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ALDEN F. ABBOTT

General Counsel

JANET M. EVANS

DC Bar No. 358467; jevans@ftc.gov

600 Pennsylvania Ave., N.W.

Mail Drop CC-10528

Washington, D.C. 20580

Tel: (202) 326-2125; Fax: (202) 326-3259

ROBERT QUIGLEY

(Local Counsel)

CA Bar No. 302879; rquigley@ftc.gov

10990 Wilshire Blvd., Suite 400

Los Angeles, California 90024

Tel: (310) 824-4300; Fax: (310) 824-4380

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION, Case No. 2:18-cv-10068-KS

Plaintiff,

v.

NOBETES CORPORATION, a/k/a SIDE

EFFECTS SOLUTIONS CORPORATION,

a corporation,

MARVIN SILVER, individually and as an

officer and director of Nobetes Corporation,

and

JEFFREY FLEITMAN, individually and as

an officer and director of Nobetes

Corporation,

~- STIPULATED

ORDER FOR PERMANENT

INJUNCTION AND

MONETARY JUDGMENT

27 Plaintiff, the Federal Trade Commission ("Commission"), filed its

28 Complaint for Permanent Injunction and Other Equitable Relief ("Complaint"), for

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a permanent injunction and other equitable relief in this matter, pursuant to Section'

13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), to

obtain permanent injunctive relief for Defendants' acts or practices in violation of

Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. The Commission

and Defendants stipulate to the entry of this Stipulated Order for Permanent

Injunction and Monetary Judgment ("Order") to resolve all matters in dispute in

this action between them.

THEREFORE, IT IS ORDERED as follows:

FINDINGS

1. This Court has jurisdiction over this matter.

2. The Complaint charges that Defendants participated in deceptive and unfair

acts or practices in violation of Sections 5 and 12 of the FTC Act, 15 U.S.C. §§ 45

and 52, in connection with the advertising and labeling, offering for sale, sale, or

~ distribution of Nobetes.

3. Defendants neither admit nor deny any of the allegations in the Complaint,

except as specifically stated in this Order. Only for purposes of this action,

Defendants admit the facts necessary to establish jurisdiction.

4. Defendants waive any claim that they may have under the Equal Access to

Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through

the date of this Order, and agree to bear their own costs and attorney fees.

5. Defendants waive all rights to appeal or otherwise challenge or contest the

validity of this Order.

DEFINITIONS

For the purpose of this Order, the following definitions apply:

A. "Billing Information" means any data that enables any person to access a

consumer's account, such as a credit card, checking, savings, share or similar

account, utility bill, mortgage loan account, or credit card.

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B. "Charge," "Charged," or "Charging" means any attempt to collect money

or other consideration from a consumer, including but not limited to causing

Billing Information to be submitted for payment, including against the consumer's

credit card, debit card, bank account, telephone bill, or other account.

C. "Clear(ly) and Conspicuous(ly)" means that a required disclosure is

difficult to miss (i.e., easily noticeable) and easily understandable by ordinary

consumers, including in all of the following ways:

1. In any communication that is solely visual or solely audible, the

disclosure must be made through the same means through which the

communication is presented. In any communication made through both

visual and audible means, such as a television advertisement, the disclosure

must be presented simultaneously in both the visual and audible portions of

the communication even if the representation requiring the disclosure is

made in only one means.

2. A visual disclosure, by its size, contrast, location, the length of time it

appears, and other characteristics, must stand out from any accompanying

text or other visual elements so that it is easily noticed, read, and understood.

3. An audible disclosure, including by telephone or streaming video,

must be delivered in a volume, speed, and cadence sufficient for ordinary

consumers to easily hear and understand it.

4. In any communication using an interactive electronic medium, such as

the Internet or software, the disclosure must be unavoidable.

5. The disclosure must use diction and syntax understandable to ordinary

consumers and must appear in each language in which the representation

that requires the disclosure appears.

6. The disclosure must comply with these requirements in each medium

through which it is received, including all electronic devices and face-to-face

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communications.

7. The disclosure must not be contradicted or mitigated by, or

inconsistent with, anything else in the communication.

8. When the representation or sales practice targets a specific audience,

such as children, the elderly, or the terminally ill, "ordinary consumers"

includes reasonable members of that group.

D. "Close Proximity" means immediately adjacent to the triggering

representation. In the case of advertisements disseminated verbally or through

~ audible means, the disclosure shall be made as soon as practicable after the

triggering representation.

