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1 SCOTT A. KAMBER (pro hac vice) ROBERT A. WEIKERT (State Bar No. 121146) [email protected] [email protected] 2 DAVID A. STAMPLEY(pro hac vice) TALLEY MCINTYRE HENRY (State Bar No. 3 [email protected] 203131) KAMBERLAW, LLC [email protected] 4 11 Broadway, 22nd Floor NIXON PEABODY LLP New York, New York 10004 One Embarcadero Center, 18th Floor 5 Telephone: (212) 920-3072 San Francisco, California 94111-3600 Facsimile: (212) 202-6364 Telephone: (415) 984-8200 6 Fax: (415) 984-8300 7 JOSEPH H. MALLEY (pro hac vice) LAW OFFICE OF JOSEPH H. MALLEY, P.C. JASON C. KRAVITZ (pro hac vice) 8 1045 North Zang Boulevard [email protected] Dallas, Texas 75208 NIXON PEABODY LLP 9 Telephone: (214) 943-6100 100 Summer Street Facsimile: (214) 943-6170 Boston, MA 02110-2131 10 Telephone: (617) 345-1000 11 BRIAN J. PANISH (SBN 116060) Fax: (617) 345-1300 [email protected] 12 RAHUL RAVIPUDI (SBN 204519) [email protected] 13 PANISH, SHEA & BOYLE, LLP 11111 Santa Monica Boulevard, Suite 700 14 Los Angeles, California 90025 15 Telephone: (310) 477-1700 Facsimile: (310) 477-1699 16 Additional Attorneys for Plaintiffs

17 Attorneys for Plaintiffs Attorneys for Defendant, 18 NEBUAD, INC.

19 UNITED STATES DISTRICT COURT 20 NORTHERN DISTRICT OF CALIFORNIA 21 22 DAN VALENTINE, et al., No. 3:08-cv-05113 (TEH) (EMC)

23 Plaintiffs, STIPULATION OF SETTLEMENT AND RELEASE 24 vs. Hon. Thelton E. Henderson. 25 NEBUAD, INC., et al., 26 Complaint Filed: November 10, 2008 Defendants. Trial Date: None Set 27

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1 STIPULATION OF SETTLEMENT AND RELEASE 2 This Stipulation of Settlement and Release (the “Agreement”) is entered into by and 3 between Defendant NebuAd, Inc., a Delaware corporation, and Plaintiffs Dan Valentine, Neil 4 Deering, Saul Dermer, Kathleen Kirch, Terry Kirch, Dale Mortenson, and Andrew Paul Manard, 5 on behalf of themselves and the class they purport to represent (hereinafter collectively 6 “Plaintiffs”). 7 A. This Agreement is submitted pursuant to Rule 23 of the Federal Rules of Civil Procedure. Subject to the approval of the Settlement Court (as 8 defined herein), this Agreement is entered into between and among: (1) the Settlement Class Representative (as defined herein) on behalf of 9 himself and the Settlement Class; and (2) Defendant (as defined herein), 10 by and through their respective counsel.

11 WHEREAS, on or about November 10, 2008, Dan Valentine and other individuals filed a 12 class action complaint in this action asserting various claims on behalf of a nationwide class (the

13 “Action”); 14 WHEREAS, Plaintiffs alleged that Defendant was liable for damages based on violations

15 of the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s 16 Invasion of Privacy Act, California’s Computer Crime Law, and Unjust Enrichment, and for 17 attorneys’ fees, costs of suit, and pre- and post-judgment interest; 18 WHEREAS, Defendant asserts a number of legal and factual defenses to the claims made 19 in the Action and denies any wrongdoing or liability whatsoever; 20 WHEREAS, after the conduct alleged in the Action occurred and after the Action was 21 commenced, on May 13, 2009, NebuAd (assignment for the benefit of creditors), LLC was 22 appointed as the Assignee by NebuAd, Inc., pursuant to California law for the purpose of 23 liquidating NebuAd, Inc.’s assets, winding down NebuAd, Inc., and distributing the net 24 liquidation proceeds to creditors of NebuAd, Inc. NebuAd (assignment for the benefit of 25 creditors), LLC is not a party to the Action, and it is not alleged that NebuAd (assignment for the 26 benefit of creditors), LLC is involved or in any way responsible for any of the claims or damages 27 alleged in the Action.

28 WHEREAS, on or about October 6, 2009, the Court dismissed Bresnan Communications, -2- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page3 of 23

1 Cable One, CenturyTel, Embarq, Knology, and Wow! as defendants in the Action based on lack 2 of personal jurisdiction; 3 WHEREAS, since the dismissal of Bresnan Communications, Cable One, CenturyTel, 4 Embarq, Knology, and Wow!, each of those cases have been refiled in each defendant’s home 5 federal forum; 6 WHEREAS, Class Counsel (as defined herein) have concluded, after discovery and

7 investigation of the facts and after carefully considering the circumstances of the Action, 8 including the claims asserted in the complaint and the possible legal and factual defenses thereto 9 and the defunct status of company and the opportunity for recovery, that it would be in the best 10 interests of the Plaintiffs (as defined herein) to enter into this Agreement, which interests include 11 the substantial value to be derived by this settlement and the interest in avoiding the uncertainties 12 of litigation and assuring that the benefits reflected herein are obtained for the Plaintiffs; and, 13 further, that Class Counsel consider the settlement set forth herein to be fair, reasonable and 14 adequate and in the best interests of the Plaintiffs; 15 WHEREAS, the Parties were able to reach this Agreement only after arms-length 16 negotiations with each other conducted telephonically over several months; meeting in person in 17 Boston, Massachusetts; negotiations and discussions with former NebuAd, Inc. officers and 18 directors; mediation in person in San Francisco before U.S. Magistrate Judge Joseph Spero, as 19 well as telephonically; Plaintiffs’ evaluation of discovery from NebuAd, Inc., its former officers

20 and directors, and its assignee; evaluation of the allegations and defenses of Internet service 21 providers in this and other litigation; and Plaintiffs’ consultation with technical experts;and

22 WHEREAS, Defendant no longer actively operates a business; and 23 WHEREAS, given Defendant’s current status, Defendant represents that it no longer 24 engages in any conduct in connection with its previous business including the conduct alleged in 25 the complaint herein, if any there was, such that there is no continued possibility that Defendant 26 may engage in conduct which Plaintiffs allege (and Defendant denies) constitutes a violation of 27 law; and 28 WHEREAS, Defendant, through its counsel, after arms-length negotiations, has -3- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page4 of 23

1 conditionally agreed to cause its insurers to pay certain sums in settlement for the benefit of the 2 Settlement Class, as provided in this Agreement; 3 WHEREAS, Defendant, despite its belief that it has valid and complete defenses to the 4 claims asserted against it in the Action, has nevertheless agreed to enter into this Agreement to 5 reduce and avoid further expense, inconvenience, and the distraction of burdensome and 6 protracted litigation, and thereby to resolve this controversy;

7 WHEREAS, Defendant represents that it no longer exists as a legal entity, NebuAd 8 (assignment for the benefit of creditors), LLC, has been requested to and has agreed to execute 9 this Agreement as a facilitator of the settlement process only, but is not a party to or in any way 10 responsible as an obligor hereunder or in any way responsible for any of the obligations incurred 11 by or on behalf of Defendant through this Agreement; 12 NOW, THEREFORE, it is agreed by and between the undersigned on behalf of NebuAd, 13 Inc. and the Settlement Class Representative that any and all claims made or that could have 14 been made against NebuAd by the Settlement Class Representative or the Settlement Class in the 15 Action be settled, compromised and dismissed on the merits and with prejudice and, except as 16 hereafter provided, without costs as to the Settlement Class Representative or NebuAd, subject to 17 the approval of the Settlement Court, on the following terms and conditions. 18 I. DEFINITIONS 19 1. Settlement Class. Subject to the Settlement Court’s approval, and the conditions

20 of Section III.1., the undersigned agree and consent to the certification pursuant to Fed. R. Civ. 21 P. 23(b)(1) of the following settlement class (the “Settlement Class”): 22 The class shall consist of all persons in the United States who, from January 1, 2007 to July 1, 2008, were consumers subscribing to the services of 23 certain Internet Service Providers identified in Exhibit A hereto (there shall be confirmatory discovery to determine and/or confirm the identities of these 24 Internet Service Providers, and Exhibit A shall be kept under seal until after Preliminary Approval). Excluded from the Settlement Class are the 25 following: Defendant, and any of aforementioned respective parent, 26 subsidiary, affiliate or control person of Defendant, as well as the officers, directors, agents, servants, or employees of Defendant, any judge presiding 27 over this case over any of the cases which comprise the Action, and the immediate family members of any such person(s). 28 -4- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page5 of 23

