STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL ASSURANCE OF VOLUNTARY COMPLIANCE A. INTRODUCTION

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1 STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL IN THE MATTER OF: Case No. L SubscriberBASE Holdings, Inc. Respondent. / ASSURANCE OF VOLUNTARY COMPLIANCE A. INTRODUCTION WHEREAS, pursuant to the provisions of Chapter 501, Part II, Florida Statutes, the OFFICE OF THE ATTORNEY GENERAL (hereinafter "OAG"), caused an inquiry to be made into the advertising and business practices pertaining to the internet marketing services of SubscriberBASE Holdings, Inc. (hereinafter "SubscriberBASE"), with a principal business address of 3830 Forest Drive, Suite 207, Columbia, SC WHEREAS, the OAG investigated the sufficiency of disclosure of material terms and conditions advertisements made by SubscriberBASE associated with that company's co-registration business; and

2 WHEREAS, the OAG asserts that third party internet publishing companies sent out commercial s on behalf of SubscriberBASE and other entities that did not comply with the requirements of Florida and federal law governing the initiation of such s; and WHEREAS, SubscriberBASE denies any wrongdoing or violation of law, but desires to resolve this investigation in order to avoid the expense and inconvenience of litigation; THEREFORE, without any admission that SubscriberBASE has violated the law and for the purpose of resolution of this matter only, the Attorney General, by and through the undersigned, does in this matter accept this Assurance of Voluntary Compliance ("AVC") in termination of this investigation with prejudice, pursuant to Section (6), Florida Statutes, and by virtue of the authority vested in the OAG by said statute and without any finding of wrongdoing on the part of SubscriberBASE or its affiliates. The OAG and SubscriberBASE (hereinafter "the parties") hereby agree and stipulate to the following: B. JURISDICTION AND VENUE 1. IT IS AGREED by the part s that SubscriberBASE is an online Advertising network that provides a distribution platform 2

3 for advertising of an internet-marketed Promotional Marketing Program to consumers. 2. IT IS FURTHER AGREED by the parties that the State of Florida has jurisdiction over SubscriberBASE solely the purpose of entering into this AVC and in any enforcement or investigative actions arising out of this AVC. 3. IT IS FURTHER AGREED by the parties that venue for any matter relating to or arising out of this AVC shall lie solely in Leon County, Florida. C. DEFINITIONS 1. "Advertising" (including "advertisement" and "advertise") includes any message created, published and/or distributed by or under control of SubscriberBASE directly to the general public or any segment thereof that promotes or is likely to promote directly internet marketing of products and/or services as relates to its Promotional Marketing Program. 2. "Below the fold" describes web content that does not initially appear on a consumer's monitor until the consumer scrolls down. For purposes of this definition, base page fold measurements are on a 1024x768 monitor. 3. "Clear and conspicuous" or "clearly and conspicuously" describes that a statement, representation, claim 3

4 or term being conveyed that is readily noticeable and reasonably understandable by the persons to whom is directed. When evaluating an advertisement, the following, without limitation, shall be considered determining whether a statement, representation, claim or term, is clearly and conspicuously disclosed: a. whether it is of sufficient prominence in terms of size, placement, color, contrast, duration of appearance, sound and speed, as to be readily noticeable and reasonably understandable by a person to whom it is directed; b. whether is presented to person(s) to whom it is directed respect to other a coherent and meaningful sequence with sentations, statements, claims, or terms conveyed; c. whether it is contradictory to any representations, statements, claims, or terms purports to cl fy, modify, or in, or otherwise contradictory or confusing in ion to any other representations, statement, claim, or term being conveyed; d. whether abbreviations are being used and if so whether they are commonly understood by consumers acting reasonably under the circumstances; 4

