tds compalint

12

3

4

5

6

7

8

9

21

23

24

25

26

27

28

MICHAEL T. STOLLER, ESQ., SBN 120241LAW OFFICES OF MICHAEL T. STOLLER, APC9454 WILSHIRE BLVD., SUITE 500BEVERLY HILLS, CALIFORNIA 90212Telephone: 818-226-4040Facsimile: 818-226-4044

Attorneys for Plaintiff-1 Assignments

Case Management 43Law and Motion 54

Minors Compromise 17

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

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

)Plaintiffs, )

vs. )

THE IRA CENTER, a California )Corporation; RANDY SCIANNA, an )individual; RENE ROCAMORA, an )individual; REBECCA OLSEN, an )individual; EMPLOYEE BENEFIT )SERVICES, INC., a California )Corporation; WILLIAM L. KREBS, an )individual; PENSION PLANNERS )SECURITIES, INC., a California )Corporation; 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, )

CASE NO.

COMPLAINT FOR:

1. Statutory Unfair Competition inViolation of Calif. Bus. & Prof.Code §17200;

2. Common-law Unfair Competition;3. Statutory False Advertising in

Violation of Calif. Bus. & Prof. Code§ 17500;

4. Federal Unfair Competition -False Designation of Origin;

5. Product Disparagement Under LanhamAct

6. Unfair Competition UnderCalifornia State Law in Violationof Calif. Bus. & Prof. Code§ 17200;Common and Statutory TrademarkInfringement Under State Law;Slander Per Se;Breach of Contract;

Defendants. )

7.

8.9.10. Business Disparagement;11. Intentional Interference With

Contract;12. Intentional Interference With

Prospective Economic Advantage;13. Accounting;14. Injunctive Relief.

lCOMPLAINT

12

3

4

5

6

7

g

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

successor in all rights and interest to TAX DEFERRED SERVICES, INC., a California

Corporation, (hereinafter "TDS") and complains against defendants THE IRA CENTER, a

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

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

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

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

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

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

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

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

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

I. PARTIES

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

located at 14388 Union Avenue, San Jose, California.

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.


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

IRA and thereafter became its Chief Operating Officer.


mentioned, defendant OLSEN was an officer of IRA.

6. Plaintiff is informed and believes, and thereon alleges that defendant

EMPLOYEE BENEFIT SERVICES, INC. (hereinafter "EBS"), is a California corporation with

its principal place of business located at 14388 Union Avenue, San Jose, California and is owned

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

2COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

Vice President/Managing Director of District Relations for BBS

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

PLANNER SECURITIES, INC. (hereinafter "PPSI") is a California corporation with its

principal place of business located at 9700 Business Park Drive, Suite 200, Sacramento,

California 95827.

8. Plaintiff is informed and believes and thereon alleges that defendant

WILLIAM L. KREBS (hereinafter "KREBS") is an individual residing at 117 W. Gutierrez

Street. Santa Barbara, California 93101.

9. Plaintiff is informed and believes and thereon alleges that defendant BAR

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

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

10. Plaintiff is informed and believes and thereon alleges that defendant ANTHONY

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

FINANCIAL, LLC.

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

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

LLC.

12. Plaintiff is informed and believes and thereon alleges that defendant JOHN

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

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.

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

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

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

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

3COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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

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

and/or consent of the remaining co-defendants.

II. NATURE OF THE ACTION

15. This is an action by plaintiff IDS against defendants IRA, SCI ANN A,

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

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

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

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

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

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

out of business.

16. Plaintiff TDS seeks a Temporary Restraining Order, preliminary and permanent

injunction:

(a) enjoining all defendants from misrepresenting that they, or

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

with TDS;

(b) enjoining all defendants from retaining and/or using

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

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

service mark owned by TDS; and

(c) enjoining all defendants from misrepresentation and

disparagement of plaintiff TDS' financial condition and purported regulatory

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

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

financial services provided by TDS.

COMPLAINT

12

3

4

5

6

7

g

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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

restitution of all monies unlawfully gained by defendants due to the conduct alleged herein.

HI. THE INDUSTRY

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

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

Offices of Education and/or Community Colleges throughout the United States (hereinafter

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

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

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

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

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

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

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

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

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

become the financial advisor to the school employees and end participants, hi addition to the

Plan Administrator Services, these contracts provide that TDS shall be the exclusive plan

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

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

19. Since 1979, Plaintiffs predecessor adopted the trademarks and/or service marksi"Tax Deferred Services" and "TDS", which it clearly imprinted on business cards, payroll flyers,

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

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

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

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

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

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

5COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

extensively and continuously used THE TDS GROUP trademark and service mark in the

marketing and sale of services and financial products since July 14, 2006 and has continued to

use the trademarks and service marks TAX DEFERRED SERVICES, INC. and TDS, as well.

20. Plaintiff TDS has extensively advertised and promoted the trademarks and service

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

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

United States, through various methods of advertisements. As a result of these activities the

public, including non-profits, School Districts, County Offices of Education and/or Community

Colleges and teachers through the United States, has come to know of TDS and recognize these

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

TDS trademarks and service marks are an asset of inestimable value to TDS, representing and

embodying its goodwill and favorable reputation.

