SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is made, executed and entered
into by and between the following parties, each of whom is individually referred
to as a "Party", and all of whom are collectively referred to as the "Parties" :
The Official Committee of Creditors Holding Unsecured Claims
("Helionetics Committee") in the Chapter 11 bankruptcy case In re
Helionetics, Inc., which was filed on March 31, 1997, as Case No.
SA-97-14645-JR (the "Helionetics Case") ;
Helionetics, Inc., a California corporation ("Helionetics") the debtor,
and debtor-in-possession in the Helionetics Case;
Tri-Lite, Inc., a Pennsylvania corporation ("Tri-Lite") , the
reorganized debtor in the Chapter 11 bankruptcy case in re Tri-Lite,
Inc., which was filed on February 26, 1996, as Case No. SA-96-12049-JR
(the "Tri-Lite Case") .
K/B Equities, Inc., a Nevada corporation ("K/B") ;
Xxxxxxx Xxxx, a married man ("Xxxx") ; and
Xxxxx Xxxxxx, a married woman ("Xxxxxx") .
R E C I T A L S :
A. One or more of the Parties may own or have an ownership interest in AIM
Energy, Inc., a Delaware corporation and AIM Technology, Inc., a Delaware
corporation (collectively "AIM") .
B. One or more of the Parties may own or have an ownership interest in Marinco
Computer Products, Inc., a Delaware corporation ("Marinco").
C. One or more of the Parties may own or have an ownership interest in Self
Powered Lighting, Inc., a New York corporation ("SPL"), the reorganized debtor
in the Chapter 11 bankruptcy case entitled In re Self Powered Lighting, Inc., as
Case No. SA-96-13178-JR (the "SPL Case") .
X. Xxxxxx is believed to be the sole shareholder of K/B.
E. Xxxx and Xxxxxx are husband and wife.
F. The Helionetics Committee through its counsel has sought to recover from
various persons 1,750,000 shares of the stock of Laser Photonics, Inc., a
Delaware corporation (the LPI Shares").
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G. All 1,750,000 LPI Shares were sold pursuant to an Order entered in the
Helionetics Case on or about January 8, 1998, at a sales price of $2.80
per share, gross of fees and taxes.
H. The 1,750,000 LPI Shares were previously held as follows:
1. 825,000 LPI Shares were in the possession of Xxxxxx;
2. 625,000 LPI Shares were in the possession of the Clerk of the
United States District Court for the Southern District of New
York, in that certain case entitled Xxxxxxxx Fund, L. P. et al
vs. Helionetics, Inc. et al (Case Xx. 00 Xxx 0000 (XXX)
consolidated with Case Xx. 00 Xxx. 0000 (XXX) , and were
alleged by Xxxxxx to have been held by said Court for the
benefit of Xxxxxx;
3. 200,000 LPI Shares were in the possession of Altres Financial;
and
4. 100,000 LPI Shares were in the possession of attorney Xxxxxxx
Broker as the agent for Xxxxxx, for the benefit of Xxxxxxx
Xxxxxxx, an alleged creditor of Tri-Lite.
I. The Helionetics Committee through its counsel has sought to recover from
various persons a total of 649,000 shares of stock (the "KSW Shares") of KSW
Inc., a Delaware corporation ("KSW"). The status of the KSW Shares is believed
to be as follows:
1. 24,000 KSW Shares are presently held by Xxxxxx (the "24,000
KSW Shares") ; and
2. The Xxxxxxxx Fund, a New York limited partnership (the
Xxxxxxxx Fund") allegedly had a claim or judgment (the
Xxxxxxxx Fund Claim") against Helionetics, Xxxxxx and/or Xxxx,
in the approximate amount of $625,000.00. 625,000 KSW Shares
(the "625,000 KSW Shares") were once owned by Helionetics;
they were allegedly transferred by Xxxxxx to the Xxxxxxxx Fund
to satisfy the Xxxxxxxx Fund Claim. The 625,000 KSW Shares
were then allegedly transferred by the Xxxxxxxx Fund to KSW.
KSW allegedly paid the Xxxxxxxx Fund, as consideration for
such transfer, the approximate sum of $625,000.00.
J. The Helionetics Committee and Helionetics claim that under the Plan of
Reorganization confirmed in the Tri-Lite Case and the Written settlement
agreement ("Committee Settlement Agreement") entered into between the
Helionetics Committee, Helionetics and The Official Committee of the Creditors
Holding Unsecured Claims in the Tri-Lite Case ("Tri-Lite Committee"),
Helionetics owns and is entitled to maintain and receive 87.5% of the issued and
outstanding common shares of stock of Tri-Lite pursuant to the Tri-Lite Plan.
The issued and
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outstanding common shares of stock of Tri-Lite (authorized pursuant to the
Tri-Lite Plan) shall be referred to as the "Tri-Lite Shares." Tri-lite
represents that currently there are 4,060,000 current issued and outstanding
common shares of Tri-Lite stock.
X. Xxxxxx claims that she is entitled to receive the same Tri-Lite Shares which
are referenced in Recital "J".
L. A secured claim ("Colyear Trust Claim") in the amount of $153,643.57 was
filed on behalf of the Xxxxxxx X. Xxxxxxx Trust ("Colyear Trust") .
X. Xxxxxx claims that: (1) Xxxxxx paid to the Colyear Trust from her own funds
certain sums to settle the Colyear Trust Claim and any other claims of the
Colyear Trust against Helionetics; and (2) the Colyear Trust assigned the
Colyear Trust Claim to Xxxxxx in consideration for such payment, or alternately,
that Xxxxxx has a claim in subrogation against Helionetics by reason of Xxxxxx
having made such payment on behalf of Helionetics.
N. In addition to the claims by Xxxxxx described in Recitals "K" and "M", Xxxxxx
and/or K/B have asserted against Helionetics in the Helionetics Case one or more
than one claim in the total amount of $4,311,000.00 (collectively, the
"Xxxxxx-K/B claim"). The Xxxxxx-K/B Claim was based, in part, upon loans and
advances allegedly made by Xxxxxx and/or K/B to Helionetics prior to the filing
of the petition in the Helionetics Case, and for rent allegedly owed by
Helionetics to Xxxxxx and/or K/B for the use by Helionetics of a building
allegedly owned by Xxxxxx and/or K/X. Xxxxxx and K/B allege that the Xxxxxx-K/B
claim was secured by a pledge by Helionetics of the LPI Shares.
