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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.____________)*
HARVARD SCIENTIFIC CORP.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
417465200
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(CUSIP Number)
Don A. Steffens, 100 No. Arlington, Suite 23-P, Reno, NV 89501
(702)329-2255
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 7, 1994-October 9, 1997(1)
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement of Schedule 13G to report
the acquisition which is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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(1) Due to administrative errors, prior filings on Schedule 13D for this
reporting person were not made. Accordingly, this Schedule sets forth
information regarding both current position as well as past activities.
(Continued on following page(s))
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CUSIP No. 417465200 13D
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Don A. Steffens SS# ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 858,250
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
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10 SHARED DISPOSITIVE POWER
858,250
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
858,250
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.4%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP 417465200 Schedule 13D
ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock par value $0.01 per share of
Harvard Scientific Corp. (the "Issuer"), 100 North Arlington Avenue, Suite 380,
Reno, Nevada 89501. All share amounts and dollar amounts per share have been
adjusted to reflect all Issuer stock splits to date.
ITEM 2. IDENTITY AND BACKGROUND
(I) DON A. STEFFENS has a business address at 100 North
Arlington Avenue, Suite 23-P, Reno, Nevada 89501. He is the
Vice President, Treasurer and a Director of Bio- Sphere
Technology, Inc., a Nevada corporation ("BTI"). He has never
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) nor has he ever been a
party to any proceeding or subjected to a judgment, decree or
final order enjoining future violations, or prohibiting or
mandating activities subject to federal or state securities
law or finding any violation with respect to such laws. He is
an American citizen.
(II) BIO-SPHERE TECHNOLOGY, INC. BTI is a Nevada biotechnology
research and development company with its principal office and
business located at 100 North Arlington, Suite 23-P, Reno,
Nevada 89501. BTI has never been convicted in any criminal
proceedings nor ever been a party to any proceeding or
subjected to a judgment, decree or final order enjoining
future violations, or prohibiting or mandating activities
subject to federal or state securities law or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(I) DON A. STEFFENS - Mr. Steffens did not purchase any shares of
Common Stock of the Issuer for cash. His method of acquiring
the shares is described as follows:
Mr. Steffens has received 125,000 shares of Common Stock of
the Issuer in payment for services rendered to the Issuer. In
particular, Mr. Steffens acquired 25,000 shares on March 18,
1997 and 100,000 shares of June 10, 1997. These shares were
valued at par value for purposes of such issuances.
(II) BIO-SPHERE TECHNOLOGY, INC. - BTI did not purchase any shares
of Common Stock of the Issuer for cash. Its method of
acquiring the shares is described as follows:
On January 7, 1994, the Issuer entered into an Asset Purchase
Agreement with BTI whereby the Issuer acquired intellectual
property rights relating to prostaglandin microsphere delivery
in exchange for 71,400 shares of the Issuer's Common Stock.
These shares were valued at par value for purposes of such
issuances.
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On November 16, 1995, the Issuer issued 613,850 shares of
Common Stock for BTI's assistance in management, raising
working capital, a patent application and distribution
agreements associated with the PGE-1 product. These shares
were valued at par value for purposes of such issuances.
On November 20, 1997, the board of directors of the Issuer
authorized a payment of $150,000 in cash, 200,000 shares of
the Issuer's Common Stock and a 3% gross override royalty to
be paid or acquired by BTI in exchange for the conveyance of
all the rights to Prostaglandin E-1 Lyophilized Liposomes used
in the treatment of Psoriasis. These shares were valued at par
value for purposes of such issuances.
ITEM 4. PURPOSE OF TRANSACTION
(I) DON A. STEFFENS - The purpose of the transactions was to
compensate Mr. Steffens for services rendered to the Issuer.
In October, 1997, Mr. Steffens transferred 111,500 shares of
Common Stock to the Steffens Family Trust and 10,000 shares to
Helen Alexander, 500 shares to Philip Alexander and 3,000
shares to John Davis.
(II) BIO-SPHERE TECHNOLOGY, INC. - The purpose of the transactions
on January 7, 1994, November 16, 1995 and November 20, 1997
was for technology transfer and promotion of the business of
the Issuer. BTI has sold or otherwise disposed of 138,500
shares of Common Stock of the Issuer from time to time through
brokerage sales, private transfers, or otherwise.