5 e. whether the language and terms used are free of technical or legal jargon and are commonly understood by consumers acting reasonably under the rcumstances; f. whether, in print or electronic media or ora represented, it is in close proximity to the representations, statements, claims, or terms it arifies, modifies, explains, or to which otherwise relates; g. whether it is presented in a place where consumers cannot miss seeing it; h. whether is presented in such a way as to be of distractions, including but not limited to sound, graphics, or text, that compete the attention of the consumer. i. whether the viewer is encouraged to scroll down within frame of the page or within a scroll box order to read such disclosure. 4. "Commercial electronic mail (' ') mes " is any message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, including content on an Internet website operated for a commercial purpose. 5. "Consumer" is a consumer who is a resident of the state of Florida. 5

6 6. "Disclosure" includes any term or condition informing consumers that by continuing through the order path, their Personal Information or Personally Identifiable information will be subject to sale or stribution without further consent, that the consumers agrees to receive communications from thirdparties, or that the consumers agree to any other term or condition. 7. "Initial Representation" includes all sponsored links, subject lines, banner ads, pop-ups, and any and all other primary impressions presented by SubscriberBASE and any and all other primary impressions presented by SubscriberBASE or any of s contracted publishers with respect to the promotion or advertising of its Promotional Marketing Program. 8. "Order path" is the entire sequence of impress for a Promotional Marketing Program, general beginning with an initial representation via an onl display advertisement (e.g., banner advertisement), search engine title and descriptions, or advertisement, and including one or more web pages (for example, "landing" and "jump" pages), that together constitute the process by which the advertisement can be conveyed to the consumer, and continuing through any and all pages where surveys or o rs appear. 9. "Person" is a natural person or entity. 6

7 10. "Personal Information" Information" or "Personally Identifiable individually identifiable information from or about an individual consumer including, but not limited to: a. rst and last name; b. home or other physical address, including street name and name a city or town; c. 1 address or other online contact information, such as an instant messaging user identifier or a screen name that reveals an individual's address; d. telephone number; e. 1 security number; and f. credit/debit card information, including credit/debit number(s), expiration date, and/or CVV or CVV2 ty code information contained in card magnetic stripes or other storage media or otherwise printed or maintained on card surfaces in any form. 11. "Pixel" is the smallest addressable screen element corresponding to the two dimensional grid corresponding to any given screen ion. 12. "Promotional Marketing Program" is a program which consumers may obta for free merchandise or services in exchange actions including completing surveys, 7

8 ewing products or services, purchasing merchandise or services, or participating in free trial offers or other programs from third party advertisers. 13. "Publishern includes any third party independent entity, whether natural person, corporation, partnership, proprietorship, limited liability company, or other organization or legal entity, that appl to be and is accepted to do bus ss with SubscriberBASE as a distributor of advertising as defined above. 14. "Submit fieldn is any location in the order path where a consumer can enter Personal Information or Personally Identifiable Information. D. AGREEMENT OF COMPLIANCE 1. IT IS AGREED by the parties that this AVC applies to and binds SubscriberBASE, in connection with advertising, promoting and/or distribution of advertising or promotions for internet marketers of products and/or services. 2. IT IS FURTHER AGREED by the parties that SubscriberBASE shall: a. in advertising or otherwise in order path, not permit the use of the terms "free, n "complimentary," "no charge, " "without charge," or other terms which 8

9 reasonably lead a person to believe that he or she may receive something of value without a requirement of payment or compensation in any form; or which tend to convey the impression to the consuming public that an article of merchandise or service is "free" without clearly and conspicuously disclosing the material terms, conditions and obligations upon which receipt and retention of the free i tern are contingent. The initial representation for each such offer shall clearly and conspicuously disclose that any item offered for "free" is offered subject to a consumer's completion of the offer requirements. of acceptable language, for purposes of this AVC, Examples include: "Free Xbox, with completion of offer(s)," "Free Xbox, simply buy or try sponsor offers," "Free Xbox, with completion of Program Requirements," "Free Xbox, details apply," "Free Xbox, terms apply," "Free Xbox, conditions apply," "Earn a free Xbox," or "Free Xbox, participation required" (hereinafter, "Disclaimer Terms"); b. in the order path, not allow the font size of the disclaimer terms to be less than one-third the font size of the term describing the free or complimentary nature of the gift, and in no event less than 11 point size; the color contrast ratio of the disclaimer terms to be less than 4.5 9

