" A MARK E. PETERSON 6 M FOR THE COUNTY OF MONTEREY. GARY KOEPPEL, DEPUTY DISTRICT ATTORNEY (Bar No )

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1 " A 1 DEAN D. FL1P1>o Monterey County District Attorney ERESA A ms. SFP 2 20*4 2 DIJE NDREU, DEPUTY DISTRICT ATTORNEY (Bar No g_egk 0p' HE SUPER OR COURT 1200 Aguajito Road, Room 301 I CI In H img 5 DEPUTY 3 Monterey, CA Telephone: (831) Facsimile: (831) ndreud@co.monterey.ca.us 5 MARK E. PETERSON Contra Costa County District Attorney GARY KOEPPEL, DEPUTY DISTRICT ATTORNEY (Bar No ) Ward St. Martinez, CA g Telephone: (925) Facsimile: (925) gkoeppe1@contracostada.org 10 Attomeys for Plaintiff 11 l SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF MONTEREY PEOPLE OF THE STATE OF CALIFORNIA, Plaintii, ) vs. ) g CASE NO. M ) STIPULATED JUDG1\/[ENT is g 1 DEBT FREE ASSOCIATES, LLC, )) 17 A Califomia Limited Liability Corporation, )) 18 Defendant. g l 9 20 It is hereby stipulated by and between Plaintiff, PEOPLE OF THE STATE OF 21 CALIFORNIA, through its attomeys Dean D. Flippo, Monterey County District Attomey, by Dije 22 Ndreu, Deputy District Attorney, and Mark A. Peterson, Contra Costa County District Attomey, by Gary Koeppel, Deputy District Attorney (hereafter, "Plaintiff ) and Defendant DEBT FREE ASSOCIATES, LLC (hereafter, "Defendant ), through its attorneys, Richard Meaglia Law Offices, 2 by Richard Meaglia, having consented to the entry of this Final Judgment without the taking of 27 evidence, without trial or adjudication of any facts herein, and without this Final Judgment 1 - People v. Debt Free Associates, LL

2 I constituting any evidence or admission by said Defendant regarding any issue of fact alleged in said 2 Complaint, and good cause appearing: 3IT IS HEREBY ORDERED, ADJUDICATED AND DECREED that: This action is brought under California law and this court has jurisdiction over the subject matter hereof and the parties hereto. INJUNCTION 8 2. Pursuant to Business and Professions Code sections and 17535, Defendant, 9 and its principals, employees, and successors acting under, by, through or on behalf of Defendant, 10 with actual or constructive notice of this judgment are hereby permanently enjoined and restrained l l l from engaging in violation of the following: A. Section 1770(a)(19) of the California Civil Code. B. Section of the California Civil Code. 15 C. Section of the California Business and Professions Code. 1 D. Section ofthe California Business and Professions Code, by engaging in 8CIVIL l PENALTIES 17 unlawful, unfair and fraudulent acts and practices as alleged in the Complaint. l 9 AND COSTS 3. Upon entry of final judgment, Defendant shall pay Plaintiff, the People of the State of California, by and through Dean D. Flippo, Monterey County District Attomey and Mark A. 22 Peterson, Contra Costa County District Attorney, a total settlement amount of Forty Thousand 23 Dollars ($40,000.00), as follows: 24 A. Defendant shall pay Plaintiff the sum of Twenty-Seven Thousand Dollars 25($27,000.00) pursuant to Business and Professions Code sections 1720 and 1753, distributed as 2 27 follows: (1) Thirteen Thousand, Five Hundred Dollars ($13,500.00) by check made payable to 2 - People v. Debt Free Associates, LL Stipulated Judgrnen

