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Intrepid Network Concepts Inc.

1639 Bradley Park Drive Suite 500, PMB 110 Columbus, Georgia 31904
Matthew S. Chan President (706) 341-2575 (888)696-3441 FAX

November 15, 2011

Peter T. Holt c/o Holt Law Firm 901 Sunrise Ave. Suite A-16 Roseville, CA 95661 FAX: 916-865-4365 RE: Letter to Attorney Oscar Michelen regarding False Accusations of Extortion Dear Mr. Holt: I am writing in response to a faxed letter that was forwarded to me by Oscar Michelen. Based on the CC reference to my name in your letter to him, it appears I was also an intended recipient. It is in that context that I write this letter. At first impression, the timing of your complaint on November 14, 2011 comes very closely on the heels of Canadian Lawyer Julie Stewarts email complaint on November 13, 2011. Based on one of your attachments, I surmise that she contacted you regarding your respective and mutual references in our discussion forum of your respective settlement demand letters and associations with Hawaiian Art Network LLC. Both Oscar Michelen and I wrote very pointed and public rebuttals to her that very afternoon regarding the so-called defamation and exaggerated claims of extortion against her. I find it annoying that less than 48 hours later, I have to write yet another rebuttal to someone supposedly informed and educated in such matters. I am not going to rehash that entire letter. I have attached it to this one if you havent already read it. It covers some of the related and surrounding issues you bring up. One topic I will revisit since it appears to be a central point of your letter is the use of the word extortion and the phrase extortion letter within the ExtortionLetterInfo.com (ELI) website and discussion forums. It is and has been well-established that within the context of the ELI website and discussion forums, there are many terms and phrases used interchangeably with the term settlement demand letter. This is a term that I coined back in 2008 for the ELI website because there seemed to be no formal name I could find for this widespread legal instrument that was causing great distress throughout Europe and North America. And the settlement demand letter description you graciously credited to Scribd was actually coined, uploaded, named, and input by me. I chose to NOT use the term extortion letter in the naming which could have easily been input otherwise.

However, since my website is named ExtortionLetterInfo.com (ELI), we do occasionally use the colloquial and less-precise term extortion letter in referring to settlement demand letters. And as distasteful or disagreeable as you may find the term, people have a fundamental right to freely express their opinion using the words they prefer. It is not profane, nor is it out of line for a website dedicated to the subject of similar type of demand letters. And while your specific letter is admittedly milder and tamer than most of your peers in this line of work, it broadly fits into the type of communication that extortion letters are all about. The phrase extortion letter is admittedly a simple, generalized, and negatively-slanted term but not altogether inaccurate from a letter recipients perspective. And while you or your client may be offended at the phrase, the use of the phrase in itself does not come close to being a criminal or civil violation of any kind. It is simply an opinion which is fully allowed to be expressed in the U.S. Just as you and your client have a right to conduct these massive and aggressive settlement demand letter campaigns, letter recipients have a right to characterize and freely express their disdain for your and your clients actions, the letters, and the entire campaign. Again, we do live in the U.S. where free speech is allowed. For the record, Oscar and I never tell anyone that what you, your client, and their industry are doing is illegal despite the fact many believe so. We believe in making accurate statements. We know it is not illegal and we tell people that. Having said that, we stand by our opinion that these heavy-handed letter campaigns are a form of legalized extortion that is ethically and morally questionable. These massive, heavy-handed settlement demand letter campaigns make ridiculous and outrageous claims of remotely possible consequences for the purpose of scaring letter recipients into silence and submission. It most certainly preys upon most peoples fear and ignorance of the legal process. Regarding your references to Terms of Service of Facebook, PayPal, etc. you are more than welcome to complain to those companies but it will be a futile effort. If you think we are being egregious in our use of social media tools then may I suggest you get further educated on those platforms and see what goes on by truly egregious communicators? I think you will discover that we are quite tame by comparison. Regarding New York Rule of Professional Conduct 7.1 on the issue of attorney advertising, Oscar Michelen does not own the ELI site nor does he have control over the design, layout, or content of the website. I do. He pays no advertising fee whatsoever. In fact, he makes editorial and informational contributions on a strictly voluntary basis. The fact that our readership is drawn to his practice and services is a by-product of the goodwill he and ELI has cultivated over the years. Let me be clear, I would be the first to admit that Oscar plays a significant and instrumental role for the ELI website. Nevertheless, Oscar has no ownership interest nor does he have management or editorial control over ELI. I do. Oscars role continues to be a volunteer subject matter expert, volunteer educator, and volunteer contributor of editorials and informational content. If you studied the history of ELI, you would know that ELI was originally created by me first as a defense tool and communication platform. Eventually ELI contributed to the larger cause of 2