10 according to the World Wide Web Consortium's Web Content Access lity Guidel (WCAG 2. 0) section ; or the disclaimer terms to be more than 25 pixels from the offer terms; c. on any webpage the order path where a consumer enters any personal information, not low any disclosure to begin below the fold or more than 100 pixels from a submit ld, excepting that a disclosure may begin below the above if the dis the submit sure appears at the same level as or provided submit f ld are located within 100 s of each other; d. on any landing page not allow any disclosure to begin below the fold, excepting that a disclosure may begin below fold if disclosure appears at the same level as or above the submit field; e. in advertis or otherwise in the path, not use terms such as "Test," "Test and Keep," "Try," or "Try and Keep," or any similar wording, that suggests to the consumer that something of value will be given in exchange for testing or trying that item of value, unless: (i) any where such phrase is used in subject line, subject l must include Disclaimer Terms that clearly and conspicuously advise consumer that he or 10

11 she will be required to satisfy obligations in addition to simply testing or trying the advertised product or service, e.g. "additional terms apply;" and (ii) of any advertisement where such the text or body e is used, the consumer must be notified, by disclosure language sclaimer Terms that are located not more than 100 pixels from such phrase, that the consumer will be required to sa tis testing requirements as well as participation requirements similar to the examples of set forth above. s aimer Terms f. in advertising or otherwise the order path, not use terms such as "Mystery Shopper," "Secret Shopper," or any s lar wording, that suggests to consumer that something of value will be given in exchange for making purchases of any kind at any location, onl or otherwise, unless ( i) in any where such phrase is used in the subject line, the subject line must lude Disclaimer Terms that clearly and conspicuously advise the consumer or she will be required to sat fy obligations in addition to making purchases, e.g. "additional terms ;" and (ii} in the text or body of any advertisement such phrase is used, the consumer must be notified, by Disclaimer Terms located not more than 100 pixels from 11

12 such phrase, that the consumer will be required to satisfy other participation requirements similar to the examples of Disclaimer Terms set forth above. 3. IT IS FURTHER AGREED by the parties that in its Promotional Marketing Program SubscriberBASE shall: a. on every webpage in the order path (including any page for submission of personal information, whereupon the link must be above the fold) place a link to the terms and conditions of the advertised offer and incentive gift which clearly and conspicuously within 200 pixels of the beginning thereof discloses the minimum cost for a consumer to purchase an item or service in each category of advertiser offers on SubscriberBASE's offer wall pages (currently referred to as the "Top," "Premium" and "Prime" offer groups) for Promotional Marketing Programs in which the amount of purchases from third party advertisers necessary to qualify for redemption of the incentive i tern is in excess of $1,000.00; b. place a link on all webpages in the order path identified as "Get Status," or its equivalent, that permits a consumer to access then-current information about the consumer's account that is specifically related to the offer presented. This status page must also link to 12

13 specific of pages within the incentive promotion path and provide ear and conspicuous sclosure of all steps a consumer must complete, and has already satisfactorily completed, offered. The order to receive the promotional item status page shall also clearly and conspicuously state that a consumer has completed 1 required sponsor offers necessary to receive the incentive gift 1 if icable, and shall provide the consumer with all related llment instructions, if any. Lastly, the status page path at 1 allow a consumer to return to the order relevant pages in the order path in order to complete all required sponsor of s necessary to receive the incent gi, if applicable; c. not use prechecked boxes an offer intended to be used for acceptance of a term or condition of the o ; d. not require a consumer to qpalify for a credit card offer or qualify for any r credit-based sponsor offer as a necessary condition to satisfy the gi fulfillment requirements without making a clear and conspicuous sclosure on the Promot Marketing Program landing page that such a condition exists. Such a condition is necessary to sa tis gift ful llment requirements if a user has no means to completely 13