X. Xxxx alleges and maintains that he has made no claim against Helionetics, the
Helionetics Committee, or any officer, director, shareholder, member, agent,
representative, employee, attorney, successor, assignee, transferee, trustee,
receiver, executor or administrator of either Helionetics or the Helionetics
Committee, in connection with any of the various matters referenced in this
Agreement, and that there exists no basis for any such claim.
P. The Helionetics Committee believes that all of the claims by Xxxxxx and K/B
in the Helionetics Case may be subordinated to the claims of other creditors or
avoided in their entirety. The Committee also believes it has claims against the
Board of Directors of Helionetics and Xxxxx Xxxxxx. K/B and Xxxxxx dispute the
assertion.
Q. Helionetics holds a claim against Tri-Lite in the amount of approximately
$1,850,000.00 (the "Helionetics Tri-Lite Claim") , which Helionetics alleges is
secured by all assets of Tri-Lite, with the possible exception of the interest
of Tri-Lite, if any, in the LPI Shares.
R. The Parties previously obtained approval of the Court in the
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Helionetics Case, pursuant to an Order entered on March 4, 1998, to execute and
enter into a settlement along the terms outlined in a letter from Helionetics
Committee counsel Xxxxxxx Xxxxxx to Xxxxxx counsel Xxxx Xxxxxxx dated November
14, 1997. However, that proposed settlement was never executed by the Parties.
S. Helionetics and the Helionetics Committee believe that the proposed
settlement referenced in Recital "R" is of no force or effect because it was
never executed by the parties, and because the proposed settlement provided
according to its own terms that referenced in Recitals "F" and "G" were sold for
a price of less than $3.00 per share, and as noted in Recital "G", the LPI
Shares were sold for only $2.80 per share.
X. Xxxxxx and K/B claim that although the proposed settlement referenced in
Recital "R" was never executed by the parties, it should none-the-less be
enforceable, because: (a) the Court in the Helionetics Case had authorized the
Parties to execute and enter into such a settlement, (b) the letter by Xxxxxxx
Xxxxxx referenced in Recital "R" contains a formula to address any sale of the
LPI Shares for less than $3.00 per share, and (c) any ambiguity should be
resolved against the Helionetics Committee.
U. The Parties desire pursuant to this Agreement to once and forever settle any
and all present and future claims, disputes, allegations and defenses of any
kind or nature that any Party may have against any one or more than one of the
other Parties, which may result from, relate to, or otherwise arise in
connection with any of the matters referenced in this Agreement.
V. The Parties desire that this Agreement fully supersede any prior or
contemporaneous negotiations, discussions, or agreements, including without
limitation those memorialized in the letter by Xxxxxxx Xxxxxx to Xxxx Xxxxxxx
referenced in Recital "R".
W. Xxxx Xxxxxx misappropriated property and assets of AIM and has not yet
returned them. Some of the property and assets acquired may have been acquired
from funds of AIM or its affiliates. AIM is taking all appropriate action to
recover such property and assets.
PURSUANT TO THE FOREGOING RECITALS and for good and valuable
consideration, the receipt and adequacy of which is acknowledged, the
Parties covenant, agree and declare as follows:
ARTICLE 1.
APPROVAL OF AGREEMENT BY COURT
1.1 Obligation of Parties to Seek Approval of Agreement.
Each Party Shall in good faith exercise all reasonable efforts which may be
required of such Party to cause the Bankruptcy Court in the Helionetics Case to
issue a final binding order approving this Agreement, including without
limitation promptly executing and delivering any motions or declarations or
other items of support that may be reasonably required in connection therewith.
Notice of the hearing before said Court seeking the approval of this Agreement
shall be served on all of the creditors in the Helionetics Case and all the
creditors in the Tri-Lite Case.
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Any order will not be deemed final until any applicable appeal periods have
expired without the filing of an appeal therefrom. Each Party shall appear at
the hearing on the motion seeking the approval of this Agreement by said court,
and at any subsequent hearings relating to such approval including without
limitation any appeal of any action by said Court regarding this Agreement.
1.2. Remainder of Agreement Contingent Upon Court Approval.
All of the terms of this Agreement, with the sole exception of the terms set
forth in this Article 1, are contingent upon the issuance of a final binding
order by the Bankruptcy Court in the Helionetics Case approving the Agreement.
If this Agreement is not approved pursuant to Section 1.1, then this Agreement
shall automatically terminate and be of no further force or effect. If this
Agreement is terminated pursuant to this Section, then such termination shall
have no effect on the previously issued Order which is referenced in Recital
"R".
ARTICLE 2.
TERMS OF SETTLEMENT
2.1. Cancellation of $1,850,000 Claim against Tri-Lite.
Helionetics hereby waives and releases the $1,850,000.00 claim by Helionetics
against Tri-Lite in the Tri-Lite Case, and shall promptly execute and deliver to
Tri-Lite any documents reasonably required to notice or effectuate same. This
claim is the claim described in Recital "Q" as the "Helionetics Tri-Lite Claim".
2.2. Cancellation of $4,311,000 Claim Against Helionetics.
Xxxxxx and K/B hereby waive and release the $4,311,000.00 claim against
Helionetics in the Helionetics Case, and shall promptly execute and deliver to
Helionetics any documents reasonably required to notice or effectuate the same.
This claim is the claim described in Recital "N" as the "Xxxxxx-K/B Claim".
Notwithstanding the foregoing, to the extent that any portion of the
$4,311,000.00 Xxxxxx-K/B Claim is secured by any lien(s) on assets of
Helionetics, such lien(s) shall be hereby avoided and preserved for the benefit
of the Helionetics Committee on behalf of the creditors of Helionetics pursuant
to 11 U.S.C. Section 551 and any other applicable provisions of the Bankruptcy
Code.
