IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS AUSTIN DIVISION FUNDSXPRESS FINANCIAL NETWORK, INC., Plaintiff, v. DIGITAL INSIGHT CORPORATION, JOHN DORMAN, VINCENT BRENNAN, RONALD GOFFMAN, ERIC EDWARDS and STEPHEN CRAIN, Defendants. PLAINTIFF'S THIRD AMENDED COMPLAINT TO THE HONORABLE SAM SPARKS: Plaintiff FundsXpress Financial Network, Inc., files this Third Amended Complaint against Defendants Digital Insight Corporation, John Dorman, Vincent Brennan, Ronald Goffman, Eric Edwards and Stephen Crain and alleges as follows: I. PARTIES. 1. Plaintiff FundsXpress Financial Network, Inc. ("FundsXpress") is a Texas corporation that maintains its principal place of business at 11950 Jollyville Road, Austin, Travis County, Texas 78759. 2. Defendant Digital Insight Corporation ("Digital Insight") is a Delaware corporation with its corporate headquarters in Calabasas, California. It has been served and has appeared in this case through counsel. 3. Defendant John C. Dorman is Chairman & Chief Executive Officer of Digital Insight. He is a citizen of California and may be served at 26025 Mureau Road, Calabasas, Los Angeles County, California 91302-3103. 4. Defendant Vincent Brennan is Senior Vice President of Sales of Digital Insight. He is a citizen of California and may be served at 26025 Mureau Road, Calabasas, Los Angeles County, California 913023103. 5. Defendant Ronald Goffman is a citizen of Minnesota. He has appeared in this case through counsel. 6. Defendant Eric Edwards is a citizen of Wisconsin. He has appeared in this case through counsel and objects to this Court's exercise of personal jurisdiction over him. 7. Defendant Stephen Crain is a citizen of South Carolina. He may be served at 108 Arden Chase, Anderson, Anderson County, South Carolina 29621-1593. II. JURISDICTION AND VENUE. 8. This Court has subject matter jurisdiction under 28 U.S.C. § 1332, because there is complete diversity of citizenship between the Plaintiff and the Defendants, and the amount in controversy far exceeds $75,000, exclusive of interests and costs. This Court also has subject matter jurisdiction over the federal law claims pursuant to 28 U.S.C. S 1331 and S 1338, and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. S 1367. 9. Venue is proper in this District pursuant to 28 U.S.C. S 1391(a)(2) because a substantial part of the events and omissions giving rise to this claim occurred in this District, and because a substantial part of the property that is the subject of this action is situated in this District. III. BRIEF OVERVIEW. 10. This is a case about cheating in the marketplace - stealing and conspiring to steal a competitor's trade secrets to compete for sales, and then libeling and slandering that competitor. In a federally regulated industry where confidentiality is paramount, Digital Insight ignored confidentiality agreements, intentionally stole, received, and used FundsXpress's trade secrets and proprietary information to make sales, take customers away from FundsXpress, and increase Digital Insight's revenues, profits and market share. 11. The proper measure of damages for misappropriation of trade secrets is the greater of the victim's lost profits or of the defendant's profits - what Digital Insight gained from its intentional misappropriation and use of FundsXpress's trade secrets. Digital Insight's actions caused actual, out-of-pocket losses to FundsXpress that exceed, even by the most conservative measure, $18,500,000. This figure pales in comparison with Digital Insight's profits - between $88,000,000 and $150,000,000 during the time it was stealing and using FundsXpress's trade secrets. Some or all of these damages are subject to statutory trebling. In addition to damages for misappropriation, Digital Insight is liable to FundsXpress for libel and slander, damages for which are presumed by law. FundsXpress values these damages at $50,000,000. 12. Because Digital Insight's actions and those of its employees were intentional - and documented in their own words in emails that they sent to each other and to other Digital Insight officers and employees and in postings of information on the Digital Insight intranet - FundsXpress is claiming punitive damages of at least $50,000,000. 13. The stakes in this case are huge. 14. FundsXpress and Digital Insight compete in providing Internet banking services to independent and community banks, credit unions and other smaller financial institutions. Digital Insight was the largest provider of such services to Financial Institutions in the beginning of 2001. 15. Beginning in 2001, Digital Insight conspired with ex-employees of FundsXpress to steal trade secrets and other confidential proprietary information of FundsXpress for the purposes of destroying or severely damaging FundsXpress's ability to compete with Digital Insight. The resulting thefts of FundsXpress's trade secrets have improperly allowed Digital Insight to acquire contracts from Financial Institutions which it could not otherwise have acquired without the use of the trade secrets and other confidential proprietary information of FundsXpress. FundsXpress has been greatly damaged by this conspiracy and the multiple thefts resulting from this conspiracy. Because Digital Insight has violated not only state but federal criminal statutes in carrying out its conspiracy, FundsXpress seeks actual damages in excess of $30,000,000, treble damages, exemplary damages of at least $50,000,000 and injunctive relief to prohibit Digital Insight from disclosing, using or retaining the trade secrets or confidential information of FundsXpress. 16. Defendants Vincent Brennan, Eric Edwards, Ron Goffman, and Stephen Crain, along with Gifford Dunn, worked together at John Harland & Company in the early l990s and have continued in close contact with each other. In January 2000, Brennan and Edwards joined Digital Insight as a result of Digital Insight's acquisition of N-Front, Inc. It appears that since that time they have systematically gone about recruiting their old friends to join them at Digital Insight. Three of those friends, Dunn, Goffman, and Crain, were employees of FundsXpress. Each one of these people has either taken FundsXpress's trade secrets, including detailed potential customer databases and detailed pricing formulas that together contained all the data FundsXpress had about every potential customer, information created a great cost that included the notes of every sales call, internal evaluation of the customers' needs, and pricing spreadsheets, which would allow Digital to figure out what price FundsXpress would offer to any potential customer, or has engaged in a systematic campaign of libel and slander aimed at FundsXpress, or both. These people, with the knowledge of Digital Insight's highest officials, were encouraged to take FundsXpress's trade secrets and were encouraged to work as spies for Digital Insight. While Dunn worked for Digital Insight, Edwards and Brennan knew that he was currently still employed as FundsXpress's most senior sales executive. Dunn was encouraged to use the access he had as a FundsXpress employee to take FundsXpress's marketing and pricing trade secrets and send them to Digital Insight. Edwards, the direct recipient, then forwarded the stolen "goods" to all the senior executives at Digital, and the purloined information was placed on Digital Insight's intranet, for the whole company to access and use. IV. FACTUAL BACKGROUND. 