14 satisfy gi fulfillment rements apart from qualifying for a credit card or other credit-based sponsor offer; and e. not place subs ion-based of rs in any set of sponsor o s unless offers clearly state, in the main body of the offer text presented, the minimum amount of time a consumer must be subscribed to receive gift fulfil any. credit for participating in offer, if 4. IT IS FURTHER AGREED by the parties that in s Promotional Marketing Program SubscriberBASE shall: a. disclose its corporate name, phys address and, either address, 1-free contact number or a link for consumers to communicate with SubscriberBASE via a web-based communication platform by way of a "Contact Us" link on all pages in the order path, or if such order path is operated by a third party pursuant to contract with SubscriberBASE, then SubscriberBASE shall require the third party to include this information for the party in the "Contact Us" link on all pages in the order path so as to ensure direct communication between the operator of the online offer pages and the consumers; 14

15 b. comply with 1 applicable federal and state laws governing advertisements containing the word "free" and comme al ; and c. undertake continuous compliance monitoring of all offer order paths and ising to insure compliance with the provisions of s AVC. As part of this monitoring, SubscriberBASE agrees to provide to Florida Attorney General, on a quarterly basis beginning six (6) months after execution of s AVC and continuing for eighteen additional months, a list of complaints received from Consumers, contact information for each complainant, and the resolution of each complaint. E. PAYMENT BY SUBSCRIBERBASE To resolve claims by OAG that third party publishers, acting on behalf of SubscriberBASE, sent out commercial s that did not comply with the requirements of and federal law governing the initiation of such s, but without admitting wrongdoing or violation of law, SubscriberBASE agrees to pay the sum of $800,000 to the OAG. shall be made payable to Department of Such payment 1 Affairs Revolving Trust Fund for expended attorney's fees and costs and other costs and expenses, including but not limited to non- 15

16 attorney costs, management fees, administrative expenses and overhead associated with the matters resolved herein and to cover the OAG for the costs of future compliance with this AVC, and shall be del to Mark A. Campbell, CyberFraud ion Chief, Office the Attorney General, Department Legal Affairs, PL-01, Capitol, Tallahassee, Florida , pursuant to Section (6), Florida Statutes (2008). SubscriberBASE shall pay the sum of $50,000 to the OAG contemporaneous to the execution of this agreement and subsequent payments to the OAG shall be made in the amounts, and not later than, the following dates: December 31, 2011 $150,000 March 30, 2012 $150,000 June 30, 2012 $150,000 September 30, 2012 $150,000 December 31, 2012 $150,000 F. RECORDKEEPING PROVISIONS 1. IT IS FURTHER AGREED by the that for a period of twelve ( 12) months from the date of execution of the AVC, SubscriberBASE s 11 retain those mater l records in connection with the marketing, advertising, promoting and/or distribution of advertis or promotions of its Promotional Marketing 16

17 Program that it currently mainta and shall make such records and reports avai e for inspect following ninety (90) days' notice to counsel for SubscriberBASE with an opportunity to object. 2. IT IS FURTHER AGREED by the parties a period of twelve ( 12) months from the date the execution of the AVC, SubscriberBASE shall promptly the OAG of changes in corporate structure that may affect compliance obligations sing under the AVC, including but not limited to a dissolution, assignment, sale, merger, or other action that would result the emergence a successor entity; the creation or dissolution of a subsidiary, parent, or affiliate entity that engages in any acts or practices subject to this AVC; the filing of any bankrupt petition; a change in the corporate name or address. 3. IT IS FURTHER AGREED by parties that a period of twelve (12) months from the date of the execution the AVC, SubscriberBASE shall notify the OAG of any material change in any corporate ownership or control. 4. IT IS FURTHER AGREED by the parties that for the purposes of this AVC, a. SubscriberBASE shall, unless otherwise directed by OAG sentati ves, mail 1 written noti ions to 17

