<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
SCHEDULE 13D
(Rule 13d-101)
Under The Securities Exchange Act of 1934
(Amendment No. )(1)
Bionutrics, Inc.
- --------------------------------------------------------------------------------
(Name of issuer)
Common Stock, $.001 par value
- --------------------------------------------------------------------------------
(Title of class of securities)
090946 10 4
- --------------------------------------------------------------------------------
(CUSIP Number)
c/o Edwin T. Markham, Esq.
Parson & Brown LLP
666 Third Avenue, 9th Floor
New York, New York 10017; (212) 551-9875
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
October 31, 1997
- --------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this 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.
(Continued on following pages)
- -------------------
(1) The remainder of this cover page shall be filled 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 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 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).
Page 1 of 12 Pages
<PAGE>
<PAGE>
CUSIP NO. 090946 10 4 13D PAGE 2 OF 12 PAGES
---------------- --- ----
================================================================================
NAME OF REPORTING PERSONS
1 S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Bali Holdings, LLC
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
2 (b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 OO (See Item 3)
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEM 2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
================================================================================
SOLE VOTING POWER
7 1,400,000 shares (See Item 5(b))
NUMBER OF -----------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8 0 shares (See Item 5(b))
OWNED BY -----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9 1,400,000 shares (See Item 5(b))
PERSON WITH -----------------------------------------------------------
SHARED DISPOSITIVE POWER
10 0 shares (See Item 5(b))
================================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 1,400,000 shares of Common Stock (See Item 5 (a))
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 7.6% (See Item 5(a))
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 OO (Limited Liability Company)
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
<PAGE>
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, $.001 par value
(the "Common Stock") of Bionutrics, Inc., a Nevada corporation (the "Company").
The address of the principal executive offices of the Company is 2425 E.
Camelback Road, Suite 650, Phoenix, Arizona 85016.
ITEM 2. IDENTITY AND BACKGROUND.
Bali Holdings, LLC, formerly known as InCon Holdings, LLC (the
"Reporting Person") is a Delaware limited liability company that was formed in
October of 1996 to own and hold the stock, and to manage the affairs, of certain
operating companies engaged in the edible oil and chemical processing business.
The address of the principal business and the principal office of the Reporting
Person is 970 Douglas Road, Batavia, Illinois 60510. There are three (3) members
of the management committee (the "Management Committee") of the Reporting
Person, namely, James M. Belcher ("Belcher"), Niazahmed P. Shaikh ("Shaikh") and
Robert K. Wheeler ("Wheeler"; Belcher, Shaikh and Wheeler sometimes hereinafter
individually referred to as a "Manager" and collectively as the "Managers").
Each of the Managers is a Member of the Reporting Person.
Belcher is a natural person and has a business address of 984
Southford Road, Middlebury, Connecticut 06762. The present principal occupation
or employment of Belcher is as President of Ennar Latex, Inc., with its
principal place of business located at 984 Southford Road, Middlebury,
Connecticut 06762. Belcher is a United States citizen.
Shaikh is a natural person and has a residence address of 1101
Ridge Road, Shorewood, Illinois 60431. The occupation of Shaikh is as an
chemical engineer and his present principal employment is as Director of
Technology of InCon Technologies, Inc., a Delaware corporation formerly known as
BNRX Inc. ("InCon"). The principal place of business of InCon is located at 970
Douglas Road, Batavia, Illinois 60510 and it is primarily engaged in the edible
oil and chemical processing business. Shaikh is a United States citizen.
Wheeler is a natural person and has a residence address of
25103 Kay Drive, Plainfield, Illinois 60544. The occupation of Wheeler is as an
accountant and his present principal employment is with InCon.
Wheeler is a United States citizen.
During the last five years, neither the Reporting Person nor
any Manager has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). During the last five years, neither the
Reporting Person nor any Manager was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting
Page 3 of 12 Pages
<PAGE>
<PAGE>
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the terms and conditions of that certain Agreement
and Plan of Merger (Forward Triangular Merger) among the Reporting Person, InCon
Technologies Inc., a Delaware corporation and wholly-owned subsidiary of the
Reporting Person ("Old InCon"), the Company and BNRX Inc. (n/k/a as InCon), a
Delaware corporation and indirect wholly-owned subsidiary of the Company ("Sub")
dated as of October 31, 1997 (the "Merger Agreement"), at 11:59 p.m. on October
31, 1997 (the "Effective Date"), Old InCon was merged with and into Sub, with
Sub as the surviving corporation under the name InCon, and each outstanding
share of common stock of Old InCon (individually, a "Old InCon Share" and
collectively, the "Old InCon Shares") was converted into the right to receive
1,400 restricted shares of Company Common Stock, or an aggregate of 1,400,000
restricted shares of Company Common Stock (hereinafter, the "Merger").