17. FundsXpress. FundsXpress has developed a proprietary, integrated system of computers, computer programs, security systems, databases and communication network interconnections through which it provides various products and services to financial institutions from FundsXpress's headquarters in Austin, Texas. FundsXpress's products and services give financial institutions the ability to provide their customers Internet banking, commercial cash management, bill payment, account aggregation and dynamic portal services. FundsXpress provides "service bureau" or "application service provider" ("ASP") services - meaning that financial institutions use FundsXpress's secure computer systems, rather than their own, to provide their customers these Internet banking services. 18. For example, a financial institution customer can use the Internet from a home computer to access his or her bank account and then transfer funds, pay bills, inquire about loan balances, and conduct virtually any other banking business. 19. In addition, a financial institution that obtains FundsXpress's dynamic portal product can give its customers with access to a convenient and useful "home page" or Internet starting point. These dynamic portals are branded with the contracting financial institution's name, and the customer can use this home page as the point for the initial access to the Internet. The portal gives the customer quick and convenient access to other banking services provided by the financial institution, personalized stock quotes, local weather and news, and Internet shopping. 20. FundsXpress's products and services allow smaller financial institutions to compete with their larger brethren, without having to make a large investment in developing their own proprietary Internet banking systems. 21. FundsXpress has spent tens of millions of dollars and devoted over six years developing its proprietary system to provide Internet banking, Dynamic Website portal, and other products and services in a secure service bureau environment. FundsXpress's service bureau solution uses proprietary software, encryption techniques, interfaces, and proprietary integration and implementation processes that assure secure transactions over the Internet, all of which constitute FundsXpress's trade secrets. FundsXpress's ability to provide secure Internet transactions through a user-customizable portal in a service bureau environment gives FundsXpress a distinct edge over its competitors, including Digital Insight, which does not currently offer an equivalent dynamic portal product. 22. The FundsXpress system has received the exclusive endorsement of numerous state banking associations. FundsXpress has developed an outstanding reputation among financial institutions throughout the United States for its products and services and has developed a substantial amount of goodwill with its over 500 financial institution customers. 23. The Goldmine customer database. FundsXpress maintains its competitive advantage by compiling extensive information relating to its customers and potential customers in its Goldmine Sales Management Contact Database ("Goldmine"). The Goldmine database includes the name, address and phone number of every financial institution in the country, the service contact there, their decision makers, their current service providers for a vast array of products, the expiration date of their various service contracts, email addresses, association membership, special product preferences for a particular financial institution, and detailed information concerning each telephone call, onsite visit, email, written correspondence and other contact made with a particular financial institution. The Goldmine database is one of the most valuable assets FundsXpress owns. 24. The Pricing Suite. FundsXpress also has developed proprietary marketing and sales strategies (including strategies relating to pricing and developing leads through association endorsements) for marketing its products and services. These strategies are not only the information in the Goldmine database, but also in its comprehensive pricing spreadsheet for all of its products and services - the "Pricing Suite." The Pricing Suite provides FundsXpress with distinctive advantages over its competitors, including Digital Insight. 25. FundsXpress, through its Marketing and Sales Department, also helps each contracting financial institution develop customized marketing campaigns for its Internet banking portal and other products. FundsXpress has developed cost and details for providing these marketing campaigns on a cost effective basis for each particular contacting financial institution. The Goldmine database, the Pricing Suite, and the FundsXpress proprietary marketing and sales strategies constitute trade secrets and confidential information of FundsXpress. 26. Trade secret safeguards. FundsXpress uses rigorous safeguards to protect its confidential information and trade secrets. The FundsXpress premises are secure. The campus is gated; access doors are kept locked at all times; employees must use card keys to open office doors; no one is allowed past the reception area without signing in, receiving an ID badge, and being escorted by an employee. FundsXpress keeps its data center locked at all times and limits access to a few individuals who not only have personalized card keys, but also a separate passcode. FundsXpress keeps source code for the software used in its service bureau under exceptionally strict control. Every employee's computer is password-protected. Should an employee leave his desk with his computer on, the employee's computer is equipped with a password-protected screen saver that will automatically come on after a few minutes, thus preventing someone from viewing what was on the employee's screen. FundsXpress notifies every employee of the importance of its confidential information and trade secrets and limits the dissemination of such information. 27. FundsXpress requires each employee to sign a nondisclosure agreement entitled Employee Intellectual Property Assignment and Nondisclosure Agreement ("Nondisclosure Agreement"). When an employee quits working at FundsXpress, the employee must sign a certification ("Nondisclosure Acknowledgement") acknowledging that the employee is aware of, and will uphold, the employee's obligation not to use or disclose any trade secrets or confidential information of FundsXpress. 28. FundsXpress also requires each financial institution to which FundsXpress submits a bid to sign a nondisclosure agreement prohibiting the financial institution from revealing any of the information in the bid to any third party. FundsXpress does not reveal its pricing formulas or strategies in a bid to a financial institution, but only provides the pricing information necessary for that particular bid. The entire "Pricing Suite" is not available to financial institutions. It is only available to a very limited number of FundsXpress employees who are all subject to a nondisclosure agreement. The ex-employees Dunn, Crain and Goffman 29. Gifford Dunn. FundsXpress hired Gifford Dunn in December 1998 as a sales Account Executive. Dunn initially sold the FundsXpress Internet Banking product in Kansas, Missouri, and Arkansas. He was promoted in April 2000 to National Sales Manager, and in August 2000 his position was renamed National Sales Director. After his promotion, Dunn was responsible for hiring, training and supervising other FundsXpress account executives. He was also instrumental in developing national sales and pricing strategy for FundsXpress. In 2001, Dunn was named Senior Account Executive, where he continued to have access to all product pricing, pricing strategies, marketing and sales materials for all FundsXpress products and services, the Goldmine database, and other previously described trade secrets and other confidential proprietary information of FundsXpress. Dunn was a key employee at FundsXpress who: * was the lead sales contact with many of FundsXpress existing customers * knew nonpublished pricing of FundsXpress products and services * knew plans for future product offerings * knew products in the development pipeline * knew information contained within the Goldmine sales database * was the primary contact for marketing and sales demonstrations to many prospective customers. 