SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 16, 1997
DUNES HOTELS AND CASINOS INC.
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
1-4385 11-1687244
(Commission File Number) (IRS Employer Identification No.)
4600 NORTHGATE BOULEVARD, SUITE 130, SACRAMENTO, CALIFORNIA 95834
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (916) 929-2295
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
John B. Anderson ("Anderson"), Edith Anderson ("Anderson's wife"), Cedar
Development Co. ("Cedar"), J.A. Inc. ("JA"), and J.B.A. Investments, Inc.
("JBA" and, collectively with Anderson, his wife, Cedar and JA, the "Anderson
Parties") are involved in litigation (the "Anderson Litigation") with the
Federal Deposit Insurance Corporation (the "FDIC"). This matter is more fully
described in the Company's Form 10-K for the year ended December 31, 1996, see
"Item 3. Legal Proceedings - Federal Deposit Insurance Corporation, et al. v.
John B. Anderson, et al."; Form 8-K, "Item 5. Other Events," dated February 4,
1997; Form 8-K, "Item 5. Other Events," dated March 26, 1997; and Form 8-K,
"Item 5. Other Events," dated July 8, 1997. Until December 11, 1997, Anderson
was the President and Chairman of the Board of the Company and Chairman of the
Board of various subsidiaries of the Company. See "Item 5. Other Events"
below. Prior to the events described herein, Anderson, through his ownership
of Cedar, the parent of Baby Grand Corp. ("BGC") and JBA, owned approximately
4,280,756 shares or 67.2% of the Company's outstanding common stock, $.50 par
value per share (the "Common Stock"). Of those shares (i) 3,000,000 shares
(the "FDIC Pledged Shares") have been pledged as collateral in favor of
entities of which the FDIC is a successor and/or assign, and (ii) 1,280,756
shares (the "BGC Pledged Shares") had been pledged as collateral in favor of a
subsidiary of the Company. The BGC Pledged Shares have been ordered to be
turned over to a Special Master appointed by the United States District Court,
District of Nevada (the "Nevada District Court"), as more fully described in
"Item 5. Other Events" below.
In July 1997, the FDIC won a motion in the Anderson Litigation before the
Nevada District Court to enforce its security interest in the FDIC Pledged
Shares. On December 12, 1997, the FDIC filed in the Nevada District Court an
emergency motion to acknowledge the FDIC's right to act by unanimous written
consent and to authorize the FDIC to so act with respect to Cedar, BGC, JBA and
JA. On December 16, 1997, with the consent of all parties to the Anderson
Litigation, the Nevada District Court issued an order declaring that the FDIC
has the right to act by written consent with respect to Cedar, BGC, JBA and JA.
Because of the Nevada District Court's order, the FDIC has the power to
exercise voting rights with respect to the FDIC Pledged shares, which represent
47.1% of the outstanding Common Stock. Because the FDIC is able to exercise
voting rights with respect to the FDIC Pledged Shares, the FDIC is able to
exercise substantial influence with respect to the election of the entire Board
of Directors of the Company and all matters submitted to stockholders. The
FDIC is able to significantly influence the direction and future operations of
the Company, including decisions regarding future financings (which could
involve the issuance of additional Common Stock or other securities) and
decisions regarding the day-to-day operations of the Company's real estate and
agricultural operations. If the Nevada District Court ultimately determines
that the FDIC has authority to exercise voting rights with respect to the BGC
Pledged Shares, then the FDIC would have the power to vote 67.2% of the
outstanding Common Stock of the Company. In such event, the FDIC would be able
to control, rather than only significantly influence, the election of the
entire Board of Directors of the Company and all matters submitted to
stockholders.
In a letter dated January 15, 1998, to the Company, the FDIC demanded that
the Company hold a special meeting of the stockholders of the Company by
January 30, 1998, and at which meeting the FDIC intends to vote or cause BGC
and JBA to vote the FDIC Pledged Shares to remove the existing board of
directors of the Company and to elect a designee or designees of the FDIC to
constitute the new board of directors of the Company. The FDIC further stated
that no corporate action should be taken by the Company which is inconsistent
in any manner with the rights of the FDIC.