equalizing the settlement demand letter debate by putting a face, organizational structure, and open forum for others to join, contribute, collaborate, and to get educated on. Our body of work speaks for itself with the thousands of posts that have been made on our forums and social media channels. Not to mention the many hours of recorded educational audios and videos we freely make to the public. I daresay that ELI, as a small but united group, has done more to openly educate others in copyright infringement and its consequences than your clients industry. Your clients industry regularly engages in unreasonable, ethically-questionable, heavy-handed, bullying, and fear-inducing tactics. As a matter of public disclosure to our community, we do transact business with members of the ELI community. While we do donate our time and energy to the overall cause, the reality is we have other demanding businesses we work in that also requires our time and attention. We incur hidden costs and expenses simply by diverting our attentions away from our primary line of work. A prime example is the considerable time I am spending now writing this response letter to you. Any compensation we receive directly or indirectly thus far has gone to offset those time expenses. From my view, I continue to work at a loss which continues to be bothersome to me but also outside the scope of this discussion. We never do hard-sells and we always encourage self-sufficiency and self-education above all else. But because of the intimidating nature for most laymen of making legal arguments and legally defending themselves, many simply prefer to pay for assistance, advice, service, and information. For you to refer ELI as an attorney advertising website is entirely baseless and shows your true ignorance of what we do. I have never accepted nor solicited any advertising fees from any attorney. You would be hard-pressed to even find Oscars law firm or my address and phone number anywhere on the ELI website as it has intentionally been removed and suppressed. Incidentally, even if advertising dollars were offered to me by other lawyers, I would unequivocally decline as Oscar and I choose to work exclusively together in our educational mission. Even if Oscar were to leave ELI, I cannot ever envision a day ELI would remotely become an attorney advertising service. ELI is a cause-based website focused on education, self-defense, and self-representation. If a written complaint were to be filed against Oscar on the basis of New York Rule 7.1 regarding attorney advertising because of his association with the ELI website, I would be compelled to provide written and oral testimony to the contrary as well as report the offending party as irresponsible. Further, if a frivolous and unsubstantiated complaint were to be filed against Oscar after being fully informed of the fact that ELI has never been an attorney advertising website, I would be extremely displeased and that would be quite unfortunate for everyone involved. Regarding the removal of extortion references, we will not alter the ELI website name. We will also not discontinue or forbid use of the word extortion or the phrase extortion letter on the ELI website and discussion forums for reasons already explained. However, as a professional courtesy to you, I did entirely delete the specific Facebook and Twitter posts that directly referenced your name and the term extortion letter. I have also replaced the phrase extortion letter with settlement demand letter in those few forum posts that directly referenced your name.

As a side comment, if you are sensitive to being associated with the word extortion and extortion letter perhaps you should revisit the specialty area you have chosen. And perhaps your peers in the business should revisit their abusive and bullying ways that trigger so much animosity and name-calling. In closing, appropriate modifications have been made on your behalf as a professional courtesy, not because I am required to. As far as I am concerned, your letter has been fully acknowledged, responded to, and issues fully resolved. I now consider your letter and this matter closed.

Matthew S. Chan

Text of Email Rebuttal to Blackline Lawyer, Julie Stewart on November 13, 2011.
Hello Julie, I am surprised that our small posts have caught your attention and that you have taken the time to send us an email on a Sunday morning. Here in the U.S., it is a 3-day holiday weekend. You appear to be very diligent working for yourself or your client, Hawaiian Art, during the weekend. In any case, I will respond to your concerns of your email. As you know by now, ExtortionLetterInfo.com was created to report and serve as a communication outlet and educational resource for those people who wish to discuss and share their experiences and be informed about Stock Photo Industry Settlement Demand Letters. We colloquially call those letters, "extortion letters". While you may disagree with it, you will find we equally apply this term to everyone issuing settlement demand letters. You and Hawaiian Art are not being singled out. In fact, thus far, we consider you and your client relatively minor players thus far as Getty Images is, by far, the "biggest elephant" in the business. The reason settlement demand letters are colloquially called "extortion letters" is because it because it illustrates an ongoing campaign by the stock photo industry to take advantage of enduser ignorance of copyright law and legal process to "compel", "motivate", "incentivize" letter recipients into making payments. As much as we find these letters distasteful, we do recognize it as being legal. We regard the whole letter campaign as "legalized extortion" because it is very much an uneven playing field. Just as your client (Hawaiian Art) has a legal right (through your assistance) to pursue alleged infringers with settlement demand letters, those alleged infringers have a right to be assisted and openly communicate with any entities that would assist them. Settlement Demand Letter recipients are free to share their information with us either privately or in an open forum. We, in turn, can accurately share information with or without permission. As a general rule, we work with our community members and have their full support and consent to share information we do have. As much as you and Hawaiian Art may prefer to communicate quietly behind the scenes, we have a right to report the information as long as it is accurate. As you requested, I have gone back to re-evaluate specific posts regarding you and Hawaiian Art: 1. Regarding Scribd, there is/was no reference to the copy of your letter as "extortion letter". It is being called the "Blackline Settlement Demand Letter" in which Hawaiian Art is being referred to within the letter. It is a legal document which feel is totally appropriate to the sharing forum Scribd provides. You, of course, have a right to contest this with Scribd. 2. The Twitter post in question cannot be edited. As such, I deleted it altogether because you objected to the phrase "extortion letter" as it relates to your name. While we feel it is EVERYONE's right to openly use that term, we will in the future endeavor to refer to such 5