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

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

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

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

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

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

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

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

facilitate providing these services, TDS entered into an arrangement with a Broker/Dealer who

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

would receive commissions from the various life insurance companies and mutual funds and pay

TDS and the respective TDS representatives their shares of commission realized from any sale of

financial products. To assist the Broker/Dealer in administration of the financial products being

purchased and the payment of the fees associated with them, the Broker/Dealer appointed one of

the principals of TDS as the Office Supervisor Jurisdiction ("OSJ") who supervised all the

6COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

Broker/Dealer, which enabled him to earn a greater portion of the commission revenue

generated.

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

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

Business to the new Broker/Dealers and a principal of TDS always remaining the OSJ.

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

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

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

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

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

would operate under the PPSI Broker/Dealer license.

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

THEM TO USE THE TDS PROPRIETARY MARKS

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

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

TDS in marketing and providing its Plan Administrator services and expanding its network. A

true and correct copy of the Franchise Agreement is attached hereto and incorporated herein as

Exhibit "A," which provides, among other things:

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

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

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

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

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

financial planning services operating under the name TAX DEFERRED

SERVICES ("TDS")."

COMPLAINT

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

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

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

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

5 (the "IDS Franchise")-"

6 "2. DUTIES OF THE FRANCHISEE

7 2.1 During this Agreement, the Franchisee will restrict his or her activities

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

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

10 "2.6 In order to protect the goodwill associated with the Proprietary

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

12 by TDS Products and Services Approval Committee."

13 "4. FEES

14 4.1 The Franchisee will pay to the Franchisor a continuing fee during this

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

16 Revenue'."

17 "8. CONDITIONS OF TRANSFER OR SALE OF INTEREST

18 8.4 Any purported assignment, transfer, conveyance or encumbrance of

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

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

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

22 Article 9."

23 "9. DEFAULT AND TERMINATION

24 9.2 Except as otherwise provided by applicable law, the Franchise will be

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

26 terminate this Agreement and all rights granted in this Agreement without

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

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

8COMPLAINT

12

3

4

5

6

7

g

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

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

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

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

the terms of Article 8;

Article 11;

9.2.7 The Franchisee fails to comply with covenants stated in

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

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

Article 11 Covenants provides:

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

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

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

corporation:

11.2.1 Divert or attempt to divert any business or customer

from the IDS 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." [Emphasis

added.]

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

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

incident.

V. PPSI/DUREYA BEGIN THEIR PATTERN OF INTENTIONAL

INTERFERENCE WITH TDS' BUSINESS RELATIONSHIPS BY DRIVING A

WEDGE BETWEEN TDS AND ITS REPRESENTATIVES (SALES FORCE)

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

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

9COMPLAINT

1

2

3

" 4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

Corporation (hereinafter "FNIC"), a Broker/Dealer and wholly owned subsidiary of ING. The

effect of this transaction was to impose FNIC as the replacement Broker/Dealer for the Book of

Business of TDS without continuing the OSJ provided by TDS.

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

defendant BAR Financial, TDS was notified by defendant DUREYA, as an officer of BAR, that

FNIC rejected the Plan Administrator services by TDS and that a business affiliate of FNIC.

through its parent ING, specifically "ING Plan With Ease," would be taking over the Plan

Administrator services for all of the TDS clients. The intended outcome of this change was to

eliminate TDS as a competitor to the defendants by putting them out of business.

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

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

financial products, thereby challenging the influence of defendants BAR and DUREYA over the

existing force of representatives that had formerly shown allegiance to TDS (sometimes referred

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

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

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

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

Questar. Questar had accepted the Plan Administrator services of TDS, unlike BAR and

DUREYA.

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

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

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

Broker/Dealer Questar.

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

move his clients to Questar, as his new Broker/Dealer, defendants BAR and DUREYA

intentionally interfered by refusing to make a bulk transfer of his Book of Business. In addition,

the TDS representatives were notified by defendants BAR and DUREYA that unless they stayed

10COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

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

the prior financial products sold. Consequently, all of the IDS representatives, for fear of losing

their commissions, stayed with defendants DUREYA and BAR.

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

promised defendant BAR and FNIC that it could deliver all of the IDS clients which included

356 California Schools, to ING's Plan With Ease and all of the 457 plan assets that exceeded

over $100 million, if they would buy defendant PPSI. Defendant PPSI schemed to accomplish

this by attempting to force TDS to give up its Plan Administrator Business which it had been

conducting over the last 30 years and specifically, authorized by defendant PPSI for the

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

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

VI. SMEAR CAMPAIGN

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

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

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

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

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

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

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

which were not authorized by TDS as follows:

(1) On or about January 22,2009, defendant OLSEN, while under

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

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

she would find them a new Plan Administrator.