Except for the acquisitions or dispositions of additional securities of
the Issuer in the ordinary course of business through broker sales, Mr.
Steffens and BTI have no other plans or proposals which relate to or
would result in any of the matters described in Items 4(a) through
4(j).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) BENEFICIAL OWNERSHIP
(I) DON A. STEFFENS. The aggregate number of shares of
Common Stock of the Issuer deemed to be beneficially
owned by Mr. Steffens is 858,250 or 16.4% of the
5,238,047 shares of Common Stock of the Issuer
currently outstanding. The shares that Mr. Steffens
may be deemed to beneficially own consist of the
746,750 shares of Common Stock held by BTI and the
111,500 shares of Common Stock held by the Steffens
Family Trust. Mr. Steffens disclaims beneficial
ownership of all except the 111,500 shares held by
the Steffens Family Trust, other than to the extent
of his indirect interest in the BTI-held shares as a
stockholder of BTI.
(II) BIO-SPHERE TECHNOLOGY, INC. The aggregate number of
shares of Common Stock of the Issuer beneficially
owned by BTI is 746,750 or 14.3% of the 5,238,047
shares of Common Stock of the Issuer currently
outstanding.
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(b) POWER TO VOTE AND POWER TO DISPOSE
(I) DON A. STEFFENS. Mr. Steffens shares voting and
dispository power with respect to the shares held by
BTI with Dr. Jackie R. See, and shares voting and
dispository power with respect to the shares held by
the Steffens Family Trust with his spouse, Ms.
Cynthia A. Steffens as a joint trustee of the
Steffens Family Trust . The Item 2 information with
respect to Dr. See and Ms. Steffens is as follows:
Jackie R. See, M.D has a business address at 100
North Arlington Avenue, Suite 23-P, Reno, Nevada
89501. He is the Chief Executive Officer, President,
a Director and majority stockholder of BTI. He is
also a member of the Board of Directors of the
Issuer, a consultant to the Issuer and the director
of research of the Issuer. He has never been
convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors), nor was
he ever a party to any proceeding or subjected to a
judgment, decree or final order enjoining future
violations, or prohibiting or mandating activities
subject to the federal or state securities law or
finding any violation with respect to such laws. He
is an American citizen.
Cynthia A. Steffens has a business address at 100
North Arlington Avenue, Suite 23-P, Reno, Nevada
89501. She has never been convicted in any criminal
proceeding (excluding traffic violations or similar
misdemeanors), nor was he ever a party to any
proceeding or subjected to a judgment, decree or
final order enjoining future violations, or
prohibiting or mandating activities subject to the
federal or state securities law or finding any
violation with respect to such laws. She is an
American citizen.
(II) BTI. BTI has the sole power to vote and the sole
power to dispose of the shares held thereby.
(c) TRANSACTIONS DURING THE LAST SIXTY DAYS
(I) DON A. STEFFENS. There have been no transactions
within the last 60 days by Mr. Steffens.
(II) BIO-SPHERE TECHNOLOGY, INC. Within the 60 days prior
to the date of this Schedule, BTI has conducted the
following sales of Common Stock of the Issuer:
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Date Shares Price/Sh. Manner of Sale
---- ------ -------- --------------
1/16/98 300 $10.312 broker sale
1/16/98 100 $10.625 broker sale
1/20/98 400 $7.50 broker sale
1/21/98 400 $5.625 broker sale
1/22/98 400 $5.937 broker sale
1/23/98 400 $5.937 broker sale
1/26/98 270 $6.25 broker sale
1/26/98 130 $5.937 broker sale
1/27/98 250 $7.50 broker sale
1/27/98 150 $7.187 broker sale
1/28/98 400 $8.125 broker sale
1/29/98 1,550 $6.975 broker sale
1/29/98 400 $7.812 broker sale
1/29/98 250 $7.50 broker sale
1/29/98 150 $7.812 broker sale
(d) RECEIPT OF DIVIDENDS AND PROCEEDS OF SALE.