2.3. Waiver by Xxxx of Any and all Claims Held by Xxxx.
Xxxx hereby warrants and represents that Ka5tz has not asserted any claim
against Helionetics or the Helionetics Committee in the Helionetics Case, and
Xxxx hereby waives and releases any claim Xxxx may have against Helionetics or
the Helionetics Committee, whether in the Helionetics Case, or otherwise.
2.4. Non-Waiver of "Colyear Trust Claim". Xxxxxx shall not be deemed
to have waived by reason of this Agreement any interest Xxxxxx may have in the
Colyear Trust Claim, or any claim Xxxxxx may have against Helionetics based upon
the payment allegedly made by Xxxxxx to the Colyear Trust on behalf of
Helionetics, as described in Recital "M"; provided, however that the Colyear
Trust Claim shall not be deemed to be a secured claim and shall, at most, have
general unsecured status. Neither Helionetics nor the Helionetics Committee will
be
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deemed to have waived by reason of this Agreement any defenses or objections
to any such claims.
2.5. Conveyance of any Interest in 1,650,000 Shares of LPI. Barnes,
Katz, Tri-Lite and K/B hereby transfer, assign and convey to the Helionetics
Committee on behalf of Helionetics, and hereby waive any and all right, title,
interest or claim they may have in or to, the proceeds from the sale of
1,650,000 Shares of LPI. The 1,650,000 Shares of LPI referenced in the Section
2.5 are all of the 1,750,000 LPI Shares, except of 100,000 Shares of LPI
referenced in Section 2.6. Barnes, Katz, Tri-Lite and K/B shall promptly take
all actions and promptly execute and deliver to the Helionetics Committee all
documents reasonably required to notice or effectuate same. Xxxxxx represents
that she does not have an interest in or own any LPI Shares other than 1,750,000
LPI Shares.
2.6. Conveyance of Any Interest in 100,000 Shares of LPI.
Helionetics, Barnes, Katz, Tri-Lite and K/B hereby transfer, assign and convey
to the Helionetics Committee and the Tri-Lite Committee, in such proportions as
shall be hereafter determined pursuant to the Committee Settlement Agreement
referenced in Recital "J", and hereby waive, any and all right, title, interest
or claim they may have in or to, the proceeds from the sale of 100,000 Shares of
LPI. The 100,000 Shares of LPI which are the subject of this Section 2.6 are all
of the 1,750,000 LPI Shares, except for the 1,650,000 Shares of LPI referenced
in Section 2.5. Barnes, Katz, Tri-Lite and K/B shall promptly take all actions
and promptly execute and deliver to the Helionetics Committee all documents
reasonably required to notice or effectuate same. Once a final determination is
made pursuant to the Committee Settlement Agreement as to the relative rights
and interests of the Helionetics Committee and the Tri-Lite committee in and to
the proceeds from the sale of those 100,000 Shares of LPI, and the Helionetics
Committee and the Tri-Lite Committee have each received their respective share
of such proceeds, any proceeds received by the Helionetics Committee shall be
used a follows:
(a) first, to pay the allowed administrative fees and costs in the SPL
Case, pro-rata to each administrative claimant according to the amount
of its allowed administrative claim which remains unpaid as of the date
of such distribution, in accordance with the Plan of Reorganization
confirmed in the SPL Case. There is presently a dispute with respect to
the amount of the allowed administrative fees and costs of Broker and
X'Xxxxx which remain unpaid. SPL shall bring the dispute before the
Bankruptcy Court for summary resolution.
(b) second, to the extent that there are funds available following the
distribution provided for in Section 2.6(a), to pay the allowed
unsecured claims in the case referenced in Section 2.6(a) which have
become payable pursuant to the terms of the Plan of Reorganization
confirmed in that case, pro-rata to each unsecured creditor according
to the amount of its allowed claim which has become payable but remains
unpaid as of the date of such distribution, in accordance with the Plan
of Reorganization confirmed in that case.
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(c) third, to the extent that there are funds available following the
distribution provided for in Section 2.6 (b), the next One Hundred
Forty Thousand Dollars ($140,000.00) shall be distributed pro-rata as
follows:
(1) 42.86% to AIM Energy, Inc., until the sum of Sixty
Thousand Dollars ($60,000.00) has been distributed to
AIM Energy, Inc., for the purpose of providing AIM
Energy, Inc. with necessary working capital; and
(2) 57.14% to Xxxx & Associates, until the sum of Eighty
Thousand Dollars ($80,000.00) has been distributed to
Xxxx & Associates, to compensate Xxxx & Associates
for the preparation of audits, income tax returns and
financial statements for Helionetics, AIM energy,
Inc., SPL and/or Tri-Lite.
(d) fourth, to the extent that there are funds available following the
distribution provided for in Section 2.6(c), any such remaining funds
shall be disbursed fifty percent (50%) to AIM Energy, Inc., and fifty
percent (50%) to SPL, to provide working capital for said entities.
To the extent that any Party has any ownership interest in or control over
Helionetics, AIM Energy, Inc., SPL and/or Tri-Lite, such Party shall exercise
its best efforts to cause such proceeds to be utilized solely for the aforesaid
purposes. No Party makes any warranty or representation that adequate funds will
be available from the sale of the 100,000 LPI Shares to enable any or all of the
distributions provided for in this Section 2.6 to be made.
2.7 Conveyance of any Interest in the 24,000 KSW Shares. The Helionetics
Committee and Helionetics hereby transfer, assign and convey to Xxxxxx, and
hereby waive, any and all right, title, interest or claim either may have in or
to the 24,000 KSW Shares and any proceeds therefrom, except for the interests of
the Helionetics Committee and Helionetics, if any which arise pursuant to this
Agreement. Xxxxxx represents that she does not have an interest in or own any
other KSW Shares other than the 24,000 KSW Shares. The Helionetics Committee and
Helionetics shall each promptly execute and deliver to Xxxxxx any documents
reasonably required to notice or effectuate same.
