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CIRCUIT COURT OF OREGON

MARION COUNTY

IN THE MATTER OF:

Hon. Claudia M. Burton

Case No. 09C188987

8ELICKO TAIEB, an individual.

ASSURANCE OF VOLUNTARY9 COMPLIANCE

10 1.

11 Elicko Taieb does business in Oregon and is respondent herein. This agreement is

12 between respondent and the Oregon Department of Justice (DOJ) acting pursuant to ORS

13 646.632.

14 PROCEDURE

15 2

16 This Assurance of Voluntary Compliance (AVC) is a settlement of a disputed matter. It

17 shall not be considered an admission of a violation for any purpose. Respondent and DOJ agree

18 that no provision of the AVC operates as a penalty, forfeiture, or punishment under the

19 Constitution of the United States, under the Constitution of the State of Oregon, or under any

20 other provision of law.

21 3.

22 Respondent waives receipt of a notice from the State of Oregon pursuant to ORS

23 646.632(2) of the alleged unlawful trade practice and the relief to be sought.

24 11/

25 III

26 III

Page 1 of 6-ASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere, Inc.)

Department of JusticeISIS SW SID Ave .• Suite 410

Portland, OR 97201T: 971-673-1880F: 971-673-1884

1 4.

2 Respondent understands and agrees this AVC applies to respondent, respondent's

3 principals; officers, directors, agents, employees, representatives, successors and assigns, jointly

4 and severally, while acting personally, or through any corporation or other business entities,

5 whose acts, practices or policies are directed, formulated or controlled by respondent.

6 5.

7 Respondent and respondent's attorney agree and understand that following acceptance of

8 the AVC by DOJ, DOJ may communicate directly with respondent for the purpose of executing

9 and enforcing the terms of this agreement, resolving future complaints, and conducting

10 undercover investigations of respondent to the extent permitted by law.

11 6.

12 Respondent understands and agrees that if this AVC is accepted by DOJ, it will be

13 submitted to the Circuit Court of the State of Oregon for Marion County for approval, and, if

14 approved, will be filed with the court pursuant to ORS 646.632(2).

15 7.

16 Respondent waives any further notice of submission to and filing with the court of this

17 AVC. Respondent agrees to accept service of a conformed or court certified copy by prepaid

18 first class mail sent to the address following respondent's signature or to respondent's attorney.

19 8.

20 If monies which are ordered to be paid in this AVC are not paid timely, DOJ may

21 convert the AVC to a money judgment under ORS 646.632(2) without notice to respondents.

22 Respondents agree a copy of the money judgment may be sent to respondents, first class mail to

23 the addresses following their respective signatures.

24 9.

25 Respondent understands that, in addition to any other sanctions which may be imposed

26 under this AVC or under the law, violation of any of the terms of this AVC may result in

Page 2 of 6-ASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere, Inc.)

Department of Justice1515 SW 511>Ave., Suite 410

Portland, OR 97201T: 971-673-1880F: 971-673-1884

1 contempt of court proceedings, civil penalties of up to $25,000 for each violation, and such

2 further relief as the court may deem appropriate. ORS 646.632(4), ORS 646.642(1) and ORS

3 646.642(2).

4 lQ

5 The parties acknowledge that no other promises, representations or agreements of any

6 nature have been made or entered into by the parties. The parties further acknowledge that this

7 AVC constitutes a single and entire agreement that is not severable or divisible, except that if

8 any provision herein is found to be legally insufficient or unenforceable, the remaining

9 . provisions shall continue in full force and effect.

10 11.

11 This AVC may be executed in counterparts, and by different signatories on separate

12 counterparts, each of which shall be deemed to constitute an original counterpart hereof, and all

13 of which shall together constitute one and the same AVc. One or more counterparts of this

14 AVC may be delivered by facsimile or electronic transmission with the intent that it or they

15 shall constitute an original counterpart hereof.

16 REMEDIES

17 12.

18 Respondent shall obey Oregon's Unlawful Trade Practices Act, ORS 646.605 to ORS

19 646.656.

20 13.

21 Respondent shall not represent or imply that DOJ acquiesces or approves of respondent's

22 past business practices, current efforts to reform its practices, or any future practices which

23 respondent may adopt or consider adopting. DOJ's decision to settle this matter or to otherwise

24 unilaterally limit current or future enforcement action does not constitute approval or imply

25 authorization for any past, present, or future business practice.

26 //I

Page 3 of 6-ASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere, Inc.)