(2) In February, 2009, defendant ROCAMORA told all the IRA

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

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

28

11COMPLAINT

1 (3) In February 2009 and continuing to the present, defendant

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

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

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

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

6 transferred to Questar and the representatives would lose their commissions;

7 (4) On or about March 18,2009, defendant DUREYA contacted a new

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

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

10 exclusive solicitation rights for employees' 457 plans;

11 (5) About April 10,2009, defendant KREBS developed a flyer for the

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

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

14 TDS and a violation of securities regulations;

15 (6) On April 10,2009, Defendant KREBS sent a letter to School

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

17 regarding compliance questions, while in fact surreptitiously directing them to

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

19 falsely representing to the employees that he was authorized to conduct

20 compliance;

21 (7) On or about April 23,2009, defendants TARANTINO,

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

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

24 Administrator coupled with the common remitting business through defendant

25 BAR and FNIC;

26 (8) On or about May 7,2009, Alonzo Wickers, CEO of TDS, spoke

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

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

12COMPLAINT

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

2 defendant TARANTINO stated that many of the TDS representatives were going

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

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

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

6 stopped. Defendant TARANTINO further advised that he was sponsoring a

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

8 asked her to attend;

9 (9) On or about May 13,2009 through June 24,2009, defendants

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

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

12 plan and conspiracy to put TDS out of business;

13 (10) On or about June 19,2009 the defendants held a meeting with the

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

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

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

17 introduced during the meeting;

18 (11) On or about May 15,2009, defendants KREBS and ROCAMORA

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

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

21 consent;

22 (12) On or about June 22,2009, defendants ROCAMORA and EBS

-23 sent an email requesting defendant KREBS to provide a "more specific head

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

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

26 Administrator, under a three-party agreement;

27 (13) On or about June 22,2009, defendants DUREYA and BAR in

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

13COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

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

Administrator services;

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

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

Administrator with NBS.

(15) On or about June 23,2009, defendants TARANTINO and BAR

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

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

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

all of its representatives during which all representatives were advised that

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

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

terminated at that point.

(17) On or about June, 2009, defendants DUREYA and KREBS, during

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

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

representatives would be taunted by allegations of embezzlement unless they

distanced themselves in a hurry from TDS;

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

problems and that he was being audited by the SEC.

VII. TERMINATION OF IRA AND KREBS

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

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

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

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

materials that utilized TDS' trademarks and service marks.

28

14

COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

EBS, ROCAMORA, OLSEN and KREBS decided they would not come over to IDS' new

Broker/Dealer, Questar.

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

written notices, defendants IRA, EBS, ROCAMORA, OLSEN and KREBS have continued to

represent themselves as representatives and/or affiliates of TDS, thereby infringing the

trademarks and service marks of TDS; having continued to sell financial services to TDS clients

without paying 10% of the gross revenue generated; have utilized a rubber signature stamps

created without authorization or approval to execute certain compliance documents that only

TDS was authorized to execute and have undertaken certain conduct to disparage TDS and

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

(a) advising TDS clients, specifically School Districts, County Offices

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

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

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

problems, and that TDS was going out of business;

(b) advising TDS clients, specifically Public Schools, County Offices

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

Administration business from TDS to National Benefit Services that defendants

would become affiliated with;

(c) contacted TDS clients, specifically school employees in various

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

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

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

churning), and redirect the client from TDS;

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

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

clients:

15COMPLAINT

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

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

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

28

16COMPLAINT

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

2 financial distress;

3 (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 financial difficulties and that checks were being returned NSF from the common

7 remitter account;

8 (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

17COMPLAINT

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

18COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

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

the San Jose Unified School District who stated that representatives from

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

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

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

Supervisor of Business for Eastside Union High School District and Vida

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

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

confirmation concerning the rumors raised regarding TDS' financial troubles;

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

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

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

IRA, OLSEN and ROCAMORA regarding IDS' financial and regulatory

problems and whether TDS had returned vendor checks.

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

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

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

IRA, OLSEN and ROCAMORA.

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

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

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

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

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

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

other districts and was told the information was inaccurate;

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

defendants to be false or were made without any reasonable belief to the truth of the matters

28

19COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

reputation and to cause economic harm to TDS.

FIRST CAUSE OF ACTION

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

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

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

contained in paragraphs 1 through 36 of this Complaint.

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

activities as set forth herein constitute acts of unfair and/or unlawful competition, and unfair

and/or unlawful business practices under California Business & Prof. Code § 17200 et seq.

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

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

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

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

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

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

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

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

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

by TDS in the marketing of their competitive services and financial products; and falsely

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

gained profits which they are not legally entitled to keep.

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

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

against defendants, and each of them.

20COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

SECOND CAUSE OF ACTION

Common Law Unfair Competition

(Against all Defendants)

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

contained in paragraphs 1 through 36 of this Complaint

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

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

defendants to falsely pass off their products and services as being sold, sponsored, authorized, orr

otherwise affiliated with TDS.

44. Defendants' acts constitute unfair competition under California common law.

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

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

at trial.

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

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

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

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

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

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

confusingly similar to TDS.

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

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

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

21COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

THIRD CAUSE OF ACTION

Statutory False Advertising in Violation of California

Business & Professions Code §17500

(Against All Defendants)

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

contained in paragraphs 1 through 36 of this Complaint.

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

California Business & Professions Code § 17500 et' seq.

50. Defendants' acts of false advertising include, but is not limited to:

a. Falsely representing to the public that defendants are authorized

by, affiliated with and/or related to TDS;

b. Falsely representing to the public that defendants are able to

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

products.

c. Misleading the public by using trademarks and/or service marks

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

by TDS; and

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

services.

51. 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

damages in an amount subject to proof at trial.

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

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

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

each of them.

27

28

22

COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

FOURTH CAUSE OF ACTION

Federal Unfair Competition - False Designation of Origin



contained in paragraphs 1 through 36, of this Complaint.