2.8 Conveyance of Any Interest in the 625,000 KSW Shares. The
Helionetics Committee and Helionetics believe that at the time of the alleged
transfer of the 625,000 KSW Shares by the Xxxxxxxx Fund to KSW, the value of the
625,000 Shares exceeded the sum of $625,000.00 allegedly paid by KSW for such
Shares, such that the Helionetics Committee and/or Helionetics may have a claim
against KSW and/or Xxxxxxxx Fund by reason of such transfer. Neither the
Helionetics Committee nor Helionetics waive any right either may have to pursue
such claim. However, if the Helionetics Committee or Helionetics pursue such
claim, then regardless of the result of such action, the Xxxxxxxx Fund shall be
entitled to retain the approximately $625,000.00 received by the Xxxxxxxx Fund
for such Shares, as consideration for the release and/or satisfaction of the
Xxxxxxxx Fund Claim, and the Helionetics Committee and Helionetics shall be
entitled to receive only the net resulting recovery, if any, in excess of said
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amount. Except as otherwise set forth in this Section 2.8, Barnes, Katz,
Tri-Lite and K/B hereby transfer, assign and convey to the Helionetics Committee
for the benefit of Helionetics, and hereby waive any and all right, title,
interest or claim they may have in or to any such claim or any proceeds
resulting therefrom. (For example and by the way of illustration only, if
Helionetics and/or Helionetics Committee pursued such a claim, and if it was
determined in such proceeding that the fair market value of the 625,000 KSW
Shares was actually $937,500.00, then the sum of approximately $625,000.00 would
be retained by the Xxxxxxxx Fund in satisfaction of the Xxxxxxxx Fund Claim, and
the Helionetics Committee would entitled to receive the remaining $312,500.00
for the benefit of the creditors of Helionetics).
2.9. Conveyance of Any Interest in the Tri-Lite Shares. The
Helionetics Committee and Helionetics hereby transfer, assign and convey to
Xxxxxx, and hereby waive, any and all right, title, and interest or claim any of
them may have in or to 82.5% of the Tri-Lite shares and any proceeds therefrom,
except for the interests of the Helionetics Committee and Helionetics, if any,
which arise pursuant to this Agreement. Accordingly, the Helionetics Committee
retains any and all ownership, right, title, interest or claim (and all voting
rights) in and to 5% of the Tri-Lite shares. The Helionetics Committee freely
owns the 5%, except of course, to the extent shares are sold by the Helionetics
Committee. The parties intend that the 5% of Tri-Lite Shares owned and retained
by the Helionetics Committee are truly owned for all purposes and are not
collateral for the Secured Promissory Note. Tri-Lite agrees that such stock
ownership shall not be diluted; the Helionetics Committee shall always own 5% of
the Tri-Lite shares. No additional shares of stock of Tri-Lite will be issued,
or alternatively, if Tri-Lite issues additional shares, Tri-Lite shall cause to
be transferred to Secured Party additional shares such that the total percentage
ownership of Tri-Lite represented by the shares owned by Secured Party following
the issuance of such additional shares is identical to the total percentage
ownership of Tri-Lite represented by shares owned by Secured Party prior to the
issuance of such additional shares. Secured Party agrees to provide five days
prior notice to Tri-Lite of any proposed sale of Tri-Lite shares. Xxxxx Xxxxxx
agrees to provide 5 days prior notice to the Helionetics Committee of any
proposed sale of the Tri-Lite shares. The Helionetics committee and Helionetics
shall each promptly execute and deliver to Xxxxxx any documents reasonably
required to notice or effectuate same.
2.10. Conveyance of Any Interest in the Shares of Marinco. The
Helionetics Committee and Helionetics hereby transfer, assign and convey to
Xxxxxx, and hereby waive, any and all right, title, interest or claim any of
them may have in or to, the shares of Marinco and any proceeds therefrom, except
for the interests of the Helionetics Committee and Helionetics, if any, which
arise pursuant to this agreement. The Helionetics Committee and Helionetics
shall promptly execute and deliver to Xxxxxx any documents reasonably required
to notice or effectuate same. This transfer, assignment, conveyance and waiver
was made based solely upon representations by Tri-Lite, K/B, Xxxx and Xxxxxx
that (a) the balance sheet, income and loss statement and other financial
statements for Marinco ("Marinco Computer Products") dated as of 12/31/97, which
were provided by said parties to Squar, Xxxxxx & Xxxxx, Inc., were true,
accurate, complete and not misleading in any material respect between said date
and the effective date of this Agreement. The transfer, assignment, conveyance
and waiver pursuant to this
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Section 2.10 shall be null and void ab initio if it is subsequently determined
that any such representations were materially false or misleading when made.
2.11. $800,000.00 Senior Promissory Note. Concurrently upon the
execution of this agreement, Tri-Lite, AIM and SPL (collectively, the "Senior
Note Obligors") shall execute and deliver to the Helionetics Committee, on
behalf of Helionetics, a Secured Promissory Note ("Senior Note"), in the form
attached as Exhibit "A", made payable to The Helionetics Committee in the
original principal amount of Eight Hundred Thousand Dollars ($800,000.00). The
Senior Note Obligors shall pay to the Helionetics Committee all principal,
interest and other sums required under the Senior Note by the dates provided for
therein. The Senior Note Obligors shall be jointly and severally liable for the
payment of the Senior Note and for the performance of the obligations of the
Senior Note Obligors under the Senior Note. The obligations of the Senior Note
Obligors under the Senior Note shall be prior, senior and superior to the
obligations of the obligors under the Junior Note referenced in the Section 2.12
below, and the priority of any liens or security interests established to secure
the obligations of the Senior Note Obligors under the Senior Note shall be
prior, senior and superior to any liens or security interests established to
secure the obligations of the obligors under the Junior Note referenced in the
Section 2.12 below. The Senior Note and the obligations of the Senior Note
Obligors pursuant to the Senior Note shall be secured as follows:
2.11.1 Senior Security Agreement. Concurrently upon the execution of
this Agreement, Tri-Lite, Barnes, Katz, AIM and SPL, as debtors, and
the Helionetics Committee, as secured party, shall execute and enter
into a security agreement ("Senior Security Agreement"), in the form
attached as Exhibit "B", pursuant to which debtors shall irrevocably
pledge, encumber and assign to the secured party as security for the
payment of the Senior Note and for the performance by the Senior Note
Obligors of their obligations under the Senior Note, the interests and
assets of the debtors which are described in the Senior Security
Agreement. The Senior Security Agreement shall provide that upon any
default, either by the Senior Note Obligors under the Senior Note or by
any debtor under the Senior Security Agreement, the Bankruptcy Court in
the Helionetics Case shall then conduct a Court-supervised sale of any
and all assets described in the Senior Security Agreement, pursuant to
the provisions of 11 U.S.C. Sections 363, 1123, 1129, and 1141. This
special remedy established in favor of the Helionetics Committee shall
be in addition to any and all other remedies provided for in the Senior
Security Agreement or provided for by law. The fully executed Senior
Note, Senior Security Agreement, financing statements, and any other
instruments required pursuant to the Senior Security Agreement,
including without limitation stock certificates and/or shares of stock,
shall be delivered to Xxxxxx, Xxxxxxx & Golden, LLP ("AW&G"), and shall
be held by AW&G until the entry of
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the Order described in Sections 1.1 and 1.2. Immediately upon the entry
of such Order, the financing statements shall be filed and all other
acts required to perfect the security interests provided for in the
Senior Security Agreement shall immediately be taken.
