Tax Deferred Services Lawsuit

CM-010 ATTORNEY OR PARTY WITHOUT ATTORNEY [Name, State Bar number, and address)

FOR COURT USE ONLY

- MICHAEL T. STOLLER, SEN 1 20241 9454 Wilshire Blvd Suite 500 Beverly Hills, CA 90212

RLF® 2

TELEPHONE NO 818-226-4040 ATTORNEY FOR (Nta* THE

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S'ai.TiSSiiQY GctUTri CSr? Gaftlf x

FAX NO 818-226-4044

TDS GROUP, INC.

SUPERIOR COURT OF CALIFORNIA, COUNTY OF

SACRAMENTO

STREET ADDRESS 720 Ninth Street MAILING ADDRESS

831116

CITY AND ZIP CODE Sacramento, CA 95814

Bw

. lOws

BRANCH NAME

CASE NAME.

The TDS Group v. The IRA Center, etc., et al. CASE NUMBER CIVIL CASE COVER SHEET Complex Case Designation G/1 Unlimited [~~l Limited 1 1 Counter 1 1 Joinder (Amount (Amount JUDGE demanded demanded is Filed with first appearance by defendant DEPT exceeds $25,000) $25,000 or less) (Cat. Rules of Court, rule 3 402) /terns 7-O* fee/bw must be completed (see instructions on page 2) 1 Check one box below for the case type that best describes this case

Auto Tort Auto (22) Uninsured motorist (46)

Contract I I Breach of contract/warranty (06)

Other PVPD/WD (Personal Injury/Property Damage/Wrongful Death) Tort CU Asbestos (04) I 1 Product liability (24) I

I Medical malpractice (45)

i I Other PI/PD/WD (23) Non-PI/PD/WD (Other) Tort I

Rule 3 740 collections (08)

I

I Antitrust/Trade regulation (03)

Other collections (09)

I

1 Construction defect (10)

Insurance coverage (18)

EU

l~~i Other contract (37) Real Property I I Eminent domain/Inverse condemnation (14) I I WTongy eviction (33)

Business tort/unfair business practice (07) ED Other real property (26) Unlawful Detainer I Civil rights (08) I I Commercial (31) Defamation (13) Fraud (16)

d]

Provisionally Complex Civil Litigation (Cal. Rules of Court, rules 3.400-3.403)

Residential (32)

I

I Intellectual property (19)

I

I

I Professional negligence (25)

Judicial Review

I Drugs (38)

EH

Other non-PI/PD/WD tort (35) loyment Wrongful termination (36)

Mass tort (40)

I ._! Securities litigation (28) I

I Environmental/Toxic tort (30)

I

I Insurance coverage claims ansing from the above listed provisionally complex case types (41)

Enforcement of Judgment I

I Enforcement of judgment (20)

Miscellaneous Civil Complaint

EH RICO (27) I

I Other complaint (not specified above) (42)

Miscellaneous Civil Petition

Asset forfeiture (05)

I I Partnership and corporate governance (21) Petition re arbrtration award (11) r—] other pet,tlon(/iorspeafed above; (43) I I Writ of mandate (02) Other employment (15) | | Other judicialreview(39) This case I I is I / I is not complex under rule 3 400 of the California Rules of Court If the case is complex, mark the factors requinng exceptional judicial management a I I Large number of separately represented parties d I j Large number of witnesses b i I Extensive motion practice raising difficult or novel e I I Coordination with related actions pending in one or more courts issues that will be time-consuming to resolve in other counties, states, or countries, or in a federal court c f' I Substantial amount of documentary evidence f I I Substantial postjudgment judicial supervision

S

Remedies sought (check all that apply) a.[ [ monetary b | / | nonmonetary, declaratory or injunctive relief Number of causes of action (specify) 14 This case I 1 is I / I is not a dass action suit If there are any known related cases, file and serve a notice of related case (You may use form CM-015.)

c|

| punitive

Date August 17, 2009 MICHAEL T. STOLLER NOTICE • Plaintiff must file this cover sheet with the first paper filed in the action or proceeding (except small claims cases or cases filed under the Probate Code, Family Code, or Welfare and Institutions Code) (Cal Rules of Court, rule 3.220) Failure to file may result in sanctions • File this cover sheet in addition to any cover sheet required by local court rule. • If this case is complex under rule 3 400 et seq of the California Rules of Court, you must serve a copy of this cover sheet on all other parties to the action or proceeding • Unless this is a collections case under rule 3 740 or a complex case, this cover sheet will be used for statistical purposes only Fom Adopted for Mandatory Urn Judicial Council or CaWomlo CM-010 (Rev July 1,2007]

CIVIL CASE COVER SHEET

Cal Rules of Court, nJes 2 30, 3220, 340O-3403, 3740; Cal Standards of Judicial Administration sld 310 www courttnfo ca gov

CM-010 INSTRUCTIONS ON HOW TO COMPLETE THE COVER SHEET To Plaintiffs and Others Filing First Papers. If you are filing a first paper (for example, a complaint) in a civil case, you must complete and file, along with your first paper, the Civil Case Cover Sheet contained on page 1 This information will be used to compile statistics about the types and numbers of cases filed You must complete items 1 through 6 on the sheet In item 1, you must check one box for the case type that best describes the case If the case fits both a general and a more specific type of case listed in item 1, check the more specific one If the case has multiple causes of action, check the box that best indicates the primary cause of action To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are provided below A cover sheet must be filed only with your initial paper Failure to file a cover sheet with the first paper filed in a civil case may subject a party, its counsel, or both to sanctions under rules 2 30 and 3 220 of the California Rules of Court To Parties in Rule 3.740 Collections Cases. A "collections case" under rule 3 740 is defined as an action for recovery of money owed in a sum stated to be certain that is not more than $25,000, exclusive of interest and attorney's fees, ansmg from a transaction in which property, services, or money was acquired on credit A collections case does not include an action seeking the following (1) tort damages, (2) punitive damages, (3) recovery of real property, (4) recovery of personal property, or (5) a prejudgment writ of attachment The identification of a case as a rule 3 740 collections case on this form means that it will be exempt from the general time-for-service requirements and case management rules, unless a defendant files a responsive pleading A rule 3 740 collections case will be subject to the requirements for service and obtaining a judgment in rule 3 740 To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the case is complex If a plaintiff believes the case is complex under rule 3 400 of the California Rules of Court, this must be indicated by completing the appropriate boxes in items 1 and 2 If a plaintiff designates a case as complex, the cover sheet must be served with the complaint on all parties to the action A defendant may file and serve no later than the time of its first appearance a joinder in the plaintiffs designation, a counter-designation that the case is not complex, or, if the plaintiff has made no designation, a designation that the case is complex CASE TYPES AND EXAMPLES Auto Tort Auto (22)-Personal Injury/Property Damage/Wrongful Death Uninsured Motorist (46) (if the case involves an uninsured motorist claim subject to arbitration, check this item instead of Auto) Other PI/PD/WD (Personal Injury/ Property Damage/Wrongful Death) Tort Asbestos (04) Asbestos Property Damage Asbestos Personal Injury/ Wrongful Death Product Liability (not asbestos or toxic/environmental) (24) Medical Malpractice (45) Medical MalpracticePhysicians & Surgeons Other Professional Health Care Malpractice Other PI/PD/WD (23) Premises Liability (e g , slip and fall) Intentional Bodily Injury/PD/WD (e g , assault, vandalism) Intentional Infliction of Emotional Distress Negligent Infliction of Emotional Distress Other PI/PD/WD Non-PI/PD/WD (Other) Tort Business Tort/Unfair Business Practice (07) Civil Rights (e g , discrimination, false arrest) (not civil harassment) (08) Defamation (e g , slander, libel) (13) Fraud (16) Intellectual Property (19) Professional Negligence (25) Legal Malpractice Other Professional Malpractice (not medical or legal) Other Non-PI/PD/WD Tort (35) Employment Wrongful Termination (36) Other Employment (15)

CM-010 [Rev July 1,2007]

Contract Breach of Contract/Warranty (06) Breach of Rental/Lease Contract (not unlawful detainer or wrongful eviction) Contract/Warranty Breach-Seller Plaintiff (not fraud or negligence) Negligent Breach of Contract/ Warranty Other Breach of Contract/Warranty Collections (e g , money owed, open book accounts) (09) Collection Case-Seller Plaintiff Other Promissory Note/Collections Case Insurance Coverage (notprovisionally complex) (18) "Auto Subrogation Other Coverage Other Contract (37) Contractual Fraud Other Contract Dispute Real Property Eminent Domain/Inverse Condemnation (14) Wrongful Eviction (33) Other Real Property (e g , quiet title) (26) Writ of Possession of Real Property Mortgage Foreclosure Quiet Title Other Real Property (not eminent domain, landlord/tenant, or foreclosure) Unlawful Detainer Commercial (31) Residential (32) Drugs (38) (if the case involves illegal drugs, check this item, otherwise, report as Commercial or Residential) Judicial Review Asset Forfeiture (05) Petition Re Arbitration Award (11) Writ of Mandate (02) Writ-Administrative Mandamus Writ-Mandamus on Limited Court Case Matter Writ-Other Limited Court Case Review Other Judicial Review (39) Review of Health Officer Order Notice of Appeal-Labor Commissioner Appeals

CIVIL CASE COVER SHEET

Provisionally Complex Civil Litigation (Cal Rules of Court Rules 3.400-3 403) Antitrust/Trade Regulation (03) Construction Defect (10) Claims Involving Mass Tort (40) Securities Litigation (28) Environmental/Toxic Tort (30) Insurance Coverage Claims (arising from provisionally complex case type listed above) (41) Enforcement of Judgment Enforcement of Judgment (20) Abstract of Judgment (Out of County) Confession of Judgment (nondomestic relations) Sister State Judgment Administrative Agency Award (not unpaid taxes) Petition/Certification of Entry of Judgment on Unpaid Taxes Other Enforcement of Judgment Case Miscellaneous Civil Complaint RICO (27) Other Complaint (not specified above) (42) Declaratory Relief Only Injunctive Relief Only (nonharassment) Mechanics Lien Other Commercial Complaint Case (non-tort/non-complex) Other Civil Complaint (non-tort/non-complex) Miscellaneous Civil Petition Partnership and Corporate Governance (21) Other Petition (not specified above) (43) Civil Harassment Workplace Violence Elder/Dependent Adult Abuse Election Contest Petition for Name Change Petition for Relief From Late Claim Other Civil Petition

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MICHAEL T. STOLLER, ESQ., SBN 120241 LAW OFFICES OF MICHAEL T. STOLLER, APC 9454 WILSHIRE BLVD., SUITE 500 BEVERLY HILLS, CALIFORNIA 90212 Telephone: 818-226-4040 Facsimile: 818-226-4044

5

Attorneys for Plaintiff -1

2 3

6

Assignments Case Management 43 Law and Motion 54 Minors Compromise 17

7 8

SUPERIOR COURT OF THE STATE OF CALIFORNIA

9

COUNTY OF SACRAMENTO

CASE NO.

THE TDS GROUP, INC., a California ) Corporation, as successor in all rights and ) interest to TAX DEFERRED SERVICES,) INC., a California Corporation, ) ) Plaintiffs, ) vs.

21

23 24 25 26

COMPLAINT FOR: 1.

2. 3.

)

THE IRA CENTER, a California ) Corporation; RANDY SCIANNA, an ) individual; RENE ROCAMORA, an ) individual; REBECCA OLSEN, an ) individual; EMPLOYEE BENEFIT ) SERVICES, INC., a California ) Corporation; WILLIAM L. KREBS, an ) individual; PENSION PLANNERS ) SECURITIES, INC., a California ) Corporation; GINA DUREYA, an ) individual; BAR FINANCIAL, LLC a ) California Limited Liability Company; ) ANTHONY TARANTINO, an individual,) JOHN BRACKETT, an individual, ) ERIC A. HUCK, an individual and ) DOES 1-100, inclusive, ) Defendants.

4. 5. 6.

7.

8. 9. 10. 11. 12.

)

13. 14.

27 28

l COMPLAINT

Statutory Unfair Competition in Violation of Calif. Bus. & Prof. Code §17200; Common-law Unfair Competition; Statutory False Advertising in Violation of Calif. Bus. & Prof. Code § 17500; Federal Unfair Competition False Designation of Origin; Product Disparagement Under Lanham Act Unfair Competition Under California State Law in Violation of Calif. Bus. & Prof. Code § 17200; Common and Statutory Trademark Infringement Under State Law; Slander Per Se; Breach of Contract; Business Disparagement; Intentional Interference With Contract; Intentional Interference With Prospective Economic Advantage; Accounting; Injunctive Relief.

1

COMES NOW, Plaintiff, THE IDS GROUP, INC., a California corporation, as

2 successor in all rights and interest to TAX DEFERRED SERVICES, INC., a California 3 Corporation, (hereinafter "TDS") and complains against defendants THE IRA CENTER, a 4 California Corporation (hereinafter "IRA"); RANDY SCIANNA (hereinafter "SCIANNA"), an 5 individual; RENE ROCAMORA (hereinafter "ROCAMORA"), an individual; REBECCA 6 OLSEN (hereinafter "OLSEN"), an individual; EMPLOYEE BENEFIT SERVICES, INC., a 7 California Corporation (hereinafter "EBS"); WILLIAM L. KREBS, an individual (hereinafter g

"KREBS"); PENSION PLANNERS SECURITIES, INC., a California Corporation (hereinafter

9 "PPSI"); GINA DUREYA, an individual (hereinafter "DUREYA"); BAR FINANCIAL, LLC 10

(hereinafter "BAR"); ANTHONY TARANTINO (hereinafter "TARANTINO"); JOHN

11

BRACKETT, an individual (hereinafter "BRACKETT"); ERIC A. HUCK, an individual

12

(hereinafter "HUCK") and DOES 1-100, inclusive, as follows: I. PARTIES

13 14 15 16

1.

Plaintiff, TDS, is a California corporation with its principal place of business

located at 6939 Sunrise Boulevard, Suite 250, Sacramento, California. 2.

Defendant, IRA, is a California corporation with its principal place of business

17 located at 14388 Union Avenue, San Jose, California. 18 19 20

3.

Plaintiff is informed and believes, and thereon alleges that, at all times herein

mentioned, defendant SCIANNA was a principal and Chief Operating Officer of defendant IRA. 4.

Plaintiff is informed and believes, and thereon alleges that, at all times herein

21

mentioned, defendant ROCAMORA was a principal and Chief Financial Officer of defendant

22

IRA and thereafter became its Chief Operating Officer.

23

5.

Plaintiff is informed and believes, and thereon alleges that, at all times herein

24 mentioned, defendant OLSEN was an officer of IRA. 25

6.

Plaintiff is informed and believes, and thereon alleges that defendant

26 EMPLOYEE BENEFIT SERVICES, INC. (hereinafter "EBS"), is a California corporation with 27 its principal place of business located at 14388 Union Avenue, San Jose, California and is owned 28

and operated by Defendant ROCAMORA. Plaintiff is further informed and believes, and 2 COMPLAINT

1

thereon alleges that defendants ROCAMORA and OLSEN are the Chief Executive Officer and

2 Vice President/Managing Director of District Relations for BBS 7.

3

Plaintiff is informed and believes and thereon alleges that defendant, PENSION

4 PLANNER SECURITIES, INC. (hereinafter "PPSI") is a California corporation with its 5 principal place of business located at 9700 Business Park Drive, Suite 200, Sacramento, 6 California 95827. 8.

7

Plaintiff is informed and believes and thereon alleges that defendant

8 WILLIAM L. KREBS (hereinafter "KREBS") is an individual residing at 117 W. Gutierrez 9 Street. Santa Barbara, California 93101. 9.

10

Plaintiff is informed and believes and thereon alleges that defendant BAR

11

FINANCIAL, LLC (hereinafter "BAR") is a California corporation with its principal place of

12

business located at 9700 Business Park Drive, Suite 200, Sacramento, California 95827. 10.

13

Plaintiff is informed and believes and thereon alleges that defendant ANTHONY

14 TARANTINO (hereinafter TARANTINO") was and at all times is a partner in defendant BAR 15

FINANCIAL, LLC.

16

11.

Plaintiff is informed and believes and thereon alleges that defendant ERIC A.

17

HUCK (hereinafter "HUCK") was and at all times is a partner in defendant BAR FINANCIAL,

18

LLC.

19

12.

Plaintiff is informed and believes and thereon alleges that defendant JOHN

20 BRACKETT (hereinafter "BRACKETT"), was and at all times is a partner in defendant BAR 21 22 23

FINANCIAL, LLC. 13.

Plaintiff is ignorant of the true names and capacities of defendants sued herein as

DOES I through 100, inclusive, and therefore sues these defendants by such fictitious names.

24 Plaintiff will amend this Complaint to allege their true names and capacities when ascertained. 25 26

14.

Plaintiff is informed and believes, and thereon alleges, that at all times mentioned

herein, defendants, and each of them were the agents, principals, partners, associates, joint

27 venturers, employees, contractors, independent contractors and/or co-conspirators of each of the 28

remaining co-defendants; that defendants, and each of them, were at various relevant times 3 COMPLAINT

1

acting within the purpose and scope of said agency, partnership, association, joint venture,

2

employment, contractor/client relationship, independent contractor/client relationship and/or

3

conspiracy and that defendants, and each of them, were acting with the authorization, permission

4

and/or consent of the remaining co-defendants. II. NATURE OF THE ACTION

5 6

15.

This is an action by plaintiff IDS against defendants IRA, SCIANN A,

7

ROCAMORA, OLSEN, KREBS and BBS who have and continue to infringe IDS' trademarks

8

and service marks; who have and continue to make misrepresentations in the marketplace that

9

are damaging to TDS' reputation, and its existing and prospective economic advantage; and who

10

have and continue to interfere with TDS' customer relationships and otherwise to compete

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unfairly and unlawfully with TDS, and with the assistance of defendants DUREYA, PPSI,

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TARANTINO, BRACKETT, HUCK and BAR as co-conspirators with the goal of putting TDS

13

out of business.

14

16.

15

injunction:

Plaintiff TDS seeks a Temporary Restraining Order, preliminary and permanent

(a)

16

enjoining all defendants from misrepresenting that they, or

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any of them, are authorized by, related to, affiliated with, or otherwise associated

18

with TDS;

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(b)

enjoining all defendants from retaining and/or using

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"TDS", "TAX DEFERRED SERVICES", "THE TDS GROUP, INC." and/or any

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other trademark or service mark that is confusingly similar to a trademark or

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service mark owned by TDS; and

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(c)

enjoining all defendants from misrepresentation and

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disparagement of plaintiff TDS' financial condition and purported regulatory

25

problems and unfairly soliciting plaintiff TDS' existing representatives, and from

26

interfering with TDS' contracts with and selling to TDS' existing customers the

27

financial services provided by TDS.

28

COMPLAINT

1

17.

Plaintiff IDS also seeks an accounting of the commissions from wrongful sales

2 and/or diverted sales of financial services by defendants; damages according to proof; and

3 restitution of all monies unlawfully gained by defendants due to the conduct alleged herein. HI. THE INDUSTRY

4 18.

5

Beginning in or about 1979, TDS has been a Plan Administrator, as that term was

6 commonly known, which provides administrative services to non-profit Public Schools, County 7 Offices of Education and/or Community Colleges throughout the United States (hereinafter g

"School Districts")- Typically, members of these groups are school employees who are eligible

9 to create certain defined contribution retirement plans, commonly known as Internal Revenue 10

Code Section 457 or 403(b) Plans. These Plans allow school employees to save money from

11

their earnings and to purchase certain financial products from life insurance companies and

12 mutual funds. The services that TDS provides as a Plan Administrator include, among other 13

things, being the Compliance Administrator for the various defined contribution plans, which

14 plans require compliance with federal and state tax regulations, and being the common remitter 15

(i.e., monthly gross payments from the schools are allocated and paid to each vendor that has

16

established a financial product for an individual teacher). By virtue of these contracts, TDS has

17 become the financial advisor to the school employees and end participants, hi addition to the 18 Plan Administrator Services, these contracts provide that TDS shall be the exclusive plan 19

provider for 457 accounts. Over time TDS has developed a reputation as a trustworthy source of

20 information and a reliable endorsement of other companies that provide financial services.

21

i

19.

Since 1979, Plaintiffs predecessor adopted the trademarks and/or service marks

22 "Tax Deferred Services" and "TDS", which it clearly imprinted on business cards, payroll flyers, 23

logos, stationery, brochures and other marketing materials that were extensively and

24 continuously utilized to promote and provide its services and financial products. On or about 25

July 14,2006 THE TDS GROUP, INC. was formed (hereinafter "THE TDS GROUP"), which

26 became the successor in all rights and interest to TAX DEFERRED SERVICES, INC. and which 27 adopted the trademark and/or service mark "THE TDS GROUP, INC." which it clearly

28 imprinted on business cards, payroll fliers, logos, stationery, brochures and other certain 5 COMPLAINT

1

marketing materials that were used to provide its services and financial products. Plaintiff has

2 extensively and continuously used THE TDS GROUP trademark and service mark in the 3 marketing and sale of services and financial products since July 14, 2006 and has continued to 4 use the trademarks and service marks TAX DEFERRED SERVICES, INC. and TDS, as well. 5

20.

Plaintiff TDS has extensively advertised and promoted the trademarks and service

6 marks "TAX DEFERRED SERVICES", "TDS" and "THE TDS GROUP" nationally to Public 7 Schools, County Offices of Education and/or Community Colleges and teachers through the 8 United States, through various methods of advertisements. As a result of these activities the 9 public, including non-profits, School Districts, County Offices of Education and/or Community 10 Colleges and teachers through the United States, has come to know of TDS and recognize these 11

trademarks and service marks as being associated exclusively with plaintiff TDS. Plaintiffs

12 TDS trademarks and service marks are an asset of inestimable value to TDS, representing and 13 embodying its goodwill and favorable reputation. 14

21.

In order to provide Plan Administrator services to the various School Districts,

15 County Offices of Education and Community Colleges, TDS entered into agreements with 16 certain entities and individuals to act as representatives of TDS and licensed the use of its 17 trademarks and service marks (hereafter, the TDS representatives). 18

22.

hi addition to providing the Plan Administrator services, the principals of TDS

19 were also licensed to sell financial products including life insurance and securities and in that 20 capacity developed a network of licensed representatives to sell certain financial service products 21

to school employees that included, among other things, life insurance and annuities. In order to

22 facilitate providing these services, TDS entered into an arrangement with a Broker/Dealer who 23 was positioned over the entire network of TDS licensed representatives. The Broker/Dealer 24 would receive commissions from the various life insurance companies and mutual funds and pay 25 TDS and the respective TDS representatives their shares of commission realized from any sale of 26 financial products. To assist the Broker/Dealer in administration of the financial products being 27 purchased and the payment of the fees associated with them, the Broker/Dealer appointed one of 28 the principals of TDS as the Office Supervisor Jurisdiction ("OSJ") who supervised all the 6 COMPLAINT

1

Broker/Dealer representatives and the quality of the financial products sold under the

2 Broker/Dealer, which enabled him to earn a greater portion of the commission revenue 3 generated. 4 5

23.

Over the past 30 years that TDS has been in business it has controlled the change

6 of Broker/Dealers for its network on several occasions, always able to transfer its Book of 7 Business to the new Broker/Dealers and a principal of TDS always remaining the OSJ. 8

24.

On or about September 2002, TDS changed its Broker/Dealer to defendant

9 Pension Planners Securities, Inc. ("PPSI") which was owned by defendant DUREYA. At that 10 time as usual, a principal of the Plaintiff was the OSJ to assist her in administration. And further. 11

PPSI approved the TDS activity as the Plan Administrator when adopting the TDS principals as

12 licensed agents along with the network of licensed representatives that were loyal to TDS and 13 would operate under the PPSI Broker/Dealer license. 14

IV. TDS AND IRA/KREBS ENTERED INTO AN AGREEMENT AUTHORIZING

15

THEM TO USE THE TDS PROPRIETARY MARKS

16

25.

On or about August 30, 2002, Plaintiff TDS ("Franchisor") and defendants,

17 SCIANNA, ROCAMORA and IRA ("Franchisee") entered into a Franchise Agreement to assist 18 TDS in marketing and providing its Plan Administrator services and expanding its network. A 19 true and correct copy of the Franchise Agreement is attached hereto and incorporated herein as 20 Exhibit "A," which provides, among other things: 21

"A. The Franchisor has the right to license certain trade names,

22

trademarks, service marks, logos, photographs and indicia or (sic) origin,

23

including the service mark "Tax Deferred Services", as may be designated now or

24

later by the Franchisor (the 'Proprietary Marks')."

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"B. The Franchisor grants a license to use the Proprietary Marks and

26

financial planning services operating under the name TAX DEFERRED

27

SERVICES ("TDS")."

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COMPLAINT

1

"C. The Franchisee desires to acquire from the Franchisor and the

2

Franchisor desires to grant to the Franchisee a license to use the Proprietary

3

Marks and any financial materials at a specified location within a designated

4

geographical area, subject to and in accordance with the terms of the Agreement

5

(the "IDS Franchise")-"

6

"2. DUTIES OF THE FRANCHISEE

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2.1 During this Agreement, the Franchisee will restrict his or her activities

8

exclusively to financial services for public or private education at the TDS

9

Financial Franchise unless otherwise approved in writing by the Franchisor."

10

"2.6 In order to protect the goodwill associated with the Proprietary

11

Marks, the Franchisee will use exclusively the services and products authorized

12

by TDS Products and Services Approval Committee."

13

"4. FEES

14

4.1 The Franchisee will pay to the Franchisor a continuing fee during this

15

Agreement in an amount equal to ten (10%) percent of the Franchisee's 'Gross

16

Revenue'."

17

"8. CONDITIONS OF TRANSFER OR SALE OF INTEREST

18

8.4 Any purported assignment, transfer, conveyance or encumbrance of

19

the TDS Franchise, any right or interest created in this Agreement, or if any

20

ownership interest in the Franchise, without the written consent of the Franchisor,

21

is null and void, and results in termination of this Agreement as stated in

22

Article 9."

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"9. DEFAULT AND TERMINATION

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9.2 Except as otherwise provided by applicable law, the Franchise will be

25

deemed in default under this Agreement and the Franchisor may, at its option,

26

terminate this Agreement and all rights granted in this Agreement without

27

affording the Franchisee any opportunities to cure the default, with the

28

termination effective immediately upon the earlier of receipt of notice of 8 COMPLAINT

1

termination by the Franchisee or, if the notice of termination is deposited by the

2

Franchisor in the United States mails, certified mail, then five (5) days after the

3

mailing by the Franchisor, upon the occurrence of any of the following events: 9.2.6 The Franchisee attempts to, or purports to, transfer any rights

4 5

or obligations under this Agreement, or otherwise, to any third party, contrary to

6

the terms of Article 8; 9.2.7 The Franchisee fails to comply with covenants stated in

7 g

Article 11; 9.2.8 The Franchisee fails to pay 10% of the Franchisee's gross

9 10

revenue or other payments on specific due dates to Franchisor."

11

Article 11 Covenants provides:

12

"11.2 The Franchisee agrees that during the term of this Agreement, the

13

Franchisee will not either directly or indirectly, for himself or herself, or

14

through, on behalf of, or in conjunction with any person, persons, partnerships or

15

corporation: 11.2.1 Divert or attempt to divert any business or customer

16 17

from the IDS Franchise to any competitor, by direct or indirect inducement or

18

otherwise, or do or perform, directly or indirectly, any other act injurious or

19

prejudicial to the goodwill associated with the Proprietary Marks." [Emphasis

20

added.]

21

26.

From on or about August 30,2002, up through September, 2008 the defendants

22 IRA and KREBS operated under the terms and conditions of the Franchise Agreement without 23

incident.

24

V. PPSI/DUREYA BEGIN THEIR PATTERN OF INTENTIONAL

25

INTERFERENCE WITH TDS' BUSINESS RELATIONSHIPS BY DRIVING A

26

WEDGE BETWEEN TDS AND ITS REPRESENTATIVES (SALES FORCE)

27

27.

Plaintiff is informed and believes, and based thereon alleges, that on or about

28 August, 2008, defendant DUREYA sold her brokerage business PPSI to defendant BAR 9 COMPLAINT

1

Financial. BAR Financial was at that time the OSJ for Financial Network Investment

2 Corporation (hereinafter "FNIC"), a Broker/Dealer and wholly owned subsidiary of ING. The 3 effect of this transaction was to impose FNIC as the replacement Broker/Dealer for the Book of " 4 Business of TDS without continuing the OSJ provided by TDS. 5

28.

About September 2008, upon the completed acquisition of defendant PPSI by

6 defendant BAR Financial, TDS was notified by defendant DUREYA, as an officer of BAR, that 7 FNIC rejected the Plan Administrator services by TDS and that a business affiliate of FNIC. 8 through its parent ING, specifically "ING Plan With Ease," would be taking over the Plan 9 Administrator services for all of the TDS clients. The intended outcome of this change was to 10 eliminate TDS as a competitor to the defendants by putting them out of business. 11

29.

TDS refused to relinquish its position as Plan Administrator and further, the

12 principals of TDS refused to relinquish their positions as licensed sales representatives of

13 financial products, thereby challenging the influence of defendants BAR and DUREYA over the 14 existing force of representatives that had formerly shown allegiance to TDS (sometimes referred 15

to as the TDS representatives). Concurrent with the threat posed by defendants BAR and

16

DUREYA, TDS requested that BAR and DUREYA make a bulk transfer of the Book of

17 Business to its new chosen Broker/Dealer, Questar Capital Corporation (hereinafter "Questar"), 18

and advised all of its representatives that all further business would be conducted through

19 Questar. Questar had accepted the Plan Administrator services of TDS, unlike BAR and 20 DUREYA. 21

30.

While DUREYA initially agreed to allow the TDS principals to block transfer its

22 Book of Business, as was the custom in the industry, the defendants reversed their position and 23

notified the TDS principals they would not make a block transfer of their clients to their new

24 Broker/Dealer Questar. 25

31.

On or about September, 2008, when Mr. Holt (a principal of TDS) attempted to

26 move his clients to Questar, as his new Broker/Dealer, defendants BAR and DUREYA 27 intentionally interfered by refusing to make a bulk transfer of his Book of Business. In addition, 28 the TDS representatives were notified by defendants BAR and DUREYA that unless they stayed 10 COMPLAINT

1

with DUREYA and BAR they would lose the stream of commissions they were entitled to from

2 the prior financial products sold. Consequently, all of the IDS representatives, for fear of losing 3 their commissions, stayed with defendants DUREYA and BAR. 4

32.

Plaintiff is informed and believes, and based thereon alleges, that defendant PPSI

5 promised defendant BAR and FNIC that it could deliver all of the IDS clients which included 6 356 California Schools, to ING's Plan With Ease and all of the 457 plan assets that exceeded

7 over $100 million, if they would buy defendant PPSI. Defendant PPSI schemed to accomplish 8 this by attempting to force TDS to give up its Plan Administrator Business which it had been 9 conducting over the last 30 years and specifically, authorized by defendant PPSI for the 10

previous 6 years, but thereafter took the contrary position that TDS' business was unauthorized

11

once defendant PPSI had been acquired by BAR Financial and FNIC. VI. SMEAR CAMPAIGN

12 13

33.

In order to deliver the TDS clients (i.e., 365 California Schools), and 457 plan

14

assets (over $100 million) to BAR and FNIC, defendant DUREYA and the other defendants,

15

conspired, schemed, planned and executed with the defendants, and each of them, a campaign

16

against TDS with the intention to drive the TDS clients and representatives away which would

17

cause it to go out of business since all commissions would not be paid and TDS would lose its

18

income. Included in this conspiracy campaign and scheme were statements made by defendant

19

DUREYA and the other defendants, and each of them, together with actions taken in TDS' name

20

which were not authorized by TDS as follows:

21

(1)

On or about January 22,2009, defendant OLSEN, while under

22

contract as a TDS representative and required to be loyal to TDS, contacted

23

Virginia Casanovas at the Cambrian Elementary School District and told her that

24

she would find them a new Plan Administrator.

25

(2)

In February, 2009, defendant ROCAMORA told all the IRA

26

representatives that TDS would be out of business in the next 3-4 months, and

27

that they were moving all the districts to a new Plan Administrator;

28 11 COMPLAINT

1

(3)

In February 2009 and continuing to the present, defendant

2

DUREYA visited and/or contacted every TDS advisor/representative in the

3

network and warned they should not go to Questar, the new Broker/Dealer,

4

knowingly, falsely stating that TDS was in severe financial trouble and threatened

5

that if they did try to transfer their accounts to Questar, the clients would not be

6

transferred to Questar and the representatives would lose their commissions;

7

(4)

On or about March 18,2009, defendant DUREYA contacted a new

8

Plan Administrator, Great American Plan Administrators, Inc., to replace TDS,

9

knowing that TDS had contracts with the various School Districts had the

10 11

exclusive solicitation rights for employees' 457 plans; (5)

About April 10,2009, defendant KREBS developed a flyer for the

12

Visalia School District promoting the sale of a financial service without TDS' or

13

Broker Dealer approval, which was contrary to the terms of the agreement with

14

TDS and a violation of securities regulations;

15

(6)

On April 10,2009, Defendant KREBS sent a letter to School

16

Employees appearing to instruct them to contact TDS as the Plan Administrator

17

regarding compliance questions, while in fact surreptitiously directing them to

18

call his office directly, all of which was contrary to the agreement with TDS; and

19

falsely representing to the employees that he was authorized to conduct

20

compliance;

21

(7)

On or about April 23,2009, defendants TARANTINO,

22

BRACKETT, KREBS ROCAMORA, BAR and IRA organized a conference call

23

to discuss replacing TDS as the Plan Administrator with ING as the Plan

24

Administrator coupled with the common remitting business through defendant

25

BAR and FNIC;

26

(8)

On or about May 7,2009, Alonzo Wickers, CEO of TDS, spoke

27

with Dianne Johnson, a TDS representative in Tennessee, who reported she was

28

contacted by defendants TARANTINO and BAR and told that "TDS would be 12 COMPLAINT

1

going out of business in 60 to 90 days." She asked how that was possible and

2

defendant TARANTINO stated that many of the TDS representatives were going

3

to leave TDS and transfer TDS' School District clients to a new 403(b) Plan

4

Administrator, which would result in TDS losing its commissions paid to Alonzo

5

Wickers, and they would not be able to stay in business when this income

6

stopped. Defendant TARANTINO further advised that he was sponsoring a

7

meeting through BAR Financial to facilitate this outcome in San Francisco and

8

asked her to attend;

9

(9)

On or about May 13,2009 through June 24,2009, defendants

10

KREBS, ROCAMORA and DUREYA contacted each other to set up a private

11

meeting without any principal of TDS present to further coordinate the scheme,

12

plan and conspiracy to put TDS out of business;

13

(10)

On or about June 19,2009 the defendants held a meeting with the

14

network of TDS advisors/representatives, unbeknownst to plaintiff, to further

15

explain that TDS was going out of business, and that TDS would be replaced with

16

a new Plan Administrator, National Benefit Services, whose representatives were

17

introduced during the meeting;

18

(11)

On or about May 15,2009, defendants KREBS and ROCAMORA

19

held a compliance seminar, specifically with the Santa Clara County Office of

20

Education (COE), which was done without TDS' authorization, knowledge or

21

consent;

22

(12)

On or about June 22,2009, defendants ROCAMORA and EBS

-23

sent an email requesting defendant KREBS to provide a "more specific head

24

count of the participating or eligible participants in his districts" with the

25

understanding that to collaborate with NBS as the group's new Plan

26

Administrator, under a three-party agreement;

27 28

(13)

On or about June 22,2009, defendants DUREYA and BAR in

furtherance of their nefarious goal to replace TDS with NBS as the new Plan 13 COMPLAINT

1

Administrator, negotiated fees and charges that vendors should pay for the Plan

2

Administrator services;

3

(14)

On or about June 24,2009, defendant KREBS forwarded to the

4

other defendants, all the documents necessary to replace TDS as the Plan

5

Administrator with NBS. (15)

6

On or about June 23,2009, defendants TARANTINO and BAR

7

advised TDS representative James Adjar that he would lose his commissions on

8

his clients if he moved to Questar, the new Broker/Dealer; (16)

9

On or about June 15,2009, TDS had a telephone conference with

10

all of its representatives during which all representatives were advised that

11

Questar was the new Broker Dealer, and that all representatives would need to

12

confirm, in writing by June 22,2009, that they were on board or would be

13

terminated at that point. (17)

14

On or about June, 2009, defendants DUREYA and KREBS, during

15

a conference call with the TDS network of representatives invited, knowingly and

16

falsely stated that TDS had serious financial troubles and that the TDS

17

representatives would be taunted by allegations of embezzlement unless they

18

distanced themselves in a hurry from TDS; (18)

19 20

problems and that he was being audited by the SEC. VII. TERMINATION OF IRA AND KREBS

21 22 23

Alonzo Wickers, TDS' principal, had regulatory and compliance)

34.

On or about June 26,2009 TDS, after not getting confirmation that defendants

IRA, ROCAMORA, OLSEN and KREBS had transferred to Questar, TDS notified defendants

24 IRA, ROCAMORA, OLSEN and KREBS in writing that they had been terminated as TDS 25

representatives and requested that they cease and desist from representing themselves as being

26

affiliated with TDS and that they should return all TDS promotional literature and marketing

27 materials that utilized TDS' trademarks and service marks. 28 14 COMPLAINT

1

35.

This notice of termination was issued by plaintiff TDS after defendants IRA,

2 EBS, ROCAMORA, OLSEN and KREBS decided they would not come over to IDS' new 3 Broker/Dealer, Questar. 4

36.

Plaintiff is informed and believes and based thereon alleges that, despite these

5 written notices, defendants IRA, EBS, ROCAMORA, OLSEN and KREBS have continued to 6 represent themselves as representatives and/or affiliates of TDS, thereby infringing the 7 trademarks and service marks of TDS; having continued to sell financial services to TDS clients 8 without paying 10% of the gross revenue generated; have utilized a rubber signature stamps 9 created without authorization or approval to execute certain compliance documents that only 10 TDS was authorized to execute and have undertaken certain conduct to disparage TDS and 11

interfere with its clients which includes, among other things, the following:

12

(a)

advising TDS clients, specifically School Districts, County Offices

13

of Education and Community Colleges, that TDS was in severe financial trouble,

14

that checks were being returned NSF from the common remitting TDS provided,

15

that one of the TDS principals (Alonzo Wickers) had regulatory compliance

16

problems, and that TDS was going out of business;

17

(b)

advising TDS clients, specifically Public Schools, County Offices

18

of Education and Community Colleges, that they should move their Plan

19

Administration business from TDS to National Benefit Services that defendants

20

would become affiliated with;

21

(c)

contacted TDS clients, specifically school employees in various

22

School Districts, who were already in 457 plans and resold and/or contracted

23

them to 403 (b) plans, which provided no benefit to the school employees but

24

allowed the defendants to earn a new commission (which is considered illegal

25

churning), and redirect the client from TDS;

26

(d)

the defendants, acting as agents for each of them as part of and in

27

furtherance of the conspiracy, made the foregoing statements to the following

28

clients:

15 COMPLAINT

1

(1)

On June 23,2009, IDS' President, Loy Douglas Holt, met

2

with Linda Dempsey, Chief Business Officer (CBO) of Monrovia Unified School

3

District and was told by her that Defendant KREBS told her that IDS was

4

changing Plan Administrators and left brochures for NBS, as the new Plan

5

Administrator;

6

(2)

On June 23,2009, Mr. Holt also met with Ken Prosser,

7

Assistant Superintendent of Fiscal Services and with Tom Etchart, Director of

8

Finance for the Ventura County Office of Education and was told that defendant

9

KREBS had given a presentation to the School District representatives stating that

10

TDS was going with a new Plan Administrator, NBS;

11

.