3 l 2 the Monterey County District Attorney s Office. (2) Thirteen Thousand Five Hundred dollars ($13,500.00) by check made payable to the 3Contra Costa County District Attomey s Office. 4 B. Defendant shall pay Plaintiff the stun of Thirteen Thousand Dollars ($13,000.00) for 5 investigative costs, distributed as follows: 7 A (1) Six Thousand Five Hundred Dollar ($,500.00) by check made payable to the 8 Monterey County District Attomey s Office. W 9 (2) Six Thousand Five Hundred Dollars ($,500.00) by check made payable to the 10 Contra Costa County District Attorney s Office. l l l 2 13 l 4 C. Defendant shall also pay the total sum of Four Hundred and Thirty-Five Dollars ($435.00) for the court filing fee, via check made payable to Monterey County Superior Court. D. Defendant shall deliver all checks required to be paid pursuant to paragraph 3 of this V 1 5 t to: 1 Monterey County District Attorney s Office 17 Attention: Dije Ndreu, 1200 Aguajito Road, Room Monterey, CA l 9RESTITUTION AND REFUNDS 4. Pursuant to Business and Professions Code sections and 17535, Defendant shall carry out a complete restitution and refund program, consistent with the qualifications stated below, to all persons in the State of California who qualify pursuant to this Judgment as "Refund 24 Eligible Clients". 25 A. "RefLmd Eligible Clients" shall be persons who (i) entered into agreements for debt 2 settlement services with Defendant during the period of time from December 20, 2008 through 27 Ma 21, 2013 and (ii) were California residents at the time they entered into such debt settlement y People v. Debt Free Associates, LL

4 l agreement. 2 B. Notwithstanding the previous sentence, "Ref1md Eligible Clients shall not include 3 any client who (i) completed Defendant s program by having paid off all debts through the program that he or she brought into the program or previously received a full refund of fee Bom Defendant Within thirty (30) days Hom the filing of this t, Defendant shall prepare and provide a written list (which may be submitted electronically) of all "Refund Eligible 8 Clients" to the Monterey County District Attomey s Office. The list shall contain the full name of 9 each client, the client s last known address, telephone munber, and address or other known 10 means of communicating with the client. The list shall also include the total dollar amount of fees paid by each "Refund Eligible Client".. 13 No later than twenty (20) days from the submission of this list of "Refund Eligible 1 4 Clients (hereinafter the "Mailing Date ), Defendant shall send a refund offer letter, l1'1 the fonn 15 attached hereto as Exhibit B, (hereafter the "Letter ), by both (i) electronic mail ( ) if 1 Defendant has an address, and (ii) First Class United States Mail to the last known address of 17 each "Refund Eligible Client". The letter shall be accompanied by a "Refund Request Claim", 18 which shall be in the form attached hereto as Exhibit C. Defendant shall send duplicate copies of Lg?) 21 each Letter and any and all attachments and Exhibits to each "Letter sent to "Refund Eligible Clients", to the Monterey District Attorney s Office, attention: Dije Ndreu, Deputy District 22 Attomey All Refund Eligible Clients who postmark a Refimd Request Claim within sixty (0) 24 days following the Mailing Date (hereafter the "Cutoff` Date") shall receive a refund in the amount 25 ij provided in paragraph 9 below (hereafter "ReiiJnd Recipients"). 8. Thereafter, no iiirther request for a reftmd pursuant to the t shall be honored. Nothing in this paragraph shall deprive a client of Defendant of any other right or V People v. Debt Free Associates, LL

5 l remedy which he or she may otherwise be entitled to by law; nor relieve Defendant of any such 2 liability The amount of the refund shall be based upon the full and total amount paid by the Refund Eligible Client regardless of how the money was allocated and/or distributed by Defendant to other entities. All Refund Eligible Clients shall receive shall receive a one hundred percent 7 (100%) full refund of all fees paid. Fees paid to Defendant include, but are not limited to, the "Set- 8 up Fee, the "Enrollment Fee", and the "Monthly Maintenance Fee". As noted in paragraph 5.A. 9 above, any client who does not meet the definition of a Refund Eligible Client shall not be entitled 10 to any refund through this t. l0. Within sixty (0) days of the Cutoff Date, Defendant shall take the following actions 1; 1 3 with respect to those persons who are determined to be Refund Recipients: Send a check for the 1 4 amoimt of the Refund Payment, as calculated pursuant to paragraph9 above, by First Class United 15 States Mail, to the address provided by the Refund Recipient on the submitted claim form. Each 1 such check shall be honored for one hundred and eighty (180) days from its issuance. Thereafter, 17 Defendant may instruct its bank to cancel and dishonor such check(s). Any check that is not 18 negotiated within one hundred and eighty (180) days after the issuance of the check shall be considered abandoned by the Reftmd Recipient to whom it was sent ll. Within two hundred and forty (240) days from the Cutoff Date, Defendant shall prepare and submit to the Monterey County District Attorney s Office written records (which may 23 be submitted electronically) of (i) all Reftmd Eligible Clients who received a Refund Payment, 24 including each such client s name, address, the amount of payment and the refund check number; 25 (ii) all Refund Eligible Clients who received a Refund Payment but did not negotiate the check sent 3; to such Refund Eligible Client including each such client s name, address, the amount of payment and the refund check number; and (iii) all Refund Eligible Clients who did not receive a Refund People v. Debt Free Associates, LL