Department of Justice1515 SW 5'" Ave., Suite 410

Portland, OR 97201T: 971-<i73-1880F: 971-<i73-1884

1 14.

2 Upon execution of this AVC respondents shall pay the sum of $25,000 for deposit to the

3 Department of Justice Account established pursuant to ORS 180.095to be used by DO] as

4 provided by law.

5 15.

6 The following schedule shall apply to said payment: $6,250 shall be paid within 30 days

7 of the filing and entry of this AVC. Thereafter, respondent shall pay eight, consecutive

8 quarterly payments of $2,343.75 each, beginning with the first payment on December 5,2010.

9 Respondent shall make the quarterly payments on the following schedule:

10 Dec. 5, 2010: $2,343.75

Mar. 5,2011: $2,343.75

June 5,2011: $2,343.75

Sept. 5, 2011: $2,343.75

Dec. 5,2011: $2,343.75

Mar. 5,2012: $2,343.75

June 5,2012: $2,343.75

Sept. 5, 2012: $2,343.75

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14 There shall be no penalty for early payment.

15 16.

16 Effective immediately upon execution by respondent of this AVC, respondent agrees

17 that respondent, his principals, officers, directors, agents, employees, representatives, successors

18 and assigns, while acting personally, or through any corporations or other business entities,

19 whose acts, practices or policies are directed, formulated or controlled by respondent, shall be

20 permanently enjoined and restrained from engaging in any business in the state of Oregon that

21 relates to electronic cigarettes, tobacco products, nicotine delivery devices, drugs, or drug

22 delivery devices of any kind. For the purposes of this AVC, "engaging in any business" in

23 /II

24 III

25 III

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Page 4 of 6-ASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere, Inc.)

Department of Justice1515 SW 5th Ave., Suite 410

Portland, OR 97201T: 971-673-1880F: 971-673-1884

1 Oregon shall mean advertising, marketing, promoting or offering for sale the specified goods, or

2 services related to those goods, in Oregon; delivering the specified goods, or services related to

3 those goods, into or from Oregon; and/or accepting payment for the specified goods, or services

4 related to those goods, from individuals or entities located in Oregon.

5 APPROVAL BY COURT

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APPROVED FOR FILING and SO ORDERED this _ day of , 2010.

8 Circuit Court Judge

9 REVIEW BY RESPONDENT'S ATTORNEY

10 Approved as to form.

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12Dated: _

13

Dennis Koho,Koho & Beatty Attorneys at Law LLCAttorney for Respondent

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RESPONDENT'S SIGNATURE AND A NOWLEDGMENT

17 Individual

d each of its terms. RespondentRespondent has read and understands thisagrees to each and every term.

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Print Name

Address \D~(,I .91J{' {~l ~q\.~ E<-- ~>~Y22

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SUB~~~~~~~~~KEVIN L HAGEN

MY COMMISSION # DO 972097EXPIRES; Ju!y 16, 2014

Bonded Thru Notary Public Underwriters

otary Public for F

Page 5 of (rASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere, Inc.)

Department ofJustice1515 SWS'" Ave., Suite4JO

Portland, OR 9720 JT: 971.Q73-J880F: 971.Q73-1884

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ACCEPTANCE OF DO.J

Accepted this _ day of , 2010.

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JOHN R. KROGERAttorney General

David Hart OSB 002750Senior Assistant Attorney GeneralOregon Degartment of Justice1515 SW 5 Ave, Suite 410Portland, OR 97201Tel.: (971) 673-1880 IIFax: (971) 673-1884david.hart@doj.state.or.us

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Page 6 of 6-ASSURANCE OF VOLUNTARY COMPLIANCEDM-#2166380-2 Elicko Taieb (Smoking Everywhere. Inc.)

Department of JusticeISIS sw Sib Ave .• Suite 410

Portland, OR 9720 IT: 971.{)73-1880F: 971'{)73-1884

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IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MARION

Plaintiff, Hon. Claudia Burton

STATE OF OREGON ex rel. JOHNKROGER, Attorney General of Oregon,

Case No. 09CI8898

v. STIPULATED GENERAL JUDGMENT andMONEY AWARD

8 SMOKING EVERYWHERE, INC.,

9 Defendant.

10 Plaintiff, State of Oregon, acting by and through John R. Kroger, Attorney General of

11 Oregon ("DOJ") brought this action pursuant to ORS 646.632 against Defendant Smoking

12 Everywhere, Inc. (''Defendant''). The parties now consent to the entry of this Stipulated General

13 Judgment ("Judgment"). This Judgment disposes of all claims against Defendant in the above

14 captioned matter. NOW THEREFORE, upon the consent of the parties hereto IT IS HEREBY

15 ORDERED, ADJUDGED and DECREED as follows:

16 I. FINDINGS

17 1.

