be Unvested Common Units for all purposes under the Agreement as of the Grant Date and shall vest in accordance with the terms set forth herein. Future Allocation: In connection with any Capital Contribution following the date hereof, if the value of the Units issued in connection with such Capital Contribution are equal to or greater than the value of such Units as of the Acquisition Date, additional Common Units shall be issued to the Common Unit Holder such that the Common Unit Holder’s Ownership Percentage (on a fully-diluted basis) remains constant. Such additional Common Units shall have the following vesting terms: • with respect to any Capital Contribution made following the date hereof, four-fifths (4/5ths) of such Common Units shall vest upon the date of the Closing of the issuance of any Preferred Units, and one-fifth (1/5th) of such Common Units shall vest on the same basis as the Performance Units issued herein. I. Vesting upon the Acquisition. 1,866,667 of the Common Units that shall be issued to the Common Unit Holder on the Grant Date (collectively, the “Acquisition Units”) shall vest as of the date on which the Acquisition is consummated (the “Acquisition Date”) on the terms set forth in the Purchase Agreement. As of the Acquisition Date, the Acquisition Units shall become Vested Common Units for all purposes under the Agreement and shall not be subject to forfeiture. II. Performance-Based Vesting. A. 466,666 of the Common Units that shall be issued to the Common Unit Holder on the Grant Date (collectively, the “Performance Units”) shall vest based upon the realization of the following multiples of invested capital by all of the holders of the Series A Preferred Units in respect of their Series A Preferred Units (each, an “MOIC”), as determined by the Board in good faith based on amounts of cash or freely tradable securities actually received by or payable to the holders of Series A Preferred Units, calculated on an aggregated basis on or before the earliest of (i) the consummation of a Sale Event, (ii) the consummation of a QPO and (iii) such other Liquidation Event (each a “Trigger Event”): Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 237 of 258 PageID #: 255 Schedule B Page 2 Aggregate Preferred Unit MOIC % of Performance Units Vested Less than 3.0x (“MOIC – Applicable Lower Bound”) 0% Equal to or greater than 3.0x and less than 5.0x A percentage calculated as follows: ((MOIC- Applicable Lower Bound) / (2.0)*100 Equal to or greater than 5.0x (“MOIC – Applicable Upper Bound”). 100% B. The Board, in its sole discretion and subject to the provisions of the Agreement, may accelerate the vesting of any then unvested Performance Units. III. Election Under Section 83(b). The Common Unit Holder shall, within 30 days following the Grant Date, file with the Internal Revenue Service an election under Section 83(b) of the Internal Revenue Code. The Common Unit Holder shall provide a copy of such election to the LLC. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 238 of 258 PageID #: 256 EXHIBIT B Subordinated Promissory Note [See attached. ] EXHIBIT B Subordinated Promissory Note [See attached. ] EXHIBIT B Subordinated Promissory Note [See attached.] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 239 of 258 PageID #: 257 THIS SUBORDINATED PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, OFFERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER. THIS NOTE IS ENTERED INTO PURSUANT AND SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN ASSET PURCHASE AGREEMENT (THE “PURCHASE AGREEMENT”), DATED AS OF FEBRUARY 17, 2023, BY AND AMONG MAKER, HOLDER AND THE OTHER PARTIES THERETO. THIS NOTE AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY SHALL BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT IN ACCORDANCE WITH THE SUBORDINATION AGREEMENT (AS DEFINED HEREIN). SUBORDINATED PROMISSORY NOTE [$_____] [Date] FOR VALUE RECEIVED, 1SEO Digital Agency, LLC, a Delaware limited liability company (“Maker”), promises to pay to 1SEO.com Inc., a Pennsylvania corporation (“Holder”), the aggregate principal sum of [[_____] ($____)] (the “Principal Amount”), on the terms and conditions set forth below. 1. Payments. (a) Maker shall, commencing on [*, 2025], and continuing on the final day before the end of each calendar quarter thereafter, pay equal quarterly installments of the Principal Amount over the twelve (12) month period ending [*, 2026] (i.e., a total of four quarterly installments) (the “Maturity Date”). (b) On the Maturity Date, a final payment in the aggregate amount of the then outstanding and unpaid Principal Amount, if any, shall become immediately due and payable in full. (c) Prior to the Maturity Date, Maker may prepay all or any portion of this Note at any time or times and in any amount without premium or penalty. (d) If all or any amount payable under this Note is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration, or otherwise, such overdue amount shall bear interest at a rate equal to five percent (5%) per annum. (e) If the date on which any payment under this Note is due is not a Business Day, then such payment date shall be extended to the next Business Day. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 240 of 258 PageID #: 258 (f) All payments by Maker hereunder must be made to Holder in immediately available U.S. funds by wire transfer, pursuant to instructions delivered by Holder, or at its address specified in the Purchase Agreement, or to such other address as Holder may inform Maker by giving five (5) business days’ prior written notice. 2. Right of Setoff. Maker shall be entitled, but not obligated, to recover any amounts due from Holder or Lance Bachmann under the Purchase Agreement by setting off such amounts against this Note in accordance with the terms of the Purchase Agreement. The exercise of such right of setoff by Maker, whether or not ultimately determined to be justified, will not constitute an event of default under this Note. Neither the exercise nor the failure to exercise such right of setoff will constitute an election of remedies or limit Maker in any manner in the enforcement of any other remedies that may be available to it. If Maker exercises its right of setoff, the amount being recovered by Maker shall reduce the Principal Amount otherwise payable hereunder by the amount of such setoff. Upon the reasonable request of Holder or Maker, from time to time, an amended and restated Note shall be issued by Maker to Holder for the then-effective Principal Amount of this Note (and in such case the existing Note shall be surrendered to Maker by Holder) to reflect reductions in the Principal Amount of this Note as a result of any such offset. If Maker exercises its right of setoff and subsequently either (a) Maker and Holder agree that all or a portion of such amount should not have been setoff and is owed to Holder, or (b) a final judgment (no longer subject to appeal) is entered which provides that all or a portion of such amount should not have been setoff and is owed to Holder, then Maker shall pay such amount to Holder. 