E. "Covered Product" means any Dietary Supplement, Food, or Drug,

including Nobetes.

F. "Defendants" means all of the Individual Defendants and the Corporate

Defendant, individually, collectively, or in any combination.

1. "Corporate Defendant" means Nobetes Corporation and its

successors and assigns. Nobetes Corporation includes Side Effects

Solutions.

2. "Individual Defendants" means Marvin Silver and Jeffrey Fleitman.

G. "Diabetes Product" means any Covered Product promoted for the

prevention, mitigation, or treatment of diabetes or high blood sugar.

H. "Dietary Supplement" means: (1) any product labeled as a Dietary

Supplement or otherwise represented as a Dietary Supplement; or (2) any pill,

tablet, capsule, powder, softgel, gelcap, liquid, or other similar form containing one

or more ingredients that are a vitamin, mineral, herb or other botanical, amino acid,

probiotic, or other dietary substance for use by humans to supplement the diet by

increasing the total dietary intake, or a concentrate, metabolite, constituent, extract,

or combination of any ingredient described above, that is intended to be ingested,

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and is not represented to be used as a conventional food or as a sole item of a meal

or the diet.

I. "Drug" means: (1) articles recognized in the official United States

Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or

official National Formulary, or any supplement to any of them; (2) articles

intended for use in the diagnosis, cure, mitigation, treatment, or prevention of

disease in humans or other animals; (3) articles (other than Food) intended to affect

the structure or any function of the body of humans or other animals; and (4)

articles intended for use as a component of any article specified in (1), (2), or (3);

but does not include devices or their components, parts, or accessories.

~ J. "Essentially Equivalent Product" means a product that contains the

identical ingredients, except for inactive ingredients (e.g., binders, colors, fillers,

excipients) in the same form and dosage, and with the same route of administration

(e.g., orally, sublingually), as the Covered Product; provided that the Covered

Product may contain additional ingredients if reliable scientific evidence generally

accepted by experts in the field indicates that the amount and combination of

additional ingredients is unlikely to impede or inhibit the effectiveness of the

ingredients in the Essentially Equivalent Product.

K. "Food" means: (1) any article used for Food or drink for humans or other

animals; (2) chewing gum; and (3) any article used for components of any such

article.

L. "Negative Option Feature" means, in an offer or agreement to sell or

provide any good, program, or service, a provision under which the consumer's

silence or failure to take an affirmative action to reject goods or services, or to

cancel the agreement, is interpreted by the seller or provider as acceptance or

continuing acceptance of the offer.

M. "Telemarketing" means any plan, program, or campaign conducted to

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induce the purchase of any good, service, plan or program, by use of one or more

telephones, and which involves a telephone call, whether or not covered by the

Telemarketing Sales Rule, 16 C.F.R. Part 310.

ORDER

I. BAN ON SALES OF NOBETES AND OTHER

DIABETES PRODUCTS

IT IS ORDERED that Defendants are permanently restrained and enjoined

from advertising, labeling, marketing, promoting, or offering for sale Nobetes and

~ any other Diabetes Product.

II. PROHIBITED REPRESENTATIONS: HEALTH-RELATED

CLAIMS REQUIRING HUMAN CLINICAL TESTING FOR

SUBSTANTIATION

IT IS FURTHER ORDERED that Defendants, Defendants' officers,

agents, employees, and attorneys, and all other persons in active concert or

participation with any of them, who receive actual notice of this Order, whether

acting directly or indirectly, in connection with the manufacturing, labeling,

advertising, promotion, offering for sale, sale, or distribution of any Covered

Product, other than a product banned under the Section entitled Ban on Sales of

Nobetes and Other Diabetes Products, are permanently restrained and enjoined

from making, or assisting others in making, expressly or by implication, including

through the use of a product or program name, endorsement, depiction, or

illustration, any representation that such product cures, mitigates, or treats any

disease, unless the representation is non-misleading, and, at the time of making

such representation, they possess and rely upon competent and reliable scientific

evidence substantiating that the representation is true. For purposes of this

Section, competent and reliable scientific evidence shall consist of human clinical

testing of the Covered Product, or of an Essentially Equivalent Product, that is

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sufficient in quality and quantity based on standards generally accepted by experts

in the relevant disease, condition, or function to which the representation relates,

when considered in light of the entire body of relevant and reliable scientific

evidence, to substantiate that the representation is true. Such testing must be: (1)

randomized, double-blind, and placebo-controlled; and (2) conducted by

researchers qualified by training and experience to conduct such testing. In

addition, all underlying or supporting data and documents generally accepted by

experts in the field as relevant to an assessment of such testing as described in the

Section entitled Preservation of Records Relating to Competent and Reliable

Human Clinical Tests or Studies must be available for inspection and production to

the Commission. Persons covered by this Section have the burden of proving that

a product satisfies the definition of Essentially Equivalent Product.