30. Because Dunn held a significant position of authority and trust in FundsXpress, he had access to much of FundsXpress's proprietary and confidential information. Dunn knew he was required to keep confidential the proprietary information he learned about technical aspects of the FundsXpress ASP solution, information about FundsXpress customers, FundsXpress marketing and sales plans, its existing and future products, its financial information - everything about FundsXpress that was not made known to the public or to its competitors. Dunn signed a Nondisclosure Agreement with FundsXpress acknowledging his obligations not to engage in any activities that constitute a conflict of interest and to maintain as confidential all FundsXpress trade secrets and other confidential information. 31. Stephen Crain. Upon Dunn's recommendation, in October 1999, FundsXpress hired Defendant Stephen Crain as a sales Account Executive. Crain was responsible for the territory of South Carolina, Georgia, Florida and Alabama. He also was supposed to assist FundsXpress sales efforts in other states. Crain had access to all product pricing, pricing strategies, marketing and sales materials for FundsXpress products and services, the Goldmine database, and other previously described trade secrets and other confidential proprietary information of FundsXpress and its strategic partners. 32. Ronald Goffman. FundsXpress hired Ronald Goffman in August 2000, as a sales Account Executive. He was initially responsible for credit union sales for Michigan, Wisconsin, and other states. Goffman reported directly to Dunn. Like Crain, Goffman had access to all product pricing, pricing strategies, marketing and sales materials for all FundsXpress products and services, the Goldmine database, and other previously described trade secrets and other confidential proprietary information of FundsXpress and its strategic partners. 33. Like Dunn, Crain and Goffman knew they were required to keep the FundsXpress trade secrets and proprietary confidential information secret. Like Dunn, Crain and Goffman signed binding Nondisclosure Agreements with FundsXpress. 34. Goffman leaves FundsXpress and goes to Digital Insight. Goffman left FundsXpress on May 2, 2001, and was promptly hired by Digital Insight. On his last day of work at FundsXpress, Goffman signed the FundsXpress Nondisclosure Acknowledgement stating that he had delivered to FundsXpress all tangible and intangible materials containing confidential information of FundsXpress in his possession, and that he knew he could not use or disclose FundsXpress confidential information. 35. Instead of returning his FundsXpress notebook computer, however, Goffman kept it and the FundsXpress trade secrets and other confidential proprietary information, including the Goldmine database, on it. Digital Insight knew about Goffman's obligations to FundsXpress but, nevertheless, conspired with Goffman to convert not only the notebook computer, but more important, to misappropriate all of the FundsXpress trade secrets and proprietary information that was stored on it. In particular, Goffman delivered to Digital Insight copies of the FundsXpress's sales pipeline reports for all its prospective sales to financial institutions generated by the FundsXpress Goldmine database. This enabled Digital Insight to target prequalified sales leads of FundsXpress to FundsXpress's detriment and use the confidential information gathered by FundsXpress about each lead to sell Digital Insight's products and services. 36. Goffman was initially hired as a salesperson at Digital Insight. Because Goffman was much better at generating leads than he was at closing sales, Goffman was moved from salesperson to "lead generator." Goffman's "talent" for generating leads was the result of his stealing FundsXpress's trade secrets and confidential information contained in the Goldmine sales database. 37. Crain leaves FundsXpress and goes to Digital Insight. Crain left FundsXpress on July 9, 2001, about two months after Goffman. He was hired by Digital Insight shortly thereafter. Like Goffman, upon leaving FundsXpress, Crain signed a Nondisclosure Acknowledgement, and like Goffman, he promptly violated that agreement by disclosing to Digital Insight trade secrets and confidential information which Digital Insight used to compete with FundsXpress. As recently as February 20, 2002, Crain sent an email concerning a potential contract between FundsXpress and a credit union to a third party core processor where he stated that I just received pricing that I know would match or beat FX if she [the credit union representative] would give me a chance.... I don't know what your relationship is with her, but if she would just give me a chance I could change her mind .... 38. Dunn goes to Digital Insight without first leaving FundsXpress. By August 2001, while still employed by FundsXpress, Dunn was talking to Crain about going to work for Digital Insight. Dunn continued these employment discussions with Digital Insight's Regional Sales Manager, Defendant Eric Edwards, in August and September 2001. Edwards offered Dunn a position as a Digital Insight sales representative in late September 2001, and Dunn orally accepted it two days later. Digital Insight sent Dunn a formal offer letter memorializing the job offer on October 3, 2001, and Dunn returned the executed acceptance letter on October 26, 2001. Dunn began working for Digital Insight on October 31, 2001, while still employed by FundsXpress, without telling FundsXpress he was now serving two masters. 39. Dunn did not tell FundsXpress he intended to quit his job until November 16, 2001, when he lied to FundsXpress that he was taking a job as vice president with a noncompetitive, local Kansas City-based company. Dunn did not tell anyone at FundsXpress that he had already gone to work for a competitor, Digital Insight. During the second half of November and in early December, 2001, Dunn drew multiple paychecks - checks from FundsXpress and checks from its direct competitor, Digital Insight. 40. Digital Insight hired Dunn to market and sell directly competitive products and services to FundsXpress's existing and prospective customers. Digital Insight hired Dunn because of his intimate knowledge of the FundsXpress business, including knowledge of how FundsXpress designed and used its Goldmine database, its proprietary marketing and sales strategy and its existing and prospective customer lists, with the understanding that Dunn would use that confidential information to sell Digital Insight's products against FundsXpress's products. 41. Moreover, signing on with Digital Insight before he quit FundsXpress gave Dunn a unique opportunity to help Digital Insight, because Dunn remained responsible for FundsXpress customers, and he retained access to FundsXpress's internal computer system and its trade secrets and other confidential information. Digital Insight knew Dunn was still working at FundsXpress while working for Digital Insight. FundsXpress just did not know it. 42. It also appears that from the time Dunn was first offered a job with Digital Insight, he began to work against FundsXpress's interests. For example, he was supposed to be trying to get Capitol Bancorp Limited in Michigan to sign an agreement with FundsXpress. Before he left FundsXpress, he reported that FundsXpress did not get the business and Capitol Bancorp Limited had signed with someone else - he wasn't sure who. He knew Capitol Bancorp Limited had, in fact, signed with Digital Insight, but he lied to his superiors at FundsXpress. There was only one reason to lie: to hide the fact that he was actually working for Digital Insight. 