6 l Payment, due to the failure to submit a Refund Request Claim by the deadline, including each such 2 client s name and address Aside from the letter and forms described herein and attached hereto as Exhibits B and C, Defendant shall not communicate with Refund Eligible Clients except by written letters the ; content of which has been approved by the Plaintiff All written records required pursuant to this t shall be maintained 8 by Defendant for a period of five (5) years after the date of entry of this Final Judgment. Such 9 records shall be made available and open for inspection by representatives of the Monterey County Q 10 and Contra Costa County District Attorney s Offices, upon reasonable written notice. 1; 1 3 RETENTION OF JURISDICTION AND ENFORCEMENT COSTS 14. Jurisdiction is retained for the purpose of enabling any party to this Final Judgment 14 to apply to the court at any time for such further orders or directions as may be necessary or 15 appropriate for carrying out this Final Judgment; for the resolution of any dispute; or for the 1 modification or termination of any of the injunctive provisions herein, for the enforcement of 17 compliance therewith, or for the ptmishment of violation thereof Reasonable attomey s fees incurred by Plaintiff as a result of any violation of this t, if such violation is proven in a court of law, shall be recoverable as enforcement costs EXISTING LAW AND SEVERABILITY Nothing contained herein shall be construed as relieving Defendant of the obligation 24 to comply with applicable California and Federal laws, regulations and rules, nor shall any of the 25 provisions of this t be deemed permission to engage in any act or practice *3; prohibited by such laws, regulations or rules. 17. Neither this Judgment nor the Stipulation shall be deemed approval by Plaintiff of People v. Debt Free Associates, LL

7 l any of Defendant s business practices, past or present, and Defendant shall ma.ke no representation 2 that Plaintiff has given such approval Whenever possible each provision of this t shall be interpreted in ; 7 S such a manner as to be effective and valid under applicable law, but if any provision of this t shall be prohibited, void, invalid, or unenforceable under applicable law, such provision shall be ineffective to the extent of such prohibition, voidability, invalidity or unenforceability without invalidating the remaining provisions of this t, which 9 shall be given full effect without regard to the invalid provision. 10 EFFECTIVE DATE 19. This Stipulated Final Judgment shall take effect immediately upon entry thereof The 1 3 parties waive their right to appeal this judgment both as to form and content. l 4 l 54 1 Datcd;SEP 2 gg];. THOMAS W. WSLLS 17 JUDGE OF THE SUPERIOR COURT l 8 l l People v. Debt Free Associates, LL