2.11.2 Financial Information on Obligors and Debtors.
Until such time as the Senior Note has been paid in full, the
Helionetics Committee and its agents shall have the right at any time
to inspect the premises and review the books, records and accountings
of Tri-Lite, AIM and SPL, and Tri-Lite, AIM and SPL shall cause to be
provided to the Helionetics Committee and its agents: (a) within ten
(10) business days following the end of each calendar month, an
accounting, which may be provided in journal form, of all receipts and
all disbursements of Tri-Lite, AIM and SPL; and (b) within forty-five
(45) calendar days following the end of each calendar quarter (or more
frequently and/or sooner, if any such report is prepared more
frequently or sooner) update income and loss statements, balance sheets
and financial statements for said entities. This provision is material
and must be performed timely.
2.12 $500,00 Junior Promissory Note. Concurrently upon the execution
of this Agreement, but following the execution and delivery of the Senior Note
referenced in Section 2.11 above, Tri-Lite (the "Junior Note Obligor") shall
execute and deliver to Xxxxxx, a Promissory Note ("Junior Note"), in the form
attached as Exhibit "C", made payable to Xxxxxx in the original principal amount
of Five Hundred Thousand Dollars ($500,000.00). Except as set forth in the next
sentence of this Agreement, the Junior Note Obligor shall pay Xxxxxx all
principal, interest and other sums required under the Junior Note by the dates
set forth therein. Regardless of any payment dates set forth in the Junior Note,
in no event shall the Junior Note Obligor pay or cause to be paid to or for the
benefit of Xxxxxx any sum which may become due or payable pursuant to the Junior
note or any security agreement or other document executed in connection with the
Junior Note, until such time as all principal, interest and other sums payable
pursuant to the Senior Note or any security agreement or other document executed
in connection with the Senior Note, have been paid in full, and all other duties
of the Senior Note Obligors under the Senior note and of the debtors under any
security agreements executed to secure the Senior Note, have been fully
satisfied. The obligations of the Junior Note Obligor under the Junior Note
shall be junior and subordinate to the obligations of the Senior Note Obligors
under the Senior Note, and the priority of any liens or security interests
established to secure the obligations of the Junior Note Obligor under the
Junior Note shall be and at all times shall remain subsequent, junior and
subordinate to any liens or security interests established to secure the
obligations of the Senior note Obligors under the Senior Note. The Junior Note
and the obligations of the Junior Note Obligors under the Junior Note shall be
secured as follows:
2.12.1 Junior Security Agreement. Concurrently upon the execution of
this Agreement, Xxxx, AIM and SPL, as debtors, and Xxxxxx, as secured
party, shall execute and enter into a security Agreement ("Junior
Security Agreement"), in the form attached as Exhibit "D", pursuant to
which the debtors shall irrevocably pledge, encumber and assign to the
secured party as security for the payment of the Junior Note and for
the performance by the Junior Note Obligors of their obligations under
the Junior
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Note, the interests and assets of the debtors described in the Junior
Security Agreement. The Junior Security Agreement shall provide that
any liens or security interests established thereunder shall be and
shall at all times remain subsequent, junior and subordinate to the
liens and security interests established pursuant to the Senior
Security Agreement referenced in Section 2.11.1. The collateral
described in the Senior Security Agreement will include all assets of
Tri-Lite all assets of AIM, all shares of stock of AIM, all assets of
SPL, all shares of stock of SPL, and 50,000 shares of stock of
Tri-Lite. The Junior note shall provide that the Junior Note and any
security agreement executed to secure the Junior Note shall be void ab
initio with respect to any collateral described in the Senior Security
Agreement which is foreclosed upon pursuant to the Senior Security
Agreement, and that in no event shall any person who acquires any
collateral through any foreclosure conducted pursuant to the Senior
Security Agreement be deemed to have assumed or become subject to any
obligation of the borrower under the Junior Note by reason of having
acquired such collateral, nor shall collateral acquired through any
foreclosure pursuant to the Senior Security Agreement be subject to the
Junior Note or any security agreement executed to secure the Junior
Note. The fully executed Junior Note, Junior Security Agreement,
financing statements and any other instruments required pursuant to the
Junior Security Agreement shall be delivered to Xxxxxx, Xxxxxxx &
golden, LLP ("AW&G"), and shall be held by AW&G until the entry of the
Order described in Sections 1.1 and 1.2. Upon entry of such Order, AW&G
shall release such documents to Xxxxxx, and all other acts required to
perfect the junior security interests provided for in the Junior
Security Agreement shall immediately be taken.