43. In addition, Dunn systematically spied for Digital Insight while still working for FundsXpress. For example, on November 12, 2001, Dunn e-mailed to Defendant Edwards (Digital Insight's Regional Sales Manager) a copy of the FundsXpress proprietary Pricing Suite for all FundsXpress products and services. Confirming that Dunn knew what he was doing was wrong, he wrote: Eric, Pricing suite attached - you don't know where you got this. See Exhibit 1, attached. 44. Edwards responded within the hour, confirming that he, and thus Digital Insight, knew this was inappropriate, unauthorized and illegal, saying got what? As long as I don't send it ot [sic] Nymo we should be OK! Ha ha. Id. 45. The next day, November 13, 2001, Dunn accessed his FundsXpress computer account and sent a "high importance" e-mail from FundsXpress to his home e-mail address with a copy of the FundsXpress proprietary Dynamic Website Tutorial and Documentation ("Tutorial") for its new Dynamic Website portal product. See Exhibit 2, attached. Dunn took this copy without authorization by FundsXpress, intending to give it to Digital Insight. 46. On November 14, Edwards, knowing that Dunn was still employed by FundsXpress and had access to its computers and trade secrets, solicited more information from Dunn. He had questions about the stolen FundsXpress pricing suite he had received two days before: Giff, Looking at the FX pricing and have a couple of questions. Are they leading with Princeton for BP and that is what the pricing is? If so then do you add the amount to the right of that to the prices to then arrive at Metavante pricing? On Cash Mgmt is there a per user or per company fee? That's it for now. Thanks. Exhibit 3. Dunn promptly complied, providing detailed answers to Digital Insight's questions about FundsXpress pricing. Id. Edwards had a follow-up question, and Dunn again obliged. Id. 47. On November 30, 2001, his last day of work at FundsXpress and just before his access to the FundsXpress computer system was terminated, Dunn again sent an email message from his FundsXpress computer to his home computer with another copy of the Tutorial. Exhibit 4. This enabled Dunn to obtain the latest copy of the Tutorial, and to provide it to Digital Insight, which he did via e-mail to Edwards on December 3, 2001. Dunn bragged: Eric, Here is pretty good intel on FX PDW product. Pass on as you see fit- as usual you don't know where you got this. gd Exhibit 5, attached. Edwards' prompt reply is revealing: interesting. Thanks for the goods. Id. Digital Insight's knowledge and use of misappropriated trade secrets. 48. Edwards told Digital Insight's executive management team including Defendant John Dorman (CEO), Kevin McDonnell (CFO), and Dale Walker (President), that Digital Insight had gotten and was using FundsXpress trade secrets. In one email dated November 9, 2001, Edwards sent "dirt" on FundsXpress to those executives, promising I will forward their [FundsXpress's] latest pricing info to all of you next week for IB, BP, CM (probably not the Cash Tech pricing), Portal, and UMonitor aggregation. Hope this helps. Thanks. Exhibit 6. Digital Insight and the other Defendants knew they had stolen secrets and confidential information because they had been told. 49. When Edwards forwarded the pricing information he had promised to Defendants Dorman and Brennan and others in Digital Insight's management, he - in the same email - told a Digital Insight employee to put this information on Digital Insight's intranet. Dorman and Brennan knew that stolen FundsXpress pricing information was being made available to Digital Insight's entire company. Digital Insight also made the stolen FundsXpress Tutorial documents available to its entire company, via its company intranet. Digital Insight armed all of its executives, salesmen, and other employees with the ability to use FundsXpress trade secrets and confidential information against it in the marketplace. 50. Initial proceedings in this litigation have revealed that Digital Insight waged a systematic campaign to misappropriate and use in competition trade secret information of FundsXpress and, upon information and belief, other competitors of Digital Insight. Digital Insight obtained - without authorization - at least the following trade secrets and proprietary information, in addition to the Goldmine database, Pricing Suite, and Tutorial: (a) FundsXpress Account Aggregation images, which contained screen shots of the product screens under development that a customer would view once the product was released; (b) A brochure entitled "FX Lending," which contains product information and screen shots of the FundsXpress Lending System under development; (c) A document called the "Shazam/FundsXpress Memorandum of Agreement." FundsXpress enters into this agreement with financial institutions that belong to the Shazam EFT network: The document contains the essential contract details including pricing, timeframes; feature/functionally, schedules and the financial institution contacts; (d) A detailed list of core processors supported by FundsXpress including pricing and feature/functionally detailing real-time, batch and multi-batch capabilities; (e) The schedule to the standard FundsXpress Memorandum of Agreement for flat pricing for providing Internet banking through specific real-time core processing interfaces: The document contains service level commitments, pricing, features/functionally and installation timeframes; (f) A document called "the FundsXpress Memorandum of Agreement" that FundsXpress executes with financial institutions to begin the relationship; (g) A document called "Cash Management Outline" which contains confidential feature/functionally and delivery timeframes for FundsXpress's new cash management system under development; (h) An internal development document called "CM Projected Completion Dates" which outlines the completion timeframes and phasing of different modules of the new FundsXpress cash management system under development; (i) A document called "Functional Overview" that is used by the FundsXpress development teams to develop functional specifications for new products and features; (j) A static screen shot of FundsXpress's online banking "Welcome-register" page that is under development for release later this year; (k) A spreadsheet exported from the FundsXpress Goldmine database that contains key information gathered by FundsXpress over the last five years from virtually every financial institution in the country concerning who they use as their Internet banking vendor (or when they plan to implement Internet Banking) and their current core processor; (l) A CD-Rom titled "Guide to Internet Banking" that is a complete guide to help financial institutions determine their level of desired feature/functionally of the FundsXpress Internet banking system; (m) A CD-Rom titled "Client Executive Website 10-2-00" which is highly confidential, internal series of reports that contains a vast amount of proprietary performance-related data from financial institutions; (n) A FundsXpress marketing folder containing miscellaneous promotional literature; and (o) An updated detailed list of FundsXpress client financial institutions. 