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In response to the FDIC's demand of January 15, 1998, the directors of the
Company on January 27, 1998, held a board meeting and met with representatives
of the FDIC. The Company stated that in light of regulatory requirements under
state and federal securities laws, the Company is unable to hold a special
shareholder meeting by January 30, 1998. The Company indicated that it is
willing to discuss the procedures and effects of a stockholder meeting with the
FDIC, but pending more information from the FDIC that it was deferring the
formal setting of the meeting date and record date for voting purposes. The
FDIC has not yet responded to the Company.
Further, the FDIC has successfully obtained the approval of the Nevada
District Court to authorize the liquidation of the various corporate entities
included among the Anderson Parties. There can be no assurance that the FDIC
would not take similar action with respect to the Company and its subsidiaries.
Regardless of what action, if any, the FDIC should determine to take with
respect to the Company, if there is a change of more than 50% of the ownership
of the outstanding Common Stock (taking into account the action of the FDIC as
well as certain other changes that have occurred over the prior three-year
period), there will be a change of control of the Company for purposes of the
Internal Revenue Code of 1986, as amended (the "Code"). At September 30, 1997,
the Company had a net operating loss carry forward ("NOL") of approximately $46
million. The Board of Directors believes that this NOL represents a valuable
asset of the Company. It is unclear whether or not the events described in
this report have resulted in a change of control under the Code. If the FDIC
obtains the power to vote the BGC Pledged Shares in addition to the FDIC
Pledged Shares, there would be a change of control under the Code. It is
possible that the Internal Revenue Service will take the position that the
events described in "Item 5. Other Events" below or other events within the
prior three-year period, taken together with the events described in this "Item
1. Changes in Control of Registrant," have already resulted in a change of
control under the Code. If there is a change of control under the Code, the
value of the Company's NOL would be materially adversely reduced or eliminated.
There can be no assurance that a change of control will not occur or has not
already occurred.
The Company is unable to determine the consideration paid by the FDIC for
the Common Stock because the FDIC Pledged Shares were part of a collateral
package in connection with a Debtor-Creditor Agreement between Anderson and the
FDIC.
ITEM 5. OTHER EVENTS
On November 26, 1997, the Company entered into a Loan Purchase Agreement
(the "Note Sale Agreement") with Anderson, as trustee of the John J. Anderson
Family Trust (the "Trust"). At such date, Anderson was President and Chairman
of the Board of the Company and through his ownership of Cedar was the sole
shareholder and President of BGC. The Note Sale Agreement provided for the
sale of a note (the "BGC Note") issued by BGC payable to M & R Investment
Company, Inc. ("MRI"), a wholly-owned subsidiary of the Company. The BGC Note
is described in detail in the Company's Form 10-K for the year ended December
31, 1996. See Item 1. "Business - Other Activities - Certain Loans - Baby
Grand Corp." The BGC Note had a principal balance at the date of the Note Sale
Agreement of approximately $1.9 million and was due on December 1, 1997. It
was carried on the Company's books at approximately $100,000, an amount which
the Company believed to be its net realizable value. The sale price of the BGC
Note was $320,000 plus a possible contingent bonus payment of $50,000. In
connection with the Agreement, MRI assigned to the Trust all of its rights
pursuant to that certain Amended and Restated Pledge Agreement (the "Pledge
Agreement") dated November 2, 1992, made by BGC in favor of MRI. Pursuant to
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the Pledge Agreement, BGC had granted the Company a security interest in the
BGC Pledged Shares as collateral for the BGC Note.