Ms. Steffens, as a joint trustee of the Steffens Family Trust
with Mr. Steffens, has the right to receive dividends or the
proceeds from the sale of 111,500 shares of Common Stock of
the Issuer owned by the Steffens Family Trust. With that
exception, no other person not described above has such rights
or powers.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
See Item 3 for a discussion of arrangements regarding shares of Common
Stock of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
(1) Agreement for the Acquisition of Intellectual Property Rights
dated January 7, 1994 between the Issuer and BTI, incorporated
by reference to Exhibit 10.6 to Amendment #1 to the
Registration Statement on Form SB-2, Regis. #333-25647, filed
June 24, 1997 (the "SB-2").
(2) Exchange Agreement dated November 16, 1995 between the Issuer
and BTI, incorporated by reference to Exhibit 10.7 to the
SB-2.
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(3) Agreement For The Acquisition Of Intellectual Property Rights
dated November 20, 1997 between the Issuer and BTI.
(4) The Steffens Family Living Trust Declaration of Trust dated
June 6, 1997.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: March 16, 1998
/s/ Don A. Steffens
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Signature
Don A. Steffens
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Name/Title
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AGREEMENT FOR THE ACQUISITION OF INTELLECTUAL PROPERTY RIGHTS
This Agreement dated November 20th, 1997, is entered into by and
between Harvard Scientific Corp, a Nevada corporation with its principal address
at 100 North Arlington Avenue, Suite 380, Reno, Nevada 89501 (hereafter
"Harvard"), and Bio-Sphere Technology, Inc., a Nevada corporation with its
principal address at 100 North Arlington Avenue, Suite 23P, Reno, Nevada 89501
(hereafter "Bio-Sphere").
WITNESSETH
WHEREAS, Bio-Sphere is the owner of all rights, title and
interest in the intellectual property pertaining to Prostaglandin E-1
Lyophilized Liposomes for the use of treatment of Psoriasis, including, but not
limited to, any patents, patents pending or other proprietary ownership thereto.
Bio-Sphere hereto agrees to assign such said rights forthwith to Harvard.
WHEREAS, upon receipt of the rights, title, and interest in the
intellectual property described above, Harvard agrees to exchange 2,000,000
shares of common stock of Harvard (the "Harvard Stock") plus $150,000 cash to
Bio-Sphere.
NOW, THEREFORE, the parties hereto agree as follows:
1. Bio-Sphere acknowledges that the shares of Harvard Stock to be issued
it have not been registered under the Securities Act of 1933, as
amended (the "Act") and may not be sold or transferred by Bio-Sphere
accept in accordance with the provisions of the Act.
2. The parties agree that the value of the additional technology and
rights conveyed hereunder by Bio-Sphere (together with the other
undertakings made by Bio-Sphere) is equal to the fair market value of
the 2,000,000 shares of Harvard Stock being issued to Bio-Sphere
hereunder.
3. Harvard agrees with Bio-Sphere to use its best efforts to actively
and diligently further develop, including obtaining regulatory
clearance for, and promotion of, the commercial sale of the Product
in the U.S. and elsewhere.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the day and year first set forth above.
HARVARD SCIENTIFIC CORP.
Dated ____________ BY: /S/ Thomas E. Waite
---------------------------------
Thomas E. Waite, President & CEO
BIO-SPHERE TECHNOLOGY, INC.
Dated _____________ BY: /S/ Don Steffens
------------------------------------
Don Steffens, Vice President & Director
Page 2
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THE STEFFENS FAMILY LIVING TRUST
DECLARATION OF TRUST
DON A. STEFFENS AND CYNTHIA A. STEFFENS, Husband and Wife, declare that:
ARTICLE 1. DECLARATIONS
CONVEYANCE TO TRUSTEE
SECTION 1.01. They hereby assign to the trustee named in this Declaration all
their personal property to constitute the initial trust estate.
IDENTITY OF TRUST ESTATE
SECTION 1.02. This shall be known as the "STEFFENS FAMILY LIVING TRUST". All
property described in Section 1.01 above and any other property that may be
transferred to this trust is called the "Trust Estate" shall be held,
administered, and distributed as provided in this Declaration of Trust.
IDENTITY OF HUSBAND, WIFE AND TRUSTORS
SECTION 1.03. As used in this Declaration of Trust:
(a) The term "Husband" shall mean DON A. STEFFENS;
(b) The term "Wife" shall mean CYNTHIA A. STEFFENS, and
(c) The term "Trustors" shall refer collectively to Husband and Wife.