letters as "settlement demand letters" simply out of professional courtesy. However, you should know through the DMCA, we cannot be held responsible for language used by our community members who may still refer to Settlement Demand Letters as "Extortion Letters". 3. The Facebook post in question could not be edited and was deleted for the same reasons as Point #2. 4. Last, but not least, the original forum post announcing your letter has been amended to "Settlement Demand Letter" replacing the previous term "extortion letter". Again, this was done as a professional courtesy but the thread of discussion will remain. Regarding your accusations of slander, defamation, libel, and copyright infringement, I question whether you truly are a knowledgeable lawyer in the areas you are accusing or if this is just a heavy-handed tactic in attempt to test our legal sensibilities. Quite frankly, I believe the latter is the case. I cannot honestly believe you know so little about slander, defamation, and libel. I cannot speak for Oscar but here are my replies: A. Regarding defamation, you have to prove what is being said is false. It is quite questionable whether the minimum level of qualification for defamation even exists. In the context of the entire existence and premise of ExtortionLetterInfo.com, which we colloquially use the term "extortion letter" in exchange and in lieu of "settlement demand letter", you may find that term distasteful but it is not false. There was no attack on you or your personal character. In fact, we know very little about you aside from the bio on your website and your letter. Even our community members have not had much to say about you or your practice as you are still a relatively unknown entity. B. Regarding slander, that generally refers to oral / spoken statements. Quite frankly, there have been ZERO oral/spoken statements about you of any kind. So the accusation of slander is outright ridiculous. Until this email, you barely registered in our consciousness much less being spoken about in ANY capacity much less in a way that is damaging to your or your character. C. Regard libel, that refers to written form. Again, does the minimum level of qualification for libel even exist? Does 3 small posts (consisting of at most two sentences) referring to your settlement demand letter even remotely qualify or meet the minimum threshold of falsehood and damaging? It's a blip. Refer to Point #A in whether the term "extortion letter" even qualifies as false. I do not think it is any worse than the statement you made in your email "It is theft, plain and simple. Yes, it is upsetting to be on the wrong side of the law." If you ask me, that is pretty inflammatory for a person in your profession. I wonder how letter recipients would react to you calling them "thieves" and being "on the wrong side of the law". I suppose it might be similar to the way you seem to be offended as being thought of as an "extortionist". (Incidentally, that word almost never is used on a personal level to anyone.) Let us also remember this is a civil matter, not a criminal matter. I don't think you are a judge qualified to say who is on "wrong side"? There are simply opposing sides of the argument. D. Regarding copyright infringement, what are you referring to? They copy of your demand letter? Your letter is being used as a method of direct communication to an alleged infringer. Are you going to sue everyone who made a photocopy of the letter for the purpose of information 6

sharing or defending the case? If you wanted copyright protection for that letter, maybe you should print it in some publication and not actually use it as an instrument of legal communication. Before I close this letter, you may want to advise future clients that trying to squash Internet communications is a futile effort and only makes them look bad. If they are too embarrassed or dislike the negative attention associated with the demand letters, maybe they should revisit how they approach the matter. People are going to talk and fight back, not willingly roll over and succumb to outrageous settlement amounts. In closing, I have acknowledged your concerns and made minor corrective changes as mentioned above as a matter of professional courtesy. We have made no factual errors that we can find. As far as I am concerned this matter is now resolved and closed. Respectfully, Matthew Chan