III. PROHIBITED REPRESENTATIONS:

OTHER HEALTH-RELATED CLAIMS

IT IS FURTHER ORDERED that Defendants, Defendants' officers,

agents, employees, and attorneys, and all other persons in active concert or

participation with any of them, who receive actual notice of this Order, whether

acting directly or indirectly, in connection with the manufacturing, labeling,

advertising, promotion, offering for sale, sale, or distribution of any Covered

Product, other than a product banned under the Section entitled Ban on Sales of

Nobetes and Other Diabetes Products, are permanently restrained and enjoined

from making, or assisting others in making, expressly or by implication, including

through the use of a product or program name, endorsement, depiction, or

illustration, any representation, other than representations covered under the

Section of this Order entitled Prohibited Representations: Health-Related Claims

Requiring Human Clinical Testing For Substantiation, about the health benefits,

performance, efficacy, safety, or side effects of any Covered Product, or that

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diabetes causes nutrient deficiencies requiring supplementation, unless the

representation is non-misleading, and, at the time of making such representation,

they possess and rely upon competent and reliable scientific evidence that is

sufficient in quality and quantity based on standards generally accepted by experts

in the relevant disease, condition, or function to which the representation relates,

when considered in light of the entire body of relevant and reliable scientific

evidence, to substantiate that the representation is true.

For purposes of this Section, competent and reliable scientific evidence

means tests, analyses, research, or studies (1) that have been conducted and

evaluated in an objective manner by experts in the relevant disease, condition, or

function to which the representation relates; (2) that are generally accepted by such

experts to yield accurate and reliable results; and (3) that are randomized, dot~bleblind, and placebo-controlled human clinical testing of the Covered Product, or of

an Essentially Equivalent Product, when such experts would generally require such

human clinical testing to substantiate that the representation is true. In addition,

when such tests or studies are human clinical tests or studies, all underlying or

supporting data and documents generally accepted by experts in the field as

relevant to an assessment of such testing as set forth in the Section entitled

Preservation of Records Relating to Competent and Reliable Human Clinical Tests

or Studies must be available for inspection and production to the Commission.

Persons covered by this Section have the burden of proving that a product satisfies

the definition of Essentially Equivalent Product.

IV. PROHIBITION AGAINST FALSE ENDORSEMENTS

IT IS FURTHER ORDERED that Defendants, Defendants' officers,

agents, employees, and attorneys, and all other persons in active concert or

participation with any of them, who receive actual notice of this Order, whether

acting directly or indirectly, in connection with the manufacturing, labeling,

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advertising, promotion, offering for sale, sale, or distribution of any goods or

services, other than a product banned under the Section entitled Ban on Sales of

Nobetes and Other Diabetes Products, are permanently restrained and enjoined

from making, or assisting others in making, expressly or by implication, any

misrepresentation concerning or relating to any endorser, including that any such

person is an expert with respect to the endorsement message provided by that

person.

V. DISCLOSURE OF MATERIAL CONNECTIONS

IT IS FURTHER ORDERED that Defendants, Defendants" officers, agents,

and employees, and all other persons in active concert or participation with. any of

them, who receive actua] notice of this Order, whether acting directly or indirectly,

in connection with the manufacturing, labeling, advertising, promotion, offering

for sale, sale, or distribution of any goods or services, are permanently restrained

and enjoined from making any representation., expressly or by implication, about

any consumer or other endorser of such good or service without disclosing, Clearly

and Conspicuously, and in Close Proximity to the representation, any unexpected

material connection between such endorser and 1) any Defendant, or 2) any other

individual or entity affiliated with the good or service. For the purposes of this

provision, `'unexpected. material connection" means any relationship that might

materially affect the weight or credibility of the testimonial or endorsement and

that would. not reasonably be expected by consumers.