DESIGNATION OF TRUSTEE
SECTION 1.04. Trustors appoint the following as trustee(s) of this trust:
First Appointment: DON A. STEFFENS and CYNTHIA A. STEFFENS, as co-trustees.
Second Appointment: CHRISTIAN A. STEFFENS
Third Appointment: PHILIP N. STEFFENS
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DON A. STEFFENS and CYNTHIA A. STEFFENS shall serve as the first trustees.
If either DON A. STEFFENS or CYNTHIA A. STEFFENS is unable or unwilling to act,
the remaining trustee shall serve alone. When both DON A. STEFFENS and CYNTHIA
A. STEFFENS cease to act, the successor appointee(s) shall serve in the order
appointed. If any co-trustee is unable or unwilling to act, the remaining
appointee shall serve as trustee.
Except as otherwise provided herein, where Trustors have appointed
co-trustees, all co-trustees shall act together. If no successor trustee is
designated to act in the event of the death, incapacity or resignation of the
trustee then acting, or no successor trustee accepts the office, the trustee
then acting may appoint a successor trustee. If no such appointment is made, the
majority of the adult beneficiaries entitled to distribution from this trust may
appoint a successor trustee.
CO-TRUSTEES
SECTION 1.05. In the event that this Trust is administered by more than one
Trustee, they may designate either one of themselves to exercise any or all of
the powers granted them. The initial Trustees may, in particular, delegate such
authority to one another (in appropriate cases--as in dealing with banks,
stockbrokers and other like financial institutions) by simply opening Trust
accounts in their names as joint owners and designating on the documents
establishing the account that either Trustee may act alone.
ADDITIONS TO TRUST
SECTION 1.06. The Trustors, or either of them, may add other property to the
Trust Estate or remove property from the Trust Estate.
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DECLARATION REGARDING JOINT
TENANCY PROPERTY
SECTION 1.07. Any joint tenancy property transferred to this trust is declared
by Trustors to be their community property, having been held in joint tenancy
form solely to avoid probate.
COMMUNITY PROPERTY TO REMAIN COMMUNITY PROPERTY
SECTION 1.08. All property conveyed to the Trust which was community property,
quasi-community property, or separate property shall remain so.
REVOCATION OF TRUST
SECTION 1.09. Either Trustor may revoke this trust during their joint lives.
MODIFICATION OF TRUST
SECTION 1.10. The Trustors may amend the trust by a writing signed by both of
them.
ARTICLE 2. DISTRIBUTIONS DURING JOINT
LIVES OF TRUSTORS
SECTION 2.01. Trustors may during their joint lives have free use of all of the
income and principal of the trust estate.
ARTICLE 3. DISTRIBUTIONS AFTER DEATH
OF FIRST TRUSTOR TO DIE
CREATION OF TWO TRUSTS
SECTION 3.01. On the death of either Trustor leaving the other Trustor
surviving, the Trustee shall collect all property payable to the Trust by reason
of such death and shall divide the entire Trust Estate into two separate trust
to be designated as the "Survivor's Trust" and the "Exemption Trust".
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REVOCATION AND AMENDMENT
SECTION 3.02. The Survivor's Trust shall be revocable and subject to amendment
by the Survivor. The Exemption Trust shall be irrevocable and not subject to
amendment.
FUNDING OF TWO TRUST
SECTION 3.03. The Survivor's Trust shall consist of the surviving spouse's
separate property that is a part of the trust estate and the surviving spouse's
interest in the Trustors' community estate and the marital deduction amount,
defined as the minimum pecuniary amount necessary to entirely eliminate (or to
reduce to the maximum extent possible) any federal estate tax at the deceased
spouse's death, taking into account:
(1) All deductions taken in determining the estate tax payable by reason of
the deceased spouse's death;
(2) The net value of all other property, whether or not it is given under
this instrument and whether it passes at the time of the deceased spouse's death
to or in trust for the surviving spouse, so that it is included in the deceased
spouse's gross estate and qualifies for the federal estate tax marital
deduction; and
(3) All credits allows for federal estate tax purposes, provided no credit
shall be taken into account in determining the size of the Survivor's Trust if
such credit if such credit shall result in the disallowance of the marital
deduction.