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

confusingly similar to IDS' trademarks and service marks is likely to confuse, deceive or cause

mistake to members of the public and persons in the trade as to the source of origin of

defendants' services and/or financial products, such that the public and persons in the trade are

likely to believe, contrary to fact, that defendants' services and financial products are ,sold, or,

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

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

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

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

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

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

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

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

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

plaintiff.

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

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

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

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

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

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

27

28

23COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

17

18

19

20

25

26

27

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

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

damages in an amount subject to proof at trial, including but not limited to attorney's fees.

58. The false representations of defendants complained of herein are likely to

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

therefore, entitled to preliminary and permanent injunctive relief against defendants, and each of

them, in addition to compensatory damages, costs and reasonable attorney's fees.

FIFTH CAUSE OF ACTION

Product Disparagement Under Lanham Act(Against All Defendants)


contained in paragraphs 1 through 36, of this Complaint.

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

13 in paragraphs 33 and 36 of this Complaint:

14(A) Constitute commercial speech by defendants commercial competitors of

15plaintiff;

16

(B) For the purpose of influencing customers and potential customers not to

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

defendants' competing services and/or financial products;

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

(D) Are false and misleading descriptions or representations of fact which22

misrepresent the nature, characteristics and quality of TDS' services and/or23

financial products;

(E) Were likely to and did damage TDS' business.

61. Defendants are therefore liable to TDS in damages pursuant to Section

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

28

24COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

violations of the Lanham Act.

SIXTH CAUSE OF ACTION

Unfair Competition Under California State Law

Violation of California Business & Professions Code §17200


63. Plaintiff TDS incorporates by reference Paragraphs 1 through 36 of this

Complaint as though fully set forth herein.

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

activities as set forth herein also constitute trademark infringement and unfair competition under

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

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

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. 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

this Court.

SEVENTH CAUSE OF ACTION

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.

25COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

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

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

sponsored or authorized by plaintiff TDS.

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

undertaken willfully and with the intention of causing confusion, mistake or deception on the

part of the consumers of TAX DEFERRED SERVICES, INC., TDS, and/or THE TDS GROUP.

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

herein, plaintiff TDS has suffered, is suffering and will continue to suffer irreparable damage

and, unless said defendants IRA, SCIANNA, ROCAMORA, OLSEN, KREBS and BBS are

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

remedy at law exists.

EIGHTH CAUSE OF ACTION

Slander Per Se Against TDS


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

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

plaintiff TDS' financial and regulatory compliance problems.

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

26COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

NINTH CAUSE OF ACTION

For Breach of Contract


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


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

plaintiff TDS entered into a written Franchise Agreement (Exhibit "A") to assist TDS in

marketing and supplying its Plan Administrator services and expanding its network.

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

Franchise Agreement, except insofar as defendants prevented such performance by their acts or

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

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

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

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

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

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

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

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

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

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

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

suffered damage in an amount according to proof.

27COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TENTH CAUSE OF ACTION

Business Disparagement


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


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

and each of them, published unprivileged false and disparaging statements of fact about plaintiff

TDS and its financial services to third party clients of plaintiff s financial condition, and

purported regulatory difficulties.

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

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

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

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

economic interests.

86. 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.

ELEVENTH CAUSE OF ACTION

Intentional Interference With Contract


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

plaintiff.

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

omissions including, but not limited to, the following:

28COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

a. Those acts described in paragraphs above;

b. Continuing to represent themselves as representatives and/or

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

c. Continuing to sell financial services to TDS clients without paying

10% of the gross revenue generated;

d. Utilizing a rubber signature stamps created without authorization

or approval to execute certain compliance documents that only TDS was

authorized to execute;

e. Undertaking certain conduct to disparage TDS and interfere with

its clients;

f. Creating conditions adverse to plaintiffs businesses; and/or

g. Other acts and/or omissions, according to proof.

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

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

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

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

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

would be sustained by plaintiff.

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

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

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

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

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

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

them.

28

29COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TWELFTH CAUSE OF ACTION

Intentional Interference With Economic Advantage




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

knowledge of the plaintiffs prospective advantageous business relationships and/or

opportunities.

96. Defendants intentionally interfered with said relationships and opportunities by

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

wrongful acts:

a. Those acts described in paragraphs above;

b. Continuing to represent themselves as representatives and/or

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

c. Continuing to sell financial services to TDS clients without paying

10% of the gross revenue generated;

d. Utilizing a rubber signature stamps created without authorization

or approval to execute certain compliance documents that only TDS was

authorized to execute;

e. Undertaking certain conduct to disparage TDS and interfere with

its clients;

f. Creating conditions adverse to plaintiffs businesses; and/or

g. Other acts and/or omissions, according to proof.

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

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

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

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

30COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

would be sustained by plaintiff.

98. The aforementioned acts of defendants were wrongful and tortuous independent

of the interference itself for the reasons alleged above.

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

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

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

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

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

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

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

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

them.

THIRTEENTH CAUSE OF ACTION

Accounting




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

owed under the agreement, improperly diverted business from plaintiff to third parties, and failed

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

of said defendants.

31COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

FOURTEENTH CAUSE OF ACTION

Injunctive Relief




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

restrained by order of this Court, will cause great and irreparable injury to plaintiff in that such

conduct, among other things: (a) is likely to confuse or deceive members of the public and

persons in the trade, contrary to fact, that defendants' services are provided by plaintiff IDS, or

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

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

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

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

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

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

preventing plaintiff from maintaining and/or expanding its business.