VI. FDA-APPROVED CLAIMS

IT IS FURTHER ORDERED that nothing in this Order prohibits

Defendants, Defendants' officers, agents, employees, and attorneys, or all other

persons in active concert or participation with any of them from:

A. For any Drug, making a representation that is approved in labeling for

such Drug under any tentative final or final monograph promulgated by the

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Food and Drug Administration, or under any new drug application approved

by the Food and Drug Administration; and

B. For any product, making a representation that is specifically

authorized for use in labeling for such product by regulations promulgated

by the Food and Drug Administration pursuant to the Nutrition Labeling and

Education Act of 1990 or permitted under Sections 303-304 of the Food and

Drug Administration Modernization Act of 1997.

VII. PRESERVATION OF RECORDS RELATING TO COMPETENT

AND RELIABLE HUMAN CLINICAL TESTS OR STUDIES

IT IS FURTHER ORDERED that, with regard to any human clinical test

or study ("test") upon which Defendants rely to substantiate any claim covered by

this Order, Defendants shall secure and preserve all underlying or supporting data

and documents generally accepted by experts in the field as relevant to an

assessment of the test, including:

A. All protocols and protocol amendments, reports, articles, write-ups, or

other accounts of the results of the test, and drafts of such documents

reviewed by the test sponsor or any other person not employed by the

research entity;

B. All documents referring or relating to recruitment; randomization;

instructions, including oral instructions, to participants; and participant

compliance;

C. Documents sufficient to identify all test participants, including any

participants who did not complete the test, and all communications with any

participants relating to the test; all raw data collected from participants

enrolled in the test, including any participants who did not complete the test;

source documents for such data; any data dictionaries; and any case report

forms;

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D. All documents referring or relating to any statistical analysis of any

test data, including any pretest analysis, intent-to-treat analysis, or betweengroup analysis performed on any test data; and

E. All documents referring or relating to the sponsorship of the test,

including all communications and contracts between any sponsor and the

test's researchers.

Provided, however, the preceding preservation requirement does not apply to

a reliably reported test, unless the test was conducted, controlled, or sponsored, in

whole or in part by: (1) any Defendant; (2) any Defendant's officers, agents,

representatives, or employees; (3) any other person or entity in active concert or

participation with any Defendant; (4) any person or entity affiliated with or acting

on behalf of any Defendant; (5) any supplier of any ingredient contained in the

product at issue to any of the foregoing or to the product's manufacturer; or (6) the

supplier or manufacturer of such product.

For purposes of this Section, "reliably reported test" means a report of the

test has been published in apeer-reviewed journal, and such published report

provides sufficient information about the test for experts in the relevant field to

~ assess the reliability of the results.

For any test conducted, controlled, or sponsored, in whole or in part, by

Defendants, Defendants must establish and maintain reasonable procedures to

protect the confidentiality, security, and integrity of any personal information

collected from or about participants. These procedures must be documented in

writing and must contain administrative, technical, and physical safeguards

appropriate to Corporate Defendant's size and complexity, the nature and scope of

Defendants' activities, and the sensitivity of the personal information collected

from or about the participants.

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VIII. PROHIBITION AGAINST MISREPRESENTATIONS:

NEGATIVE OPTION SALES

IT IS FURTHER ORDERED that Defendant, Defendant's officers, agents,

employees, and attorneys, and all other persons in active concert or participation

with any of them, who receive actual notice of this Order, whether acting directly

or indirectly, in connection with promoting or offering for sale any good or service

with a Negative Option Feature, are permanently restrained and enjoined from

misrepresenting or assisting others in misrepresenting, expressly or by implication:

A. Any cost to the consumer to purchase, receive, use, or return the

initial good or service;

B. That the consumer will not be Charged for any good or service;

C. That a good or service is offered on a "free," "trial," "sample,"

"bonus," "gift," "no obligation," "discounted" basis, or words of simr~ar

import, denoting or implying the absence of an obligation on the part of the

recipient of the offer to affirmatively act in order to avoid Charges, including

where a Charge will be assessed pursuant to the offer unless the consumer

takes affirmative steps to prevent or stop such a Charge;

D. That the consumer can obtain a good or service for a processing,

service, shipping, handling, or administrative fee with no further obligation;

E. The purposes) for which the consumer's Billing Information will be

used;

F. The date by which the consumer will incur any obligation or be

Charged unless the consumer takes an affirmative action on the Negative

Option Feature;

G. That a transaction has been authorized by the consumer;

H. Any material aspect of the nature or terms of a refund, cancellation,

exchange, or repurchase policy for the good or service; or

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I. Any other material fact.