1 2. General Definitions. As used in this Agreement, the following terms shall have 2 the indicated meanings: 3 A. “Complaint” means the complaint in this Action filed on November 10, 4 2008. 5 B. “Action” means the action associated with the Complaint. 6 C. “Court” or “Settlement Court” means the Honorable Thelton E. Henderson

7 of the United States District Court for the Northern District of California, or if Judge 8 Henderson is not available, another judge from the United States District Court for the 9 Northern District of California who will be designated by Judge Henderson or who is 10 appointed or assigned to preside over the action, or any subsequent court before which 11 NebuAd, Inc.’s Counsel and Class Counsel agree to settle the claims of the Settlement 12 Class. 13 D. “Class Member” means any person or entity falling within the definition 14 of the Settlement Class set forth in Paragraph 1 above. 15 E. “Class Counsel” means attorneys Scott A. Kamber and David Stampley of 16 KamberLaw, LLC; and Rahul Ravipudi and Pete Kaufman of Panish Shea & Boyle LLP, 17 and their respective law firms. 18 F. “Settlement Class Representative” means the named plaintiff who has 19 asserted claims on behalf of himself and a putative class in the Action and whose name

20 will be submitted to the Court for consideration as an adequate representative of the 21 Settlement Class. Named as provisional Settlement Class Representative for pre-

22 certification purposes is the following person: Dan Valentine. Each Settlement Class 23 Representative shall execute for submission with the Joint Motion (as defined herein) a 24 sworn declaration in substance and form mutually acceptable to the Parties. 25 G. “Effective Date” has the meaning ascribed in Section II.5. of this 26 Agreement. 27 H. “Motion” is the pleading to be filed by Class Counsel pursuant to Section 28 II.2. This Agreement shall be an exhibit to the Motion. -5- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page6 of 23

1 I. “Plaintiffs” means the Settlement Class Representative together with all 2 members of the Settlement Class as defined. 3 J. “Releasees” or “Released Entities” means NebuAd (as defined herein) and 4 also means and includes NebuAd’s Carriers (as defined herein), solely to the extent of 5 their capacities as insurers of NebuAd, and Sherwood Partners, LLC. Notwithstanding 6 any language in this agreement to the contrary, other than identified Releasees, no release

7 whatsoever is being provided to any other entity, including but not limited to any entity 8 listed on Exhibit A. 9 K. “Released Claims” means any and all known or unknown claims, 10 demands, actions, suits, causes of action (under the common or civil law, statutes, or 11 regulations, including laws of all jurisdictions outside the United States), damages 12 whenever incurred whether compensatory or exemplary, liabilities of any nature or under 13 any theory whatsoever, including costs, expenses, penalties, and attorneys’ fees, in law or 14 equity, that any Releasor, whether or not they object to the settlement, ever had or now 15 has, directly, representatively, derivatively or in any capacity, arising out of or related in 16 any way to any conduct, events, or transactions occurring in the course of the Action or 17 arising out of the facts, transactions, events, matters, occurrences, acts, disclosures, 18 statements, misrepresentations, omissions or failures to act regarding NebuAd, Inc.’s 19 deployment of devices, appliances, software, and/or other processes and in processing

20 Internet communications or transmissions from January 1, 2007 to the present, that were 21 or could have been alleged or asserted in the Action. Notwithstanding any other term or

22 condition herein, “Released Claims” shall not include any claims, demands, actions, suits, 23 causes of action, damages, and liabilities against any Internet service providers or any 24 entities listed on Exhibit A. 25 L. “Releasors” means any and all Class Members, as well as their respective 26 present and former, direct and indirect, parents, subsidiaries, divisions, partners and 27 affiliates, their respective present and former stockholders, officers, directors, employees, 28 managers, agents, attorneys and any of their legal representatives, any future operating -6- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page7 of 23

1 entities created and controlled by a Class Member, and any predecessors, successors, 2 heirs, executors, trustees, administrators, assigns and subrogees of each of the foregoing, 3 all in their capacities as such, and any entities or persons on whose behalf the Class 4 Member is authorized to act. All Released Claims are forever discharged, and such 5 claims cannot be asserted by any of Releasors’ future, direct and indirect, parents, 6 subsidiaries, divisions, partners and affiliates, their respective future stockholders,

7 officers, directors, employees, managers, agents, attorneys and any of their legal 8 representatives, or any successors, heirs, executors, trustees, administrators, assigns or 9 subrogees of each of the foregoing. As used in this Paragraph, “affiliates” means entities 10 controlling, controlled by or under common control with a Releasor. 11 M. “Settlement Notice” has the meaning set forth in Section II.3.A. of this 12 Agreement. 13 N. “NebuAd” means NebuAd, Inc.; NebuAd (assignment for the benefit of 14 creditors), LLC, and their present and former subsidiaries, affiliates, divisions, associates, 15 business partners, co-venturers, agents, successors, predecessors, assignors, assignees, 16 assigns, and each of all these entities’ respective present, former or future, officers, 17 directors, shareholders, agents, counsel, and employees. 18 O. “NebuAd’s Carriers” means AXIS Surplus Insurance Company and St. 19 Paul Fire & Marine Insurance Company.

20 P. “NebuAd, Inc.’s Counsel” means Jason C. Kravitz and Talley McIntyre 21 Henry of Nixon Peabody LLP, and their law firm.

22 Q. “Defendant” means NebuAd, Inc. 23 R. "Alternative Judgment" means an order and final judgment entered by the 24 Settlement Court other than that set forth in Exhibit E, entry of which does not cause any 25 Party to terminate the Agreement as permitted by Section IV, herein. 26 S. "Parties" or "Party" mean the Settlement Class Representative and 27 Defendant. 28 T. The “Settlement Administrator” is that person or entity, selected by Class -7- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page8 of 23

1 Counsel and agreed to by Defendant (approval shall not be unreasonably withheld), and 2 appointed by the Court, to serve as the administrator for the settlement of the Action. 3 U. “Settlement Payment” means the full and final payment of settlement 4 funds on behalf of NebuAd as described in Section II.6. 5 II. IMPLEMENTATION OF SETTLEMENT 6 1. Reasonable Best Efforts to Effectuate This Settlement. Consistent with the terms

7 of this Agreement and notwithstanding the rights of the Parties to terminate this Agreement at 8 certain times, the Parties and their counsel agree to use their reasonable best efforts, including all 9 steps and efforts contemplated by this Agreement and any other reasonable steps and efforts that 10 may be necessary or appropriate, by order of the Settlement Court or otherwise, to carry out the 11 terms of this Agreement. 12 2. Motion. Plaintiffs shall move for preliminary approval of the settlement 13 contemplated herein on or before August 8, 2011. This date may be changed upon written 14 agreement of the parties. 15 3. Notice. Unless otherwise specified, all costs of notice to the Settlement Class as 16 well as the cost of any person retained to effectuate notice in accordance with this Paragraph, 17 shall be paid exclusively out of the Settlement Fund as further provided in this Agreement in 18 Section II.7. 19 A. NOTICE TO THE CLASS. Within 20 business days of preliminary

20 approval of this settlement, the Settlement Administrator shall, in accordance with Rule 21 23 of the Federal Rules of Civil Procedure and the Preliminary Approval Order, provide

22 notice by publication by placing a banner advertisement on selected Internet websites, in 23 substantially the form attached hereto as Exhibit B (the “Internet Notice”), or by utilizing 24 the Google Adwords service to display notices substantially similar to the content of 25 Exhibit B, as approved by the Settlement Court, and by publication on the website 26 created by the Settlement Administrator, in substantially the form attached hereto as 27 Exhibit C (the “Website Notice”). The Internet Notice shall contain a link that will direct 28 inquiries to the Website Notice. The Website Notice shall direct all members of the -8- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page9 of 23

1 Settlement Class to review a copy of the detailed Settlement Notice, which will be 2 published on the website. A cost quotation from the Settlement Administrator shall be 3 provided to the Court 4 Prior to the filing of the Motion for Preliminary Approval, Class Counsel shall 5 consult with the Settlement Administrator to determine if the notice plan set forth above 6 could be meaningfully improved, within reasonable economic limits, to reach more Class