ITEM 4. PURPOSE OF TRANSACTION.
As disclosed in Item 3 above, pursuant to the terms and
conditions of the Merger Agreement, the Reporting Person acquired 1,400,000
restricted shares of the Common Stock of the Company in a transaction pursuant
to Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), which shares were acquired by the Reporting Person for
investment purposes.
The Merger Agreement also contained (i) non-competition and
non-solicitation covenants of the Reporting Person, (ii) an undertaking by the
Reporting Person to change its name within ten (10) days of the Effective Date
to delete any references to "InCon" and an agreement to cease using the name
InCon, (iii) a covenant not to offer or sell any shares of Common Stock acquired
in the Merger in any offer or sale pursuant to Regulation S adopted pursuant to
the Securities Act prior to the date which is one (1) year following the date of
delivery of such shares to the Reporting Person and (iv) a covenant of the
Reporting Person to maintain its separate existence for a period of one (1) year
following the Effective Date and not to sell, assign, transfer, divide, or
otherwise distribute the shares of Common Stock acquired in the Merger for a
minimum period of one (1) year from the Effective Date and (iv) certain
indemnities made by the Reporting Person in favor of the Company and by the
Company and the Sub in favor of the Reporting Person, for any incorrectness or
breach of such party's (or such party's affiliates, as the case may be)
representations, warranties covenants or agreements contained in the Merger
Agreement or specified Exhibits to the Merger Agreement. Pursuant to the Merger
Agreement, the stock certificate representing the restricted shares of Common
Stock issued to the Reporting Person in the Merger bears, in addition to the
standard Securities Act restrictive legend, the following contractual
restrictive legend, which contractual restrictive legend the Reporting Person
is entitled to have removed after the first anniversary of the Effective Date,
provided that there have been no claims for indemnity against the Reporting
Person under the Merger Agreement: "The issuance of these shares is further
subject to the terms and conditions of that certain Agreement and Plan of Merger
among InCon Holdings LLC, BNRX, Inc. and other parties dated in October 1997 and
the
Page 4 of 12 Pages
<PAGE>
<PAGE>
Assignment and Non-Compete Agreement between Rye Investments, Ltd. and
Bionutrics International, Ltd. dated in October 1997."
The consummation by the parties thereto of the transactions
contemplated by the Merger Agreement was subject to the satisfaction of various
conditions, including, without limitation, requisite approval of the Merger
Agreement and the transactions contemplated thereby by the Board of Directors
of the Company, the obtaining of all requisite governmental and third party
consents, and the execution and delivery by the parties and their affiliates of
various documents, including, without limitation, (i) an employment agreement
among InCon, the Company and Shaikh, in the form of Exhibit 2 thereto, (ii) an
employment agreement among InCon, the Company and Wheeler, in the form of
Exhibit 3 thereto, (iii) an employment agreement among InCon, the Company and
John R. Palmer, a Member of the Reporting Person and former executive officer of
Old InCon, in the form of Exhibit 1 thereto, (iv) a certain assignment and
non-compete agreement, in the form of Exhibit 5 thereto, (v) a certain purchase
agreement with respect to Vitamin E, in the form of Exhibit 6 thereto and (vi)
a certain manufacturing agreement, in the form of Exhibit 7 thereto. In
addition, the obligations of the Company and Sub, on the one hand, and Old
InCon, on the other hand, to consummate the transactions contemplated by the
Merger Agreement were subject to the satisfaction or waiver of various other
conditions, as specified in Sections 7.02 and 7.03, respectively, of the Merger
Agreement. Following satisfaction or waiver of all of such closing conditions,
the Merger was effected, the shares of Common Stock were issued to the Reporting
Person and the Reporting Person changed its name to Bali Holdings, LLC, all on
the October 31, 1997 Effective Date.
As further described in Item 6 below, contemporaneously with
the execution and delivery of the Merger Agreement, the Reporting Person
delivered a written agreement to the Company (the "Letter Agreement"),
to the effect that the Reporting Person would not offer, sell or otherwise
dispose of any shares of Common Stock acquired in the Merger, except pursuant to
an effective registration statement, or in a transaction which in the opinion of
legal counsel is exempt from the registration requirements of the Securities
Act.
