David M. Sears and Carol L. McCabe - Page 7

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         corresponding amount of employee benefit programs expense.  Mr.              
         Sears believed it was unnecessary to reimburse Ms. McCabe because            
         “The money [to pay the medical bills] was coming from the same               
         place.”  He described this practice as a “Poor job of accounting,            
         maybe.”                                                                      
              On October 25, 2000, a Kansas State court entered a                     
         Temporary Restraining Order (TRO) against RTP, its founder, and              
         other related parties, enjoining them from marketing products and            
         services to new customers and imposing restrictions on their                 
         business activities with existing customers.  The court found                
         that RTP and the other defendants “committed numerous acts which             
         are deceptive and unconscionable acts and practices” in violation            
         of the Kansas Consumer Protection Act, sec. 50-683 (1994).  The              
         court later permanently enjoined the defendants from conducting              
         any business activity in or from the State of Kansas.                        
              Petitioners continued to use the RTP system and purchase the            
         platinum service after learning of the TRO, but they did not                 
         attempt to recruit new downline distributors.  Petitioners                   
         believed that RTP was a legitimate business, although Mr. Sears              
         acknowledged “there were some things going on that were not good             












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