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4 CIRCUIT COURT FOR THE STATE OF OREGON

5 COUNTY OF MARION

6 IN THE MATTER OF:

7 COOLEST, LLC

8 and

9 RY AN GREPPER,

10 Respondents.

11

ASSURANCE OF VOLUNTARY COMPLIANCE

12 1.

13 Respondents Coolest LLC and Ryan Grepper are doing or have recently done business

14 in Oregon as Coolest LLC.

15 This case stems from a Kickstarter (crowd funding) campaign launched in 2014 by

16 Portland-based inventor Ryan Grepper to promote his concept for a 60-quart cooler on wheels,

17 with a built-in heavy-duty blender, USB charger, and waterproof speakers. The product was

18 dubbed "Coolest Cooler." Kickstarter backers who pledged $185 plus $15 for shipping reached

19 a reward tier that earned them a cooler if Grepper was able to turn his prototype into a product

20 that could be shipped to backers. Grepper was successful in manufacturing and bringing the

21 product to the marketplace, and as of the signing of this document, he had fulfilled his

22 commitment to 38,979 of the 60,439 confirmed backers who funded the Kickstarter campaign.

23 2.

24 This Assurance of Voluntary Compliance ("A VC") is a settlement of a disputed matter

25 between Respondents and the Oregon Department of Justice (DOJ) acting pursuant to ORS

26 646.632, relating to specific representations (for shipping/delivery dates) made to Kickstarter

Page 1 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OI<' JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

1 backers in post-campaign updates by Ryan Grepper, regarding delivery of the product to

2 backers. This A VC does not resolve or in any manner waive, discharge, release or otherwise

3 limit investigation and litigation (private or public) relating to any other type of representation

4 that was, is, or may in the future be made by Respondents about the Coolest Cooler and the

5 financial backing therefor.

6 3.

7 This A VC shall not be considered an admission of a violation for any purpose, and

8 Respondents expressly deny having engaged in any unlawful or otherwise inappropriate

9 business practices. Respondents enter into this AVC for the sole purpose of resolving DOJ's

10 concerns. Respondents and DOJ agree that no provision of this A VC operates as a penalty,

11 forfeiture, or punishment under the Constitution of the United States and the Constitution of the

12 State of Oregon, or under any other provision of law.

13 4.

14 Respondents waive notice from the State of Oregon of the alleged unlawful trade

15 practices. See ORS 646.632(2) ORS 646.607(2), ORS 646.632(3), (8).

16 5.

17 Respondents understand and agree that this AVC creates joint and several liability in its

18 applicability to the individual and corporate Respondents, Respondents' principals, officers,

19 directors, agents including independent contractors, employees, representatives, successors and

20 assigns, jointly and severally, while ading personally, or through any corporation or other

21 business entities, whose acts, practices or policies are directed, formulated or controlled by

22 Ryan Grepper.

23 6.

24 Respondents agree and understand that following acceptance of the A VC by DOJ, DOJ

25 may communicate directly with Respondents for the purpose of executing and enforcing the

26 terms of this af:,rreement, resolving future complaints, and conducting undercover investigations

Page 2 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl mmGoN DEPARTMENT OF JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

1 of Respondents to the extent permitted by law and by the Oregon Rules of Professional

2 Responsibility. However, neither this paragraph nor any other language contained in this A VC

3 is intended in any manner to be a waiver of Respondents' right to seek the advice and assistance

4 of counsel at any time or to direct DOJ to communicate with Respondents through specified

5 counsel at any time.

6 7.

7 Respondents understand and agree that if this AVC is accepted by DOJ, it will be held

8 by DOJ. However, if DOJ becomes aware of circumstances which could result in a

9 determination by DOJ that Respondents have failed to comply with any terms of the A VC,

10 whether willful or not, DOJ shall promptly notify Respondents and Respondents' Oregon

11 counsel of record in writing of such circumstances and Respondents shall have ten (10) business

12 days from receipt of such written notice to provide a good faith written response to DOJ's

13 inquiry. If DOJ detennines that a violation has occurred and remains uncured, DOJ may submit

14 this AVC to the Circuit Court of the State of Oregon for Marion County for approval. If

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

16 8.