The Exemption Trust shall consist of the balance of the trust estate. The
trustee shall satisfy the amount so determined in case or in kind, or partly in
each, and shall allocate to the Survivor's Trust only assets of the deceased
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spouse contributed or added to the trust that are eligible for the federal
estate tax marital deduction. Assets allocated in kind shall be deemed to
satisfy this amount on the basis of their net fair market values as finally
determined for federal estate tax purposes.
Assets qualifying for the federal estate tax marital deduction shall be
transferred to the Survivor's Trust only to the extent that the transfer reduces
the federal estate tax otherwise payable by reason of the deceased spouse's
death. No assets for which a credit for foreign death taxes is allowed under the
federal estate tax law applicable to the deceased spouse's estate shall be
allocated to the Survivor's Trust, unless that estate contains insufficient
other property to fully fund the Survivor's Trust. The trustee shall select
property to satisfy the pecuniary amount constituting the Survivor's Trust so
that any appreciation or depreciation that has occurred in the value of this
property between the applicable valuation date and the date of allocation shall
be fairly apportioned between the Survivor's Trust and the Exemption Trust.
DISCLAIMERS
SECTION 3.04. If the surviving Trustor disclaims any property given to the
Survivor outright, or disclaims all or a portion of Survivor's interest in the
Survivor's Trust, said disclaimed property shall be allocated to the Exemption
Trust.
FUNERAL EXPENSES OF FIRST TRUSTOR TO DIE
SECTION 3.05. On the death of the first of the Trustors to die, the Trustee
shall pay from the Exemption Trust the expenses of the Deceased Trustor's last
illness, funeral, and burial, and any federal estate tax and state death taxes
that may be due unless the Trustee determines that other adequate provisions
exist for payment.
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ALL INCOME TO SURVIVING TRUSTOR
SECTION 3.06. After the death of the first of the Trustors the Trustee shall pay
to the Surviving Trustor all income from both the Survivor's Trust and the
Exemption Trust that the Survivor shall request.
INVASION OF PRINCIPAL OF
SURVIVAL'S TRUST
SECTION 3.07. If the Trustee considers income insufficient the Trustee may pay
to Surviving Trustor so much of the principal of the Survivor's Trust as the
Trustee deems advisable.
INVASION OF PRINCIPAL OF
EXEMPTION TRUST
SECTION 3.08. During the lifetime of Survivor, should the net income of the
Trusts be insufficient, the Trustee may pay such amounts from the principal of
the Exemption Trust as the Trustee may deem advisable for the health, education,
maintenance, and support of the Trustor. As used in this section, the term
"health, education, maintenance, and support" shall mean:
(a) The providing of proper care, maintenance, and support for the Survivor
during any period of illness, or other want or necessity;
(b) The maintenance of the Survivor in the manner of living to which
Survivor is accustomed on the date of this Declaration;
(c) The support and maintenance in the manner in which they are accustomed
on the date of this Declaration of any person, whether adult or minor, dependent
on the Survivor for support and maintenance; and
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(d) The education in the manner desired by the Survivor of any person,
whether adult or minor, dependent on the Survivor for such education.
ARTICLE 4. DISTRIBUTIONS ON DEATH OF
SURVIVING TRUSTOR
SURVIVOR'S POWER TO APPOINT SURVIVOR'S TRUST
SECTION 4.01. Should the Surviving Trustor have failed to exercise the power of
appointment described in Section 4.01 of this Declaration, the Survivor's Trust
shall be added to the principal of the Exemption Trust and shall be held,
administered, and distributed by the Trustee in the same manner as it if had
been originally included in the principal of the Exemption Trust.
FAILURE TO EXERCISE POWER OF APPOINTMENT
SECTION 4.02. Should the Surviving Trustor have failed to excercise the power
of appointment described in Section 4.01 of this Declaration, the Survivor's
Trust shall be added to the principal of the Exemption Trust and shall be held,
administered, and distributed by the Trustee in the same manner as if it had
been originally included in the principal of the Exemption Trust.
PAYMENT OF SURVIVOR'S FUNERAL EXPENSES AND DEATH TAXES
SECTION 4.03. On the death of the Surviving Trustor, the Trustee shall pay all
debts of the Survivor, expenses of last illness, funeral burial, and any federal
estate tax and state death taxes that may be due unless the Trustee determines
that other adequate provisions exist for payment. The right to control
disposition or Trustor's remains shall be in accordance with Health and Safety
Code of the State of California, Section 7100, except that the trustee shall
have priority over the Public Administrator.