12

County Office of Education (COE) for San Mateo, who stated that defendant

13

OLSEN came to meet her under the auspices of representing TDS (and presented

14

a TDS business card), and stated that TDS was going to a new Plan

15

Administrator, NBS, and left her brochure for NBS;

16

(3)

On June 29,2009, Mr. Holt met with Margie Gustafson,

(4) . On June 24,2009, Mr. Holt also met with several

17

representatives of Union Unified School District, specifically Nimrat Johnal

18

(Santa Clara County COE), Nan Wijcik (CBO), Rita Sohal, Serena Glancy and

19

Linda Rode (Payroll Department of Union USD) to discuss their concerns over

20

the rumors they heard from defendants IRA, OLSEN, ROCAMORA and EBS

21

that TDS had certain financial problems which included, among other things,

22

common remitting checks being returned for non-sufficient funds (NSF),

23

regulatory compliance audit problems and were confused as to who to deal with

24

on plan compliance, since the defendants had directed them to deal with the local

25

San Jose office directly;

26 27

(5)

On June 30, 2009, Mr. Holt spoke with Rhonda Wang,

Assistant Comptroller of Foothill De Anza Community College District, and was

28 16 COMPLAINT

1 2

told that she heard from representatives of defendant IRA that IDS was in financial

3

distress; (6)

On July 1,2009, Mr. Holt met with Chris Jew, Assistant

4

Supervisor of Business Services for Oak Grove Elementary School District and

5

was told that defendant IRA's representatives stated that TDS was having

6 7 8

financial

difficulties and that checks were being returned NSF from the common

remitter account; (7)

On July 1,2009, Mr. Holt met with Joanne Chin of

9

Franklin McKinley Unified School District and was told that she had heard of the

10

financial rumors and was told by a representative of defendant IRA, BBS, OLSEN

11

and ROCAMORA, that all compliance for Plan Administration should be sent to

12

defendant's local office rather than to TDS' corporate office;

13

(8)

On July 1,2009, Mr. Holt also met with Jim Luyau,

14

Assistant Supervisor of Business Services for the Santa Clara Unified School

15

District, who advised that Doris Luang, a TDS representative of defendant IRA,

16

OLSEN, ROCAMORA and BBS stated that TDS was having financial difficulties

17

and that they should deal directly with the local San Jose office;

18

(9)

On July 1,2009, Mr. Holt also met with Tina Tsu, Director

19

of Fiscal Services for Berryessa Union School District, who stated that she had

20

recent phone calls from defendant IRA's representative that advised TDS was

21

having financial trouble and was having checks returned from the common

22

remitter account for NSF;

23

(10)

On July 1,2009, Mr. Holt also met with Julie Swanson

24

(CBO) for Cambrian Elementary School District, who stated that she had heard

25

from defendant IRA's representatives that TDS had fiscal problems, and was

26

having vendor checks returned NSF from the common remitter account and was

27

having vendor checks returned NSF from the common remitter account;

28 17 COMPLAINT

1

(11)

On July 1,2009, Mr. Holt also met with Alejandra San

2

Miguel, Human Resources for Campbell Union Elementary School District, who

3

stated that defendant OLSEN on behalf of defendants IRA and BBS previously

4

came to her office and advised that all plan compliance had to be done at the local

5

San Jose office and provided return envelopes that reflected the same, which

6

caused her confusion as to who to direct the plan compliance to;

7

(12)

On July 7,2009, Mr. Holt met with Cathy Grovenberg,

8

Assistant Supervisor of Business Services for Santa Clara (COE) who stated that

9

representatives of defendant IRA had told her that IDS was in financial trouble,

10

that vendor checks were being returned NSF from the common remitter account

11

and that it was under audit and relayed that there was a rift created between the

12

local San Jose office and the corporate office;

13

(13)

On July 9,2009, Mr. Holt and three other representatives of

14

TDS attended a Multiple District County meeting in Santa Clara, that was

15

attended by over 30 representatives throughout the county that was called by

16

Nimrat Johnal, to discuss the rumors spread by the defendants, specifically

17

defendants IRA, ROCAMORA, OLSEN, EBS and KREBS, that TDS had

18

financial

problems, that it had vendor checks returned NSF from its common

19

remitter account, that it had regulatory and compliance problems and TDS had

20

done illegal activities;

21

(14)

On July 9,2009, Mr. Holt spoke with Julie McCarthy a

22

representative from the Brisbane School District who advised that she had

23

received a telephone call from defendant OLSEN on July 8,2009, during which

24

she requested to meet to discuss moving the School District to another Plan

25

Administrator because of the financial troubles TDS was having. Ms. McCarthy

26

stated that she was unaware of any problems TDS was having until she received

27

the phone call from defendant OLSEN.

28 18 COMPLAINT

1

(15)

On July 17,2009, Mr. Holt spoke with Ann Jones (CBO) of

2

the San Jose Unified School District who stated that representatives from

3

defendant IRA had advised that IDS had regulatory compliance issues and was

4

being audited, had financial troubles which included checks returned NSF;

5

(16)

On July 17,2009, Mr. Holt met with Jerry Ken, Assistant

6

Supervisor of Business for Eastside Union High School District and Vida

7

Branner-Sidess and Jill Kaufman (representatives of East Side Union HSD), who

8

attended the Santa Clara COE meeting on July 7,2009 and wanted further

9

confirmation concerning the rumors raised regarding TDS' financial troubles;

10

(17)

On July 17,2009, Mr. Holt met with Margie Gustafson

11

(COE) of San Mateo and approximately 30 other representatives and CBO's of

12

the district to discuss the rumors they heard from the representatives of defendants

13

IRA, OLSEN and ROCAMORA regarding IDS' financial and regulatory

14

problems and whether TDS had returned vendor checks.

15

(18)

.On July 17,2009, Mr. Holt spoke with Vicky Rinehart,

16

Superintendent of Knightsen School District, who stated that TDS had financial

17

and regulatory audit issues that she had heard from representatives of defendants

18

IRA, OLSEN and ROCAMORA.

19

(19)

On July 17,2009, Mr. Holt spoke with Nancy Anderson,

20

Director, Moreno Valley Unified School District who stated that she had heard

21

from representatives of defendants IRA, OLSEN, ROCAMORA and KREBS that

22

TDS was having financial difficulties and that defendant KREBS had told her

23

vendor checks were being returned NSF, that TDS was being audited by the SEC

24

and Mr. Wickers had failed a compliance audit; She thereafter contacted several

25

other districts and was told the information was inaccurate;

26

All of the foregoing representations made by defendants were false, were known by the

27 defendants to be false or were made without any reasonable belief to the truth of the matters 28 19 COMPLAINT

1

stated at the time they were made, and were made with the intent to disparage and harm its

2 reputation and to cause economic harm to TDS. 3

FIRST CAUSE OF ACTION

4

Statutory Unfair Competition in Violation of California Bus. & Prof. Code §17200

5

(Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS)

6

37.

Plaintiff, TDS hereby incorporates by reference, each and every allegation

7 contained in paragraphs 1 through 36 of this Complaint. 8

38.

Defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS

9 activities as set forth herein constitute acts of unfair and/or unlawful competition, and unfair 10 and/or unlawful business practices under California Business & Prof. Code § 17200 et seq. 11

39.

Defendants' acts of unfair and/or unlawful business practices include, but are not

12

limited to: the conversion of TDS' personal property for defendants' own use and benefit; the

13

selling of TDS products without authorization; the conversion of proceeds from the sale of TDS'

14 products for defendants' own use and benefit; falsely representing to the public that defendants 15

are authorized by, affiliated with and/or related to TDS; falsely representing to the public that

16

defendants are the source of TDS services and financial products; unfairly and/or unlawfully

17

diverting sales from TDS' existing and/or prospective customers to defendants; intentionally

18

interfering with TDS customer relationships; misleading the public by using trademarks and/or

19

service marks that are identical or confusingly similar to trademarks and/or service marks owned

20 by TDS in the marketing of their competitive services and financial products; and falsely 21 22 23

representing to the public the nature and source of TDS financial products and services. 40.

As a proximate result of defendants' unfair and/or unlawful business practices,

TDS has suffered, and is continuing to suffer, irreparable injury, and defendants unlawfully

24 gained profits which they are not legally entitled to keep. 25 26

41.

The unfair and/or unlawful business practices of defendants complained of herein

are likely to continue unabated unless and until defendants are enjoined and restrained by this

27 Court. TDS is, therefore, entitled to preliminary and permanent injunctive relief and restitution

28

against defendants, and each of them. 20 COMPLAINT

1

SECOND CAUSE OF ACTION

2

Common Law Unfair Competition

3

(Against all Defendants) 42.

4 5

Plaintiff, IDS hereby incorporates by reference, each and every allegation

contained in paragraphs 1 through 36 of this Complaint 43.

6

Defendants' adoption and unauthorized use of TDS' trademarks and service

7

marks in the marketing and sale of competing financial products and services have enabled

8

defendants to falsely pass off their products and services as being sold, sponsored, authorized, or r otherwise affiliated with TDS.

9 10

44.

Defendants' acts constitute unfair competition under California common law.

11

45.

As a direct and proximate result of defendants' acts as allege herein, TDS has

12

suffered and will continue to suffer damages, including lost profits, in an amount subject to proof

13

at trial.

14

46.

Defendants' acts have caused and will continue to cause irreparable harm to TDS

15

unless restrained by this Court. TDS has no adequate remedy at law. Accordingly, TDS is

16

entitled to an order enjoining and restraining defendants, during the pendency of this action and

17

permanently thereafter, from marketing, distributing and offering for sale or selling their

18

products and/or services through the use of the trademarks and/or services marks "TAX

19

DEFERRED SERVICES, INC." "TDS" or "THE TDS GROUP, INC." or any other mark

20

confusingly similar to TDS.

21

47.

Defendants' acts of unfair competition were intentional, fraudulent and malicious.

22

By reason thereof, TDS is also entitled to an award of punitive and exemplary damages against

23

defendants, and each of them, in an amount subject to proof at trial.

24 25 26 27 28 21 COMPLAINT

1

THIRD CAUSE OF ACTION

2

Statutory False Advertising in Violation of California

3

Business & Professions Code §17500

4

(Against All Defendants)

5

48.

Plaintiff, IDS hereby incorporates by reference, each and every allegation

6 contained in paragraphs 1 through 36 of this Complaint. 7

49.

Defendants' activities as set forth herein constitute acts of false advertising under

8 California Business & Professions Code § 17500 et' seq. 9

50.

a.

10

11

Defendants' acts of false advertising include, but is not limited to: Falsely representing to the public that defendants are authorized

by, affiliated with and/or related to TDS; b.

12

Falsely representing to the public that defendants are able to

13

provide Plan Administrator services of TDS and/or sell TDS financial service

14

products.

15

c.

Misleading the public by using trademarks and/or service marks

16

that are identical or confusingly similar to trademarks and/or service marks owned

17

by TDS; and

d.

18 19

services.

20

51.

21

Falsely representing to the public the nature and source of TDS'

As a proximate result of defendants' false advertising, TDS has suffered, and is

continuing to suffer, irreparable injury, and has incurred, and is continuing to incur, monetary

22 damages in an amount subject to proof at trial. 23

52.

Defendants' acts of false advertising practices are likely to continue unabated

24 unless and until defendants are enjoined and restrained by this Court. Plaintiff TDS is, therefore, 25

entitled to preliminary and permanent injunctive relief and restitution against defendants, and

26

each of them.

27 28 22 COMPLAINT

1

FOURTH CAUSE OF ACTION

2

Federal Unfair Competition - False Designation of Origin

3

(Against All Defendants)

4

53.

Plaintiff, TDS hereby incorporates by reference, each and every allegation

5 contained in paragraphs 1 through 36, of this Complaint. 6

54.

Defendants' unauthorized and unlawful use of marks that are identical or

7 confusingly similar to IDS' trademarks and service marks is likely to confuse, deceive or cause 8 mistake to members of the public and persons in the trade as to the source of origin of 9 defendants' services and/or financial products, such that the public and persons in the trade are 10 likely to believe, contrary to fact, that defendants' services and financial products are ,sold, or, 11

licensed, endorsed, sponsored, or otherwise authorized by TDS and constitutes a false

12 description and/or false designation of origin, which are damaging to plaintiff. 13

55.

Defendants' false representations that (a) defendants are authorized by, affiliated

14

with and/or related to TDS; (b) defendants own and/or have some ownership interest in TDS

15

and/or TDS services; and/or (c) defendants are the source of TDS services, are likely to confuse

16

or deceive members of the public and persons in the trade as to the origin of the defendants'

17

services, such that the public and persons in the trade are likely to believe, contrary to fact, that

18

defendants' services are sold or licensed, endorsed, sponsored, or otherwise authorized by TDS

19

and constitutes a false description and/or false designation of origin, which are damaging to

20 plaintiff. 21

56.

TDS is informed and believes, and thereon alleges, that defendants' false

22

representations as to the origin of their goods and services are, and have been, intentional,

23

deliberate and willful defendants intentional use of the terms "TAX DEFERRED SERVICES,

24

INC.; TDS and THE TDS GROUP, INC. to identify them and the services and financial products

25

they sell and thereby compete with plaintiff in the same market constitutes federal unfair

26

competition in violation of Section 43(a) and (c) of the Lanham Act, 15 U.S.C. Section 1125(a).

27 28 23 COMPLAINT

1

57.

As a proximate result of defendants' false representations, TDS has suffered, and

2 is continuing to suffer, irreparable injury, and has incurred, and is continuing to incur, monetary 3 damages in an amount subject to proof at trial, including but not limited to attorney's fees. 4

58.

The false representations of defendants complained of herein are likely to

5 continue unabated unless and until defendants are enjoined and restrained by this Court. TDS is,

6 therefore, entitled to preliminary and permanent injunctive relief against defendants, and each of 7 them, in addition to compensatory damages, costs and reasonable attorney's fees. 8

FIFTH CAUSE OF ACTION

9

Product Disparagement Under Lanham Act (Against All Defendants) Plaintiff, TDS hereby incorporates by reference, each and every allegation

10 11 12 13

59.

contained in paragraphs 1 through 36, of this Complaint. 60.

Defendants' statements to customers and potential customers of TDS, as set forth

in paragraphs 33 and 36 of this Complaint:

14

(A)

Constitute commercial speech by defendants commercial competitors of

15

plaintiff; 16

(B)

17

For the purpose of influencing customers and potential customers not to

18

purchase TDS' services and/or financial products, but rather to purchase

19

defendants' competing services and/or financial products;

20

(C)

Were widely disseminated to a significant portion of the potential market;

(D)

Are false and misleading descriptions or representations of fact which

22

misrepresent the nature, characteristics and quality of TDS' services and/or 23

financial products; (E)

25 26

61.

Were likely to and did damage TDS' business.

Defendants are therefore liable to TDS in damages pursuant to Section

27 43(a)(l)(B) of the Lanham Act, 15 U.S.C. § 1125(a)(l)(B). 28 24 COMPLAINT

1

62.

In addition, IDS is entitled to an injunction prohibiting defendants from further

2 violations of the Lanham Act. 3

SIXTH CAUSE OF ACTION

4

Unfair Competition Under California State Law

5 6 7

Violation of California Business & Professions Code §17200 (Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS) 63.

Plaintiff TDS incorporates by reference Paragraphs 1 through 36 of this

8 Complaint as though fully set forth herein. 9 64. Defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS 10 activities as set forth herein also constitute trademark infringement and unfair competition under 11 12 13 14 15 16 17 18

the laws of the State of California and at common law. 65.

EBS intentional state and common law trademark infringement and unfair competition, Plaintiff TDS has suffered, and is continuing to suffer, irreparable injury, and has incurred, and is continuing to incur, monetary damages in an amount to be determined at trial. 66.

this Court. SEVENTH CAUSE OF ACTION

20

22 23 24 25 26

The infringing and unfair competitive activities of defendants complained of

herein are likely to continue unabated unless and until defendants are enjoined and restrained by

19

21

As a result of defendants' IRA, SCIANNA, ROCAMORA, OLSEN, KREBS,

Common and Statutory Trademark Infringement Under State Law (Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and EBS) 67.

Plaintiff incorporates by reference Paragraphs 1 through 36, inclusive, of this

Complaint, as though folly set forth herein. • 68.

By their acts alleged herein, defendants IRA, SCIANNA, ROCAMORA, OLSEN,

KREBS, and EBS have engaged in trademark infringement under the common and statutory laws of the State of California and California Business and Professions Code § 14330, et seq.

27 28 25 COMPLAINT

1

69.

Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS have

2 intentionally deceived the public by misrepresenting that'their financial services are in some way

3 sponsored or authorized by plaintiff TDS. 4

70.

Plaintiff is informed and believes, and thereon alleges that, the aforesaid acts were

5 undertaken willfully and with the intention of causing confusion, mistake or deception on the 6 part of the consumers of TAX DEFERRED SERVICES, INC., TDS, and/or THE TDS GROUP. 7

71.

Asa proximate result of the acts of defendants, and each of them, as alleged

8 herein, plaintiff TDS has suffered, is suffering and will continue to suffer irreparable damage 9 and, unless said defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS are

10 restrained from continuing its wrongful acts, the damage will be increased since no adequate 11

remedy at law exists.

12

EIGHTH CAUSE OF ACTION

13

Slander Per Se Against TDS

14

(Against All Defendants)

15 16 17

72.

Plaintiff, TDS hereby incorporates by reference paragraphs 1 through 36 of this

Complaint as if fully set forth herein. 73.

As specifically identified hi paragraphs 32 and 35 of this Complaint, defendants

18

published unprivileged false and defamatory statements of fact to third parties of and concerning

19

plaintiff TDS' financial and regulatory compliance problems.

20 21 22 23 24 25 26 27

74.

Defendants published these false and defamatory statements negligently, with

reckless disregard of their truth or falsity, and/or with knowledge of their falsity when made. 75.

Defendants identified false and defamatory published statements have caused

injury and damage to TDS' reputation, goodwill and prestige. 76.

As a direct result of defendants' identified false and defamatory published

statements, TDS has suffered actual injury, including pecuniary damage. 77.

As a result of defendants' identified false and defamatory published statements,

TDS is entitled to nominal, general and exemplary damages.

28 26 COMPLAINT

1

NINTH CAUSE OF ACTION

2

For Breach of Contract

3

(Against Defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS)

4

78.

Plaintiff, IDS hereby incorporates by reference paragraphs 1 through 36 of this

5 Complaint as if fully set forth herein. 6

79.

As set out more fully in paragraph 25, supra, on or about August 30,2002,

7 plaintiff TDS entered into a written Franchise Agreement (Exhibit "A") to assist TDS in 8 marketing and supplying its Plan Administrator services and expanding its network. 9

80.

Plaintiff duly performed all its obligations in accordance with the terms of the

10 Franchise Agreement, except insofar as defendants prevented such performance by their acts or 11 12 13

omissions. 81.,

From and since June 26,2009 and continuing through the present, defendants

breached the Franchise Agreement by (1) continuing to represent themselves as representatives

14 and/or affiliates of TDS, thereby infringing the trademarks and service marks of TDS; 15

(2) continuing to sell financial services to TDS clients without paying 10% of the gross revenue

16

generated; (3) utilizing a rubber signature stamps created without authorization or approval to

17 execute certain compliance documents that only TDS was authorized to execute; and 18

(4) undertaking certain conduct to disparage TDS and interfere with its clients. Plaintiff is

19

informed and believes and thereon alleges that Defendants IRA, ROCAMORA, OLSEN, EBS

20 and KREBS also breached the Franchise Agreement prior to this time by selling financial 21

services to TDS clients without paying 10% of the gross revenue generated by diverting sales in

22 such a manner that prevented TDS from having knowledge that such sales occurred. 23

82.

As a result of defendants' breach of the Franchise Agreement, plaintiff has

24 suffered damage in an amount according to proof. 25 26 27 28 27 COMPLAINT

1

TENTH CAUSE OF ACTION

2

Business Disparagement

3

(Against All Defendants)

4

83.

Plaintiff, TDS hereby incorporates by reference paragraphs 1 through 36 of this

5 Complaint as if fully set forth herein.

6

84.

As specifically identified in paragraphs 33 and 36 of this Complaint, defendants,

7 and each of them, published unprivileged false and disparaging statements of fact about plaintiff 8 TDS and its financial services to third party clients of plaintiff s financial condition, and 9 purported regulatory difficulties. 10

85.

Defendants, and each of them, both individually and in furtherance of their

11

conspiracy, published false and disparaging information with malice, hi that they knew the

12

statements were false, and/or acted in reckless disregard of their truth or falsity, and/or acted

13

with ill will toward plaintiff TDS, and/or intended without privilege to interfere in TDS'

14

economic interests.

15

86.

16 17 18

Defendants' publication of these false, defamatory and disparaging statements of

fact have proximately caused TDS to suffer special damages as set forth in paragraph 37, supra. 87.

As a result of defendants identified false, defamatory, and disparaging statements

of fact, TDS is entitled to special and exemplary damages.

19

ELEVENTH CAUSE OF ACTION

20

Intentional Interference With Contract (Against All Defendants)

21 22 23 24 25

88.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as

though fully set forth herein. 89.

Plaintiff is informed and believes and based thereon alleges that defendants had

knowledge of plaintiff s contracts with third parties that had been entered into for the benefit of

26 plaintiff. 27 28

90.

Defendants intentionally interfered with said contracts by various acts and/or

omissions including, but not limited to, the following: 28 COMPLAINT

1

a.

Those acts described in paragraphs above;

2

b.

Continuing to represent themselves as representatives and/or

affiliates of TDS, thereby infringing the trademarks and service marks of TDS;

3

c.

4

Continuing to sell financial services to TDS clients without paying

10% of the gross revenue generated;

5

d.

6

Utilizing a rubber signature stamps created without authorization

7

or approval to execute certain compliance documents that only TDS was

8

authorized to execute; e.

9

Undertaking certain conduct to disparage TDS and interfere with

its clients;

10 11

f.

Creating conditions adverse to plaintiffs businesses; and/or

12

g.

Other acts and/or omissions, according to proof.

91.

13

Plaintiff is informed and believes that defendants exercised the acts and/or

14 omissions set forth above intentionally and/or with a reckless disregard to the consequences of 15

their conduct; and/or with specific intent to further their own pecuniary interest and to reap

16

unfair financial gains in violation of the trust placed in them by the public, including plaintiff and

17

in violation of their contractual and fiduciary duties, knowing all the while of the damage that

18

would be sustained by plaintiff. 92.

19 20

As a legal result of the acts and/or omissions of defendants against whom this

cause of action is asserted, plaintiff suffered those damages as set forth above. 93.

21

The conduct of defendants against whom this cause of action is asserted as

22 described hereinafter was done with a conscious disregard of plaintiff s rights and with an intent 23

to vex, injure or annoy plaintiff, such as to constitute oppression, fraud or malice pursuant to the

24

Civil Code, Section 3294, and either committed by or authorized, ratified or otherwise approved

25

by officers, directors or managing agents of defendants. Plaintiff is therefore entitled to punitive

26

damages in an amount appropriate to punish, deter or set an example of defendants, and each of

27 them. 28 29 COMPLAINT

1

TWELFTH CAUSE OF ACTION

2

Intentional Interference With Economic Advantage (Against All Defendants)

3 4 5 6

94.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as

though fully set forth herein. 95.

Plaintiff is informed and believe and based thereon allege that defendants had

7 knowledge of the plaintiffs prospective advantageous business relationships and/or 8 opportunities. 9

96.

Defendants intentionally interfered with said relationships and opportunities by

10

various acts and/or omissions including, but not limited to, the following intentional and

11

wrongful acts:

12

a.

Those acts described in paragraphs above;

13

b.

Continuing to represent themselves as representatives and/or

14

affiliates of TDS, thereby infringing the trademarks and service marks of TDS; c.

15 16

Continuing to sell financial services to TDS clients without paying

10% of the gross revenue generated; d.

17

Utilizing a rubber signature stamps created without authorization

18

or approval to execute certain compliance documents that only TDS was

19

authorized to execute; e.

20 21

Undertaking certain conduct to disparage TDS and interfere with

its clients;

22

f.

Creating conditions adverse to plaintiffs businesses; and/or

23

g.

Other acts and/or omissions, according to proof.

24

97.

Plaintiff is informed and believes that defendants exercised the acts and/or

25

omissions set forth above intentionally and/or with a reckless disregard to the consequences of

26

their conduct; and/or with specific intent to further their own pecuniary interest and to reap

27

unfair financial gains in violation of the trust placed in them by the public, including plaintiff and

28 30 COMPLAINT

1

in violation of their contractual and fiduciary duties, knowing all the while of the damage that

2 would be sustained by plaintiff. 98.

3

The aforementioned acts of defendants were wrongful and tortuous independent

4 of the interference itself for the reasons alleged above. 99.

5

As a legal result of the acts and/or omissions of defendants against whom this

6 cause of action is asserted, plaintiffs suffered those damages as set forth above. 100.

7

The conduct of defendants against whom this cause of action is asserted as

8 described hereinafter was done with a conscious disregard of plaintiff s rights and with an intent

9 to vex, injure or annoy plaintiff, such as to constitute oppression, fraud or malice pursuant to 10

C/v/7 Code, Section 3294, and either committed by or authorized, ratified or otherwise approved

11

by officers, directors or managing agents of defendants. Plaintiff is therefore entitled to punitive

12

damages in an amount appropriate to punish, deter or set an example of defendants, and each of

13

them.

14

THIRTEENTH CAUSE OF ACTION

15

Accounting

16

(Against All Defendants)

17

101.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as

18 though fully set forth herein. 19

102.

As set forth above, defendants, and each of them, improperly paid commissions

20 owed under the agreement, improperly diverted business from plaintiff to third parties, and failed 21 22 23

to compensate Plaintiff for the services which plaintiff performed. 103.

The exact amount of money due from defendants to plaintiff for said breaches is

unknown to plaintiff and cannot be ascertained without an accounting of the books and records

24 of said defendants. 25 26 27 28 31 COMPLAINT

1

FOURTEENTH CAUSE OF ACTION

2

Injunctive Relief

3

(Against All Defendants)

4

104.

Plaintiff incorporates by reference Paragraphs 1 through 36 of this Complaint, as

5 though fully set forth herein.

6

105.

Defendants' wrongful conduct as described above, unless and until enjoined and

7 restrained by order of this Court, will cause great and irreparable injury to plaintiff in that such 8 conduct, among other things: (a) is likely to confuse or deceive members of the public and 9 persons in the trade, contrary to fact, that defendants' services are provided by plaintiff IDS, or

10 are licensed, endorsed, sponsored or otherwise authorized by TDS; (b) that defendants and each 11

of their use of the marks that are identical or confusingly similar to TDS' trademarks and service

12

marks will create a likelihood of confusion with plaintiff TDS' services among TDS' customers

13 and members of the consuming public; (c) that defendants and each of their false and 14

defamatory statements will continue to damage TDS' reputation, goodwill and prestige; and

15

(d) intentionally interfere with TDS customer relationships and economic advantage thereby

16

preventing plaintiff from maintaining and/or expanding its business.

17

106.

Plaintiff has no adequate remedy at law for many of the injuries that are

18

threatened in that it will be impossible for plaintiff to determine the precise amount of damage it

19

will suffer if defendants' conduct is not restrained.

20 21 22

PRAYER FOR RELIEF WHEREFORE, plaintiff TDS seeks judgment against defendants, jointly and severally, and other orders as follows:

23

1.

For a preliminary and permanent injunction:

24

(a)

enjoining all defendants, their officers, directors, agents, servants,

25

employees and all persons in active concert and participation with them, from

26 misrepresenting that they, or any of them, are authorized by, related to, affiliated with, or 27 otherwise associated with TDS; 28 32 COMPLAINT

1

(b)

enjoining all defendants, their officers, directors, agents, servants,

2 employees and all persons in active concert and participation with them, from retaining 3 and/or using "IDS", "TAX DEFERRED SERVICES", "THE TDS GROUP, INC." 4 and/or any other trademark or service mark that is confusingly similar to a trademark or 5 service mark owned by TDS; and

6

(c)

enjoining all defendants, their officers, directors, agents, servants,

7 employees and all persons in active concert and participation with them, from 8 misrepresentation and disparagement of plaintiff TDS' financial condition and purported

9 regulatory problems and unfairly soliciting plaintiff TDS' existing representatives, and 10 from interfering with TDS' contracts with and selling to TDS' existing customers the 11 12

financial services provided by plaintiff TDS. (d)

any business cards, payroll fliers, logos, stationery, brochures,

13

advertisements and other marketing materials bearing the infringing trademarks or

14

service marks as set forth above, shall be delivered up for impoundment and ultimate

15

destruction as the Court directs.

16

2.

For general and special damages according to proof at trial, but in any event in an

17 amount in excess of the jurisdictional limit of this Court; 18

3.

For exemplary damages;

19

4.

For the disgorgement by defendants of the amount by which they were unjustly

20 enriched; 21

5.

For attorney's fees;

22

6.

All damages hereunder shall be trebled in accordance with the provisions of 15

23 24 25

U.S.C.§1117;43(a)(l);(c)(l);and 7.

For such other and further relief this Court deems just and proper.

DATED: August 17,2009

LAW OFFICES OF MICHAEL T. STOLLER, APC

26 27 28 COMPLAINT

EXHIBIT A

FRANCHISE A6REBMENT

THIS AGREEMENT Is signed on -.2fl 2002 between TAX DEFERRED SERVICES, INC., a /V/^fc%^y tJorporailon. and COMPLIANCE ADMINISTRATIVE SERVICES, ,180., a .^/jfrfrV^ corporation (the "Franchisor") and THE IRA CENTER, a Califqmla corporation "Franchisee*). BACKGROUND

A. Tha. Franchisor has the right to license certata. ftade^riames, aervfca marks, logos, photographs and indicia or origin. Including the service mark TAX DEFERRED SERVICES," as may be1 designated now or later by the Franchisor (the "Proprietary Marks"). i

B. The Franchisor grants a license to use the Proprietary Marka, and financial planning services operating under the name TAX DEFERRED SERVICES CTDS"). C. The Franchisee deslraa to acquire from the Franchisor arid the Franchisor desires to grant to the Franchisee a license to usa the Proprietary Marks and any financial materials at a specified location wfihtn a designated geographical area, subject to and In accordance with 'the terms of this Agreement (the TDS Franchise"). The parties agrea as follows: 1. GRANT OF LOCATION

1.1 The Franchisor grants to the Franchisee, upon tha terms contained fn this Agreement, the right, and the Franchisee undertakes the obligation, to establish and operate a TD3 Franchise. 1 .2 Tha TD9 Franchise wfH be located solely at 14&88 Union Avenue, San Jose, California 95124 (the location"). The Franchisee may not relocate the TDS Franchise without the written approval of the Franchisor, which approval may not be unreasonably withheld or delayed.

1 .3 The Franchisor agrees that it will not grant another TDS Franchise or establish for itself a company-owned TDS Franchise Swithln the following specified area: Within Santa Clara County

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(the "Designated Territory"). Provided, however, that the Franchises meet Ihe specified sales goals stated in Section 5; and further provided, that the Franchisor, as well as the Franchisor's Affiliates rasarva expressly the right to conduct In Its or their sote discretion any promotional function or actfvfty within or outside of the' Designated Territory, Including, but not limited to," luncheon meetings, sending matter* and other types of promotions. In addition, the Franchisor reserves the right to offer and self any financial products bearing the Proprietary Marks to persons or entities of the Franchisor's own choosing, within the Designated Territory. Further dteflnfflon of "Designated Territory* would be any school district that IDS chooses outside of the Santa Clara County area that TDS requires the Franchisee to provide trained representatives fof purposes of serving that school district, Any sales or accounts that have been opened electronically (vta ths Web) would be considered the Francfeee's right of territorial domain and be commissioned and considered revenue to be received oy the Franchisee. 2.

DUTIES OF THE FRANCHISEE

2,1 During this Agreement, the Franchisee will restrict his or her activities exduaivoiy to financial services for pqb(fe or TDS Franchise, unless otherwise approved- In writing by the Franchisor.— • -- ; -2,2 The Franchisee will obtain all required gcWiment licenses and permits for the establishment and oparatlon'o? the TDS Franchise and maintain these licenses and permits In full force and effect, throughout this Agreement Ths Franchisee will operate the TDS Franchise In compliance with all applicable local, state and federal {statutes, rules, ordinances and regulations and will take prompt and Immediate action to correct any violation stated in any notice issued by any governmental or municipal authority with respect to the establishment and/or operation of the TDS Franchise, The Franchisee will comply with all governmental orders or decrees Issued by any federal, state or local agency with respect to the T05 Franchise. 23 The Franchisee must employ a sufficient nUmber of qualified representatives and other personnel to successfully and efflctentty operate the TDS Franchise including the following; 2.3.1 The Franchisee agrees to maintain; and assure that his or her employees maintain the highest qualify standards of professionalism and Integrity In the operation of the TDS Franchise. 2.3.2 The Franchisee agrees to conduct ongoing training classes for its representatives.

U/21/20.0B. 17:28 <& 004/015

2,3.3 The Franchisee agrees to screen carefully prospective trainees and staff applicants before employment and to employ only those who have good moral character, experience and training. 2.4 The Interior and exterior d6cor of the TDS Franchise, as well as the Location, must be tasteful, In accordance with loc£i community standards and with due regard at all times to the preservation of the dignity and quality associated wfth the Proprietary Mart®. Tfte Franchises will maintain the TDS Franchise premises In the highest degree of cleanliness, attractiveness, orderliness, sanitation and repair, and will make all additions, alterations, repairs and replacements to the premises as may be required for that purpose Including the periodic repainting or replacement of obsolete signs, furnishings, equipment and de*cor as the Franchisor may reasonably direct, 2.5 The Franchisee will operate the TDS Franchise and ail activities fn conformity with the standards, operating procedures and policies stated by the Franchisor, and as- tha Franchisor-may otherwise reasonably prescribe fn writing. 2.6 in order to protect the goodwill associated with the Proprietary Marks, the Franchisee wiii use exclusively the services and products authorized by TDS Products and Services Approval Committee. 2.7 The Franchisee wiil permit the Franchisor ajid Its agents or designated representatives to enter the TDS Franchise, without prior notice, during normal business hours for the purpose of conducting inspections; will cooperate fully wilh the Franchisor's agents or representatives In these inspections by rendering the assistance as they may reasonably request. Upon written notice from the Franchisor, or its agents or representatives, and without BmKJng Hie Franchisor's other rights under this Agreement, the Franchisee wfli take ail steps as may be necessary to correct an/ deficiencies detected during these inspections including Immediately desisting from any action in violation of the requirements Imposed upon the Franchisee by thisAgreement 3.

OBLIGATIONS OF THE FRANCHISOR

'

3.1 Tha Franchisor or Its designated representatives will, upon reasonable request, consult wilh and advise tie Franchisee by mail or by telephone with respect to matters pertaining to Jhe servicing of publio or private schools.

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4.

PEES

4.1 The Franchisee will pay to the Franchisor a continuing fee during this Agreement In an amount equal to ten (10%) percent of the Franchisee's "Gross Revenues". 4.2 "Gross Revenues" means the amount of; all revenue \ received by the Franchisee In the form of commissions from any and all new transactions and from any commissions derived from any and ail busfnesa revenue received from electronic transactions (via the Web) within tha Designated Territory of this Franchise from the date of this Agreement •

4.3 (f any fea or other amount due under this Agreement Is not paid within ten (10) days after the payment Issue, the Franchisee will pay a sen/tea charge equal lo the lesser of the dally equivalent of 13% per year, or tha highest-rate then permitted by applicable few, far each day the amount Is past due. If It Is necessary for the Franchisor to employ an attorney to collect any amount due from the Franchises under this Agreement, the Franchisee agrees to pay ali costs of collection^ Including a reasonable attorney's fee. 5,

RIGHTS TO TERRITORIAL PROTECTION

5,1 v Tbe Franchisee's rights to the Designated Terrf*^ ar^ _gxgres8ly comfitloned upon ^Fie Frgngteejlai&Igtfinfl I cgrtaln annual .quotas or minimum gjTOS__Rgvenuesi|n connection : with the I'Ub Franchise as follows; ~ ~~~— •— Sea Exhibit A attached hereto 5,2 If the Franchisee falls to meet the specified goals stated In Section 5,1 for any __ periods, all of the Franchl84e's rights In and to territorial protection fn the Designated Territory permanently cease and the Franchisor may, In its sole discretion, franchise other TDS Franchises or operate a TDS Franchise within tha Designated Territory. However, all renewal and trailer commissions earned by the Franchisee prior to termination of this Agreement would continue as long as the business stays on the books. All other remaining terms of this Agceement,continue.

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6.

INSURANCE

6.1 The Franchisee agrees to obtain before the cjpenlng of the Franchise, and maintain fn fair force and effect during the Agreement, Errors and Omissions Insurance for any producer representing the Franchisee, • ' "' ''~»*:.--~ "- "-^"' 82 These policies must include, at a minimum (except as additional coverages and higher policy limits are reasonably specified for all franchisees by the Franchisor In writing) the following; i

6.2.1 Errors 4 Omission Insurance to be kept at levels to satisfy Broker Dealer requirements,

8.2.2 Franchises agrees to obtain before opening of the Franchise, and maintain in full force and effeot during this Agreement, general liability insurance naming TDS as additional insured (minimum coverage to be specified by TDS).' 7,

ADVERTISING AND BUSINESS PROMOTION

7.1 AH advertising- and business promotion conducted by th$ Franchisee In any medium (including print video or audio) must be conducted in a tasteful and dignified manner and must be conducted consistent with tha dignity and integrity of the Proprietary Marks, in accordance with good business practices, The Franchisor may, In Its sole discretion, object to and have the right to terminate the Franchisee's use of the Proprietary Marks... ; 7.2 The Franchisee will display the Proprietary Marks In the manner prescribed by the Franchisor Irrhla or her actfvkies and on all stationery, business cards, operational forms and printed signs and all other advertising and promotion materials used In connection with the TDS Franchise. Afl displays of the Proprietary Marks, Including all interior and exterior signs, must dearly state and identify the'Franchisee as a TDS Franchise," In the specific form required by the Franchisor. 7.3 The Franchisee will submit to the Franchisor for approval samples of all advertising and promotional plans and i materials and all other materials and all other materials displaying- the Proprietary Marks that the Franchisee desires to use and that have not •been prepared or previously approved by the Franchisor, The Franchisor has the right to disapprove the plans and materials for failure to be consistent with the goodwill associated with the Proprietary Marks, upon notice In writing to

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the franchisee within thirty (30) days from the date a\ ..acefpt by the Franchisor of the plans and materials. 8.

CONDITIONS OF TRANSFER OH SALE OF INTEREST

8.1 The Franchisor has tho right to transfer or assign IhtsAgreement, and al? or any part of its rights or oblfgatfons in this Agreement, to any person or legal entity. a2 This TDS Franchise Is personal to the Franchisee. Ths Franchisee will not sell, assign, transfer or convey the following without the prior written consent of the Franchisor: 8.2.1 The TDS Franchise; %

8.2.2 Any right or Interest created by this Agreement; 8.2.3 "The ownership interests in the Franchisee; 8.2.4 This Agreement, ff.3 The TD$ Franchise- may not be divided or otherwise segregated and sold or transferred by the Franchisee. The Franchisor will not, however, unreasonably withhold "or delay its consent jto a transfer of the TDS Franchise or any ownership Interests in the Franchisee, provided that all of the following-conditions are met before jthe time of the proposed transfer: J "

"**1 '

»

8.3.1 All of the Franchisee's acenjed monetary obligations to the Franchisor have been satisfied; 8.3.2 The Franchisee's right to receive compensation must • be subordinated and secondary to the Franchisor's' rights to receive compensation and have satisfied any outstanding monetary obligations or other outstanding obligations 'due from the Franchisee; 6.3.3 If permitted by applicable (aw, the Franchisee must sign a general release under seal, In a form satisfactory to the Franchisor, of ail claims against the Franchisor and Its affiliates, and each of their officers, directors, shareholders and employees, in their corporate and individual capacities, including claims arising under federal, state and local laws, rules and ordinances;

HA1

&008/015

•

8.5.4 The transferrea must demonstrate to t,' Franchisor's satisfaction that he or she meets the Franchisor's i educational, managerial and business standards, possesses a good aptitude, moral character, business reputation and ability ;as may be evidenced by prior related business experience or otherwise; has adequate financial resources and capital to own and operate the TDS Franchise and has no material, prior unresolved problems related to financial planning services. The Franchisee will provide the Franchisor with any Information that the Franchisor may reasonably require to make Its determination concerning each proposed transfer. 8.3.5 The transferee must sign (and/or, upon the Franchisor's request, cause an Interested parties, to sign) the Franchisor's then-current standard form franchise agreement and other ancillary agreements as th$.Hranchfsor may require; and 6.3.6 The Franchisor must receive fully signed copies of ad documents fn connection with the proposed transfer including a completed standard franchise application form, together with all requited supporting documentation. The failure i to submit the Information required In the Franchisor's then-currant standard' application form, Including alt required supporting'documentation, Is reasonable grounds for rejection of the proposed transfer.