Although there is no present intention to do so, any of the
Reporting Person or any Manager may decide to make additional purchases of
Common Stock in the future, either in the open market or in private
transactions, subject to their evaluation of the Company's business, prospects
and financial condition, the market for the Common Stock, other opportunities
available to the Reporting Person and the Managers, prospects for the respective
business' of the Reporting Person and the Managers, general economic conditions,
money and stock market conditions and other future developments.
Depending upon the results of the reviews and the other
factors mentioned above, the Reporting Person or any of the Managers, at any
time, may decide to change its or his intention with respect to the acquisition
and/or retention of shares of Common Stock (or common stock equivalents, as the
case may be), including, without limitation, a determination to increase,
decrease or entirely dispose of its or his holdings of Common Stock (or common
stock equivalents, as the case may be), although, neither the Reporting Person
nor any Manager has any current intention to do so.
Page 5 of 12 Pages
<PAGE>
<PAGE>
The descriptions of the Merger Agreement and the Rule 145
Letter Agreement contained in this Item 4 are summaries and are subject to and
qualified in their entirety by reference to the detailed provisions of the
Merger Agreement and the Rule 145 Letter Agreement, which are Exhibits I and II,
respectively, hereto and incorporated herein by reference.
Except as discussed above in this Item 4 (inclusive of the
provisions of the documents incorporated herein by reference), neither the
Reporting Person nor any Manager has any current plans or proposals which relate
to or would result in the occurrence of any actions or events specified in
clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The aggregate number and percentage of shares of Common
Stock beneficially owned by the Reporting Person and other persons named in Item
2 above are as follows:
The aggregate number and percentage of the Common Stock which
are owned beneficially and of record by the Reporting Person on the date hereof
are 1,400,000 shares of Common Stock, or approximately 7.6% of the 18,314,205
shares of Common Stock that were issued and outstanding on the Effective Date.
The aggregate number and percentage of the Common Stock which
are owned beneficially by Belcher on the date hereof are 1,454,375 shares of
Common Stock, or approximately 7.9% of the 18,314,205 shares of Common Stock
that were issued and outstanding on the Effective Date, which number and
percentage include the 1,400,000 shares owned of record by the Reporting Person,
since Belcher is a member of the Management Committee of the Reporting Person.
The aggregate number and percentage of the Common Stock which
are owned beneficially by Shaikh on the date hereof are 1,454,375 shares of
Common Stock, or approximately 7.9% of the 18,314,205 shares of Common Stock
that were issued and outstanding on the Effective Date, which number and
percentage include the 1,400,000 shares owned of record by the Reporting Person,
since Shaikh is a member of the Management Committee of the Reporting Person.
The aggregate number and percentage of the Common Stock which
are owned beneficially by Wheeler on the date hereof are 1,454,875 shares of
Common Stock, or approximately 7.9% of the 18,314,205 shares of Common Stock
that were issued and outstanding on the Effective Date, which number and
percentage include the 1,400,000 shares owned of record by the Reporting Person,
since Wheeler is a member of the Management Committee of the Reporting Person.
The Reporting Person expressly disclaims beneficial ownership
of the shares of Common Stock owned of record by any of the Managers and each of
the Managers expressly disclaims beneficial ownership of the shares of Common
Stock owned of record by the other Managers.
Page 6 of 12 Pages
<PAGE>
<PAGE>
(b) With respect to each person named in response to paragraph
(a) of this Item 5 of Schedule 13D, set forth below are the number of shares of
Common Stock as to which there is sole power to vote or to direct the vote,
shared power to vote or direct the vote, and sole or shared power to dispose or
direct the disposition:
The Reporting Person may be deemed to have the sole power to
vote (and to direct the vote of) and to dispose of (and direct the disposition
of) the 1,400,000 shares of Common Stock owned of record by it. Notwithstanding
the foregoing, each of Belcher, Shaikh and Wheeler, as the members of the
Management Committee of the Reporting Person, may be deemed to share the power
to vote (and direct the vote of) and to dispose of (and direct the disposition
of) the 1,400,000 shares of Common Stock owned of record by the Reporting
Person.