2.13. Subordinating Senior and Junior Note to New Financing. The
secured parties under any security agreements securing the Senior Note or the
Junior Note shall agree to subordinate their respective security interests under
any such security agreements, with the exception of the interest of the secured
party under the Senior Security Agreement, in the shares of stock pledged
pursuant to the Senior Security Agreement, to any security interest that may be
established in favor of any third party lender providing new commercially
reasonable and necessary operating financing to AIM, SPL and/or Tri-Lite;
provided, however, that it shall be the burden of AIM, SPL and/or Tri-Lite, to
demonstrate that any such financing is commercially reasonable, it is necessary
to conduct the business and affairs of AIM, SPL and /or Tri-Lite in a good,
prudent and businesslike manner, and that none of the proceeds from any such
financing will be used to pay any salary, debt or reimbursement to Xxxx, Xxxxxx
or any affiliate of Xxxx or Xxxxxx. The secured party under any such security
agreement may refuse to grant any such subordination if such secured party
believes that such subordination is not required pursuant to this Agreement, and
will not be deemed to be in breach of this Agreement if it is subsequently
determined by the court having jurisdiction over such matter that such
subordination should be granted, provided that such secured party shall execute
any such subordination promptly following any such determination by any such
court. However, in no event shall any subordination in favor of any third party
lender affect the relative rights and interests of the secured parties under any
security agreements executed to secure the Senior Note, and of the secured
parties under any security agreements executed to secure the Junior Note. The
Helionetics Committee shall have the authority to subordinate the Senior Note
and Senior Security Agreement to new loans by Xxxxxx, should the Committee so
desire.
11
2.14. Intercompany Transfers. SPL and AIM shall not transfer any
assets, property or funds to any other affiliate, insider, related entity,
including, without limitation, Tri-Lite, absent advance written consent from the
Committee's designated representative.
ARTICLE 3
RELEASE OF CLAIMS
3.1. Definition of a Claim for Purposes of this Article. For
purposes of this Article 3, "Claim" shall mean and refer to any claims, demands
right, obligations, duties, debts, liens, encumbrances, levies, contracts,
agreements, promises, covenants, understandings, damages, injuries, actions,
causes of action, expenses, costs, charges, attorneys' fees, judgements, orders
and liabilities of any kind, whether in law, equity or otherwise, whether known
or unknown, and whether or not concealed or hidden.
3.2 Release of Claims by Helionetics and the Helionetics Committee.
Except for: (a) Claims, if any, which are retained pursuant to the terms of this
Agreement; (b) obligations which are created pursuant to this Agreement; (c)
Claims, if any, which arise by reason of any breach or default of this
Agreement: and (d) Claims, if any, which arise due to acts, errors or omissions
which occur subsequent to the effective date of this Agreement; Helionetics and
the Helionetics Committee, for and on behalf of themselves and their respective
successors, assigns, grantees and administrators (collectively, the "Releasing
Parties"), hereby now and forever release, discharge and promise not to xxx
Tri-Lite, K/B, Xxxxxx or Xxxx, or any administrators, attorneys, heirs,
successors, executors, trustees or assigns of said Parties (collectively, the
"Released Parties"), from any and all Claims which said Releasing Parties may
now own or hold, or have at any time prior hereto owned or held, or may in the
future own or hold, against said Released Parties, resulting from, arising out
of, or otherwise relating in any way to, the acts, errors, omissions, business,
affairs, dealings and conduct of Tri-Lite, Helionetics, AIM and or SPL,
including without limitation the specific matters a disputes referenced in this
Agreement. It is the intention of the Releasing Parties that by executing this
Agreement, this Agreement shall be effective as a complete and absolute bar to
each and every Claim which is referenced in this Agreement. In furtherance of
this intention, the Releasing Parties hereby waive any and all rights and
benefits conferred upon the Releasing Parties pursuant to the provisions of
Section 1542 of the California Civil Code, which states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
12
3.3 Release of Claims by Tri-Lite, K/B, Xxxxxx and Xxxx. Except for:
(a) Claims, if any, which are retained pursuant to the terms of this Agreement;
(b) obligations which are created pursuant to this Agreement; (c) Claims, if
any, which arise by reason of any breach or default of this Agreement; and (d)
Claims, if any, which arise due to acts, errors or omissions which occur
subsequent to the effective date of this Agreement; Tri-Lite, K/B, Xxxxxx and
Xxxx, for and on behalf of themselves and their respective administrators,
successors, assigns and grantees (collectively, the "Releasing Parties"), hereby
now and forever release, discharge and covenant not to xxx Helionetics and the
Helionetics Committee, or any officers, directors, employees, members, agents,
affiliates, administrators, attorneys, heirs, successors, executors, trustees or
assigns of said Parties (collectively, the ("Released Parties"), with respect to
any and all Claims, the acts, errors, omissions, business, affairs, dealings and
conduct of Tri-Lite, Helionetics, AIM and/or SPL, including without limitation
and specific matters and disputes referenced in this Agreement. Also, the
Releasing Parties now and forever hereby release, discharge and covenant not to
xxx the Released Parties with respect to any Claims for lender liability, which
said Releasing Parties may now own or hold, or have at any time prior hereto
owned or held, or mat in the future own or hold, against said Released Parties,
resulting from, arising out of or otherwise relating in any way to, the
negotiation, preparation, execution, implementation and enforcement of this
Agreement, the Senior Note attached hereto as Exhibit "A" and the Senior
Security Agreement attached hereto as Exhibit "B" and all other documents
executed in connection with this Agreement. It is the intention of the Releasing
Parties that by executing this Agreement, this Agreement shall be effective as a
complete and absolute bar to each and every Claim referenced in this Agreement.
In furtherance of this intention, the Releasing Parties hereby waive any and all
rights and benefits conferred upon the Releasing Parties pursuant to the
provisions of Section 1542 of the California Civil Code, which state as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
3.4. Binding Effect. To the fullest extent permitted by law, the
terms of this Agreement, including all benefits derived by any Party pursuant to
the terms of this Agreement, shall be binding on all of the Parties and on all
of the creditors in the Helionetics Case and all of the creditors in the
Tri-Lite Case; Provided, however, that nothing in this Agreement shall amend,
restrict, alter or affect: (a) any Claim held by any creditor of Tri-Lite; (b)
any claim held against any creditor of Tri-Lite; (c) any claim held by any
creditor of Helionetics, including without limitation any member of the
Helionetics Committee; and (d) any claim held against any creditor of
Helionetics, including without limitation any member of the Helionetics
Committee.