•

8.4 Any purported assignment, transfer, conveyance or encumbrance of the TDS Franchise, any right or Interest created In this Agreement, or of any ownership Interest in the Franchisee* without.the written consent of the Franchisor, is null and void,land results in termination of this Agreement, as stated in Article 9. 8.5 The Franchisor's consent to a transfer of any interest granted in this Agreement does not constitute a waiver of any claims the Franchisor may have against the transferring party, nor Deemed a waiver of the Franchisor's rights to demand exact compliance' with any of tha terms of this Agreement by the transferee. 8.6 It Is agreed that since. Franchjsee has beeh an Integral part of brinolno this Franchise toJniltion. upon anv sale of tTDS. Franchisee shall have tha gotten of being a. part of the safe; tha value to be negotiated between TDS and tha Franehisae known as The IRA Center0, 9.

DEFAULT AND TERMINATION

9.1 Except as otherwise provided by applicable law, the Franchisee will be deemed to be In default under this Agreement, and this

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Agreement and all rights granted In this Agreement wii. automatically terminate without opportunity to cure and without notice by the Franchisor to the Franchisee, If the Franchisee files any petition in* bankruptcy, voluntary or Involuntary. 9.2 Except as otherwise provided by applicable law, the Franchisee will be deemed In default under Ibis Agreement and the Franchisor may, at its option, terminate this Agreement and all rights granted in this Agreement without affording the Franchisee any opportunity to cum the default, with the termination effective Immediately upon the earlier of receipt of notice of termination by the Franchisee or, If the notice of termination Is deposited by the Franchisor in-United States mails, certified mail; then five (5) days after ths mailing by tijie Franchisor, upon ths occurrence of any of the. following events: d.2.1 The Franchisee becomes Insolvent' or, in Franchisor's reasonable opinion, the Franchisee cannot fulfill his or her obligations to TDS cfient or to One Franchisor, as provided in this Agreement; s\ • 9.2.2 The Franchisee makes an asisfgnrnent'for the banafit of his or her creditors; The Franchisee admits in writing his or her Inability to pay his or her debts generally as they become due; 9.2.4 The Franchisee suffers temporary or permanently appointed receivership; 9.2.5 The Franchisee Is convicted of a felony or any other crime or offense, including any violation of SEC rules, that Is reasonably likely, in the sole opinion of the Franchisor, to adversely affect the Franchisor, the Proprietary Marks, or the goodwill associated with the Proprietary Marks; 9.2,8 The Franchisee attempts to, or purports to, transfer any rights, or obligations under this Agreement, or otherwise, to any third party, contrary to the terms of Article 8; 9.2.7 The Franchisee fans to comply with the covenants stated In Article 11; 8.2.8 The Franchisee, falfe to pay 10% of; the Franchisee's gross revenue or other payments on specific due dates to Franchisor.

09/28/2004 TOE

•a 010/015

9.3 Except as stated In Sections 9.1 and 9.2, v it except as otherwise provided by applicable law, the Franchises has 3p days after receipt from the Franchisor of a written notice of default within which to remedy a default of any of the terms of this Agreement, as stated in the written notice'of default, and provide written evidence of (cure to the satisfaction of the Franchisor, if the notice of default Is deposited by the Franchisor in United States mails, certified mall, then receipt will be presumed 5 days after- majiing by the Franchisor, if arty default is not cured within the SO day period (or longer period as appfip^ble law may. otherwise require), the Franchisor may, at its option, terminate this Agreement and all rights granted in this Agreement without affording the Franchises any further opportunity to cure the default, with termination to be effective immediately upon the depositing -of the notice of termination by the Franchisor In the United States Mail, certified mail. 10.

OBLIGATIONS UPON TERMINATION

Upon the termination of thte Agreement by either the Franchises or the Franchisor, by operation* of law, the Franchisee's obligations am as follows: 10.1 The Franchisee will Immediately cease to operate the TDS Franchise and Is- prohibited thereafter from either directly or indirectly representing himself or herself to the public, or to any person, that he or she \3 a present or former TDS Franchisee. 10.2 The Franchisee will Immediately and permanently cease to use, by advertising or any other manner, the trademarks, trade names, setvtaa marks, signs, structures and other forms of adverting and indicia as a TD3 Franchisee, including ail materials and articles displaying the Proprietary Marks and agrees to turn over ai( discs, systerns, trade secrets and any other material? provided by TDS without duplication or copying. 10.3 The Franchisee must take all action as may be required to cancel all assumed names or equivalent fictlHoua name registrations relating to use of the Proprietary Marks and any other related marks in connection with TDS Franchise. ' 10.4 Ths Franchisee will not use any reproduction, counterfeit, copy or other imitation of the Proprietary Marks that arp likely to cause confusion, mistake or deception, or to dilute the Franchisor's exclusive rights In and to the Proprietary Marks, nor utilize any designation of origin or description or representation falsely suggesting or-'representing an association or connection with the Franchisor which constitutes unfair competition, in any business which it may thereafter engage.

03/25/2004 TUB 12:10

17:28

IS 011/016

10,5 The Franchisee will promptly pay all sums! owing to the Franchisor. The Franchise* will also pay all damages, costs and expense^ Including reasonable attorns/a f^es incurred byfthe Franchisor as a result of a default by the Franchisee which resulted fn termination of this Agreement, Including all fees and caste In obtaining InjcmcHve or other relief for the enforcement of the Franchisee's obligations In Jhls Article, 11.

COVENANTS

11.1 The Franchisee agrees that during tha term of this Agreement, except as otherwise approved In writing by'the Franchisor, which approval wili not be unreasonably withheld or delayed, die Franchisee will personally devote his or her full time, energy and best efforts to the management and operation of the TDS Franehfee, 11.2 TTia Franchisee agrees that during the term of this Agreement, tha Franchisee will not, either directly or indirectly, for himself or herself, or through, on behalf of, or In conjunction Mth any person, persons, partnership or corporation: 11.2.1 Divert of attempt to divert any business or customer \ from the TDS Franchise to any competitor, by 'direct or Indirect \ inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks; ^/ 11.2.2 Employ or seek tq employ any person, who is at that time currently employed by any other TDS Franchise or had been employed by any other TDS Franchise in the pijevious ninety (90) days, or directly or indirectly, Induce that person to leave his or her employment, without the written consent of the current or previous employer of tha person; 11.2.3 Own, maintain, engage in or haveiany Interest In any business specializing, in whole or in part, financial planning services, other than as a TDS Franchisee. 12.

INDEPENDENT CONTRACTOR AND INDEMNIFICATION

12.1 It is agreed by the parties mat this Agreement does not create a fiduciary relationship between or amend them'. The Franchisee is an independent contractor. Nothing in this Agreement fs Intended to constitute or construe tha Franchises as an agent, jegal representative,

09/28/2004

17:30

10012/015

subsidiary, Joint venture, partner, affiliate, employee 01 .servant of the Franchisor for any purpose. 12.2 (t Is agreed that nothing in this Agreement Authorizes the Franchisee to mate any contract, agreement, warranty or representation on the Franchisor's behalf, or to Incur any debt or other obligation in the Franchisor's name* Tha Franchisor will not assume liability for, or be deemed liable under this Agreement, as a result of any action, or by reason of any act or omission of the Franchisee, his or her employees or agent, In hls-or her conduct of the TDS Franchise, 12.3 The Franchises indemnifies the Franchisor, Us parent company and its affiliates, as well as their respective officers, employees, partners, directors and shareholders (for purposes of this Section only, all are (collectively, the "^Company") and holds the Company, and each of them, harmless from, against, for and in respect of any damages, losses, obligations, liabilities, claims, deficiencies, costs and expanses, Including reasonable attorney's lees and other costs and expenses. Incident to any suit, action, Investigation, claim or proceeding
The establishment and operation of the TDS The TDS Franchise;

(c) Any suit, action, deJm or proceeding brought by any person or entity within the Designated Territory during the term, and renewals with respect to the TDS Franchise irrespective of when the claim arose; (d) Any failure by tha Franchisee to observe or perform his or her covenants and agreements slated in this Agreement; or (e) Any injury to, or loss of property ot, any clients of the TDS Franchise, Alf of the Compan/s Losses must be satisfied fay cash payments from the Franchisee to the Company. The Franchisee will, In writing, nbtify the Franchisor immediately as to any suit, action, Investigation, claim or proceeding for whfch indemnification might be claimed fay the Company, or any of them. Upon receipt of any notice of SUB, action, Investigation, claim or proceeding for which indemnification might be claimed by Ihe Company, or any of them, the Company

11 TUB

.17:30 1^013/016

will ba entitled promptly to defend, prosecute, contest or oth'eiwM protect itself, by counsel of its own choosing, at the Franchisee's aote cost and expense. The Franchises has the right to select hJa or her own counsel; provided, that attorney's fee£ and costs for this counsel are pafd by the Franchisee. The Company Is entitled to control the defense or prosecution of the ImgaBon, unteas the Company has consented In writing to -oftow the Franchisee to control the litigation, 13.

NOTICES

Any notices required or permitted under this Agreement must be in writing and be personally delivered or mailed by certified or registered mail, return receipt requested, to tha respective parties at the following addresses unless and until a different address has been designated by written notice to the other party: Notices to the Franchiser

With a copy to;

Mr, Al Wickers a Mr. Doug Holt Tax Deferred Services, inc. 6740 Windmill Way, #16 Carmlchael, CA 96608

Counsel for TDS: ..'

..

,

* :_..

i

,

Notices to the Franchisee: Mr. Randy Scfanna, on behalf of The IRA Center. Ino. 14388 Union Avenue San Jose, CA 95124 14.

ENTIRE AGREEMENT

This Agreement and the documents .referred to in this Agreement constitute the entire, full and complete agreement between tf)e Franchisor and tha Franchisee concerning the subject matter of ihis Agreement, awUupersede all prior agreements. No other representations have been made by tha Franchisor or its agents to induce the Franchisee to sign this Agreement, No amendment, change or variance from this Agreement is binding on either party unless mutually agreed to In writing by the parties and signed by their authorized officers or agents in writing. TAX DEFERRED SERVICES, INC.

IRACi

By.

09/2S/Z004 TUB

fc:W

ITX/SI NO 8487) @013

SUM-100 !^$
SUMMONS (CITACION JUDICIAL)

,..

.

R, a Californi

ara t ion ;

Gowl CM Calif OT

NOTICE TO DEFENDANT:

TA

• • |Lffn(tw

FINANCIAL, EEC a Califorfiia limited . .lability

lit ,and

Us r-

re

YOb ARE BEING SUE~6 BY PLAINTIFF: (LO ESTA DEMANDANDO EL DEMANDANTE):

THE TDS GROUP, INC., a California Corporation as successor in all rights and interest to TAX DEFERRED SERVICES, INC., <=. <^ WW7; ^ Cot pc NOTICE! You have been sued The court may decide against you without your being heard unless you respond within 30 days Read the information below You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff A letter or phone call will not protect you Your written response must be in proper legal form if you want the court to hear your case There may be a court form that you can use for your response. You can find these court forms and more information at the California Courts Online Self-Help Center (www courtinfo ca gov/selfhelp), your county law library, or the courthouse nearest you. If you cannot pay the filing fee, ask the court clerk for a fee waiver form If you do not file your response on time, you may lose the case by default, and your wages, money, and property may be taken without further warning from the court There are other legal requirements. You may want to call an attorney right away If you do not know an attorney, you may want to call an attorney referral service If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program You can locate these nonprofit groups at the California Legal Services Web site (www.lawhelpcalifomia org). the California Courts Online Self-Help Center (www courtmfo ca gov/setfhelp), or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and costs on any settlement or arbitration award of $10,000 or more in a civil case The court's hen must be paid before the court will dismiss the case iAVISO! Lo ban demandado. SI no responds dentro do 30 dias. la corte puede deadir en su centre sin escuchar su version Lea la mformaaon a continuation Tiene 30 DiAS DE CALENDARIO dospues de que le entreguen esta cttacton y papeles legates para presenter una respuesta por escnto en esta corte y haoer que se entregue una cop/a al demandants Una carte o una llamada telafonlca no to protegen Su respuesta por escnto dene que ester en tomato legal correcto si desea que procesen su caso en la corte. £s posible que haya un formulario que usted pueda usar parasu respuesta Puede enoontrar estos formulanos de la corte y mis information en el Centro de Ayuda de las Cortes de California (www.sucorte.ca gov), en la biblioteca de /eyes de su condado oenla corte que le quede mas oerca Si no puede pagar la cuota da presentation, pida al secretano de la corte que ledeun fbrmulano de exenoon de pago de cuotas Si no presenta su respuesta a tiempo, pueda perder el caso por incumplimiento y la corte le podra gutter su sueldo, dinero y bienes sin ma's advertentia. Hay otros requisites legates Es recomendable que Name a un abogado mmediatamente Si no conoce a un abogado, puede llamar a un servttio de remision a abogados Si no puede pagar a un abogado, es posible que cumpla con los requis/tos para obtener sennctos legates gratultos de un programa de sennaos legates sin fines de lucro Puede encontrar estos grupos sin fines de lucro en el sitio web de California Legal Services, (www lawhelpcalifomla orgj, en el Centro de Ayuda de las Cortes de California. (Www.sucorte ca govj o poniendose en contacto con la corte o el coteg/o de abogados locales. A VISO. Por ley. la corte tiene derecho a reclamar las cuotas y los costos exentos por importer un gravamen sobre cualqwer recuparacion de $10.000 6 mas de valor recibida mediante un acuerdo o una concesion de arbitrate en un caso de derecho cMI Tiene que pagar el gravamen de la corte antes de que la corte pueda desechar el caso

The name and address of the court is(B nombre y direccton da la corte es)

CASE NUMBER. (HumerofclCaco).

SACRAMENTO SUPERIOR COURT, 720 Ninth Street Sacramento, CA 95814 The name, address, and telephone number of plaintiffs attorney, or plaintiff without an (El nombre, la direccidn y el numero de te/eforo del abogado del demandant Michael T. Stoller, Esq. 9454 Wilshire Bvd. #500, Beverly Hi DATE

tfe que no tiene abogado, es) 18-226-4040 .Deputy (Adjunto)

AUG 1 7 2009

(For proof of service of this summons, use Proof of Service of Summons (form POS-OfOTi (Para pmeba de entrega de esta dtatidn use el formulario Proof of ServiceW Summons [SEAJJ

NOTICE TO THE PERSON SERVED: You)

1. I 2 |

I as an individual defendant | as the person sued under thefictrtjousname of (specify).

3 I

i on behalf of (specify)

under L__l CCP 416 10 (corporation) CCP 416 60 (minor) I I CCP 416 20 (defunct corporation) CCP 416 70 (conservatee) LI CCP 416 40 (association or partnership) |~~~) CCP 416 90 (authorized person) L" I other (specify)4 I I by personal delivery on (date) Page I oft Form Adopted for Mandatory Use Judicial Council of Caftomra SUM-100 [Rev July t 2009]

SUMMONS

Code of Owl Procedure §§412 20 465 mmcouiSntoagov Arrwncan LegalNet, Inc

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO ORDER DETERMINING DISPOSITION OF EX PARTE APPLICATION Case Number

Case Name

IK IRA Type of Application

By

Names of Appearing Party

Representing

Application

A The Court, having considered the above entitled ex parte application with appearance as noted above, rules as follows:

Qwithout a hearing

[after hearing

D The application is granted

The application is denied on the merits of the papers presented to the Court.

The application is denied without prejudice to its resubmission for the following reason(s)-

D The,moving party may not proceed except by noticed motion. O^Dther

D Counsel for the

I order.

AUG 18 2009 DATE CI-150 (10/2006) ORIGINAL-CASE FILE

JUDGE OF THE~§URE£I0R COURT YELLOW-SUBMITTING PARTY

PINK-OFFICE COPY

The court deems the ex parte application to be a motion for preliminary injunction and sets this matter for hearing on its regular law and motion calendar on September 15, 2009 at 9:00 a.m. The following briefing schedule shall apply: Plaintiff shall file and serve all Exhibits/Notice of Errata to Loy Douglas Holt on all defendants by August 20, 2009. To the extent plaintiff has not already done so, it shall serve complete copies of its ex parte papers and this Order on all named defendants by August 20, 2009. Proof of service of this Order and Exhibits/Notice of Errata shall be filed by August 24, 2009. Defendants shall file and serve via fax or email their Opposition to the Motion for Preliminary Injunction by September 2, 2009. Plaintiff shall file and serve via fax or email its Reply by September 10, 2009.

t

t 4

MICHAEL T. STOLLER, ESQ. SBN 120241 LAW OFFICES OF MICHAEL T. STOLLER, APC 9454 WILSHIRE BLVD., SUITE 500 BEVERLY HILLS, CALIFORNIA 90212 Telephone: 818-226-4040 Facsimile: 818-226-4044

ILEDX

i i i~i r~i <—r^r"t [J U l"\T7c U

AUG } 8 2009 By.

5 Attorneys for Plaintiff

Ao—J A. O'Donnell

6 7 8

SUPERIOR COURT OF THE STATE OF CALIFORNIA

9

COUNTY OF SACRAMENTO

10 11 12

CASE NO. 34-2009-00055591

THE TDS GROUP, INC., a California ) Corporation, as successor in all rights and ) interest to TAX DEFERRED SERVICES,) INC., a California Corporation,

[Complaint filed 8-17-09]

13 Plaintiffs,

14 15 16 17 18 19 20 21 22 23 24 25 26

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Concurrently Filed With Supporting Declarations and Proposed Order]

vs. THE IRA CENTER, a California Corporation; RANDY SCIANNA, an individual; RENE ROCAMORA, an individual; REBECCA OLSEN, an individual; EMPLOYEE BENEFIT SERVICES, INC., a California Corporation; WILLIAM L. KREBS, an individual; PENSION PLANNERS SECURITIES, INC., a California Corporation; GINA DUREYA, an individual; BAR FINANCIAL, LLC a California Limited Liability Company; ANTHONY TARANTINO, an individual,) JOHN BRACKETT, an individual, ERIC ) A. HUCK, an individual and DOES 1100, inclusive,

Date: August 18,2009 Time: 2:15 p.m. Dept: 54

Defendants.

27 28

i EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSF

f 1

TABLE OF CONTENTS

2 3 4

6 7

Table of Contents

i

Table of Authorities

ii

Memorandum of Points & Authorities

4

I.

Introduction

4

II.

Factual Background

4

A.

The TDS Logo

4

B.

TDS and IRS/Krebs Entered Into An Agreement Authorizing Them To Use The TDS Propriety Marks

7

PPS/DUREYA Intentionally Interferes With TDS Customers and TDS Representatives (Sales) Force

9

D.

Smear Campaign

11

E.

Termination of IRA and KREBS

15

8 9 10

12 13

C.

14 15 16 17 18

III.

Argument

21

IV.

An Injunction May Be Granted Pursuant To Business And Professions Code §§ 17204 And 17535 And Under California's Code Of Civil Procedure Restraining An Act To Prevent Irreparable Harm To The Moving Party

21

Any Balancing Of Equities Clearly Favors The Granting Of The Injunctive Relief Being Requested

23

Conclusion

23

20 21 22

IV.

23 24 25 26 27 28

V.

t TABLE OF AUTHORITIES

1 2 3 Codes

4 California Code of Civil Procedure § 527(c)(l)

4

Cal. Code Civ. Proc. §527.6

4

Business & Professions Code §17203

21

Business and Professions Code §§ 17200 and 17500

21

9 Business and Professions Code §§ 14330 and 143 3 5 (a)

22

5 6 7 8

10 11

Cases

12

Brockey v. Moore (2003) 107 Cal App 4th 86, 102, 131 Cal Rptr 2d 746 page 14

21

14

Hewlett v. Squaw Valley Ski Corp. (1997) 54 Cal App. 499, 540, 63 Cal.Rptr.2d 118

21

15

Barquis v. Merchants Correction Ass 'n (1972)

13

16

7Cal.3d94, 111

22

17 People ExRel. Moskv. National Research Co. of Calif. (1962) 201 Cal.App.2d 765, 771

22

18 19 20 21

Courtesy Temporary Service, Inc. v. Camachio (1990) 22 Cal.App.3d 1278.)

23

Mutual Pharmaceutical Co. v. Ivax Pharmaceuticals 459 F.Supp.2d 925 (C.D. Cal. 2006)

23

22 23 24 25 26 27 28

n

f 1

I

4

MICHAEL T. STOLLER, ESQ. SBN 120241 LAW OFFICES OF MICHAEL T. STOLLER, APC 9454 WILSHIRE BLVD., SUITE 500 BEVERLY HILLS, CALIFORNIA 90212 Telephone: 818-226-4040 Facsimile : 818-226-4044

5

Attorneys for Plaintiff

2 3

6 7 8

SUPERIOR COURT OF THE STATE OF CALIFORNIA

9

COUNTY OF SACRAMENTO

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

THE TDS GROUP, INC., a California ) Corporation, as successor in all rights and ) interest to TAX DEFERRED SERVICES, ) INC., a California Corporation, ) ) Plaintiffs ) \ ( vs ' ) THE IRA CENTER, a California ) Corporation; RANDY SCIANNA, an ) individual; RENE ROCAMORA, an ) individual; REBECCA OLSEN, an ) individual; EMPLOYEE BENEFIT ) SERVICES, INC., a California ) Corporation; WILLIAM L. KREBS, an ) individual; PENSION PLANNERS ) SECURITIES, INC., a California ) Corporation; GFNA DUREYA, an ) individual; BAR FINANCIAL, LLC a ) California Limited Liability Company; ) ANTHONY TARANTINO, an individual,) JOHN BRACKETT, an individual, ERIC ) A. HUCK, an individual and DOES 1) 100, inclusive, ) Defendants.

CASE NO. 34-2009-00055591 [Complaint filed 8-1 7-09] EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Concurrently Filed With Supporting Declarations and Proposed Order] Date: August 18, 2009 Time: 2:15 p.m. Dent' 54

)

97 /. /

28 1 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

t 1 2 3 4

COMES NOW, Plaintiff, TAX DEFERRED SERVICES, INC., a California corporation, as successor in all rights and interest to TAX DEFERRED SERVICES, INC., a California Corporation, (hereinafter "TDS") and complains against THE IRA CENTER, a

5

California Corporation (hereinafter "IRA"); RANDY SCIANNA (hereinafter "SCIANNA"), an 6 7

individual; RENE ROCAMORA ("hereinafter "ROCAMORA"), an individual; REBECCA

8

OLSEN (hereinafter "OLSEN"), an individual; EMPLOYEE BENEFIT SERVICES, INC., a

9

California Corporation (hereinafter "BBS"); WILLIAM L. KREBS, an individual (hereinafter

10 11

"KREBS"); PENSION PLANNERS SECURITIES, INC., a California Corporation, (hereinafter "PPSI"); GINA DUREYA, an individual, (hereinafter "DUREYA"); BAR FINANCIAL, LLC

12

(hereinafter "BAR"); ANTHONY TARANTINO (hereinafter "TARANTINO"); JOHN 13 14

BRACKETT, an individual; ERIC A. HUCK, an individual and DOES 1-100, inclusive, as

15

follows: THE TDS GROUP, INC., a California corporation, as successor in all rights and

16

interest to TAX DEFERRED SERVICES, INC., a California Corporation (hereinafter "TDS"),

17

hereby applies for a temporary restraining order restraining Defendants THE IRA CENTER, a

18

California Corporation (hereinafter "IRA"); RANDY SCIANNA (hereinafter "SCIANNA");

19

RENE ROCAMORA (hereinafter "ROCAMORA"); REBECCA OLSEN (hereinafter

20

"OLSEN"); EMPLOYEE BENEFIT SERVICES, INC., a California Corporation (hereinafter 21

EBS"); and WILLIAM L. KREBS (hereinafter "KREBS") from engaging in any and all of the 23 24

following acts: (a)

enjoining all Defendants from misrepresenting that they, or any of

25

them, are authorized by, related to, affiliated with, or otherwise associated with

26

TDS;

27 28

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

(b)

enjoining all Defendants from retaining and/or using "IDS", "TAX

2

DEFERRED SERVICES", "THE TDS GROUP, INC." and/or any other trademark

3

or service mark that is confusingly similar to a trademark or service mark owned

4

by TDS; and

5

(c)

enjoining all Defendants from misrepresentation and disparagement of

6

plaintiff TDS' financial condition and purported regulatory problems and unfairly

7

soliciting plaintiff TDS' existing representatives, and from interfering with TDS'

8

contracts with and selling to TDS' existing customers the financial services provided

9

by TDS.

10

Plaintiff TDS further applies for an order to show cause why a preliminary injunction

11

should not be granted enjoining the above named Defendants, their agents, servants, and

12

employees from committing the above-described acts during the pendency of this action.

13

This Ex Parte Application is made on the grounds that pecuniary compensation would

14

not afford the adequate relief to Plaintiff TDS; and that the relief requested is justified under

15

Code of Civil Procedure §§ 527(c)(l) and 527.6, and Business and Professions Code

16

§§ 17204 and 17535; and the Federal Latham Act and this court's equitable powers. Great

17

and irreparable harm will result to Plaintiff unless a temporary restraining order is issued

18

enjoining Defendants from committing the acts outlined above since Defendants have created

19

confusion in the market place by unduly using Plaintiffs trade name and trademark and have

20

made false disparaging remarks to plaintiffs' customers which have resulted in some of them

21

terminating their agreement with plaintiff.

22

This Ex Parte Application is based upon this Application; the attached Memorandum

23

of Points and Authorities in support thereof; the Declarations of Loy Douglas Holt and

24

Alonzo Wickers filed concurrently herewith, as well as such other and further oral and

25

documentary evidence as may be presented at the time of the hearing.

26

DATED: August 17, 2009

LAW OFFICES PF MJ£HAEL T. SJOLLER, APC

27 28

IAEL T. STOI Attorneys for Plaintiff EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f MEMORANDUM OF POINTS AND AUTHORITIES

1

2 I. 3

INTRODUCTION Plaintiff TDS' ex parte application for a temporary restraining order, being filed

4 concurrently with its application for an Order to Show Cause re preliminary injunction, is 5 engendered by the threat of imminent harm to TDS' current and future business. 6

This is an action by plaintiff TDS against defendants, IRA, SCIANNA,

7 ROCAMORA, OLSEN, KREBS and BBS who have and continue to infringe TDS' 8 trademarks and service marks; who have and continue to make misrepresentations in the 9 marketplace that are damaging to TDS' reputation, and its existing and prospective economic 10

advantage; and who have and continue to interfere with TDS' customer relationships and

11

otherwise to compete unfairly and unlawfully with TDS, and with the assistance of

12

defendants GINA DUREYA (hereinafter "DUREYA"), PENSION PLANNER

13

SECURITIES, INC. (hereinafter "PPSI"), ANTHONY TARANTINO (hereinafter

14

"TARANTINO"), JOHN BRACKETT (hereinafter "BRACKETT"), ERIC A. HUCK

15

(hereinafter "HUCK") and BAR FINANCIAL, LLC (hereinafter "BAR") as co-conspirators

16

with the goal of putting TDS out of business.

17

A temporary restraining order ("TRO") may also issue in connection with an

18

application for a preliminary injunction where it appears from the facts shown by affidavit

19

that "great or irreparable" harm will occur before the matter can be heard on notice,

20

California Code of Civil Procedure § 527(c)(l), and where harassment and intimidation of

21

individual witnesses is shown to exist. (Cal. Code Civ. Proc. §527.6.) Such is the case here.

22

II.

FACTUAL BACKGROUND

23

(As set forth in the attached Declaration of Alonzo Wickers (hereinafter "Wickers")

24

at paragraphs 5-11, the following events occurred):

25 26

A.

The TDS Logo

Beginning in or about 1979, TDS has been a Plan Administrator, as that term was

27

commonly known, which provides administrative services to non-profit Public Schools,

28

County Offices of Education and/or Community Colleges throughout the United States 4 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

f

(hereinafter "School Districts"). Typically, members of these groups are school employees

2 who are eligible to create certain defined contribution retirement plans, commonly known as 3 Internal Revenue Code section 457 or 403(b) Plans. These Plans allow school employees to 4 save money from their earnings and to purchase certain financial products from life insurance 5 companies and mutual funds. Plaintiff, TDS serves as a Plan Administrator which provides 6 services that include, among other things, being the Compliance Administrator for the 7 various defined contribution plans, which plans require compliance with federal and state tax 8 regulations, and being the common remitter (i.e., monthly gross payments from the schools 9 are allocated and paid to each vendor that has established a financial product for an 10

individual teacher). By virtue of these contracts, TDS has become the financial advisor to

11

the teachers and end participants. In addition to the Plan Administrator Services, these

12

contracts provide that TDS shall be the exclusive plan provider for 457 accounts. Over time

13

TDS has developed a reputation as a trustworthy source of information and a reliable

14

endorsement of other companies that provide financial services.

15

Since 1979, Plaintiffs predecessor adopted the trademarks and/or service marks "Tax

16

Deferred Services" and "TDS", which it clearly imprinted on business cards, payroll flyers,

17

logos, stationery, brochures and other marketing materials that were extensively and

18

continuously utilized to promote and provide its services and financial products. On or about

19

July 14,2006 THE TDS GROUP, INC. was formed (hereinafter "THE TDS GROUP"),

20

which became the successor in all rights and interest to TAX DEFERRED SERVICES, INC.

21

and which adopted the trademark and/or service mark "THE TDS GROUP, INC." which it

22

clearly imprinted on business cards, payroll fliers, logos, stationery, brochures and other

23

certain marketing materials that were used to provide its services and financial products.

24

Plaintiff has extensively and continuously used THE TDS GROUP trademark and service

25

mark in the marketing and sale of services and financial products since July 14,2006 and has

26

continued to use the trademarks and service marks TAX DEFERRED SERVICES, INC. and

27

TDS, as well.

28

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

I 1

Plaintiff TDS has extensively advertised and promoted the trademarks and service

2 marks "TAX DEFERRED SERVICES", "TDS" and "THE TDS GROUP" nationally to 3

Public Schools, County Offices of Education and/or Community Colleges and teachers

4 through the United States, through various methods of advertisements. As a result of these 5 activities the public, including non-profits, School Districts, County Offices of Education 6 and/or Community Colleges and teachers through the United States, has come to know of 7 TDS and recognize these trademarks and service marks as being associated exclusively with 8 plaintiff TDS. Plaintiffs TDS trademarks and service marks are an asset of inestimable 9 value to TDS, representing and embodying its goodwill and favorable reputation. 10

In order to provide Plan Administrator services to the various School Districts,

11

County Offices of Education and Community Colleges, TDS entered into agreements with

12

certain entities and individuals to act as representatives of TDS and licensed the use of its

13

trademarks and service marks (hereafter, the TDS representatives).

14

In addition to providing the Plan Administrator services, the principals of TDS were

15

also licensed to sell financial products including life insurance and securities and in that

16

capacity developed a network of licensed representatives to sell certain financial service

17 products to school employees that included, among other things, life insurance and annuities. 18

In order to facilitate providing these services, TDS entered into an arrangement with a

19

Broker/Dealer who was positioned over the entire network of TDS licensed representatives.

20

The Broker/Dealer would receive commissions from the various life insurance companies

21

and mutual funds and pay TDS and the respective TDS representatives their shares of

22

commission realized from any sale of financial products. To assist the Broker/Dealer in

23

administration of the financial products being purchased and the payment of the fees

24

associated with them, the Broker/Dealer appointed one of the principals of TDS as the Office

25

Supervisor Jurisdiction ("OS J") who supervised all the Broker/Dealer representatives and the

26

quality of the financial products sold under the Broker/Dealer, which enabled him to earn a

27

greater portion of the commission revenue generated.

28

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f Over the past 30 years that TDS has been in business it has controlled the change of

1

2

Broker/Dealers for its network on several occasions, always able to transfer its Book of

3

Business to the new Broker/Dealers and a principal of TDS always remaining the OSJ. On or about September 2002, TDS changed its Broker/Dealer to defendant Pension

4 5

Planners Securities, Inc. ("PPSI") which was owned by defendant DUREYA. At that time as

6

usual, a principal of the Plaintiff was the OSJ to assist her in administration. And further,

7

PPSI approved the TDS activity as the Plan Administrator when adopting the TDS principals

8

as licensed agents along with the network of licensed representatives that were loyal to TDS

9

and would operate under the PPSI Broker/Dealer license. B.

10

TDS AND IRA/KREBS ENTERED INTO AN AGREEMENT AUTHORIZING THEM TO USE THE TDS PROPRIETARY MARKS

11 12

On or about August 30, 2002, Plaintiff TDS ("Franchisor") and defendants,

13

SCIANNA, ROCAMORA and IRA ("Franchisee") entered into a Franchise Agreement to

14

assist TDS in marketing and providing its Plan Administrator services and expanding its

15

network. A true and correct copy of the Franchise Agreement is attached to the Declaration

16

of Alonzo Wickers and incorporated herein as Exhibit "A," which provides, among other

17

things:

18

"A. The Franchisor has the right to license certain trade names,

19

trademarks, service marks, logos, photographs and indicia or (sic) origin,

20

including the service mark "Tax Deferred Services", as may be designated

21

now or later by the Franchisor (the 'Proprietary Marks')."

22

"B. The Franchisor grants a license to use the Proprietary Marks and

23

financial planning services operating under the name TAX DEFERRED

24

SERVICES ("TDS")."

25

"C. The Franchisee desires to acquire from the Franchisor and the

26

Franchisor desires to grant to the Franchisee a license to use the Proprietary

27

Marks and any financial materials at a specified location within a designated

28

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

geographical area, subject to and in accordance with the terms of the

2

Agreement (the "IDS Franchise")."

3

"2. DUTIES OF THE FRANCHISEE

4

2.1 During this Agreement, the Franchisee will restrict his or her

5

activities exclusively to financial services for public or private education at

6

the TDS Financial Franchise unless otherwise approved in writing by the

7

Franchisor."

8 9

"2.6 In order to protect the goodwill associated with the Proprietary Marks, the Franchisee will use exclusively the services and products

10

authorized by TDS Products and Services Approval Committee."

11

"4. FEES

12

4.1 The Franchisee will pay to the Franchisor a continuing fee during

13

this Agreement in an amount equal to ten (10%) percent of the Franchisee's

14

'Gross Revenue'."

15

"8. CONDITIONS OF TRANSFER OR SALE OF INTEREST

16

8.4 Any purported assignment, transfer, conveyance or encumbrance

17

of the TDS Franchise, any right or interest created in this Agreement, or if any

18

ownership interest in the Franchise, without the written consent of the

19

Franchisor, is null and void, and results in termination of this Agreement as

20

stated in Article 9."

21

"9. DEFAULT AND TERMINATION

22

9.2 Except as otherwise provided by applicable law, the Franchise

23

will be deemed in default under this Agreement and the Franchisor may, at its

24

option, terminate this Agreement and all rights granted in this Agreement

25

without affording the Franchisee any opportunities to cure the default, with

26

the termination effective immediately upon the earlier of receipt of notice of

27

termination by the Franchisee or, if the notice of termination is deposited by

28

the Franchisor in the United States mails, certified mail, then five (5) days 8 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

after the mailing by the Franchisor, upon the occurrence of any of the

2

following events:

3

9.2.6 The Franchisee attempts to, or purports to, transfer any

4

rights or obligations under this Agreement, or otherwise, to any third party,

5

contrary to the terms of Article 8; 9.2.7 The Franchisee fails to comply with covenants stated in

6 7

Article 11; 9.2.8 The Franchisee fails to pay 10% of the Franchisee's gross

8 9

revenue or other payments on specific due dates to Franchisor."

10

Article 11 Covenants provides:

11

"11.2 The Franchisee agrees that during the term of this Agreement,

12

the Franchisee will not either directly or indirectly, for himself or herself, or

13

through, on behalf of, or in conjunction with any person, persons, partnerships

14

or corporation: 11.2.1 Divert or attempt to divert any business or customer

15 16

from the TDS Franchise to any competitor, by direct or indirect inducement

17

or otherwise, or do or perform, directly or indirectly, any other act injurious or

18

prejudicial to the goodwill associated with the Proprietary Marks." [Emphasis

19

added.]

20

From on or about August 30,2002, up through September, 2008 the defendants IRA

21

and KREBS operated under the terms and conditions of the Franchise Agreement without

22

incident. (Wickers Dec. para. 9.)

23

C. PPSI/DUREYA INTENTIONALLY INTERFERE WITH TDS'

24

REPRESENTATIVES (SALES FORCE) AND CUSTOMERS

25

On or about August, 2008, defendant DUREYA sold her brokerage business PPSI to

26

defendant BAR Financial. BAR Financial was at that time the OSJ for Financial Network

27

Investment Corporation (hereinafter "FNIC"), a Broker/Dealer and wholly owned subsidiary

28

of ING. (Holt Dec. para 5). The effect of this transaction was to impose FNIC as the

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

replacement Broker/Dealer for the Book of Business of TDS without continuing the OSJ

2

provided by TDS.

3

About September 2008, upon the completed acquisition of defendant PPSI by

4

defendant BAR Financial, TDS was notified by defendant DUREYA, as an officer of BAR,

5

that FNIC rejected the Plan Administrator services by TDS and that a business affiliate of

6

FNIC, through its parent ING, specifically "ING Plan With Ease," would be taking over the

7

Plan Administrator services for all of the TDS clients. The intended outcome of this change

8

was to eliminate TDS as a competitor to the defendants by putting them out of business.

9

TDS refused to relinquish its position as Plan Administrator and further, the

10

principals of TDS refused to relinquish their positions as licensed sales representatives of

11

financial products, thereby challenging the influence of defendants BAR and DUREYA over

12

the existing force of representatives that had formerly shown allegiance to TDS (sometimes

13

referred to as the TDS representatives). Concurrent with the threat posed by defendants BAR

14

and DUREYA, TDS requested that BAR and DUREYA make a bulk transfer of the Book of

15

Business to its new chosen Broker/Dealer, Questar Capital Corporation (hereinafter

16

"Questar"), and advised all of its representatives that all further business would be conducted

17

through Questar. Questar had accepted the Plan Administrator services of TDS, unlike BAR

18

and DUREYA. (Holt Dec. para 7).

19

While DUREYA initially agreed to allow the TDS principals to block transfer its

20

Book of Business, as was the custom in the industry, the defendants reversed their position

21

and notified the TDS principals they would not make a block transfer of their clients to their

22

new Broker/Dealer Questar. (Holt Dec. para 8).