Compliance with this Section is separate from, and in addition to, the

disclosures required by Sections entitled Required Dislosures Relating to Negative

Option Features and Obtaining Express Informed Consent.

IX. REQUIRED DISCLOSURES RELATING TO

NEGATIVE OPTION FEATURES

IT IS FURTHER ORDERED that Defendant, Defendant's officers, agents,

employees, and attorneys, and all other persons in active concert or participation

with any of them, who receive actual notice of this Order, whether acting directly

or indirectly, in connection with promoting or offering for sale any good or service

with a Negative Option Feature, are permanently restrained and enjoined from:

A. Representing directly or indirectly, expressly or by implication, that

any good or service that includes a Negative Option Feature is being offered

on a free, trial, no obligation, reduced, or discounted basis, without

disclosing Clearly and Conspicuously, and immediately adjacent to, any

such representation:

1. The extent to which the consumer must take affirmative

actions) to avoid any Charges: a) for the offered good or service, b)

of an increased amount after the trial or promotional period ends, and

c) on a recurring basis;

2. The total cost (or range of costs) the consumer will be Charged

and, if applicable, the frequency of such Charges unless the consumer

timely takes steps to prevent or stop such Charges; and

3. The deadlines) (by date or frequency) by which the consumer

must affirmatively act in order to stop all recurring Charges.

B. Obtaining Billing Information from a consumer for any transaction

involving a good or service that includes a Negative Option Feature, without

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first disclosing Clearly and Conspicuously, and immediately adjacent to

where a consumer provides Billing Information:

1. The extent to which the consumer must take affirmative

actions) to avoid any Charges: a) for the offered good or service, b)

of an increased amount after the trial or promotional period ends, and

c) on a recurring basis;

2. The total cost (or range of costs) the consumer will be Charged,

the date the initial Charge will be submitted for payment, and, if

applicable, the frequency of such Charges unless the consumer timely

takes affirmative steps to prevent or stop such Charges;

3. The deadlines) (by date or frequency) by which the consumer

must affirmatively act in order to stop all recurring Charges;

4. The name of the seller or provider of the good or service and, if

the name of the seller or provider will not appear on billing

statements, the billing descriptor that will appear on such statements;

5. A description of the good or service;

6. Any Charge or cost for which the consumer is responsible in

connection with the cancellation of an order or the return of a good;

and

7. The simple cancellation mechanism to stop any recurring

Charges, as required by the Section entitled Simple Mechanism to

Cancel Negative Option Feature.

C. Failing to send the consumer:

1. Immediately after the consumer's submission of an online

order, written confirmation of the transaction by email. The email

must Clearly and Conspicuously disclose all the information required

by Subsection IX.B, and contain a subject line reading "Order

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Confirmation" along with the name of the product or service, and no

additional information; or

2. Within two (2) days after receipt of the consumer's order by

mail or telephone, a written confirmation of the transaction, either by

email or first class mail. The email or letter must Clearly and

Conspicuously disclose all the information required by Subsection

IX.B. The subject line of the email must Clearly and Conspicuously

state "Order Confirmation" along with the name of the product or

service, and nothing else. The outside of the envelope must Clearly

and Conspicuously state "Order Confirmation" along with the name

of the product or service, and no additional information other than the

consumer's address, the Defendant's return address, and postage.

X. OBTAINING EXPRESS INFORMED CONSENT

IT IS FURTHER ORDERED that Defendant, Defendant's officers, agents,

employees, and attorneys, and all other persons in active concert or participation

with any of them, who receive actual notice of this Order, whether acting directly

or indirectly, in connection with promoting or offering for sale any good or service

with a Negative Option Feature, are permanently restrained and enjoined from

using, or assisting others in using, Billing Information to obtain payment from a

consumer, unless Defendant first obtains the express informed consent of the

consumer to do so. To obtain express informed consent, Defendants must:

A. For all written offers (including over the Internet or other web-based

applications or services), obtain consent through a check box, signature, or

other substantially similar method, which the consumer must affirmatively

select or sign to accept the Negative Option Feature, and no other portion of

the offer. Defendant shall disclose Clearly and Conspicuously, and

immediately adjacent to such check box, signature, or substantially similar

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method of affirmative consent, only the following, with no additional

information:

1. The extent to which the consumer must take affirmative

actions) to avoid any Charges: a) for the offered good or service, b)

of an increased amount after the trial or promotional period ends, and

c) on a recurring basis;

2. The total cost (or range of costs) the consumer will be Charged

and, if applicable, the frequency of such Charges unless the consumer

timely takes affirmative steps to prevent or stop such Charges; and

3. The deadlines) (by date or frequency) by which the consumer

must affirmatively act in order to stop all recurring Charges.