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DISTRIBUTION OF EXEMPTION TRUST
SECTION 4.04. On the death of the Surviving Trustor, the Exemption Trust shall
terminate and be distributed as follows:
a) one-half (1/2) of the estate shall be distributed to CHRISTIAN A.
STEFFENS, if living, otherwise to his then living children in equal shares.
b) The remaining one-half (1/2) of the estate shall be distributed to
PHILIP N. STEFFENS, if living, otherwise to his then living children in equal
shares.
CONTINUATION OF TRUST
SECTION 4.05. Notwithstanding other language in this Trust to the contrary, if
any person entitled to outright distribution is under age 21 the Trustee shall
use and apply so much of the net income and also of principal as shall be
necessary for the proper education, health, support and maintenance of said
child. Upon said child attaining twenty-one (21) years, the Trustee shall hand
to that child their share, both principal and income.
ARTICLE 5. POWERS OF TRUSTEE
RETAIN INVESTMENTS OF TRUSTORS
SECTION 5.01. The Trustee is authorized to retain in trust any property whether
or not such property is on the character permitted by law for investment of
trust funds. After the death of one Trustor, the Trustee may retain any such
property in trust provided, however, that the surviving Trustor may direct the
Trustee to convert non-income producing property into income-producing property.
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MANAGEMENT OF TRUST PROPERTY
SECTION 5.02. The Trustee shall have power to:
(a) Purchase, sell, convey, exchange, convert, improve, repair, partition,
divide, allow, subdivide, create restrictions, easements, or other servitudes
thereon, manage, operate, and control real estate;
(b) Lease for terms within or beyond the term of any trust provided for in
this Declaration and for any purpose, including exploration for a removal of
gas, oil, and other minerals; and enter into any covenants and agreements
relating to the property so leased or any improvements which may then or
thereafter be erected on such property;
(c) Encumber or hypothecate for any trust purpose by mortgage, deed of
trust, pledge, or otherwise;
(d) Purchase and carry insurance of any nature;
(e) Commence or defend litigation and employ legal counsel;
(f) To buy, sell and trade in securities of any nature, including short
sales, on margin, and for such purposes may maintain and operate margin accounts
with brokers, and may pledge any securities held or purchased by the Trustee
with such brokers as security for loans and advances made to the Trustee;
(g) The Trustee is authorized to employ investment advisors and to confer
on such investment advisors full discretionary authority to manage, but and sell
and to otherwise provide advisory and management services with respect to all or
any part of the securities of the fund pursuant to such guidelines as the
Trustee may establish with such investment advisors;
(h) Exercise any subscription, conversion, or other rights given to the
holders of any stocks, bonds, securities, or other instruments held in trust;
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(i) Participate in any plans or proceedings for the foreclosure,
reorganization, consolidation, merger, or liquidation of any corporation or
organization that has issued securities held by the Trustee and to deposit
securities with and transfer title to any protective or other committee
established to further or defeat any such plan or proceedings;
(j) Enforce any mortgage or deed of trust and bid and purchase any property
subject to such security instrument;
(k) Compromise and adjust any claims in favor of or against the trust; and
(l) Subject to any limitations expressly set forth in this Declaration and
faithful performance of the Trustee's fiduciary obligations, to do all such
acts, take all such proceedings, and exercise all such rights and privileges as
cold be done, taken, or exercised by an absolute owner of the trust property.
POWER TO BORROW MONEY
SECTION 5.03. The Trustee shall have the power to borrow money for any necessary
trust purpose and the power to borrow money on behalf of one trust from any
other trust provided for in this Declaration and to obligate the trusts to repay
such borrowed money.
POWER TO LOAN MONEY TO TRUSTS
SECTION 5.04. The Trustee is authorized to loan Trustee's own funds and to
charge for such loan or advance an appropriate rate of interest. Any such loan
or advance, together with the interest shall be a first lien against the trust
estate.
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ALLOCATION OF PRINCIPAL AND INCOME
SECTION 5.05. The Trustee shall allocate all receipts and expenditures to the
income or principal of each trust in the manner provided by the Revised Uniform
Principal and Income Act.