23

On or about September, 2008, when Mr. Holt (a principal of TDS) attempted to move

24

his clients to Questar, as his new Broker/Dealer, defendants BAR and DUREYA

25

intentionally interfered by refusing to make a bulk transfer of his Book of Business. In

26

addition, the TDS representatives were notified by defendants BAR and DUREYA that

27

28 10 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f

t 1

unless they stayed with DUREYA and BAR they would lose the stream of commissions they

2 were entitled to from the prior financial products sold. (Holt Dec. para 9). 3

Consequently, all of the IDS representatives, for fear of losing their commissions, stayed

4 with defendants DUREYA and BAR. 5

Plaintiff is informed and believes, and based thereon alleges, that defendant PPSI

6 promised defendant BAR and FNIC that it could deliver all of the TDS clients which 7 included 356 California Schools, to ING's Plan With Ease and all of the 457 plan assets that 8 exceeded over $100 million, if they would buy defendant PPSI. Defendant PPSI schemed to 9 accomplish this by attempting to force TDS to give up its Plan Administrator Business which 10

it had been conducting over the last 30 years and specifically, authorized by defendant PPSI

11

for the previous 6 years, but thereafter took the contrary position that TDS' business was

12

unauthorized once defendant PPSI had been acquired by BAR Financial and FNIC. (Holt

13

Dec. para 10).

14

D.

15

In order to deliver the TDS clients (i.e., 365 California Schools), and 457 plan assets

SMEAR CAMPAIGN

16

(over $100 million) to BAR and FNIC, defendant DUREYA and the other defendants,

17

conspired, schemed, planned and executed with the defendants, and each of them, a

18

campaign against TDS with the intention to drive the TDS clients and representatives away

19

which would cause it to go out of business since all commissions would not be paid and TDS

20

would lose its income. Included in this conspiracy campaign and scheme were statements

21

made by defendant DUREYA and the other defendants, and each of them, together with

22

actions taken in TDS' name which were not authorized by TDS as follows:

23

(1)

On or about January 22, 2009, defendant OLSEN, while under

24

contract as a TDS representative and required to be loyal to TDS, contacted Virginia

25

Casanovas at the Cambrian Elementary School District and told her that she would

26

find them a new Plan Administrator. (Holt Dec. para 1 l,p.4).

27 28 11 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

t 1

(2)

In February, 2009, defendant ROCAMORA told all the IRA

2

representatives that IDS would be out of business in the next 3-4 months, and that

3

they were moving all the districts to a new Plan Administrator; (Holt Dec. para 11,

4

p.4).

5

(3)

In February 2009 and continuing to the present, defendant DUREYA

6

visited and/or contacted every TDS advisor/representative in the network and warned

7

they should not go to Questar, the new Broker/Dealer, knowingly, falsely stating that

8

TDS was in severe financial trouble and threatened that if they did try to transfer their

9

accounts to Questar, the clients would not be transferred to Questar and the

10 11

representatives would lose their commissions; (Holt Dec. para 11, p.5). (4)

On or about March 18, 2009, defendant DUREYA contacted a new

12

Plan Administrator, Great American Plan Administrators, Inc., to replace TDS,

13

knowing that TDS had contracts with the various School Districts had the exclusive

14

solicitation rights for employees' 457 plans; (Holt Dec. para 11, p.5).

15

(5)

About April 10, 2009, defendant KREBS developed a flyer for the

16

Visalia School District promoting the sale of a financial service without TDS' or

17

Broker Dealer approval, which was contrary to the terms of the agreement with TDS

18

and a violation of securities regulations; (Holt Dec. para 11, p.5.

19

(6)

On April 10, 2009, Defendant KREBS sent a letter to School

20

Employees appearing to instruct them to contact TDS as the Plan Administrator

21

regarding compliance questions, while in fact surreptitiously directing them to call his

22

office directly, all of which was contrary to the agreement with TDS; and falsely

23

representing to the employees that he was authorized to conduct compliance; (Holt

24

Dec. para 11, p.5).

25

(7)

On or about April 23, 2009, defendants TARANTINO, BRACKETT,

26

KREBS ROCAMORA, BAR and IRA organized a conference call to discuss

27

replacing TDS as the Plan Administrator with ING as the Plan Administrator coupled

28 12 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

I 1

with the common remitting business through defendant BAR and FNIC; (Holt Dec.

2

para ll,p.5).

3

(8)

On or about May 7, 2009, Alonzo Wickers, CEO of IDS,

4

spoke with Dianne Johnson, a TDS representative in Tennessee, who reported

5

she was contacted by defendants TARANTINO and BAR and told that "TDS

6

would be going out of business in 60 to 90 days." She asked how that was

7

possible and defendant TARANTINO stated that many of the TDS

8

representatives were going to leave TDS and transfer TDS' School District

9

clients to a new 403(b) Plan Administrator, which would result in TDS losing

10

its commissions paid to Alonzo Wickers, and they would not be able to stay in

11

business when this income stopped. Defendant TARANTINO further advised

12

that he was sponsoring a meeting through BAR Financial to facilitate this

13

outcome in San Francisco and asked her to attend; (Wickers Dec. para. 11)

14

(9)

On or about May 13, 2009 through June 24, 2009, defendants KREBS,

15

ROCAMORA and DUREYA contacted each other to set up a private meeting without

16

any principal of TDS present to further coordinate the scheme, plan and conspiracy to

17

put TDS out of business; (Holt Dec. para 11, p.6).

18

(10)

On or about June 19,2009 the defendants held a meeting with the

19

network of TDS advisors/representatives, unbeknownst to plaintiff, to further explain

20

that TDS was going out of business, and that TDS would be replaced with a new Plan

21

Administrator, National Benefit Services, whose representatives were introduced

22

during the meeting; (Holt Dec. para 11, p.6).

23

(11)

On or about May 15, 2009, defendants KREBS and ROCAMORA

24

held a compliance seminar, specifically with the Santa Clara County Office of

25

Education (COE), which was done without TDS' authorization, knowledge or

26

consent; (Holt Dec. para 11, p.6).

27 28

(12)

On or about June 22, 2009, defendants ROCAMORA and EBS sent an

email requesting defendant KREBS to provide a "more specific head count of the

13 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

participating or eligible participants in his districts" with the understanding that to

2

collaborate with NBS as the group's new Plan Administrator, under a three-party

3

agreement; (Holt Dec. para 11, p.6).

4

(13)

On or about June 22, 2009, defendants DUREYA and BAR in

5

furtherance of their nefarious goal to replace TDS with NBS as the new Plan

6

Administrator, negotiated fees and charges that vendors should pay for the Plan

7

Administrator services; (Holt Dec. para 11, p.6).

8 9 10 11

(14)

On or about June 24, 2009, defendant KREBS forwarded to the other

defendants, all the documents necessary to replace TDS as the Plan Administrator with NBS. (Holt Dec. para 11, p.7). (15)

On or about June 23, 2009, defendants TARANTINO and

12

BAR advised TDS representative James Adjar that he would lose his

13

commissions on his clients if he moved to Questar, the new Broker/Dealer;

14

(Holt Dec. para 11, p.7)

15

(16)

On or about June 15, 2009, TDS had a telephone conference

16

with all of its representatives during which all representatives were advised

17

that Questar was the new Broker Dealer, and that all representatives would

18

need to confirm, in writing by June 22, 2009, that they were on board or

19

would be terminated at that point; (Holt Dec. para 11, p.7).

20

(17) On or about June, 2009, defendants DUREYA and KREBS, during a

21

conference call with the TDS network of representatives invited, knowingly and

22

falsely stated that TDS had serious financial troubles and that the TDS

23

representatives would be taunted by allegations of embezzlement unless they

24

distanced themselves in a hurry from TDS; (Holt Dec. para 11, p.7).

25

(18)

Alonzo Wickers, TDS'principal, had regulatory and

26

compliance problems and that he was being audited by the SEC. (Wickers

27

Dec. para 10)

28 14

EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

t

t 1

E. TERMINATION OF IRA AND KREBS

2

On or about June 26, 2009 IDS, after not getting confirmation that defendants IRA,

3

ROCAMORA, OLSEN and KREBS had transferred to Questar, IDS notified defendants

4 IRA, ROCAMORA, OLSEN and KREBS in writing that they had been terminated as IDS 5 representatives and requested that they cease and desist from representing themselves as 6 being affiliated with TDS and that they should return all TDS promotional literature and 7 marketing materials that utilized IDS' trademarks and service marks.

8

This notice of termination was issued by plaintiff TDS after defendants IRA, BBS,

9 ROCAMORA, OLSEN and KREBS decided they would not come over to TDS' new 10 11

Broker/Dealer, Questar. (Holt Dec. para 13; Ex. O). Plaintiff is informed and believes and based thereon alleges that, despite these written

12

notices, defendants IRA, BBS, ROCAMORA, OLSEN and KREBS have continued to

13

represent themselves as representatives and/or affiliates of TDS, thereby infringing the

14

trademarks and service marks of TDS; having continued to sell financial services to TDS

15

clients without paying 10% of the gross revenue generated; have utilized a rubber signature

16

stamps created without authorization or approval to execute certain compliance documents

17

that only TDS was authorized to execute and have undertaken certain conduct to disparage

18

TDS and interfere with its clients which includes, among other things, the following:

19

(a)

advising TDS clients, specifically School Districts, County

20

Offices of Education and Community Colleges, that TDS was in severe

21

financial trouble, that checks were being returned NSF from the common

22

remitting TDS provided, that one of the TDS principals (Alonzo Wickers) had

23

regulatory compliance problems, and that TDS was going out of business;

24

(b)

advising TDS clients, specifically Public Schools, County

25

Offices of Education and Community Colleges, that they should move their

26

Plan Administration business from TDS to National Benefit Services that

27

defendants would become affiliated with;

28 15 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

I 1

(c)

contacted TDS clients, specifically school employees in

2

various School Districts, who were already in 457 plans and resold and/or

3

contracted them to 403 (b) plans, which provided no benefit to the school

4

employees but allowed the defendants to earn a new commission (which is

5

considered illegal churning), and redirect the client from TDS; (d)

6

as set forth more specifically in the Holt Declaration

7

(paragraph 14, pp. 8-12) the defendants, acting as agents for each of them as

8

part of and in furtherance of the conspiracy, made the foregoing statements to

9

the following clients: (1)

10

On June 23, 2009, IDS' President, Loy Douglas Holt,

11

met with Linda Dempsey, Chief Business Officer (CBO) of Monrovia Unified

12

School District and was told by her that Defendant KREBS told her that TDS

13

was changing Plan Administrators and left brochures for NBS, as the new

14

Plan Administrator; (2)

15

On June 23, 2009, Mr. Holt also met with Ken Prosser,

16

Assistant Superintendent of Fiscal Services and with Tom Etchart, Director of

17

Finance for the Ventura County Office of Education and was told that

18

defendant KREBS had given a presentation to the School District

19

representatives stating that TDS was going with a new Plan Administrator,

20

NBS;

21

(3)

On June 29, 2009, Mr. Holt met with Margie

22

Gustafson, County Office of Education (COE) for San Mateo, who stated that

23

defendant OLSEN came to meet her under the auspices of representing TDS

24

(and presented a TDS business card), and stated that TDS was going to a new

25

Plan Administrator, NBS, and left her brochure for NBS;

26

(4)

On June 24, 2009, Mr. Holt also met with several

27

representatives of Union Unified School District, specifically Nimrat Johnal

28

(Santa Clara County COE), Nan Wijcik (CBO), Rita Sohal, Serena Glancy 16 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

and Linda Rode (Payroll Department of Union USD) to discuss their concerns

2

over the rumors they heard from defendants IRA, OLSEN, ROCAMORA and

3

BBS that IDS had certain financial problems which included, among other

4

things, common remitting checks being returned for non-sufficient funds

5

(NSF), regulatory compliance audit problems and were confused as to who to

6

deal with on plan compliance, since the defendants had directed them to deal

7

with the local San Jose office directly;

8

(5)

On June 30, 2009, Mr. Holt spoke with Rhonda Wang,

9

Assistant Comptroller of Foothill De Anza Community College District, and

10

was told that she heard from representatives of defendant IRA that TDS was

11

in financial distress;

12

(6)

On July 1, 2009, Mr. Holt met with Chris Jew,

13

Assistant Supervisor of Business Services for Oak Grove Elementary School

14

District and was told that defendant IRA's representatives stated that TDS was

15

having financial difficulties and that checks were being returned NSF from the

16

common remitter account;

17

(7)

On July 1, 2009, Mr. Holt met with Joanne Chin of

18

Franklin McKinley Unified School District and was told that she had heard of

19

the financial rumors and was told by a representative of defendant IRA, EBS,

20

OLSEN and ROCAMORA, that all compliance for Plan Administration

21

should be sent to defendant's local office rather than to TDS' corporate office;

22

(8)

On July 1, 2009, Mr. Holt also met with Jim Luyau,

23

Assistant Supervisor of Business Services for the Santa Clara Unified School

24

District, who advised that Doris Luang, a TDS representative of defendant

25

IRA, OLSEN, ROCAMORA and EBS stated that TDS was having financial

26

difficulties and that they should deal directly with the local San Jose office;

27 28

(9)

On July 1, 2009, Mr. Holt also met with Tina Tsu,

Director of Fiscal Services for Berryessa Union School District, who stated 17 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f

t 1

that she had recent phone calls from defendant IRA's representative that

2

advised TDS was having financial trouble and was having checks returned

3

from the common remitter account for NSF; (10)

4

On July 1,2009, Mr. Holt also met with Julie Swanson

5

(CBO) for Cambrian Elementary School District, who stated that she had

6

heard from defendant IRA's representatives that TDS had fiscal problems, and

7

was having vendor checks returned NSF from the common remitter account

8

and was having vendor checks returned NSF from the common remitter

9

account; (11)

10

On July 1, 2009, Mr. Holt also met with Alejandra San

11

Miguel, Human Resources for Campbell Union Elementary School District,

12

who stated that defendant OLSEN on behalf of defendants IRA and BBS

13

previously came to her office and advised that all plan compliance had to be

14

done at the local San Jose office and provided return envelopes that reflected

15

the same, which caused her confusion as to who to direct the plan compliance

16

to;

17

(12)

On July 7, 2009, Mr. Holt met with Cathy Grovenberg,

18

Assistant Supervisor of Business Services for Santa Clara (COE) who stated

19

that representatives of defendant IRA had told her that TDS was in financial

20

trouble, that vendor checks were being returned NSF from the common

21

remitter account and that it was under audit and relayed that there was a rift

22

created between the local San Jose office and the corporate office;

23

(13)

On July 9, 2009, Mr. Holt and three other

24

representatives of TDS attended a Multiple District County meeting in Santa

25

Clara, that was attended by over 30 representatives throughout the county that

26

was called by Nimrat Johnal, to discuss the rumors spread by the defendants,

27

specifically defendants IRA, ROCAMORA, OLSEN, BBS and KREBS, that

28

TDS had financial problems, that it had vendor checks returned NSF from its 18 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1

common remitter account, that it had regulatory and compliance problems and

2

TDS had done illegal activities; (14)

3

On July 9, 2009, Mr. Holt spoke with Julie McCarthy a

4

representative from the Brisbane School District who advised that she had

5

received a telephone call from defendant OLSEN on July 8, 2009, during

6

which she requested to meet to discuss moving the School District to another

7

Plan Administrator because of the financial troubles TDS was having. Ms.

8

McCarthy stated that she was unaware of any problems TDS was having until

9

she received the phone call from defendant OLSEN. (15)

10

On July 17,2009, Mr. Holt spoke with Ann Jones

11

(CBO) of the San Jose Unified School District who stated that representatives

12

from defendant IRA had advised that TDS had regulatory compliance issues

13

and was being audited, had financial troubles which included checks returned

14

NSF;

15

(16)

On July 17, 2009, Mr. Holt met with Jerry Kerr,

16

Assistant Supervisor of Business for Eastside Union High School District and

17

Vida Branner-Sidess and Jill Kaufman (representatives of East Side Union

18

HSD), who attended the Santa Clara COE meeting on July 7, 2009 and

19

wanted further confirmation concerning the rumors raised regarding TDS'

20

financial troubles;

21

(17)

On July 17, 2009, Mr. Holt met with Margie Gustafson

22

(COE) of San Mateo and approximately 30 other representatives and CBO's

23

of the district to discuss the rumors they heard from the representatives of

24

defendants IRA, OLSEN and ROCAMORA regarding TDS' financial and

25

regulatory problems and whether TDS had returned vendor checks.

26 27

(18)

On July 17, 2009, Mr. Holt spoke with Vicky Rinehart,

Superintendent of Knightsen School District, who stated that TDS had

28 19 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

I

f 1

financial and regulatory audit issues that she had heard from representatives of

2

defendants IRA, OLSEN and ROCAMORA.

3

(19)

On July 1 7, 2009, Mr. Holt spoke with Nancy

4

Anderson, Director, Moreno Valley Unified School District who stated that

5

she had heard from representatives of defendants IRA, OLSEN,

6

ROCAMORA and KREBS that IDS was having financial difficulties and

7

that defendant KREBS had told her vendor checks were being returned NSF,

8

that TDS was being audited by the SEC and Mr. Wickers had failed a

9

compliance audit; She thereafter contacted several other districts and was told

10

the information was inaccurate;

11

All of the foregoing representations made by defendants were false, were known by

12

the defendants to be false or were made without any reasonable belief to the truth of the

13

matters stated at the time they were made, and were made with the intent to disparage and

14

harm its reputation and to cause economic harm to TDS.

15

In the last several weeks TDS has received 12 written termination notices from

16

School Districts, Schools and Municipalities. The anticipated loss of revenue from these

17

clients is approximately $346,000 over the next five years. In comparison, over the last three

18

years TDS lost only one customer which was due to a new school administrator bringing in a

19

plan administrator it had a previous relationship with. (See Holt Dec. para 17-18).

20

Additionally, the defendants have started to go to the teachers redirecting their

21

investments from TDS. By way of example in Santa Clara County, TDS suffered $40,000 in

22

redirecting of employee investments. This diversion provides no benefit to the employee and

23

only commissions to the sales agent and is therefore considered illegal churning. Unless

24

defendants' conduct is immediately stopped, the defendants' statement that TDS will go out

25

of business will become a reality and it will face the potential loss of millions of dollars. (See

26

Holt Dec. para 17- 18).

27 28

20 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f 1 2

III.

ARGUMENT The court in Brockey v. Moore (2003) 107 Cal App 4th 86, 102, 131 Cal Rptr 2d 746 a

3 4

case involving false advertising), reiterated that trial courts have "great latitude in protecting the

5

public and making the victims of unfair competition whole." It further recognized that

6

"A trial court may issue an injunction where a person has

7

committed a past unlawful practice (emphasis in the original)."

8

Id. at 103.

The court may also enjoin future conduct under Business & Professions Code §17203

9 10

in that:

11

"The remedial power granted under this section is

12

'extraordinarily broad'. Probably because...unfair business

13

practices can take many forms, the Legislature has given the

14

courts the power to fashion remedies to prevent their "use or

15

employment" in whatever context they may occur. (Citation

16

omitted) This power "necessarily includes the authority to

17

make orders to prevent such activities from occurring in the

18

future

19

Cal App. 499, 540, 63 Cal.Rptr.2d 118 (emphasis added).

20

IV.

" See Hewlett v. Squaw Valley Ski Corp. (1997) 54

AN INJUNCTION MAY BE GRANTED PURSUANT TO BUSINESS AND

21

PROFESSIONS CODE §§ 17204 AND 17535 AND UNDER CALIFORNIA'S

22

CODE OF CIVIL PROCEDURE RESTRAINING AN ACT TO PREVENT

23

IRREPARABLE HARM TO THE MOVING PARTY.

24

Injunctive relief is one of the principal remedies available for violations of Section 17200

25

and 17500 of the Business and Professions Code Sections 17204 and 17535 permit injunctions to

26 27

be sought by "any person acting for the interest of itself, its members, or the general public. In suits brought by private parties, injunctions may be sought by ... any person ... who has

28 21 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

1

suffered injury in fact and who has lost money or property as a result of such unfair

2 competition." 3 4

The Legislature "intended ... to permit courts to enjoin ongoing wrongful business conduct in whatever context such activity might occur." (Barquis v. Merchants Correction Ass 'n

5 6 7

(1972) 7 Cal.3d 94, 111.) Equitable relief such as injunctions apply to, but are not limited to, business competitors. (People Ex Rel. Mosk v. National Research Co. of Calif. (1962) 201

8 Cal.App.2d765,771.) 9 10 11

Additionally, California Business & Professions Code sections 14330 and 14335(a) provide additional grounds for the requested injunctive relief, as follows: Section 14330

12 "Likelihood of injury to business reputation or of dilution of the distinctive

13 14

quality of a mark registered under this chapter, or a mark valid at common law,

15

or a trade name valid at common law, shall be a ground for injunctive relief

16

notwithstanding the absence of competition between the parties or the absence of

17

confusion as to the source of goods or services."

18

Section 14335(a)

19

"Any person who uses or unlawfully infringes upon a mark registered under this

20 chapter or under Title 15 of the United States code, other than in an otherwise

21 22

noninfringing manner, either on the person's own goods or services or to

23

describe the person's own goods or services, irrespective of whether the mark is

24

used primarily as an ornament, decoration, garnishment, or embellishment on or

25

in products, merchandise, or goods, for the purpose of enhancing the commercial

26 27

value of, or selling or soliciting purchases of, products, merchandise, goods, or services, without prior consent of the owner of the mark, shall be subject to an

28 injunction against that use by the owner of the mark." 22 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

f Plaintiff has alleged and provided declarations supportive of its claims under Business

1

2

and Professions Code §§ 17200, 17500, 14330 and 14335(a). Consequently, injunctive relief is

3

appropriate and necessary.

4 5 6 7

Further, it is well settled that non-privileged communications that would reflect negatively on a business' reputation and cause it economic losses, when rendered to the business' customers, are enjoinable. (Courtesy Temporary Service, Inc. v. Camachio (1990) 22 Cal.App.3d 1278.)

8 9 10 11 12

Injunctive relief is similarly available under the Lanham Trademark Act of 1946, for both misappropriation of the fruits of another's labors and trade disparagement. (Complaint, Fourth and Fifth Causes of Action.) (Mutual Pharmaceutical Co. v. Ivax Pharmaceuticals 459 F.Supp.2d 925 (C.D. Cal. 2006).) V.

13

ANY BALANCING OF EQUITIES CLEARLY FAVORS THE GRANTING OF THE INJUNCTIVE RELIEF BEING REQUESTED.

14

The injunctive relief requested does not cause any prejudice to the Defendants. Rather,

15 16 17

the activities which Plaintiff seeks to enjoin are those which Defendants could not lawfully engage in; i.e., trade liable and disparagement and use of TDS' trademark and service marks,

18

including on business cards and disparaging and false statements as to Plaintiffs financial

19

conditions and the presence of regulatory problems cannot cause this kind of prejudice to

20

Defendants that should be considered in balancing the equities. The potential prejudice to

21

Plaintiff, on the other hand, is enormous, as it has had its reputation disparaged, lost its sales

22

representatives and have had customers terminate their contracts and lost business; as set forth in 23 24

the Holt Declaration, paragraphs 11 and 14; faces a potential loss of business in the millions of

25

dollars; Holt Declaration, para 18.

26

VI.

27 28

CONCLUSION In view of the foregoing points and authorities, it is respectfully submitted that unless a

temporary restraining order is issued and an order to show cause re: preliminary injunction is 23 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

t

t 1

entered in this case, TDS will suffer irreparable harm and possibly the destruction of its entire

2 business, whereas no prejudice will be caused to Defendants by the granting of the requested 3 4

relief. DATED: August 17, 2009

LAW OFFICES OF MICHAEL T. STOLLER, APC

5

6 7 8

Attorneys for Plaintiff

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE

1

DECLARATION RE EX PARTE NOTICE

2 3 4

f

I, ANNE VAN COTT, declare: 1.

I am a paralegal employed by the office of plaintiff s attorney, Michael T.

5

Stoller. I am over the age of eighteen years and not a party to the within action. I have

6

personal knowledge of the matters herein and, if called as a witness, I can competently

7

testify to the same.

8

2.

On August 17, 2009, at the request of plaintiffs attorney, I telephoned the

9

following parties and gave notice that plaintiff would be seeking ex parte relief on 10 11

Tuesday, August 18, 2009 at 2:15 p.m. in Department 54 of the Sacramento Superior

12

Court in the matter The IDS Group. Inc. v. The IRA Center, etc., et al. , Case No. 34-

13

2009-00055591. I explained that the ex parte was for a restraining order enjoining all

14

defendants from using the TDS trademarks as well as disparagement of TDS.

15 16

(a)

At 10:17 a.m. on August 17, 2009 I telephoned defendant inpropria

persona Bill Krebs at 805-965-4774 extension 102 and left a voice mail giving ex parte

17 18 19

notice with time date and department, and the reason for same. (b)

At 10:20 a.m. on August 17, 2009 I telephoned attorney Roger

20

Brothers of the McNamara Law Firm, representing defendants, BAR Financial, LLC, John

21

Brackett, Eric A Huck, Anthony Tarantino, Gina Dureya and Pension Planners Securities,

22

Inc., at 925-939-5330 and spoke with his secretary, Janice and gave ex parte notice with

23

time date and department, and the reason for same.

24

(c)

At 10:22 a.m. on August 17, 2009 I telephoned attorney Sheela Deen

25 26

of the Hoge, Fenton, law firm representing defendants, The IRA Center, Rene Rocamora,

27 28 1 DECLARATION RE EX PARTE NOTICE

1

Rebecca Olsen, Randy Scianna and Employee Benefit Services, at 408-287-9501 and

2

spoke with her assistant, Stephanie and gave ex parte notice with time date and

3

department, and the reason for same.

4 5 6 7 8

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed this 17th day of August, 2009 at Calabasas, California. ANNE VAN COTT

9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28

DECLARATION RE EX PARTE NOTICE

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ROGER J. BROTHERS (State Bar No. 118622) TONYA R. DRAEGER (State Bar No. 223047) MCNAMARA, DODGE, NEY, BEATTY, SLATTERY, ' PFALZER, BORGES & BROTHERS LLP 1211 Newell Avenue Post Office Box 5288 Walnut Creek, CA 94596 Telephone: (925) 939-5330 Facsimile: (925) 939-0203 Attorneys for Defendants PENSION PLANNERS SECURITIES, INC., a California Corporation; GINA DUREYA, an individual; BAR FINANCIAL, LLC a California Limited Liability Company; ANTHONY TARANTINO, an individual, JOHN BRACKETT, an individual, ERIC A. HUCK, an individual

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SUPERIOR COURT OF CALIFORNIA, COUNTY OF SACRAMENTO

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Defendants.

19 20 21 22 23 24

Case No. 34 - 20CPDEFENDANTS OPPOSITION TO APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE FOR PRELIMINARY INJUNCTION

vs. THE IRA CENTER, a California Corporation; RANDY SCIANNA, an individual; RENE ROCAMORA, an individual; REBECCA OLSEN, an individual; EMPLOYEE BENEFIT SERVICES, INC., a California Corporation; WILLIAM L. KREBS, an individual; PENSION PLANNERS SECURITIES, INC., a California Corporation; GINA DUREYA, an individual; BAR FINANCIAL, LLC a California Limited Liability Company; ANTHONY TARANTINO, an individual, JOHN BRACKETT, an individual, ERIC A. HUCK, an individual and DOES 1-100, inclusive

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THE TDS GROUP, INC., a California Corporation, as successor in all rights and interest to TAX DEFERRED SERVICES, INC., a California Corporation,

27

Defendants BAR Financial, LLC, a California limited liability corporation, John Brackert,

28

Eric Hull, Anthony Tarantino (collectively "BAR"), Pension Planners Securities, Inc. ("PPSI")

1

and Gina Dureya ("Dureya") submit the following memorandum of points and authorities in

2

opposition to the ex parte application for a temporary restraining order and order to show cause

3

for preliminary injunction filed by The IDS Group, Inc. ("IDS"). BAR, PPSI and Dureya shall

4

be referred to hereinafter collectively as "Defendants".

5

As set forth below, a temporary restraining order and an order to show cause for

6

preliminary injunction are not warranted. The specific legal and factual grounds and supporting

1

authority are outlined below.

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LEGAL ANALYSIS

8 9

A temporary restraining order is issued in order to prohibit the acts complained of,

10

pending a hearing on whether the plaintiff is entitled to a preliminary injunction. (See, Cal Code

11

Civ Proc. §527.) Temporary restraining orders may be granted ex parte if it appears from the

12

facts set forth in the affidavit or declaration or the verified complaint that great or irreparable

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injury would result to the applicant before the matter could be heard on notice. (Cal. Code Civ.

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Proc. §§527(c)(l).)

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Trial courts evaluate two interrelated factors when deciding whether or not to issue a

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restraining order: Whether the plaintiff will prevail on the merits at trial and the interim harm that

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the plaintiff is likely to sustain if the restraining order were denied as compared to the harm that

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the defendant is likely to suffer if the restraining order were issued. (Church of Christ in

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Hollywood v. Superior Court (2002) 99 Cal.App.4th 1244, 1251 - 1252.)

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The trial court's determination must be guided by a 'mix' of the potential-merit and interim-harm factors; the greater the plaintiffs showing on one, the less must be shown on the other to support [a restraining order].... Of course, '[t]he scope of available preliminary relief is necessarily limited by the scope of the relief likely to be obtained at trial on the merits.' ... A trial court may not grant a [restraining order], regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim.

25

(Id. citing Butt v. State of California (1992) 4 Cal.4th 668, 678, citations omitted.)

26

TDS is attempting to obtain a TRO in order to restrain Defendants from disparaging TDS.

27

However, nothing in the moving papers supports TDS' claims that Defendants have disparaged

28

TDS, that TDS will prevail on the merits of its claim for disparagement or the need for immediate

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action to avoid irreparable injury. In fact, if action is necessary in the short amount of time that

2

this matter may be heard on proper notice, why did TDS wait to file this ex parte application.

3

A.

TDS will not prevail on the merits of is disparagement claim at trial.

4

TDS is asserting a claim of disparagement against BAR, PPSI and Dureya as the

5

foundation for ordering a temporary restraining order. However, TDS has not, in its moving

6

papers, and cannot, show that BAR, PPSI and/or Dureya disparaged TDS.

7

Disparagement is defined in Black's Law Dictionary as: "A false and injurious statement

8

that discredits or detracts from the reputation of another's property, product or business."

9

(Black's Law Diet. (7th ed. 1999) p. 483, col. 2.) Webster's defines disparage as "to lower in

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esteem or reputation" or "to speak slightingly of." (Webster's Third New International Dictionary

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(unabridged 1993). The American Heritage Dictionary further discusses "disparagement" in the

12

context of its synonyms.

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Disparage, along with numerous other verbs, conveys that the sense "of as being of little value or

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importance." In this context, "disparage" often involves "the communication of a low opinion."

15

(Id. at p. 486, col. 2.)

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(American Heritage Dictionary (3rd ed. 1992) p. 536, col. 2.)

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In order to be actionable, disparagement must be not only false and derogatory, it must be

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express and not merely implied.

18

Cal.App.3d 766, 774.)

(Nichols v. Great American Ins. Companies (1985) 169

19

TDS, through the declaration of Douglas Holt, recounts meetings held by BAR, PPSI or

20

Dureya to discuss commissions for representatives; the transfer of Plan Administrators; meetings

21

with School Districts; third party conversations and the fact that Defendants took part in

22

conference calls not attended by TDS, in order to claim ,that Defendants disparaged TDS.

23

However, nothing TDS has set forth in its Ex Parte (as hereinafter defined) supports the claim that

24

any express derogatory statements regarding TDS have been made. Without factual support for

25

the contention that Defendants have made disparaging remarks regarding TDS, TDS cannot

26

prevail on the merits at trial. If TDS has not shown that it can prevail on the merits at trial, TDS

27

has not met its burden for the granting of a temporary restraining order. Thus, TDS's request for

28

a temporary restraining order should be denied. 3

1

B.

TDS has Failed to Establish the Immediate Irreparable Injury Necessary for Granting an Ex Parte Application for Temporary Restraining Order.

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Vague and ambiguous facts or facts alleged on information and belief are inadequate to support a request for Temporary Restraining Order.

4

TDS has not met the evidentiary burden necessary to establish an entitlement to

5

immediate injunctive relief. (Levy v. City of Santa Monica, (2004) 114 Cal. App. 4th 1252,

6

1262.) Injunctive relief will not be granted on conclusory statements based on information and

7

belief. (Id.) The affidavits, declarations, or verified complaint must contain specific facts, on

8

personal knowledge, supporting the allegations that are the basis for the request for a temporary

9

restraining order. (Low v. Low, (1956) 143 Cal. App. 2d 650, 654.)

10

Generally, facts alleged on information and belief are inadequate as a matter of law. (San

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Francisco Newspaper Printing Co. v. Superior Court, (1985) 170 Cal. App. 3d 438, 464.) It is a

12

general rule that affidavits made on information and belief as to facts that have transpired are

13

hearsay and must be disregarded. (Bank of America National Trust & Savings Assn. v. Williams,

14

(1948) 89 Cal. App. 2d 21,29.)

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First and foremost, TDS has not presented a verified complaint. Instead, TDS relies on

16

the declarations that Alonzo Wickers ("Wickers") and Loy Douglas Holt submitted in

17

conjunction with its Ex Parte Application for Temporary Restraining Order ("Ex Parte") in order

18

to support its request for a temporary restraining order to enjoin Defendants from disparaging and

19

causing harm to the reputation of TDS. (Declaration of Holt, p. 22-28.) However, neither of the

20

declarations attached to the Ex Parte allege either specific facts or personal knowledge that

21

Defendants have disparaged TDS. Moreover, neither of the declarations evidence the need for a

22

temporary restraining order in order to avoid immediate harm.

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The declaration of Wickers is devoid of any specific facts, based on personal knowledge

24

supporting the claim that a temporary restraining order is necessary to enjoin Defendants from

25

making disparaging statements regarding TDS. (Low, 143 Cal.App.2d at 654.) In fact, Wickers

26

attests to only two facts. The first consists of hearsay statements made by Dianne Johnson.

27

(Declaration of Wickers, p. 6:19-20.) In addition to being hearsay, and the Ex Parte omitting the

28

declaration of Ms. Johnson, Wickers lacks personal knowledge of the alleged harmful statements

1

made by Mr. Tarantino. Without personal knowledge of specific facts, Wickers' recitation of Ms.

2

Johnson's statements of disparaging remarks is not sufficient for the granting of a temporary

3

restraining order. The only other fact stated in the declaration of Wickers is that he is "aware of the various

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incidents stated in Mr. Holts' declaration."

Such conclusory statements of incidents of

6

disparagement are precisely the declarations that California courts have stated are not sufficient to

7

meet the evidentiary burden necessary in order to establish an entitlement to immediate injunctive

8

relief.

9

declaration of Wickers is sufficient to support a temporary restraining order.

(Levy, 114 Cal. App. 4th at 1262.) Thus, none of the information set forth in the

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The other declaration submitted in support of the Ex Parte is the declaration of Loy

11

Douglas Holt ("Holt"). Similar to the declaration of Wickers, the declaration of Holt fails to state

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specific facts, based on personal knowledge, that are sufficient to grant a temporary restraining

13

order.

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The first statement made in the declaration of Holt that mentions BAR is 11 subparagraph

15

7. (Declaration of Holt, p. 5:17-21.) However, this statement mentions only the fact that BAR

16

organized a conference call to discuss replacing TDS.

17

injurious statement of or concerning TDS was made in that communication.

" Holt does not claim that a false or

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Next, Holt recounts the same hearsay statements mentioned in the declaration of Wickers

19

regarding Dianne Johnson. (Declaration of Holt, p. 5:22 - 6:4.) As stated above, these hearsay

20

statements are insufficient evidence to support the granting of a temporary restraining order.

21

Holt goes on to claim that "defendants", without defining which defendants, held a

22

meeting with TDS representatives to explain that TDS was going out of business. However, Holt

23

claims that TDS didn't know about the meeting. Thus, how could Holt have personal knowledge

24

regarding the facts that were discussed at the meeting? (Declaration of Holt, p. 6:9-13.)

25

Moreover, Holt's declaration is replete with numerous hearsay statements of alleged

26

actions of or conversations involving Dureya. As stated above, such hearsay statements are

27

insufficient to support a temporary restraining order.

28

Nothing in the declaration of Holt provides evidentiary support for a temporary restraining 5

1

order to enjoin BAR, Dureya and/or PPSI from making disparaging remarks. The fact is, TDS

2

cannot present any specific facts based on personal knowledge that BAR, Dureya and/or PPSI

3

have made any disparaging remarks regarding TDS.

4

irreparable injury necessary for the granting of a temporary restraining order. (Levy, 114 Cal.

5

App. 4th at 1262.)

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Thus, TDS has not established the

The Ex Parte is void of any contentions that TDS will be irreparably injured before this matter can be heard on proper notice.

8

"The term 'irreparable injury1 . . . means that species of damages, whether great or small,

9

that ought not to be submitted to on the one hand or inflicted on the other." (Wind v. Herbert,

10

(1960) 186 Cal. App. 2d 276, 285.) "Irreparable injury" has been defined as an injury which

11

constitutes an overbearing assumption by one person of superiority and domination over the

12

rights and property of others. (See, Fretz v. Burke (1967) 247 Cal.App.2d 741, 746.)

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Rather than provide any specific facts in either the Ex Parte, the declaration of Wickers or

14

the declaration of Holt that TDS will be subject to immediate irreparable injury if a temporary

15

restraining order is not granted, TDS concludes that if a temporary restraining order is not issued

16

it will cause economic damage and damage to its reputation. This is not sufficient for the

17

granting of a temporary restraining order. As set forth above, specific facts evidencing the

18

likelihood of irreparable injury are required.

19

Moreover, the declaration of Holt is silent as to any alleged disparaging remarks being

20

made by Defendants since June 2009. (Declaration of Holt). In fact, it appears that the last

21

alleged disparaging statement made by defendants was made during a conference call, which Holt

22

did not attend, in June 2009. As well as begging the question as to the necessity of a temporary

23

restraining order to cease immediate irreparable injury, it raises the issue of whether there is a

24

reasonable probability that the alleged disparaging acts will be repeated in the future.

25

A temporary restraining order should neither serve as punishment for past acts, nor be

26

exercised in the absence of any evidence establishing the reasonable probability the acts will be

27

repeated in the future. (Cisneros v. U.D. Registry, Inc. (1995) 39 Cal.App.4th 548, 574; Donald

28

v. Cafe Royale, Inc. (1990) 218 Cal.App.3d 168, 184.) Indeed, a change in circumstances at the 6

1

time of the hearing, rendering injunctive relief moot or unnecessary, justifies denial of the

2

request. (Id.) Thus, to authorize the issuance of an injunction, it must appear with reasonable

3

certainty that the wrongful acts will be continued or repeated." (Gold v. Los Angeles Democratic

4

League (1975) 49 Cal.App.3d 365, 372.)

5

Not only has TDS failed to show that it will be immediately irreparably injured by the

6

alleged disparaging statements of Defendants if a temporary restraining order is not issued, TDS

1

has failed to provide evidence that the alleged disparaging statements have continued since June

8

2009. Without this foundation evidence, a temporary restraining order cannot be granted.

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TDS has failed to put forth the facts necessary to establish irreparable injury or the threat

11

of irreparable injury necessary for the court to issue a Temporary Restraining Order or Order to

12

Show Cause for Preliminary Injunction.

13

Restraining Order and refuse to issue an Order to Show Cause for Preliminary Injunction.