7 Members through advertising in print publications specifically targeted to the geographic 8 location of the Internet service providers identified in Exhibit A. 9 B. OTHER REQUIRED NOTICE. NebuAd, Inc.’s Counsel or their designee, 10 shall serve and be solely responsible for any notices that may be required under 28 U.S.C. 11 § 1715, on the “Appropriate Federal official” and the “Appropriate State officials,” as 12 defined in 28 U.S.C. § 1715(a). The costs of this notice shall not be paid from the 13 Settlement Fund. 14 4. Entry of Final Judgment. If, after the settlement fairness hearing scheduled by the 15 Settlement Court in the Preliminary Approval Order, the Settlement Court approves this 16 Agreement, then counsel for the Parties shall request that the Settlement Court enter an Order 17 and Final Judgment substantially in the form annexed hereto as Exhibit E. 18 5. Effective Date of Settlement. The settlement detailed in this Agreement shall be 19 effective on the first date after all of the following events have occurred: (1) entry of the

20 Preliminary Approval Order substantially in the form annexed hereto as Exhibit D, or entry of a 21 Preliminary Approval Order not substantially in the form annexed hereto with respect to which

22 neither Defendant nor Class Counsel invoke its termination rights within the period prescribed in 23 Section IV; (2) final approval by the Settlement Court of this Agreement, following notice to the 24 Settlement Class and a fairness hearing, as prescribed by Rule 23 of the Federal Rules of Civil 25 Procedure; (3) entry by the Settlement Court of an Order and Final Judgment, substantially in the 26 form set forth in Exhibit E annexed hereto, or entry of an Alternative Judgment; and, (4) if there 27 has been an objection to the Settlement, the expiration of any time for appeal or review of such 28 Order and Final Judgment or Alternative Judgment, or, if any appeal is filed and not dismissed, -9- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page10 of 23

1 after such Order and Final Judgment or Alternative Judgment is upheld on appeal in all material 2 respects and is no longer subject to review upon appeal or review by writ of certiorari; and 4) this 3 Agreement is no longer subject to termination by any Party as provided for in Section IV. 4 6. Settlement Fund For Benefit Of Class. Subject to the provisions hereof, and in 5 full, complete and final settlement of all Released Claims as provided herein, Defendant agrees 6 to the following:

7 A. In full settlement of Plaintiffs’ claims for the Settlement Class, and 8 without admitting any liability, not later than forty-five (45) days following the Effective 9 Date, Defendant shall cause to be made a Settlement Payment in an amount calculated as 10 follows: 11 (i) $2,000,000.00, from NebuAd, Inc.’s insurance policy issued by St. 12 Paul Fire & Marine Insurance Company (Policy Number: 13 VP09403475); 14 (ii) $409,509.74, which is the balance remaining on NebuAd, Inc.’s 15 insurance policy issued by AXIS Surplus Insurance Company 16 (Policy Number: ECN634807) ; 17 (iii) less any amounts previously advanced on behalf of Defendant to 18 reimburse and/or pay the Settlement Administrator for the 19 reasonable costs of administering the settlement, as described in

20 Section II.3., and as provided for in Section II.7., below. 21 The Settlement Payment will be deposited in a trust account to be held by the Settlement

22 Administrator for the benefit of the Settlement Class (“Settlement Fund”). Payment of the 23 required settlement funds into the Settlement Fund shall completely fulfill Defendant’s 24 obligations under this Agreement to the Settlement Class, and Defendant shall have no 25 liability or responsibility with respect to any distribution of the monies from the 26 Settlement Fund. Neither NebuAd nor the NebuAd Carriers shall be liable for satisfaction 27 of any liens or for any pre- or post judgment interest, liquidated or punitive damages, or 28 penalties in addition to the Settlement Payment. -10- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page11 of 23

1 B. The money in the Settlement Fund may be held in an interest-bearing 2 account and is not considered a fund for distribution to Class Members. Class Counsel, 3 on behalf of the Class Members, shall be responsible for all administrative, accounting 4 and tax compliance activities in connection with the Settlement Fund and the monies 5 deposited into the Settlement Fund, with all costs being paid from the Settlement Fund. 6 7. Distribution of Settlement Fund. The Settlement Fund shall be applied as follows:

7 A. Settlement Administration. To reimburse or pay all of the costs and 8 expenses reasonably and actually incurred by the Settlement Administrator in connection 9 with providing notice and administering claims as provided herein. Reimbursement or 10 payment of the Settlement Administrator’s costs and expenses incurred prior to funding 11 of the Settlement Fund may be made directly to the Settlement Administrator on behalf of 12 Defendant. Any funds paid under this section shall not be reimbursed or returned in any 13 way if the Settlement does not become Effective. 14 B. Taxes and Expenses. To pay any necessary taxes and expenses related to 15 interest earned by the Settlement Fund. Any funds paid under this section shall not be 16 reimbursed or returned in any way if the Settlement does not become Effective. 17 C. Advocacy Compensation. To pay advocacy compensation as awarded by 18 the Court, if any, including any and all attorney’s fees, costs and expenses as further set 19 forth in section II.9.

20 D. Relief to Settlement Class – Cy Pres Donation. Any amount remaining in 21 the Settlement Fund, less payments of expenses of administration and attorney’s fees, if

22 any, approved by the Court, shall be distributed to a non-profit organization or 23 organizations with the purpose of protecting consumers from misuse and/or unauthorized 24 distribution of their electronic information or of personally identifiable information 25 gathered through use of the Internet. Class Counsel shall submit the plan for such 26 distribution to the Court and any distribution pursuant to this paragraph must be approved 27 by the Court. No organization in which the Class Representative or Class Counsel holds 28 any ownership or control qualifies for distribution under this paragraph, and the -11- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page12 of 23

1 application referred to herein must affirmatively declare the absence of such interest. 2 E. Incentive Award. Class Representative Plaintiff Valentine may apply for 3 an incentive award from the Court for his efforts as Representative Plaintiff in an amount 4 not to exceed $5,000, each of the other representatives plaintiffs named above may apply 5 for an award up to $1,000, and such awards shall be paid solely from the Settlement Fund 6 after the Effective Date.

7 8. Relief To Settlement Class 8 A. Testimonial Cooperation of Former NebuAd, Inc. Directors and Officers. 9 NebuAd, Inc.'s former directors and officers, Robert Dykes and Kira Makagon shall: 10 (i) Within two weeks of the initial execution of this Agreement, agree 11 with Plaintiff’s counsel on mutually convenient dates before 12 September 1, 2011, as reasonably possible and on a reasonable 13 basis, for: (a) a scheduled session and one follow-up session, as 14 requested by Plaintiffs’ counsel, in which NebuAd, Inc.’s former 15 directors and officers named herein shall provide Plaintiffs’ 16 counsel, in response to questions posed solely by Plaintiffs’ 17 counsel, sworn statements, taken under oath and officially 18 transcribed and videotaped, and in response to questions posed by 19 Plaintiffs’ counsel and no others, relating to the allegations of the

20 Action; and (b) any and all relevant, personal documents in their 21 possession, including notes, calendars, and documents relating to

22 inventions, processes, and art indicated in patent applications. 23 (ii) Comply in good faith with any trial subpoena served by a plaintiff 24 to testify at trial of defendants in other actions relating to or arising 25 out such defendants' or clients' relationships with NebuAd, Inc. 26 (iii) Promptly notify Plaintiff's counsel of any requests by former 27 defendants in the Action or any former clients of NebuAd, Inc., for 28 information and/or cooperation relating to other actions arising out -12- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page13 of 23

1 such defendants' or clients' relationships with NebuAd, Inc., and 2 providing to Plaintiff's counsel all information provided in 3 response to such requests. 4 B. Cy Pres Donation. As stated in Section II.7.D., any amount remaining in 5 the Settlement Fund, less payments of expenses of administration and attorney’s fees, if 6 any, approved by the Court, shall be distributed to a non-profit organization or