3. Subordination. This Note is subordinated in accordance with that certain Subordination Agreement, dated as of the date hereof, between Maker, Holder, 1SEO Holdings, LLC, and Live Oak Banking Company, a North Carolina banking corporation (the “Subordination Agreement”). 4. Unsecured Note. This Note is an unsecured obligation of Maker. 5. Events of Default; Remedies. (a) Events of Default. For purposes of this Note, the occurrence of any of the events described below shall constitute an “Event of Default:” (i) Maker fails to make any payment of the Principal Amount owed under this Note in accordance with the terms hereof for a period of fifteen (15) days after written notice from Holder that the same is due and payable; (ii) A proceeding is instituted against Maker seeking a declaration or order for relief, or entailing a finding, that Maker is insolvent or bankrupt, or seeking reorganization, liquidation, dissolution, winding-up, charter revocation or other similar relief with respect to Maker or any of its properties, assets or debts, or seeking the appointment of a receiver, trustee, custodian, liquidator, sequestrator or similar official for Maker or any of its properties or assets, and such proceeding remains undismissed and unstayed for a period of sixty (60) consecutive days; or (iii) Maker institutes a proceeding described in subsection (ii) above, consents to any such declaration, order, finding, relief or appointment described in subsection (ii) Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 241 of 258 PageID #: 259 above or takes any action in furtherance of any of the foregoing and such proceeding remains undismissed and unstayed for a period of sixty (60) consecutive days. (b) Remedies. If an Event of Default has occurred and is continuing: (i) Holder may, upon written notice to Maker, declare all or any portion of the amounts owed under this Note to be immediately due and payable; and (ii) Holder shall be entitled to exercise any other rights which Holder may have been afforded under any contract or agreement, including the Purchase Agreement, at any time and other rights which Holder may have pursuant to applicable law. 6. Miscellaneous. (a) No delay or omission on the part of Holder in the exercise of any right or remedy hereunder shall operate as a waiver thereof, and no partial exercise of any right or remedy precludes other or further exercise thereof or the exercise of any other rights or remedies. (b) Maker, signers, sureties, endorsers and guarantors, if any, of this Note jointly and severally waive grace, presentment for payment, notice of renewals and extensions, notice of nonpayment, notice of protest, notice of and demand for payment of amounts coming due under this Note that are not paid when due, notice of intent or election to accelerate maturity or the actual acceleration of maturity of the indebtedness evidenced by this Note, and diligence in the collection hereof or in filing suit hereon and agree to one or more extensions for any period or periods of time and partial payments before or after maturity without prejudice to Holder. (c) Any notice required or permitted to be given hereunder shall be given in accordance with Section 9.7 of the Purchase Agreement. (d) This Note shall not be assigned or transferred by Holder without the express prior written consent of Maker. (e) Notwithstanding anything in this Note to the contrary, this Note shall be binding on any successors and assigns of Holder and Maker. (f) This Note shall be governed and construed solely and exclusively in accordance with the domestic laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule. (g) Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Note shall be brought exclusively in a Federal District Court or State Court located in Wilmington, Delaware, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. (h) Waiver of Jury Trial. EACH OF MAKER AND HOLDER WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS NOTE IN ANY Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 242 of 258 PageID #: 260 ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF MAKER OR HOLDER AGAINST THE OTHER OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. MAKER AND HOLDER AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, MAKER AND HOLDER FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE. [Reminder of This Page Left Intentionally Blank] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 243 of 258 PageID #: 261 IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first written above. MAKER: 1SEO DIGITAL AGENCY, LLC By: Name: John Shoaf Title: Executive Chairman Acknowledged and agreed to: HOLDER: 1SEO.COM INC. By: Name: Lance Bachmann Title: President Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 244 of 258 PageID #: 262 SECTION 1.4 Earnout Calculation 24-MO EBITDA Annual Avg Earnout Total EV 5,300,000 2,650,000 – 13,000,000 5,400,000 2,700,000 428,571 13,428,571 5,500,000 2,750,000 857,143 13,857,143 5,600,000 2,800,000 1,285,714 14,285,714 5,700,000 2,850,000 1,714,286 14,714,286 5,800,000 2,900,000 2,142,857 15,142,857 5,900,000 2,950,000 2,571,429 15,571,429 $ 6,000,000 $ 3,000,000 3,000,000 $16,000,000 SECTION 1.4 Earnout Calculation Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 245 of 258 PageID #: 263 SCHEDULE 1.10 Working Capital Calculation Methodology The illustrative calculation of Working Capital set forth below as of February 6, 2023 (the “Illustrative Calculation”) has been included for illustrative purposes only. The line items included represent the only line items to be included in the calculation of Working Capital under the Agreement; however, the amounts contained within the line items shall not form part of the calculation of Working Capital and remain subject to the terms and provisions of the Agreement. In addition, Working Capital shall be prepared in the same form and format as set forth in this Illustrative Calculation of Working Capital. [Illustrative Calculation of Working Capital attached] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 246 of 258 PageID #: 264 1SEO.Com Balance Sheet As of February 6, 2023 Actual