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Therefore, the Court should deny the Temporary

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Dated: August f^, 2009

MCNAMARA, DODGE, NEY, BEATTY, SLATTERY,

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/^H/^C jA —v. Roger J. BrotKers Tonya R. Draeger Attorneys for Defendants

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MICHAEL T. STOLLER, ESQ. SBN 120241 LAW OFFICES OF MICHAEL T. STOLLER, APC 9454 WILSHIRE BLVD., SUITE 500 BEVERLY HILLS, CALIFORNIA 90212 Telephone: 818-226-4040 Facsimile : 818-226-4044

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A O'Donnell

Attorneys for Plaintiff

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

9

COUNTY OF SACRAMENTO

10 !! 12 13

TAX DEFERRED SERVICES, INC., a ) California Corporation, ) ) Plaintiffs, ) ) _,_

14

15 16 17 1g

19 20 91

22 23 24 25 T/" 20

CASE NO. 34-2009-00055591 [Complaint filed 8-1 7-09]

/•sfc&r *~f '** DECLARATION OF LOY DOUGLAS HOLT IN SUPPORT OF EX PARTE APPLICATION FOR ^ TEMPORARY RESTRAINING ORDER AND AN ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION [Concurrently Filed With Ex Parte Application; Memorandum of Points and Authorities; and Proposed Order]

\

VS

'

THE IRA CENTER, a California ) Corporation; RANDY SCIANNA, an ) individual; RENE ROCAMORA, an ) individual; REBECCA OLSEN, an ) individual; EMPLOYEE BENEFIT ) SERVICES, INC., a California ) Corporation; WILLIAM L. KREBS, an ) individual; PENSION PLANNERS ) SECURITIES, INC., a California ) Corporation; GINA DUREYA, an ) individual; BAR FINANCIAL, LLC a ) • • California Limited Liability Company; ) ANTHONY TARANTINO, an individual, ) JOHN BRACKETT, an individual, ERIC ) ERIC A. HUCK, an individual and ) DOES 1-100, inclusive, ) ) Defendants.

Date: August 18, 2009 Time: 2: 15 p.m. Dept: 54

) ')

27 28 1 DECLARATION OF DOUGLAS HOLT

1

I LOY DOUGLAS HOLT, declare:

2

1.

3

4 "

I am President of TDS and I have worked for the company for 20 years. I have

personal knowledge of the matters hereinafter set forth and if called as a witness, I could and would competently testify to the same. This declaration is made in support of TDS' ex parte

5 6 7 8 9 10 11

application for a Temporary Restraining Order. 2.

As set forth in Mr. Wickers' Declaration, TDS has been a Plan Administrator, for

School Districts throughout the state and in over 28 states throughout the country. 3.

In order to provide plan administration services to the various School Districts,

County Offices of Education and Community Colleges, TDS entered into agreements with certain entities and individuals to act as representatives of IDS and licensed the use of its

12

trademarks and service marks. 13

14

4.

On or about August 30, 2002, TDS ("Franchise") and defendants, SCIANNA,

15

ROCAMORA and IRA ("Franchisee") entered into a Franchise Agreement to assist TDS to

16

market and provide its Plan Administration services and expand its network which I also

17

executed with Mr. Wickers, a true and correct copy of which is attached to the Wickers

18

Declaration as Exhibit "A".

19

A similar agreement was entered into between defendant KREBS

and TDS on or about the same time.

20

5.

I am informed and believe, and based thereon state, that on or about August,

21 22 23 24

2008, defendant DUREYA sold her brokerage business PPSI to defendant BAR Financial. BAR Financial was at that time the OSJ for Financial Network Investment Corporation (hereinafter "FNIC"), a Broker/Dealer and wholly owned subsidiary of ING. The effect of this transaction was to impose FNIC as the replacement Broker/Dealer for the Book of Business of TDS without

A*-3

continuing the OSJ provided by TDS. 26 27 28

6.

About September 2008, upon the completed acquisition of defendant PPSI by

defendant BAR Financial, TDS was notified by defendant DUREYA, as an officer of BAR, and defendant BRACKETT who was a principal of BAR, that FNIC rejected the Plan Administrator 2

DECLARATION OF DOUGLAS HOLT

1

services by IDS and that a business affiliate of FNIC, through its parent ING, specifically "ING

2 Plan With Ease," would be taking over the Plan Administrator services for all of the TDS clients. 3 The intended outcome of this change was to eliminate TDS as a competitor to the defendants by 4 putting them out of business.

5

7.

TDS refused to relinquish its position as Plan Administrator and further, Mr.

6 Wickers and I, the principals of TDS, refused to relinquish our positions as licensed sales 7 representatives of financial products, thereby challenging the influence of defendants BAR and 8 DUREYA over the existing force of representatives that had formerly shown allegiance to TDS 9 (sometimes referred to as the TDS representatives). Concurrent with the threat posed by 10

defendants BAR and DUREYA, Mr. Wickers on behalf of TDS requested that BAR and

11

DUREYA make a bulk transfer of the Book of Business to its new chosen Broker/Dealer,

12

Questar Capital Corporation (hereinafter "Questar"), and advised all of its representatives that all

13

further business would be conducted through Questar. Questar had accepted the Plan

14

Administrator services of TDS, unlike BAR and DUREYA.

15

8.

While DUREYA initially agreed to allow the Mr. Wickers and myself on behalf

16

of TDS to block transfer its Book of Business, as was the custom in the industry, the defendants

17

reversed their position and notified the TDS principals they would not make a block transfer of

18

their clients to their new Broker/Dealer Questar.

19

9.

On or about September, 2008, when I attempted to move my clients to Questar,

20

as my new Broker/Dealer, defendants BAR and DUREYA intentionally interfered by refusing to

21

make a bulk transfer of my Book of Business. In addition, our TDS representatives were notified

22

by defendants BAR and DUREYA that unless they stayed with DUREYA and BAR they would

23

lose the stream of commissions they were entitled to from the prior financial products sold.

24

Consequently, all of the TDS representatives, for fear of losing their commissions, stayed with

25

defendants DUREYA and BAR.

26

10.

I am informed and believe, and based thereon state that defendant PPSI promised

27

defendant BAR and FNIC that it could deliver all of the TDS clients which included 356

28

California Schools, to ING's Plan With Ease and all of the 457 plan assets that exceeded over

DECLARATION OF DOUGLAS HOLT

1

$100 million, if they would buy defendant PPSI. Defendant PPSI schemed to accomplish this by

2 attempting to force TDS to give up its Plan Administrator Business which it had been conducting 3

over the last 30 years and specifically, authorized by defendant PPSI for the previous 6 years, but

4 thereafter took the contrary position that TDS' business was unauthorized once defendant PPSI 5 had been acquired by BAR Financial and FNIC. 6

11.

In order to deliver the TDS clients (i.e., 365 California Schools), and 457 plan

7 assets (over $100 million) to BAR and FNIC, defendant DUREYA and the other defendants, 8 conspired, schemed, planned and executed with the defendants, and each of them, a campaign 9 against TDS with the intention to drive the TDS clients and representatives away which would 10

cause it to go out of business since all commissions would not be paid and TDS would lose its

11

income. Included in this conspiracy campaign and scheme were statements made by defendant

12

DUREYA and the other defendants, and each of them, together with actions taken in TDS' name

13

which were not authorized by TDS.

14

These statements were discovered from emails sent and received on our company

15

server, true and correct copies of which are attached and indicated by the following exhibit

16

numbers:

17

(1)

On or about January 22, 2009, defendant OLSEN, while under

18

contract as a TDS representative and required to be loyal to TDS, contacted

19

Virginia Casanovas at the Cambrian Elementary School District and told her that

20

she would find them a new Plan Administrator. (Exhibit "B")

21

(2)

In February, 2009, defendant ROCAMORA told all the IRA

22

representatives that TDS would be out of business in the next 3-4 months, and

23

that they were moving all the districts to a new Plan Administrator; (Exhibit "C")

24

(3)

In February 2009 and continuing to the present, defendant

25

DUREYA visited and/or contacted every TDS advisor/representative in the

26

network and warned they should not go to Questar, the new Broker/Dealer,

27

knowingly, falsely stating that TDS was in severe financial trouble and threatened

28

DECLARATION OF DOUGLAS HOLT

1

that if they did try to transfer their accounts to Questar, the clients would not be

2

transferred to Questar and the representatives would lose their commissions;

3

(4)

On or about March 18,2009, defendant DUREYA contacted a new

4

Plan Administrator, Great American Plan Administrators, Inc., to replace TDS,

5

knowing that TDS had contracts with the various School Districts had the

6

exclusive solicitation rights for employees' 457 plans; (Exhibit "D")

7

(5)

About April 10,2009, defendant KREBS developed a flyer for the

8

Visalia School District promoting the sale of a financial service without TDS' or

9

Broker Dealer approval, which was contrary to the terms of the agreement with

10 11

TDS and a violation of securities regulations; (Exhibit "E") (6)

On April 10, 2009, Defendant KREBS sent a letter to School

12

Employees appearing to instruct them to contact TDS as the Plan Administrator

13

regarding compliance questions, while in fact surreptitiously directing them to

14

call his office directly, all of which was contrary to the agreement with TDS; and

15

falsely representing to the employees that he was authorized to conduct

16

compliance; (Exhibit "F")

17

(7)

On or about April 23, 2009, defendants TARANTINO,

18

BRACKETT, KREBS ROCAMORA, BAR and IRA organized a conference call

19

to discuss replacing TDS as the Plan Administrator with ING as the Plan

20

Administrator coupled with the common remitting business through defendant

21

BARandFNIC; (Exhibit "G")

22

(8)

On or about May 7, 2009, Alonzo Wickers, CEO of TDS, spoke

23

with Dianne Johnson, a TDS representative in Tennessee, who reported she was

24

contacted by defendants TARANTINO and BAR and told that "TDS would be

25

going out of business in 60 to 90 days." She asked how that was possible and

26

defendant TARANTINO stated that many of the TDS representatives were going

27

to leave TDS and transfer TDS' School District clients to a new 403(b) Plan

28

Administrator, which would result in TDS losing its commissions paid to Alonzo 5 DECLARATION OF DOUGLAS HOLT

1

Wickers, and they would not be able to stay in business when this income

2

stopped. Defendant TARANTINO further advised that he was sponsoring a

3

meeting through BAR Financial to facilitate this outcome in San Francisco and

4

asked her to attend; (Wickers Dec. para. 11)

5

(9)

On or about May 13, 2009 through June 24, 2009, defendants

6

KREBS, ROCAMORA and DUREYA contacted each other to set up a private

7

meeting without any principal of TDS present to further coordinate the scheme,

8

plan and conspiracy to put TDS out of business; (Exhibit "H")

9

(10)

On or about June 19,2009 the defendants held a meeting with the

10

network of TDS advisors/representatives, unbeknownst to plaintiff, to further

11

explain that TDS was going out of business, and that TDS would be replaced with

12

a new Plan Administrator, National Benefit Services, whose representatives were

13

introduced during the meeting; (Exhibit"!")

14

(11)

On or about May 15, 2009, defendants KREBS and ROCAMORA

15

held a compliance seminar, specifically with the Santa Clara County Office of

16

Education (COE), which was done without TDS' authorization, knowledge or

17

consent; (Exhibit "J")

18

(12)

On or about June 22, 2009, defendants ROCAMORA and BBS

19

sent an email requesting defendant KREBS to provide a "more specific head

20

count of the participating or eligible participants in his districts" with the

21

understanding that to collaborate with NBS as the group's new Plan

22

Administrator, under a three-party agreement; (Exhibit "K")

23

(13)

On or about June 22,2009, defendants DUREYA and BAR in

24

furtherance of their nefarious goal to replace TDS with NBS as the new Plan

25

Administrator, negotiated fees and charges that vendors should pay for the Plan

26

Administrator services; (Exhibit "L")

27 28 6 DECLARATION OF DOUGLAS HOLT

1

(14)

On or about June 24, 2009, defendant KREBS forwarded to the

2

other defendants, all the documents necessary to replace TDS as the Plan

3

Administrator with NBS. (Exhibit "M") (15)

4

On or about June 23, 2009, defendants TARANTINO and BAR

5

advised TDS representative James Adjar that he would lose his commissions on

6

his clients if he moved to Questar, the new Broker/Dealer; (Exhibit "N") (16)

7

On or about June 15, 2009,1 on behalf of TDS arranged a

8

telephone conference with all of its representatives during which all

9

representatives were advised that Questar was the new Broker Dealer, and that all

10

representatives would need to confirm, in writing by June 22, 2009, that they were

11

on board or would be terminated at that point. (17)

12

After the June 15,2009 conference call, I contacted various TDS

13

representatives to determine whether they were confirming staying with TDS and

14

I spoke to Ken Bowers, a representative from Albuquerque, New Mexico, who

15

advised that defendants DUREYA and KREBS, had a conference call with the

16

TDS network of representatives invited, stated that TDS had serious financial

17

troubles and that the TDS representatives would be taunted by allegations of

18

embezzlement unless they distanced themselves in a hurry from TDS; (18)

19

Also after the June 15, 2009 conference call, I was told by Richard

20

Odegaard, Assistant Superintendent of Business Services for Elk Grove Unified

21

who stated that Alonzo Wickers, TDS' principal, had regulatory and compliance

22

problems and that he was being audited by the SEC.

23

12.

On or about June 26, 2009 TDS, after not getting confirmation that defendants

24

IRA, ROCAMORA, OLSEN and KREBS had transferred to Questar, TDS notified defendants

25

IRA, ROCAMORA, OLSEN and KREBS in writing that they had been terminated as TDS

26

representatives and requested that they cease and desist from representing themselves as being

27

affiliated with TDS and that they should return all TDS promotional literature and marketing

28

materials that utilized TDS' trademarks and service marks.

DECLARATION OF DOUGLAS HOLT

1

13.

This notice of termination was issued after defendants IRA, EBS, ROCAMORA,

2 OLSEN and KREBS decided they would not come over to IDS' new Broker/Dealer, Questar. A 3 true and correct copy of which is attached hereto as Exhibit "O". 4

14.

I am informed and believe and based thereon state that, despite these written

5 notices, defendants IRA, EBS, ROCAMORA, OLSEN and KREBS have continued to represent 6 themselves as representatives and/or affiliates of TDS, thereby infringing the trademarks and 7 service marks of TDS; having continued to sell financial services to TDS clients without paying 8 10% of the gross revenue generated; have utilized a rubber signature stamps created without 9 authorization or approval to execute certain compliance documents that only TDS was 10

authorized to execute and have undertaken certain conduct to disparage TDS and interfere with

11

its clients which includes, among other things, the following:

12

(a)

advising TDS clients, specifically School Districts, County Offices

13

of Education and Community Colleges, that TDS was in severe financial trouble,

14

that checks were being returned NSF from the common remitting TDS provided,

15

that one of the TDS principals (Alonzo Wickers) had regulatory compliance

16

problems, and that TDS was going out of business;

17

(b)

advising TDS clients, specifically Public Schools, County Offices

18

of Education and Community Colleges, that they should move their Plan

19

Administration business from TDS to National Benefit Services that defendants

20

would become affiliated with;

21

(c)

contacted TDS clients, specifically school employees in various

22

School Districts, who were already in 457 plans and resold and/or contracted

23

them to 403(b) plans, which provided no benefit to the school employees but

24

allowed the defendants to earn a new commission (which is considered illegal

25

churning), and redirect the client from TDS;

26

(d)

the defendants, acting as agents for each of them as part of and in

27

furtherance of the conspiracy, made the foregoing statements to the following

28

clients that I spoke or met with; 8 DECLARATION OF DOUGLAS HOLT

1

(1)

On June 23, 2009,1 met with Linda Dempsey, Chief

2

Business Officer (CBO) of Monrovia Unified School District and was told by her

3

that Defendant KREBS told her that TDS was changing Plan Administrators and

4

left brochures for NBS, as the new Plan Administrator;

5

(2)

On June 23,2009, I met with Ken Prosser, Assistant

6

Superintendent of Fiscal Services and with Tom Etchart, Director of Finance for

7

the Ventura County Office of Education and was told that defendant KREBS had

8

given a presentation to the School District representatives stating that TDS was

9

going with a new Plan Administrator, NBS;

10

(3)

On June 29, 2009, I met with Margie Gustafson, County

11

Office of Education (COE) for San Mateo, who stated that defendant OLSEN

12

came to meet her under the auspices of representing TDS (and presented a TDS

13

business card), and stated that TDS was going to a new Plan Administrator, NBS,

14

and left her brochure for NBS;

15

(4)

On June 24, 2009,1 also met with several representatives of

16

Union Unified School District, specifically Nimrat Johnal (Santa Clara County

17

COE), Nan Wijcik (CBO), Rita Sohal, Serena Glancy and Linda Rode (Payroll

18

Department of Union USD) to discuss their concerns over the rumors they heard

19

from defendants IRA, OLSEN, ROCAMORA and EBS that TDS had certain

20

financial problems which included, among other things, common remitting checks

21

being returned for non-sufficient funds (NSF), regulatory compliance audit

22

problems and were confused as to who to deal with on plan compliance, since the

23

defendants had directed them to deal with the local San Jose office directly;

24

(5)

On June 30, 2009,. I spoke with Rhonda Wang, Assistant

25

Comptroller of Foothill De Anza Community College District, and was told that

26

she heard from representatives of defendant IRA that TDS was in financial

27

distress;

28 9 DECLARATION OF DOUGLAS HOLT

1

(6)

On July 1, 2009,. I met with Chris Jew, Assistant

2

Supervisor of Business Services for Oak Grove Elementary School District and

3

was told that defendant IRA's representatives stated that TDS was having

4

financial difficulties and that checks were being returned NSF from the common

5

remitter account;

6

(7)

On July 1,2009,. I met with Joanne Chin of Franklin

7

McKinley Unified School District and was told that she had heard of the financial

8

rumors and was told by a representative of defendant IRA, BBS, OLSEN and

9

ROCAMORA, that all compliance for Plan Administration should be sent to

10 11

defendant's local office rather than to TDS' corporate office; (8)

On July 1, 2009,1 also met with Jim Luyau, Assistant

12

Supervisor of Business Services for the Santa Clara Unified School District, who

13

advised that Doris Luang, a TDS representative of defendant IRA, OLSEN,

14

ROCAMORA and EBS stated that TDS was having financial difficulties and that

15

they should deal directly with the local San Jose office;

16

(9)

On July 1, 2009,. I also met with Tina Tsu, Director of

17

Fiscal Services for Berryessa Union School District, who stated that she had

18

recent phone calls from defendant IRA's representative that advised TDS was

19

having financial trouble and was having checks returned from the common

20

remitter account for NSF;

21

(10)

On July 1, 2009,1 also met with Julie Swanson (CBO) for

22

Cambrian Elementary School District, who stated that she had heard from

23

defendant IRA's representatives that TDS had fiscal problems, and was having

24

vendor checks returned NSF from the common remitter account and was having

25

vendor checks returned NSF from the common remitter account;

26

(11)

On July 1,2009,1 also met with Alejandra San Miguel,

27

Human Resources for Campbell Union Elementary School District, who stated

28

that defendant OLSEN on behalf of defendants IRA and EBS previously came to 10 DECLARATION OF DOUGLAS HOLT

1

her office and advised that all plan compliance had to be done at the local San

2

Jose office and provided return envelopes that reflected the same, which caused

3

her confusion as to who to direct the plan compliance to;

4

(12)

On July 7, 2009,1 met with Cathy Grovenberg, Assistant

5

Supervisor of Business Services for Santa Clara (COE) who stated that

6

representatives of defendant IRA had told her that IDS was in financial trouble,

7

that vendor checks were being returned NSF from the common remitter account

8

and that it was under audit and relayed that there was a rift created between the

9

local San Jose office and the corporate office;

10

(13)

On July 9,2009,1 and three other representatives of IDS

11

attended a Multiple District County meeting in Santa Clara, that was attended by

12

over 30 representatives throughout the county that was called by Nimrat Johnal,

13

to discuss the rumors spread by the defendants, specifically defendants IRA,

14

ROCAMORA, OLSEN, BBS and KREBS, that TDS had financial problems, that

15

it had vendor checks returned NSF from its common remitter account, that it had

16

regulatory and compliance problems and TDS had done illegal activities;

17

(14)

On July 9,2009,1 spoke with Julie McCarthy a

18

representative from the Brisbane School District who advised that she had

19

received a telephone call from defendant OLSEN on July 8, 2009, during which

20

she requested to meet to discuss moving the School District to another Plan

21

Administrator because of the financial troubles TDS was having. Ms. McCarthy

22

stated that she was unaware of any problems TDS was having until she received

23

the phone call from defendant OLSEN.

24

(15)

On July 17, 2009,1 spoke with Ann Jones (CBO) of the

25

San Jose Unified School District who stated that representatives from defendant

26

IRA had advised that TDS had regulatory compliance issues and was being

27

audited, had financial troubles which included checks returned NSF;

28

n DECLARATION OF DOUGLAS HOLT

1

(16)

On July 17, 2009,1 met with Jerry Kerr, Assistant

2

Supervisor of Business for Eastside Union High School District and Vida

3

Branner-Sidess and Jill Kaufman (representatives of East Side Union HSD), who

4

attended the Santa Clara COE meeting on July 7, 2009 and wanted further

5

confirmation concerning the rumors raised regarding TDS' financial troubles; (17)

6

On July 17,2009,1 met with Margie Gustafson (COE) of

7

San Mateo and approximately 30 other representatives and CBO's of the district

8

to discuss the rumors they heard from the representatives of defendants IRA,

9

OLSEN and ROCAMORA regarding TDS' financial and regulatory problems and whether TDS had returned vendor checks.

10

(18)

11

On July 17, 2009,1 spoke with Vicky Rinehart,

12

Superintendent of Knightsen School District, who stated that TDS had financial

13

and regulatory audit issues that she had heard from representatives of defendants

14

IRA, OLSEN and ROCAMORA.

15

(19)

On July 17, 2009,1 spoke with Nancy Anderson, Director,

16

Moreno Valley Unified School District who stated that she had heard from

17

representatives of defendants IRA, OLSEN, ROCAMORA and KREBS that TDS

18

was having financial difficulties and that defendant KREBS had told her vendor

19

checks were being returned NSF, that TDS was being audited by the SEC and Mr.

20

Wickers had failed a compliance audit; She thereafter contacted several other

21

districts and was told the information was inaccurate;

22

15.

All of the foregoing representations made by defendants were and are false and

23

were made with the intent to disparage and harm its reputation and to cause economic harm to

24

TDS.

25 26

16.

As a result of defendants' conduct, over the past several weeks our office has

responded to over 25 calls per week of inquiries made by our customers as to the rumors they

27 had heard regarding TDS' financial problems and matters as set forth above which originated 28

from the defendants. 12 DECLARATION OF DOUGLAS HOLT

1

17.

In the last several weeks TDS has received 12 written termination notices from

2

School Districts, Schools and Municipalities. True and correct copies of these letters are

3

attached hereto as Exhibit "P". The anticipated loss of revenue from these clients is

4

approximately $346,000 over the next five years. In comparison, over the last three years TDS

5

lost only one customer which was due to anew school administrator bringing in a plan

6

administrator it had a previous relationship with.

7

18.

Additionally, the defendants have started to go to the teachers redirecting their

8

investments from TDS. By way of example in Santa Clara County, TDS suffered $40,000 in

9

redirecting of employee investments. This diversion provides no benefit to the employee and

10

only commissions to the sales agent and is therefore considered illegal churning. Unless

11

defendants' conduct is immediately stopped, the defendants' statement that TDS will go out of

12

business will become a reality and it will face the potential loss of millions of dollars.

13

I declare under penalty of perjury under the laws of the State of California that the

14

foregoing is true and correct. Executed this 17th day of August, 2009 at dityu

15

California.

16

JGLAS HOLT 17 18 19 20 21 22 23 24 25 26 27 28

EXHIBIT B

Page 1 of2

From:

Al Wickers

To:

Jessica McCliss

Sent: Thu 6/25/2009 2:40 PM

Cc:

Subject:

FW: Cambrian Elementary School District

Attachments:

From: Jared Sowards [mailto:[email protected]]

Sent: Thu 1/29/2009 2:31 PM To: Al Wickers; 'Alonzo B Wickers' Subject: Cambrian Elementary School District

Al,

There seems to be some communication problems with the IDS account manager and the district. I just spoke with Virginia Casanovas at the district and I think you need to speak with her ASAP. She just told me that Becky Olsen from the IRA Center went in there last week and acknowledged that they are a separate company and that if TDS isn't doing a good job, that she or they would be able to help her find a new plan administrator. Please give me a call I have more to share.

Jared Sowards

Insurance license #0057144

TDS Group

Financial Network Investment Corporation* Member SIPC

1289 S. Park Victoria Dr. Suite 201 Milpitas CA, 95035 408-623-5548 office 408-957-0663 fax

www.tdsgroup.org

Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege. Review,

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Two%20Emails%20FWD%20From%2...

7/25/2009

EXHIBIT C

Page 1 of 1

Doug Holt Al Wickers From: Jessica McCliss To: Cc: FW: Conflict of interest. Subject: Attachments:

Sent: Thu 6/25/2009 2:40 PM

From: jared sowards [mailto:[email protected]] Sent: Thu 2/19/2009 10:10 AM To: Al Wickers Subject: Conflict of interest. Al,

I just got work from one of the IRA Center reps, Mostafa Reeza, that in their last meeting Rocky told the reps they are moving all the districts to a new TPA. They have already or are in the process of switching over one. He said that TDS will be out of business in the next 3-4 months and not to worry that they found a TPA out of Florida that they will be using. I don't know if he's trying to divide n conquere and convince the reps to follow him or what but I thought you should know. Jared

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Two%20Emails%20FWD%20From%2...

7/25/2009

EXHIBIT D

March 18,2009 Gina M. Duryea BAR Financial 9700 Business Park Drive, Suite 102 Sacramento. CA 95827-1717 Re: Agreement & Acknowledgement of Actions Dear GinaIt is with much anticipation that we look forward to working with BAR Financial to build a mutually beneficial partnership and to expand upon the relationships we have already established. We are certain you will find in Great American Plan Administrators an organization that is committed to providing service to both you and your clients that is second to none. To that end GA Plan agrees and acknowledges that it will take the following actions. 457 Plan Exclusivity & Product Solicitation GA Plan acknowledges those employers with whom BAR Financial has or obtains exclusive product solicitation rights to the employers 457 Plan. Furthermore, GAFRI agrees not to incorporate other Great American Financial Resources (GAFRI) Independent Distribution Partners not licensed under BAR Financial hierarchy into the 457 Plan without the express written consent of BAR Financial. There may be instances where BAR Financial, GAFRI, or another distribution partner of GAFRI, all has a 403 (b) slot with the same employer. In those occurrences, GA Plan commits to keeping those slots separated by ownership. Thank you for giving GA Plan the opportunity to serve you and your clients. We look forward to building upon our relationship for many years to come. Sincerely,

Lana K. Woodring Senior Vice President Great American Plan Administrators. Inc. Cc:

Mat Dutkiewicz Pete Titone Kevin Hensley

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^Attachments can contain viruses that may harm your computer. Attachments may not display correctly.

Doug Holt From:

Bill Krebs

To:

Jessica McCliss

Cc: Subject:

FW: Acknowledgment Letters

Sent: Wed 6/24/20091:47 PM

Attachments: J BAR Financial Acknowledgement Letter.doc(24KB)

Respectfully,

William L. Krebs

Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC BillK@tdsQroup. org http://www. tdsqroup. orq Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Hensley, Kevin [mailto:[email protected]] Sent: Mon 5/4/2009 8:29 AM To: Bill Krebs Subject: Acknowledgment Letters Bill,

It was a pleasure speaking with you again. Attached is the letter we spoke about; please let me know if you have any questions.

Kevin

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Email%20Set%204%20-%20Part%203.... 7/25/2009

EXHIBIT E

Page 1 of 1

i, Attachments can contain viruses that may harm your computer. Attachments may not display correctly. Doug Holt From:

Bill Krebs

To:

Jessica McCliss

Sent: Wed 6/24/2009 2:44 PM

Cc:

Subject:

FW: Visalia Retirement by Design

Attachments: \ Retirement By Design Visaha.doc(55KB)

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BillK@tdsQroup. org htrp://wvw,: tdsgroup. org Office (800) 975-6555 xl02 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Jennifer Berry Sent: Fri 4/10/2009 3:07 PM To: Bill Krebs Subject: Visalia Retirement by Design I'm re-formatting the Retirement by Design, so far, I've fixed the link directions, including how to get to the financial calculator through the STRS website (since the TDS site no longer offers one) Should we add a blurb about TPA services through our office, such as the transfers/loans/etc? Thank you, Jennifer Berry Office Manager, The TDS Group Financial Network Investment Corporation, member SIPC Office - (800) 975-6555 ext 113 Fax - (805) 882-0098 Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal, or other use of the email and any attachment by an unintended recipient is expressly prohibited If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Email%20Set%204%20-%20Part%203.... 7/25/2009

Frequently Asked Questions

IED SCHOOL

DISTRICT

Q. How do I locate the 403b vendors offered through the district? A. Go to www.tdsgroup.org * Click on QuickLinks * Click on 403b COMPARE. In the left hand column, select BROWSE VENDORS, then select ALL. (You can retrieve financial information about the vendors.)

Q. How do I get the districts' Salary Reduction Agreement Forms? A. Go to www.tdsgroup.org <» Click on QuickLinks <* Under the "Forms" column, choose the applicable salary reduction form. Q. What if I want a financial calculator to explore various options? A. Go to www.calstrs.com * On the left column, under the TOOLS heading, click on CALCULATORS (There are several available calculators for you to choose.)

For More Information: www.tdsgroup.org To Schedule an Appointment: 805.965.4774 2009 Retirement Plan Limits 403(b)0/? Roth403(b) $16,500 OK $16,500

457(b) Individual Limits

$16,500

$5,500 OR $5,500

Age 50 Catch up Provision*

$5,500

$3,000 OR $3,000

15 Year Catch up Provision*

N/A

N/A $25,000

457 Catch-up Maximum Contribution Limits

$16,500 $33,000

Total $58,000 * Please soeak with a financial consultant or tax professional Drior to utilizing catch-uo Securities and Investment Advisory Services are offered with and through Financial Network Investment Corporation (FNIC), Member of FINRA & SIPC. OSJ Office: 117 W. Gutierrez St., Santa Barbara, CA-(805) 965-4774. IDS and FNIC are not r\r DCDQ

EXHIBIT F

April 10, 2009 Dear Employee: You may have heard that the new IRS 403(b) regulations took effect on January 1st, 2009. These new regulations, the first of their kind in 40 years, have changed the way districts manage 403(b) plans for their employees. For example, your employer now has a written document that provides a summary of its 403(b) plan and identifies the approved list of vendors, eligibility rules, contribution limits, loan rules and limits, and distribution and withdrawal guidelines.

What does this mean to you? • Some vendors have discontinued their 403(b) programs. If your investment provider is no longer an approved vendor, research your other investment options, including fees and charges of the other companies on the approved list • If you are not making contributions, be informed about the plan features and options to make an informed decision whenever you decide to participate in the future. • If you are planning to take advantage of your 403(b) plan's features such as a loan or hardship withdrawals, check with your plan administrator to find out when these are available under the new plan. Expect delays in the processing of these transactions; employers, plan administrators and investment providers are still sorting out the logistics of the new regulations. If you have questions regarding the impact of the new 403(b) regulations to your specific situation, please contact our Plan Administrator, The TDS Group at (800) 975-6555, or simply fill out the attached form and return in the postage-paid reply envelope. Sincerely,

Assistant Superintendent- Business Services

EXHIBIT G

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Doug Holt From: To:

Bill Krebs Jessica McCliss

Sent: Wed 6/24/2009 2:21 PM

Cc: Subject:

FW: New Time Proposed: conf call re: ING common remitting/plan admin business

Attachments:

Respectfully, William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC BillK@tdsgroup. om http://www. tdsQroup, orcj Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Anthony Tarantino [mailto:[email protected]] Sent: Thu 4/23/2009 2:12 PM To: [email protected]; John Brackett; Bill Krebs Subject: RE: New Time Proposed: conf call re: ING common remitting/plan admin business OK we will do the call at 5:00 Pacific time

1-866-390-5250; passcode 3059112*

Anthony Tarantino, Partner BAR Financial, LLC Raising the BAR of Excellence to Serve You Better

From: Rocky Rocamora [mailto:[email protected]] Sent: Thursday, April 23, 2009 2:12 PM To: Anthony Tarantino http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20New...

7/25/2009

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Subject: RE: New Time Proposed: conf call re: ING common remitting/plan admin business

Ok

Rocky Original Appointment From: Anthony Tarantino rmaiito:[email protected]] Sent: Thursday, April 23, 2009 7:16 AM To: JOHN BRACKETT; Rene Rocamora; Bill Krebs; Lois Shaw; [email protected] Subject: New Time Proposed: conf call re: ING common remitting/plan admin business When: Thursday, April 23, 2009 4:00 PM-5:00 PM (GMT-08:00) Pacific Time (US & Canada). Where: 1-866-390-5250; passcode 3059112; host only: 2864 [Anthony is hose] Bill and Rocky Can we change the time to either 4:30 West coast or 5:00 West coast? John doesn't land until after 4:00 Pacific

New Meeting Time Proposed: Thursday, April 23, 2009 8:00 PM-9:00 PM (GMT-05'00) Eastern Time (US & Canada).

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20New... 7/25/2009

so rapidly and fully to the banking system's

Doug Holt From: Bill Krebs on behalf of Anthony Tarantino Required: Jessica McCliss Optional: Resources: Subject: FW: Current Issues - IDS - TPA Location: Conference Call When: Monday, May 04, 2009 1:15 PM-1:45 PM Attachments:

Sent:

Wed 6/24/2009 1:39 PM

-' Reminder: 15 minutes

—Original Appointment— Organizer: Anthony Tarantino rmaiito:[email protected]

Sent: Mon 5/4/2009 12:27 PM Required: [email protected]; [email protected]; John Brackett; Eric Huck; Gina Duryea Subject: Current Issues - IDS - TPA When: Monday, May 04, 2009 1:15 PM-1:45 PM Location: Conference Call

1-866-390-5250

Code 1035466*

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20Curr...

7/25/2009

EXHIBIT H

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Doug Holt From:

Bill Krebs

To: Cc:

Jessica McCliss

Subject:

FW: Saldebar & Mays

Sent: Wed 6/24/2009 4:37 PM

Attachments:

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279

The TDS Group / Financial Network Investment Corp. Member SIPC BillK@tdsgroup. org h ftp://www. tdsgroup. orq Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Bill Krebs Sent: Mon 5/4/2009 8:18 AM To: Anthony Tarantino Subject: RE: Saldebar & Mays

Dear Anthony: Today or Thursday are best... Anytime, today except for 9-10 AM West Coast introduction of Casey Cason.

We're doing conference call with reps and

I am going to attach a seperate email re: this last week's recent correspondence between our SB office and Corp....it's insightful of the drama.

Respectfully, William L. Krebs Regional Manager CA Insurance License #0541279

The TDS Group / Financial Network Investment Corp. Member SIPC http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20Sald...

7/25/2009

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8illK@tdsQroup. org http://www. tdsQroup. org Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Anthony Tarantino [mailto:[email protected]] Sent: Mon 5/4/2009 6:37 AM To: [email protected] Subject: FW: Saldebar & Mays Bill A couple of things we need to address 1)

Al Wickers - TPA status

2)

Recent complaints

3)

Attached are reports showing commissions owed to Pension Planners BAR owns those companies and needs to be repaid.

What time(s) do you have available this week I would like the first part of the call to discuss IDS along with Rocky I would like the 2nd part to discuss items 2 and 3

Anthony Tarantino, Partner BAR Financial, LLC Raising- the BAR of Excellence to Serve You Better

From: Debbie Harding Sent: Tuesday, April 28, 2009 12:29 PM To: Anthony Tarantino Subject: Saldebar & Mays Attached are the commission statements from Pacific Life and AUL which show the chargeback's. Saldebar's current balance due is $3465.92 May's current balance due is $1587.63 Let me know if you need anything else. «Saldebar-PacLife Chargeback.pdf» «Mays-AUL chargeback.pdf» http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20Sald...

7/25/2009

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Debbie Harding Office Manager/Executive VP Assistant

BAR Financial, LLC

Please note my new email address: [email protected] 9700 Business Park Dr., Ste 102 Sacramento, CA 95827 (916) 362-4107 Ext. 106 (916) 362-7706 Fax 'Securities offered through Financial Network, member SIPC. BAR Financial and Financial Network are not affiliated. Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities They may also be work product and/or protected by the attorney-client privilege or other privileges Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments "

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20Sald...

7/25/2009

Jessica McCliss From: Sent: To: Subject:

Bill Krebs Wednesday, June 24, 2009 1:11 PM Jessica McCliss FW. Meeting with Paul/NBS

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC BillKuf'idssroitp.ors hup, //www. tdsgroup ors Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Jennifer Berry Sent: Wed 5/13/2009 2:56 PM To: Bill Krebs Subject: Meeting with Paul/NBS You're set up to use the Pacific Club, which is one mile away from the airport. Address and directions are in your redtail, and the letter of introduction has been faxed over. Thank you, Jennifer Berry Office Manager, The TDS Group Financial Network Investment Corporation, member SIPC Office - (800) 975-6555 ext. 113 Fax - (805) 882-0098 Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal, or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments

Page 1 of4

Doug Holt From:

Bill Krebs

To: Cc:

Jessica McCliss

Subject:

FW: meeting time & location

Sent: Wed 6/24/2009 11:29 AM

Attachments:

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279

The TDS Group / Financial Network Investment Corp. Member SIPC Bil!K@tdsqroup. om http://www. tdsgroup. org Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Rocky Rocamora

Sent: Sun 5/31/2009 3:26 PM To: Bill Krebs Subject: RE: meeting time & location Sure, just let me know.

From: Bill Krebs [mailto:[email protected]] Sent: Sunday, May 31, 2009 3:08 PM To: Rocky Rocamora Subject: RE: meeting time & location

I would like to meet with you the week of the 8th sometime. I'll call you on Monday.

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/FW:%20Email%20Request.EML/FW:...

7/13/2009

Page 2 of4

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC [email protected] gtitp.'//www.cdsqroup.orq

Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

—Original Message— From: Rocky Rocamora Sent: Sun 5/31/2009 2:51 PM To: Bill Krebs Subject: RE: meeting time & location Ok, whatever works is fine with me. We can meet for early breakfast and then pick him up.

Rocky

From: Bill Krebs fmailto:[email protected] Sent: Sunday, May 31, 2009 7:22 AM To: Rocky Rocamora Subject: RE: meeting time & location

Yes, he lands at 9:45 am . It might look best if we both pick him up. I plan on driving up.

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/FW:%20Email%20Request.EML/FW:...

7/13/2009

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Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC <_rnaiito:[email protected]> [email protected]

http://www,tdsqroup.org

Office (800)975-6555x102 Cell (805) 886-5664 Fax

(805) 882-0098

117 W. Gutierrez Street Santa Barbara, CA 93101

This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Rocky Rocamora Sent: Sat 5/30/2009 5:16 PM To: Bill Krebs Subject: RE: meeting time & location Great. Is Paul flying to San Jose? I can certainly pick him up.

Let me know what else can I do on my end.

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Rocky

From: Bill Krebs frnaiito:[email protected]] Sent: Saturday, May 30, 2009 8:15 AM To: Rocky Rocamora Cc: [email protected] Subject: meeting time & location

Dear Rocky: We are now scheduled to meet with John and Paul Lovell this upcoming June 19th at your office @ 11:00 AM. I will make arrangements to pick up Paul at the airport. In speaking with Paul, we agreed to put togather an agenda so as to keep on track of our mutual objectives. I will work on this over the weekend and run it by you for your input.

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC [email protected] nttp://www.tdsgroup.orq Office (800)975-6555x102

Cell

(805) 886-5664

Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/FW:%20Email%20Request.EML/FW:...

7/13/2009

Jessica McCliss From: Sent: To: Subject:

Bill Krebs Wednesday, June 24, 2009 1:23 PM Jessica McCliss FW. Current Issues - TDS - TPA

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BillK(q).tdsgroitp. ors http://ww\v. tdssroup. org Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Anthony Tarantino [mailto:[email protected]] Sent: Mon 5/11/2009 5:20 AM To: Bill Krebs Cc: John Brackett Subject: RE: Current Issues - TDS - TPA Bill I will not be there but John Brackett will. John will telephone you and set up some times to meet and discuss latest issues. By the way, how are you doing with the fires? Is your home threatened?