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

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

will suffer if defendants' conduct is not restrained.

PRAYER FOR RELIEF

WHEREFORE, plaintiff TDS seeks judgment against defendants, jointly and severally,

and other orders as follows:

1. For a preliminary and permanent injunction:

(a) enjoining all defendants, their officers, directors, agents, servants,

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

misrepresenting that they, or any of them, are authorized by, related to, affiliated with, or

otherwise associated with TDS;

28

32COMPLAINT

12

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

(b) enjoining all defendants, their officers, directors, agents, servants,

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

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

and/or any other trademark or service mark that is confusingly similar to a trademark or

service mark owned by TDS; and

(c) enjoining all defendants, their officers, directors, agents, servants,

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

misrepresentation and disparagement of plaintiff TDS' financial condition and purported

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

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

financial services provided by plaintiff TDS.

(d) any business cards, payroll fliers, logos, stationery, brochures,

advertisements and other marketing materials bearing the infringing trademarks or

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

destruction as the Court directs.

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

amount in excess of the jurisdictional limit of this Court;

3. For exemplary damages;

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

enriched;

5. For attorney's fees;

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

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

COMPLAINT

EXHIBIT A

FRANCHISE A6REBMENT

THIS AGREEMENT Is signed on -.2fl 2002 betweenTAX DEFERRED SERVICES, INC., a /V/^fc%^y tJorporailon. andCOMPLIANCE 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 theservice mark TAX DEFERRED SERVICES," as may be1 designated nowor later by the Franchisor (the "Proprietary Marks").

i

B. The Franchisor grants a license to use the Proprietary Marka, and financialplanning services operating under the name TAX DEFERRED SERVICESCTDS").

C. The Franchisee deslraa to acquire from the Franchisor arid the Franchisordesires to grant to the Franchisee a license to usa the Proprietary Marksand any financial materials at a specified location wfihtn a designatedgeographical area, subject to and In accordance with 'the terms of thisAgreement (the TDS Franchise").

The parties agrea as follows:

1. GRANT OF LOCATION

1.1 The Franchisor grants to the Franchisee, upon tha terms containedfn this Agreement, the right, and the Franchisee undertakes the obligation, toestablish 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 relocatethe TDS Franchise without the written approval of the Franchisor, which approvalmay not be unreasonably withheld or delayed.

1 .3 The Franchisor agrees that it will not grant another TDS Franchiseor establish for itself a company-owned TDS Franchise Swithln the followingspecified area:

Within Santa Clara County

09/2«/«004 TUB Jl2:iO m/RX NO ami @004

^2006, 17:28

$003/015

(the "Designated Territory"). Provided, however, that the Franchises meet Ihespecified sales goals stated in Section 5; and further provided, that theFranchisor, as well as the Franchisor's Affiliates rasarva expressly the right toconduct In Its or their sote discretion any promotional function or actfvfty within oroutside of the' Designated Territory, Including, but not limited to," luncheonmeetings, sending matter* and other types of promotions. In addition, theFranchisor reserves the right to offer and self any financial products bearing theProprietary Marks to persons or entities of the Franchisor's own choosing, withinthe Designated Territory. Further dteflnfflon of "Designated Territory* would beany school district that IDS chooses outside of the Santa Clara County area thatTDS requires the Franchisee to provide trained representatives fof purposes ofserving that school district, Any sales or accounts that have been openedelectronically (vta ths Web) would be considered the Francfeee's right ofterritorial domain and be commissioned and considered revenue to be receivedoy the Franchisee.

2. DUTIES OF THE FRANCHISEE

2,1 During this Agreement, the Franchisee will restrict his or heractivities exduaivoiy to financial services for pqb(fe or

TDS Franchise, unless otherwise approved- In writing by theFranchisor.- — • -- ; - --

2,2 The Franchisee will obtain all required gcWiment licensesand permits for the establishment and oparatlon'o? the TDS Franchise andmaintain these licenses and permits In full force and effect, throughout thisAgreement Ths Franchisee will operate the TDS Franchise Incompliance with all applicable local, state and federal {statutes, rules,ordinances and regulations and will take prompt and Immediate action tocorrect any violation stated in any notice issued by any governmental ormunicipal authority with respect to the establishment and/or operation ofthe TDS Franchise, The Franchisee will comply with all governmentalorders or decrees Issued by any federal, state or local agency with respectto the T05 Franchise.

23 The Franchisee must employ a sufficient nUmber of qualifiedrepresentatives and other personnel to successfully and efflctentty operatethe TDS Franchise including the following;

2.3.1 The Franchisee agrees to maintain; and assure thathis or her employees maintain the highest qualify standards ofprofessionalism and Integrity In the operation of the TDS Franchise.

2.3.2 The Franchisee agrees to conduct ongoing trainingclasses for its representatives.

U/21/20.0B. 17:28

3. OBLIGATIONS OF THE FRANCHISOR '

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

<& 004/015

2,3.3 The Franchisee agrees to screen carefullyprospective trainees and staff applicants before employment and toemploy only those who have good moral character, experience andtraining.