7 organizations with the purpose of protecting consumers from misuse and/or unauthorized 8 distribution of their electronic information or of personally identifiable information 9 gathered through use of the Internet. Class Counsel shall submit the plan for such 10 distribution to the Court and any distribution pursuant to this paragraph must be approved 11 by the Court. No organization in which the Class Representative or Class Counsel holds 12 any ownership or control qualifies for distribution under this paragraph, and the 13 application referred to herein must affirmatively declare the absence of such interest. 14 9. Attorneys’ Expenses and Fees and Fee Disputes. The Parties agree that an award 15 of attorneys’ fees in this action is a matter committed to the sole discretion of the Settlement 16 Court and Defendant does not and shall not take any position as to fees. Class Counsel shall 17 submit an application for attorneys’ fees and expenses, not to exceed thirty (30) percent of the 18 Settlement Fund, to the Settlement Court. The Settlement Court shall determine the appropriate 19 amount of attorneys’ fees and expenses, if any, to be paid to Class Counsel. Such fees and

20 expenses approved by the Settlement Court shall be paid exclusively from the Settlement Fund. 21 Class Counsel release and forever discharge any claims, demands, actions, suits, causes of

22 action, or other liabilities relating to any attorneys’ fees or expenses incurred in the Class Action 23 as to NebuAd and the NebuAd Carriers. No additional attorney fees shall be paid by NebuAd or 24 the NebuAd Carriers. Class Counsel shall be entitled to receive any attorneys’ fees awarded by 25 the Settlement Court only after the Effective Date. 26 10. Settlement Administration. In addition to administering notice as set forth in 27 Section II.3., the Settlement Administrator shall be responsible for distributing the Settlement 28 Fund in accordance with Section II.7. above. The Settlement Administrator shall copy counsel -13- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page14 of 23

1 for both parties on all communications and shall provide regular reports regarding the 2 administration of the Settlement Fund to both Class Counsel and NebuAd, Inc.’s Counsel. Any 3 and all funds distributed to Settlement Administrator under Section II.7.A. must be approved in 4 writing by both Class Counsel and NebuAd, Inc.’s Counsel prior to said distribution. 5 11. All Claims Satisfied. Each Class Member shall look solely to the relief described 6 in Section II.6., II.7., and II.8. for settlement and satisfaction, as provided herein, of all Released

7 Claims. 8 12. Class Certification For Settlement Purposes Only. The Parties acknowledge and 9 agree and hereby stipulate, and shall so stipulate to the Court at the hearing on the request for 10 entry of the Preliminary Approval Order and at the certification hearing and the fairness hearing, 11 that: (i) the Settlement Class is being certified for settlement purposes only pursuant to this 12 Agreement, (ii) NebuAd reserves the right to object to class certification de novo in the event this 13 Agreement is terminated for any reason, and (iii) this Agreement shall have no precedential 14 effect with regard to certification of a litigation class that may arise if this Action is not fully and 15 completely resolved through this settlement effort, or otherwise. 16 13. Mandatory Class. The Settlement Class shall be certified as a mandatory class 17 under Rule 23(b)(1) of the Federal Rules of Civil Procedure. Mandatory class treatment is 18 appropriate because (1) prosecuting separate actions by individual Class Members would create a 19 risk of inconsistent or varying adjudications that would create incompatible standards of conduct

20 for Defendant; (2) a determination in this case as to one Class Member would be dispositive as to 21 all Class Members; See Fed. Rules Civ. Proc. Rule 23(b)(1). Because the Class is a mandatory

22 class, Class Members will not be given the option to exclude themselves. 23 III. RELEASES AND JURISDICTION OF COURT 24 1. Releases. Upon the Effective Date of this Agreement the Released Entities shall 25 be released and forever discharged from any Released Claims that any Releasor may have had. 26 All Releasors covenant and agree that they shall not hereafter seek to establish liability against 27 any Released Entity based, in whole or in part, on any of the Released Claims, nor shall any 28 Releasor assert any claim for relief against the NebuAd Carriers. Upon the Effective Date, all -14- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page15 of 23

1 Releasors will be forever barred and enjoined from commencing, filing, initiating, instituting, 2 prosecuting, maintaining, or consenting to any action against any Released Entity with respect to 3 the Released Claims. 4 With regard to the Released Claims, the Releasors acknowledge that they are aware that 5 they may later discover facts in addition to or different from those which they now know or 6 believe to be true with regard to the subject of this Agreement, but that, upon the Effective Date,

7 they intend fully, finally, and forever to settle and release all disputes and differences, known and 8 unknown, suspected or unsuspected, which now exist or formerly existed between the Parties 9 and/or any of the Releasees with respect to the Released Claims. In furtherance of this intention, 10 this release shall be and will remain a full and general release of the subject matter of the 11 Released Claims notwithstanding the discovery or existence of any additional or different facts 12 relating to the Released Claims or the subject of this Agreement. The Releasors also expressly 13 waive all rights or benefits to which they may be entitled under the terms of Section 1542 of the 14 California Civil Code or of any other state or federal law of similar effect. California Civil Code 15 § 1542 provides that:

16 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of 17 executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. 18

19 2. Consent to Jurisdiction. Defendant and Plaintiffs hereby irrevocably submit to the 20 exclusive jurisdiction of the Settlement Court for purposes of any suit, action, proceeding or 21 dispute arising out of, or relating to, this Agreement or the applicability of this Agreement. 22 3. Resolution of Disputes: Retention of Jurisdiction. Any disputes between or among 23 NebuAd and any of the Plaintiffs concerning matters contained in this Agreement shall, if they 24 cannot be resolved by negotiation and agreement, be submitted to the Settlement Court for 25 resolution. The Settlement Court shall retain jurisdiction over the implementation and 26 enforcement of this Agreement. 27 IV. TERMINATION OF THE AGREEMENT

28 1. Rejection Or Material Alteration Of Settlement Terms. Defendant and Plaintiff -15- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page16 of 23

1 Class Representatives shall each have the right to terminate this Agreement by providing written 2 notice of their election to do so (“Termination Notice”) to each other within thirty (30) days of: 3 (1) the Settlement Court declining to enter the Preliminary Approval Order substantially in the 4 form annexed hereto as Exhibit D; (2) the Settlement Court declining to enter the Order and 5 Final Judgment substantially in the form annexed hereto as Exhibit E; (3) the date upon which 6 the Order and Final Judgment is modified or reversed in any material respect by the U.S. Court

7 of Appeals or the U.S. Supreme Court; (4) the date upon which an Alternative Judgment is 8 modified or reversed in any material respect by the U.S. Court of Appeals or the U.S. Supreme 9 Court; or (5) the mutual agreement of Class Counsel and NebuAd, Inc. Counsel to terminate the 10 Agreement. 11 2. Return To Pre-Agreement Status. In the event any of the Parties exercise the right 12 of termination enumerated in this Paragraph, the Parties will resume the litigation of the Action 13 as if the settlement had never existed; the settlement and the Terms Sheet and this Stipulation of 14 Settlement and Release, and any and all papers and acts done pursuant to the settlement the 15 stipulation concerning the certification of the shall be null and void, and shall not be admissible 16 in evidence nor considered by the Court or jury for any purpose. The rights and obligations of the 17 Parties shall be identical to those prior to the execution of this Agreement. In the event either 18 Party exercises any right of termination, Defendant will have a reasonable opportunity to conduct 19 non-repetitive discovery and to raise and have heard any dispositive motions with respect to the

20 claims against it. 21 3. Preservation of Rights. The Parties hereto agree that this Agreement, whether or

22 not the Effective Date occurs, and any and all negotiations, documents and discussions 23 associated with it shall be without prejudice to the rights of any Party, shall not be deemed or 24 construed to be an admission or evidence of any violation of any statute or law, of any liability or 25 wrongdoing by NebuAd or of the truth of any of the claims or allegations contained in the 26 Complaint in the Action; and evidence thereof shall not be discoverable or used directly or 27 indirectly by the Settlement Class or any third party, in any way (except that the provisions of 28 this Agreement may be used by the Parties to enforce its terms), whether in the Action or in any -16- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page17 of 23

1 other action or proceeding. This Agreement and all of the terms herein constitute compromises 2 and offers to compromise covered by Federal Rule of Evidence 408. In the event that this 3 Agreement is terminated pursuant to Section IV, nothing in this Agreement or its negotiation 4 may be used as evidence in any action. The Parties expressly reserve all their rights and defenses 5 if this Agreement does not become final and effective substantially in accordance with the terms 6 of this Agreement.