3.5. No Release of Claims Against a Subsequent Transferee. The
release of claims pursuant to Section 3.1 does not include those claims, if any,
which may be held by Helionetics and/or by the Helionetics Committee, against
any person, where such person is
13
alleged to be a subsequent transferee as to any asset to which Helionetics
and/or the Helionetics Committee may be entitled, or as to the proceeds from any
such asset, and where such Claim is for the recovery of such asset or the
recovery of such proceeds. Nothing contained in this Agreement shall prohibit
Helionetics and/or Helionetics Committee from naming Tri-Lite, K/B, Xxxxxx or
Xxxx in any action for the purpose of establishing the initial transferee
condition in such action, and Tri-Lite, K/B, Xxxxxx and Xxxx shall exercise
their good faith best efforts to assist the Helionetics Committee and
Helionetics in such action.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
4.1. Legal Capacity to Contract. Each party represents that, subject
to the entry of an order by the Bankruptcy Court approving of this Agreement
pursuant to Section 1.1, it has the requisite power, authority and legal
capacity to make, execute, enter into and deliver this Agreement and to fully
perform its duties and obligations under this Agreement, and that neither this
Agreement not the performance by such Party of any duty or obligation under this
Agreement will violate any other contract, agreement, covenant or restriction by
which such Party is bound.
4.2. No Prior Assignments. Each Party represents that it has not
pledged, transferred or assigned to any third party any right, interest, claim,
or cause of action being transferred, conveyed, released or compromised pursuant
to this Agreement, and such Party shall indemnify all other Parties from and
against any third party claim asserting such a pledge, transfer or assignment of
any such right, interest, claim or cause of action.
4.3. No Undisclosed Inducements. Each Party represents that it
executed and entered into this Agreement in reliance solely upon its own
independent investigation and analysis of the facts and circumstances, and that
no representations, warranties or promises other than those set forth in this
Agreement were made by any Party or any employee, agent or legal counsel of any
Party to induce said Party to execute this Agreement.
4.4. No Admission of Liability. This Agreement has been negotiated
and executed for the purpose of settling the various disputes described herein
and obtaining the release of any known, suspected or unknown claims that the
Releasing Parties may have against the Released Parties with respect to the
various disputes described herein. The execution of this Agreement by any Party
does not constitute, infer or evidence the truth of any claim, the admission of
any liability, the validity of any defense or the existence of any circumstance
or fact which could constitute a basis for any claim, liability or defense,
other than for the purpose of enforcing the terms and provisions of this
Agreement.
4.5. Representation by Counsel. Each Party represents that is has
acted pursuant to the advice of legal counsel of its own choosing in connection
with the negotiation, preparation and execution of this Agreement, or that it
was advised to obtain the advice of such legal
14
counsel, had ample opportunity to obtain the advice of such legal counsel and
willfully declined to obtain the advice of such legal counsel.
4.6. Truth and Accuracy of Representations and Warranties. Each of
the representations, warranties and covenants set forth in this Agreement shall
be, and the Party making the same shall cause them to be, true and correct as of
the time of execution of this Agreement and as of the time of the entry by the
Court pursuant to Section 1.1 of the order approving this Agreement.
4.7. Survival. Each of the statements, certifications,
representations, warranties, covenants, disclosures, disclaimers, waivers and
other agreements contained in this Agreement shall survive the execution of this
Agreement, the payment of any settlement consideration provided for in this
agreement, and the dismissal of any legal actions referenced in this Agreement.
ARTICLE 5.
GENERAL TERMS AND PROVISIONS:
5.1. Entire Agreement. This Agreement shall constitute the sole and
entire agreement between the Parties with respect to the settlement of disputes
and release of claims provided for herein. Any and all prior or contemporaneous
agreements and negotiations, whether oral or written, with respect to the
subject matter of this Agreement, are hereby superseded. No employee or agent of
any Party has authority to orally modify any term or condition of this
Agreement, or to make any representation or agreement other than as contained in
this Agreement. Unless any representation or agreement is contained in this
Agreement or is added pursuant to a written agreement executed by all Parties,
it shall not be binding nor otherwise affect the validity of this Agreement.
5.2. Amendment of Agreement. No modification of, deletion from, or
addition to this Agreement shall be effective unless made in writing and
executed by each Party hereto.
5.3. Construction of Agreement. The provisions of this Agreement
shall be liberally construed to effectuate the intended settlement of the
disputes and the release of all related claims. Section headings have been
inserted for convenience only and shall not be given undue consideration in
resolving questions of construction or interpretation. For purposes of
determining the meaning of, or resolving any ambiguity with respect to, any
word, phrase, term or provision of this Agreement, each Party shall be deemed to
have had equal bargaining strength in the negotiation of this Agreement and
equal control over the preparation of this document, such that neither the
Agreement nor any uncertainty or ambiguity herein shall be arbitrarily construed
or resolved against any Party under any rule of construction.
5.4. Further Assurances. Each Party shall promptly execute any and
all instruments and documents and take all other actions, including without
limitation the payment of money, that may be required to effectuate the
contemplated settlement and release.
15
5.5. Gender and Quantitative Use. Wherever the context of this
Agreement may so require, the gender shall include the masculine, feminine and
neuter, and the quantitative usage of any word, term or phrase shall include the
singular and plural.
5.6. Enforcement of Agreement. Each Party to this Agreement shall
have the right to enforce by proceedings at law or in equity all of the terms
and provisions of this Agreement, including without limitation the right to
prosecute proceedings at law or in equity against the person(s) who have
violated or who are attempting to violate any of such terms or provisions, to
enjoin such person(s) from doing so, to cause such violation to be remedied,
and/or to recover damages for such violation.
5.7. Waiver. The failure by any Party to enforce any term or
provision of this agreement shall not constitute a waiver of the right to
enforce the same term or provision, or any other term or provision, thereafter.