Current BS Estimated Closing BS Estimated Closing BS Sample Final Closing BS Comments/Questions 6-Feb 14-Feb QuickBooks Seller NewCo NewCo ASSETS Current Assets Bank Accounts 1seo.com – – – – Centric 25,674 25,674 – – Checking-Citizens 528 528 – – TD Bank 02/27/2019 3,287,400 3,287,400 – – Truist 378 378 – – Total Bank Accounts (“Cash Amount”) 3,313,980 3,313,980 – – Economically, this gets split between buyer and seller (see below), but technically stays with Seller (so Lance doesn’t have to pay tax on us buying cash) Accounts Receivable Accounts Receivable 554,502 554,502 558,228 500,000 Balance as of Feb 6. Future value for illustrative purposes only for amounts actually collected from original AR balance Total Accounts Receivable 554,502 554,502 558,228 500,000 Other Current Assets Due from Red Dawg – – – – Stay with seller Employee Advance – – – – Stay with seller ERC Receivable 1,126,866 1,126,866 – – Stay with seller Exchange – – – – Stay with seller Officer Advance-LB – – – – Stay with seller Pre-Paid Tax – – – – Stay with seller Prepaid Expense 24,399 – 8,100 20,000 Prepaid conference expense, per Joline should be closer to $8,100 Prepaid Insurance – – – – Stay with seller Receivable – Ex employee – – – – Stay with seller Shared Asset – – – – Stay with seller Shared Asset Tax – – – – Stay with seller Undeposited Funds 48,700 48,700 – – Assume this is cash and stays with seller Total Other Current Assets 1,199,965 1,175,566 8,100 20,000 Total Current Assets 5,068,447 5,044,048 566,328 520,000 “Assumed Current Assets” Fixed Assets Accumulated Depreciation (816,586) (816,586) NA Automobile 532,469 532,469 NA Furniture and Fixtures 90,900 – NA Leasehold Improvement 25,527 – NA Office Equipment 267,836 – NA Total Fixed Assets 100,146 (284,117) Other Assets Advance-Bachmann – – NA Advance-JSL Real Estate – – NA Goodwill 7,778 7,778 NA Intangibles 36,750 36,750 NA Security Deposit (SLC office, closed) – – NA Total Other Assets 44,528 44,528 – TOTAL ASSETS 5,213,121 4,804,459 566,328 LIABILITIES AND EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable 7,500 – – 10,000 Seller to pay off oustanding bills at closing, example variance for illustrative purposes only Total Accounts Payable 7,500 – – 10,000 Credit Cards Amex Black 03/10/2020 73,241 73,241 – – Amex Gold 03/10/2020 (198) (198) – – Amex Platinum 03/10/2020 710 710 – – Amex Plum 03/10/2020 21,840 21,840 – – Credit Card(5) at American Exp – – – – Credit Card(7) at American Exp – – – – Total Credit Cards 95,594 95,594 – – Seller to pay off cards at closing. Buyer to set up new CC Other Current Liabilities 401k Liability – – Stay with seller Accrued Expenses – – – 25,000 Seller to prepare a list of any known expenses that aren’t otherwise included in accounts payable at closing. Assumed zero at close. Future value for illustrative purpose only Accrued Payroll – – – – Seller to make final payroll through Closing (including any deferred bonus, overtime, accrued, PTO, etc.) Citizens Line of Credit – – – – Shutting down at closing Deferred Advertising 26,400 – 26,400 25,000 Client advertising funds (retained by buyer and spent post closing) Deferred Income 2,230,103 – 1,711,034 1,750,000 Estimated balance for Feb 14th (per Jolin and Luke deferred revenue schedule). Pending schedule of DR amount balances per client as support documentation Due to Comcast PSM Holding – – – – Stay with seller Due to Shock IT – – – – Stay with seller Garnishments – – – – Stay with seller Loan M&T – Mercedes – – – – Stay with seller Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 247 of 258 PageID #: 265 Loan Payable-Centric – – – – Stay with seller Loan Payable-Centric PPP Funds – – – – Stay with seller Loan Payable-GM Financial – – – – Stay with seller Loan WF – GMC Sierra – – – – Stay with seller LSTB 1,029 1,029 – – Stay with seller Payroll Tax Liabilities – – – – Stay with seller Salary Exchange – – – – Stay with seller Total Other Current Liabilities 2,257,532 1,029 1,737,434 1,800,000 Total Current Liabilities 2,360,626 96,623 1,737,434 1,810,000 “Assumed Current Liabilities” Long-Term Liabilities EIDL Loan 2,059,558 2,059,558 – – Stay with seller Loan M&T Bank – Mercedes 89,170 89,170 – – Stay with seller Loan Payable – 2022 GMC 74,403 74,403 – – Stay with seller Loan Payable TD Bank – Lincoln Nav 65,560 65,560 – – Stay with seller Loan Payable- Volvo 37,934 37,934 – – Stay with seller Loan Payable-Chrysler Toyota – – – – Stay with seller Loan Payble Centric – Jeep – – – – Stay with seller Loan Wells Fargo – GMC Sierra – – – – Stay with seller Toyota Loan 1 – – – – NA Toyota Loan 2 – – – – NA Toyota Loan 3 – – – – NA Toyota Loan 4 – – – – NA Total Long-Term Liabilities 2,326,626 2,326,626 – – Total Liabilities 4,687,252 2,423,249 1,737,434 1,810,000 Equity AAA Bachmann – – – – Stay with seller AAA Zeitland – – – – Stay with seller Capital Stock 500 500 – – Stay with seller Distributions – – – – Stay with seller Distribution-LB (2,639,041) (2,639,041) – – Stay with seller Distribution-Lance Tax (613,890) (613,890) – – Stay with seller Total Distribution-LB (3,252,931) (3,252,931) – – Stay with seller Distributions-Sz – – – – Stay with seller Distributions-Sam Tax – – – – Stay with seller Total Distributions-Sz – – – – Stay with seller Total Distributions (3,252,931) (3,252,931) – – Stay with seller EIDL Advance – – – – Stay with seller Members Equity 3,082,083 3,082,083 – – Stay with seller PPP Loan Forgiveness – – – – Stay with seller Retained Earnings 346,395 346,395 – – Stay with seller Net Income 349,822 349,822 – – Stay with seller Total Equity 525,869 525,869 – – TOTAL LIABILITIES AND EQUITY 5,213,121 2,949,118 1,737,434 1,810,000 AT CLOSING (JAN 31) – Estimated Est. Assumed Current Assets (excluding cash) 566,328 Est. Assumed Current Liabiliites 1,737,434 Est. Assumed Working Capital (1,171,106) Target Net Working Capital @ Closing (Per LOI) 180,000 180,000 Cash on BS at Closing $ 3,313,980 Estimated “Working Capital Deficit” (amount to Buyer) $ (1,351,106) Amount credited for Buyer to offset assumed liabilities Net Closing Cash (amount to Seller) $ 1,962,874 Amount remaining for seller “Debt Amount” 2,059,558 2,059,558 – EIDL Loan. To be paid off at Closing WC ESCROW CLOSING (JULY 31) – Final Final Current Assets (excluding cash) 520,000 Final Current Liabiliites 1,810,000 Final Working Capital (180 days after Closing) (1,290,000) Target Net Working Capital @ Closing (Per LOI) 180,000 180,000 Final “Working Capital Deficit” (amount to Buyer) (1,470,000) Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 248 of 258 PageID #: 266 Working Capital “True-Up” Amount (118,894) Estimated Cash Payment (ECP) 5,577,212 Final Cash Payment (FCP) 5,458,318 WC Escrow Amount (50% of Estimated NWC) $ 400,000 50% of Estimated NWC Escrow – released to buyer (if positive variance) (118,894) If ECP > FCP, excess paid by Sellers to Buyer (APA corection: from Escrow?) Escrow – released to seller (if vegative variance) – If FCP > ECP, excess paid by Buyer to Company (APA corection: from Escrow?) Escrow – remainder released to seller 281,106 Total Escrow Released to Seller 281,106 Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 249 of 258 PageID #: 267 SCHEDULE 1.11 Allocation Schedule Purchase Price Allocation Methodology — IRC Section 1060 [See attached.] SCHEDULE 1.11 Allocation Schedule Purchase Price Allocation Methodology – IRC Section 1060 [See attached.] Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 250 of 258 PageID #: 268 Asset Class Amount Desription I $ – Cash and cash equivalents II $ 390,000 Actively traded personal property, certificates of deposit and other Class II assets III $ 550,000 Accounts receivable and other Class III assets IV Inventories, work-in-process, supplies and other Class IV assets V $ 390,000 Prepaid assets, property, plant and equipment, fixed assets, furniture, fixtures, machinery, equipment, similar tangible assets and other Class V assets VI $ 50,000 Restrictive Covenant Agreement VI $ 5,200,000 Other Intellectual Property VIII $ 9,420,000 Goodwill (any variance shall be allocated to Goodwill) $ 16,000,000 Estimated Total Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 251 of 258 PageID #: 269 SCHEDULE 1.12 Non-Assignable Assets None. SCHEDULE 1.12 Non-Assignable Assets None. SCHEDULE 1.12 Non-Assignable Assets None. SCHEDULE 1.12 Non-Assignable Assets None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 252 of 258 PageID #: 270 SCHEDULE 4.8 Hired Employees 1. All employees listed on Section 3.16(a) of the Disclosure Schedule, except Lance Bachmann, Jolin Bachmann and any other individual who is designated in such schedule as ‘no longer with the Company as of Closing.’ 2. Shauna Cwick is the only Person who qualifies under the category of Excluded Employees. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 253 of 258 PageID #: 271 SCHEDULE 5.1(D) Indebtedness Paid at Closing 1. $2,081,681.62 (payoff from that certain Lon Agreement dated June 24, 2020, as amended on July 27, 2021, October 21, 2021, and February 28, 2022, by and between the U.S. Small Business Administration and the Company in connection with an EIDL credit facility in the amount of $2,000,000, SBA Loan Number 2993798007). Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 254 of 258 PageID #: 272 SCHEDULE 5.1(E) Third Party Consents Under Contracts and Permits 1. Merchant Payment Service by and between the Company and Intuit Payments Inc. 2. The Lease Agreement between Red River Island View, LLC and the Company in connection with a lease for a portion of the property located at 1414 Radcliffe St. Bristol, PA 19007, as amended by the First Amendment to Lease dated August 2016, the Second Amendment to Lease dated October 10, 2017, the Third Amendment to Lease dated September 1, 2018, and the Fourth Amendment to Lease dated November 9, 2021 (the “Lease”). Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 255 of 258 PageID #: 273 SCHEDULE 6.1(A)(IV) Specific Indemnities 1) Adverse Consequences from or related to the Company’s failure to pay distributions to its shareholders. 2) Adverse Consequences from or related to the Agreement for Purchase and Sale of Shares between Lance Bachmann and Sam Zeitlin dated July 26, 2021. 3) Adverse Consequences from or related to the improper forgiveness of the Loan Agreement by and between Centric Bank and the Company in connection with a Payment Protection Program (“PPP”) loan to the Company, which was forgiven in full on January 25, 2021. 4) Adverse Consequences from or related to the Company’s seeking of Employee Retention Credits. 5) Adverse Consequences from or related to the Company’s failure to pay state sales and use tax in all states where the Company’s services are not exempt from sales and/or use tax. 6) Adverse Consequences from or related to 1SEO COM Inc v. Nicholas Quirk (Bucks County Common Pleas #2018-06290). Settled March 23, 2020. 7) Adverse Consequences from or related to 1SEO.com, Inc. v. SEO Locale et al. (U.S. District Court, Eastern District of Pennsylvania, No. 19-cv-1472-GEKP), which settled in March of 2020. 8) Adverse Consequences from or related to My Phillie Wireless v. 1SEO (Philadelphia County C.C.P., October Term 2022, No. 2151) (the “My Phillie Wireless Litigation”). 9) Adverse Consequences from or related to Villainarts, Inc. et al. v. 1SEO.com, Inc. et al. (Philadelphia County C.C.P., November Term 2020, No. 01238). Settled September 27, 2021. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 256 of 258 PageID #: 274 SCHEDULE 8(A) Assumed Employee Obligations 1. None. SCHEDULE 8(A) Assumed Employee Obligations 1. None. SCHEDULE 8(A) Assumed Employee Obligations 1. None. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 257 of 258 PageID #: 275 SCHEDULE 8(B) Excluded Liabilities 1.Schedule 6.1(a)(iv) is hereby incorporated by reference. SCHEDULE 8(B) Excluded Liabilities 1. Schedule 6.1(a)(iv) is hereby incorporated by reference. Case 1:25-cv-00535-UNA Document 1-1 Filed 05/01/25 Page 258 of 258 PageID #: 276 EXHIBIT “B” Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 1 of 10 PageID #: 277 4859-3753-9441 v6 SETTLEMENT AND REDEMPTION AGREEMENT This Settlement and Redemption Agreement (the “Agreement”) is entered into as of July 26, 2023, by and between 1SEO Holdings, LLC, a Delaware limited liability company (the “Company”), Bachmann Inc., f/k/a 1SEO.com Inc., a Pennsylvania corporation (“Seller”), Lance Bachmann, individually (“Lance” and, together with the Seller, the “Seller Parties”), and 1SEO Digital Agency, LLC, a Delaware limited liability company (“Digital Agency”). The Company, Seller, Lance and Digital Agency are referred to individually herein as a “Party,” and collectively as the “Parties.” RECITALS A. The Company, Seller, Lance, and Digital Agency are parties to that certain Asset Purchase Agreement dated February 17, 2023 (the “APA”). All terms used by not defined herein shall have the meaning given such terms in the APA. B. The Seller Parties and Digital Agency are engaged in a dispute over the calculation of the Final Cash Payment pursuant to Section 1.9 of the APA, and more specifically the manner in which accounts receivable were recorded by the Seller, the computation of deferred revenue as part of Working Capital, the