7 V. REPRESENTATIONS AND WARRANTIES 8 1. Authorization to Enter This Agreement. The undersigned representatives of 9 Defendant represent and warrant that they are fully authorized to enter into and to execute this 10 Agreement on behalf of Defendant. Class Counsel represent and warrant that they are fully 11 authorized to conduct settlement negotiations with NebuAd, Inc.’s Counsel on behalf of the 12 Class and to enter into, and to execute, this Agreement on behalf of Plaintiffs, subject to 13 Settlement Court approval pursuant to Fed. R. Civ. P. 23(e). 14 2. Assignment. Settlement Class Representative represents and warrants that he has 15 not assigned or transferred any interest in the Action which is the subject of this Agreement, in 16 whole or in part. 17 3. Representation. Settlement Class Representative acknowledges that he has been 18 represented by counsel of his or her own choosing in the Action and the negotiation and 19 execution of this Agreement and that he has had a reasonable and sufficient opportunity to

20 consult with counsel to the extent he desires before executing this Agreement. 21 VI. ADDITIONAL PROVISIONS

22 1. Settlement Communication. The Parties specifically acknowledge, agree and 23 admit that this Agreement and its exhibits, along with all related drafts, motions, pleadings, 24 conversations, negotiations and correspondence, shall be considered a compromise within the 25 meaning of Federal Rule of Evidence 408, and any equivalent rule of evidence of any state, and 26 shall not (i) constitute, be construed, be offered, or received into evidence as an admission of the 27 validity of any claim or defense, or the truth of any fact alleged or other allegation in this Action 28 or in any other pending or subsequently filed action, or of any wrongdoing, fault, violation of -17- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page18 of 23

1 law, or liability of any kind on the part of NebuAd, or (ii) be used to establish a waiver of any 2 defense or right, or to establish or contest jurisdiction or venue. The Parties also agree that this 3 Agreement, any orders, pleadings or other documents entered in furtherance of this Agreement, 4 and any acts in the performance of this Agreement are not intended to be, nor shall they in fact 5 be, admissible, discoverable or relevant in any case or other proceeding against NebuAd to 6 establish grounds for certification of any class involving any Class Member, against NebuAd to

7 prove either the acceptance by any Party hereto of any particular theory of coverage, or as 8 evidence of any obligation that any Party hereto has or may have to anyone. 9 2. Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, 10 the successors and assigns of the Parties hereto. 11 3. No Party Is the Drafter. This Agreement has been negotiated at arm’s length, with 12 the participation of the Parties and their counsel. In the event of a dispute arising out of this 13 Agreement, none of the Parties shall be considered to be the drafter of this Agreement or any 14 provision hereof for the purpose of any statute, case law or rule of construction that would or 15 might cause any provision to be construed against the drafter hereof. 16 4. Headings. The headings to this Agreement have been inserted for convenience 17 only and are not to be considered when construing the provisions of this Agreement. 18 5. Construction. This Agreement shall be construed and interpreted to effectuate the 19 intent of the Parties, which is to provide, through this Agreement, for a complete resolution of

20 the Released Claims with respect to the Released Entities. 21 6. Choice of Law. All terms of this Agreement shall be governed by and interpreted

22 according to the substantive laws of the State of California, without regard to its choice of law or 23 conflict of laws principles. 24 7. Amendment or Waiver. This Agreement shall not be modified in any respect 25 except by a writing executed by all the Parties hereto, and the waiver of any rights conferred 26 hereunder shall be effective only if made by written instrument of the waiving Party. The waiver 27 by any Party of any breach of this Agreement shall not be deemed or construed as a waiver of 28 any other breach, whether prior, subsequent or contemporaneous, of this Agreement. -18- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page19 of 23

1 8. Modification. Prior to entry of the Order and Final Judgment, this Agreement 2 may, with approval of the Court, be modified by written agreement of Class Counsel and 3 NebuAd, Inc.’s Counsel in their discretion without giving any additional notice to the Class 4 Members, provided that such modifications are not materially adverse to the Class Members. 5 To the extent that Class Members desire to be notified regarding any additional changes 6 as described in this paragraph, or otherwise after the initial notice of the settlement, the

7 certification hearing, and the fairness hearing, they must file with the Clerk of Court in the 8 Action a request for notice, or send such a request in writing to Class Counsel, who shall 9 maintain a list of all such requests that are received. Class Members who have and who provide 10 an e-mail address agree to electronic notification. The provisions of this section advising Class 11 Members of this requirement shall be included in the Settlement Notice, the certification hearing 12 and the fairness hearing. 13 Subsequent to the Final Approval Order and Judgment becoming a Final Judgment, this 14 Agreement may, with approval of the Court, be modified by written agreement of Class Counsel 15 and NebuAd, Inc.’s Counsel in their discretion without giving any additional notice to the Class 16 Members, provided that such modifications do not limit the rights of the Class Members under 17 the Agreement. 18 9. Execution in Counterparts. This Agreement may be executed in counterparts. 19 Facsimile signatures or signatures in PDF format shall be considered as valid signatures as of the

20 date thereof, although the original signature pages shall thereafter be appended to this Agreement 21 and filed with the Settlement Court.

22 10. Integrated Agreement. This Agreement, including the exhibits hereto, contain an 23 entire, complete, and integrated statement of each and every term and provision agreed to by and 24 between the Parties hereto, and supersedes all prior oral or written agreements and 25 contemporaneous oral agreements among the Parties. 26 11. Notices. All notices and other communications required or permitted under this 27 Agreement, other than objections to or comments regarding the proposed settlement, shall be in 28 writing and delivered in person, by overnight delivery service or by facsimile. Any such notice -19- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page20 of 23 Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page21 of 23 Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page22 of 23

1 SETTLEMENT CLASS COUNSEL 2 By: ______3 SCOTT A. KAMBER 4 KamberLaw, LLC 5 Dated: Aug. 15, 2011 6

7 SETTLEMENT CLASS COUNSEL 8 By: ______9 10 Dated: ______

11 12 13 14 15 16 17 18 19

20 21 22 23 24 25 26 27

28 -21- STIPULATION OF SETTLEMENT AND RELEASE NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-1 Filed08/16/11 Page23 of 23 Case3:08-cv-05113-TEH Document240-1 Filed09/28/11 Page1 of 2

1 2 3 4 EXHIBIT A 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 A-1 STIPULATION OF SETTLEMENT AND RELEASE EXHIBIT A NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document240-1 Filed09/28/11 Page2 of 2

1 EXHIBIT A 2 (subject to Stipulated Protective Order pending Preliminary Approval) 3

4 AllCities Grande Communications

5 Annapolis Wireless Internet High Speed Data Inc. 6 AzulStar, Inc. 20/20 Communications

7 Bresnan Communications, LLC iBahn General Holdings 8 Cable One, Inc. Knology, Inc. 9 Casco Communications/Peak Internet Mesa Networks, Inc.

10 Cavalier Broadband, LLC Millennium Digital Media Systems/Broadstripe 11 CenturyTel, Inc.; CenturyTel Broadband Network Evolution, Inc. Services, LLC; CenturyTel Service Group, 12 LLC Nexicom Inc. 13 CMS Internet LLC Ricochet Networks, Inc. 14 Eastern Oregon Network, Inc. Rochester Telephone Company, Inc.

15 Education Networks of America (ENA) Softcom Internet Communications Embarq Management Co.; United Telephone 16 Co. of Eastern Kansas United Online/NetZero 17 Fire2Wire Unplugged Cities

18 Galaxy Internet Services WideOpen West Finance, LLC (WOW)

19 ! 20

21 22 23 24 25 26 27 28 A-2 STIPULATION OF SETTLEMENT AND RELEASE EXHIBIT A NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-3 Filed08/16/11 Page1 of 2

1 2 3 4 EXHIBIT B 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B-1 STIPULATION OF SETTLEMENT AND RELEASE EXHIBIT B NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-3 Filed08/16/11 Page2 of 2

DID YOUR ISP TRACK YOU? Class action settlement that is being considered by federal court may impact your rights. www.insertsettlementurl.com for more information.