51. Using the trade secrets and confidential proprietary information of FundsXpress, Edwards had a very successful 2001. Digital Insight rewarded him, they made him a Vice President. 52. On April 18, 2002, counsel for Digital Insight provided a listing of FundsXpress documents published on the Digital Insight intranet, "various e-mail messages," and the personal files of Defendants Brennan and Goffman. See Exhibit 7. 53. After receiving reports from concerned FundsXpress field salespersons, FundsXpress copied Digital Insight on a letter to Crain on October 10, 2001, complaining that Crain was using and revealing trade secrets of FundsXpress to help Digital Insight, and reminding Digital Insight of Crain's Nondisclosure Agreement with FundsXpress. Digital Insight defames FundsXpress in the marketplace. 54. Not satisfied with misappropriating trade secrets, Digital Insight has also engaged in the systematic defamation and trash-talking of FundsXpress in the marketplace. On information and belief, FundsXpress alleges that Digital Insight and its employees routinely make false and defamatory statements, both orally and in writing, about FundsXpress to customers and potential customers of FundsXpress intending to destroy FundsXpress's ability to retain its customers and obtain new customers. 55. In January, for example, Digital Insight told at least one salesman who was competing for a financial institution's business to use negative information that FundsXpress had a corporate airplane despite not being in a strong financial position and was burning cash at a rate that would not allow it to survive even one more year. These statements were false and were intended to convince FundsXpress customers and potential customers that FundsXpress was financially irresponsible, that it was spending money on corporate airplanes instead of product development or other essential services and could not continue to service its customers. 56. On or about February 20, 2002, in trying to make a sale for Digital Insight, Defendant Crain sent an e-mail message to a business associate of a potential customer of FundsXpress. Crain's email stated that FundsXpress had laid off 200 of its employees in the last 12 months, cut customer service by 90%, done no upgrades to its products in the last 12 months, made no investment in research and development, was almost out of cash, and was for sale. That email was forwarded to the potential customer of FundsXpress, as it was intended to be. 57. In February and March of 2002, Defendant Goffman sent an email saying that a bank president had told Goffman that the Office of the Comptroller of Currency did not think FundsXpress would be in business very long and that banks and credit unions who had contracts with FundsXpress should get a back-up plan for the banking services FundsXpress was providing for them. Goffman asked the sales teams of Digital Insight to find out if there were other banks with the same information before he started calling FundsXpress banks. Brennan approved his sales force trying to get this information and other sales personnel gave names of possible sources. At least one salesman intentionally suggested to a potential customer of FundsXpress that the Office of the Comptroller of Currency was advising financial institutions dealing with FundsXpress to get a backup plan to protect themselves. These statements were false and obviously intended to damage FundsXpress's ability to function in the marketplace by suggesting that the Office of the Comptroller of Currency had doubts about FundsXpress's ability to survive. 58. On or about May 29, 2002, Defendant Dorman tried to deflect the damages caused by Digital Insight's theft of FundsXpress's trade secrets by falsely blaming FundsXpress. He publicly stated, in words or effect, that "In the past year FundsXpress has laid off most of their sales force and raised prices at the same time. We hired three of those people they laid off. Were their sales down and ours up because ... they laid off people and raised prices?" 59. These statements about FundsXpress are false assertions about objectively verifiable facts. They were made in writing and orally. They were made by these persons, acting both individually and as agents of Digital Insight. These false written and oral statement were literally and substantially false and gave a substantially false impression of FundsXpress's financial condition. These statements were made with knowledge of their falsity. The written statements constitute libel. The oral statements constitute slander per se because they were so obviously hurtful to FundsXpress's business reputation and ability to do business with its intended customers that no proof of their injurious character is needed.. 60. FundsXpress believes that these statements materially contributed in leading customers that otherwise would have contracted with FundsXpress to choose other providers. FundsXpress's damages and Digital Insight's gain from the theft of trade secrets. 61. FundsXpress believes that it directly lost a minimum of 53 long term contracts with financial institutions as a consequence of Digital Insight's unlawful actions. During l999 and 2000, FundsXpress and Digital Insight's sales rose and fell in tandem, demonstrating stable market share for both companies, with each rising and falling at about the same rate. During the time that Digital Insight had access to FundsXpress's trade secrets, Digital Insight's sales expanded rapidly and the rate of FundsXpress's sales growth dropped proportionately. Shortly after the injunction was entered in this case, Digital Insight's rate of growth dropped and FundsXpress's rate of growth increased. See the chart below showing Digital Insight's and FundsXpress's actual sales between April of 2000 and April of 2002 and FundsXpress's projected sales for that period. Note that when Dunn began emailing FundsXpress's trade secrets to Digital Insight, in October of 2001, FundsXpress's actual sales fell below projections and Digital Insight's sales rose sharply. 62. These contracts that FundsXpress lost between April of 2000 and April of 2001 have a value, over the life of the contract, of at least $350,000 per contract. This figure is what Digital Insight paid per contract when it acquired a competitor, Virtual Financial, during the period Digital Insight had possession of FundsXpress's trade secrets. At a minimum, therefore, Digital Insight gained - and FundsXpress lost - $18,550,000 (53 x $350,000). After the merger, Digital Insight's market value was about $550,000 per contract. Taking into consideration the projected growth of Internet banking and the ability to cross-sell additional products to the contracting financial institutions, a more appropriate market value of the contracts would be $600,000, for a total lost value of $31,800,000 ($600,000 x 53). 63. Stealing FundsXpress's trade secrets was more valuable to Digital Insight than just the sales they were able to divert from FundsXpress. Digital Insight was also able to use this information in part to divert sales from other competitors as well. Comment F of Section 45 of the Restatement of Unfair Competition provides that the appropriate measure for restitution: in an action for the appropriation of a trade secret is an accounting of the defendant's profits on sales attributable to the use of the trade secret. ... The plaintiff is entitled to recover the defendant's net profits. The plaintiff has the burden of establishing the defendant's sales; the defendant has the burden of establishing any portion of the sales not attributable to the trade secret and any expenses to be deducted in determining net profits. 