The Note Sale Agreement was unanimously approved by the Audit Committee of
the Board of Directors and by seven (7) of the Directors of the Company. The
Note Sale Agreement was approved because the Board of Directors and the Audit
Committee had been advised by counsel that the imminent foreclosure on the BGC
Pledged Shares by MRI, which represent approximately 20.1% of the outstanding
Common Shares of the Company, when coupled with the then likely exercise of
voting rights by the FDIC of the FDIC Pledged Shares, which represent 47.1% of
the outstanding Common Stock of the Company, would result in a change of
control under the Code. Such change of control would result in a significant
reduction, or the complete loss, of the NOL. See "Item 1. Changes in Control
of Registrant" above. The Board of Directors and the Audit Committee had been
advised by counsel that, only through Anderson maintaining control over the BGC
Pledged Shares could a change of control be avoided and that the Trust was the
only entity controlled by Anderson that, at the time the Note Sale Agreement
was approved, was free from claims of the FDIC that might adversely effect the
ownership of the BGC Pledged Shares. The Note Sale Agreement was approved to
avoid the loss of the NOL. Anderson did not participate in the Board's
deliberation or vote with respect to the Note Sale Agreement. Anderson
represented to the Board that (i) he was aware of his fiduciary obligation to
the Company, and (ii) he was unaware of any transaction pending or in prospect
which would enhance the value of the Note above the sale price to the Trust.
On December 2, 1997, subsequent to completing the Note Sale Agreement, it
came to the Company's attention that BGC had transferred to the Trust, in
satisfaction of the BGC Note, assets having an estimated value, determined by
BGC, ranging from $1,192,443 (low estimate) to $1,612,632 (high estimate). The
assets transferred consisted of the BGC Pledged Shares, the net equity in a
residence occupied by Anderson in Yolo County, California, and $580,000 in
cash.
By letter to Anderson, as trustee of the Trust, dated December 8, 1997,
the Company demanded that Anderson confirm to the Company that the transfer of
the assets from BGC to the Trust did in fact occur. In addition, the Company
demanded that all assets received by the Trust from BGC, less the amount paid
to MRI for the purchase of the BGC Note, be turned over to MRI. The Company
further advised Anderson that the Company reserves all rights and remedies,
including possible claims for compensatory and punitive damages, the imposition
of a constructive trust, and rescission.
On December 15, 1997, Larry L. Bertsch, the Special Master previously
appointed by the Nevada District Court, filed with that court an emergency
motion seeking (1) to set aside the allegedly fraudulent transfers of assets by
the Company to the Trust and by BGC to the Trust; (2) to freeze assets held by
the Trust; and (3) to schedule an order to show cause why Anderson, James H.
Dale (the Company's Secretary and a Director and the President of MRI), Kent
Neville Calfee (counsel to Anderson who drafted the Note Sale Agreement
documents), and Calfee & Young (Calfee's law firm) should not be held in
contempt by the Nevada District Court.
On December 16, 1997, the Nevada District Court ordered that Anderson, as
trustee of the Trust, return to BGC the $580,000 in cash. The Nevada Court
further ordered that the residence in Yolo County, California remain in the
Trust until further order of the Nevada District Court and that the BGC Pledged
Shares be turned over to the custody of the Special Master until further order
of the Nevada District Court. The Nevada District Court gave the parties until
January 9, 1998, to submit responses to the Special Master's Motion. The
<PAGE>5
Company submitted a response on that date challenging the allegation in the
Special Master's Motion that MRI fraudulently transferred between $872,443 and
$1,292,632 to the Trust. The response also opposes the unwinding of the Note
Sale Agreement and any order that would deny the Trust ownership of the BGC
Pledged Shares. If the Nevada District Court issues such an order, a change of
control in the Company will occur. See "Item 1. Changes in Control of the
Registrant" above. At this time, the Company is unable to predict the outcome
of the motion.
The Company intends to defend vigorously the Special Master's request for
a contempt citation against James H. Dale, and in subsequent filings made with
Nevada District Court, the Special Master and FDIC have omitted Mr. Dale in
seeking contempt and sanctions. On December 11, the Company's board of
Directors terminated Anderson as president and Chairman of the Board. The
Company is considering the possibility of bringing legal action against
Anderson and the Trust. Additionally, the FDIC has caused Anderson to be
removed from his positions as Director and officer of the various Anderson
Parties; those positions are now occupied by representatives of the FDIC.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT
(c) Exhibits
EXHIBIT NUMBER DESCRIPTION
10.1 Loan Purchase Agreement dated November 19, 1997, between M & R
Investment Company, Inc. and John B. Anderson, as Trustee of
the John J. Anderson Family Trust
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DUNES HOTELS AND CASINOS INC.