responsibility for certain refunds paid to the Company’s customers for work performed before the Closing, and the Company’s proposed calculation of a Working Capital Deficit (the “Dispute”). C. In accordance with that certain Amended and Restated Limited Liability Company Agreement, dated February 17, 2023, by and among the Company and its members, as amended and restated from time to time thereafter (the “LLC Agreement”), Seller is the holder of 875,000 Series A Preferred Units in the Company (the “Preferred Units”). At the closing of the APA, Seller received 1,400,000 Series A Preferred Units, but thereafter transferred 175,000 Series A Preferred Units to each of Catrina Bachmann, William Rossell (“Rossell”), and Jolin Bachmann (“Jolin” and, together with Rossell and Seller, the “Preferred Unit Holders”). D. To settle the Dispute, the Parties have agreed, and this Agreement provides (i) for purposes of the Final Cash Payment, the Working Capital Deficit shall be deemed to be zero, and that the Working Capital Escrow shall be released to Seller as provided herein, (ii) the Company shall redeem from the Preferred Unit Holders, pursuant to Section 2.03(a) of the LLC Agreement, and Preferred Unit Holders shall surrender and transfer to the Company, all of the Preferred Unit Holders’ Series A Preferred Units; and (iii) all past and present claims of Digital Agency for indemnification arising from a breach of the representation and warranties of the Seller Parties (under the APA) relating to the working capital adjustment shall be released, as hereinafter set forth. AGREEMENT In consideration of the premises and the actual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Section 1. Definitions. “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities, obligations, taxes, liens, losses, interest, penalties, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses. Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 2 of 10 PageID #: 278 4859-3753-9441 v6 “Security Interest” means any lien, encumbrance, mortgage, pledge, or other security interest. “Series A Preferred Units” means the Series A Preferred Units of the Company, as defined in the LLC Agreement. Section 2. Basic Transaction. (a) Redemption of Preferred Units. On and subject to the terms and conditions of this Agreement, at and as of the Closing (as defined below), pursuant to Seller’s request pursuant to Section 2.03(a) of the LLC Agreement, the Company hereby redeems and purchases from Seller, and Seller hereby sells, transfers, conveys, and delivers to the Company all of Seller’s right, title, and interest in and to the Preferred Units (including (i) Seller’s capital account in the Company, (ii) Seller’s right to share in the profits and losses of the Company, (iii) Seller’s right to receive distributions from the Company, and (iv) all voting and information rights attributable to the Preferred Units, in each case, if any) free and clear of any Security Interests for the aggregate redemption price (the “Redemption Price”) of US $1.00 (in the aggregate). At and as of the Closing, Seller hereby withdraws and resigns as a member of the Company. (b) Additional Settlement Consideration. As additional mandatory consideration to the Company and Digital Agency for the settlement of the Dispute, after discussions with Seller/Lance, Rossell and Jolin have each agreed to surrender their respective Series A Preferred Units for redemption by the Company pursuant to Section 2.03(a) of the LLC Agreement (the “Additional Settlement Consideration”), in the form attached hereto as Exhibit A. Notwithstanding anything herein to the contrary or in the agreements documenting the Additional Settlement Consideration, even though each of Jolin and Rossell are directly transferring their respective Series A Preferred Units to the Company in connection with the Additional Settlement Consideration, each of Jolin’s and Rossell’s transfer of Series A Preferred Units (in connection with the Additional Settlement Consideration) shall be treated as a transfer back to Seller first, and then Seller transferring such Series A Preferred Units to the Company. (c) Final Resolution of Dispute Regarding Working Capital Deficit. Each of Digital Agency, Seller and Lance hereby agree that the Working Capital Deficit (under the APA) shall be deemed to be zero, and is hereby satisfied in full by the redemption of the Preferred Units and the Additional Settlement Consideration, which resolves the Dispute. (d) Future Indemnification Claims. The Seller Parties and Digital Agency agree that neither the Company nor Digital Agency shall make, and hereby releases and discharges, any claim of indemnification (i) related to the Dispute, and the components contained in the Buyer’s calculation of the alleged Working Capital Deficit as set forth in correspondence from John Shoaf dated June 16, 2023, calculation of deferred revenue, accounts receivable, refunds, and all related items and other transactions contemplated in the Illustrative Calculation of Working Capital incorporated into Schedule 1.10 of the APA; (ii) any claim for indemnification under Section 6.1 of the APA for the breach of any representation and warranty by the Seller Parties in the APA relating to the items included in or related to the calculation of Working Capital, including without limitation the representations and warranties set forth in Section 3.7 of the APA; and (iii) no amount attributable to any transactions described in subsections (i) and (ii) of this paragraph shall be applied to or reduce the Indemnification Threshold or Cap provided in Section 6.4 of the APA. (e) Working Capital Escrow Release. Each of Digital Agency, Seller and Lance agree to the release of the full Working Capital Escrow Amount to Seller, pursuant to the Joint Instructions attached hereto as Exhibit B, which shall be submitted to the Escrow Agent (as defined in the APA) upon consummation of the transactions contemplated hereby. Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 3 of 10 PageID #: 279 4859-3753-9441 v6 (f) Seller No Longer a Member of the Company. The Company and Seller agree that following the consummation of the transactions contemplated by this Agreement, Seller is no longer a party to the LLC Agreement, and neither Party has any rights or obligations to each other pursuant to the LLC Agreement (other than the rights and obligations under the LLC Agreement which by their terms expressly survive, or by their nature are intended to survive, the withdrawal or removal of a member), and all other rights and obligations are hereby terminated. (g) The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place simultaneously with the execution of this Agreement on the date hereof (the “Closing Date”) remotely by exchange of documents and signatures (or their electronic counterparts). (h) Cash Consideration. At the Closing, the Company shall deliver to Seller the Redemption Price in immediately available funds. (i) Tax Treatment. This redemption, together with the Additional Settlement Consideration, shall be treated as a purchase price adjustment under the APA, and neither Seller nor Lance (or their respective representatives) will take any position inconsistent therewith. (j) Non-Disparagement. Each Party hereby agrees (and agrees to instruct its officers, managers, employees, representatives and agents, as applicable) not to make any negative or disparaging statements or communications about another Party or such Party’s operations, or the Party’s officers, managers, employees, independent contractors or known investors. (k) Certificates. The Company and Seller/Lance acknowledge and agree that none of the Preferred Units are certificated. Section 3. Representations and Warranties of Seller/Lance. Seller/Lance each represent and warrant to the Company and Digital Agency that the statements contained in this Section 3 are correct and complete as of the Closing Date. (a) Power and Authority. Seller and Lance each have the full legal right, requisite power and authority to execute and deliver this Agreement and to perform Seller’s and Lance’s obligations hereunder and to consummate the transactions contemplated hereby. (b) Enforceability. This Agreement has been duly executed and delivered by Seller and Lance, respectively, and constitutes the legal, valid and binding obligation of Seller and Lance, enforceable against Seller and Lance in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application relating to or affecting creditors’ rights and to general principles of equity. (c) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, or other restriction of any government, governmental agency, or court to which Seller or Lance is subject, (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller or Lance is a party or by which Seller or Lance is bound or to which any of Seller’s or Lance’s assets is subject (or result in the imposition of any Security Interest upon any of Seller’s or Lance’s assets), or (iii) require Seller or Lance to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement. Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 4 of 10 PageID #: 280 4859-3753-9441 v6 (d) Legal Proceedings. Neither Seller nor Lance is a party to any claim, action, suit, proceeding, or governmental investigation (“Action”) and, to Seller’s and Lance’s knowledge, there is no threatened Action, in either case (a) relating to or affecting the Preferred Units or the Additional Settlement Consideration or in which a charging order against the Preferred Units has been sought or awarded; or (b) that challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement or the Additional Settlement Consideration. (e) Units. Seller holds of record and owns beneficially the Preferred Units, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act of 1933, as amended, and state securities laws and the LLC Agreement), Security Interests, options, warrants, purchase rights, commitments, and claims. Seller is not a party to any option, warrant, purchase right, or other contract or commitment that could require Seller to sell, transfer, or otherwise dispose of any Preferred Units (other than this Agreement and the LLC Agreement). Upon Seller’s receipt of the Redemption Price, good and valid title to the Preferred Units will pass to the Company, free and clear of all Security Interests, options, warrants, purchase rights, commitments, and claims. (f) Non-Foreign Status. Seller is not a foreign person as such term is used in Section 1446(f) of the Internal Revenue Code of 1986, as amended, or Treasury Regulations Section 1.1445-2. Section 4. Survival and Indemnification. The representations, warranties, covenants, and agreements contained herein shall survive indefinitely. In the event of a misrepresentation or breach of representation, warranty or covenant contained in this Agreement (including the failure of the Company to receive in full the Additional Settlement Consideration or any claim by Rossell or Jolin for inadequacy of consideration for entering into their respective redemption agreements as contemplated hereby), Seller agrees to indemnify the Company and Digital Agency from and against any Adverse Consequences the Company or Digital Agency may suffer resulting from, arising out of, relating to, in the nature of, or caused by such misrepresentation, breach or claim. Section 5. Covenant Amendment. Effective as of Closing, Section 4.6 of the APA, entitled Covenant Not to Solicit, is amended and restated in its entirety to read as follows: Covenant Not to Solicit. During the Restricted Period, each Seller shall not, directly or indirectly, in any manner (whether on his or its own account, or as an owner, operator, manager, consultant, officer, director, employee, investor, agent, representative or otherwise), (a) call upon, solicit or provide services to any Customer with the intent of selling or attempting to sell any products or services similar to those offered by the Business, (b) hire or engage or recruit, solicit or otherwise attempt to employ or engage, or enter into any business relationship with, any Person currently employed by, or providing consulting services to, Buyer, or induce or attempt to induce any Person to leave such employment or consulting arrangement, it being understood and agreed that each Seller may hire or otherwise employ (i) individuals formerly employed by or providing consulting services to the Company who are no longer employed by or providing services to the Company so long as Seller does contact, induce or attempt to induce any Person to leave such employment or consulting arrangement with the Company; or (c) in any way interfere with the relationship between Buyer or its Affiliates and any employee, consultant, Customer, sales representative, broker, supplier, licensee or other business relation (or any prospective Customer, supplier, licensee or other business relation) of Buyer or its Affiliates (including, without limitation, by making any negative or disparaging statements or communications regarding Buyer or its Affiliates or any of their operations, officers, managers, employees, independent contractors or investors). Section 6. Miscellaneous. Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 5 of 10 PageID #: 281 4859-3753-9441 v6 (a) Entire Agreement. This Agreement (together with the exhibits attached hereto) constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. (b) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party. (c) Further Assurances. Following the Closing, each of the Parties shall execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement. (d) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and effective for all purposes. (e) Governing Law; Interpretation. This Agreement shall be construed in accordance with and governed for all purposes by the internal substantive laws of the State of Delaware applicable to contracts executed and to be wholly-performed within such State. (f) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Company and Seller. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. (g) Withholding. The Company shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement such amounts as may be required to be deducted or withheld therefrom under any provision of applicable law. To the extent such amounts are so deducted or withheld, such amounts shall be remitted to the appropriate governmental entity, and treated for all purposes as having been paid to Seller. (h) Expenses. Except as set forth herein, Seller/Lance and the Company/Digital Agency will bear Seller’s/Lance’s or the Company’s/Digital Agency’s own respective costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. (i) Agreement Prepared by Company Counsel. Seller and Lance have read this Agreement and acknowledge that: (i) counsel for Company and Digital Agency prepared this Agreement on behalf of Company and Digital Agency and not on behalf of any equityholder of the Company (including Seller); Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 6 of 10 PageID #: 282 4859-3753-9441 v6 (ii) Seller has been advised that a conflict exists between its interests, the interests of Company, and/or the interests of the other equityholders of the Company; (iii) this Agreement and the transactions contemplated by this Agreement may have significant legal, tax, financial, and other consequences to Seller; (iv) Seller and Lance have sought the advice of independent legal and tax counsel and/or financial and tax advisors of its choosing regarding such consequences; and (v) counsel for Company has made no representations to Seller or Lance regarding such consequences. [Signatures on following page] Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 7 of 10 PageID #: 283 4859-3753-9441 v6 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. COMPANY: 1SEO HOLDINGS, LLC By: Name: John Shoaf Title: Executive Chairman SELLER: BACHMANN INC. By: ____________________________________ Name: _________________________________ Title: __________________________________ DIGITAL AGENCY: 1SEO DIGITAL AGENCY, LLC By: ____________________________________ Name: _________________________________ Title: __________________________________ LANCE: Lance Bachmann, individually [Signature Page to Settlement and Redemption Agreement] Executive Chairman John Shoaf Lance Bachmann pres Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 8 of 10 PageID #: 284 4859-3753-9441 v6 EXHIBIT A Form of Redemption Agreements (Rossell and Jolin) (See attached) Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 9 of 10 PageID #: 285 4859-3753-9441 v6 EXHIBIT B Joint Instructions (See attached) Case 1:25-cv-00535-UNA Document 1-2 Filed 05/01/25 Page 10 of 10 PageID #: 286 EXHIBIT “C” Case 1:25-cv-00535-UNA Document 1-3 Filed 05/01/25 Page 1 of 4 PageID #: 287 1414 Radcliffe Street, Suite 301, Bristol, PA 19007 215.946.1046 · info@1seo.com Mar 7, 2025 Mr. Lance Bachmann LB Capital 1414 Radcliffe St Suite #115, Bristol, PA 19007 Dear Mr. Bachmann, Per the terms of the purchase agreement dated Feb 17, 2023 please find the enclosed “Earnout Report” detailing the financial performance of 1SEO Digital Agency for the 24 month period beginning on Feb 17, 2023 and ending on Feb 16, 2025. Also enclosed is the calculation and determination of the “Earnout Amount” based on Schedule 1.4 from the original purchase agreement dated Feb 17, 2023. John Shoaf Executive Chairman Case 1:25-cv-00535-UNA Document 1-3 Filed 05/01/25 Page 2 of 4 PageID #: 288 Case 1:25-cv-00535-UNA Document 1-3 Filed 05/01/25 Page 3 of 4 PageID #: 289 As a result of the 24-month cumulative EBITDA (even after courtesy adjustments), falling well below the minimum threshold of $5,300,000 the determination is that the final Earnout Amount shall be $0.00. Case 1:25-cv-00535-UNA Document 1-3 Filed 05/01/25 Page 4 of 4 PageID #: 290 EXHIBIT “D” Case 1:25-cv-00535-UNA Document 1-4 Filed 05/01/25 Page 1 of 3 PageID #: 291 4910-0966-2503 v1 To: 1 SEO Digital Agency, LLC From: Bachmann, Inc. (formerly known as 1 SEO.Com, Inc.) Re: Earnout Report Date: March 17, 2025 EARNOUT OBJECTIONS STATEMENT We are in receipt of the Earnout Report dated March 7, 2025, delivered pursuant to Section Section 1.5 of the Asset Purchase Agreement between 1SEO Digital Agency, LLC, (“you” or “Buyer”), Bachmann Inc. (formerly known as 1SEO.com Inc.) (“Company” or “we”) and Lance Bachmann, dated February 17, 2023 (the “Agreement”). The Report indicates that the Earnout Amount is $0. The Company objections to the Earnout Report, which objections shall constitute the “Earnout Objections Statement” as defined in Section 1.5 of the Agreement. OBJECTIONS The Company is limited in its ability to provide details regarding its objections, and the flaws in the Buyer’s calculation of the Earnout Amount, because the Buyer has not shared sufficient information regarding its operation of the Business to allow the Company fully to evaluate either the operation of the Business or the Buyer’s calculation of the Earnout Amount, thereby frustrating the intent and purpose of Section 1.5 of the Agreement. Subject to, and without waiver of, those limitations, the Company objects to the Earnout Report and the calculation of the Earnout Amount as follows: I. Lack of Good Faith The Buyer did not operate the Business in a manner that would have been likely to maximize revenues and growth. The Company’s failure to at least maintain a level of production and performance of the Business that was projected and promised to the Company at the time of the Closing of the sale of Assets, without any notice or effort to seek the Company’s input amounted to a breach of the good faith obligation that is inherent in every contract. Absent additional information from the Buyer regarding its operation of the Business, the Buyer cannot provide a comprehensive