Internet Notice 1 No. 3:08-cv-05113 (TEH) (EMC) ! Case3:08-cv-05113-TEH Document233-4 Filed08/16/11 Page1 of 8

1 2 3 4 EXHIBIT C 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C-1 STIPULATION OF SETTLEMENT AND RELEASE EXHIBIT C NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-4 Filed08/16/11 Page2 of 8

Page 1

IMPORTANT COURT-ORDERED NOTICE—PLEASE READ

THIS NOTICE SUMMARIZES THE TERMS OF A PROPOSED CLASS ACTION SETTLEMENT UNDER WHICH YOU MAY HAVE CERTAIN LEGAL RIGHTS. SUBJECT: Notice of Pendency of Class Action and Proposed Settlement in the U.S. District Court, Northern District Of California— Valentine, et al. v. NebuAd, Inc., No. 3:08-cv-05113 (TEH)(EMC). DATE: July __, 2011

Introduction ...... 1! The Lawsuit...... 2! A.! What Is a Class Action? ...... 2! B.! What Lawsuit and Parties Are Related to This Settlement? ...... 2! C.! What Is the Lawsuit About?...... 2! Class Membership...... 3! A.! Who Is in the Class?...... 3! The Settlement...... 3! A.! What Does the Settlement Accomplish for the Class?...... 3! B.! What Does the Defendant Obtain from the Settlement?...... 4! Class Members’ Options ...... 4! A.! What Are My Options for Participating in the Settlement?...... 4! B.! Who Represents Me and How Are They Paid? ...... 5! C.! How Can I Comment in Support of or in Opposition to the Settlement? ...... 5! D.! Can I Attend the Settlement Hearing? Do I Have to Attend? ...... 6! For Other Details about the Settlement...... 6! COURT ORDER FOR PUBLICATION OF THIS NOTICE...... 7!

INTRODUCTION

This Notice of Pendency of Class Action and Proposed Settlement (the “Notice”) provides information about a settlement proposed by the plaintiffs and the defendant (the “Parties”) in a class action lawsuit (the “Lawsuit”) pending in the United States District Court for the Northern District of California (the “Court”).

The Parties negotiated a Stipulation and Agreement of Settlement (the “Settlement”) and submitted it to the Court for review and approval. The Settlement would resolve the Lawsuit before the Court takes a position on which side is right. As part of the review process, the Court has ordered that this Notice be issued to provide information to persons whose legal rights would be affected if the Court approves the Settlement. This Notice summarizes what claims are at issue in the Lawsuit,

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Page 2 who is a member of the class covered by the Settlement (a “Class Member”), and how the Settlement, if approved, would affect Class Members’ legal rights. If the Court approves the Settlement, the Defendant, NebuAd, Inc. (“NebuAd”), will pay a total of approximately $2.41 million to create a Settlement Fund. That money will not be paid to Class Members, but instead, the bulk of it will be donated to non-profit groups in order to advance the interests of Class Members’ and other consumers’ online privacy. Any amount going to the attorneys representing the class as a fee and reimbursement for their costs shall be determined by the Settlement Court. The named plaintiffs who brought the Lawsuit and who will serve as representatives of the class will receive payments up to $5,000 for Dan Valentine, and up to $1,000 for each of the other named representatives. Some of the money will be spent providing notice to Class Members and administering the settlement. The rest will be donated to several non-profit organizations as detailed below.

THE LAWSUIT

A. What Is a Class Action?

In a class action, one or more named plaintiffs sue on behalf of a larger number of people whom they believe have similar claims. Each person who is part of a class is called a Class Member. Once the Court has determined that all Class Members have similar claims, the Court can resolve those claims for all Class Members at the same time.

B. What Lawsuit and Parties Are Related to This Settlement?

The named plaintiffs filed a lawsuit against NebuAd and several other defendants. The other defendants were dismissed from the lawsuit by the Court for lack of personal jurisdiction. This settlement applies only to defendant NebuAd in the case Valentine, et al. v. NebuAd, Inc., No. 3:08- cv-05113 (TEH)(EMC).

Defendant NebuAd delivered Internet advertisements to some consumers through its technology installed in the Internet Services Provider (ISP) networks of certain of its clients. It is no longer in operation.

C. What Is the Lawsuit About?

The Lawsuit contends that NebuAd’s services included displaying behaviorally targeted advertisements to website visitors. The Lawsuit further contends that NebuAd determined which advertisement to target to a visitor by analyzing the visitor’s communications with websites visited by using devices (“Appliances”) installed in the networks of the visitors’ Internet Service Providers (ISPs) that were NebuAd clients. In addition, the Lawsuit contends that NebuAd stored and read browser cookies on the computers of website visitors, as part of the process of serving advertisements and collecting information for profiling users. (Ordinarily, users who do not want third parties’ cookies can set their browser controls to block them. Users also can delete third-party cookies after those cookies have been delivered to them.)

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The Lawsuit alleges, and NebuAd denies, that it used the Appliances to intercept and alter consumers’ communications with websites they visited and that the Defendant did not provide adequate notice or choice about the use of the Appliance and thereby violated Class Members’ privacy rights. The Lawsuit alleges that NebuAd violated the following federal statutes, California statutes, and common-law legal rights: the Computer Fraud and Abuse Act, Title 18, United States Code 1030; the Electronic Communications Privacy Act, Title 18, United States Code, Section 2510; the Computer Crime Law, California Penal Code, Section 502; Civil Conspiracy; and Unjust Enrichment.

NebuAd is no longer in commercial operation and has made an assignment of its assets for the benefit of creditors.

NebuAd denies any and all wrongdoing. The Court has not made any decision about whether any aspect of the Lawsuit would be resolved in favor of the Plaintiffs or the Defendant. That the Court has ordered this Notice to be provided does not mean the Court has taken any position on the merits of the Lawsuit. It means that the Court is willing to consider the Parties’ request to conclude the Lawsuit by means of the Settlement.

CLASS MEMBERSHIP

A. Who Is in the Class?

You are a Class Member if, at any time between January 1, 2007 and July 1, 2008, you subscribed to the services of certain Internet Service Providers identified in the attached list. [Under seal until Preliminary Approval]

THE SETTLEMENT

The named plaintiffs and their attorneys believe the Settlement is in the best interests of the Class. In addition, the Parties all believe the Settlement benefits Class Members as well as the Defendant by avoiding the uncertainties and costs of trials and, potentially, appeals.

The full terms of the Settlement are contained in a document entitled “Stipulation and Agreement of Settlement,” which is on file with the Court, and which you can read at [address of settlement website to be inserted when known].

A. What Does the Settlement Accomplish for the Class?

The Settlement, if the Court approves it, includes the following relief.

What NebuAd Will Do NebuAd agrees, as part of the Settlement, that certain former directors and officers, on a reasonable basis, will provide sworn testimony relating to the allegations of the Lawsuit for use in other actions against ISPs that were NebuAd clients, for claims related to or arising out of such clients’ relationships with NebuAd, and testify at trial in any related lawsuits.

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Monetary Relief As discussed in the Introduction, above, as part of the Settlement, NebuAd will create a Settlement Fund of approximately $2.41 million. Some of this Settlement Fund will be used to pay the costs of administering the settlement (primarily notice costs) and, if approved by the Court, to pay incentive awards of no more than $5,000 to Dan Valentine and no more than $1,000 each to the other named plaintiffs, as well as attorneys’ fee and costs, which plaintiffs’ counsel will request in an amount not to exceed 30 percent of the Settlement Fund, and which shall be awarded in the Court’s discretion. The majority of the Settlement Fund will be dedicated to “cy pres” relief—money that will be donated to Court-approved non-profit organizations to fund research. education or activities to promote consumer awareness and choice regarding the privacy, safety, and security of electronic information from and about consumers. The named plaintiffs and their counsel have recommended that, if the Court approves the Settlement, the following organizations, all of which have demonstrated a nexus with the issues raised in the Litigation—particularly, research and education related to avoidance of future harm to consumers—should receive these funds. ! ______! ______! ______! ______The Defendant had no role in selecting these recipients.

B. What Does the Defendant Obtain from the Settlement?

In return for the Defendant’s agreement of testimonial cooperation with Plaintiffs and the creation of the Settlement Fund, the case against NebuAd will be dismissed. Class Members will release the Defendant from any and all liability arising out of or relating to the claims and allegations in the Lawsuit, meaning that no Class Member will be able to assert any of these claims against NebuAd, Inc., NebuAd (assignment for the benefit of creditors), LLC, and their present and former subsidiaries, affiliates, divisions, associates, business partners, co-venturers, agents, successors, predecessors, assignors, assignees, assigns, and each of all these entities’ respective present, former or future, officers, directors, shareholders, agents, counsel and employees. Class Members will also be prevented from asserting any of these claims against NebuAd Carriers AXIS Surplus Insurance Company, St. Paul Fire & Marine Insurance Company, and Sherwood Partners, LLC.