(Registrant)
Dated: February 3, 1998 By: /S/ JAMES H. DALE
James H. Dale, Secretary/Treasurer
LOAN PURCHASE AGREEMENT
DATE: November 19, 1997
PARTIES: M & R INVESTMENT COMPANY, INC. ("M&R"); and
JOHN B. ANDERSON, as Trustee of the John J. Anderson Family Trust
("Trust").
RECITALS:
A. M&R is the holder of that certain promissory note dated November
2, 1992, in the amount of Two Million Six Hundred Fifty Thousand Dollars
($2,650,000.00) (the "Note") executed by Baby Grand Corp., a Nevada
corporation ("Baby Grand").
B. The Note is secured by an Amended and restated Pledge Agreement
between M&R and Baby Grand dated November 2, 1992 (the "Pledge Agreement").
C. The Note and Pledge Agreement shall be referred to herein as the
"Loan."
D. The aggregate unpaid balance of the Loan as of November 1, 1997,
was One Million Nine Hundred Thirty-Six Thousand Five Hundred Ninety-Three
Dollars ($1,936,593.00).
E. Based upon knowledge and information known to the Trust,
including its Trustee, the Trust has elected to purchase the Loan. The
Trust has not relied upon any statement, representation, or warranty of M&R
or any other entity or person in electing to proceed with this transaction.
F. M&R is willing to sell the Loan to Trust provided that such sale
is made on a non-recourse basis, without any warranties or representations
whatsoever (other than as specifically set forth herein) on the terms
hereinafter set forth.
AGREEMENTS:
In consideration of the terms and conditions hereinafter set forth and
other good and valuable consideration, the parties agree as follows:
1. AGREEMENT TO SELL. M&R hereby agrees to sell, assign, transfer,
and convey to Trust, without warranty, recourse, or representation other
than expressly stated herein and Trust and agrees to purchase from M&R,
without warranty, recourse or representation other than as specifically
stated herein, on the terms and conditions stated herein, all of the right,
<PAGE>2
title, and interest of M&R, as of the Closing Date, in and to the Loan and
each and every document encompassing the Loan.
2. PURCHASE PRICE.
A. The purchase price shall be Three Hundred Twenty Thousand
Dollars ($320,000.00) ("Purchase Price") plus a potential Contingent Bonus
Payment of Fifty Thousand Dollars ($50,000.00) as described in Paragraph B,
below. The Purchase Price shall be paid into escrow in cash and
distributed to M&R as follows:
(i) Two Hundred Thousand Dollars ($200,000.00) shall be
payable at the close of escrow upon delivery to the Trust of one million
thirty-six thousand one hundred sixty (1,036,160) shares of Common Stock of
Dunes Hotels and Casinos Inc., held by M&R pursuant to the Pledge
Agreement;
(ii) The balance of the Purchase Price, One Hundred Twenty
Thousand Dollars ($120,000.00) shall be distributed to M&R on a pro rata
basis ($.4906/share) as the remaining shares held by M&R pursuant to the
Pledge Agreement, two hundred forty-four thousand five hundred ninety-six
(244,596) shares are delivered to the Trust.
(iii) In the event any of the shares to be delivered
pursuant to subparagraph 2.A.(ii) are not delivered to the Trust on or
before January 1, 1998, the Trust reserves the right to withdraw any
remaining funds from escrow and shall be obligated to pay said sums to M&R
only at such future time as said shares are delivered to the Trust. Except
as set forth in this subparagraph 2.A.(iii), the Trust shall under no
circumstances be entitled to a refund or return of any portion of the
Purchase Price or Contingent Bonus Payment paid hereunder.
B. In the event the Trust receives any payment on the Note in
December, the Trust shall pay to M&R, immediately upon receipt of any such
payment, the sum of Fifty Thousand Dollars ($50,000.00) (the "Contingent
Bonus Payment"). The Contingent Bonus Payment is contingent upon the Trust
receiving said payment. Except for the Contingent Bonus Payment M&R shall
have no interest in or right to any future payments on the Note.
3. TRUST'S DUE DILIGENCE AND REPRESENTATION AND WARRANTY. The Trust
is a sophisticated purchaser with respect to the Loan and represents and
warrants to M&R that it has adequate information concerning the business
and financial affairs of Baby Grand to make an informed decision regarding
the purchase of the Loan. The Trust reaffirms and agrees that except as
set forth specifically herein it has not relied upon any representation or
warranty of M&R.