17 Respondents agree to accept service of a conformed or court certified copy of the A VC

18 by prepaid first class mail sent to the addresses following Respondents' signatures, or to

19 Respondents' attorney.

20 9.

21 If the shipments ordered to be made and/or monies which are ordered to be paid in this

22 AVC are not timely made and/or paid, DOJ may convert the AVC to a money judgment under

23 ORS 646.632(2) that includes all monetary values associated with the obligations set forth in

24 paragraphs 14 & 15, below (i.e., number of coolers selected by eligible but unfulfilled backers

25 multiplied by $20, plus $50,000). Respondents agree that a copy of the money judgment may

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Page 3 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT 01< JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

1 be sent to Respondents, and to Respondents' Oregon counsel, by first class mail to the address

2 following their respective signatures below.

3 10.

4 Respondents understand that, in addition to any other sanctions which may be imposed

5 under this AVC or under the law, a willful violation (as defined by ORS 646.605(10)) of any of

6 the terms of this AVC may result in contempt of court proceedings, civil penalties of up to

7 $25,000 for each violation, and such further relief as the court may deem appropriate. ORS

8 646.632(4); ORS 646.642(1); ORS 646.642(2).

9 11.

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

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

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

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

14 provisions shall continue in full force and effect.

15 REMEDIES

16 12.

17 Respondents shall obey Oregon's Unlawful Trade Practices Act, ORS 646.605 to ORS

18 646.656.

19 13.

20 Respondents shall not represent or imply that DOJ or any other governmental unit of the

21 State of Oregon acquiesces or approves of Respondents' past business practices, current efforts

22 to reform its practices, or any future practices which Respondents may adopt or consider

23 adopting, DOJ's decision to settle this matter or to otherwise unilaterally limit current or future

24 enforcement action does not constitute approval or imply authorization for any past, present, or

25 future business practice.

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Page 4of8 -ASSURANCE O:F VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 IF AX: (503) 378-5017

1 14.

2 Effective immediately upon execution of this A VC by Respondents, Respondents agree

3 that:

4 (A) Within 120 days from the signing of this agreement, Respondents shall ship

5 coolers and accessories to all eligible backers who filed complaints with the Oregon Department

6 of Justice on or before April 15, 2017. A backer is "eligible" ifs/he provided funding at the

7 $185 level, has completed Respondents' shipping survey, has confirmed a mailing address by

8 responding to Respondents' request for confirmation, and has not received all coolers and/or

9 accessories (battery pack, Bluetooth speakers, pitcher & plates,.blenders and drink guide menu)

10 that the backer selected and paid for. As of the signing of this document, the number of eligible

11 backers who filed DOJ complaints against Coolest on or before April 15, 2017, stands at 392.

12 (B) Within 120 days from the signing of this agreement, Respondents shall also ship

13 coolers and/or accessories to all eligible backers who were residents of Oregon but did not file a

14 complaint with the Oregon Department of Justice, subject to these backers confirming a mailing

15 address. As of the signing of this document, the number of eligible backers in this category

16 stands at 481.

17 (C) For the 21,021 backers who did not file a complaint with the Oregon DOJ by

18 April 15, 2017 and are not residents of Oregon, but are otherwise "eligible" as defined in

19 subsection (A), immediately above, Coolest shall immediately (as of the signing of this A VC)

20 begin placing in a Backer Fund a minimum of 10% of net income from Coolest Cooler sales,

21 and shall use said Fund to manufacture and ship coolers and accessories at cost to this category

22 of backers (hereinafter referred to as Group C), over the next 3 years. At the close of each fiscal

23 quarter, Respondents shall submit Coolesi's financials to an outside accounting firm to

24 determine net income from sales of Coolest Coolers during the quarter that just closed. On a

25 quarterly basis, Respondents shall provide DOJ access to its financials, the status of the Backer