Belcher has the sole power to vote (and direct the vote of)
and to dispose of (and direct the disposition of) 54,375 shares of Common Stock
owned of record by him. In addition, Belcher, as a Manager of the Reporting
Person, may be deemed to share the power to vote (and direct the vote of) and to
dispose of (and direct the disposition of) the 1,400,000 shares of Common Stock
owned beneficially and of record by the Reporting Person.
Shaikh has the sole power to vote (and direct the vote of) and
to dispose of (and direct the disposition of) 54,375 shares of Common Stock
owned of record by him. In addition, Shaikh, as a Manager of the Reporting
Person, may be deemed to share the power to vote (and direct the vote of) and to
dispose of (and direct the disposition of) the 1,400,000 shares of Common Stock
owned beneficially and of record by the Reporting Person.
Wheeler has the sole power to vote (and direct the vote of)
and to dispose of (and direct the disposition of) 54,875 shares of Common Stock
owned of record by him. In addition, Wheeler, as a Manager of the Reporting
Person, may be deemed to share the power to vote (and direct the vote of) and to
dispose of (and direct the disposition of) the 1,400,000 shares of Common Stock
owned beneficially and of record by the Reporting Person.
As previously stated in Item 5(a) above, the Reporting Person
expressly disclaims beneficial ownership of the shares of Common Stock owned of
record by any of the Managers and each of the Managers expressly disclaims
beneficial ownership of the shares of Common Stock owned of record by the other
Managers.
(c) Except for the acquisition of the 1,400,000 shares of
Common Stock by the Reporting Person pursuant to the Merger Agreement, as more
fully disclosed in response to Items 3 and 4 above, during the past 60 days,
neither the Reporting Person nor any Manager has effected any transaction in the
Common Stock. See Items 3 and 4 above for further details in connection with the
acquisition of the Common Stock by the Reporting Person pursuant to the Merger
Agreement.
(d) Except for any cash or other distributions (which may
include dividends from, or the proceeds from the sale of, securities owned by
the Reporting Person, inclusive of shares of Common Stock) that may be made by
the Reporting Person to its members (inclusive of the
Page 7 of 12 Pages
<PAGE>
<PAGE>
Managers), at the sole discretion of the Management Committee of the Reporting
Person, pursuant to the terms of the Limited Liability Company Agreement of the
Reporting Person, no other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the securities of the Company owned by the Reporting Person.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
As previously disclosed in Item 4 above, the Reporting Person
is a party to (i) the Merger Agreement, which provided for the issuance of the
1,400,000 shares of Common Stock to the Reporting Person, as well as various
covenants and agreements of the Reporting Person concerning restrictions on the
transfer or disposition of such shares of Common Stock during the one (1) year
period following the acquisition thereof and (ii) the Letter Agreement, which
contains a representation and covenant of the Reporting Person not to sell,
assign or transfer any of the shares of Common Stock received by it in the
Merger except (A) pursuant to an effective Registration Statement under the
Securities Act or (B) in a transaction which, in the opinion of independent
counsel reasonably satisfactory to the Company or as described in a "no-action"
or interpretive letter specifically addressing such transaction from the Staff
of the Securities and Exchange Commission, is not required to be registered
under the Securities Act. See Item 4 above for further details with respect to
the provisions of the Merger Agreement.
The descriptions of the Merger Agreement and the Letter
Agreement contained in this Item 6 are summaries and are subject to and
qualified in their entirety by reference to the detailed provisions of the
Merger Agreement and the Letter Agreement, which are Exhibits I and II,
respectively, hereto and incorporated herein by reference.
Except as discussed in this Item 6 and in Item 4 above (in
each case, inclusive of the provisions of the documents incorporated herein by
reference), neither the Reporting Person nor any Manager is a party to any
contract, arrangement, understanding or relationship (legal or otherwise) among
the Reporting Person and the other persons named in Item 2 above or between any
such persons and any other person with respect to any securities of the Company,
including, without limitation, those relating to the transfer or voting of any
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, the giving or
withholding of proxies, the pledge of securities or any other arrangement
involving a contingency the occurrence of which would give another person voting
power or investment power over such securities.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
I. Merger Agreement referred to in Items 3, 4, 5 and 6.
II. Letter Agreement referred to in Items 4 and 6.
Page 8 of 12 Pages
<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
Dated: November 7, 1997
BALI HOLDINGS, LLC.
By: /s/ JAMES L. BELCHER
------------------------------------
Name: James M. Belcher
Title: Member of Management Committee
Page 9 of 12 Pages
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page No.