The transfer of the Loan which is provided for in this Agreement is
expressly made without recourse, warranty or representation of any kind,
express or implied (except as specifically set forth by Section 4, below.
The warranties and representations which are disclaimed hereby include, but
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are not limited to, all warranties and representations with respect to any
of the following:
A. The legality, validity, enforceability, collectibility or
sufficiency of the Loan;
B. The performance by Baby Grand of its obligations under the
Loan;
C. The existence or non-existence of any of the following with
regard to any of the Loan: (i) legal or equitable defenses; (ii) any
counterclaim; (iii) claims or rights of setoff, reduction, recoupment,
impairment, avoidance, disallowance, or subordination;
D. Any certificate, statement, representation or warranty made
by Baby Grand in connection with the Loan;
E. The value of the Collateral securing the Note;
F. The priority or perfection of liens (if any) securing the
Loan;
G. The accuracy, completeness, sufficiency or timeliness of the
filing of any document with any governmental authority; and
H. Financial condition of Baby Grand, or the willingness of
Baby Grand to satisfy its obligations under the Loan.
The trust hereby warrants, represents, and acknowledges that as of the
date hereof, and as of the closing date:
3.1 AUTHORITY. The Trust is a trust duly formed and validly
existing under the laws of the State of California and John B. Anderson, as
Trustee, has all requisite power and authority to enter into this Agreement
and to perform its obligations hereunder. The execution, delivery and
compliance by the Trust with the terms of this Agreement, and the
consummation by the Trust of the transactions contemplated hereby have been
duly and validly authorized by all necessary actions on the part of the
Trust.
3.2 ENFORCEABILITY. This Agreement, upon its execution and
delivery, will constitute the valid, legal and binding obligations of the
Trust enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws effecting creditors' rights
generally and by equitable principles restricting the availability of
equitable remedies.
3.3 NO CONFLICTS. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
performance of its obligations hereunder by the Trust will conflict with,
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or constitute a violation of, the Trust's organizational documents, or any
provision of any law, rule, regulation, or order to which the Trust is
subject, or conflict with or result in a breach of or constitute a default
(or an event which would constitute such a default with notice, or lapse of
time, or both) under any of the terms, conditions, or provisions of any
agreement or instrument to which the Trust is a party or by which it is
bound, or any order or decree applicable to the Trust (including, without
limitation, Borrowers), is required in connection with the execution,
delivery, and performance by Buyer of its obligations hereunder or the
consummation of the transactions contemplated hereby.
3.4 NO ADVERSE PROCEEDING. The Trust has no actual knowledge or
actual notice of any pending or threatened proceedings against or affecting
the Trust or its assets, before any federal, state, or other governmental
agency, authority, administrative or regulatory body, arbitrator, court, or
other tribunal, foreign or domestic, which, singly, or in the aggregate,
could materially and adversely affect the Trust's ability to consummate the
transactions contemplated hereby and to perform its obligations thereunder.
3.5 INDEPENDENCE OF TRUST. John B. Anderson is the Trustee of
the Trust but has no claim of any nature or kind as a beneficiary of the
Trust. No creditor of the Trustee, in his individual capacity, has ever
made a claim or demand against the Trust or the Trust's assets and Trustee
is aware of no legal basis for any such claim or demand. Trustee has not
contributed any assets into the Trust. The Trust was created and
originally funded by John J. Anderson and Elvene Anderson with assets in
which the Trustee had no interest or claim whatsoever.
3.6 NET WORTH OF TRUST. The Trust has a net worth as of the
date of this Agreement in excess of Seven Hundred Fifty Thousand Dollars
($750,000.00).
4. M&R'S REPRESENTATIONS AND WARRANTS. M&R makes the following
representations and warranties, and no others, to the Trust:
A. The aggregate unpaid balance of the Loan as of November 1,
1997, was One Million Nine Hundred Thirty-Six Thousand Five Hundred Ninety-
Three Dollars ($1,936,593.00);
B. M&R is the sole owner and holder of the Note and has not
previously conveyed or transferred any interest therein.