64. The sales DI achieved, during the time it was known to be using FundsXpress trade secrets, were approximately 251 financial institution Internet banking contracts. Therefore, FundsXpress's damages range from a low of $87,850,000 (251 x $350,000) to a high of $150,060,000 (251 x $600,000). The market valued these Digital Insight contracts even higher. During the time Digital Insight had access to FundsXpress's trade secrets and was therefore growing rapidly, Digital Insight's stock price rose from $7.52 per share on April 11, 2001 to $27.90 on April 16, 2002, when the theft became public. This represents an increase in market capitalization of over $653,000,000. FundsXpress's damages from Digital Insight's defamatory statements. 65. In addition to the damages resulting from the theft of trade secrets, FundsXpress has suffered damages as a result of Digital Insight's series of false and defamatory statements that, according FundsXpress's customers and potential customers, has continued. The statements made orally and in writing affected FundsXpress's ability to conduct its business and were peculiarly harmful to an entity providing banking services. The oral and written statements of salesmen asserting that FundsXpress did not have the financial strength to remain a viable and competitive provider of banking services constitute slander and libel per se as an injury to FundsXpress's business reputation. Libel per se is not protected by the constitution, and entitles the libel to recover presumed damages without the showing of economic harm.[1] These damages are hard to quantify, but they are presumed under the law, and the amount of damages can be determined by the jury. FundsXpress believes these damages are not less than $50,000,000. V. CAUSES OF ACTION. COUNT I MISAPPROPRIATION OF TRADE SECRETS Common Law 66. All Defendants' conduct described above, including their unlawful acquisition, receipt, possession and use of FundsXpress's trade secrets and confidential information constitutes misappropriation. 67. FundsXpress has been substantially damaged by the Defendants' misappropriation and is entitled to recover its actual damages. FundsXpress is further entitled to recover from the Defendants all gains, profits, and advantages they have obtained as a result of their wrongful conduct. 68. The Defendants' misappropriation, as alleged above, was malicious in that the Defendants specifically intended to cause substantial injury to FundsXpress. Accordingly, FundsXpress seeks an award of exemplary damages in an amount of no less than two times the amount of FundsXpress's economic damages, to be determined by the jury at trial. COUNT II MISAPPROPRIATION OF TRADE SECRETS California Civil Code S 3426 69. The documents and information obtained by all Defendant through the unlawful actions alleged above constitute trade secrets as defined by California Civil Code S 3426.1. 70. The Defendants misappropriated FundsXpress trade secrets by acquiring and/or using the trade secrets when the Defendants knew, or should have known, that the trade secrets had been acquired by improper means. 71. Defendants Goffman, Dunn and Crain misappropriated FundsXpress's trade secrets by acquiring and using those trade secrets when they knew or should have known that those trade secrets had been acquired, and were being used, in violation of their duties of confidentiality owed to FundsXpress, without FundsXpress's express or implied consent. All other Defendants knew of and approved of the misappropriation and acquired the trade secrets for use by Digital Insight. 72. By reason of the Defendants' conduct described above, FundsXpress has suffered, and will suffer, great and irreparable harm and damage, which damage will be difficult to ascertain, and FundsXpress will be without an adequate remedy at law. 73. FundsXpress is entitled to a permanent injunction restraining the Defendants from retaining, disclosing or using in any way the trade secrets misappropriated from FundsXpress. 74. FundsXpress is further entitled to recover from Defendants the damages sustained by it as a result of the Defendants' wrongful acts. FundsXpress is further entitled to recover from the Defendants all gains, profits, and advantages they have obtained as a result of their wrongful conduct. 75. The Defendants' misappropriation was willful and malicious, and therefore FundsXpress is entitled to exemplary damages against each Defendant. COUNT III RECEIPT, CONCEALMENT AND USE OF STOLEN PROPERTY California Penal Code S 496(c) 76. All Defendants' acts alleged above constitute the knowing receipt, concealment and use of stolen property in violation of California Penal Code S 496(a). 77. The Defendants' knowing receipt, concealment and use of the stolen property caused FundsXpress substantial actual economic injury, including loss of existing and potential customers, loss of profits, dilution of its goodwill, and confusion of existing and potential customers. 78. Pursuant to California Civil Code S 496(c), FundsXpress is entitled to recover, and hereby seeks to recover, from the Defendants three times its actual damages, costs, and attorney's fees. COUNT IV CONVERSION 79. At all relevant times, FundsXpress was and still is the owner of all of the trade secrets and confidential information that are the subject of this lawsuit. 80. As alleged above, from at least May 2001 through January 2002, all Defendants unlawfully and without authority assumed dominion and control over the Plaintiff's trade secrets and proprietary information inconsistent with the Plaintiff's rights in this property. The value of the property to the Defendants was in excess of $25,000,000, for which sum the Plaintiff sues. The Plaintiff is also entitled to interest on the sum on the value of the converted property from the date of conversion, at the prejudgment rate of interest. 81. The Defendants' conversion of the property, as alleged above, was malicious in that the Defendants specifically intended to cause substantial injury to FundsXpress. Accordingly, the Plaintiff asks that exemplary damages of at least $50,000,000 be awarded to FundsXpress. COUNT V VIOLATIONS OF THE FEDERAL CRIMINAL COMPUTER FRAUD AND ABUSE ACT (18 U.S.C. S 1030(A)(2)(C); S 1030(A)(4); S 1030(a)(5)) 82. From at least November 1, 2001 and perhaps much earlier, Dunn was an employee and agent of Defendant Digital Insight. From at least November 1, 2002 and perhaps much earlier, Dunn acquired an undisclosed adverse interest to FundsXpress due to his relationship with, and employment by, Digital Insight. From the time that Dunn acquired this undisclosed adverse interest, Dunn ceased acting as an agent of FundsXpress, or with FundsXpress's authority, and began working as an agent of Digital Insight. 83. While acting as an employee and agent of Digital Insight, Dunn accessed FundsXpress's internal computer system without FundsXpress's authorization, and in excess of any authorized access, in order to obtain FundsXpress financial and marketing information, including FundsXpress's Pricing Suite and Tutorial. The computer system Dunn accessed was a "protected computer," as defined in the federal Computer Fraud and Abuse Act, 47 U.S.C. S 1030(e)(2), because it was used in interstate commerce and communication. 84. Defendant Digital Insight, through its agent Dunn and other agents who obtained FundsXpress computerized information, intentionally accessed FundsXpress's computers without authorization, and in excess of authorized access, and thereby obtained information from protected computers through conduct involving an interstate communication, in violation of 47 U.S.C. S 1030(a)(2)(c). 