BAR Financial, LLC

Raising the BAR of Excellence to Serve You Better From: Bill Krebs [mailto:[email protected]] Sent: Saturday, May 09, 2009 5:22 PM To: Anthony Tarantino Subject: RE: Current Issues - TDS - TPA

Anthony:

I will be in SF this next week. I am scheduling time to meet with Rocky. He has cleared his schedule this next week to meet. Will you be in SF this next week? We may have some breakthrough on alternative TPA sources...All three are long term, top shelf entities, without the drama. Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC Bi//K(q),tdssroup. ors. http.//ww\v tdsgroup ore Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Anthony Tarantino [mailto:[email protected]] Sent: Mon 5/4/2009 12:27 PM To: [email protected]; [email protected]; Subject: Current Issues - TDS - TPA

John Brackett; Eric Huck; Gina Duryea

When: Monday, May 04, 2009 4:15 PM-4:45 PM (GMT-05:00) Eastern Time (US & Canada). Where: Conference Call

1-866-390-5250 Code 1035466#

Page 1 of3

Doug Holt From: Bill Krebs To: Jessica McCliss Cc: Subject: FW: location Attachments:

Sent: Wed 6/24/20091:11 PM

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BillK@tdsqroup. org http://www. tdsQroup.om Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Gina Duryea [mailto:[email protected]] Sent: Wed 5/13/2009 1:26 PM To: Rocky Rocamora Cc: Bill Krebs Subject: RE: location Ok, you both answered 2 different things, I think?'?? please advise

Sincerely,

Gina Duryea Executive Vice President Registered Principal* Insurance license #0804826 http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%201ocat... 7/25/2009

Page 2 of3

FAX 916 362 7706 Toll Free 800 722.2999 916.362 4107 vVW"V barfinancig! net 9700 Business Park Drive Suite 102 Sacramento, CA 95827 *Secunties offered through Financial Network Investment Corporation, member SIPC BAR Financial and Financial Network are not affiliated

Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments."

From: Rocky Rocamora [mailto:[email protected]] Sent: Wednesday, May 13, 2009 1:10 PM To: Gina Duryea Subject: RE: location

Marriot Hotel in Walnut Creek

Rocky

From: Gina Duryea [mailto:[email protected]] Sent: Wednesday, May 13, 2009 12:18 PM To: William L. Krebs; Rene Q. Rocamora Subject: location

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%201ocat...

7/25/2009

EXHIBIT I

Page 1 of2

From:

Bill Krebs

To:

Jessica McCliss

Sent: Wed 6/24/2009 3:27 PM

Cc:

Subject:

FW: meeting time & location

Attachments:

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BitlK@tdsqroup. org h ftp;//www. tdsQrouo. oro Office (800) 975-6555 x!02 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Bill Krebs

Sent: Sat 5/30/2009 8:14 AM To: Rocky Rocamora Cc: [email protected] Subject: meeting time & location

Dear Rocky: We are now scheduled to meet with John and Paul Lovell this upcoming June 19th at your office @ 11:00 AM. I will make arrangements to pick up Paul at the airport. In speaking with Paul, we agreed to put together an agenda so as to keep on track of our mutual objectives. I will work on this over the weekend and run it by you for your input.

Respectfully,

William L. Krebs Regional Manager

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20meet...

7/25/2009

Jessica McCliss From: Sent: To: Subject:

Bill Krebs Wednesday, June 24, 2009 1 • 10 PM Jessica McCliss FW: urgent

Importance:

High

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC BillK(a),tcls2:roi

From: Gina Duryea [mailto:[email protected]] Sent: Thu 5/14/2009 9:21 AM To: Bill Krebs Subject: urgent Need the time ASAP please. Sincerely, Gma Duryea Executive Vice President Registered Principal* Insurance license #0804826 FAX 916.362 7706 Toll Free 800 722.2999 916.362.4107 www.barfmancial.net 9700 Business Park Drive Suite 102 Sacramento, CA 95827 *Secunties offered through Financial Network Investment Corporation, member SIPC. BAR Financial and Financial Network are not affiliated.

Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments."

From: Bill Krebs [mailto:[email protected]] Sent: Wednesday, May 13, 2009 1:13 PM To: Gina Duryea Cc: Louis Barragan Subject: Meeting Location

Hello Gina, Testaurant reservations are set for this Thursday @ Hariss Restaurant for a party of 7. The restaurant is located at 2100 Van Ness Avenue (at Pacific). Hope this helps, call me on my cell with any issues. Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC org http.//www tdsgrcntp ore Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93 101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

EXHIBIT J

Page 2 of3

reply email and permanently delete the email and its attachments.

—Original Message— From: Rocky Rocamora Sent: Fri 5/15/2009 8:40 PM To: Bill Krebs Subject: Santa Clara COE presentation Hi Bill,

As promised, attached is the rough draft of the presentation we did today at the COE 403b workshop.

Feel free to add, delete or change as you wish. Any feedback to make it better would be appreciated.

Best,

Rocky Rocamora Regional Branch Manager CA Insurance License OE02855 IDS - Bay Area Region Phone: (866) 474-1144 Fax: (408) 904-7367 <ma''[email protected]> [email protected]

This message is intended for the recipient only and is not meant to be forwarded or distributed in any other format. This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, or security, or as an official confirmation of any transaction. Financial Network Investment Corporation does not accept purchase or redemption of securities, instructions, or authorizations that are sent via e-mail. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Securities Offered Through: Financial Network Investment Corporation 14388 Union Avenue, San Jose, CA (408) 978-1000. Member FINRA & SIPC.

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Email%20Set%204%20-%20Part%201.... 7/25/2009

403(6) Plan- 5LO

7/P5/2009

In 2004 IRS proposed new rules regarding administration of 403(6) plans Requires Written Plan Document Requires Employer or Plan Sponsor Accountability In-house 403(0) administrator or Third Party Administrator

I Fast forward-January 1,2009 New regulations effective 01/01/09 •Written Plan Document Requirement extended to 12/31/09

•Even if no written plan document is in place by 01/01/09, plan must act as if a Plan Document is in place

•If written Plan Document is in place after 01/01/09, must be dated retroactively to 01/01/09

'•Withdra waf s/Distrib'ui ft

'

7/95/2009

7/95/2009

1 2QGg Contribution Limits Special additional catch-up requires employee to be with the same employerfor 15 years

Pre-tax 403(6) contributions and After-tax Roth 403(6) contributions are combined m determining the annual contribution limit

-- /$16,500- ],- ;

$3,009 '.^ '^

4

7/?5/?009

I Investment Providers Must be on the Approved List as stated in the Plan Document m order to accept contributions

In California, must be registered with the state 4O3bcompare com website

i ax-free Plan to Plan i ransfers •Plan to plan transfers must be done directly from one vendor toanother •Only permrtted if the transferring 403(6) plan and the receiving 403(6) plan permrt such transfers •Receiving vendor must be an approved vendor in the receiving 403(6) plan •A transfer or exchange is Not a Distribution

Plan Administrator Approval Required

I Tax-free Exchanges •An exchange is simply the movement of all or some port ion of a 403(6) account held from one vendorto another vendor in the employer's plan •Receiving vendor must be an approved vendor or has signed an Information Sharing Agreement

Plan Administrator Approval Required

jrWOTYPES OFTOANSFERS

7/?5/?009

FaxaSiht of Distribution Rules >Permanent disability-physician recommendation required >RMD-musttake distribution otherwise hefty tax penalty >Normal distribution - separated from service and you reached age 55

ORDINARY INCOME TAX APPLIES

Plan Administrator Approval Required

•costs relating to the . • and related educational fees and expenses • payments necessary to prevent from, or . _• .• on a principal residence •

...

or . .

expenses

• certain expenses for the repair of •.•iefnplQyee's:pnncipal residence.

-. to the

I hranaai Hardship Withdrawals >Must meet IRS guideline for approval >Musttake maximum loan before requesting hardship withdrawal >Must provide proper documentation to substantiate hardship (Note If participant rs less than 59 Viand takes hardship withdrawal, 10% «ariy withdrawal penalty plus ordinary income tax apply except for medical expenses in excess of 7 5% of AG1 (adjusted gross income))

Plan Administrator Approval Required

If hardship K taken, no contributions allowed for six month*following withdrawal)

EXHIBIT K

Page 1 of3

Doug Holt From:

Bill Krebs

To:

Jessica McCliss

Sent: Wed 6/24/2009 10:32 AM

Cc:

Subject:

FW: NBS/EBS collaboration

Attachments:

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC Bi/IK@tdsgroup. org h ftp://www, tdsgroup, ortj Office (800)975-6555x302 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Nathan Glassey [mailto:[email protected]]

Sent: Mon 6/22/2009 12:07 PM To: [email protected] Cc: 'William Krebs1 Subject: RE: NBS/EBS collaboration Rocky / Bill,

That should work fine.

When you get a chance, will you send me a more specific head count of the participating, or at least, eligible participants that are included within your respective districts.

Thank you,

http://mail.tdsgroup.Org/exchange/doughoMnbox/Email%20Set%201.EML/FW:%20NBS... 7/25/2009

Page 2 of 3

Nathan Glassey, QKA National Benefit Services, LLC 8523 S Redwood Road, West Jordan, UT 84088 (801) 532-4000, (800) 274-0503 x!27 fa\ (801) 823-2276 naihaiV-Kmnsbenenis com For more information on our services select a category

Pension Plans

Cafeteria Plans

COBRA

The information contained in this electronic mail message is confidential information intended only for the use of the individual or entity named above, and may be privileged. If the reader of this message is not the intended recipient or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictty prohibited. If you have received this communication in error, please immediately notify us by telephone (800-274-0503), and delete the original message Thank you.

IRS Circular 230 Disclosure To ensure compliance with the requirements imposed on us by IRS Circular 230 (31 C.F.R. 10.33 -10.37, et. seq.), we inform you that to the extent this communication, including attachments, mentions any federal tax matter, it is not intended or written and cannot be used for the purpose of avoiding Federal Tax penalties. In addition, this communication may not be used by anyone in promoting, marketing or recommending the transaction or matter addressed herein. Anyone other than the recipient who reads this communication should seek the advice based on their particular circumstances from an independent tax advisor.

From: Rocky Rocamora [mailto:[email protected]] Sent: Monday, June 22, 2009 12:56 PM To: Paul Lovell Cc: Nathan Glassey; 'William Krebs' Subject: NBS/EBS collaboration

Hi Paul & Nathan,

Thank you for taking the time to meet with us last Friday. It was indeed a pleasure to meet and discuss plan administration services with you.

Attached is the image file of our logo. I think it is in Adobe Illustrator format. Please let me know if this will work to be embedded with some of the marketing materials.

Also, when you have the change please email us a copy of the three-way agreement we discussed last Friday. http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20NBS...

7/25/2009

Page 3 of3

Looking forward to our future business partnership.

Best regards,

Rocky Rocamora Employee Benefits Services & Advisors, Inc. Email: [email protected] Phone-408 483 7210 Fax: 408.904.7367

The information in this email message maybe privileged, confidential, and protected from disclosure. If you are not the intended recipient, any dissemination, distribution or copying is strictly prohibited. If you think that you have received this email in error, please email the sender and delete all copies. Thank you. IRS Circular 230 Disclosure: Recently adopted Internal Revenue Service regulations generally provide that, for the purpose of avoiding federal tax penalties, a taxpayer may rely only on formal written advice meeting specific requirements. Any tax advice in this message (including any attachments) does not meet those requirements and is not intended or written to be used, and cannot be used, for the purpose of avoiding federal tax penalties or promoting, marketing or recommending to another party any transaction or matter addressed herein.

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%201.EML/FW:%20NBS... 7/25/2009

EXHIBIT L

Jessica McCliss From: Sent: To: Subject:

Bill Krebs Wednesday, June 24, 2009 10.31 AM Jessica McCliss FW: question for you

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BiIIK(ciJtds£.roup.orx hup://www. idssroup org Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Gina Duryea [mailto:[email protected]] Sent: Mon 6/22/2009 2:37 PM To: Reed Lloyd Cc: Bill Krebs Subject: question for you Hey Reed We have some changes going on that will affect the TPA systems we are using for 403b. We want to bring on another administrator and they charge the vendor $2 per month per employee to send the money to Pac All the other vendors are on the system, with few exceptions. Could we work out getting Pac on this? Our only other option for those districts is to charge the employee and that may not fly well with them Any thoughts? Sincerely, Gina Duryea Executive Vice President Registered Principal* Insurance license #0804826 FAX 916 362.7706 Toll Free 800.722.2999 916.362.4107 www barfmancial net 9700 Business Park Drive Suite 102

EXHIBIT

Jessica it/lcCliss From: Sent: To: Subject: Attachments: 1

Bill Krebs Wednesday, June 24, 2009 10:35 AM Jessica McChss FW NBS New Plan Implementation Guide 0-lmplementation Guide Cover Letter.pdf, 2-Employer Checklist.pdf; 3-lmplementation timeline pdf; 4-NBS Plan Contact lnformation.pdf; 5-Plan Information Worksheets pdf, 6-File Formats pdf; 7-lnstructions for Money Transfer.pdf; 8-lnstructions for Secure Upload.pdf; 9Template - Cancelation of Old ISA.pdf, 10-Template - Letter to Participants - lnitial.pdf; 11Template - Letter to Participants - Affected Vendor.pdf; 12-Template - Letter to Participants Final.pdf; 1-Implementation Guide lndex.pdf; 12-Template - Letter to Participants - Fmal.pdf, 13-Template - Universal Availabilty - Letter pdf; 14-Template - Universal Availabilty - Flier pdf, 15-Good Faith Notice to Vendors pdf, 16-Sample Authorization Forms.pdf, 17-MAC 2009.pdf; 18-SRA.pdf

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC BillK@tdsgroup. org http://www. tdsaroup. org Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W.Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments.

From: Evan Stephens [mailto:[email protected]] Sent: Fri 6/19/2009 4:50 PM To: '[email protected]'; '[email protected]'; '[email protected]' Cc: Nathan Glassey Subject: NBS New Plan Implementation Guide Nathan Glassey requested I send you copies of the generic files that comprise the NBS 403(b) Plan Implementation Guide for "open vendor". Employer specific documents such as the plan document, SPD, contracts, etc. are also included in the Guide but are not attached at this time.

Evan Stephens, QKA National Benefit Services, LLC 8523 S. Redwood Road, West Jordan, UT 84088 (801) 532-4000, (800) 274-0503 ext. Ill Fax (801) 838-7305 [email protected]

Date Employer Name Attn: Contact Name Address City, STZIP

RE: National Benefit Services 403(b) Plan Compliance and Administration Program Implementation Dear Contact Name, We are pleased to have been selected by Employer Name to be your 403(b) plan's Third Party Administrator and we look forward to a successful relationship. The mission of National Benefit Services is to help employers provide the finest benefits for their employees. Our goal in the coming weeks will be to implement the NBS 403(b) Compliance and Administration program as smoothly as possible to help achieve that mission. The NBS 403(b) Plan Compliance and Administration Program Implementation Guide are enclosed. The Guide will serve a reference and a resource for you in the coming weeks. As your New Business Coordinator, I would like to setup a conference call to discuss the implementation steps and answer any questions you may have. If you have not done so already, please contact me to schedule a call at a convenient time for you. 403(b) New Business Coordinator Email: [email protected]

Phone: 800-274-0503 ext. 127 Fax: 801-823-2276

Again, we look forward to working with you and please feel free to contact me if you have any questions.

Sincerely,

Nathan Glassey New Business Coordinator

Employer Plan Setup Checklist Date |

[

Complete 403(b) Plan Setup Information Worksheet Part 1 (Payroll Information)

[

|

Complete 403(b) Plan Setup Information Worksheet Part 2 (Miscellaneous)

|

[

Complete 403(b) Plan Setup Information Worksheet Part 3 (Current Investment Providers)

[

|

Complete 403(b) Plan Setup Information Worksheet Part 4 (Orphan Investment Providers)

I

I

Send all four 403(b) Plan Setup Information Worksheets to your NBS New Business Coordinator

I I

Review and sign both copies of Plan Document

[

[

Send one signed copy of the Plan Document to your NBS New Business Coordinator

|

I

Send NBS a copy the Salary Reduction Agreement you would like posted to the Plan Website

I

I

Have initial conference call with your NBS New Business Coordinator (contact New Business Coordinator to arrange a time that will be convenient for you)

|

I

Send Initial Letter to Current Participants to employees that currently participate in plan

[ I

Send ISA Cancelation Letter to any investment providers with whom you have previously entered into an Information Sharing Agreement, Hold Harmless Agreement, or other Service Provider Agreement. If the employer acts as trustee of a plan or maintains an ERISA plan, consult with your New Business Coordinator first

\

I

Submit initial census file to NBS

| |

Submit test payroll file to NBS

[

|

Submit YTD contribution file to NBS

I

I

Submit Historical Contribution Data File to NBS (if your plan allows for the 15 Years of Service Catchup)

[

I

Transfer ongoing contribution remittance duties to NBS (after test payroll confirmed successful)

|

|

__Send Letter to Participants of Canceled Vendors to current plan participants whose vendor will be removed from the Plan (after it is known which vendors choose not to enter into an Information Sharing Agreement with NBS for the Plan).

I [

Send Final Letter to Participants to all Plan participants

[

Send Universal Availability Notifications to all employees not currently participating in the Plan

[

Implementation Timeline This timeline is a tentative schedule outlining major events in the plan implementation process. Most NBS activities have been omitted from the timeline for simplicity.

NBS and Employer

Employer

Week One Initial conference call with NBS

Week One Return Plan Setup Information Worksheets to

NBS

NBS

Sign Plan Document and return copy to NBS Send NBS copy of Employer's SRA Week Two Send ISA Cancelation letters to vendors Send initial letters to current plan participants

Week Two Send Provider/Information Shanng Agreements to current investment providers Setup participant Plan website (if applicable)

Week Three Send initial Census file to NBS Submit Test Payroll file to NBS Submit YTD Contribution file to NBS Submit Historical Contribution Data file to NBS (if applicable)

Week Three ionfirm with the employer that hies received and remittance test successful Setup participant Plan website (if applicable)

Week Four Transfer common remittance responsibilities to NBS (if applicable) Week One Approximate for vendors to estabhsth ISA Week Three Final conference call to resolve any outstanding issues or concerns

Week Three Send letters to participants whose vendor will be removed from program Send letters to all participants explaining program details Week Four Send Universal Availability letters to employees that do not currently participate Week Two Notices sent to orphan vendors

January 1, 2009 New IRS regulations go into effect

NBS Contact Information General Contact Information National Benefit Services, LLC Phone: 800-274-0503 (General) Phone: 800-274-0503 ext. 5 (403(b) Plan Team) Fax: 800-597-8206 Mailing Address PO Box 698 West Jordan, UT 84084 Overnight (Physical) Address 8523 S. Redwood Road West Jordan, UT 84088 New Business Coordinator Nathan Glassey Email: [email protected] Phone: 800-274-0503 ext. 127 Fax: 801-838-7303 Plan Administrator NAME Email: Phone: Fax: Assistant Plan Administrator NAME Email: Phone: Fax: Team Manager Evan Stephens Email: [email protected] Phone: 800-274-0503 ext. Ill Fax: 801-838-7305

403(b) Plan Setup Plan Information Worksheet - Parti Payroll Information Please complete this form and return it to NBS. Describe the employer's payroll schedule. For example, the 15th day of each month or the first Monday of each montf

Are there exceptions to the general payroll schedule? What happens if the designated date occurs on a weekend or holiday?

What is the last payroll date that will be included on employees IRS W-2 form this year?

Will payroll contributions be forwarded to NBS by wire, ACH, or check? [JACH

LJWire

jJCheck

Indicate the person with whom NBS should coordinate payroll activities. Name Phone

Fax. Email

Employee contributions may occasionally be returned to NBS by an investment provider (because the employee closed his or her account or for other reasons). In these situations, NBS will contact the employee to determine what should happen to the contribution. Depending on the employee's instructions, the contribution may be returned to the same provider, forwarded to a new provider, or returned to the employer's payroll department to be taxed. If NBS is unable to obtain instructions from the employee after two months, the contribution will be returned to the payroll department to taxed. If other procedures are desired, please indicate below.

NBS2008 PI1 6/2008

403(b) Plan Setup Plan Information Worksheet - Part 2 Miscellaneous Please complete this form and return it to NBS.

Indicate the person that will be given access to the secure Plan Sponsor Web Portal. This person will be able to access all Plan reports and view detailed information about the Plan. NBS will create a single account for the employer. Name

Email

Indicate the employer contact phone number and email address for employees that have questions about the plan. This information will be included on the Plan's webpage maintained by NBS. Please indicate if you do not want NBS to maintain a webpage for the plan. Phone.

Email-

Messages from the employer to employees may be posted on the Plan's webpage. Please indicate any desired messages. Future changes to messages may be requested thorugh your designated NBS plan administrator.

If NBS will be assisting in the management of Salary Reduction Agreements (SRA's), please indicate your desired schedule for receiving SRA updates. For example, SRA updates must be receive by the payroll office 5 business days before the payroll date or by the 10th day of the month.

NBS2008 PI1 6/2008

403(b) Plan Setup Plan Information Worksheet - Parts Current Investment Providers Please complete this form or provide a separate file or page that includes the same information. Identify each investment provider that currently receives contributions as part of the 403(b) plan. NBS will contact each provider you wish to retain in order to provide an opportunity to enter into a Provider/Information Sharing Agreement. Send this information to NBS.

Vendor Code/ID

Vendor Name

Vendor Remittance Address

Retain Vendor' I

|Yes I

]NO

GYCS

No

NBS2008 P21 6/2008

403(b) Plan Setup Plan Information Worksheet - Part 4 Orphan Investment Providers Please complete this form or provide a separate file or page that includes the same information. Identify each investment provider which received one or more contributions since January 1, 2005 but which will not be receiving contributions after January 1,2009. Send this information to NBS.

Vendor Name

NBS2008 PIS 6/2008

Vendor Remittance Address

403(b) Plan Setup File Formats Any files containing sensitive, non-public data (especially SSN) should be sent to NBS through the NBS Secure File Upload System on the NBS website. Please reference the NBS Secure File Upload Instructions in this packet for detailed instructions on using the system. All files should be in Microsoft Excel or similar CSV format and should include headers. Pre-formatted spreadsheets are included on the Plan Setup CD. Please note that all year-to-date data referenced in this document refers to the calendar year. Census File (Periodic) NBS needs to know basic census or biographical information about Plan participants. An initial census file should be supplied to NBS as well as periodic updates—the more frequent the better We encourage employers to provide a census file on a monthly basis. This file should also be supplied after the end of each calendar year. SSN

Last Name

First Name

Date of Birth

Date of Hire

Date of Termination

Street Address

City

State

ZIP

YTD Compensation Amount (Only required at year end)

Payroll File (Every Payroll Period) A file (and corresponding ACH, wire, or check if NBS will be performing remittance of the Plan's 403(b) contributions) must be provided to NBS for each payroll. Vendor Code is the unique code used by trie employer to identify each investment provider/vendor. Source Code identifies the type of contribution. Please use the following Source Codes as applicable. 403b EE, 403b ER, 403b Roth, 457b, 401k EE, 401k ER, 401a, IRA, IRA Roth. Please contact NBS if you have additional sources. The Date of Birth, Date of Hire, and YTD Contribution Amount fields are suggested but not required. Payroll Date

SSN

Last Name

First Name

Vendor Code

Source Code

Contribution Amount

Date of Birth (optional)

Date of Hire (optional)

YTD Contnbution Amount (optional)

YTD Contribution File (One Time) Description: Unless NBS begins administration of your plan on January 1, we will need to obtain the contributions totals of Plan participants up to (but not including) the first live payroll remittance performed by NBS. This data may be supplied in either of the methods shown below, however, the first method is preferred. Date is the date through which the data is current. Do not send YTD contribution data to NBS that includes the first set of payroll data. Date

SSN

Last Name

First Name

Date

SSN

Last Name

First Name

Vendor Code Source Code

YTD Contribution Amount

YTD Contnbution Amount

Historical Contribution Data File for 15 Years of Service Catch-Up (One Time) If your Plan permits employees to utilize the 15 Years of Service Catch-up, historical 403(b) contribution data is required. Data should be provided for every year during which an employee made a contribution (even if contributions began more than 15 years ago). Year

NBSjnns PIFF 7/2nns

SSN

Last Name

First Name

EE 403(b) Contnbution Amount for Year

Contribution Transfer Instructions Check Make check payable to: National Benefit Services, LLC. Please include the Employer Name and Payroll Period Ending Date on the FBO line. Mail check and list bill (sending a file to NBS through our web-based Secure Upload System in lieu of a hardcopy list bill is preferred) to: Regular Mail National Benefit Services, LLC P.O. Box 698 West Jordan, UT 84084

Overnight Delivery National Benefit Services, LLC 8523 South Redwood Road West Jordan, UT 84088

ACH

Include the name of the employer and payroll date when sending an ACH payment. Transmit money to: Zions First National Bank Broadway Office 310 South Main Salt Lake City, UT 84101 Routing Number: 124000054 Account Number: 3423829

Wire Include the name of the employer and payroll date when sending a wire payment. Please avoid using wire transferring for transmitting small dollar amounts. Transmit money to: Zions First National Bank Broadway Office 310 South Main Salt Lake City, UT 84101 Routing Number: 124000054 Account Number: 3423829

Secure File Upload Instructions 1. Using your internet browser, navigate to: www.nbsbenefits.com. 2. Click on "Secure Upload" link on the left hand side.

C u s t o m e r C a r e • K n o w led

Homf'-i •' Employees Employers Advisors

NATIONAL

(' n >%

3. Enter the password: nbslsecure

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4. Enter the requested information. 5. Use the "Browse" button to find and attach your files. • Enter your first and last Full Name*

[ • Enter ihenameof

Company Name* f Email Address*

[

Enter a valid e-miil address We wili send vfu a confirmasion e-mail upon Aitoccssfu! upload oi'\our liies

Hl« *?

Fill! »J file »•» r«e»s

Click this first browse buiiun to attach your first file A box will open whsth snows !he consents i))"\t>ur iocai ;omputer Simpiy selec! the Hie you \vi4 to upload. The name of the file wsll ROW appear in the-box to the right of "File r1!" i j Jescriouon ul trie files you at v,dl as any

CLK'KHERE TO COMPLETE

If you have an additional file that sou wish to send at this time, click the ne*.! "Browse" butfan to repeat the above process. Repeat the process for each additional file \ ou wi*h to fend.

6. Click "Upload". 7. You will receive an email confirmation that your file upload was complete. If you do not receive a confirmation email, contact your plan administrator.

If you need to borrow, withdraw or transfer funds from your 403B 457 or other retirement plan this summer please see instructions below. For more details about your CALSTRS, CALPERS Retirement Benefits or have questions about vour 403B ISA Mutual Funds fill out the form below and fax (626-628-0325) or mail to The IDS Group 117 West Gutierrez Street Santa Barbara, CA 93101 and your TDS Group Representative, Maurice G. Saldebar, will contact vou or call at 626-628-3750 or 800-975-655 exl 215 See the instructions below to borrow, withdraw or transfer money from your 403B/TSA or 457 plan Q

Q

Q

Borrow money from TSA * 1. Obtain loan form from vour TSA Comoanv. broker or ask TDS 2. Include your account number and signature on form 3 Fax form to 805-882-0098 Withdraw (Hardshm) monev from TSA * 1 Obtain withdrawal loan form from your TSA Company, broker or ask TDS 2 Include your account number and signature on form 3 Fax form to 805-882-0098 Transfer retirement assets into school district LACOE 457 or 403B (Requires ffardcopy form) ] Obtain withdrawal loan form from your TSA Company, broker or ask TDS 2. Include vour account number and signature on form 3. Mail hardcopyform to- The TDS Group, II7 Gutierrez Street Santa Barbara, CA 93101ATTN. Marissa L./Jennifer B.

Terms can be subject to TSA comoanv oolicv . Be sure to check with TSA Comoanv. .vour broker or The TDS Grouo

Name Years of Service

School District/School Site Date of Birth

Contact Numbers) Home Best time and method to contact you

I have a broker Y/N I need a broker Y/N Not Sure Cell

Email(s)

/

Quick Question/Comment

Mailing Address The TDS Group, 117 Gutierrez Street Santa Barbara, CA 93101 800-975-6555 ext215/626-629-3750 Securities and Investment Advisory Services are offered with and through Financial Network Investment Corporation (FNIC), Member of FINRA & SIPC OSJ Office 6100 Uptown Blvd, Suite 220, Albuquerque, NM 87110 TDS and FNIC are not affiliated companies and neither represents STRS or PERS IW2007)

DATE

Template Initial Letter to Participants

PARTICIPANT NAME PARTICIPANT ADDRESS CITY ST, ZIP

RE: 403(b) Plan Changes Dear PARTICIPANT NAME, Last year the IRS made comprehensive changes to the rules that govern 403(b) plans. As a result, EMPLOYER NAME is required to makes changes to the 403(b) plan you currently participate in. EMPLOYER NAME has contracted with National Benefit Services, LLC (NBS) to act as third party administrator of the plan. Some of the changes that will be occurring over the next several weeks include: •

NBS will begin providing oversight of the plan to ensure the plan complies with the new IRS regulations. For you, the employee, this will be most apparent when you wish to initiate a transaction with your investment provider such as a loan, distribution, or transfer to a different provider. Pre-authorization from NBS will be required to perform these transactions. Forms and instructions are available on the EMPLOYER NAME plan website maintained by NBS.

•

NBS will contact the plan's current investment providers and give them the opportunity to enter into an Information Sharing Agreement. Some investment providers may not be willing or able to enter into the agreement. Because of the new IRS regulations, EMPLOYER NAME must remove providers from the plan that do not sign the agreement. You will need to select a new provider if your current provider is removed. Additional communication will be sent to you after it has been determined which providers have chosen to remain part of the plan.

•

The NBS website www.nbsbenefits.com/403b will be updated to include information about the EMPLOYER NAME 403(b) plan and will include a list of available investment providers, plan forms, and other useful information.

You will receive additional communication regarding these changes in the coming weeks. Please contact the human resource office at XXX-XXX-XXXX if you have any questions. Sincerely,

^oi'overs- must have qualifying event Rolloverto an IRA, another 4O3(b), or 457 plan are allowed

Plan Administrator Approval Required

I Loans-Options Check with Plan Administrator if allowed • Loan repayments must be made at least quarterly • Principal and interest most be amortized •Term- 5 years or longer if used for the purchase of participant's home • Loans may be made for any reason • Loans must be coordinated among ali providers of the employer's ptan

•'Lqansare not discharged in:. '; .."' ' .a'bankruptcy.!;'.!"'-''- •'

reaches 59 Vi has a severance from employment dies becomes disabled has a qualified reservist distribution encounters financial hardship

N A T I O N A L B E N E F I T —|B SERVICES, LLC C u s t o m e r Care • Knowledge and Expertise m Organizational Excellence

403(b) Plan Administration and Compliance Services Plan Implementation Guide Index: Tabl Employer checklist, timeline, NBS contact information Tab 2 Plan Information Worksheets

Tab3 General instructions and reference Tab 4 Letter templates

Tab5 Plan documents Tab 6 Summary Plan Description

Tab? Service Contact, Fee Schedule, Service Proposal, and Provider/Information Sharing Agreement Tab8 Forms

DATE

Template Letter to Participants of Canceled Vendor

EMPLOYEE NAME EMPLOYEE ADDRESS CITY, ST ZIP

Re: Changes to District 403(b) plan - Action required to continue participation Dear EMPLOYEE NAME, The IRS recently issued new, comprehensive regulations governing 403(b) plans—the first in over 40 years. As a result, changes to EMPLOYER NAME'S 403(b) plan are necessary at this time. All investment providers that currently participate in the District's 403(b) plan were given the opportunity to continue to do so. However, some investment providers are unable or unwilling to meet the plan's new requirements resulting from the regulation changes. Providers that do not meet these requirements will soon cease to be available to employees. Action Required: The District's records indicate you are currently contributing to a 403(b) plan account with VENDOR. Unfortunately, this provider will no longer be available as of DATE. In order to continue to make salary deferrals to the 403(b) plan, you will need to: 1) 2) 3)

Select a new investment provider (a list of eligible providers is included on the back of the enclosed form) Contact your chosen investment provider to establish a 403(b) account Complete the enclosed Salary Reduction Agreement (SRA) and submit it to the payroll office

If you do not submit a new SRA to the District by DATE, your current SRA will be canceled and your salary deferrals to the 403(b) plan will be halted. You may submit a new SRA to resume contributions at any time. Please note that your savings currently held by VENDOR are not affected by these changes—only your ability to continue to actively contribute to your VENDOR account. The back of the enclosed SRA form includes a list of eligible plan investment providers. Contact the HUMAN RESOURCES OFFICE if you have any questions.

Sincerely,

Template Final Letter to Participants

DATE

PARTICIPANT NAME PARTICIPANT ADDRESS CITY ST, ZIP

RE: 403(b) Plan Changes Dear PARTICIANT NAME, As mentioned in a letter sent to you several weeks ago, the IRS has changed the rules that govern 403(b) plans. As a result, EMPLOYER NAME is required to makes changes to the 403(b) plan you currently participate in. EMPLOYER NAME has contracted with National Benefit Services, LLC (NBS) to act as third party administrator of the plan. The following changes have taken place: •

NBS is providing oversight to ensure the plan is compliant with IRS regulations.

•

Withdrawals from your current investment provider must be approved by NBS. Go to the plan website at www.nbsbenefits.com/403b to obtain the necessary approval paperwork. Please note that your vendor will still require its own form be used in addition to the NBS form.

•

The plan is now being governed by a formal written plan document. A copy of the plan document or a summary of the plan document may be obtained from the human resources office.

•

The plan website maintained by NBS, www.nbsbenefits.com/403b. will serve as a resource to obtain information about the plan. The website includes: Plan forms List of investment providers eligible to receive plan salary deferral contributions List of investment providers eligible to receive transfers General information about 403 (b) investing

Please contact the human resource office at XXX-XXX-XXXX or NBS at (800) 274-0503 ext. 5 if you have any questions.

Sincerely,

DATE

Template Universal Availability

EMPLOYEE NAME EMPLOYEE ADDRESS CITY ST, ZIP

RE: Eligibility to participate in 403(b) retirement plan Dear EMPLOYEE NAME, You are eligible to participant in the 403(b) retirement plan sponsored by EMPLOYER NAME. Participation is voluntary. What is a 403(b) plan? A 403(b) plan, also known as a Tax-Sheltered Annuity (TSA) plan, is a tax-deferred retirement plan for employees of certain tax-exempt, governmental organizations or public education institutions. An employer may sponsor a 403(b) plan to provide a benefit to its employees of the opportunity to save for retirement on a tax-deferred basis. 403(b) plans were created to encourage long-term savings, so depending on your plan, distributions are available only when you reach age 59 '/2, leave you job or upon death or disability. Keep in mind, distributions before age 59 '/2 might be subject to restrictions and a 10% federal penalty for early withdrawals. Why contribute to a 403(b) plan? Participating in your plan can provide a number of benefits, including the following: •

Lower Taxes Today The 403(b) contributions you make are on a pre-tax basis. This means that you are taxed on a lower amount of income. For example, if your federal marginal income tax rate is 25%, and if you contribute $100 a month to a 403(b) plan, you have reduced your federal income taxes by nearly $25. In effect, your $100 contribution costs you only $75. The tax savings can grow with the size of your 403(b) contribution.

•

Tax-deferred Growth In your 403(b) plan, interest and earnings accrue tax-deferred. This means that your interest will grow taxfree until the time of your withdrawal. The compounding interest on your 403(b) plan can allow your account to grow more quickly than saving in a taxable account where interest and earnings are generally taxed each year.

•

Taking the Initiative Contributing to a 403(b) retirement plan can help you take control of your future retirement needs. Other sources of retirement income, including state pension plans and, if applicable, Social Security, often do not adequately replace a person's salary upon retirement. A 403(b) plan can be a great way to provide you with additional income at retirement.

•

Possible Tax Credits If you contribute to the plan, you may be able to receive a tax credit, which could reduce your overall federal income tax paid for the year.

How do I get more information? To obtain additional information about participation, and about the savings products made available under the plan, contact the payroll/human resources department at PHONE NUMBER.

Sincerely,

Important Benefit Information about your 403(b) Retirement Plan

What is a 403(b) plan? A 403(b) plan, also known as a Tax-Sheltered Annuity (ISA) plan, is a tax-deferred retirement plan for employees of certain tax-exempt, governmental organizations or public education institutions. An employer may sponsor a 403(b) plan to provide a benefit to its employees of the opportunity to save for retirement on a tax-deferred basis. 403(b) plans were created to encourage long-term savings, so depending on your plan, distributions are available only when you reach age 59 '/2, leave you job or upon death or disability. Keep in mind, distributions before age 59 Vi might be subject to restrictions and a 10% federal penalty for early withdrawals.

Why contribute to a 403(b) plan? Participating in your plan can provide a number of benefits, including the following: •

Lower Taxes Today The 403(b) contributions you make are on a pre-tax basis. This means that you are taxed on a lower amount of income. For example, if your federal marginal income tax rate is 25%, and if you contribute $100 a month to a 403(b) plan, you have reduced your federal income taxes by nearly $25. In effect, your $100 contribution costs you only $75. The tax savings can grow with the size of your 403(b) contribution.

•

Tax-deferred Growth In your 403(b) plan, interest and earnings accrue tax-deferred. This means that your interest will grow tax-free until the time of your withdrawal. The compounding interest on your 403(b) plan can allow your account to grow more quickly than saving in a taxable account where interest and earnings are generally taxed each year.

•

Taking the Initiative Contributing to a 403(b) retirement plan can help you take control of your future retirement needs. Other sources of retirement income, including state pension plans and, if applicable, Social Security, often do not adequately replace a person's salary upon retirement. A 403(b) plan can be a great way to provide you with additional income at retirement.

•

Possible Tax Credits If you make contributions to the plan, you may be able to receive a tax credit, which could reduce your overall federal income tax paid for the year.

How do I get more information? To obtain additional information about participation, and about the savings products made available under the plan, contact the payroll/human resources department at PHONE NUMBER.