26 Fund, and its progress in shipping coolers and accessories to eligible backers.

Page 5of8 ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGONDEPARTMENTOF.JUSTJCF:

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

1 (D) At the end of 3 years (i.e., on June 6, 2020), Respondents shall pay any backer in

2 Group C who has not yet received their cooler(s) $20 per cooler selected by the backer. This

3 :financial obligation shall not be subject to discharge in bankruptcy. Also at the 3-year mark,

4 Respondents shall provide to DOJ contact information for the 21,021 backers in Group C, an

5 accounting for said backers, and proof of the $20-per-cooler payments made to each Group C

6 backer. DOJ may file and convert this A VC to a General Judgment Money Judgment which

7 will be entered for the amount of any unmade payments (at $20 x the number of coolers

8 selected by the unfulfilled backers in Group C).

9 (E) Any unfulfilled backer who has not yet completed Respondents' shipping survey

10 must complete the shipping survey, including a current shipping address, by December 31,

11 2019, to be included in Group C. If an unfulfilled backer does not complete a shipping survey,

12 including a current mailing address, by December 31, 2019, then the backer is not eligible under

13 Group C. If a backer fails to complete a shipping survey due to a change of email address (and

14 corresponding failure to receive the survey), and subsequently contacts either Respondents or

15 DOJ with a confirmation of mailing address by December 31, 2019, that backer shall be eligible

16 under Group C.

17 (F) No reward-based crowdfunding may be utilized by Respondents unless and until

18 the backers in this case are fulfilled. Respondents are not prohibited from seeking investors and

19 engaging in (with or without remuneration) educational activities, mentoring, or advising other

20 individuals who are seeking crowdfunding for their own projects.

21 15.

22 PAYMENT TO THE STATE

23 In addition to the consumer restitution specified above, Respondents shall pay the sum

24 of $50,000 (fifty thousand dollars) to DOJ for deposit in the Oregon Department of Justice

25 Consumer Protection and Education Account established pursuant to ORS 180.095, to be used

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Page 6 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

1 by DOJ as provided by law. However, DOJ agrees to suspend the full amount of $50,000

2 provided that Respondents comply with each and every term and condition of this AVC.

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APPROVED AS TO FORM

DATE

RESPONDENTS' SIGNATURES AND ACKNOWLEDGMENT

LLC.

I, Ryan Grepper, being duly sworn on oath depose and say that I am the CEO of Coolest

In this capacity, I am fully authorized and empowered to sign this Assurance of

Voluntary Compliance on behalf of myself and those Respondents, and to bind the same to the

terms hereof. I have read, understand, and agree to each and every term of this Assurance of

Voluntary Compliance.

OFFICIAL STAMP MARIAN MOJ'iAMED NOTARY PUBLIC-OREGON COMMISSION NO. 957763

MY COMMISSION EXPIRES JANUARY 08, 2021

PMTlPtOIV , 01t ct 7 Zl.'f

SUBSCRIBED AND SWORN to before me this a day ofJune, 2017.

Page 7 of 8 - ASSURANCE OF VO LUNT ARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF JUSTICE

1162 Court Street NE Salem, OR 97301-4096

(503) 934-4400 I FAX: (503) 378-5017

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ACCEPTANCE BY DOJ

I '7 Accepted this / ,) day of June, 2017.

ELLEN F. ROSENBLUM Attorney General

.. / , ,, LUCILLE SAGE,£)· B #903790 Senior Assistant Attorney General Oregon Department of Justice Of Attorneys for Plaintiff 1162 Court Street NE Salem, OR 97301-4096 Phone: (503) 934-4400 Fax: (503) 378-5017 Email: lucille.sage@doj.state.or.us

APPROVAL BY COURT

APPROVED FOR FILING and SO ORDERED

Marion County Circuit Court Judge

Page 8 of 8 -ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF.JUSTICE

1162 Court Street NE Salem, OR 9730 l-4096

(503) 934-4400 IF AX: (503) 378-5017