analysis of the flaws in the calculation of the Earnout Amount. II. Negligence. The Buyer owed a duty to the Company to operate the Business in a manner designed to maximize revenues. The Company violated this duty by failing to notify or seek any input from the Company as it oversaw a steady decline in performance of the assets and, at a minimum, failed to mitigate losses and the decline in financial performance. This violation resulted in damage to the Company in the loss of its expected earnings from the sale of the Assets to the Buyer and in a flawed calculation, though the Company cannot Case 1:25-cv-00535-UNA Document 1-4 Filed 05/01/25 Page 2 of 3 PageID #: 292 4910-0966-2503 v1 provide further analysis of the flaws in the calculation absent additional information from the Buyer. CONCLUSION As detailed above, the Company objects to the calculation of the Earnout Amount and demands that the Buyer pay the maximum Earnout Amount of $3,000,000 to the Company as provided in Section 1.4 of the Agreement. Respectfully Submitted, Bachmann, Inc. (formerly known as 1SEO.com. Inc). __________________________ By: Lance Bachmann, President Case 1:25-cv-00535-UNA Document 1-4 Filed 05/01/25 Page 3 of 3 PageID #: 293 EXHIBIT “E” Case 1:25-cv-00535-UNA Document 1-5 Filed 05/01/25 Page 1 of 4 PageID #: 294 Jeffrey R. Vlasek direct dial: 216.861.7421 jvlasek@bakerlaw.com April 14, 2025 VIA E-MAIL Mathieu J. Shapiro Managing Partner, Obermayer 1500 Market Street, Suite 3400 Philadelphia, PA 19102 mathieu.shapiro@obermayer.com Re: IMMEDIATE CEASE AND DESIST DEMANDED BY 1SEO DIGITAL AGENCY LLC Re: Lance Bachmann’s Restrictive Covenants Mr. Shapiro: Our firm has been retained by 1SEO Holdings, LLC, owner of 1SEO Digital Agency LLC, regarding Mr. Lance Bachmann’s threats to violate his restrictive covenants. We are currently investigating the situation and are evaluating all of our legal options, including bringing any necessary legal action to seek equitable remedies, including injunctive relief, and recover damages and fees should we uncover any unlawful conduct on the part of Mr. Bachmann or should he carry through on his threats. On February 17, 2023, Mr. Bachmann executed an Asset Purchase Agreement (the “APA”), a copy of which is enclosed. In addition, Mr. Bachmann executed a Settlement and Redemption Agreement (the “SRA”) on July 26, 2023, a copy of which is also enclosed. These agreements prohibit Mr. Bachmann from engaging in certain specified conduct, including the conduct he threatened to engage in during the April 11, 2025, teleconference call. To summarize, the APA prohibits Mr. Bachmann, for a period of five (5) years after Closing, from engaging, in any manner, in the business of providing search engine optimization, search engine marketing, digital marketing services, and all other services provided by 1SEO.com Inc. (the “Business”), or engaging, in any manner, in any business that competes directly or indirectly, anywhere in North America. Nor may he own interest in, manage, control, provide financing to, or consult for any person that is engaged in the Business or who competes directly or indirectly with 1SEO Digital Agency LLC. (See APA, Sec. 4.5). Case 1:25-cv-00535-UNA Document 1-5 Filed 05/01/25 Page 2 of 4 PageID #: 295 Mathieu J. Shapiro April 14, 2025 Page 2 Under the APA, as amended by the SRA, Mr. Bachmann is prohibited, for a period of five (5) years, from soliciting any Customer (as defined in the APA) for the sale of any products of services similar to those offered by the Business, from attempting to hire, recruit, employ, or enter into any business relationship with any employee or consultant of 1SEO Digital Agency LLC, from attempting to induce any employee or consultant to change their relationship with 1SEO Digital Agency LLC, and from interfering with the relationships 1SEO Digital Agency LLC has with any employee, consultant, customer, sales representative, broker, supplier, licensee, or other business relation (including a prohibition on negative and disparaging statements). (See SRA, Sec. 5). To be clear: Mr. Bachmann’s threats to go into business with Bill Rossell would violate these agreements. Mr. Bachmann’s threats to attempt to take all of 1SEO Digital Agency LLC’s clients would violate these agreements. Indeed, if Mr. Bachmann attempts to take even a single client, it would be a violation of these agreements. Mr. Bachmann’s threats to disparage 1SEO Digital Agency LLC in the business community, would violate these agreements. Moreover, Mr. Bachmann’s personal threats against 1SEO Digital Agency management and employees are both unwelcome and totally inappropriate. Based on Mr. Bachmann’s threatened conduct, we must demand that he immediately cease and desist from engaging in any violative conduct. We request that he confirm in writing by the close of business on Thursday, April 17, 2025, that he has complied, and will continue to comply, with his restrictive covenants contained in the APA and RSA. Should Mr. Bachmann decide not to comply with the request to abide by his restrictive covenants, 1SEO Digital Agency LLC is prepared to promptly take all steps necessary to protect its rights, including filing a complaint to enforce the above referenced agreements and assert any other applicable claims under the law based on Mr. Bachmann’s conduct, including but not limited to, tortious interference with contract/business. 1SEO Digital Agency LLC will also take all necessary steps to seek the maximum recovery available to it, including attorneys fees, costs, and expenses. (See APA, Sec. 4.7). This letter is not intended as a full recitation of the facts or a complete review of applicable law. Nothing contained in or omitted from this letter is or shall be deemed to be a limitation, restriction, or waiver of any of 1SEO Digital Agency LLC’s rights or remedies, either at law or in equity, in connection with any of the matters raised herein, all of which are expressly reserved. Thank you for your immediate attention to this matter. Case 1:25-cv-00535-UNA Document 1-5 Filed 05/01/25 Page 3 of 4 PageID #: 296 Mathieu J. Shapiro April 14, 2025 Page 3 Sincerely, Jeffrey R. Vlasek, Partner Baker Hostetler LLP Case 1:25-cv-00535-UNA Document 1-5 Filed 05/01/25 Page 4 of 4 PageID #: 297 EXHIBIT “F” Case 1:25-cv-00535-UNA Document 1-6 Filed 05/01/25 Page 1 of 3 PageID #: 298 Case 1:25-cv-00535-UNA Document 1-6 Filed 05/01/25 Page 2 of 3 PageID #: 299 Case 1:25-cv-00535-UNA Document 1-6 Filed 05/01/25 Page 3 of 3 PageID #: 300 (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) 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