2.4 The Interior and exterior d6cor of the TDS Franchise, as wellas the Location, must be tasteful, In accordance with loc£i communitystandards and with due regard at all times to the preservation of thedignity and quality associated wfth the Proprietary Mart®. Tfte Franchiseswill maintain the TDS Franchise premises In the highest degree ofcleanliness, attractiveness, orderliness, sanitation and repair, and willmake all additions, alterations, repairs and replacements to the premisesas may be required for that purpose Including the periodic repainting orreplacement of obsolete signs, furnishings, equipment and de*cor as theFranchisor may reasonably direct,

2.5 The Franchisee will operate the TDS Franchise and ailactivities fn conformity with the standards, operating procedures andpolicies stated by the Franchisor, and as- tha Franchisor-may otherwisereasonably prescribe fn writing.

2.6 in order to protect the goodwill associated with theProprietary Marks, the Franchisee wiii use exclusively the services andproducts authorized by TDS Products and Services Approval Committee.

2.7 The Franchisee wiil permit the Franchisor ajid Its agents ordesignated representatives to enter the TDS Franchise, without priornotice, during normal business hours for the purpose of conductinginspections; will cooperate fully wilh the Franchisor's agents orrepresentatives In these inspections by rendering the assistance as theymay reasonably request. Upon written notice from the Franchisor, or itsagents or representatives, and without BmKJng Hie Franchisor's otherrights under this Agreement, the Franchisee wfli take ail steps as may benecessary to correct an/ deficiencies detected during these inspectionsincluding Immediately desisting from any action in violation of therequirements Imposed upon the Franchisee by this Agreement

09/28/2004 TDS.NO

17;23

4. PEES

4.1 The Franchisee will pay to the Franchisor a continuing feeduring this Agreement In an amount equal to ten (10%) percent of theFranchisee'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 allnew transactions and from any commissions derived from any and ailbusfnesa revenue received from electronic transactions (via the Web)within tha Designated Territory of this Franchise from the date of thisAgreement

•

4.3 (f any fea or other amount due under this Agreement Is notpaid within ten (10) days after the payment Issue, the Franchisee will paya sen/tea charge equal lo the lesser of the dally equivalent of 13% peryear, or tha highest-rate then permitted by applicable few, far each day theamount Is past due. If It Is necessary for the Franchisor to employ anattorney to collect any amount due from the Franchises under thisAgreement, the Franchisee agrees to pay ali costs of collection^ Includinga 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'UbFranchise as follows; ~ ~~~— : •—

Sea Exhibit A attached hereto

5,2 If the Franchisee falls to meet the specified goals stated InSection 5,1 for any __ periods, all of the Franchl84e's rights In andto territorial protection fn the Designated Territory permanently cease andthe Franchisor may, In its sole discretion, franchise other TDS Franchisesor operate a TDS Franchise within tha Designated Territory. However, allrenewal and trailer commissions earned by the Franchisee prior totermination of this Agreement would continue as long as the businessstays on the books. All other remaining terms of this Agceement,continue.

09/28/2004 TUB

11/21/20.06. 17:28 FAX

1^1006/016

6. INSURANCE

6.1 The Franchisee agrees to obtain before the cjpenlng of theFranchise, and maintain fn fair force and effect during the Agreement,Errors and Omissions Insurance for any producer representing theFranchisee, • ' "' ''~»*:.--~ "- "-̂ "'

82 These policies must include, at a minimum (except asadditional coverages and higher policy limits are reasonably specified forall franchisees by the Franchisor In writing) the following;

i6.2.1 Errors 4 Omission Insurance to be kept at levels to satisfyBroker Dealer requirements,

8.2.2 Franchises agrees to obtain before opening of theFranchise, and maintain in full force and effeot during thisAgreement, general liability insurance naming TDS as additionalinsured (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 beconducted in a tasteful and dignified manner and must be conductedconsistent with tha dignity and integrity of the Proprietary Marks, inaccordance with good business practices, The Franchisor may, In Its solediscretion, object to and have the right to terminate the Franchisee's useof the Proprietary Marks... ;

7.2 The Franchisee will display the Proprietary Marks In themanner prescribed by the Franchisor Irrhla or her actfvkies and on allstationery, business cards, operational forms and printed signs and allother advertising and promotion materials used In connection with theTDS Franchise. Afl displays of the Proprietary Marks, Including all interiorand exterior signs, must dearly state and identify the'Franchisee as aTDS Franchise," In the specific form required by the Franchisor.

7.3 The Franchisee will submit to the Franchisor for approvalsamples of all advertising and promotional plans and i materials and allother materials and all other materials displaying- the Proprietary Marksthat the Franchisee desires to use and that have not •been prepared orpreviously approved by the Franchisor, The Franchisor has the right todisapprove the plans and materials for failure to be consistent with thegoodwill associated with the Proprietary Marks, upon notice In writing to

99/28/2004 TUB 12:10 ITX/ftI NO 8487] @OOS

11/21/2UOB, 17,'Zt» KiU

1^007/015

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

8. CONDITIONS OF TRANSFER OH SALE OF INTEREST

8.1 The Franchisor has tho right to transfer or assign Ihts-Agreement, and al? or any part of its rights or oblfgatfons in thisAgreement, to any person or legal entity.

a2 This TDS Franchise Is personal to the Franchisee. ThsFranchisee will not sell, assign, transfer or convey the following withoutthe 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 otherwisesegregated and sold or transferred by the Franchisee. The Franchisor willnot, however, unreasonably withhold "or delay its consent jto a transfer ofthe TDS Franchise or any ownership Interests in the Franchisee, providedthat all of the following-conditions are met before jthe time of the proposedtransfer:

" "**1 ' »

8.3.1 All of the Franchisee's acenjed monetary obligationsto 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 monetaryobligations or other outstanding obligations 'due from theFranchisee;

6.3.3 If permitted by applicable (aw, the Franchisee mustsign a general release under seal, In a form satisfactory to theFranchisor, 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 arisingunder federal, state and local laws, rules and ordinances;

J

HA1

&008/015

8.5.4 The transferrea must demonstrate to t,' Franchisor'ssatisfaction 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 beevidenced by prior related business experience or otherwise; hasadequate financial resources and capital to own and operate theTDS Franchise and has no material, prior unresolved problemsrelated to financial planning services. The Franchisee will providethe Franchisor with any Information that the Franchisor mayreasonably require to make Its determination concerning eachproposed transfer.

8.3.5 The transferee must sign (and/or, upon theFranchisor's request, cause an Interested parties, to sign) theFranchisor's then-current standard form franchise agreement andother 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 allrequited supporting documentation. The failure i to submit theInformation required In the Franchisor's then-currant standard'application form, Including alt required supporting'documentation, Isreasonable grounds for rejection of the proposed transfer.

8.4 Any purported assignment, transfer, conveyance orencumbrance of the TDS Franchise, any right or Interest created In thisAgreement, or of any ownership Interest in the Franchisee* without.thewritten consent of the Franchisor, is null and void,land results intermination of this Agreement, as stated in Article 9.

8.5 The Franchisor's consent to a transfer of any interestgranted in this Agreement does not constitute a waiver of any claims theFranchisor may have against the transferring party, nor Deemed a waiverof the Franchisor's rights to demand exact compliance' with any of thaterms of this Agreement by the transferee.

8.6 It Is agreed that since. Franchjsee has beeh an Integral partof brinolno this Franchise toJniltion. upon anv sale of tTDS. Franchiseeshall have tha gotten of being a. part of the safe; tha value to be negotiatedbetween TDS and tha Franehisae known as The IRA Center0,

9. DEFAULT AND TERMINATION

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

09/24X2004 TUB d:lO m/Rl NO 8487] ®010

Agreement and all rights granted In this Agreement wii. automaticallyterminate without opportunity to cure and without notice by the Franchisorto the Franchisee, If the Franchisee files any petition in* bankruptcy,voluntary or Involuntary.

9.2 Except as otherwise provided by applicable law, theFranchisee will be deemed In default under Ibis Agreement and theFranchisor may, at its option, terminate this Agreement and all rightsgranted in this Agreement without affording the Franchisee anyopportunity to cum the default, with the termination effective Immediatelyupon the earlier of receipt of notice of termination by the Franchisee or, Ifthe notice of termination Is deposited by the Franchisor in-United Statesmails, 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, inFranchisor's reasonable opinion, the Franchisee cannot fulfill his orher obligations to TDS cfient or to One Franchisor, as provided inthis Agreement;

s\ •

9.2.2 The Franchisee makes an asisfgnrnent'for the banafitof his or her creditors;

The Franchisee admits in writing his or her Inability topay his or her debts generally as they become due;

9.2.4 The Franchisee suffers temporary or permanentlyappointed receivership;

9.2.5 The Franchisee Is convicted of a felony or any othercrime or offense, including any violation of SEC rules, that Isreasonably likely, in the sole opinion of the Franchisor, to adverselyaffect the Franchisor, the Proprietary Marks, or the goodwillassociated with the Proprietary Marks;

9.2,8 The Franchisee attempts to, or purports to, transferany rights, or obligations under this Agreement, or otherwise, to anythird party, contrary to the terms of Article 8;

9.2.7 The Franchisee fans to comply with the covenantsstated In Article 11;

8.2.8 The Franchisee, falfe to pay 10% of; the Franchisee'sgross revenue or other payments on specific due dates toFranchisor.

09/28/2004 TOE

•a 010/015

9.3 Except as stated In Sections 9.1 and 9.2, v it except asotherwise provided by applicable law, the Franchises has 3p days afterreceipt from the Franchisor of a written notice of default within which toremedy a default of any of the terms of this Agreement, as stated in thewritten notice'of default, and provide written evidence of (cure to thesatisfaction of the Franchisor, if the notice of default Is deposited by theFranchisor in United States mails, certified mall, then receipt will bepresumed 5 days after- majiing by the Franchisor, if arty default is notcured within the SO day period (or longer period as appfip^ble law may.otherwise require), the Franchisor may, at its option, terminate thisAgreement and all rights granted in this Agreement without affording theFranchises any further opportunity to cure the default, with termination tobe effective immediately upon the depositing -of the notice of terminationby the Franchisor In the United States Mail, certified mail.

10. OBLIGATIONS UPON TERMINATION

Upon the termination of thte Agreement by either the Franchises or theFranchisor, by operation* of law, the Franchisee's obligations am as follows:

10.1 The Franchisee will Immediately cease to operate the TDSFranchise and Is- prohibited thereafter from either directly or indirectlyrepresenting himself or herself to the public, or to any person, that he orshe \3 a present or former TDS Franchisee.

