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									                           ADMINISTRATIVE PROCEEDING
                                   BEFORE THE

IN THE MATTER OF:                                    *

TDS ENTERPRISES, INC.,                               *
D.B.A. E-COMMERCE EXCHANGE                                  Case No. 2005-0166

*      *       *      *       *       *       *      *      *       *       *      *       *

                                    CONSENT ORDER

       WHEREAS, the Maryland Division of Securities (the "Division") initiated an investigation

into the activities of T.D.S. Enterprises, Inc., d.b.a. E-Commerce Exchange ("E-Commerce")

pursuant to the authority granted under the Maryland Business Opportunities Sales Act, Title 14,

Subtitle 1, Business Regulation Article, Annotated Code of Maryland (2004 Repl. Vol.) (the

"Business Opportunity Act"); and

       WHEREAS, based on information presented by the Division, the Maryland Securities

Commissioner (the "Commissioner") concluded that grounds existed to allege that E-Commerce

violated the registration, disclosure and antifraud provisions of the Business Opportunity Act; and

       WHEREAS, before the holding of a hearing in this matter, without trial or final adjudication

of any issue of fact or law, and without E-Commerce admitting or denying any violation of law, the

Commissioner and E-Commerce have reached an agreement to enter into this Consent Order:


                                          I. JURISDICTION

       1.      The Commissioner has jurisdiction in this proceeding pursuant to §14-210(a) of the
Business Opportunity Act.

                                  II. STATEMENT OF FACTS

       2.      E-Commerce is a New York corporation with a principal business address of 732

Smithtown Bypass, Smithtown, NY 11787.

       3.      E-Commerce offers and sells business opportunities in the form of Internet websites,

merchant accounts, marketing, and other support and assistance designed to allow a buyer to operate

a website-based business selling products over the Internet, including electronic equipment, health

foods and nutritional supplements.

       4.      E-Commerce requires buyers to sign a Merchant Application and a Noncancellable

Equipment/Software and Services Lease Agreement (the “Equipment Lease”) with E-Commerce.

The Equipment Lease requires buyers to pay E-Commerce an initial fee of $99.00 or more.

       5.      Buyers signing the Equipment Lease also agree to pay ongoing monthly lease

payments of, in many cases, $99.95 per month for up to 36 months. Buyers also are required to pay

other fees to E-Commerce in conjunction with their operation of an E-Commerce business


       6.      Buyers are required to attach a voided check to their Equipment Lease, allowing E-

Commerce to directly debit the buyer’s checking account.

       7.      Between January 1, 2002 and the date of this Consent Order, E-Commerce sold E-

Commerce business opportunities to a total of 46 Maryland residents (“Maryland Buyers”).

       8.      In its promotional materials provided to prospective buyers, E-Commerce represents

the following, in response to the question, “What is this opportunity going to cost?”:

       First off, the best thing about any profitable business is that the business does not
       “cost” anything. The money you invest provides a return on the investment greater
       than the amount you are paying out each month. This is called a profit. If you invest
       $100 per month and you make $600 from the $100 you invested, your business did
       not “cost” you one penny. In fact, it made you $500 in profits, after expenses.

In response to the question, “What is the FREE Affiliate Website,” E-Commerce states as follows:

       We provide an additional Website for you, and this is known as your Affiliate site.
       You can earn $85 - $300 each time a funded account originates on your Website, and
       this can result in substantial income for any business owner. We have a Four Star
       rated Affiliate program (, and we pay over $250,000 per month to our
       current affiliate partners. Why not include your business in that type of revenue?

       9.      Many Merchant Applications that buyers of the E-Commerce business opportunity

sign include a pre-printed section indicating a monthly processing limit and an average ticket price

of $495.00. Other Merchant Applications include the notation “occasional sale up to $2,000.”

       10.     E-Commerce has never registered to offer and sell business opportunities in

Maryland, as required under §14-113 the Maryland Business Opportunity Act.

       11.     E-Commerce never gave a business opportunity disclosure statement to buyers of the

E-Commerce business opportunity, as required under §14-114 the Business Opportunity Act.

       12.     E-Commerce did not provide substantiation of any of the representations that buyers

could earn a specific income or obtain an average ticket price, or an occasional sale amount.

                                 III. CONCLUSIONS OF LAW

       13.     By engaging in the above activities, the Commissioner has determined that E-

Commerce violated the registration, disclosure and antifraud provisions of §§14-113, 14-114 and

14-120 and 14-122 of the Business Opportunity Act.

                         IV. ORDER AND CONSENT


          A.   E-Commerce shall permanently cease and desist from the offer and sale of
               business opportunities in violation of the Business Opportunity Act.