8 g a` Exhibit B IMPORTANT NOTICE REGARDING YOUR AGREEMENT WITH DEBT FREE ASSOCIATIONS AND YOUR RIGHT TO A REFUND PLEASE READ CAREFULLY, 2014 Dear: You previously entered into an agreement with Debt Free Associates ("DFA") for debt settlement services. We have been notified by the Monterey County District Attorney s Office that the cancellation notice included with your original agreement was not strictly compliant with California law. To correct this, we are enclosing a revised cancellation notice in duplicate as required by law. U Because you did not receive the enclosed notice with your original agreement, you have the right to cancel your agreement and receive a full reftmd of all fees you have paid to us. Even if you have already cancelled or terminated your program for any reason, you may still contact us to receive a full refund. You are not eligible for a refund if you paid off all enrolled debts on your program or have previously received a full refund of all fess from DFA. Although the corrected notice gives you three business days to cancel, we are extending the cancellation period for 0 days from the date of this notice. You have until then to contact us to obtain a full refund. To do so, sign and date the enclosed "REFUND REQUEST CLAIM form and mail it to the address below. It must be postmarked within 0 days of the date of this notice. You do not need to sign or return anything to us unless you want to cancel your program and receive a full refund of all fees you have paid us. Ifyou have any questions, please contact the Debt Free Associates customer service line at You may also contact the Monterey County District Attorney s Office at 83 l If you wish, you may also contact your own attorney or counselor with any questions relating to your legal rights. It continues to be our pleasure to service your account, and we certainly want to make sure you are fully and properly informed of your cancellation rights. Thank you, Debt Free Associates Debt Free Associates 2101 Business Center Drive #150 Irvine, CA 9212 Toll Free:

9 Q Q_ I, Exhibit B, 2014 IMPORTANT: Please keep this notice with your Debt Free Associates agreement. Notice of Cancellation Three-Day Right to Cancel You, the buyer, have the right to cancel this contract within three business days. You may cancel by ing, mailing, faxing, or delivering a written notice to the contractor at the contractor s place of business by midnight of the third business day after you received a signed and dated copy of the contract that includes this notice. Include your name, your address, and the date you received the signed copy ofthe contract and this notice. If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received it, any goods delivered to you under this contract or sale. Or, you may, if you wish, comply with the contractor s instructions on how to return the goods at the contractor s expense and risk. If you do not make the goods available to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to return the goods to the contractor and fail to do so, then you remain liable for performance of all obligations under the contract. To cancel this transaction, send a signed and dated copy of the notice to Debt Free Associates as follows: Via info@debtfrceassociates.com Via Mail or Hand-Delivery: Debt Free Associates, 2101 Business Center Drive #150, Irvine, CA 9212 Via Fax: I HEREBY CANCEL TIHS TRANSACTION. Date: Name: Signature: Debt Free Associates 2101 Business Center Drive #150 Irvine, CA 9212 Toll Free:

10 A An 9, i Exhibit B, 2014 IMPORTANT: Please keep this notice with your Debt Free Associates agreement. Notice of Cancellation Three-Day Right to Cancel You, the buyer, have the right to cancel this contract within three business days. You may cancel by ing, mailing, faxing, or delivering a written notice to the contractor at the contractor s place of business by midnight of the third business day after you received a signed and dated copy of the contract that includes this notice. Include your name, your address, and the date you received the signed copy ofthe contract and this notice. If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received it, any goods delivered to you under this contract or sale. Or, you may, if you wish, comply with the contractor s instructions on how to return the goods at the contractor s expense and risk. If you do not make the goods available to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to retlu n the goods to the contractor and fail to do so, then you remain liable for performance of all obligations under the contract. To cancel this transaction, send a signed and dated copy of the notice to Debt Free Associates as follows: Via info@debtfreeassociates.com Via Mail or Hand-Delivery: Debt Free Associates, 2101 Business Center Drive #150, Irvine, CA 9212 Via Fax: I HEREBY CANCEL TIHS TRANSACTION. Date: Name: Signature: A Debt Free Associates 2101 Business Center Drive #150 Irvine, CA 9212 Toll Free:

11 Q Exhibit C, 2014 DEBT FREE ASSOCIATES REFUND REQUEST CLAIM I (clearly print your name), would like to cancel my contract with Debt Free Associates, LLC, and claim a full refund of the fees that I paid. The refund check may be sent to me at the following address: (Number and Street): <Ciw)= ; (State and Zip Code): I understand that when I receive my refund check, I must cash it within 180 days of the date of its issuance or the check will no longer be honored and my right to a refund under this program will expire. (Date): (Signature): ************************************************** Retain a copy of the signed and dated form for your records. Return this form by mailing it to us at the address below. Your signed and dated form must be postmarked within 0 days of the date on this form. Mail your completed form to: Debt Free Associates 2101 Business Center Drive #150 Irvine, CA 9212