18 the OAG, identifying all written communications as in reference to OAG Case No. L , and sent to: Economic Crimes Division/Tallahassee Office of Attorney General The Capitol, PL-01 Tallahassee, Florida ; and b. the OAG shall, unless otherwise directed by SubscriberBASE, mail all written SubscriberBASE to: CEO I General Counsel SubscriberBASE Holdings, Inc Forest Drive Suite 207 Columbia, SC notifications to G. NO ADMISSION OF LIABILITY OR WAIVER OF DEFENSES IT IS FURTHER AGREED by the parties that this AVC is not and shall not in any event be construed, deemed to be, and/or used as: 1. an admission or evidence of the validity of any claim that the OAG has or could assert against SubscriberBASE, or an admission of any alleged wrongdoing or liability by SubscriberBASE; 2. an admission or evidence of any fault of omission by SubscriberBASE in any civil, criminal, or administrative proceeding in any court, administrative agency or other tribunal, other than such proceedings as may be necessary to 18

19 consummate or enforce this AVC. Moreover, by entering into this AVC and agreeing to the terms and conditions provided herein, SubscriberBASE does not intend to waive and does not waive any defenses it may have in any other action or proceeding that has been or may be brought against them arising from advertising or promoting content. 3. a finding by any court or agency, including the OAG, that SubscriberBASE has engaged in any act or practice declared unlawful by any laws, rules or regulations of the State of Florida. H. APPLICATION, EFFECT AND OTHER TERMS IT IS FURTHER AGREED by the parties that: 1. This AVC shall become effective upon its acceptance by the Attorney General, by and through a Deputy Attorney General who may refuse to accept it at his discretion. The receipt or deposit by the OAG of the monies called for in this Agreement does not constitute acceptance by the OAG, and such monies received will be immediately returned if the Attorney General does not accept this Agreement; 2. SubscriberBASE will implement the terms of this AVC within one hundred twenty ( 120) days following the effective date of the AVC; 19

20 3. No waiver, modification or amendment of the terms this AVC shall be valid or binding unless made in writing, signed by parties and then only to the extent set forth in such written wa, modification, or amendment; 4. This AVC shall be governed by, construed and enforced exclusively in accordance with and subject to the laws of the State of Florida, including, but not limited to, its choice of law principles; 5. No waiver of any term, provision, or condition of this AVC, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or shall constitute, a wa of any provision hereof, whether or not similar, nor shall such waiver constitute a continuing waiver, and no waiver shall be binding ss executed in writing by the party making waiver; 6. If any clause, provision, or section of the AVC shall, for any reason, be held illegal, invalid, or unenforceable, such illegality, lidity, or unenforceability shall not affect any other clause, provision, or section of s AVC, and this AVC shall be construed and enforced as if such illegal, invalid, or unenforceable ause, section, or other provision had not been contained herein; 20

21 7. SubscriberBASE 1 be responsible for copy of this AVC to all of their officers, livering a directors, successors, and managers. SubscriberBASE must also deliver a summary of material terms of this AVC to employees, affiliate entities, and other persons who engage in conduct related to the subject matter of this AVC. For current personnel, delivery shall be within 10 days of the date execution of this AVC. For new personnel, deli very sha be made within ten (10) days of the date of commencement of employment or other as ion with SubscriberBASE; 8. Violations of this AVC shall subject SubscriberBASE to 1 penal ties and sanct provided by law, and payment of attorney's of this AVC; s and costs incurred in enforcing the provisions 9. This AVC shall become effective upon its execution by all parties; and 10. This AVC const es the entire agreement and understanding between the parties re ing to the subject matter conta herein. This AVC may not be altered, amended, or modified in any respect or particular whatsoever except by a writing duly executed by each of parties hereto. 11. The OAG, on behalf of the State of Florida, hereby releases, acquits, and forever discharges SubscriberBASE and s 21