POWER TO APPLY FOR GOVERNMENT ASSISTANCE
SECTION 5.06. The trustee shall have the power to deal with governmental
agencies and to make applications for, receive and administer any of the
following benefits, if applicable: Medi-Cal, Social Security, Medicare,
Medicaid, Supplemental Security Income, In-Home Support Services, and any other
government resources and community support services available to the elderly,
i.e., California Department of Aging, Federal Older Americans Act, Nursing Home
Ombudsman, "Senior Day Care" programs and senior centers.
POWER TO OBTAIN BENEFITS
SECTION 5.07. The trustee shall have the power to explore and implement Medi-Cal
planning strategies and options and to plan and accomplish asset preservation in
the event a Trustor needs long-term health and nursing care. Such planning shall
include, but is not necessarily limited to, the power and authority to: (1) make
home improvements and additions to the Trustors' family residence; (2) pay off
partly or in full the encumbrance, if any, on the Trustors' family residence;
(3) purchase a family residence, if the Trustors to not own one; (4) purchase a
more expensive family residence; (5) transfer the family residence to the
Trustor-spouse who does not need long-term medical, health, or nursing care; (6)
direct that income payments be made to the well spouse only under the "name on
the instrument rule"; (7) make gifts of assets for estate planning purposes; (8)
establish and fund irrevocable trusts for asset preservation purposes.
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TRUSTEE COMPENSATION
SECTION 5.08. The Successor Trustee shall be entitled to reasonable compensation
for services, expenses and professional assistance in administering the trust,
except that no beneficiary who acts as trustee shall receive compensation for
services.
MANNOR OF HOLDING PROPERTY
SECTION 5.09. The Trustee may hold securities or other property or may receive
income in Trustee's name as Trustee under this Declaration, in Trustee's own
name without a designation showing it to be Trustee under this Declaration, in
the name of Trustee's nominee, or the Trustee may hold such securities
unregistered in such condition that ownership will pass by delivery.
ARTICLE 6. ADMINISTRATIVE PROVISIONS
DEATH OF BENEFICIARY DURING DISTRIBUTION PERIOD
SECTION 6.01. Should any beneficiary die during distribution, any portion then
undistributed shall be administered by the Trustee in the same manner as if said
beneficiary had predeceased Trustors.
PERIODIC ACCOUNTINGS
SECTION 6.02. The successor trustee shall periodically, at least annually,
deliver to each beneficiary an accounting of the Trustee's administration.
Written approval of any such accounting by the beneficiaries shall constitute an
absolute release of the Trustee and shall be binding on the administrators,
executors, successors, and assigns of such beneficiary.
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SPENDTHRIFT PROVISION
SECTION 6.03. No beneficiary shall have any right to alienate, encumber, or
transfer his or her interest in the trust nor shall such interest be subject to
claims of creditors or liable to attachment, execution, or other process of law.
DIVISION OR DISTRIBUTION IN KIND OR IN CASH
SECTION 6.04. On any division of assets the Trustee may divide and distribute
such assets in cash, in kind, or partly in cash and partly in kind. The decision
of the Trustee shall be binding.
CLASS GIFTS
SECTION 6.05. As used in this instrument, a gift to "issue" of a person includes
all of that person's lineal descendants of all generations. For purposes of all
class gifts, e.g., "issue", "children", "grandchildren" and
"great-grandchildren" legally adopted persons shall be treated in the same
manner as a natural born child of that adoptive parent but "step" or "foster"
relationships shall be excluded. The terms "child" and "children" shall refer to
any natural child of either Trustor.
BOND
SECTION 6.06. No bond shall be required of any trustee.
POWER TO HOLD TITLE IN THE NAME OF ONE TRUSTEE ONLY
SECTION 6.07. With regard to the separate property of one Trustor, that Trustor
may, at his or her option, be the sole trustee with regard to title to that
property. Upon the death or incapacity of the trustee in whose name title to the
property is held, the successor trustee of the property shall be the other
co-trustee as shown in Article 1; or if none, then the successor trustees shall
serve in the order set forth in Article 1.
