Exhibit 10.24
8 June 2000
Mr. Maurice Mallette and
Judith A. Mallette
11744 East Sand Hills Raod
Scottsdale, AZ 85255
Mr. Pasquale Rizzi
17837 North 53rd Street
Scottsdale, AZ 85254
Re: OneSource Technologies, Inc., stock issuances relative to its acquisition
of Cartridge Care, Inc.
Sometime ago when I realized Don was hopelessly buried I took over a number of
tasks that I'd previously assigned to him. One such task was the accountability
for all stock issuances of Company stock. The backlog has taken me until now to
adequately sort things out well enough to determine what stock has been issued
and what stock has yet to be issued in the subject transaction.
In this regard, I've found that the shares due you haven't been fully tendered.
Specifically, it looks like the only shares issued in connection with the
subject transaction were to Maurice's IRA account. Accordingly, I'm pressing to
order the issuance of all remaining shares required by this transaction as soon
as possible.
As you know the "Folino thing" has put a cloud over the Cartridge Care, Inc.
("CC") merger. While in the end I, like you, firmly believe the final outcome
will not change our opinion that we did the right thing in acquiring CC, it has
called attention to the need to appropriately determine the "real" value of the
company we acquired. As you'll recall our agreement was that the shares called
for in the purchase agreement would be adjusted to reflect any decrease in the
purchase price as ordered by the Court. In this regard at year-end, as part of
the independent audit the auditors and we agreed that a value of approximately
$370,000 best reflected our present estimate of such a price.
Consequently, until a final settlement of the matter is reached, I propose as
Chairman of the Company, that the remaining shares up to the $370,000 value be
issued to you immediately and shares related to the balance yet to be resolved
be issued in your names but deposited and held in an escrow account. I have
asked our mutual counsel, Jim Deer, to accept the charge to hold the stock and
he has agreed to do so with appropriate agreed written instructions.
<PAGE>
Mallette - Rizzi
8 June 2000
Page 2
The tabulation below shows the number of shares that have been issued as well as
those ordered for your respective accounts. The table also delineates between
shares ordered for immediately issue and those held in escrow pending final
court word.
Upon your agreement, the issuance instructions will stipulate that the latter
shares be held in an escrow account at the law offices of James Deer, ESQ. and
not distributed until a resolution of the Folino case enables us to make a final
determination of the real value of CC at the date of merger. In the interim and
pending final resolution, you will vote all issued shares but escrow shares will
be held as "non voting" until released.
<TABLE>
<CAPTION>
Total Shares Actual Shares Shares Shares To Be
Shareholder Name Expected Issued To Be Issued Escrowed
---------------------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Maurice and Judith Mallette 943,750 506,250 75,694 361,806
Pasquale Rizzi 943,750 None 581,944 361,806
----------------------------- ------------ ------------- ------------ ------------
</TABLE>
To effect this issuance and escrow I request your acknowledgement and acceptance
of this arrangement, by signing the acknowledgement spaces below and returning a
copy of this letter to my attention.
Best regards,
/s/ Jerry Washburn
Jerry Washburn
Acknowledged and agreed:
/s/ Maurice Mallette /s/ Judith Mallette /s/ Pasquale Rizzi
--------------------- ------------------- ---------------------
Maurice Mallette Judith Mallette Pasquale Rizzi
