LINCK HARRIS LAW GROUP, PLLC Charlotte Durham/KTP Greensboro

2530 Mendiaii Parkway, Suite 300 Durham, North Caiolina 27713

T E L E P H O N E 919-806-4220 FAX 866-274-0756

David H. Harris, Jr. dharris@liiickharris .com

September 23, 2014

Susan Kluttz, Secretary North Carolina Department of Cultural Resources 109 East Jones Street Raleigh, NC 27601

Grayson Kelley Chief Deputy Attorney General Legal Services Division 9001 Mail Service Center Raleigh, NC 27699-9001

Re: QAR Digital Media displayed on Flicker, Pinterest and Facebook

Dear Secretary Kluttz and Deputy Attorney General Kelley:

This firm represents Intersal, Inc. in matters related to the October 15, 2013 Settlement Agreement ("Agreement") among the North Carolina Department of Cultural Resources ("DCR") and Intersal, Inc. ("Intersal"), and Rick Allen and Nautilus Productions, LLC (collectively, "Nautilus"), relating to media rights arising out of the discovery of Queen Anne's Revenge ("QAR"). It is very apparent that DCR has not complied with the mandates of that Agreement.

On June 21, 2014, Intersal became aware that DCR is displaying QAR digital media on internet websites other than DCR's own, in violation of Paragraph IV. 16.b.2 of the Agreement; and is doing so without time code stamp or watermark included, in violation of Paragraph IV. 16.b. 1 of the Agreement.

Since June 21, 2014, Intersal has documented over two thousand QAR Project digital media images displayed on DCR's Flicker and Facebook pages, the Friends of QAR Flicker page, and the NCMM Pinterest page. See Attachment "A". These include images of the October 28, 2013 QAR cannon lift taken by Karen Blum of the North Carolina Department of Justice, posted to DCR's Flicker page, and images of the October 28, 2013 QAR cannon hft posted by the NCMM to Pinterest, grants a sublicense for use to anyone who downloads the images. Also included in the documentation are four (4) QAR Project videos on DCR's Facebook page. These are not just breach of contract issues, but also constitute several violations of Intersal's

intellectual property rights.

Intersal entered into the Agreement in good faith, dismissing its petition for a contested hearing in Intersal v. N.C. Dep't of Cultural Resources (13DCR15732). Intersal has every right to expect DCR to act in good faith.

In addition to the clear violations described above, Intersal has documented a series of irregularities concerning DCR implementation of and adherence to the Settlement Agreement See Attachment "B". Intersal believes these irregularities may represent and/or include additional violations of the Settlement Agreement.

DCR's actions have caused harm to Intersal's business; some of which harm may be irreparable.

Intersal demands the following immediate actions:

a) DCR save all relevant information concerning its display of QAR digital media on websites other than its own (Flicker, Pinterest and Facebook, etc.), including, but not limited to: date of posting, description, and URL number for each image and video; number of downloads, views, shares, likes, etc., for each image and video since October 15, 2013; and all instructions given since October 15, 2013 to staff responsible for posting of content and maintenance of internet pages;

b) DCR, upon completion of the above, immediately remove all QAR Project digital media displayed on all websites other than the DCR's own website; including, but not limited to, those displayed on Flicker, Pinterest and Facebook;

c) DCR direct staff to cease and desist in posting media of QAR Project on any website other than the DCR website; and

d) DCR compensates Intersal for each QAR Project digital media image displayed on non-DCR official website (e.g.. Flicker, Pinterest and Facebook pages) in the amount of $ 3,000.00 per violation.

Pursuant to Paragraph VIII.32 of the Agreement, Intersal reserves the right to avail itself of all remedies provided by law or equity for all breaches and/or potential breaches of the Agreement.

Intersal looks forward to the correction of all violations and enforcement irregularities, and to discussion with DCR to remedy violations of the Agreement.

The Agreement reflects the fact that Intersal, as discover of QAR, and DCR, as administrator of the QAR Project, are inexorably joined in partnership. Adherence to and enforcement of the tenants of the Agreement is therefore vital, and in the best interests of both Intersal and the people of North Carolina. Intersal remains committed to the implementation and

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enforcement of the Agreement, in partnership with DCR, to the benefit of all the QAR Project partners and the people of North Carolina.

I f you have any questions, feel free to contact me.

Karen Blum, NC DOJ

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