          B.   E-Commerce shall send a letter, in substantially the form attached as Exhibit
               1 (“Refund Letter”), to the last known address of all Maryland residents who
               purchased an E-Commerce business opportunity from it (“Maryland
               Buyers”), advising the Maryland Buyers that E-Commerce will cancel their
               Equipment Lease and refund certain monies paid in conjunction with their E-
               Commerce business opportunity, if the Maryland Buyers notify E-Commerce
               in writing that they request such a refund.

                      i.      If any Refund Letter is returned to E-Commerce as
                      nondeliverable, E-Commerce shall make good faith efforts to
                      ascertain the current addresses of any such Maryland Buyers and
                      resend the Refund Letter to that address.

                      ii.    The maximum amount that E-Commerce will be required to
                      refund is $29,130, representing the amount of revenue E-Commerce
                      received as a result of sales to Maryland Buyers during the period
                      March 1, 2003 through March 1, 2005 (the “Maximum Amount”).

                      iii.  If the total amount paid by Maryland Buyers who request
                      refunds (“the Total Requested Refunds”) does not exceed the
                      Maximum Amount, then each Maryland buyer will receive a full
                      refund of the amounts he or she paid to E-Commerce.

                      iv.    If the Total Requested Funds exceed the Maximum Amount,
                      each Maryland Buyer requesting a refund will receive his or her pro
                      rata share of the Maximum Amount, as determined by the formula of
                      Maximum Amount divided by Total Requested Refund = the Refund
                      Factor. That is, each Maryland Buyer who requests a refund as
                      provided herein will receive a refund equal to the amount that E-
                      Commerce received from that Maryland Buyer, multiplied by the
                      Refund Factor.

                      v.   The parties agree that the minimum Refund Factor will be .60,
                      which equals the Maximum Amount divided by $48,321, the total
                      revenue received by E-Commerce from all Maryland Buyers. The

                               maximum Refund Factor will be 1.0.

               C.      E-Commerce will provide the Division with the names and last known
                       addresses of all Maryland Buyers of the E-Commerce business opportunity,
                       to the extent E-Commerce has not already provided that information.

               D.      E-Commerce represents that if, in the future, E-Commerce offers or sells any
                       business opportunities in Maryland or to any Maryland residents, it will
                       comply with all provisions of the Business Opportunity Act.

               E.      E-Commerce acknowledges that this Consent Order is a discloseable order
                       as described under §14-114(c)(10)(I)(2) of the Business Opportunity Act.

                                 V. JURISDICTION RETAINED

         15.   Jurisdiction shall be retained by the Commissioner for such further orders and

directions as may be necessary or appropriate for the construction or enforcement of the Consent



         16.   If the Respondent fails to comply with any term of this Consent Order, the Division

may bring administrative or judicial proceedings against it to enforce this Consent Order or to

sanction that Respondent for violating an order of the Commissioner, and may take any other action

authorized under the Business Opportunity Act or any other applicable law. In any such proceeding

in which, after an opportunity for a hearing, the Commissioner or a court finds that a Respondent has

violated this Consent Order, the Statement of Facts and the violations of the Business Opportunity

Act alleged in the Consent Order shall be deemed admitted and may be introduced into evidence

against that Respondent.


       17.    The terms of this Consent Order may be modified only by a subsequent order issued

by the Commissioner.

                                                  SO ORDERED:

                                                  MELANIE SENTER LUBIN
                                                  SECURITIES COMMISSIONER

                                                  DATE OF THIS ORDER:

                                                                        , 2005


T.D.S. Enterprises, Inc.
D.B.A. E-Commerce Exchange

Thomas Stridiron, President

Exhibit 1

Certified Mail
Return Receipt Requested

       Re:     Notice of Offer to Refund Your E-Commerce Exchange Business Opportunity

Dear           :

        You purchased or signed a lease agreement with E-Commerce Exchange (“ECX”) for us to
develop a website, assist you with establishing a merchant account and otherwise enable you to begin
offering products for sale over the Internet. While we have provided these services to you in good
faith, we have been informed by the Division of Securities of the Maryland Attorney General's Office
(the "Division"), that our offering of these services may not have been made in compliance with the
Maryland Business Opportunities Sales Act.

        In accordance with discussions we have had with the Division, we have agreed to give you
this opportunity to receive a refund of certain amounts you have paid to us, either through a purchase
agreement or lease agreement. The amount of your refund will depend upon the number of other
buyers in Maryland who request a refund. Based upon a formula for customer refunds that we
agreed upon with the Division, if you choose to accept a refund, the maximum refund that you would
receive would be                  [100% of the total amount of fees we received from you], and the
minimum refund would be                  [approximately 60% of the total amount of fees we received
from you].

        If you wish to receive this refund (if you have not already received one) you must mail or fax
a written request for a refund to EXC within fourteen (14) days of your receipt of this letter. You
must include your name and business name, your address, and the fact that you request a refund.
EXC’s address is E-Commerce Exchange, 732 Smithtown Bypass, Suite 302, Smithtown, NY
11787. Our fax number is 631-863-2249.

       If you elect to receive this refund, ECX will cancel your lease agreement and close out your
account. If you are also a current customer of iPayment, Inc. ECX will take steps to cancel yur
agreements with that company as well. If your accounts are canceled, those companies will
discontinue processing credit card charges for you. If you do not want to cancel and receive a refund,
we ask that you advise us that you wish to continue under your current lease or purchase agreement.
If we do not hear from you at all, you will not receive a refund.

       This offer is being made in settlement of an administrative action the Division may bring
under the Maryland Business Opportunity Sales Act. It does not affect any civil liability for damages
for which we may be responsible to you under that law. If you have any questions about this matter,
please contact Dale E. Cantone, Assistant Attorney General, at the Division (410-576-6368).


                                                      Thomas D. Stridiron, President
                                                      E Commerce Exchange, Inc.

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