DATE

Template

Good Faith Notice to Orphan Vendors

VENDOR NAME VENDOR ADDRESS CITY ST, ZIP

RE: Plan Administrator Contact for EMPLOYER NAME 403(b) Plan Our records indicate VENDOR NAME received salary deferral contributions as part of the EMPLOYER NAME 403(b) Plan (the "Plan") after December 31, 2004. Additionally, as of January 1, 2009 VENDOR NAME will no longer be an active vendor of the Plan. This letter constitutes "good faith" notice described in IRS Rev. Proc 2007-71 regarding annuity or custodial accounts held by your company that were established and funded by employees of EMPLOYER NAME from January 1, 2005 and December 31, 2008. National Benefit Services, LLC (NBS) has been appointed third-party plan administrator of the EMPLOYER NAME 403(b) Plan. We ask that you contact NBS to coordinate necessary information sharing should a participant or beneficiary request a loan, distribution, or other transaction that requires non-participant certification. National Benefit Services, LLC Attn: 403(b) Department 8523 S. Redwood Road West Jordan, UT 84088 Sincerely,

Phone: (800) 274-0503 ext. 5 Fax: (800) 597-8206

403(b) Loan Authorization Form

RV

NATIONAL BENEFIT

JLS:JL?LJbi£-

Participant Instructions The 403(b) Loan Authorization Form must be submitted to National Benefits Services, LLC (NBS), the third party administrator, to authorize any loan of 403(b) amounts from investment providers of your employer or former employer's 403(b) plan The investment provider may require its own paperwork in addition to this form You may wish to attach your investment provider's paperwork to this form You must attach account statements from your investment provider documenting the account and loan balances you indicate in step 4 All attached forms or paperwork will be forwarded to the investment provider indicated below Complete steps 1 -5 and mail or fax this form to NBS Inquiries regarding the status of your loan may be directed to NBS at (800) 274-0503 After paperwork has been forwarded to your investment provider, mqumes should be directed to your provider After this form has been received by NBS in good order, it will be forwarded to your provider within 5 business days NBS Mailing Address:

National Benefit Services, LLC 8805 S Sandy Parkway Sandy, UT 84070

NBS Fax Number

(800)597-8206

NBS Phone Number:

(800)274-0503

Investment NBS represent this loan of 403(b) amounts is permitted by the employer's plan and is in accordance with the 403(b) Provider/Information Shanng Agreement (Agreement) Provider entered into by your company and NBS, and provided that NBS has signed below The loan issue amount may not exceed the dollar amount indicated in Maximum Instructions Eligible Loan Amount box. Social Secunty Number Date of Birth Participant Name Participant Participant Mailing Address Information

Home Phone Number

Work Phone Number

Agent Name

Agent Phone Number

(Cty.STZIPI

Investment provider from which 403(b) amounts will be loaned to you Investment Provider Information

Investment Provider Account Number

^____

Street or PO Box City, State, Zip Phone Number Fax Number | Answer the following questions concerning current and previous loans Current and Previous Loans

1 Have you ever defaulted on a previous 403(b), 401 (k), or 457(b) plan loan? If YES, then you must provide documentation that the previously defaulted loan has been repaid, offset, or otherwise returned to good standing

Y

N

2 Do you currently have or have you had in the past 12 months a 403(b), 401(a), or 457(b) loanls)?

Y

N

3 If you have or have had an outstanding loan(s) in the past 12 months, what is your highest outstanding loan balance(s) in the last 12 months7 You must attach an account statement reflecting your highest loan balance(s) in the past 12 months Identify all your current 403(b), 401 (a), or 457(b) accounts, account balances, and loan balance and attach a copy of your most recent account statement(s) Attach an account statement for each account If you have more than three accounts, please attach a separate page with that account information Current account value (excluding Current outstanding loan amount Current Loan outstanding loans) Investment Provider Name (if any) Total account value and Account Account 1 Balance(s) Account 2 Account 3 Example

XYZ Annuity Company

30,00000

6,00000

36,00000

I recognize that the information contained on and attached to this form may be shared with a third party (including National Benefit Services, LLC (NBS)) as necessary to administer the Plan in accordance with the Internal Revenue Code I authonze the investment providers indicated on this form to release non-public information pertaining Participant to my accounts as necessary to administer the plan including account balance, loan balance, loan status, and loan history Approval $

Participant Signature (Required)

Date

Requested Loan Amount

NBS Signature (Required)

Date

Maximum Eligible Loan Amount

For NBS Use Only

403(b) Exchange Authorization Form

NATION A L B E N E FIT

R V I C E S , L LC^ ilt ! \ t i l i t ' I I I

Participant The 403(b) Exchange Authorization Form must be submitted to National Benefit Services, LLC (NBS), the third party administrator, to authonze any exchange of Instructions 403(b) amounts between exchange-eligible investment providers of your employer's 403(b) plan The surrendering investment provider may require its own

paperwork in addition to this form. You may wish to attach your investment provider's paperwork to this form. All attached forms or paperwork will be forwarded to the surrendering investment provider indicated (unless specified otherwise in steps 2 and 3) Complete steps 1-4 and mail or fax this form to NBS Inquiries regarding the status of your transaction may be directed to NBS at (800) 274-0503 ext. 5. After paperwork has been forwarded to your investment provider, mqumes should be directed to your provider. After this form has been received by NBS in good order, it will be forwarded to your provider within 5 business days A list of exchange-eligible investment providers is available on your plan's website NBS Mailing Address:

National Benefit Services, LLC 8523 S. Redwood Road West Jordan, UT 84088

NBS Fax Number.

(800)597-8206

NBS Phone Number:

(800) 274-0503 ext 5

Investment NBS represents that this exchange of 403(b) amounts is permitted by the employer's plan and is in accordance with a 403(b) Provider/Information Sharing Provider Agreement (Agreement) entered into by the receiving provider and NBS, provided that NBS has signed below. The surrendering investment should provide to the Instructions receiving provider at the time of the exchange information regarding the portion of the exchanged amount represented by deferral amounts and, in the case of

Roth amounts (if allowed by the plan), the Roth portion and commencement date of the 5-year holding penod Employer State Employer Name ^^^n^^^^^H

Participant Participant Name Information

Participant Mailing Address

Social Security Number

Date of Birth

Home Phone Number

Work Phone Number

Agent Name

Agent Phone Number

(Sleel)

(City STZIP|

Recipient of this form: Please indicate the provider Surrendenng or Receiving) to which NBS should send this paperwork. Generally, the Surrendenng provider should receive this form but the Receiving provider may instruct you otherwise If no option is selected, NBS will forward this form and all accompanying paperwork to the Surrendering provider

Investment provider from which 403(b) amounts will be exchanged or surrendered (source of assets) Surrendering Investment Provider Information

Investment Provider Account Number Street or P.O. Box City, State, Zip Phone Number Fax Number Investment provider that will receive the exchange of 403(b) amounts (destination of assets)

| | Surrendering Provider (Provider from which assets will be exchanged)

Investment Provider Receiving Investment Provider Information

Account Number Street or P.O. Box

| | Receiving Provider (Provider that will be receiving the assets)

City, State, Zip Phone Number Fax Number

•Krcffil I recognize that the information contained on and attached to this form may be shared with a third party (including National Benefit Services, LLC (NBS)) as necessary to administer the Plan in accordance with the Internal Revenue Code I authonze the release of non-public information pertaining to the above Participant accounts and transaction to NBS representatives as necessary to administer the plan Approval

Participant Signature (Required)

Date

NBS Signature (Required)

Date

For NBS Use Only Ver SMPL9/08

403(b) Distribution/Rollover Authorization Form

NATIONAL BENEFIT SIR VICES, LLC Customer Cart1 • Knowledge ami r.xpr

Participant The 403(b) Distribution/Rollover Authorization Form must be submitted to National Benefit Services, LLC (NBS), the third party administrator, to authorize a distribution Instructions or rollover of 403(b) amounts from your employer or former employer's plan. Two types of distnbutions do not require this form 1) Hardship distributions require submission of a different form 2) Required minimum distnbutions following attainment of age 70112 do not require NBS authorization Your investment provider may require its own paperwork in addition to this form You may wish to attach your investment provider's paperwork to this form All attached forms or paperwork will be forwarded to the investment provider indicated below Complete steps 1-4 and mail or fax this form to NBS. Inquiries regarding the status of your distnbution or rollover may be directed to NBS at (800) 274-0503 After paperwork has been forwarded to your investment provider, inquiries should be directed to your provider After this form has been received by NBS in good order, it will be forwarded to your provider within 5 business days. NBS Mailing Address:

National Benefit Services, LLC 8805 S Sandy Part Sandy, UT 84(

NBS Fax Number:

(800)597-8206

NBS Phone Number:

(800) 274-0503

Investment NBS represents this participant (or beneficiary) is eligible to distribute or rollover of 403(b) amounts in accordance with the employer's plan and the 403(b) Provider Provider/Information Shanng Agreement (Agreement) entered into by your company and NBS, provided that NBS have signed below Instructions Social Security Number Date of Birth Participant Participant Mailing Address Information

Home Phone Number

Work Phone Number

Agent Name

Agent Phone Number

(SUM!)

(Crty.STZIP)

I Select all applicable reasons for withdrawal and the date of the applicable event. If none of the events listed below apply to you, you may not be eligible for a distnbution or rollover You may still be eligible to transfer 403(b) amounts to a different investment provider using 403(b) Transfer Authonzation Form Contact your investment Reason(s) for Provlder> financial advisor, or NBS for additional information Withdrawal

Distributable Event: QjTermmation of employment from Sponsonng Employer Retirement [^Attainment of age 59 % |

Date of event Date of event

Required minimum? [Y[N|

Death of participant (provide documentation)

Date of event: Date of event

| ^Disability (provide documentation)

Date of event

[JdDRO (provide documentation)

Date of event.

Correction of excess contnbution or deferral

Tax year

Indicate the investment provider that currently holds the assets you wish to distribute or rollover Source of Assets

Investment Provider Account Number Street or PO Box City, State, Zip Phone Number Fax Number

I recognize that the information contained on and attached to this form may be shared with a third party (including National Benefit Services, LLC (NBS)) as necessary to administer the Plan in accordance with the Internal Revenue Code I authonze the release of non-public information pertaining to the above accounts and transaction to Participant/ NBS representatives as necessary to administer the plan Beneficiary Approval Participant Signature (or Beneficiary Signature if participant is deceased) (Required) Date For NBS Use Only

NBS Signature (Required)

Date

Maximum Allowable Contribution Worksheet NATIONAL BEN

403(b) 2009

. "»_.'ii.mi < "El'r

RVICES, LLC

~ "ku.'i r(7a~i "in,l (

Instructions The 2009 Maximum Allowable Contribution Worksheet is to be used to determine the maximum dollar amount that you may contribute to a 403(b) Retirement Program in 2009 Upon completion, submit a copy of this form to National Benefit Services, LLC by fax or mail. NBS Mailing Address:

National Benefit Services, LLC 8523 S Redwood Road West Jordan, UT 84088

Employee Participant Name Information

NBS Fax Number:

(800) 597-6206

NBS Phone Number:

(800) 274-0503 ext. 5

Social Security Number

Employer Name

Home Phone Number

Participant Mailing Address

Work Phone Number

(Str«el)

E-mail Address (Qty. ST ZIP)

403(b) and Roth 403(b) Calculation

1.

2009 base deferral limit

2.

Special 15-Year Catch-up Contribution (if permitted by your employer)

1.

$16,5C1000

a

Have you completed 15 or more full years of service with you current employer? If NO, enter $0 in line 2e and preceed to question 3 If YES, continue to the next question.

2a.

Y E S / NO

b.

Have your previous combined 403(b) and Roth 403(b) contributions averaged less than $5,000 per year during your lifetime?

2b.

Y E S / NO

YES 1 NO

If NO, enter $0 in line 2e and proceed to question 3. If YES, continue to the next question

3.

c

Have you made any Special 1 5-Year Catch-up contributions previously? If NO, skip to question 2e If YES, continue to next question

2c.

d

Enter the total amount of any previously utilized Special 1 5-Year Catch-up contributions in line 2d

2d.

e

Subtract line 2d from $15,000 If the result is greater than $3,000 then enter $3,000 in line 2e If the result is less than $3,000 then enter the result in line 2e

2e.

Age 50 Catch-up Contribution a

Will you reach Age 50 by 1 2/31/2009'

3a.

b

If 3a is YES, enter $5,500 in line 3b If 3a is NO, enter $0 in line 3b

3b.

4.

Add lines 1,2e, and 3b This is your Maximum 403(b) and Roth 403 b) Contribution Amount for 2009. This number cannot exceed $25,000.

4.

5.

Enter the total of any contributions already made to 403(b) plans during 2009

5.

6.

Subtract line 5 from line 4. This is the total remaining amount you may contribute to 403(b) plans during 2009

6.

YES 1 NO

1

|

Employee IMPORTANT. You may rely on the accuracy of this Worksheet if the information you provide is correct and complete. Neither your Employer, nor Signature National Benefit Services, LLC possess data for purposes of calculating the 403(b) Special 15-Year Catch-up Contribution. By signing this Worksheet, you certify that all the information provided is accurate and you agree to indemnify and hold harmless your Employer, and National Benefit Services, LLC from any and all damages which may result from providing inaccurate or incomplete information You understand and agree that your total annual contributions to the combined 403(b) and Roth 403(b) Employee Signature Date

X

403(b) Salary Reduction Agreement

NATIONAL BENEFIT

Instructions The Salary Reduction Agreement (SRA) is to be used to establish, change, or cancel salary reductions withheld from your paycheck and contributed to the 403(b) plan on your behalf The SRA is also used to change the investment providers that receive your contributions Upon completion, fax or mail a copy of the form to National Benefit Services, LLC Please note that this form is not valid unless all applicable sections are completed and you have signed the form MBS Mailing Address: National Benefit Services, LLC NBS Fax Number: (800) 597-8206 8523 S Redwood Road West Jordan, UT 84088 NBS Phone Number. (800) 274-0503 ext 5 Social Secunty Number Employee Employee Name Information Employer Name

Home Phone Number

Employee Mailing Address

E-mail Address Date of Birth

Number of Pay Penods Per Year

(Cfy.STZIP)

Requested Action

Check only one box SRA is not valid without an Effective Date. | | I want to STOP all contnbutions to all providers

Effective Date.

f~j

I want to BEGIN contributions (complete Amount and Provider section below)

Effective Date

I I

I want to CHANGE contnbution amounts and/or providers (complete Amount and Provider section below)

Effective Date

Amount and Leave this section blank if you are canceling contnbutions To change or begin contnbutions, enter your desired amount(s), investment providers), and vendor Provider code(s) This SRA will replace any previously submitted SRA's Only salary reductions identified in the space below will be performed starting on the Effective Date. Please see page 2 for examples Please note that you must establish your accounts) with your desired investment provider(s) pnor to submitting this form Contact your investment provider(s) directly to establish your accounts) Salary reduction will not be performed if you have not established your accounts) The Code # of your chosen investment provider may be found atwww nbsbenefits com/403b Monthly Dollar Have you established an account Investment Provider Name Code* Amount with this provider? $

[>es

Agent Agent Name Information Agent Address

D No

Agent Phone Number Agent Email Address Agent Fax Number

(Cily STZIPI

Employee Approval

I understand and agree to the following 1 This Salary Reduction Agreement (Agreement) is an agreement between me and my employer which I have entered into voluntanly 2 The Agreement supersedes all pnor Salary Reduction Agreements 3 The Agreement is legally binding and irrevocable with respect to amounts paid or available while this agreement is in effect 4 The Agreement may be terminated at any time for amounts not yet paid or available, and that a termination request is permanent 5 The Agreement may be changed with respect to amounts not yet paid or available. 6 Nothing herein shall affect the terms of employment between the Employer and myself This agreement supersedes all pnor Salary Reduction Agreements and shall automatically terminate if my employment is terminated I understand that I may not contribute an amount which will exceed the annual additions limitation under Code Section 415 or permit excess elective deferrals under Code Section 402(g) If, based on information held by my employer or the Plan's third party administrator (National Benefit Services, LLC), either my employer or National Benefit Services, LLC believes additional contnbutions will cause me to exceed limits under Code Section 415 or 402(g), I authorize the automatic cancelation of this Salary Reduction Agreement I have read and understood the information contained on page 2 of this Agreement I understand that by making this application the release of my confidential information to third parties may occur as necessary to administer the Plan in accordance with the Internal Revenue Code Employee Signature Date X

403(b) Salary Reduction Agreement (Continued)

N A T I O N A L B E N E F I T SERVICES, LLC

Important The Employee agrees to indemnify and hold the Employer and National Benefit Services, LLC (NBS) harmless against any and all actions, claims and demands Information whatsoever that may anse from the purchase of annuities or custodial accounts in this 403(b) Plan The Employee acknowledges that neither the Employer nor NBS have made representation to the Employee regarding the advisability, appropriateness or tax consequences of the purchase of the annuity and/or custodial accounts The Employee agrees that neither the Employer nor NBS shall have any liability whatsoever for any and all losses suffered by the Employee with regard to his/her selection of the annuity and/or custodial account, its terms, the selection of the insurance company or regulated investment company, the solvency of, operation of or benefits provided by said insurance company or regulated investment company, or his/her selection and purchase of shares of regulated investment companies The Employer reserves the nght to alter terms of this Agreement as required to facilitate Program compliance with State and Federal law The Employer does not choose the annuity contract or custodial account in which the Employee's contributions are invested The Employee is responsible for setting up and signing the legal documents to establish the annuity contract or custodial account In order for the Employee to receive the expected tax results, the annuity contract or custodial account established must meet the requirements of Section 403(b) of the Internal Revenue Code. It is solely the Employee's responsibility to establish the proper type of contract or account for this purpose The Employee is responsible for naming a death beneficiary under the annuity contract or custodial account This is normally done at the tme the contract or accoun is established, although the designation should be reviewed from time to time The Employee is responsible for investment decisions, distributions and any other transactions with the insurance company or investment company and shall have total responsibility for all distributions and any resulting taxation consequences All nghts under the contract or account are enforceable solely by the Employee, the Employee's beneficiary or the Employee's authonzed representative The insurance or investment company or may be required to receive approval from the Employer or National Benefit Services, LLC prior to executing certain transactions including loans, hardships, distributions, or transfers (as permitted by the Plan). The Employee understands that information contained in this Agreement and other non-public information may be shared with the Employer's designated third-party administrator in conjunction with the operation of the 403(b) Plan Retain a copy of this form for your records Amount and Example 1: If you currently do not participate in the Plan and wish to begin contributing $300 per month to your account with ABC Company and $200 per month to Provider your account with XYZ Company, enter the following on the first page Examples Monthly Dollar Have you established an account Investment Provider Name Code* Amount with this provider?

ABC Company

(ABC's Code)

$300.00

[xJYes []NO

XYZ Company

(XYZ'sCode)

$20000

[xJYes QNO

Example 2: If you currently contribute $300 per month to ABC Company and $200 per month to XYZ company but wish to reduce both contributions to $100 per month each, enter the following on the first page (remember, this SRA supersedes and replaces any previous SRA's) Monthly Dollar Have you established an account Investment Provider Name Code* Amount with this provider?

ABC Company

(ABC's Code)

$100.00

[XJYes []NO

XYZ Company

(XYZ's Code)

$10000

[xlYes

Example 3. If you currently contnbute $300 per month to ABC Company and $200 per month to XYZ company and wish to eliminate the contnbution to ABC Company but keep the contribution to XYZ Company unchanged, enter the following on the first page (remember, this SRA supersedes and replaces any previous SRA's) Monthly Dollar Have you established an account Investment Provider Name Code* Amount with this provider?

ABC Company

(ABC's Code)

$300.00

[xlYes HNO

D

403(b) Hardship Authorization Form

NATIONAL BENEFIT

Participant The 403(b) Hardship Authorization Form must be submitted to National Benefit Services, LLC (NBS), the third party administrator, to authonze any hardship Instructions distnbution of 403(b) amounts from your employer or former employer's 403(b) plan The investment provider may require its own paperwork in addition to this form You may wish to attach your investment provider's paperwork to this form All attached forms or paperwork will be forwarded to the exchanging investment provider indicated below Complete steps 1 - 4 and mail or fax this form to NBS Inquiries regarding the status of your hardship withdrawal request may be directed to NBS at (800) 274-0503. After paperwork has been forwarded to your investment provider, mqumes should be directed to your provider After this form has been received by NBS in good order, it will be forwarded to your provider within 5 business days NBS Mailing Address:

Investment Provider Instructions Hardship Withdrawal Provisions

National Benefit Services, LLC 8805 S. Sandy Parkway Sandy, UT 84070

NBS Fax Number:

(800)597-8206

NBS Phone Number:

(800)2744503

NBS represents this hardship withdrawal of 403(b) amounts is permitted by the employer's plan and is in accordance with the 403(b) Provider/Information Sharing Agreement (Agreement) entered into by your company and NBS provided that NBS has signed below The investment provider should distribute no more than the amount indicated in the Maximum Eligible Hardship Amount box Hardship Withdrawal Provisions: Hardship withdrawals are only permitted to the extent a participant demonstrates that the reason for the hardship withdrawal complies with the applicable requirements under the Internal Revenue Code and that such hardship imposes an immediate and heavy financial burden upon such participant Hardship withdrawals are limited to bona fide financial emergencies A hardship withdrawal cannot be applied for until all other options have been exhausted These options include, insurance, reasonable liquidation of the participant's assets, cessation of elective deferrals to any retirement account, or other distributions or loans from the employer's plan(s) or a commercial loan Amounts Available for Withdrawal: If you have a qualified hardship, you may withdraw the amount necessary to meet the need created by the hardship, as long as the amount withdrawn does not exceed your total employee deferrals less any earnings. The total amount of the withdrawal cannot exceed the value of your deferral A hardship withdrawal disqualifies you from making deferral contributions to any 403(b) retirement account (or 6 months after withdrawal. Participant Name Social Secunty Number I Date of Birth

Participant Participant Mailing Address Information

Home Phone Number

Work Phone Number

Agent Name

Agent Phone Number

(Swell

(City ST ZIP)

Hardship Reason

In the space provided below, indicate the nature of the hardship for which you are requesting a withdrawal You may attach additional pages if more space is needed You must attach appropnate documentation providing evidence that you have a financial hardship As part of the review process, you may be required to provide additional proof of your financial hardship I I Payment for or to obtain medical care for the participant or the participant's spouse or dependents | |Costs related to the purchase of a participant's principal residence (not including mortgage payments) | | Payment of tuition related educational fees, and room and board expenses for the next 12 months of post-secondary education for the participant, the participant's spouse, or dependents | j Payments necessary to prevent eviction from or foreclosure on a mortgage on the participant's principal residence Additional hardship descnption

Investment provider from which 403(b) amounts wili be withdrawn Investment Provider Information

Investment Provider Account Number Street or P 0 Box City, State, Zip Fax Number

Phone Number

I hereby certify that I do not have any other source of assets which can be liquidated to meet the financial hardship outlined above I declare under penalty of perjury under the laws that the information I have supplied on this application for the hardship withdrawal is true and complete in all respects I recognize that the information Hardship contained on and attached to this form may be shared with a third party (National Benefit Services, LLC (NBS)) as necessary to administer the Plan in accordance with Amount and the Internal Revenue Code I authonze the release of non-public information pertaining to the above accounts and transaction to NBS representatives as necessary to Participant administer the plan. Approval

$ Participant Signature (Required)

Date

NBS Signature (Required)

Date

Requested Hardship Amount

For NBS Use Only

Maximum Eligible Hardship Amount

DATE

Template Cancelation of Old ISA

VENDOR NAME VENDOR CONTACT PERSON VENDOR ADDRESS CITY, ST ZIP

Re: Cancelation of 403(b) Information Sharing Agreement Dear VENDOR CONTACT NAME, EMPLOYER NAME previously established a 403(b) Information Sharing Agreement with VENDOR NAME. We wish to cancel the Agreement immediately. We have engaged the services of a third party administrator, National Benefit Services, LLC (NBS). NBS will establish and maintain a Provider/Information Sharing Agreement on our behalf. •

NBS has or will soon notify your company in writing that EMPLOYER NAME is now covered under an existing NBS 403(b) Provider/Information Sharing Agreement. or

•

NBS has or will soon contact your company with the opportunity to establish an NBS 403 (b) Provider/Information Sharing Agreement.

In order for your company to remain a provider of our 403(b) plan, your company must establish a 403(b) Provider/Information Sharing Agreement with NBS. Please contact NBS at (800) 2740503 ext. 5 if you have any questions.

Sincerely,

EXHIBIT N

Page 1 of2

Doug Holt From:

James M. Adgar

To:

Jessica McCliss

Sent: Thu 6/25/2009 2: 17 PM

Cc: Subject:

FW: IDS Changes - recent corporate email

Attachments:

James M. Adgar CA Insurance Licence #0081748 Registered Rep./457 Plan Administer Rep. TDS/Financial Network Investment Corp. 510.851.1196 (Cell) This message is intended for the recipient only and is not meant to be forwarded, or distributed in any other format This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument, or secunty, or as an official confirmation of any transaction. TDS/Financial Network Investment Corporation does not accept purchase or redemptions of securities, instructions, or authonzations that are sent via e-mail. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessanly reflect those of TDS/Financial Network Investment Corporation, its subsidiaries, or affiliates. If you are not the intended recipient of this e-mail, please delete the e-mail.. Member FINRA & SIPC

From: Anthony Tarantino [mailto:[email protected]]

Sent: Tue 6/23/2009 1:06 PM To: James Michael Adgar Subject: TDS Changes - recent corporate email June 23, 2009 DearJames Things continue to occur at an ever increasing pace. I have been informed that the TDSGroup.org email system has been shut down. Hopefully you all set up your Financial Network email address. In fact the only way you will receive this is if you have a Financial Network email address as we have change everyone in our database. If you speak with another Rep and they did not get this email, please tell them to call Financial Network and get there email established. Yesterday, there was an email that was sent out by TDS corporate. The email stated that it's time to move over to Questar. There was a pre licensing kit attached to that email. I want to address two sentences in the email. 1) The last sentence of the 3rd paragraph states the following "Your pre-hire form needs to be submitted by no later than the end of this week to prevent any interruption of commissions." a. That is a completely false statement. Your commissions are paid by the product providers to Financial Network. Financial Network on a weekly basis pays you commissions based on your payout. TDS does NOT control the flow of those commissions. They will continue to be paid to you as long as your client is assigned to you. The only way that client can be moved away from you is by your client signing a form that states that they do not want to be your client any longer. In a previous email I stated that there were NO Block Transfers. b. In fact the opposite is true. If you move your business over to Questar, there will be an interruption of commissions. From the moment you submit your resignation a clock starts to click. Financial Network

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%202.EML/FW:%20TDS... 7/25/2009

Page 2 of2

will continue to pay commissions for the next 4 weeks. After 4 weeks it will stop paying commissions. Any client of yours that has not signed a transfer form to your new B/D will no longer be paid to you. YOU WILL LOSE COMMISSIONS BY MOVING OVER TO QUESTAR.

2) The last sentence of the 5th paragraph states the following "You will no longer be able to represent our firm in any school district." a. While it may be true that you can no longer represent TDS in a school district, that does not prevent you from working with your existing clients in a school district or from seeking new business in a school district. California along with many other states does not prevent you from selling in a school district. As the partners of BAR Financial, LLC have stated in the past "We welcome all Reps that are currently affiliated with TDS, to stay with us at Financial Network". We know that we can support you and your business model. Our goal is to continue to bring you the best trainings, technology, and service that you deserve. Thank you Anthony Tarantino, Partner BAR Financial, LLC Raising the BAR of Excellence to Serve You Better 5 Kacey Ct, Suite 101 Mechanicsburg, PA 17055 Phone: 717-766-4551 Fax: 717-691-3299 Mobile: 717-319-5929 Securities offered through Financial Network Investment Corporation, Member SIPC - BAR Financial, LLC and Financial Network are not affliated. The information contained in this e-mail message, including attachments, is confidential and intended solely for the addressee. It may contain information that is protected by attorney-client privilege, work-product doctrine, or other privileges, and may be restricted from disclosure by applicable state and federal law. Any further distribution of this message is prohibited without the written consent of the sender. If you are not the intended recipient of this message, be advised that any dissemination, distribution, copying or use of the contents of this message is strictly prohibited. If you received this e-mail in error, please contact the sender by reply e-mail and delete all copies of the original e-mail and any attachments. Thank you.

http://mail.tdsgroup.Org/exchange/dougholt/Inbox/Email%20Set%202.EML/FW:%20TDS... 7/25/2009

Page 1 of3

Doug Holt From: To: Cc: Subject:

Sent: Wed 6/24/2009 10:28 AM

Bill Krebs Jessica McCliss FW: IDS Changes - recent corporate email

Attachments:

Respectfully,

William L. Krebs Regional Manager CA Insurance License #0541279 The TDS Group / Financial Network Investment Corp. Member SIPC

BillK@tdsqroup. orq http://www. tasgroup. ortj Office (800)975-6555x102 Cell (805) 886-5664 Fax (805) 882-0098 117 W. Gutierrez Street Santa Barbara, CA 93101 This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient's) shall not be deemed to waive any privilege. Review, distribution, storage, transmittal or other use of the email and any attachment by an unintended recipient is expressly prohibited. If you are not the named addressee (or its agent) or this email has been addressed to you in error, please immediately notify the sender by reply email and permanently delete the email and its attachments. From: Anthony Tarantino

[mailto:[email protected]]

Sent: Tue 6/23/2009 1:08 PM To: William L. Krebs

Subject: TDS Changes - recent corporate email June 23, 2009 DearWilliam Things continue to occur at an ever increasing pace. I have been informed that the TDSGroup.org email system has been shut down. Hopefully you all set up your Financial Network email address. In fact the only way you will receive this is if you have a Financial Network email address as we have change everyone in our database. If you speak with another Rep and they did not get this email, please tell them to call Financial Network and get there email established. Yesterday, there was an email that was sent out by TDS corporate. The email stated that it's time to move over to Questar. There was a pre licensing kit attached to that email. I want to address two sentences in the email. 1) The last sentence of the 3rd paragraph states the following "Your pre-hire form needs to be submitted by no later than the end of this week to prevent any interruption of commissions." a. That is a completely false statement. Your commissions are

http://mail.tdsgroup.org/exchange/dougholt/Inbox/Email%20Set%204%20-%20Part%202....

7/25/2009

EXHIBIT O

• 11|

fi'i - \ / 1 / >|

I he 1 Do Ciroiip

June 26,2009 Rocky Rocarnura 3423 Gradell Place San Jose, CA 95148

Please be advised that this letter constitutes notice that your affiliation with The IDS Group under any agreements, written or verbal, is hereby terminated immediately. Based on this termination you are no longer authorized to contact any clients of TDS and/or represent to them that you are affiliated with TDS, directly or indirectly, in any capacity. Based on this termination you are hereby directed to return all TDS marketing materials and company information in your possession to TDS immediately to the address listed below. Additionally, you are to immediately cease using any business cards which may imply you are in any way associated with TDS. Please confirm your receipt of this notice and return the requested items to TDS.

The TDS Group Attention: Danielle Biagioni 6939 Sunrise Blvd, Suite 209 Citrus Heights, CA 95610

I wish you well in your future endeavors and appreciate your immediate response to this request, Should you have any questions please feel free to contact me.

Sincerely, Loy Douglas Holt

I he T!)S Or Succors, AWc'/'Wil

June 26,2009

Rebecca Olsen 14388 Union Ave. San Jose, CA 95124

Please be advised that this letter constitutes notice that your affiliation with The IDS Group under any agreements, written or verbal, is hereby terminated immediately. Based on this termination you are no longer authorized to contact any clients of TDS and/or represent to them that you are affiliated with TDS, directly or indirectly, in any capacity. Based on this termination you are hereby directed to return all TDS marketing materials and company information in your possession to TDS immediately to the address listed below. Additionally, you are to immediately cease using any business cards which may imply you are in any way associated with TDS. Please confirm your receipt of this notice and return the requested items to TDS.

The TDS Group Attention: Danielle Biagioni 6939 Sunrise Blvd, Suite 209 Citrus Heights, CA 95610

I wish you well in your future endeavors and appreciate your immediate response to this request, Should you have any questions please feel free to contact me.

Sincerely, Loy Douglas Holt

1 [ he MM"\O IJJb tlirou p

•pi

June 26,2009

William Krebs 117 W.Gutierrez St. Santa Barbara, CA 93101

Please be advised that this letter constitutes notice that your affiliation with The IDS Group under any agreements, written or verbal, is hereby terminated immediately. Based on this termination you are no longer authorized to contact any clients of IDS and/or represent to them that you are affiliated with TDS, directly or indirectly, in any capacity. Based on this termination you are hereby directed to return all TDS marketing materials and company information in your possession to TDS immediately to the address listed below. Additionally, you are to immediately cease using any business cards which may imply you are in any way associated with TDS. Please confirm your receipt of this notice and return the requested items to TDS.

The TDS Group Attention: Danielle Biagioni 6939 Sunrise Blvd, Suite 209 Citrus Heights, CA 95610

I wish you well in your future endeavors and appreciate your immediate response to this request. Should you have any questions please feel free to contact me.

Sincerely, Loy Douglas Holt

The TDS Group, Corporate Office 6939 Sunrise Blvd., Suite 209, Citrus Heights, CA 95610 Phone:(800)542-5829 FAX: (916) 723-3994 www.tdsgroup.org

FAX To:

Rebecca obe, Allen Riordan, Annie

From: Danielle Biagioni

PhiIIips,Qara Zaya, David Kuga, David Kwan, David Phillips, Doris Wang, Edgar Aguilera, Fred Dowhower, George Allen, James Adgar, Jeffrey dark, Kevin Witt Nicole Kikugawa, Randy Kundmueller, Rocky Rocamura, Stacie Bowman, Tony Green,Mostefa Rezai

Fax:

Pages: 20

408-371-9364

Phone:

Date:

Re:

CC:

f~| Per Your Request

[^Urgent

June 26,2009

FlFor Review

QPlease Comment

• Comments: Original to follow in US Mail

Danielle Biagioni, Executive Assistant (800) 542-5829 * [email protected] TNs message is intended for the recipient only and is not meant to be distributed to anyone else, unless previously agreed upon by the sender. This communication fs for informational purposes only. It is not intended as an offer or solicitation for the purchase or safe of any financial instrument, or security, or as an official confirmation of any transacffpn, TDS/Pension Planners Securities Inc. does not accept purchase or redemptions of securities, instructions, or authorizations that are sent via fax. All market prices, data and other information are not warrantor! ao lr> rnrnrtlptonfxK nr arrnrRru and aro «ithliv4 tn rJiAncw UMlhr.nl nntirp

Anv r-rinimfmK nr vtefomonN niMo hwrffln i)r> nnt

EXHIBIT

MarkB.WIIIoughby

Board of Education Wiring students to learn, achieve, and succeed

charles Robinson

T «»OT onno June 22, 2009

-

WJ. Evins, III, Vice Chairman Joan Draper John David Foutch Johnny Lattimore Bruce Parsley Kenny Rhody

Mr. Loy Douglas Holt, President The TDS Group 6939 Sunrise Blvd., Suite 209 Citrus Heights, CA 95610 RE: TDS Compliance Program 403b Dear Mr. Holt, This letter is written notification that the DeKalb County Board of Education will terminate the Compliance Agreement with TDS effective June 30,2009.

Sincerely,

MarkB. Willoughby Director of Schools

110 South Public Square • Smithville,Tennessee 37166 • (615) 597-4084 • Fax (615) 597-6326 • www.web.dekalb.k12tn.net

City of

CORCORAN A MUNICIPAL CORPORATION

FOUNDED 1914

June 26,2009

IDS Group 6939 Sunrise Blvd Suite 209 Citrus Heights, CA 95610

RE: City of Corcoran Deferred Compensation Program Please be advised that the City of Corcoran is giving TDS Group 30 days notice to terminate its relationship as its third party administrator. No payrolls will be sent after the pay period ending July 29th, 2009 (checks issued July 31,2009). Thank you for your service.

Ron Hoggard City Manager

832 Whitley Avenue

•

CITY OFFICES: Corcoran, CA 93212 • Phone 559/992-2151

•

www.cityofcorcaraacom

Mayor

Office of the City Manager

John Murray

Mayor Pro Tern Mary Hornsby Council Members John Plourde Willard Rodarmel William Slegel

City of

LEMOORE CALIFORNIA

119 Fox Street Lemoore * CA 93245 Phone * (559) 924-6700 FAX « (559) 924-9003

IDS Group 6939 Sunrise Blvd Suite 209 Citrus Heights, CA 95610 RE: City of Lemoore Deferred Compensation Program Please be advised that the City of Lemoore is giving TDS Group 30 days notice to terminate its relationship as its third party administrator. No payrolls will be sent after July 27lh, 2009. Thank you for your service. Reg^fds,

Jdff Briltz, City Manager City of Lemoore

"In God We Trust"

MERCED IRRIGATION DISTRICT

July 24,2009 TDS Group 6939 Sunrise Blvd Suite 209 Citrus Heights, CA 95610 RE: Merced Irrigation District Please be advised that the Merced Irrigation District is giving TDS Group notice to terminate its relationship as its third party administrator and common remitter. Merced Irrigation District rescinds any signing authority by TDS Group. No payrolls^will be sent after August 24,2009. This is also to give notice that Ted Edminster is our agent of record for all accounts set up by him, and no access is given to any representative of TDS Group. Thank you for your service.

Andre Urquidei Chief Financial Officer

Cc:

Ted Edminster, Registered Representative Bob Blum, Director of Human Service, MED Dan Pope, General Manager, MID

P.O. BOX 2288 Merced, Califo rn I a 744 West 20th Street^ 95344-0288 Administration / Electric Services (209) 722-5761 / FAX (209) 722-6421 / Water Resources Engineering (209) 722-5761 / FAX (209) 726-4176 Finance \ Billing Dept. (209) 722-3041 / FAX (209) 722-1457 / Irrigation Operations (209) 722-2720 / FAX (209) 722-1457

904 N. Willow Ave. La Puente.CA 91746-1696

July 31, 2009 Loy Douglas Holt, President The IDS Group/Tax Deferred Services, Inc. 6939 Sunrise Blvd., suite 209 Citrus Heights, CA 95610 Dear Mr. Holt: The purpose of this letter is to terminate the 457(b) Employer Agreement and the 403(b) Employer Agreement for (collectively referred to as the "Agreements") between the Bassett Unified School District and the TDS Group/Tax Deferred Services, Inc., effective immediately. Pursuant to the Agreements, we give you notice that The TDS Group should no longer provide our district with 403(b) and/ or 457(b) deferred compensation plan services as a third party administrator. Thank you for your past services and we wish you all the best in your future endeavors.

Sincerely,

Jim Ballard Assistant Superintendent, Business Services

August 13, 2009 Administrative Office

SENT VIA CERTIFIED MAIL AND FAX TO 916-221-5040

3434 Marten Ave. San Jose, CA 95148

Tax Deferred Services, Inc. 6939 Sunrise Blvd., Ste 209 Citrus Heights, CA 95610

Ph: (408)223-3720 Fax: (408) 223-3799

ATTENTION:

Douglas Holt

REFERENCE:

Third Party Administrative Services

Governing Board Members

Dear Mr. Holt:

N a n c y F. Hopkins Galvin D. Jackson Betty Martinez Gail A. Tremaine Robert R a m i r e z

This letter will serve as Mount Pleasant School District's notice to Tax Deferred Services, Inc. of the District's decision to terminate the agreements for Third Party Administrative Services for both our 403(b) Compliance and 457 Deferred Compensation Plans. Termination was reviewed and approved by the Board of Trustees on August 12,2009. The effective date of the termination for bother services is August 13, 2009.