22 respective officers, directors, managers, members, managing members, and employees from any and all actions, causes of action, obligations, liabilities, claims or demand for damages, civil penalties, claims for relief, or demand whatsoever in law or in equity, civil or administrative, which were asserted or maintained, could have been asserted or maintained, or which could in the future be asserted or maintained against them in any civil, enforcement action or administrative action, or proceeding, based upon, arising out of, related to, or connected with, directly or indirectly, the subject of the OAG's investigation and the alleged wrongful conduct described above. It is agreed that the OAG shall not reopen this matter except to the extent it investigates an alleged breach of this AVC. I. NOTICE OF DEFAULT AND OPPORTUNITY TO CURE IT IS FURTHER AGREED by the parties that: 1. In consideration of the compliance and monetary terms set forth above, no penalties shall be imposed against SubscriberBASE pursuant to the OAG's investigation. If the OAG believes that a material breach of this AVC has occurred the OAG shall give written notice, in the manner provided for above, to SubscriberBASE within ninety ( 90) days of the alleged material breach. The notice shall describe the claimed material breach. 22

23 Following notice, SubscriberBASE shall have a reasonable opportunity to cure during which t no enforcement action will be taken. Specifically, SubscriberBASE shall have thirty ( 30) days from receipt the notice within which to provide to provide a good written response to the OAG's determination. The response shall include, at a minimum, either: a. A statement explaining why SubscriberBASE believes it is the AVC; or full compl with the material terms b. An explanation of how the alleged mate al breach occurred; and i. a statement that the alleged breach has been cured and how; or ii. a statement that the alleged breach cannot be reasonably cured within thirty (30) days from receipt of the notice, but (a) Subs rbase has begun to take corrective action to cure the alleged breach, and (b) SubscriberBASE is pursuing such corrective action with reasonable and due diligence; and (c) SubscriberBASE provided OAG with a detailed and reasonable timetable alleged breach. curing the 23

24 2. In the event the OAG becomes aware of any action by a third party 1 such as a publisher 1 that 1 acting on behalf of SubscriberBASE 1 fails to adhere to the compliance requirements set forth in sect D, the OAG shall notify SubscriberBASE writing so that SubscriberBASE may noti make good faith e s to take correct terms of its contract with the third party. the third party and action under the The OAG understands and agrees that, ing to this AVC, SubscriberBASE is not a guarantor of, or responsible for, performance of third parties, except as provided by law. 3. This section (NOTICE OF DEFAULT AND OPPORTUNITY TO CURE) shall expire and be of no further force or effect r the second anniversary of the execution of this AVC. After that time, the OAG shall not be requi to provide notice and opportunity to cure, but may instead choose to immediately pursue any appropriate remedy for alleged violations of the terms of this AVC. 24

25 IN WITNESS WHEREOF, SubscriberBASE Holdings, Inc. has caused this Agreement to be executed by Jeffery L. French as Chairman, a duly authorized representative of SubscriberBASE Holdings, Inc., as a true act and deed, in chland County, South Carolina, this 16th day of September, BY MY SIGNATURE I hereby rm that I am acting in my capacity with SubscriberBASE Holdings, Inc., and that by my signature I am binding said company to this Agreement. COUNTY OF Richland BEFORE ME, an officer duly authorized to take acknowledgments in the State of South Carolina, personally appeared Jeffery L. French, as Chairman of SubscriberBASE Holdings, Inc., and acknowledged before me that he executed the foregoing instrument for the purposes therein stated, on this 16th day of September, Sworn to and subscribed be me this 16th day of September, :DIU.:.\UBij {d 1 (j(;j S (print name I NOTARY PUB C (Print, type or stamp commissioned name of Notary Pub1~ic) I Personally known X or Produced identification

26 ~C. MARK A. CAMPBELL CyberFraud Section OFFICE OF THE ATTORNEY GENERAL The Capitol, PL-01 Tallahassee, Florida Accepted this :2 3~ay of ~"\--t-~ Patricia A. Conners Deputy Attorney General, State OFFICE OF THE ATTORNEY GENERAL The Capitol, PL-01 Tallahassee, Florida Florida 26