No Waiver by any Party of any term or provision of this Agreement shall be
deemed or shall constitute a waiver of any other provision of this agreement,
whether or not similar, nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided in writing.
5.8. Severability. In the event that any term or provision of this
Agreement is held by any court of competent jurisdiction to be illegal, invalid
or unenforceable for any reason, then the remaining portions of this Agreement
shall nonetheless remain in full force and effect, unless such portion of the
Agreement is so material that its deletion would violate the obvious purpose and
intent of the Parties.
5.9. Litigation Costs and Attorneys' Fees. If any Party(s) shall
commence legal proceedings against any other Party(s) to enforce the provisions
of this Agreement or to declare any rights of obligations under this Agreement,
then the prevailing Party(s) shall recover from the losing Party(s) its/their
costs of suit, including attorneys' fees, as shall be determined by the court.
5.10. Governing Law. This Agreement is made under and shall be
construed in accordance with and governed by the laws of the State of
California, without giving effect to the principles of conflicts of law. All
Parties consent to the jurisdiction of the United States Bankruptcy Court -
Central District of California, Santa Xxx Division, for the purpose of resolving
any disputes which may arise under this Agreement. If for any reason said
Bankruptcy Court shall decline to accept such jurisdiction, then the Parties
shall be deemed to have consented to the jurisdiction of California Courts and
to the venue in Orange County, California.
5.11. Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which is an original, an all of which together
constitute one and the same agreement.
5.12. Incorporation of Exhibits. The following Exhibits to this
Agreement, as now existing or as from time to time amended, modified or
supplemented by the written agreement of
16
the Parties, are incorporated into and made fully a part of this Agreement, as
though set forth in their entirety in this Agreement:
Exhibit "A" - $800,000 Senior Promissory Note
Exhibit "B" - Senior Security Agreement
Exhibit "C" - $500,000 Junior Promissory Note
Exhibit "D" - Junior Security Agreement
5.13. Inurement. This Agreement shall inure to the benefit of and be
fully binding upon each of the Parties and upon their respective heirs,
executors, successors, assigns and grantees.
5.14. Notices. Any payments to be made or any notices or other
communications to be given pursuant to this Agreement shall be delivered to the
appropriate Party at the address shown below, until written notice of a
different address is given by such Party in accordance with this Section. Any
payments to be made pursuant to this Agreement shall be deemed made only upon
actual receipt. Any notices or other communications must be in writing. Any
notices or other communications given by personal service shall be deemed to
have been received upon delivery . Any notices or other communications given by
first class mail, postage prepaid, addressed to the address required by this
Section, shall be deemed to have been received three Business Days following the
deposit thereof with the United States Post Office. Any notices or other
communications given by overnight courier service shall be deemed to have been
received on the date of delivery confirmed by the courier service. Any notice
given by facsimile transmission shall be deemed to have been received on the
date upon which the recipients facsimile machine electronically confirms the
receipt of such notice, provided that a copy of any such notice given by
facsimile transmission shall also be sent to the recipient by first class mail,
postage prepaid, addressed to the address required by this Section. Telephone
numbers, if listed below, have been listed for convenience purposes only, and
not for the purposes of giving notice pursuant to this Agreement.
The "Committee":
The Official Committee of Creditors
(In re Helionetics/Case XX-00-00000-XX)
Xxxxxxxxx: Hevka X. Xxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17
A COPY OF ANY NOTICE TO THE COMMITTEE MUST ALSO BE SENT TO:
Xxxxxx, Xxxxxxx & Golden, LLP
Attention: Xxxxxxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxxx - Xxxxx 0000
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
"Helionetics": Helionetics, Inc.
Attention: Hevka X. Xxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
A COPY OF ANY NOTICE TO HELIONETICS MUST ALSO BE SENT TO:
X. Xxxx, Chairman
Attention:_____________________
0000 Xxxxxxxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
"Tri-Lite": Tri-Lite, Inc.
Attention: Xxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
A COPY OF ANY NOTICE TO TRI-LITE MUST ALSO BE SENT TO:
X. Xxxx, Chairman
Attention:___________________
0000 Xxxxxxxx
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18
"Xxxxxx": Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
"Xxxx": Xxxxxxx Xxxx
000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
"K/B": K/B Equities, Inc.
Attention: Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
A COPY OF ANY NOTICE TO K/B MUST ALSO BE SENT TO:
K/B Equities, Inc.
Attention: Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ALSO, A COPY OF ANY NOTICE TO ANY PARTY MUST ALSO BE SENT TO:
Squar, Xxxxxx & Xxxxx, Inc.
Attention: Xxxxx Xxxxx
0000 Xxxxxxx Xxxxx - Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
19
THE UNDERSIGNED PARTIES TO THIS AGREEMENT have made, executed
and entered into this Agreement.
"Helionetics Committee"
The Official Committee of Creditors Holding
Unsecured Claims in the Chapter 11 bankruptcy
Case In re Helionetics, Inc., which was filed
On March 31, 1997, as Case No. SA-97-14645-JR
By:
----------------------------------
(signature)
----------------------------------
(typed or printed name)
----------------------------------
(title or capacity)
"Helionetics"
Helionetics, Inc., a California corporation, the debtor and
debtor-in-possession in the Chapter 11 bankruptcy case In re
Helionetics, Inc., which was filed on March 31, 1997, as Case
No. SA-97-14645-JR
By:
----------------------------------
(signature)
----------------------------------
(typed or printed name)
----------------------------------
(title or capacity)
20
"Tri-Lite"
Tri-Lite, Inc., a California corporation the reorganized debtor
in the Chapter 11 bankruptcy case In re Tri-Lite, Inc., which
was filed on February 26, 1996, as Case No. SA-96-12049-JR
By:
----------------------------------
(signature)
----------------------------------
(typed or printed name)
----------------------------------
(title or capacity)
"K/B"
K/B Equities, Inc., a Nevada corporation
By:
----------------------------------
(signature)
----------------------------------
(typed or printed name)
----------------------------------
(title or capacity)
"Xxxx"
-----------------------------------
Xxxxxxx Xxxx
"Xxxxxx"
-----------------------------------
Xxxxx Xxxxxx
21
