Tds Compalint

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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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Attorneys for Plaintiff -1

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Assignments Case Management 43 Law and Motion 54 Minors Compromise 17

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

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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.

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COMPLAINT FOR: 1.

2. 3.

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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.

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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.

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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

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

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

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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

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

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IRA and thereafter became its Chief Operating Officer.

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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

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

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

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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.

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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.

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Plaintiff is informed and believes and thereon alleges that defendant BAR

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

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

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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.

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11.

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

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

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LLC.

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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

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

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

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

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

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15.

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

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

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

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

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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

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out of business.

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16.

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injunction:

Plaintiff TDS seeks a Temporary Restraining Order, preliminary and permanent

(a)

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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

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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

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

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

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financial services provided by TDS.

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COMPLAINT

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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

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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

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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

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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.

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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

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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

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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

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THEM TO USE THE TDS PROPRIETARY MARKS

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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,

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

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

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

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

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financial planning services operating under the name TAX DEFERRED

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SERVICES ("TDS")."

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COMPLAINT

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

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

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

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

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(the "IDS Franchise")-"

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"2. DUTIES OF THE FRANCHISEE

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

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

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

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

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

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by TDS Products and Services Approval Committee."

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"4. FEES

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

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

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Revenue'."

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"8. CONDITIONS OF TRANSFER OR SALE OF INTEREST

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8.4 Any purported assignment, transfer, conveyance or encumbrance of

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

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

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

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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

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

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terminate this Agreement and all rights granted in this Agreement without

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

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

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

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

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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

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

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

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

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

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Article 11 Covenants provides:

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

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

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

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

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

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

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

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added.]

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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.

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V. PPSI/DUREYA BEGIN THEIR PATTERN OF INTENTIONAL

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INTERFERENCE WITH TDS' BUSINESS RELATIONSHIPS BY DRIVING A

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WEDGE BETWEEN TDS AND ITS REPRESENTATIVES (SALES FORCE)

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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

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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

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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

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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

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

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33.

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

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

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

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

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

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

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

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which were not authorized by TDS as follows:

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(1)

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

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

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

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she would find them a new Plan Administrator.

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(2)

In February, 2009, defendant ROCAMORA told all the IRA

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

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

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(3)

In February 2009 and continuing to the present, defendant

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

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

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

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

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transferred to Questar and the representatives would lose their commissions;

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(4)

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

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

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

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

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

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

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

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TDS and a violation of securities regulations;

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(6)

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

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

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regarding compliance questions, while in fact surreptitiously directing them to

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

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falsely representing to the employees that he was authorized to conduct

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compliance;

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(7)

On or about April 23,2009, defendants TARANTINO,

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

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

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Administrator coupled with the common remitting business through defendant

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BAR and FNIC;

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(8)

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

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

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

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

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defendant TARANTINO stated that many of the TDS representatives were going

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

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

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

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stopped. Defendant TARANTINO further advised that he was sponsoring a

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

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asked her to attend;

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(9)

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

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

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

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plan and conspiracy to put TDS out of business;

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(10)

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

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

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

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

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introduced during the meeting;

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(11)

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

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

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

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consent;

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(12)

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

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

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

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

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Administrator, under a three-party agreement;

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(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

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

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Administrator services;

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(14)

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

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

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Administrator with NBS. (15)

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

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

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

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

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all of its representatives during which all representatives were advised that

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

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

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terminated at that point. (17)

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

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

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

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representatives would be taunted by allegations of embezzlement unless they

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distanced themselves in a hurry from TDS; (18)

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

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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

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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

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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:

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(a)

advising TDS clients, specifically School Districts, County Offices

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

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

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

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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.

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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.

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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,

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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

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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.

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