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INCAPACITY OF TRUSTEE
SECTION 6.08. Incapacity of any trustee may be established by a letter signed by
the incapacitated trustee's treating physician stating in words of substance or
effect that said trustee is unable to adequately look to his or her personal or
business affairs. Said letter from the treating physician need not be sworn,
acknowledged, witnessed or verified in any other manner than that it bears the
writer's signature and be on his or her business letterhead.
Said treating physician shall not be related by blood or marriage to the
trustee nor be entitled to anything from the estate.
Any person or entity holding Trust Property is expressly relieved from any
and all liability and shall be held harmless from any and all claims by any
persons beneficially interested in this trust for good faith reliance on any
physician's or treating professional's letter submitted as described herein.
Said letter presented by any person named as successor trustee in this
Declaration or any subsequent amendment thereto shall constitute full and
complete proof of incapacity on which any holder of Trust Property may rely.
The authority of the successor trustee acting under incapacity of a prior
trustee shall continue until the holder of trust property has been advised in
writing by the prior trustee that said prior trustee is able to perform their
duties, at which time the holder shall resume dealing with the prior trustees as
before.
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These instructions shall be subordinate to any policies or procedures then
in force by the holder and are intended only to facilitate administration of
this trust. By accepting trust property said holder is in no manner expressly or
impliedly agreeing to be bound by these instructions.
PERPETUITIES SAVINGS CLAUSE
SECTION 6.09. Unless sooner terminated in accordance with other provisions of
this Agreement, each Trust created under this Agreement shall terminate
twenty-one (21) years after the death of the last survivor of the following
persons: The Trustors, the Trustor's parents, all of the issue of Trustors and
all of the issue of the Trustors' parents living at the time this Trust becomes
irrevocable.
All principal and undistributed income of any Trust so terminated shall be
distributed to the then income beneficiaries of that Trust.
OMISSIONS INTENTIONAL
SECTION 6.10. It is Trustors' intention that no relative not provided for in
this trust, whether they be Trustors' ancestor, descendant or lateral relative,
receive any part of Trustors' estate. No subsequent spouse of either Trustor
shall acquire rights as a pretermitted spouse.
ATTACK ON TRUST
SECTION 6.11. Except as otherwise provided in this trust, Trustors have
intentionally and with full knowledge omitted to provide for Trustors' heirs. If
any beneficiary under this trust in any manner, directory or indirectly,
contests this trust or any of its provisions, any share or interest in Trustors'
estate given to that contesting beneficiary under this trust is revoked and
shall be disposed of in the same manner provided herein as if that contesting
beneficiary had predeceased Trustors without issue.
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PROPERTY SUBJECT TO DEBTS
SECTION 6.12. Unless specifically state otherwise in this Declaration of Trust,
any specific gift of property, whether real property or personal property, is
subject to any mortgage, deed of trust, or other lien existing at the date of
death of the surviving Trustor, regardless of any general directive in this
Declaration of Trust to pay debts.
CERTIFICATION OF HUSBAND AND WIFE
We, and each of us, certify that:
1. We, and each of us, have read the foregoing Declaration of Trust;
2. The foregoing Declaration of Trust correctly states the terms and
conditions under which Trust Estate is to be held, managed, administered, and
disposed of by the Trustee;
3. We, and each of us, approve such Declaration of Trust in all
particulars; and
4. As the Trustee named in such Declaration of Trust we, and each of us,
approve and accept the trusts provided for in such Declaration.
5. We have been advised that there is a potential conflict of interest
concerning separate and community property and distribution of the property. We
have been advised that each of us has the right to seek independent advise from
separate attorneys. We choose not to do so and hereby affirm that we are in full
agreement as to the status of our property and distribution thereof, and we have
asked the OLIVER LAW OFFICE to represent both of us in setting up our estate
plan.
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Executed on 6/7/97, at Los Angeles County, California.
/S/ DON A. STEFFENS
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DON A STEFFENS
/S/ CYNTHIA A. STEFFENS
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CYNTHIA A. STEFFENS
CERTIFICATE OF ACKNOWLEDGEMENT OF NOTARY PUBLIC
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On 6/7/97 before me, S.P. Oliver, personally appeared DON A. STEFFENS and
CYNTHIA A. STEFFENS, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and office seal.
Signature /S/ S.P. OLIVER
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Comm. # 1017548
Notary Public-California
Los Angeles County
My Commission Expires on Oct. 17, 1997
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