COMPLAINT ALLEGES FRAUD, NEGLIGENT MISREPRESENTATION, PROFESSIONAL NEGLIGENCE AND UNFAIR COMPETITION RELATED TO INSURANCE/412(I) PENSION PLAN EXECUTED IN 2006. PLAINTIFFS ALLEGE PENSION PLAN WAS UNSUITABLE AND DID NOT PROVIDE LEGITIMATE TAX DEDUCTIONS FOR PREMIUMS PAID TO FUND THE PLAN.

$6,000,000.00

$15,000.00

NOTE TO QUESTION 22, THE SETTLEMENT IS GREATER THAN $15,000, BUT THE ACTUAL AMOUNT IS CONFIDENTIAL. MR. BAKER REFERRED MR. DENNIS CUNNING CPA, A NATIONALLY KNOWN PENSION CONSULTANT TO HANDLE THE DESIGN AND IMPLEMENTATION OF A DEFINED BENEFIT PLAN FOR TWO DIFFERENT CLIENTS. HE MET WITH THE CLIENTS, THE CPAS AND DESIGNED PLANS THAT WERE IMPLEMENTED. BOTH PLANS WERE FUNDED 100% WITH INSURANCE PRODUCTS - ANNUITIES AND LIFE INSURANCE. THE IRS SUBSEQUENTLY ANNOUNCED THEY WERE GOING TO AUDIT AND CHALLENGE ALL PLANS FUNDED WITH LIFE INSURANCE, CALLED 412I PLANS. BOTH OF THESE PLANS WERE WRITTEN UNDER THE SAFE HARBOR RULES ISSUED BY THE IRS. BUT PLAINTIFFS LOST CONFIDENCE IN THE PLANS AND SOUGHT LEGAL RELIEF. MR. CUNNING DIED AND WAS UNABLE TO DEFEND HIMSELF. MR. BAKER WAS INCLUDED IN THE ACTIONS AND AS A RESULT BORE THE BRUNT OF THE LEGAL ACTION. MR. BAKER'S ONLY INVOLVEMENT WAS TO MAKE THE REFERRAL AND TO PARTICIPATE IN THE INSURANCE POLICIES THAT MR. CUNNING RECOMMENDED. MR. CUNNING WAS THE PRIMARY AGENT AND I WAS INCLUDED ON THE INSURANCE APPLICATIONS. BOTH CASES WERE SETTLED OUT OF COURT. BOTH CASES SETTLED FOR CONSIDERABLY LESS THAN THE ORIGINAL SUITS CLAIMED.

COMPLAINT ALLEGES FRAUD, NEGLIGENT MISREPRESENTATION, PROFESSIONAL NEGLIGENCE AND UNFAIR COMPETITION RELATED TO INSURANCE/412(I) PENSION PLAN EXECUTED IN 2006. PLAINTIFFS ALLEGE PENSION PLAN WAS UNSUITABLE AND DID NOT PROVIDE LEGITIMATE TAX DEDUCTIONS FOR PREMIUMS PAID TO FUND THE PLAN.

$12,000,000.00

$15,000.00

NOTE TO QUESTION 22, SETTLEMENT IS GREATER THAN $15,000, BUT THE ACTUAL AMOUNT IS CONFIDENTIAL. MR. BAKER REFERRED MR. DENNIS CUNNING CPA, A NATIONALLY KNOWN PENSION CONSULTANT TO HANDLE THE DESIGN AND IMPLEMENTATION OF A DEFINED BENEFIT PLAN FOR TWO DIFFERENT CLIENTS. HE MET WITH THE CLIENTS, THE CPAS AND DESIGNED PLANS THAT WERE IMPLEMENTED. BOTH PLANS WERE FUNDED 100% WITH INSURANCE PRODUCTS - ANNUITIES AND LIFE INSURANCE. THE IRS SUBSEQUENTLY ANNOUNCED THEY WERE GOING TO AUDIT AND CHALLENGE ALL PLANS FUNDED WITH LIFE INSURANCE, CALLED 412I PLANS. BOTH OF THESE PLANS WERE WRITTEN UNDER THE SAFE HARBOR RULES ISSUED BY THE IRS. BUT PLAINTIFFS LOST CONFIDENCE IN THE PLANS AND SOUGHT LEGAL RELIEF. MR. CUNNING DIED AND WAS UNABLE TO DEFEND HIMSELF. MR. BAKER WAS INCLUDED IN THE ACTIONS AND AS A RESULT BORE THE BRUNT OF THE LEGAL ACTION. MR. BAKER'S ONLY INVOLVEMENT WAS TO MAKE THE REFERRAL AND TO PARTICIPATE IN THE INSURANCE POLICIES THAT MR. CUNNING RECOMMENDED. MR. CUNNING WAS THE PRIMARY AGENT AND I WAS INCLUDED ON THE INSURANCE APPLICATIONS. BOTH CASES WERE SETTLED OUT OF COURT. BOTH CASES SETTLED FOR CONSIDERABLY LESS THAN THE ORIGINAL SUITS CLAIMED.

ON MARCH 22ND, 2001 A VARIABLE UNIVERSAL LIFE INSURANCE POLICY WAS TAKEN OUT BY EAGLE NEST MINISTRIES TO BE USED AS A RETIREMENT PLAN FOR THE SENIOR PASTOR [CUSTOMER]. IN A JUNE 27TH, 2005 LETTER FROM [CUSTOMER] AND THE BOARD OF DIRECTOS OF EAGLE'S NEST MINISTRIES THEY ALLEGED THEY HAD BEEN GIVEN MISLEADING AND FALSE STATEMENTS AND THERE WAS A MISREPRESENTATION DURING THE SALES PROCESS.

$65,000.00

THE CUSTOMER WAS, IT IS BELIEVED, ENCOURAGED BY A THIRD PARTY INSURANCE AGENT TO COMPLAIN ABOUT THE INSURANCE PRODUCT HE HAD PREVIOUSLY PURCHASED THROUGH MR. BAKER'S EMPLOYER BROKER-DEALER. THE COMPLAINT WAS FULLY REVIEWED BY THE SPONSORING INSURANCE COMPANY AND THE EMPLOYER BROKER-DEALER AND WAS FOUND TO BE WITHOUT MERIT. MR. BAKER WAS EXONERATED OF ANY MISREPRESENTATION. NO PENALTIES OR DISCIPLINARY ACTIONS WERE ASSESSED TO EITHER THE REPRESENTATIVE OR THE BROKER-DEALER AND NO REMUNERATION WAS OWED TO THE COMPLAINANT. THE COMPLAINT WAS DENIED AND THE MATTER WAS CLOSED WITHOUT INCIDENT.