18 This Court has jurisdiction over the subject matter of this lawsuit and over all parties.

19 2

20 The terms of this Judgment shall be governed by the laws of the State of Oregon.

21 3.

22 Entry of this Judgment is in the public interest.

23 4.

24 Defendant is a Florida corporation.

25 5.

26 Defendant did business in Oregon by selling and distributing electronic cigarettes.

Page 1 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere, Inc.

Department of Justice1515 SW 5111 Ave., Suite 410

Portland, OR 97201T: 971-673-1880 IIF: 971-673-1884

1 6.

2 Electronic cigarettes are nicotine delivery devices constructed to mimic the look and

3 experience of smoking a conventional cigarette. Defendant's electronic cigarettes contain a

4 battery-operated, heating element and a replaceable plastic cartridge that contains various

5 chemicals, including liquid nicotine. The heating element vaporizes the liquid, which is inhaled

6 by the user.

7 7.

8 When selling and promoting electronic cigarettes in Oregon, Defendant violated ORS

9 646.608 (l)(e).

10 II. ADMINISTRATIVE PROVISIONS

11 8.

12 Defendant understands and agrees that the terms and conditions of this Judgment apply to

13 Defendant, its principals, officers, directors, agents, employees, representatives, successors and

14 assigns, while acting personally, or through any corporations or other business entities, whose

15 acts, practices or policies are directed, formulated or controlled by Defendant.

16 9.

17 Defendant agrees and understands that following the filing and entry of this Judgment

18 with the court, DOJ may communicate directly with Defendant for the purpose of executing and

19 enforcing the terms of this Judgment, resolving future complaints and conducting undercover

20 investigations to the extent permitted by law of the Defendant.

21 10.

22 Defendant understands that, if it violates the terms or conditions of any portion of this

23 Judgment, DOJ may institute appropriate legal action to enforce said Judgment, including, but

24 not limited to, contempt proceedings before the Court, civil or punitive penalties, and such

25 further relief as the Court may deem appropriate.

26 III

Page 2 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Snwking Everywhere. Inc.

Department of Justice1515 SW5tb Ave., Suite 410

Portland, OR 97201T: 971-673-1880" F: 971-673-1884

1 11.

2 Defendant and DOJ acknowledge that no other promises, representations or agreements

3 of any nature have been made or entered into by the parties. The parties further acknowledge

4 that this Judgment constitutes a single and entire agreement that is not severable or divisible,

5 except that if any provision herein is found to be legally insufficient or unenforceable, the

6 remaining provisions shall continue in full force and effect.

7 12.

8 This Stipulated General Judgment resolves all claims brought by Plaintiff in Marion

9 County Case No. 09C18898.

10 13.

11 Defendant shall not represent or imply that DOJ acquiesces or approves of Defendant's:

12 past business practices; current efforts to reform their practices; or, any future practices that

13 Defendant may adopt or consider adopting. DOl's decision to settle this matter or to otherwise

14 unilaterally limit current or future enforcement action does not constitute approval or imply

15 authorization for any past, present, or future business practices of the Defendant.

16 14.

17 This Judgment may be executed in counterparts, and by different signatories on separate

18 counterparts, each of which shall be deemed to constitute an original counterpart hereof, and all

19 of which shall together constitute one and the same Judgment. One or more counterparts of this

20 Judgment may be delivered by facsimile or electronic transmission with the intent that it or they

21 shall constitute an original counterpart hereof.

22 III. INJUNCTION

23 15.

24 On DOl's claims for relief under Oregon's Unlawful Trade Practices Act, ORS 646.605

25 through 646.656, JUDGMENT in the form of PERMANENT INJUNCTIVE RELIEF is awarded as

26 follows:

Page 3 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere. Inc.

Department of Justice1515 SW 5th Ave., Suite4to

Portland, OR 97201T: 971-673-1880 IIF: 971-673-1884

1 Defendant, its principals, officers, directors, agents, employees, representatives,

2 successors and assigns, while acting personally, or through any corporations or other business

3 entities, whose acts, practices or policies are directed, formulated or controlled by Defendant,

4 shall be permanently enjoined and restrained from engaging in any business in the state of

5 Oregon. For the purposes of this Judgment, "engaging in any business" in Oregon shall mean

6 promoting products for sale in Oregon, delivering goods or services into Oregon or from Oregon,

7 and/or accepting payment from individuals or entities located in Oregon.