5. On or before November 25, 1997, escrow shall close. The escrow
holder shall be any qualified entity or firm selected by M&R. Prior to the
close of escrow, the parties shall do the following:
A. The Trust shall deposit the sum of Three Hundred Twenty
Thousand Dollars ($320,000.00);
<PAGE>5
B. M&R shall deposit one million thirty-six thousand one
hundred sixty (1,036,160) shares of stock held pursuant to the Pledge
Agreement;
C. M&R shall deposit the Note, the Pledge Agreement, an
endorsement in the form of Exhibit "A" attached hereto ("Endorsement") and
an assignment in the form of Exhibit "B") attached hereto ("Assignment").
The parties shall instruct the escrow holder to do the following at the
close of escrow:
(i) Distribute Two Hundred Thousand Dollars ($200,000.00)
to M&R;
(ii) Deliver the original, duly executed Endorsement and
Assignment to the Trust together with the Note and Pledge Agreement;
(iii) Deliver instructions adequate to allow the escrow
holder to perform as set forth in Paragraph 2.A.(ii), above, together with
such other instructions as may be reasonably required to close this
transaction.
6. INDEMNITY. The Trust hereby agrees to indemnify, defend, and
hold M&R harmless from any and all future claims, demands, liability or
costs, including reasonable attorneys' fees, relating to or resulting from
any breach or violation of any of the representations and warranties of the
Trust set forth above or any subsequent claims by creditors of the Trust or
the Trustee, individually, attempting in any way to deprive M&R of the
benefits of this Agreement by asserting claims against or on behalf of the
Trust or the Trustee.
7. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties with respect to the transfer by M&R and
acquisition by the Trust of the Loan. This Agreement shall not be changed,
waived, discharged or terminated orally, and, instead, may only be changed,
waived, discharged r terminated by an instrument in writing, signed by the
party against whom enforcement of the change, waiver, discharge or
termination is sought.
8. COUNTERPART. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures hereto and hereby
were upon the same instrument. All such counterparts, held together,
constitute but one and the same document. Such counterparts may be
delivered pursuant to facsimile transmission, and such transmission(s)
shall be accepted in place of the original document.
9. SEVERABILITY. Each party of this Agreement is intended to be
severable. In the event that any provision of this Agreement is found by
any court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this
Agreement shall continue in full force and effect.
<PAGE>6
10. RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties
under this Agreement are cumulative. The rights of each of the parties
hereunder shall not be capable of being waived or varied other than by an
express waiver or variation in writing. Any failure to exercise or any
delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right. Any defective or partial
exercise of any of such rights shall not preclude any other or further
exercise of that or any other such right. No act or course of conduct or
negotiation on the part of any party shall in any way preclude such party
from exercising any such right or constitute a suspension or any variation
of any such right.
11. TIME OF ESSENCE. Time shall be of the essence of this Agreement.
12. GOVERNING LAW. This Agreement is in all respects to be governed
by the laws of the State of California and of any actions to enforce the
terms of this Agreement, such actions shall be commenced and maintained
within the State of California.
13. CONTINUING OBLIGATIONS. The obligations of the Trust and M&R
hereunder shall survive the closing of escrow.
14. CONFIDENTIALITY. Except to the extent necessary for M&R and/or
Dunes Hotels & Casinos Inc. to comply with securities reporting
requirements or as may be ordered by a court of competent jurisdiction, the
parties shall keep the terms and conditions of this Agreement confidential
and neither party nor any affiliated entity or person shall disclose any of
the terms and conditions hereof. Provided, however, nothing herein shall
limit or restrict efforts by the Trust or any successor in interest from
taking any and all reasonable and lawful action to collect sums due under
the Note and/or enforce its rights in all collateral securing the Note.
IN WITNESS WHEREOF, the parties have executed this agreement the day
and year first above written.
M&R: M & R INVESTMENT COMPANY, INC.
By: /S/ JAMES H. DALE
James H. Dale, President
Trust: /S/ JOHN B. ANDERSON
JOHN B. ANDERSON, as Trustee of the John J.
Anderson Family Trust