- ------ ------------ --------
I Agreement and Plan of Merger (Forward Triangular Merger)
dated as of October 31, 1997 among InCon Technologies,
Inc., InCon Holdings LLC (n/k/a Bali Holdings, LLC),
Bionutrics, Inc. and BNRX Inc. (Incorporated by
reference to Exhibit 7(c) to the Form 8-K of the
Bionutrics, Inc. filed on November 7, 1997 with the
Securities and Exchange Commission on EDGAR (Commission
File No. 0-22011)
II Letter Agreement, dated October 27, 1997, between InCon
Holdings, LLC (n/k/a Bali Holdings, LLC) and Bionutrics
Inc. 11
Page 10 of 12 Pages
<PAGE>
<PAGE>
EXHIBIT II
INCON HOLDINGS, LLC
970 DOUGLAS ROAD
BATAVIA, ILLINOIS 60510
October 27, 1997
Bionutrics, Inc.
2425 E. Camelback Road, Suite 650
Phoenix, Arizona 85016
Gentlemen:
The undersigned, a holder of shares of Common Stock, par value
$0 per share ("Company Stock"), of InCon Technologies, Inc., a Delaware
corporation (the "Company") is entitled to receive, in connection with the
merger (the "Merger") of the Company with and into BNRX, Inc., a Delaware
corporation, shares of common stock, par value $.001 per share (the "Parent
Stock") of Bionutrics, Inc., a Nevada corporation (the "Parent"). The
undersigned acknowledges that the undersigned may be deemed an "Affiliate" of
the Company within the meaning of Rule 145 ("Rule 145") promulgated under the
Securities Act of 1933, as amended (the "Act"), although nothing contained
herein should be construed as an admission of such fact.
Pursuant to Rule 145, the undersigned's ability to sell,
assign or transfer the Parent Stock received by the undersigned in exchange for
any shares of Company Stock pursuant to the Merger may be restricted unless such
transaction is registered under the Act or an exemption from such registration
is available. The undersigned understands that in connection with sales of, or
offers to sell, the Parent Stock by the undersigned, the undersigned will not be
deemed an underwriter pursuant to Rule 145(c) if the provisions of Rule 145(d)
are complied with (including, without limitations by compliance with paragraphs
(c), (e), (f) and (g) of Rule 144). The undersigned understands that such
exemptions are limited and the undersigned has obtained advice of counsel as to
the nature and conditions of such exemptions, including information with respect
to the applicability to the sale of such securities or Rules 144 and 145(d)
promulgated under the Act.
The undersigned hereby represents to and covenants with the
Parent that the undersigned will not sell, assign or transfer any of the shares
of the Parent Stock received by the undersigned in exchange for shares of
Company Stock pursuant to the Merger except (i) pursuant to an effective
Registration Statement under the Act, or (ii) in a transaction which, in the
opinion of independent counsel reasonably satisfactory to Parent or as described
in a "no-action" or interpretive letter specifically addressing such transaction
from the Staff of the Securities and Exchange Commission, is not required to be
registered under the Act.
Page 11 of 12 Pages
<PAGE>
<PAGE>
Bionutrics, Inc.
October 27, 1997
Page Two
In the event of a sale or other disposition pursuant to Rule
145, the undersigned will supply Parent with evidence or compliance with such
Rule, such evidence to be in form reasonably satisfactory to Parent. The
undersigned understands that Parent may instruct its transfer agent to withhold
the transfer of any securities disposed of by the undersigned, but that upon
receipt of such evidence of compliance with Rule 145, the transfer agent shall
effectuate such transfer of shares.
The undersigned acknowledges and agrees that the appropriate
legends will be placed on certificates representing the shares of Parent Stock
received by the undersigned in the Merger or held by a transferee thereof, which
legends will be removed by delivery of substitute certificates upon receipt of
an opinion in form and substance reasonably satisfactory to Parent (the
reasonable fees of which counsel will be paid by Parent) to the effect that such
legends are no longer required for purposes of the Act.
The undersigned acknowledges that (i) it has carefully read
this letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of shares of Parent
Stock and (ii) the receipt by Parent of this letter is an inducement and a
condition to Parent's obligations to consummate the Merger.
Very truly yours,
InCon Holdings, LLC
/s/ JAMES M. BELCHER
----------------------------------
Manager
Page 12 of 12 Pages