10.2 The Franchisee will Immediately and permanently cease touse, by advertising or any other manner, the trademarks, trade names,setvtaa marks, signs, structures and other forms of adverting and indiciaas a TD3 Franchisee, including ail materials and articles displaying theProprietary Marks and agrees to turn over ai( discs, systerns, trade secretsand any other material? provided by TDS without duplication or copying.

10.3 The Franchisee must take all action as may be required tocancel all assumed names or equivalent fictlHoua name registrationsrelating to use of the Proprietary Marks and any other related marks inconnection 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 causeconfusion, mistake or deception, or to dilute the Franchisor's exclusiverights In and to the Proprietary Marks, nor utilize any designation of originor description or representation falsely suggesting or-'representing anassociation or connection with the Franchisor which constitutes unfaircompetition, in any business which it may thereafter engage.

03/25/2004 TUB 12:10

17:28

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

IS 011/016

11. COVENANTS

11.1 The Franchisee agrees that during tha term of thisAgreement, except as otherwise approved In writing by'the Franchisor,which approval wili not be unreasonably withheld or delayed, dieFranchisee will personally devote his or her full time, energy and bestefforts to the management and operation of the TDS Franehfee,

11.2 TTia Franchisee agrees that during the term of thisAgreement, tha Franchisee will not, either directly or indirectly, for himselfor 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, anyother act injurious or prejudicial to the goodwill associated with theProprietary Marks; ^/

11.2.2 Employ or seek tq employ any person, who is at thattime currently employed by any other TDS Franchise or had beenemployed by any other TDS Franchise in the pijevious ninety (90)days, or directly or indirectly, Induce that person to leave his or heremployment, without the written consent of the current or previousemployer of tha person;

11.2.3 Own, maintain, engage in or haveiany Interest In any -business specializing, in whole or in part, financial planningservices, other than as a TDS Franchisee.

12. INDEPENDENT CONTRACTOR AND INDEMNIFICATION

12.1 It is agreed by the parties mat this Agreement does notcreate a fiduciary relationship between or amend them'. The Franchisee isan independent contractor. Nothing in this Agreement fs Intended toconstitute or construe tha Franchises as an agent, jegal representative,

09/28/2004

17:30

10012/015

subsidiary, Joint venture, partner, affiliate, employee 01 .servant of theFranchisor for any purpose.

12.2 (t Is agreed that nothing in this Agreement Authorizes theFranchisee to mate any contract, agreement, warranty or representationon the Franchisor's behalf, or to Incur any debt or other obligation in theFranchisor's name* Tha Franchisor will not assume liability for, or bedeemed liable under this Agreement, as a result of any action, or byreason of any act or omission of the Franchisee, his or her employees oragent, In hls-or her conduct of the TDS Franchise,

12.3 The Franchises indemnifies the Franchisor, Us parentcompany and its affiliates, as well as their respective officers, employees,partners, directors and shareholders (for purposes of this Section only, allare (collectively, the "̂ Company") and holds the Company, and each ofthem, harmless from, against, for and in respect of any damages, losses,obligations, liabilities, claims, deficiencies, costs and expanses, Includingreasonable attorney's lees and other costs and expenses. Incident to anysuit, action, Investigation, claim or proceeding <coiieotfveiy, the"Company's Losses") suffered, sustained, incurred or required to be paidby Company, or any of them, by reason of any representation, act,commission or omission of tha Franchisee, his or her agents servants,employees, guests or visitors, with respect to;

(a) The establishment and operation of the TDSFranchise;

(b) The TDS Franchise;

(c) Any suit, action, deJm or proceeding brought by anyperson or entity within the Designated Territory during the term, andrenewals with respect to the TDS Franchise irrespective of whenthe claim arose;

(d) Any failure by tha Franchisee to observe or performhis or her covenants and agreements slated in this Agreement; or

(e) Any injury to, or loss of property ot, any clients of theTDS Franchise,

Alf of the Compan/s Losses must be satisfied fay cash payments from theFranchisee to the Company. The Franchisee will, In writing, nbtify the Franchisorimmediately as to any suit, action, Investigation, claim or proceeding for whfchindemnification might be claimed fay the Company, or any of them. Upon receiptof any notice of SUB, action, Investigation, claim or proceeding for whichindemnification might be claimed by Ihe Company, or any of them, the Company

11

TUB

.17:30

1^013/016

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

13. NOTICES

Any notices required or permitted under this Agreement must be in writingand be personally delivered or mailed by certified or registered mail, returnreceipt requested, to tha respective parties at the following addresses unless anduntil 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 Counsel for TDS: *Tax Deferred Services, inc. i6740 Windmill Way, #16 , :_.. ,Carmlchael, CA 96608 ..' ..

Notices to the Franchisee:

Mr. Randy Scfanna, on behalf ofThe IRA Center. Ino.14388 Union AvenueSan Jose, CA 95124

14. ENTIRE AGREEMENT

This Agreement and the documents .referred to in this Agreementconstitute the entire, full and complete agreement between tf)e Franchisor andtha Franchisee concerning the subject matter of ihis Agreement, awUupersedeall prior agreements. No other representations have been made by thaFranchisor or its agents to induce the Franchisee to sign this Agreement, Noamendment, change or variance from this Agreement is binding on either partyunless mutually agreed to In writing by the parties and signed by their authorizedofficers or agents in writing.

TAX DEFERRED SERVICES, INC. IRACi

By.

09/2S/Z004 TUB fc:W ITX/SI NO 8487) @013

tds compalint

Documents