CLASS MEMBERS’ OPTIONS

A. What Are My Options for Participating in the Settlement?

To participate, you do not have to do anything. Under the Settlement, the Class is considered a “mandatory class,” which means you do not have the option to exclude yourself from the Class. If you are a Class Member, you are deemed to have accepted the Settlement and any decisions of the Court with respect to the Settlement and the Lawsuit. You will be represented by the named plain- tiffs and their counsel for purposes of the Settlement. Finalization of the Settlement means no Class Member will be able to sue or be part of any other lawsuit against NebuAd or other released

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Page 5 entities regarding the legal issues in this case. (NebuAd’s ISP clients are not among the released entities.)

B. Who Represents Me and How Are They Paid?

The named plaintiffs filed the Lawsuit on behalf of themselves, as individuals, and on behalf of “all persons similarly situated”—that is, Class Members. To provide legal representation to the Class, the Court has appointed the attorneys the named plaintiffs hired, KamberLaw, LLC, as Class Counsel. The KamberLaw, LLC attorneys representing the Plaintiffs and Class Members in the Lawsuit are Scott A. Kamber and David A. Stampley.

Class Counsel have not yet received any payment from anyone for their services in bringing or prosecuting this Lawsuit and they have not been reimbursed for their out-of-pocket expenses. If the Court approves the Settlement, Class Counsel will ask the Court to award them attorneys’ fees and reimbursement of costs and expenses from the Settlement Fund that NebuAd has agreed to create to resolve the Lawsuit. When Class Counsel file this request, which they will do no later than [_____, 2011], you will able to review it, along with all supporting documentation Class Counsel provides, at the settlement website, [address of settlement website to be inserted when known].

Class Counsel will also request that the Court authorize the payment of incentive awards of up to $5,000 for Dan Valentine and up to $1,000 each to the other named plaintiffs. These awards will serve as compensation for the named plaintiffs’ time and effort representing Class Members in the Lawsuit. If the Court agrees, these amounts will be paid from the $2.41 million Settlement Fund.

C. How Can I Comment in Support of or in Opposition to the Settlement?

How to Object If you are a Class Member and want to object to any aspect of the Settlement, you have the right to do so. If you wish to object to the terms of the settlement, your written comments must contain your name and address, be signed by you, and include the reference: Valentine, et al. v. NebuAd, Inc., No. 3:08-cv-05113 (TEH)(EMC) and sent to the following address: [Mailing Address Established by Settlement Administrator to Be Inserted When Known] Your objection must be received no later than [______, 2011].

If you do not comply with these procedures and deadlines for submitting objections, you will not be entitled to object or contest in any way the Settlement or the Court’s decision on applications for attorneys fees and awards, and you will not be able to contest any other orders or judgments that the Court may enter in connection with the Settlement.

How to Comment If you want the Court to receive your comment in support of or in opposition to the Settlement or Class Counsel’s fee application, you must follow the same procedure described above for lodging an objection (i.e., by making sure your comment contains your name and address, is signed by you, includes a reference to the case about which you are writing, and is received no later than ______, 2011).

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D. Can I Attend the Settlement Hearing? Do I Have to Attend?

You may attend the settlement hearing, but you are not required to do so. The Court will hold a hearing on [______, 2011] at [______], before the Honorable Thelton E. Henderson, United States District Judge for the Northern District of California, San Francisco Courthouse, 450 Golden Gate Avenue, San Francisco, California 94102. The Court reserves the right to adjourn or continue the Settlement hearing to a different date, time or location without further notice to the Class, except for those who filed objections.

The purpose of the hearing will be to determine: (a) whether the Settlement should be approved as fair, reasonable and adequate; (b) whether the Court should certify a class comprising all Class Members for purposes of effecting the Settlement; (c) whether Class Counsel’s Fee Application should be granted and in what amount; (d) whether the named plaintiffs should receive incentive awards and in what amount; and (e) whether the Lawsuit and Class Members’ claims should be dismissed with prejudice pursuant to the Settlement.

FOR OTHER DETAILS ABOUT THE SETTLEMENT

This Notice contains only a summary of certain provisions in the Settlement. The full terms and provisions of the Settlement are contained in the Settlement Agreement. A copy of the Settlement Agreement is on file with the Court and can be viewed, along with other documents relating to the Lawsuit, at the settlement website, [address of settlement website to be inserted when known]. The Clerk of the Court, located at 450 Golden Gate Avenue, San Francisco, California 94102, maintains files containing the Settlement Agreement and all other documents filed in the lawsuit. Copies of these documents are available for inspection and copying during the Court’s normal business hours.

Do not contact NebuAd about the Lawsuit, this Notice, or the Settlement. NebuAd’s counsel are not permitted to give you legal advice or answer your questions about the Lawsuit, this Notice, or the Settlement.

Do not telephone the Court about the Lawsuit, this Notice, or the Settlement. To comment on or object to the Settlement, you must follow the procedures explained in Section C, above.

Section VI, paragraph 8 of the Settlement Agreement states as follows:

Modification. Prior to entry of the Order and Final Judgment, this Agreement may, with approval of the Court, be modified by written agreement of Class Counsel and NebuAd, Inc.’s Counsel in their discretion without giving any additional notice to the Class Members, provided that such modifications are not materially adverse to the Class Members.

To the extent that Class Members desire to be notified regarding any additional changes as described in section VI, paragraph 8 of the Settlement Agreement, or otherwise after the initial notice of the settlement, the certification hearing, and the fairness hearing, they must file with the Clerk of Court in the Action a request for

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notice, or send such a request in writing to Class Counsel, who shall maintain a list of all such requests that are received. Class Members who have and who provide an e-mail address agree to electronic notification. The provisions of this section advising Class Members of this requirement shall be included in the Settlement Notice, the certification hearing and the fairness hearing.

Subsequent to the Final Approval Order and Judgment becoming a Final Judgment, this Agreement may, with approval of the Court, be modified by written agreement of Class Counsel and NebuAd, Inc.’s Counsel in their discretion without giving any additional notice to the Class Members, provided that such modifications do not limit the rights of the Class Members under the Agreement.

COURT ORDER FOR PUBLICATION OF THIS NOTICE

Dated: ______BY ORDER OF:

Thelton E. Henderson Judge Of The United States District Court

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1 2 3 4 EXHIBIT D 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 D-1 STIPULATION OF SETTLEMENT AND RELEASE EXHIBIT D NO. 3:08-CV-5113 (TEH) (EMC) Case3:08-cv-05113-TEH Document233-5 Filed08/16/11 Page2 of 6

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA

3 DAN VALENTINE, et al. ) 4 Plaintiffs, ) ) No. 3:08-cv-05113 (TEH) (EMC) 5 v. )

) 6 NEBUAD, INC., et al. ) 7 Defendants. )

8 [PROPOSED] HEARING ORDER 9 Upon the motion of plaintiffs in the above-captioned class action matter (“Plaintiffs”) 10 and defendant NebuAd, Inc. (“NebuAd” or “Defendant,” with Plaintiffs and Defendant collec- 11 tively referred to herein as the “Parties”); with reference to the Settlement Agreement among 12 the Parties, filed ______, 2011, and exhibits thereto (the “Settlement Agreement”); and 13 upon all prior proceedings conducted in this Action, this Court hereby finds reasonable cause 14 exists to consider whether to approve the proposed settlement set forth in the Settlement 15 Agreement (the “Settlement”) and to conduct a hearing, pursuant to Rule 23(e) of the Federal 16 Rules of Civil Procedure, to determine, inter alia: (a) whether the Settlement is fair, reason- 17 able, and adequate, and whether it should be approved pursuant to Rule 23 of the Federal 18 Rules of Civil Procedure; and (b) whether the application of Plaintiffs’ counsel for an award of 19 attorneys’ fees and reimbursement of expenses and Plaintiffs’ request for the payment of in- 20 centive awards should be granted. 21 IT IS HEREBY ORDERED, that: 22 1. The Court, for settlement purposes only, hereby conditionally certifies, pursu- 23 ant to Rule 23(a) and Rule 23(b)(1) of the Federal Rules of Civil Procedure, a class consisting 24 of all persons in the United States who, from January 1, 2007 to July 1, 2008, were consumers 25 subscribing to the services of certain entities named in Exhibit A to the Settlement Agreement. 26 2. The Court finds that: (a) the number of Settlement Class Members is so numer- 27 ous that joinder of all members thereof is impracticable; (b) there are questions of law and fact 28 common to the Settlement Class; (c) the claims of the named representatives are typical of the