B. For all oral offers, prior to obtaining any Billing Information from the

consumer:

1. Clearly and Conspicuously disclose the information contained

in Subsection IX.B.; and

2. Obtain affirmative unambiguous express oral confirmation that

the consumer: a) consents to being Charged for any good or service,

including providing, at a minimum, the last four (4) digits of the

consumer's account number to be Charged, b) understands that the

transaction includes a Negative Option Feature, and c) understands the

specific affirmative steps the consumer must take to prevent or stop

further Charges.

Provided further that, for transactions conducted through Telemarketing,

Defendant shall maintain for three (3) years from the date of each

transaction an unedited voice recording of the entire transaction, including

the prescribed statements set out in Subsection IX.B. Each recording must

be retrievable by date and by the consumer's name, telephone number, or

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Billing Information, and must be provided upon request to the consumer, the

consumer's bank, or any law enforcement entity.

XI. SIMPLE MECHANISM TO CANCEL

NEGATIVE OPTION FEATURE

IT IS FURTHER ORDERED that Defendant, Defendant's officers, agents,

employees, attorneys, and all other persons in active concert or participation with

any of them, who receive actual notice of this Order, whether acting directly or

indirectly, in connection with promoting or offering for sale any good or service

with a Negative Option Feature, are permanently restrained and enjoined from

failing to provide a simple mechanism for the consumer to: (1) avoid being

Charged, or Charged an increased amount, for the good or service and (2)

immediately stop any recurring Charges. Such mechanism must not be difficult,

costly, confusing, or time consuming, and must be at least as simple as the

mechanism the consumer used to initiate the Charge(s). In addition:

A. For consumers who entered into the agreement to purchase a good or

service including a Negative Option Feature over the Internet or through

other web-based applications or services, Defendant must provide a

mechanism, accessible over the Internet or through such other web-based

application or service that consumers can easily use to cancel the product or

service and to immediately stop all further Charges.

B. For consumers who entered into the agreement to purchase a good or

service including a Negative Option Feature through an oral offer and

acceptance, Defendants must maintain a telephone number and a postal

address that consumers can easily use to cancel the product or service and to

immediately stop all further Charges. Defendants must assure that all calls

to this telephone number shall be answered during normal business hours

and that mail to the postal address is retrieved regularly.

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XII. MONETARY JUDGMENT

IT IS FURTHER ORDERED that:

A. Judgment in the amount of $182,000 is entered in favor of the

Commission against Individual Defendants and Corporate Defendant, jointly

and severally, as equitable monetary relief.

B. Defendants are ordered to pay to the Commission $182,000 which, as

Defendants stipulate, their undersigned counsel holds in escrow for no

purpose other than payment to the Commission. Such payment must be

made within 7 days of entry of this Order by electronic fund transfer in

accordance with instructions previously provided by a representative of the

Commission.

XIII. ADDITIONAL MONETARY PROVISIONS

IT IS FURTHER ORDERED that:

A. Defendants relinquish dominion and all legal and equitable right, title,

and interest in all assets transferred pursuant to this Order and may not seek

the return of any assets.

B. The facts alleged in the Complaint will be taken as true, without

further proof, in any subsequent civil litigation by or on behalf of the

Commission, including in a proceeding to enforce its rights to any payment

or monetary judgment pursuant to this Order, such as a nondischargeability

complaint in any bankruptcy case.

C. The facts alleged in the Complaint establish all elements necessary to

sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the

Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have

collateral estoppel effect for such purposes.

D. All money paid to the Commission pursuant to this Order may be

deposited into a fund administered by the Commission or its designee to be

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used for equitable relief, including consumer redress and any attendant

expenses for the administration of any redress fund. If a representative of

the Commission decides that direct redress to consumers is wholly or

partially impracticable or money remains after redress is completed, the

Commission may apply any remaining money for such other equitable relief

(including consumer information remedies) as it determines to be reasonably

related to Defendants' practices alleged in the Complaint. Any money not

used for such equitable relief is to be deposited to the U.S. Treasury as

disgorgement. Defendants have no right to challenge any actions the

Commission or its representatives may take pursuant to this Subsection.