85. Digital Insight, through its agent Dunn and other agents who obtained FundsXpress computerized information, knowingly and with intent to defraud accessed FundsXpress's computers without authorization, and in excess of authorized access, and by means of such conduct furthered the intended fraud and obtained things of value exceeding $5,000, in violation of 47 U.S.C. S 1030(a)(4). 86. Digital Insight, through its agent Dunn and other agents who obtained FundsXpress computerized information, intentionally accessed FundsXpress's computers without authorization, and in excess of authorized access, and as a result of such conducted caused damage, in violation of 47 U.S.C. S 1030(a)(5)(ii) and (iii). 87. Digital Insight's violations of the Computer Fraud and Abuse Act caused FundsXpress to suffer damage and loss as defined in the Act. FundsXpress brings suit under 47 U.S.C. S 1030(g) to obtain compensatory damages, injunctive relief, and other equitable relief, including disgorgement and restitution of all profits and gains made by Digital Insight from the information obtained in violation of the Act. COUNT VI COPYRIGHT INFRINGEMENT 88. FundsXpress's Tutorial and Pricing Suite are original works of authorship belonging to FundsXpress. The Tutorial and Pricing Suite contain a large amount of material wholly original with Plaintiff and is copyrightable subject matter under the laws of the United States. 89. FundsXpress has complied in all respects with the Copyright Act of 1976 and all other laws governing copyright, and has obtained from the Copyright Office registrations of its copyrights in said Tutorial and Pricing Suite. 90. FundsXpress has been and is still the sole proprietor of all rights, title and interest in and to the copyrights in the Tutorial and Pricing Suite. 91. On or about December 3, 2001, Dunn distributed his pirated copy of the Tutorial to Digital Insight via e-mail. Since at least December 3, 2001, Digital Insight has also infringed FundsXpress's copyright by copying the Tutorial to its intranet site thereby publishing the entire Tutorial for internal copying and use by Digital Insight's employees. Various employees of Digital Insight have also made copies of the Tutorial by viewing and/or downloading copies of the Tutorial accessible through the Digital Insight intranet site. 92. Since at least December 2001, Digital Insight has also infringed FundsXpress's copyright in its Pricing Suite by copying, without authorization, the Pricing Suite to its intranet site, thereby publishing the entire Pricing Suite for internal copying and use by Digital Insight's employees. Various employees of Digital Insight have also made copies of the Pricing Suite by viewing and/or downloading copies of the Pricing Suite accessible through the Digital Insight intranet site. 93. Plaintiff has notified Digital Insight that Digital Insight has infringed the copyrights of Plaintiff, and although Digital Insight has represented as of mid-February 2002 that it is no longer infringing the copyrights, FundsXpress has not been able to determine whether this is accurate. Nevertheless, FundsXpress has been substantially damaged by the Defendants' infringement of its copyrights, and it sues to recover such damages. COUNT VII TORTIOUS INTERFERENCE 94. The Defendants were well aware of the Nondisclosure Agreements entered into by each of the FundsXpress ex-employees hired by Digital Insight. Digital Insight requires its own employees to sign similar agreements, and nondisclosure agreements are standard in this industry. Moreover, the ex-employees of FundsXpress informed Edwards of their confidentiality agreements and FundsXpress reminded Digital Insight of the agreements in the letter of October 10, 2001 to Crain and copied to Digital Insight. 95. Despite this knowledge, the Defendants willfully and intentionally induced Dunn, Crain and Goffman to breach the terms of their Nondisclosure Agreements by misappropriating as much confidential information and trade secrets from FundsXpress as possible, and by delivering the confidential information and trade secrets of FundsXpress to Digital Insight for its use. The purpose of hiring Dunn, Crain and Goffman was to take advantage of their knowledge of this confidential information. Without this inducement, Dunn, Goffman and Crain would not have breached their Nondisclosure Agreements with FundsXpress and would have had no reason to disclose the confidential information and trade secrets of FundsXpress. 96. FundsXpress has been substantially damaged by this tortious interference, which actual damages are not subject to precise calculation at this time, but are in excess of $25,000,000. 97. Plaintiff will show that the Defendants' tortious interference was done with malicious intent for the purpose of causing severe economic injury to FundsXpress by removing or crippling it as a competitor so that Digital Insight could improperly acquire more contracts. Accordingly, Plaintiff asks that exemplary damages of at least $50,000,000 be awarded to FundsXpress. COUNT VIII DEFAMATION 98. The false and defamatory statements alleged above constitute libel and slander of FundsXpress. The statements are defamatory per se and therefor damages are presumed. In the alternative, the statements were made either negligently, or knowing they were false, or with actual serious doubts as to the truth of the statements, and with common law malice and ill will. 99. The false and defamatory statements alleged above were the proximate cause of actual and presumed damages to FundsXpress, which sues to recover presumed, actual, and exemplary damages on account of the Defendants' defamatory statements. COUNT IX FEDERAL FALSE ADVERTISING, TRADE DISPARAGEMENT AND TRADE LIBEL Lanham Act S 43(a) 100. By their false and misleading statements of fact and their material omissions described above, the Defendants violated Section 43(a) of the Lanham Act, 15 U.S.C. S 1125(a). 101. Specifically, the Defendants' actions described above constituted, false and/or misleading representations of fact made in connection with goods and services in commercial advertising or promotion that misrepresented the nature, characteristics, and qualities of the goods, services and commercial activities of FundsXpress. 102. FundsXpress has been damaged, and is likely to be damaged, by the Defendants' actions in violation of Section 43(a) of the Lanham Act. FundsXpress seeks injunctive relief pursuant to 15 U.S.C. S 1116(a), plus monetary relief comprising the Defendants' profits, all damages sustained by FundsXpress, treble damages, and reasonable attorney's fees and costs pursuant to 15 U.S.C. S1 1 17(a). COUNT X PERMANENT INJUNCTION 103. FundsXpress has and will continue to be damaged and injured by the Defendants' conduct by loss of customers, loss of goodwill and permanent injury to the value of the infringed copyrights and the trade secrets amassed by the Plaintiff over the years. 104. The Plaintiff has no adequate remedy at law for all the injuries it has suffered. Its injuries and losses are continuing. The property and rights involved are unique and irreplaceable, so that it will be impossible to accurately measure, in monetary terms, the full damages caused by the Defendants' conduct. 105. The Defendants should be permanently enjoined from possessing, using, or disclosing any FundsXpress trade secrets or other confidential proprietary information and from publishing, distributing, or copying or otherwise infringing any of FundsXpress's exclusive rights in any copyrightable works of FundsXpress. The Defendants should also be permanently enjoined to return all copies of FundsXpress's trade secrets, confidential information and copyrighted works to FundsXpress. VI. ADDITIONAL ALLEGATIONS. A. Exemplary Damages. 