Superintendent

Regards,

George L. Perez

Laura Phan, CPA Assistant Superintendent of Business and Operations Cc: Payroll

88/14/2009

11:19

8058828098

TDS

PAGE

Unified School district ADMINISTRATIVE OFFICES TELEPHONE. (626) 299-7000 FAX: (626) 286-7010

1665 WEST DRIVE

SAN MARINO. CALIFORNIA 91108-2594

August 3,2009

Mr. Douglas Holt, President The TDS Group/Tax Deferred Services, Inc. 6939 Sunrise Blvd., Suite 209 Citrus Heights, CA 95610 Dear Doug: The purpose of this letter is to terminate the 457(b) Employer Agreement and the 403(b) Employer Agreement for (collectively referred to as the "Agreements") between the Sail Marino Unified School District and the TDS Group/Tax Deferred Services, Inc. effectively immediately. Pursuant to the Agreements, we give you notice that The TDS Group should no longer provide our district with 403(b) and/or 457(b) deferred compensation plan services as a third party administrator. Thank you for your past services and we wish you all the best in your future endeavors. Sincerely,

(

-<mHe Boucher Assistant Superintendent, Business Services JB:lp cc:

Bill Krebs Maurice Saldebar

02/03

I

Tennessee School Boards Association

August 6, 2009

Doug Holt, President The TDS Group 6939 Sunrise Blvd Suite 209 Citrus Heights, CA 95610 Dear Mr. Holt: It is the decision of the Tennessee School Boards Association to terminate the agreement between it and The TDS Group for the purpose of administering TSBA's 403(b) plan. In order to adhere to the agreement between the parties, the effective date of termination of the service agreement between the parties shall be August 15, 2009. TSBA is effecting this termination pursuant to the terms of agreement between the parties herein, in accordance with paragraph 16 of The TDS Group's Compliance Program Employer Agreement and paragraph 12 of The TDS Group's Common Remitter Employer Agreement. Within 3 business days following your receipt of this termination notice, please common remit any and all remaining funds on behalf of our participants to the respective providers and provide us proof thereof. Should any funds be returned to TDS from providers at any point in the future, please forward those funds to us (the employer) within 24 hours of receipt. Please forward to us copies of any and all compliance records at the address listed on the agreements signed between us and TDS. These compliance records include any loans, hardship distributions, intra-plan and inter-plan transfers, etc. which TDS approved or denied on behalf of our participants, as well as any other compliance related records related to the services provided by TDS on behalf of our plan. Finally, please provide us written confirmation of your receipt of this letter at the address shown on the agreements between TDS and our school district. Thank you for your prompt attention to this matter. Sincerely, 'G/Y\L/v^

Dr. Tammy Grissom Executive Director

525 BRICK CHURCH PARK DRIVE • NASHVIUJ. TN 37207 * TELEPHONE (61?) 815-3900 * (800) 448-6465 • FAX (615) 815-3911 www.tsba.net Assist ing school boards in effectively governing school districts

08/11/2009 11:50

7352785

PAGE

August 10, 2009

Gary Tartarean, Chief Operating Officer The IDS Group

6939 Sunrise Blvd Suite 209 Citrus Heights, CA 85610 Mr. Tartanian, It is the decision of the Smith County School District Board of Education (BOE) to terminate the agreement between it and The TDS Group for the purpose of administering the BOE's 403(b) plan. In order to adhere to the agreement between the parses, the efface, date of termination of the service agreement between the parties shall be. The BOE is effecting this termination pursuant to the terms of agreement between the parties herein, in accordance with paragraph 16 of The TDS Group's Compliance Program Employer Agreement and paragraph 12 of The TDS Group's Common Remitter Employer Agreement. Within 3 business days following your receipt of this termination notice, please common remit any and all remaining funds on behalf of our participants to the respective providers and provide us proof thereof. Should any funds be returned to TDS from providers after the date on which this termination notice is effective, and thereafter at any point in the future, please forward those funds to us (the employer) within 48 hours of receipt of such funds. Please forward to us copies of any and all compliance records at the address listed on the agreements signed between the BOE and TDS. These compliance records include any loans, hardship distributions, infra-plan and inter-plan transfers, rollovers, etc. which TDS approved or denied on behalf of our participants, as well as any other compliance records related to the services provided by TDS on behalf of our participants and the Plan. Finally, please provide us written confirmation of your receipt of this letter at the address listed on the agreements between TDS and our school district. Thank you for your prompt attention to this matter. Sincerely,

Titlk of Signatory:

01

11:89

7315B674I9

HOLLOW ROCK BRUCETGN

PAGE

83

ROD STURDIVANT DlflECTOR OF SCHOC 791-568-7657 28590 BRO*0 STREET • P.O. BOX 135 BKUC6TON, TENNESSEE 38317 www.hrbki2.org

August To, 2009

It is the decision of the Hollow Rock / Bruceton Special School District to terminate the agreement between h and the TDS Qtaaf for the purpose of administering said school district's 40J(b) plaa. h order to adhere to the agreement between 1he parties, the effective date of tennlnatton of the service agreemeujt between the parties shall be August 10.2009. The Board of Education is effecting this termination pursuant to the terms of agreement between the parties herein in accordance with paragraph 16 of the Employer Agrcemant/The TDS Group Compliance. Within 3 business days following your receipt of Ibis termination notice, please common remit any and all remaining funds on behalf of our participants to the respective providers and provide us proof thereof. Also, please forward copies of any and all compliance records to us at the address listed on the agreements we signed with TDS. These compliance records include any loans, hardship distributions, intra-pJan and inter-plan transfers, etc, TDS approved or denied on behalf of our participants, as 'well as any other compliance related records related to the services provided by TDS on behalf of our plan. Finally, please provide as written confirmation of yaw receipt of this letter at the address shown on the agreements between TDS and our school district Thank you far your attention to this matter.

Sincerely,

RodSturidivant Director of Schools

60

August 14,2009

SENT VIA CERTIFIED MAIL AND FAX TO 916 221-5040 Tax Deferred Service Inc. 6939 Sunrise Blvd. Ste 209 Citrus Heights, CA 95610 ATTENTION:

Douglas Holt

REFERENCE:

Third Party Administrative Services

Dear Mr. Holt: This letter will serve as Evergreen School District's notice to Tax Deferred Services Inc. of the District's decision to terminate the agreements for Third Party Administrative Services for both our 403(b) Compliance and 457 Deferred Compensation Plans. Termination was reviewed and approved by the Board of Trustees on August 13,2009. The effective date of the termination for both services is August 14, 2009. Regards,

Nelly Yahg Chief Financial Officer cc: Payroll

District Administration Office 3188 Quimby Road San Jose, California 95148 Phone: (408) 270-6800 Fax: (408) 274-3894

Superintendent: Clif Black Governing Board: Jeff Fischer Carolyn Clark Mercilee Claverie Sylvia Alvarez Vince Songcnyawon

te \<* J

Board Members Mark Clark, Chinn. Joyce Eady Tom Holland, Jr. MO-TH Alice B. Palacio

110A Elk Avenue, South Fayetteville, Tennessee 37334 (931)433-5542 Fax (931)433-7499

4$

Billy J.Evans Director of Schools , 2009

Board Members Jack Raby, Vice Chmn. Jeff Whitmore Dorothy Small, Ex Oflicio

DAY

Gary Tartarean, Chief Operating Officer The IDS Group

6939 Sunrise Blvd Suite 209 Citrus Heights, CA 95610

Mr.

It is the decision of the FaH£\W\JvUe Cv\-^ Board of Education (BOE) to terminate the agreement between it and The TDS Group for the purpose of administering the BOE's 403(b) plan. In order to adhere to the agreement between the parties, the effective date of termination of the service agreement between the parties shall be . The BOE is effecting this termination pursuant to the terms of agreement between the parties herein, in accordance with paragraph 16 of The TDS Group's Compliance Program Employer Agreement and paragraph 12 of The TDS Group's Common Remitter Employer Agreement. Within 3 business days .following your receipt of this termination notice, please common remit any and all remaining funds on behalf of our participants to the respective providers and provide us proof thereof. Should any funds be returned to TDS from providers after the date on which this termination notice is effective, and thereafter at any point in the future, please forward those funds to us (the employer) within 48 hours of receipt of such funds. Please forward to us copies of any and all compliance records at the address listed on the agreements signed between the BOE and TDS. These compliance records include any loans, hardship distributions, intra-plan and inter-plan transfers, rollovers, etc. which TDS approved or denied on behalf of our participants, as well as any other compliance records related to the services provided by TDS on behalf of our participants and the Plan. Finally, please provide us written confirmation of your receipt of this letter at the address listed on the agreements between TDS and our school district. Thank you for-your prompt attention to this matter. Sincerely,

:

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.1

MICHAEL T. STOLLER, ESQ. SEN 120241 LAW OFFICES OF MICHAEL T. STOLLER, APC 2 9454 WILSHIRE BLVD., SUITE 500 BEVERLY HILLS, CALIFORNIA 90212 3 Telephone: 818-226-4040 4 Facsimile : 818-226-4044 5

Attorneys for Plaintiff

O'NLJUHSEn

AUG 1 8 2009 By. A O'Donnell

6 7 8

SUPERIOR COURT OF THE STATE OF CALIFORNIA

9

COUNTY OF SACRAMENTO

10 11 12

TAX DEFERRED SERVICES, INC., a California Corporation,

DECLARATION OF ALONZO WICKERS IN SUPPORT OF EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER AND AN ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION [Concurrently Filed With Ex Parte Application; Memorandum of Points and Authorities; and Proposed Order]

Plaintiffs

13 14

CASE NO. 34-2009-00055591

vs.

15 16 17 18 19 20 21 22 23 24 25

THE IRA CENTER, a California Corporation; RANDY SCIANNA, an individual; RENE ROCAMORA, an individual; REBECCA OLSON, an individual; EMPLOYEE BENEFIT SERVICES, INC, a California Corporation; WILLIAM L. KREBS, an individual; PENSION PLANNERS SECURITIES, INC, a California Corporation; GINA DUREYA, an individual; BAR FINANCIAL, LLC a California Limited Liability Company; ANTHONY TARANTINO, an individual and DOES 1-100, inclusive,

Date: August 18, 2009 Time: 2:15 p.m. Dept: 54

Defendants.

26 27 28 1 ALONZO WICKERS DECLARATION

1 2

I, ALONZO WICKERS, declare as follows: 1.

I am the founder and former CEO of THE IDS GROUP, INC.

3 ("TDS"), the Plaintiff in this action, and if called as a witness, I could and would 4 competently testify to the following facts as being within my own personal knowledge, 5 except for that stated on information and belief. 6

2.

TDS has brought this action against Defendants THE IRA CENTER,

7 a California Corporation ("IRA"), RANDY SCIANNA ("SCIANNA"), RENE 8 ROCAMORA ("ROCAMORA"), REBECCA OLSEN, WILLIAM L. KREBS and 9 EMPLOYEE BENEFIT SERVICES, INC., a California Corporation, who have and 10

continue to infringe TDS' trademarks and service marks; who have and continue to make

11

misrepresentations in the marketplace that are damaging to TDS' reputation, and its existing

12

and prospective economic advantage; and who have and continue to interfere with TDS'

13

customer relationships and otherwise to compete unfairly and unlawfully with TDS, and

14

with the assistance of Defendants GINA DUREYA ("DUREYA"), PENSION PLANNERS

15

SECURITIES, INC., a California Corporation ("PPSI"), ANTHONY TARANTINO

16

("TARANTINO"), JOHN BRACKETT, ERIC A. HUCK and BAR FINANCIAL, LLC, a

17

California Limited Liability Company ("BAR") as co-conspirators with the goal of putting

18

TDS out of business. If immediate relief is not granted by this court, TDS faces the loss of

19

much, if not all, of the business it has spent decades building up and maintaining.

20

3.

TDS therefore seeks a Temporary Restraining Order, preliminary and,

21

ultimately, permanent injunction: (a)

22

enjoining all Defendants from misrepresenting that they, or

23

any of them, are authorized by, related to, affiliated with, or otherwise associated

24

with TDS;

25

(b)

enjoining all Defendants from retaining and/or using

26

"TDS", "TAX DEFERRED SERVICES", "THE TDS GROUP, INC." and/or any

27

other trademark or service mark that is confusingly similar to a trademark or

28

service mark owned by TDS; and

ALONZO WICKERS DECLARATION

1

(c)

enjoining all Defendants from 1) misrepresentation and

2

disparagement of TDS' financial condition and purported regulatory problems and

3

2) unfairly soliciting TDS' existing representatives, and 3) from interfering with TDS'

4

contracts with and selling to TDS' existing customers the financial services provided by

5

TDS.

6

4.

Plaintiff TDS also seeks an accounting of the commissions from

7 wrongful sales and/or diverted (illegal churning of accounts) sales of financial services by

8 Defendants; damages according to proof; and restitution of all monies unlawfully gained by 9 Defendants due to the conduct alleged herein. 10 11

Background 5.

Beginning in or about 1979, TDS has been a Plan Administrator, as that

12

term was commonly known, which provides administrative services to non-profit Public

13

Schools, County Offices of Education and/or Community Colleges throughout the United States

14

(hereinafter "School Districts"). Typically, members of these groups are school employees who

15

are eligible to create certain defined contribution retirement plans, commonly known as Internal

16

Revenue Code Section 457 or 403(b) Plans. These Plans allow school employees to save money

17

from their earnings and to purchase certain financial products from life insurance companies

18

and mutual funds. The services that TDS provides as a Plan Administrator include, among

19

other things, being the Compliance Administrator for the various defined contribution plans,

20

which plans require compliance with federal and state tax regulations, and being the common

21

remitter (i.e., monthly gross payments from the schools are allocated and paid to each vendor

22

that has established a financial product for an individual teacher). By virtue of these contracts,

23

TDS has become the financial advisor to the school employees and end participants. In addition

24 to the Plan Administrator Services, these contracts provide that TDS shall be the exclusive plan 25

provider for 457 accounts. Over time TDS has developed a reputation as a trustworthy source

26

of information and a reliable endorsement of other companies that provide financial services.

27 28

6.

Since 1979, Tax Deferred Services, Inc. adopted the trademarks and/or

service marks "Tax Deferred Services" and "TDS", which it clearly imprinted on business cards,

ALONZO WICKERS DECLARATION

1

payroll flyers, logos, stationery, brochures and other marketing materials that were extensively

2 and continuously utilized to promote and provide its services and financial products. On or 3 about July 14, 2006,1 caused THE IDS GROUP, INC. to be formed (hereinafter "THE TDS 4 GROUP"), which became the successor in all rights and interest to TAX DEFERRED 5

SERVICES, INC. and which adopted the trademark and/or service mark "THE TDS GROUP,

6 INC." which it clearly imprinted on business cards, payroll fliers, logos, stationery, brochures 7 and other certain marketing materials that were used to provide its services and financial 8 products. We have extensively and continuously used THE TDS GROUP trademark and service 9 mark in the marketing and sale of services and financial products since July 14, 2006 and has 10

continued to use the trademarks and service marks TAX DEFERRED SERVICES, INC. and

11

TDS, as well.

12

7.

TDS has extensively advertised and promoted the trademarks and service

13

marks "TAX DEFERRED SERVICES", "TDS" and "THE TDS GROUP" nationally to Public

14

Schools, County Offices of Education and/or Community Colleges and teachers through the

15

United States, through various methods of advertisements. As a result of these activities the

16

public, including non-profits, School Districts, County Offices of Education and/or Community

17

Colleges and teachers through the United States, has come to know of TDS and recognize these

18

trademarks and service marks as being associated exclusively with TDS. TDS trademarks and

19

service marks are an asset of inestimable value to TDS, representing and embodying its goodwill

20

and favorable reputation.

21

8.

In order to provide Plan Administrator services to the various School

22

Districts, County Offices of Education and Community Colleges, TDS entered into agreements

23

with certain entities and individuals to act as representatives of TDS and licensed the use of its

24 trademarks and service marks (hereafter, the TDS representatives). 25

9.

In addition to providing the Plan Administrator services, Loy Douglas

26

Holt and I, the principals of TDS, were also licensed to sell financial products including life

27

insurance and securities and in that capacity developed a network of licensed representatives to

28

sell certain financial service products to school employees that included, among other things, life

ALONZO WICKERS DECLARATION

1

insurance and annuities. In order to facilitate providing these services, TDS entered into an

2 arrangement with a Broker/Dealer who was positioned over the entire network of TDS licensed 3 representatives. The Broker/Dealer would receive commissions from the various life insurance 4 companies and mutual funds and pay TDS and the respective TDS representatives their shares of 5 commission realized from any sale of financial products. To assist the Broker/Dealer in 6 administration of the financial products being purchased and the payment of the fees associated 7 with them, the Broker/Dealer appointed me as one of the principals of TDS as the Office 8 Supervisor Jurisdiction ("OSJ") who supervised all the Broker/Dealer representatives and the 9 quality of the financial products sold under the Broker/Dealer, which enabled me to earn a 10

greater portion of the commission revenue generated. 10.

11

Over the past 30 years that TDS has been in business we have controlled

12

the change of Broker/Dealers for our network on several occasions, always able to transfer its

13

Book of Business to the new Broker/Dealers and I as a principal of TDS always remained the

14

OSJ.

15

11.

On or about September 2002, TDS changed its Broker/Dealer to defendant

16

PPSI which was owned by defendant DUREYA. At that time as usual, I as a principal of TDS

17

was the OSJ to assist her in administration. And further, PPSI approved the TDS activity as the

18

Plan Administrator when adopting Mr. Holts' and myself as licensed agents along with the

19

network of licensed representatives that were loyal to TDS and would operate under the PPSI

20

Broker/Dealer license.

21

12.

On or about August 30, 2002, TDS ("Franchisor") and Defendants,

22

SCIANNA, ROCAMORA and IRA ("Franchisee") entered into a Franchise Agreement to assist

23

TDS in marketing and providing its Plan Administrator services and expanding its network. A

24 true and correct copy of the Franchise Agreement is attached hereto as Exhibit "A." A similar 25 26

agreement was entered into with defendant Krebs and TDS. 13.

From on or about August 30, 2002 up through September, 2008 the

27

defendants IRA and KREBS operated under the terms and conditions of the Franchise

28

Agreement without incident.

ALONZO WICKERS DECLARATION

1

14.

As set forth in Mr. Holt's Declaration, after Ms. Dureya sold her

2 broker/dealer to BAR, the TDS Plan Administration business that I started over 30 years ago 3 became somehow unacceptable even despite operating with Ms. Dureya for the previous six (6) 4 years. About September 2008, upon the completed acquisition of defendant PPSI by defendant 5 BAR Financial, I was notified by defendant DUREYA, as an officer of BAR, that FNIC rejected 6 the Plan Administrator services by TDS and that a business affiliate of FNIC, through its parent 7 ING, specifically "ING Plan With Ease," would be taking over the Plan Administrator services 8 for all of the TDS clients. The intended outcome of this change was to eliminate TDS as a 9 competitor to the defendants by putting them out of business. As I stated above, TDS developed 10

a reputation within the School Districts, that it was a trustworthy source of information and a

11

reliable endorsement of other companies that provide financial services. However, since the sale

12

and subsequent actions taken by defendants, TDS' reputation and mine have been under

13

relentless attacks of accusations that the company has financial troubles, that common remitter

14

checks to vendors were being returned NSF, and that I am being audited by the SEC, all of which

15

are false and untrue.

16

15.

I am aware of the various incidents stated in Mr. Holts' declaration which

17

describe the coordinated efforts to ruin TDS' business and prior to stepping down as CEO,

18

received the following information:

19

On or about May 7, 2009,1 spoke with Dianne Johnson, a TDS representative in

20

Tennessee, who reported she was contacted by Defendants TARANTINO and BAR and told that

21

"TDS would be going out of business in 60 to 90 days." She asked how that was possible and

22

defendant TARANTINO stated that many of the TDS representatives were going to leave TDS

23

and transfer TDS' School District clients to a new 403(b) Plan Administrator, which would result

24

in TDS losing its commissions paid to me, and they would not be able to stay in business when

25

this income stopped. Defendant TARANTINO further advised that he was sponsoring a meeting

26

through BAR Financial to facilitate this outcome in San Francisco and asked her to attend.

27 28

ALONZO WICKERS DECLARATION

1

I declare under penalty of perjury under the laws of the State of California that the

2

foregoing is true and correct. Executed this 17th day of August, 2009, att

3

California.

4 5

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

25. 26 27 28

' ^ALONZO WICKERS

EXHIBIT A

, 17 !

FRANCHISE AGREEMENT THIS AGREEMENT is signed on "lQ ' « 2003 between TAX DEFERRED SERVICES, INC., a ^1,'Mi^a corporation, and COMPLIANCE ADMINISTRATIVE SERVICES, ,WC,, , a ..... corporation (the "Franchisor") and THE IRA CENTER, a California corporation (the "Franchisee"). BACKGROUND A. The. Franchisor has the right to license certaJn.tr^de.snames, trademarks, service marks, logos, photographs and Indicia or origin, including the service mark TAX DEFERRED SERVICES," as may be designated now or later by the Franchisor (the "Proprietary Marks"). i

B. The Franchisor grants a license to use the Proprietary Marks, and financial planning services operating under the name TAX DEFERRED SERVICES ('TDS"). • .teivt

C. The Franchisee desires to acquire from the Franchisor and the Franchisor desires 10 grant to the Franchises a license to use the Proprietary Marks and any financial materials at a specified Ideation within a designated • geographical area, subject to and in accordance with I the terms Of this Agreement (the TDS Franchise"). The parties agree as follows; 1. GRANT OF LOCATION 1.1 The Franchisor grants to tha Franchisee, upon the terms contained In this Agreement, the right, and the Franchisee undertakes the obligation, to establish and operate a TDS Franchise. 1.2 The TDS Franchise will be located solely at 14388 Union Avenue, Sao Jose, California 95124 (the "Location"). Tha Franchisee may not relocate the TDS Franchise without the written approval of the Franchisor, which approval may not be unreasonably withheld or delayed. 1.3 The Franchisor agrees that it will not grant anolher TDS Franchise or establish for itself a company-owned TDS Franchise within the following specified area: Within Santa Clara County

i

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(iha "Designated Territory"), Provided, however, that the Franchises meet the specified sales goals stated In Section 5; and further provided, that the Franchisor, as well as the Franchisor's Affiliates reserve expressly the right to conduct In Ks or their sole discretion any promotional function or activity within or outside of the' Designated Territory, including, but not limited to," luncheon meetings, sending mailers and other types of promotions. In addition, the Franchisor reserves the right to offer and self any financial products bearing the Proprietary Marks to persons or entitles of the Franchisor's own choosing, within the Designated Territory. Further definition of "Designated Territory" would be any school district thatTDS chooses outside of the Santa Clara County area that TDS requires the Franchisee to provide trained representatives foi" purposes of serving that school district. Any sales or accounts that have been opened electronically (via the Web) would be considered the FranoisWs rtgW of territorial domain and be commissioned and considered revenue to be received by the Franchisee. 2.

DUTIES OF THE FRANCHISES

2,1 During this Agreement, the Franchisee will restrict his or her activities exclusively to financial services for public or private ftdnnatifth at .. TDS" Franchise, uniesotherwige approved in writing by the ~~

2.2 The Franchisee will obtain all required government licenses and permits for the establishment and operation of the TDS Franchise and maintain these licenses and permits in full force and effect throughout this Agreement The Franchisee will operate the TDS Franchise in compliance wilh all applicable local, state and federal! statutes, rules, ordinances and regulations and will take prompt and immediate action to correct any violation stated in any notice issued by any governmental or municipal authority with respect to the establishment and/or operation of the TDS Franchise. The Franchisee will comply with all governmental orders or decrees Issued by any federal, state or local agency wilh respect to the TDS Franchise. 2.3 The Franchisee must employ a sufficient nUmber of qualified representatives and other personnel to successfully and Efficiently operate the TOS Franchise including the following:

2.3.1 The Franchisee agrees to maintain; and assure that his or her employees maintain the highest qualify standards of professionalism and integrity in the operation of the TD3 Franchise. 2.3.2 The Franchisee agrees to conduct ongoing training classes for its representatives.

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2,3.3 The Franchisee agrees to screen carefully prospective trainees and staff applicants before employment and to employ only those who have good moral character, experience and training. 2.4 The interior and exterior d6cor of the TDS Franchise, as well as the Location, must be tasteful, In accordance with local community standards and with due regard at ail times to the preservation of the dignity and quality associated with the Proprietary Marks. Tne Franchisee will maintain the TDS Franchise premises in the highest degree of cleanliness, attractiveness, orderliness, sanitation and repair, and will make ail additions, alterations, repairs and replacements to the premises as may be required for that purpose including the periodic repainting or replacement of obsolete signs, furnishings, equipment and de"cor as the Franchisor may reasonably direct, 2.5 The Franchisee will operate the TDS Franchise and ail activities in conformity with the standards, operating procedures and policies stated by the Franchisor, and as- the Franchisor-may otherwise reasonably prescribe in writing. 2.6 In order to protect the goodwill associated with the Proprietary Marks, the Franchisee will use exclusively the services and products authorized by TDS Products and Services Approval Committee. 2.7 The Franchisee will permit the Franchisor ajhd Its agents or designated representatives to enter the TDS Franchise, without prior notice, during normal, business hours for the purpose of conducting inspections; will cooperate fully with the Franchisor's agents or representatives in these inspections by rendering the assistance as they may reasonably request Upon written notice from the Franchisor, or its agents or representatives, and without limiting tne Franchisor's other rights under this Agreement, the Franchisee will take all-'steps as may be necessary to correct any deficiencies detected during these Inspections Including immediately desisting from any action in violation of the requirements Imposed upon the Franchisee by this Agreement 3.

OBLIGATIONS OF THE FRANCHISOR

3.1 The Franchisor or its designated representatives will, upon reasonable request, consult with and advise the Franchisee by mall or by telephone with respect to matters pertaining to the servicing of public or private schools.

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4.

FEES

4.1 The Franchisee will pay to the Franchisor a continuing fee during this Agreement In an amount equal to ten (10%) percent^ the Franchisee's "Gross Revenues". 4.2 "Gross Revenues" means the amount of -all revenue \ received by the Franchisee In the form of commissions from any and all \ new transactions and from any commissions derived frora any and all business revenue received from electronic transactions (via the Web) within the Designated Territory of this Franchise from the date of this Agreement 4.3 if any fee or other amount due undar this Agreement is not paid within ten (10) days after the payment issue, the Franchisee will pay a service charge equal to the lesser of the daity equivalent of 18% per year, or the highest -rate then permitted by applicable law, fdr each day the amount is past dua. If it Is necessary for the Franchisor to employ an attorney to collect any amount dua from the Franchises under this Agreement, the Franchisee agrees to pay all costs of collectlorv, including a reasonable attorney's fee. 5,

RIGHTS TO TERRITORIAL PROTECTION

5.1 i The Franchisee's rights to the Desjflnatgrf Tftfrfo'y am _gxpres3ly conditioned upon the Nartftftisea'^^levlngj^ertainannuat juoiaT"or minimum Gross jggvenues In connection with 'the I' PS Franchise as Follows; " •- '• See Exhibit A attached hereto 5.2 if the Franchisee fails to meet the specified goals stated in Section 5,1 for any periods, all of the Franchisee's rights In and to territorial protection In the Designated Territory permanently cease and the Franchisor may, in its sole discretion, franchise other TDS Franchises or operate a TDS Franchise within the Designated Territory. However, all renewal and trailer commissions earned by the Franchisee prior to termination of this Agreement would continue as long as the business stays on the books. All other remaining terms of this Agreement .continue.

09/28/2004 IDE 12UO

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6.

INSURANCE

6.1 The Franchisee agrees to obtain before the opening of the Franchise, and maintain In fulf fores and effect during this Agreement. Errors and Omissions insurance for any producer representing the Franchisee, • ' "! ' : " H "' ; ••••'••'"- •-»--"•" 8.2 These policies must include, at a minimum (except as additional coverages and higher policy limits are reasonably specified for all franchisees by the Franchisor In writing) the following; !

6.2.1 Errors & Omission Insurance to be kept at levefe to satisfy Broker Dealer requirements, 8.2.2 Franchisee agrees to obtain before opening of the Franchise, and maintain in full force and effect during this Agreement, general liability Insurance naming TDS as additional insured (minimum coverage to be specified by TDS).' 7,

ADVERTISING AND BUSINESS PROMOTION

7.1 All advertising- and business promotion conducted by the Franchisee In any medium (Including print, video or audio) must be Conducted in a tasteful and dignified manner and must bs conducted consistent with the dignity and integrity of the Proprietary Marks, In accordance v/ith good business practices. The Franchisor may, In its sole discretion, object to and have the right (o terminate the Franchisee's use of the Proprietary Marks,.. ; 7.2 The Franchisee will display the Proprietary Marks in the manner prescribed by the Franchisor In-hla or her acf(vRies and on all stationery, business cards, operational forms and printed signs and all other advertising and promotion materials used In connection with the TDS Franchise. All displays of the Proprietary Marks, Including all Interior and exterior signs, must clearly state and identify the'Franchisee as a TDS Franchise," In the specific form required by the Franchisor. 7.3 The Franchisee will submit to the Franchisor for approval samples of all advertising and promotional plans and f materials and ail other materials and all other materials displaying- the Proprietary Marks that the Franchisee desires to use and lhat have not been prepared or previously approved by the Franchisor, The Franchisor has the tfght to disapprove the plans and materials for failure to be consistent with the goodwill associated with the Proprietary Marks, upon notice in writing to

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the Franchisee within thirty (30) days from the date o\ ,«2cefpt by the Franchisor of the plans and materials, 8,

CONDITIONS OF TRANSFER OR SALE OF INTEREST

8.1 The Franchisor has the right to transfer or assign this. Agreement, and all or any part of its rights or obligations in this Agreement, to any person or legal entity. 8.2 This TDS Franchise Is personal to the Franchisee, The Franchisee will not sell, assign, transfer or convey the following without the prior written consent of the Franchisor: 8.2.1 The TDS Franchise; *

a.z.2 Any right or interest created by this Agreement; 8.2.3 Tha ownership intersats in the Franchisee; 8.2.4 Thia Agreement. 8:3 The TDS Franchise- may not be divided or otherwise segregated and sold or transferred by the Franchisee, The Franchisor will not, however, unreasonably withhold "or delay its consent jto a transfer of the TDS Franchise or any ownership Interests in the Franchisee, provided that all of the following-conditions are met before the time of the proposed transfer: '*** *

J

.

8.3-1 All of the Franchisee's accrued monetary obligations to the Franchisor have been satisfied; 8.3.2 The Franchisee's right to receive compensation must • be subordinated and secondary to the Franchisor's! rights to receive compensation and have satisfied any outstanding monetary obligations or other outstanding obligations 'due from the Franchisee; 8.3.3 if permitted by applicable law, the Franchisee must sign a general release under seal, In a form satisfactory to the Franchisor, of all claims against the Franchisor and Its affiliates, and each of their officers, directors, shareholders and employees, in their corporate and Individual capacities, including claims arising under federal, state and local laws, rules and ordinances;

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8487] @009

17;28 KAi $008/015

8.3.4 The transferee must demonstrate to t „' Franchisor's satisfaction that he of she meets the Franchisor's (educational, managerial and business standards, possesses a good aptitude, moral character, business reputation and ability ;as may be evidenced by prior related business experience or otherwise; has adequate financial resources and capital to own and operate the TDS Franchise and has no material, prior unresolved problems related to financial planning services, The Franchisee will provide the Franchisor with any information that the Franchisor may reasonably require to make Its determination concerning each proposed transfer. 8.3.5 The transferee must sign (and/or, upon the Franchisor's request, cause all interested parties, to sign) the Franchisor's then-current standard form franchise agreement and other ancJHary agreements as the .franchisor may require; and 8.3.6 The Franchisor must receive folly signed copies of all documents in connection with the proposed transfer including a completed standard franchise application form, together with ail required supporting documentation. The failure!to submit the information required in the Franchisor's then-current standard' application farm, including all required supporting'documentation, is reasonable grounds for rejection of the proposed transfer. 8.4 Any purported assignment, transfer, conveyance or encumbrance of Hie TDS Franchise, any right or Interest created In this Agreement, or of any ownership interest in the Franchisee, without.the written consent of the Franchisor, Is null and void,land results In termination of this Agreement, as stated In Article 9. 8.5 The Franchisors consent to a transfer of any interest granted In this Agreement does not constitute a waiver of any claims the Franchisor may have against the transferring party, nor Deemed a waiver of the Franchisor's rights to demand exact compliance' with any of the terms of this Agreement by the transferee. 8.6 It is agreed that. since^Franchisee haa been an integral part of bringing this Franchise.. tojfjaittton. uporLany sals oftTDS. Franchisee shall have the option of being a part of the sale: tha value to 1ba negotiated between TDS and the Franchisee known as The IRA Center '. 9,

DEFAULT AND TERMINATION

9.1 Except as otherwise provided by applicable law, the Franchisee will ba deemed to be in default under this Agreement, and this

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Agreement and ail rights granted In this Agreement wii. automatically terminals without opportunity to cure and without notice by the Franchisor to the Franchisee, if the Franchisee files any petition in1 bankruptcy, voluntary or involuntary. i

9,2 Except as otherwise provided by applicable law, the Franchisee will be deemed in default under Ihis Agreement and tha Franchisor may, at its option, terminate this Agreement gnd all rights granted in this Agreement without affording the Franchisee any opportunity to cura the default, with the termination effective Immediately upon the earlier of receipt of notice of termination by the Franchisee or. if the notice of termination Is deposited by the Franchisor in-JUnited States mails, certified mail; then fh/e (5) days after the mailing by ttjie Franchisor, upon the occurrence of any of the, following events: 0.2.1 The Franchisee becomes insolvent or, In the Franchisor's reasonable opinion, the Franchisee cannot fulfill his or her obligations to TDS client or to tile Franchisor, as provided in this Agreement; 9.2.2 The Franchisee makes an assignment'for the benefit of his or her creditors; 9.2.3 The Franchisee admits in writing his or her Inability to pay his or her debts generally as they become due;

g.2.4 The Franchisee suffers temporary or permanently appointed receivership; 9.2.5 -The Franchisee is. convicted of a felony or any other crime or offense, including any violation of SEC rules, that Is reasonably likely, in the sole opinion of the Franchisor, to adversely affect the Franchisor, the Proprietary Marks, or the goodwill associated with the Proprietary Marks; 9.2.6 The Franchisee attempts to, or purports lo, transfer any rights, or obligations under this Agreement, or otherwise, to any third party, contrary to the terms of Article 8; 9.2.7 Ths Franchisee falls to comply with the covenants stated In Article 11; 9.2.8 The Franchisee, fails to pay 10% of the Franchisee's gross revenue or other payments on specific due dates to Franchisor.

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9.3 Except as stated In Sections 9.1 and 9.2, ^ il except as otherwise provided by applicable law, the Franchisee has ap days after receipt from the Franchisor of a written notice of default within which to remedy a default of any of the terms of this Agreement, as stated In the written notice of default, and provide written evidence off cure to the satisfaction of the Franchisor. If the notice of default Is deposited by the Franchisor in United States malla, certified mail, then receipt will be presumed 5 days after mailing by the Franchisor. If any default Is not cured within the 80 day period (or longer period as applicable law may. otherwise require), the Franchisor may, at its option, terminate (his Agreement and all rights granted in this Agreement without affording the Franchisee any further opportunity to cure the default, with termination to be effective immediately upon the depositing -of the notice of termination by the Franchisor in the United States Mail, certified mail. 10.

OBLIGATIONS UPON TERMINATION

Upon the termination of this Agreement by either the Franchisee or the Franchisor, by operation4 of law, the Franchisee's obligations are as follows: 10.1 The- Franchisee will immediately cease to operate the TDS Franchise and Is prohibited thereafter from either directly or indirectly representing himself or herself to the public, or to any person, that he or she is a presenter former TDS Franchisee, 10.2 The Franchisee will Immediately and permanently cease to use, by advertising or any other manner, the trademarks, trade names, service marks, signs, structures and other forms of advertising and Indicia as a TDS Franchisee, including all materials and articles displaying the Proprietary Marks and agrees to turn over all discs, systerris, trade secrets and any other materials provided by TDS without duplication or copying, 10.3 The Franchisee must take all action as may be required to cancel all assumed names or equivalent fictitious name registrations relating to use of the Proprietary Marks and any other related marks in connection with TDS Franchise. ' 10.4 The Franchisee will not use any reproduction, counterfeit, copy or other Imitation of the Proprietary Marks that afe likely to cause confusion, mistake or deception, or to dilute the Franchisor's exclusive rights In and to tha Proprietary Marks, nor utilize any designation of origin or description or representation falsely suggesting or-'representing an association or connection with the Franchisor which constitutes unfair competition, in any business which ft may thereafter engage.

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TO/RI

NO 8487J @012

•aoio/015

17:29

10.5 The Franchisee will promptly pay all sums! owing to the Franchisor. The Franchisee will also pay all damages, costs and expenses^ Including reasonable attorney's fees incurred byl-the Franchisor as a result of a default by the Franchisee which resulted fn termination of this Agreement, Including all fees and costs in obtaining Injpnctlve or other relief for the enforcement of the Franchisee's obligations In Jhls Article, 11.

COVENANTS

11.1 The Franchisee agrees that during the term of this Agreement, except as otherwise approved In writing by: the Franchisor, which approval will not be unreasonably withheld or delayed, the Franchisee wJU personally devote his or her full time, energy and best efforts to the management and operation of the TDS Franchise, 11.2 Ths Franchisee agrees that during the term of this Agreement, the Franchisee will not, either directly or indirectly, for himself or herself, or through, on behalf of, or in conjunction foith any person, persons, partnership or corporation: 1 1 .2.1 Divert or attempt to divert any business or customer from the TDS Franchise to any competitor, by 'direct or Indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks; 11, 2,2 Employ or seek to employ any person, who Is at that time currently employed by any other TDS Franchise or had been employed by any other TDS Franchise in the pi-evloua ninety (90) days, or dlre'ctly or Indirectly, Induce that person to leave hte or her employment, without the written consent of the cyrrent or previous employer of the 11. 2.3 Own, maintain, engage in or haveiany interest In any business specializing, In whole fcr In part, financial planning services, other than as a TDS Franchisee, 12.

INDEPENDENT CONTRACTOR AND INDEMNIFICATION

12.1 It is agreed by the parties that this Agreement does not oreate a fiduciary relationship between or among them'. The Franchisee is an independent contractor, Nothing in thfe Agreement Is Intended to constitute or construe the Franchises as an agent, legal representative,

10

09/28/2004 TO 12UO

[TJ/K

MO 848TJ

\ \ I J

•3012/015

subsidiary, joint venture, partner, affiliate, employee 01 Servant Of the Franchisor for any purpose.

12.2 It is agreed that nothing In this Agreement authorizes the Franchisee to make any contract, agreement, warranty or representation on the Franchisor's behalf, or to Inour any debt or other obligation in the Franchisor's name* The Franchisor will not assume liability for, or be deemed liable under this Agreement, as a result of any action, or by reason of any act or omission of the Franchisee, his or her employees or agent, fn hls-or her conduct of the TDS Franchise, 12.3 The Franchisee indemnifies the Franchisor, its parent company and its affiliates, as well as their respective officers, employees, partners, directors and shareholders (for purposes of this Section only, all are (collectively, the "Company") and holds the Company, and each of them, harmless from, against, for and In .respect of any damages, losses, obligations, liabilities, claims, deficiencies, costs and expenses, including reasonable attorney's lees and other costs and expenses. Incident to any suit, action, investigation, claim or proceeding {collectively, the "Company's Losses") suffered, sustained, incurred or required ta be paid by Company, or any of them, by reason of any representation, act, commission or omission of the Franchisee, his or her agents servants, employees, guests or visitors, with respect to; (a) The establishment and operation of the TDS Franchise; (b)

The TDS Franchise;

(c) Any suit, action, claim or proceeding brought by any parson or entity within the Designated Territory during the term, and renewals wfth respect to the TDS Franchise irrespective of when the claim arose; (d) Any failure by the Franchisee to obseive or perform his or her covenants and agreements stated In this Agreement; or (e) Any injury to, or loss of property oft any clients of the TDS Franchise, Alf of the Company's Losses must be satisfied by cash payments from the Franchisee to the Company. The Franchisee will, fn writing, nbtify the Franchisor immediately as to any suit, action, Investigation, claim of proceeding for which indemnification might be claimed by the Company, of any of them, Upon receipt of any notice of suit, action, Investigation, claim or proceeding for which indemnification might be claimed by the Company, or any of them, the Company

11 09/28/2004 TUB

848r]

17:30

will ba entitled promptly to defend, prosecute, contest or otherwM protect itself, by counsel of its own choosing, at the Franchisee's sole coat and expense. The Franchisee has the right to select hjs or her own counsel; provided, that attorney's fees and costs for this counsel are paid by the Franchisee, the Company is entitled to control the defense or prosecution of the iftlgation, unless the Company has consented in writing to -allow the Franchisee to control the litigation. 13.

NOTICES t

Any notices required or permitted under this Agreement must be jn writing and be personally delivered or mailed by certified or registered mail, return receipt requested, to. the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party: Notices to the Franchiser;

Wfth a copy to;

Mr, Al Wickers & Mr, Doug Holt Tax Deferred Services, Inc. 5740 Windmill Way, #18 Carmfchael, CA 9S60B

Counsel for IDS; •

.

' .

Notices to the Franchisee: Mr. Randy Scianna, on behalf of The IRA Center, inc. 14388 Union Avenue San Jose, CA 95124 14.

ENTIRE AGREEMENT

This Agreement and the documents .referred to irl this Agreement constitute the entire, full and complete agreement between trje Franchisor and the Franchisee concerning the subject matter of this Agreement, atvUupersede all prior agreements. No other representations have been made by the Franchisor or its agents to induce the Franchisee to sign this Agreement No amendment, change or variance from this Agreement is binding on either party unless mutually agreed to in writing by the parties and signed by thaJr authorized officers or agents In writing. TAX DEFERRED SERVICES, INC.

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