XIV. CUSTOMER INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants' officers;

agents, and employees, and all other persons in active concert or participation with

any of them, who receive actual notice of this Order, are permanently restrained

and enjoined from directly or indirectly:

A. Failing to provide sufficient customer information to enable the

Commission to efficiently administer consumer redress. If a representative

of the Commission requests in writing any information related to redress,

Defendants must provide it, in the form prescribed by the Commission,

within 14 days.

B. Disclosing, using, or benefitting from customer information,

including the name, address, telephone number, email address, social

security number, other identifying information, or any data that enables

access to a customer's account (including a credit card, bank account, or

other financial account), that any Defendant obtained prior to entry of this

Order in connection with the sale of Nobetes; and

C. Failing to destroy such customer information in all forms in their

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possession, custody, or control within 30 days after receipt of written

direction to do so from a representative of the Commission.

Provided, however, that customer information need not be disposed of, and may be

disclosed, to the extent requested by a government agency or required by law,

~ regulation, or court order.

XV. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of

~ receipt of this Order:

A. Each Defendant, within 7 days of entry of this Order, must submit to

the Commission an acknowledgment of receipt of this Order sworn under

penalty of perjury.

B. For 5 years after entry of this Order, each Individual Defendant for

any business that such Defendant, individually or collectively with any other

Defendants, is the majority owner or controls directly or indirectly, and the

Corporate Defendant, must deliver a copy of this Order to: (1) all principals,

officers, directors, and LLC managers and members; (2) all employees

having managerial responsibilities for conduct related to the subject matter

of the Order or who engage in "I~elemarketing, and all agents and

representatives who participate in conduct related to the subject matter of the

Order; and (3) any business entity resulting from any change in structure as

set forth in the Section titled Compliance Reporting. Delivery must occur

within 7 days of entry of this Order for cun-ent personnel. For all others,

delivery must occur before they assume their responsibilities.

L. From each individual or entity to which a Defendant delivered a copy

of this Order, that Defendant must obtain, within 30 days, a signed and dated

acknowledgment of receipt of this Order.

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XVI. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendants make timely submissions to

the Commission:

A. Sixty days after entry of this Order, each Defendant must submit a

compliance report, sworn under penalty of perjury:

1. Each Defendant must: (a) identify the primary physical, postal,

and email address and telephone number, as designated points of

contact, which representatives of the Commission may use to

communicate with Defendant; (b) identify all of that Defendant's

businesses by all of their names, telephone numbers, and physical,

postal, email, and Internet addresses; (c) describe the activities of each

business, including the goods and services offered, the means of

advertising, marketing, and sales, and the involvement of any other

Defendant (which Individual Defendants must describe if they know

or should know due to their own involvement); (d) describe in detail

whether and how that Defendant is in compliance with each Section

of this Order; and (e) provide a copy of each Order Acknowledgment

obtained pursuant to this Order, unless previously submitted to the

Commission.

2. Additionally, each Individual Defendant must: (a) identify all

telephone numbers and all physical, postal, email and Internet

addresses, including all residences; (b) identify all business activities,

including any business for which such Defendant performs services

whether as an employee or otherwise and any entity in which such

Defendant has any ownership interest; and (c) describe in detail such

Defendant's involvement in each such business, including title, role,

responsibilities, participation, authority, control, and any ownership.

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B. For 10 years after entry of this Order, each Defendant must submit a

compliance notice, sworn under penalty of perjury, within 14 days of any

change in the following:

1. Each Defendant must report any change in: (a) any designated

point of contact; or (b) the structure of any Corporate Defendant or

any entity that Defendant has any ownership interest in or controls

directly or indirectly that may affect compliance obligations arising

under this Order, including: creation, merger, sale, or dissolution of

the entity or any subsidiary, parent, or affiliate that engages in any

acts or practices subject to this Order.

2. Additionally, each Individual Defendant must report any

change in: (a) name, including aliases or fictitious name, or residence

address; or (b) title or role in any business activity, including any

business for which such Defendant performs services whether as an

employee or otherwise and any entity in which such Defendant has

any ownership interest, and identify the name, physical address, and

any Internet address of the business or entity.

C. Each Defendant must submit to the Commission notice of the filing of

any bankruptcy petition, insolvency proceeding, or similar proceeding by or

against such Defendant within 14 days of its filing.