8 IV. MONEY A WARD

9 1~

10 JUDGMENT, in the form of a MONEY AWARD as described by the Money Award

11 Summary set forth below, shall be entered for DOJ and against Defendant. Defendant shall pay

12 DOJ's attorney fees and costs for this litigation in the amount of $95,862.07, which shall be

13 deposited to the Protection and Education Revolving Account established pursuant to ORS

14 180.095 to be used by DOJ as provided by law.

15 17.

16 The following schedule shall apply to said payment: $24,000.07 shall be paid within 30

17 days of the filing and entry of this judgment. Thereafter, Defendant shall pay eight, consecutive

18 quarterly payments of $8,982.75 each, beginning with the first payment on December 5, 2010.

19 Defendant shall make the quarterly payments on the following schedule:

20 Dec. 5,2010: $8,982.75

Mar. 5,2011: $8,982.75

June 5,2011: $8,982.75

Sept. 5, 2011: $8,982.75

Dec. 5,2011: $8,982.75

Mar. 5, 2012: $8,982.75

June 5,2012: $8,982.75

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23 Sept. 5, 2012: $8,982.75

24 There shall be no penalty for early payment.

25 1//

26 1//

Page4 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere, Inc.

Department of Justice1515 SW 5th Ave., Suite 410

Portland. OR 97201T: 971-673-1880 IIF: 97H573-1884

1 18.

2 So long as Defendant makes all payments timely pursuant to this schedule, no interest

3 shall accrue. However, if Defendant fails to make any payment timely, the entire outstanding

4 balance shall become immediately due in full and interest shall begin to accrue from the date of

5 the late payment at a rate of 9% per annum.

6 19.

7 MONEY AWARD SUMMARY

8 A. Judgment Creditor: State of Oregon, ex reI. John Kroger, Attorney General of Oregon.

9 a. Address of Judgment Creditor: 1162Court Street, NE, Salem, OR 97301-4096.

10 b. Judgment Creditor's Attorney: David Hart, OSB 002750, Senior Assistant

11 Attorney General.

12 c. Address of Judgment Creditor's Attorney: Oregon Department of Justice,

13 1515SW 5th Avenue, Suite 410, Portland, OR 97201. Telephone: (971) 673-

14 1880. Fax: (971) 673-1884. Email: david.hart@doj.state.or.us.

15 B. Judgment Debtor: SMOKING EVERYWHERE, INe.

16 a. Address of Judgment Debtor: 1500Weston Rd., Suite 200, Weston, FL 33326

17 b. Date of Birth: NIA

18 c. TaxID#: _

19 d. Driver's License No.1 State ofIssuance: NIA

20 e. Judgment Debtor's Attorney: Dennis Koho (OR) I Kevin Hagen (FL)

21 f. Address of Judgment Debtor's Attorney:

22 i. Dennis Koho, Koho & Beatty Attorneys at Law LLC,

23 132Glynbrook St. N, Suite 350, Keizer, OR 97303.

24 TeL (503) 390-3501. Fax. (503) 390-3506.

25 Email: dkoho@koholaw.com

26 III

Page5 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere. Inc.

Department of Justice1515 SW SibAve., Suite 410

Portland, OR 97201T: 971-673-1880 IIF: 971-673-1884

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Page 6-

11. Kevin Hagen, Hagen & Hagen, PA,

3531 Griffm Rd., Fort Lauderdale, FL 33312.

Tel. (954) 987-0515. Fax. (954) 964-3764

Email: khagen@hagenlawfrrm.com

C. Other person(s) or public body entitled to a portion of payment: None.

D. Principal Amount of Judgment: None. The parties have stipulated that Defendant

shall pay DOl's attorney fees and costs in the amount of $95,862.07, as described below.

E. Pre-judgment Interest:

F. Post-judgment Interest:

None.

As long as Defendant makes all payments timely pursuant

to this schedule, no interest shall accrue. However, if Defendant fails to make any

payment timely, the entire outstanding balance shall become immediately due in full and

interest shall begin to accrue from the date of the late payment at a rate of 9% per annum.

G. Other Costs, Disbursements, Periodic Payments, Arrearages: None.

STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Snwking Everywhere. Inc.