106. FundsXpress is entitled to recover exemplary damages under Texas law against each Defendant because the harm caused FundsXpress by the Defendants resulted from the Defendants' malice and/or fraud and because the Defendants' acts were willful and malicious and the Defendants were actually, subjectively aware of the harm that they intended to cause to FundsXpress, but nevertheless proceeded with conscious indifference to the rights, safety, and welfare of the Plaintiff. Tex. Civ. Prac. & Rem. Code S 41.003(a). The wrongful conduct set forth herein constitutes malice, willful acts or omissions, or gross neglect within the meaning of Section 41.003 Tex. Civ. Prac & Rem. Code. 107. FundsXpress is entitled to recover exemplary damages against each Defendant, including Digital Insight, based on their individual conduct. Tex. Civ. Prac. & Rem. Code S 41.005(a). 108. In addition, FundsXpress is entitled to recover exemplary damages against Digital Insight because it is responsible for the acts of its employees, and each Defendant is responsible for the conduct of the others under Chapter 7 of the Texas Penal Code. Tex. Civ. Prac. & Rem. Code S 41.005(b)(1) & (2). 109. FundsXpress is entitled to recover exemplary damages against Digital Insight because it authorized the doing and the manner of the criminal acts; its employees and agents were unfit and Digital Insight acted with malice in employing and retaining those employees; the employees were employed in a managerial capacity and were acting within the scope of employment; and/or Digital Insight and/or a manager ratified or approved the act. Tex. Civ. Prac. & Rem. Code S 41.005(c). 110. Further, FundsXpress is entitled to recover exemplary damages above the limit imposed by Section 41.008 of the Texas Civil Practice & Remedies Code, because the Defendants knowingly or intentionally violated Section 32.21, Section 32.43, Section 32.45, Section 32.46, Section 32.47 and/or Chapter 31 of the Texas Penal Code, the punishment level for which is at least a third degree felony. Tex. Civ. Prac. & Rem. Code S 41.008(c). B. Conspiracy. 111. By the activities set forth above, each of the Defendants collaborated and conspired, pursuant to an agreement amongst themselves to undertake the unlawful acts alleged in Section IV, above, and conspired with at least one other person to misappropriate and use FundsXpress's trade secrets, to conceal their theft of those trade secrets, to use those stolen trade secrets in unfair competition with FundsXpress, and to tortiously interfere with FundsXpress's contractual relations. The Defendants knew or should have known that their actions were unlawful, or if lawful, were done with the intent to produce an unlawful result. Each of the Defendants is therefore jointly and severally liable for the acts of each other conspirator. C. Ratification of the Trade Secret Theft. 112. Rather than acknowledge its wrongdoing, Digital Insight ratified the trade secret theft. In May 2002, Digital Insight's CEO John Dorman denied that the stolen information consisted of trade secrets, and confirmed that Digital Insight considered itself free to acquire and use the stolen information. He publicly stated: What they claim as trade secrets, we don't see as trade secrets. What's being talked about is information about pricing, information about demos. You're not talking about anything involving source code. It's sales information. This is information that is readily out there in the public domain. Credit Union Times, Vol. 13, No. 22 at 34 (May 29, 2002). Such statements, and the other actions alleged above, constitute ratification by Digital Insight of the unlawful acts of its employees and agents. D. Incorporation by Reference. 113. The Plaintiff re-alleges and incorporates by reference all preceding and subsequent paragraphs in this Complaint into each paragraph. VII. JURY DEMAND. 114. Plaintiff demands a trial by jury and has tendered the applicable jury fee. VIII. PRAYER WHEREFORE, Plaintiff demands: 1. That Defendants, their agents, servants, and all those persons in active concert or participation with them be enjoined during the pendency of this action and permanently from accessing or using the trade secrets or other confidential proprietary information of Plaintiff or otherwise disclosing the trade secrets or other confidential proprietary information of Plaintiff in any manner. 2. That Defendants, their agents, servants, and all those persons in active concert or participation with them be enjoined during the pendency of this action and permanently from directly, indirectly or by any contributory manner infringing any of FundsXpress's exclusive rights in the copyrights of Plaintiff, including copying, publishing, or distributing any copies of the Tutorial and Pricing Suite. 3. That Defendants be required to pay to Plaintiff such damages as Plaintiff has sustained in consequence of Defendants' misappropriation of trade secrets, conversion and tortious interference with contract, or in the alternative, account for and pay to Plaintiff all gains, profits, and advantages derived by Defendants from their misappropriation of trade secrets, conversion, and tortious interference with contract, or such damages as to the Court shall appear proper. 4. That Defendants be required to pay to Plaintiff such damages as Plaintiff has sustained in consequence of Defendants' infringement of FundsXpress's copyrights and account for all gains, profits, and advantages derived by Defendants by their infringement of Plaintiff's copyrights or such damages as to the Court shall appear proper within the provisions of the copyright statutes. 5. That Defendants be required to pay to Plaintiff such damages as Plaintiff has sustained in consequence of Defendants' misappropriation of trade secrets and account for all gains, profits, and advantages derived by Defendants by their acts of misappropriation of trade secrets or such damages as to the Court shall appear proper. 6. That Defendants be required to pay exemplary damages. 7. That Defendants be required to deliver to Plaintiff during the pendency of this action all copies of documents containing any misappropriated trade secrets and all copies of the Tutorial, Pricing Suite, and other copyrightable works of FundsXpress in its possession or under its control. 8. That Defendants pay the Plaintiff the costs of this action and reasonable attorneys' fees to be allowed to the Plaintiff by the Court. 9. That Plaintiff have such other and further relief as is just or appropriate. [1] Snead v. Redland Aggregates, Ltd., 998 F.2d 1325 (5th Cir. 1993). Respectfully submitted, R. James George, Jr. State Bar No. 07810000 David H. Donaldson, Jr. State Bar No. 05969700 Peter D. Kennedy State Bar No. 11296650 Nanneska N. Hazel State Bar No. 12813500 114 W. 7th Street, Suite 1100 Austin,Texas 78701 (512) 495-1400 (512) 499-0094 (Fax) ATTORNEYS FOR PLAINTIFF FUNDSXPRESS FINANCIAL NETWORK, INC. OF COUNSEL: GEORGE & DONALDSON, L.L.P. 114 West 7th Street, Suite 1100 Austin, Texas 78701 (512) 495-1400 FAX: (512) 499-0094 WINSTEAD SECHREST & MINICK, P.C. 100 Congress Ave., Suite 800 Austin, Texas 78701 (512) 474-4330 FAX: (512) 370-2850 CERTIFICATE OF SERVICE I hereby certify that on August 14, 2002, a true and correct copy of the foregoing was served on counsel of record as shown below: Barry K. Bishop Clark, Thomas & Winters, P.C. 300 W. 6th Street, Suite 1500 Austin, Texas 78701 (via Hand Delivery) Aaron C. Gundzik Cotton & Gundzik, L.L.P. 725 S. Figueroa St., 34th Floor Los Angeles, CA 90017 (via Certified Mail, Return Receipt Requested) Nanneska N. Hazel