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1 claims of the Settlement Class they seek to represent; (d) the Plaintiffs will fairly and ade- 2 quately represent the interests of the Settlement Class; (e) the questions of law and fact com- 3 mon to the Settlement Class predominate over any questions affecting only individual mem- 4 bers of the Settlement Class; and (f) a class action is superior to other available methods for 5 the fair and efficient adjudication of the controversy. 6 3. The Court finds that a mandatory class under Rule 23(b)(1) is appropriate as 7 prosecuting separate actions by or against individual class members would create a risk of in- 8 consistent or varying adjudications, or such adjudications would be dispositive of the interests 9 of other members not party to the individual adjudication. 10 4. Plaintiff Dan Valentine is appointed Settlement Class Representative. 11 5. After considering the factors described in Rule 23(g)(1) and (g)(2) of the Fed- 12 eral Rules of Civil Procedure, the Court appoints Scott A. Kamber and David A. Stampley of 13 KamberLaw, LLC; and Rahul Ravipudi and Pete Kaufman of Panish Shea & Boyle LLP; and 14 their respective firms as Class Counsel. 15 6. The Court finds the Settlement as set forth in the Settlement Agreement falls 16 within the range of reasonableness and warrants providing notice of such Settlement to the 17 members of the Settlement Class and, accordingly, the Court, pursuant to Rules 23(c) and 18 23(e) of the Federal Rules of Civil Procedure, preliminarily approves the Settlement upon the 19 terms and conditions set forth in the Settlement Agreement. 20 7. The Court sets a hearing to take place on ______, 2011, at 9:30 a.m. before 21 this Court, at the United States Courthouse for the Northern District of California, 450 Golden 22 Gate Avenue, San Francisco, California, to hear all interested parties on whether: (a) the re- 23 quirements for certification of the Settlement Class have been met; (b) the proposed settlement 24 of the Action in accordance with the terms set forth in the Settlement Agreement, including as 25 part of the settlement the payment of Plaintiffs’ Class Counsel’s attorneys’ fees and reim- 26 bursement of Plaintiffs’ Class Counsel’s expenses as well as any incentive awards to the Rep- 27 resentative Plaintiffs, should be approved as fair, reasonable and adequate; and (c) the Judg- 28 ment approving the settlement and dismissing the Action on the merits and with prejudice

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1 against Plaintiffs and Settlement Class Members should be entered (the “Fairness Hearing”). 2 The Court may adjourn the Fairness Hearing without further notice to the members of the Set- 3 tlement Class (except those Settlement Class Members who file timely and valid objections). 4 8. The Court approves the form of the Legal Notice of Proposed Class Action Set- 5 tlement (the “Internet Notice”), substantially in the form of Exhibit B annexed to the Settle- 6 ment Agreement, and approves the Notice of Pendency of Class Action and Proposed Settle- 7 ment (the “Website Notice”), substantially in the form of Exhibit C, annexed to the Settlement 8 Agreement. 9 9. Non-substantive changes may be made to the Internet Notice and/or the Web- 10 site Notice by agreement of the Parties, without further order of this Court. 11 10. The Court directs that the Settlement Class be given notice of the proposed Set- 12 tlement as follows: Internet advertisements using banner ads will be placed on selected Inter- 13 net websites or by utilizing Google Adwords service to display notices substantially similar to 14 the content of Exhibit B to the Settlement Agreement. In addition, the Settlement Administra- 15 tor will create a website which will include a copy of the detailed Website Notice. 16 11. The Court finds such notice to the members of the Settlement Class as de- 17 scribed above: (a) is the best notice practicable to members of the Settlement Class; (b) is rea- 18 sonably calculated, under the circumstances, to apprise members of the Settlement Class of the 19 pendency of the Action, conditional certification of the Settlement Class, and the proposed 20 Settlement; the application of Plaintiffs’ counsel for an award of attorneys’ fees and reim- 21 bursement of expenses; and the application by Representative Plaintiffs for an incentive 22 award; (c) is reasonable and constitutes due, adequate and sufficient notice to all persons and 23 entities entitled to receive notice; and (d) meets all applicable requirements of law including, 24 but not limited to, Rule 23(c) of the Federal Rules of Civil Procedure and the Due Process 25 Clause of the Fourteenth Amendment of the United States Constitution. 26 12. The Court directs for the express purpose of executing Notice of the Settlement, 27 the names of the ISPs listed in Exhibit A be revealed, and that Notice be provided to the ISPs 28 listed in Exhibit A that their names will be revealed for this limited purpose.

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1 13. The Court directs any Class Member who wishes to object to any aspect of the 2 Settlement shall, in writing, by letter postmarked on or before ______, 2011, submit com- 3 ments that set forth: (a) such person’s name and address; (b) a clear and unambiguous state- 4 ment regarding such person’s objection; (c) include the reference Valentine, et al. v. NebuAd, 5 Inc., No. 3:08-cv-05113 (TEH) (EMC); and (d) must be signed by such person. Any objec- 6 tions should be sent to ______. 7 14. The Court directs Class Counsel and Defendant’s counsel, on or before 8 ______, 2011, to file with the Court evidence that the provisions of paragraph 10 of this 9 Order has been satisfied. 10 15. The Parties shall, by ______, 2011, file and serve all papers in support of the 11 application for final approval of the Settlement, including the provision for payment of attor- 12 neys’ fees, reimbursement of expenses and an award of to Representative Plaintiffs. 13 16. The Parties shall, by ______, 2011, file and serve all papers in response to 14 any valid and timely objections received by the designated counsel for the Parties identified in 15 the Full Settlement Notice. 16 17. Defendant shall, by ______, 2011, provide the notices required by the 17 Class Action Fairness Act of 2005, Pub. L. 109-2 (2005), including, but not limited to, the no- 18 tices to the United States Department of Justice and to the Attorneys General of all states in 19 which Settlement Class members reside, as specified in 28 U.S.C. § 1715. 20 18. Plaintiffs and all members of the Settlement Class and any other person, repre- 21 sentative, or entity acting on behalf of any members of the Settlement Class are, until the Fair- 22 ness Hearing, barred and enjoined from filing, commencing, prosecuting, maintaining, inter- 23 vening in, participating in (as members of a class action or otherwise), any claim, lawsuit, arbi- 24 tration, administrative, regulatory or other proceeding arising out of the Released Claims 25 against any of the Releasees or Released Entities, which Released Entities shall not include 26 any entity listed on Exhibit A to the Settlement Agreement. 27 19. If for any reason, the Effective Date of the Settlement does not occur, this Or- 28 der shall become null and void, and shall be without prejudice to the rights of the parties, all of

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1 whom shall be restored to their respective positions as of ______, except any extensions 2 of time granted since that date by one Party to the other shall continue to have force and effect, 3 and neither Party shall seek an order of default against any other Party for actions not taken 4 while approval of the Settlement was pending, and the Settlement and Settlement Agreement 5 shall become null and void and be of no further force and effect, and neither the Settlement 6 Agreement nor the Court’s orders issued in connection with consideration of the Settlement, 7 including this Order, shall be used or referred to in any litigation for any purpose whatsoever, 8 except as required to enforce those provisions of the Settlement Agreement which survive a 9 failure of the Settlement to be consummated or the Effective Date of the Settlement to occur. 10 20. Nothing in this Order shall be construed or used as an admission, concession, or 11 declaration by or against the Defendant for any fault, wrongdoing, breach, or liability, nor 12 shall this Order be construed or used as an admission, concession, or declaration by or against 13 Plaintiffs or the members of the Settlement Class that their claims lack merit or the relief re- 14 quested in the operative Complaints in this Action is inappropriate, improper, or unavailable; 15 nor shall this Order be construed or used as a waiver by any Party of any defenses or claims 16 such Party may have; nor shall this Order be construed as a finding or conclusion of the Court 17 with respect to the merit or lack of merit of any claim asserted in the Action or any defense to 18 any such claim. 19 21. The Court retains exclusive jurisdiction over the Action to consider all further 20 matters arising out of or connected with the Settlement. 21 Dated: ______, 2011 SO ORDERED, ADJUDGED AND DECREED 22

23 Thelton E. Henderson 24 Judge Of The United States District Court 25 26 27 28

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