D. Any submission to the Commission required by this Order to be

sworn under penalty of perjury must be true and accurate and comply with

28 U.S.C. § 1746, such as by concluding: "I declare under penalty of

perjury under the laws of the United States of America that the foregoing is

true and correct. Executed on: "and supplying the date, signatory's

full name, title (if applicable), and signature.

E. Unless otherwise directed by a Commission representative in writing,

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all submissions to the Commission pursuant to this Order must be emailed to

DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service)

to: Associate Director for Enforcement, Bureau of Consumer Protection,

Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington,

DC 20580. The subject line must begin: FTC v. Nobetes Corporation.

XVII. RECORDKEEPING

IT IS FURTHER ORDERED that Defendants must create certain records

for 10 years after entry of the Order, and retain each such record for 5 years.

Specifically, Corporate Defendant if a going concern, in connection with the sale

of any goods or services, and each Individual Defendant for any business that such

Defendant, individually or collectively with any other Defendants, is a majority

owner or controls directly or indirectly, must create and retain the following

records:

A. Accounting records showing the revenues from all goods or services

sold;

B. Personnel records showing, for each person providing services,

whether as an employee or otherwise, that person's: name; addresses;

telephone numbers; job title or position; dates of service; and (if applicable)

the reason for termination;

C. Records of all consumer complaints concerning the subject matter of

the order and all refund requests, whether received directly or indirectly,

such as through a third party, and any response;

D. All records necessary to demonstrate full compliance with each

provision of this Order, including all submissions to the Commission; and

E. A copy of each unique advertisement or other marketing material.

XVIII. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring

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Defendants' compliance with this Order:

A. Within 14 days of receipt of a written request from a representative of

the Commission, each Defendant must: submit additional compliance

reports or other requested information, which must be sworn under penalty

of perjury; appear for depositions; and produce documents for inspection

and copying. The Commission is also authorized to obtain discovery,

without further leave of court, using any of the procedures prescribed by

Federal Rules of Civil Procedure 29, 30 (including telephonic depositions),

31, 33, 34, 36, 45, and 69.

B. For matters concerning this Order, the Commission is authorized to

communicate directly with each Defendant. Defendant must permit

representatives of the Commission to interview any employee or other`

person affiliated with any Defendant who has agreed to such an interview.

The person interviewed may have counsel present.

C. The Commission may use all other lawful means, including posing,

through its representatives as consumers, suppliers, or other individuals or

entities, to Defendants or any individual or entity affiliated with Defendants,

without the necessity of identification or prior notice. Nothing in this Order

limits the Commission's lawful use of compulsory process, pursuant to

Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

D. Upon written request from a representative of the Commission, any

consumer reporting agency must furnish consumer reports concerning

Individual Defendants, pursuant to Section 604(1) of the Fair Credit

Reporting Act, 15 U.S.C. §1681b(a)(1).

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XIX. RETENTION CJ►F JUItCSDTCTIUN

IT IS FURTHER ORDERED that this Court retains jurisdiction of this

matter fr~r purpos~;s ~f construction, modification, and enforcement of this girder,

SO ORDERED this 1`~ ' `day of l , 201 ~.

't"-, In - .iLvt,C~ ~~~

STATES JUDGE

~ta9 r~utL

~O STIPULATED AND AGREED.

FOR PLAINTIFF:

~a~ rtd Date:

JANET M. EVANS,

ATTORNEY

600 Pennsylvania Ave., N.W.

Mail Drop CC-10528

Washington, I.C. 2058q

Teiephon~e (202) 3~6-~1~5

Facsimile: (?U2) 326-3259

Email: ,jevans(a~,ftc.~;ov

December 3, 2018

FOR DEFENbANTS:

f, ~

,~ ,f ~ ~-.

Burton C~. Jacob '(in

424 S Beverly TJr.,

~3everly Hills, CA 9O212

"Telephone: (310) 553-8533

l~'ax N~urnber: (310) .553-1145

Page 25 of 2C~

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;mail ::_~ ~ ~ , .! ~~~,~r

Counsel for Nobetes Cor~x~ration a/(.la

Side Efiect~5 Solution. Corporation,

Maz~~in. Silver, ar~d Jeffrey Fleitman

~_.__~___. Dates

Marvin Silver, Individually and as

an Officer ar~d Director n~

Nabetes Cc~rporati~rn afkla fide Fff'ects

Se~lution Cozporatian

_.._._ Date. ~

Je~`fre itr~an, Individually end as

an Officer and Director of

Nobetes Corparatinn alk/a Side Effects

Solution Corporation

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