Department of Justice1515 SW 5th Ave .. Suite 410

Portland. OR 97201T: 971-673-1880 IIF: 971-673-1884

1 H. Attorneys' Fees and Associated Costs: The parties have stipulated that Defendant shall

2 pay DOJ's attorney fees and costs in the amount of $95,862.07, which shall be deposited

3 to the Protection and Education Revolving Account established pursuant to ORS 180.095

4 to be used by DOJ as provided by law. The following schedule shall apply to said

5 payment: $24,000.07 shall be paid within 30 days of the filing and entry of this judgment.

6 Thereafter, Defendant shall pay eight, consecutive quarterly payments of $8,982.75 each,

7 beginning with the first payment on December 5,2010. Defendant shall make the

8 quarterly payments on the following schedule:

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131415161718192021222324252627282930313233343536373839

Dec. 5,2010: $8,982.75

Mar. 5,2011: $8,982.75

June 5,2011: $8,982.75

Sept. 5, 2011: $8,982.75

Dec. 5,2011: $8,982.75

Mar. 5,2012: $8,982.75

June 5,2012: $8,982.75

Sept. 5, 2012: $8,982.75

There shall be no penalty for early payment.

DATED: , 2010.

Submitted by:David Hart OSB 002750Senior Assistant Attorney GeneralOregon Department of Justice1515 SW 5th Ave, Suite 410, Portland, OR 97201Tel.: (971) 673-1880 II Fax: (971) 673-1884david.hart@doj.state.or.usAttorneys for Plaintiff

Hon. Claudia BurtonMarion County Circuit Court Judge

UTCR 5.100 CERTIFCATION: Opposing counsel stipulates that no objection exists as to the form ofthe order:

Signed: Dated: _Dennis Koho, OSB 043310Koho & Beatty, Attorneys At Law, PC132 Glynbrook N, Suite 350, Keizer, OR 97303Tel.: 503-390-3501 IIFax 503-390-3506Email: dkoho@koholaw.comAttorneys for Defendant

Page 7 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere. Inc.

Department of Justice1515 SW Sib Ave .• Suite 410

Portland, OR 97201T: 971-673-1880 IIF: 971-673-1884

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IT IS SO STIPULATED:

DEFENDANT'S SIGNATURE

I, 6_·~_\ -"J?-'---o_.....:\~"'_\ -=--c,..c:h,-----" being first duly sworn on oath depose and say that I am

of Smoking Everywhere, In ., and am fully authorized and

7 empowered to sign this Stipulated General Judgment and oney Award and bind the same to the

terms hereof. I have read and understand this agr ement

behalf, I agree to each and every term.

SUBSCRIBED AND SWORN to before me this -+ day of__ ~~~ __ , 2010.

Page 8 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere, Inc.

Department of Justice1515 SW 5111 Ave., Suite 410

Portland, OR 97201T: 971'{)73-1880 IIF: 971'{)73-1884

123456789

101112131415161718

DOJ's ACCEPTANCE

DATED: , 2010.

JOHN R. KROGERAttorney General

David Hart OSB 002750Senior Assistant Attorney GeneralOf Attorneys for PlaintiffOregon Department of Justice1515 SW 5th Ave., Suite 410Portland, OR 97201david. hart @doj.state.or.usTel: 971-673-1880 I Fax: 971-673-1884

Page 9 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere, Inc.

Department of JusticeISIS SW 5"' Ave., Suite 410

Portland, OR 97201T: 971-673-1880 II F: 971-673-1884

CERTIFICA TE OF SERVICE

I hereby certify that on the date below, I served true copies of the foregoingSTIPULATED GENERAL JUDGMENT and MONEY AWARD on the persons identifiedbelow byemail and US Mail, frrst-class postage prepaid to:

Dennis KohoKoho & Beatty, Attorneys at Law LLC132 Glynbrook St. N, Suite 350Keizer, OR 97303Email: dkoho@koholaw.com

Kevin HagenHagen & Hagen, PA3531 Griffm Rd.Fort Lauderdale, FL 33312Email: khagen@hagenlawfrrm.com

Attorneys for Defendant Smoking Everywhere, Inc.

DATED: , 2010.

David HartSenior Assistant Attorney General

Page 10 - STIPULATED GENERAL JUDGMENT and MONEY AWARDDM#2166934-3 State v. Smoking Everywhere, Inc.

Department of Justice1515 SW 5th Ave .. Suite 410

Portland, OR 97201T: 971-673-1880 IIF: 971-673-1884