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EXHIBIT 10.4
[VALHALLA FINANCIAL GROUP, L.L.C. LETTERHEAD]
December 1, 1997
Xxxxxxx X. Xxxxx PAN Environmental Corporation
Xxxxxxx X. Xxxxx, X.X.X. c/o Xxxxx Xxxxxxxx
00000 Xxxxxxx Xxxxx XX 00000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
RE: Extension of Settlement and Option Agreement dated December 7, 1995 and
Joint Escrow Instructions dated December 7,1995 (copies attached) and
additional proposals
Dear Xxxxx:
PAN Environmental Corporation has proven to be a very difficult company to
clean up and resurrect.
Maximum Resources, Inc. pulled out of the deal because of time delays and its
lack of resources to adequately finance the PAN project.
Valhalla Financial Group, L.L.C. has continued to work for PAN to locate a
suitable merger candidate; however, this has proved to be a difficult task as
PAN has a considerable amount of debt to clean up and a substantial amount of
accounting to do in order to obtain certified audits for 1994, 1995, 1996 and
1997.
In addition, we estimate that PAN will require $40-50,000 in cash for
transfer agent fees, accounting fees, certified audit fees, legal fees and
other similar business expenses between now and December 31, 1997, which is our
target date to complete the work of bringing PAN into compliance as a
reporting company, so that we can complete the merger we are working on in the
first week of January 1998.
Accordingly, we propose that you consider the following proposal:
1. That you extend the subject Settlement and Option Agreements to December
31, 1998.
2. That you, for your part in assisting us in generating immediate cash to
complete all tasks to bring PAN into compliance by December 31, 1997,
contribute $15,000.00 in exchange for new issue Rule 144 common shares at
$0.25 per share, or 60,000 shares.
3. That PAN, through its escrow agent, Xxxxxxx Xxxxxxx, will assign to a
separate escrow 189,805 of the 450,000 common shares that it had
authorized for issuance to cover PAN's debt. PAN and/or Xxxxxxx will
negotiate with PAN's creditors to settle out debt as cheaply as possible
and will only sell enough stock to cover such settlements and will return
any stock remaining to PAN'S treasury. A portion of PAN's debt is the
accrued interest on your judgment from March 12, 1996 to March 12, 1998
(the interest from March 12, 1995 to March 12, 1996 having been covered by
the Settlement and Option
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Xxxxxxx X. Xxxxx
December 1, 1997
Page 2 of 2
Agreement dated December 7, 1995). This two-year amount of accrued interest
is as follows:
$161,250.00 $ 39,659.10
Principal Amount Interest, Attorney
@ 25% per annum Fees and Costs
@18% per annum
---------------- ------------------
March 12, 1996 to March 12, 1997 $40,312.50 $ 7,138.64
March 12, 1997 to March 12, 1998 40,312.50 7,138.64
---------- ----------
Total $80,625.00 $ 14,277.28
TOTAL INTEREST $94,902.28
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Unlike PAN's other creditors where PAN and Xxxxxxx are going to negotiate
settlements, PAN intends to fully pay the above accrued interest through
this separate agreement.
4. The terms and conditions of the separate escrow agreement to be set up will
be as follows: That we form a separate escrow to pay off the $94,902.28
with 189,805 common shares of PAN assigned to the separate escrow by PAN
and Xxxxxxx Xxxxxxx and that TCKTS, L.L.C. dba Bristol Media, Ltd.
("Bristol") be granted an option at $0.50 per share on the escrow shares,
good until December 31, 1998. Bristol will be handling investor relations
duties for PAN and this option will serve as an additional incentive to
Bristol to get this debt paid off as soon as possible. If Bristol does not
exercise its option by December 31, 1998, all such shares will become the
sole and separate property of Xxxxxxx X. Xxxxx/Xxxxxxx X. Xxxxx, X.X.X.
(The judgment will not accrue any additional interest until December 31,
1998, the expiration of the option agreement to Bristol.)
If you agree to this proposal, please sign and date below.
Sincerely,
VALHALLA FINANCIAL GROUP, L.L.C.
Xxxxxxxx X. Xxxxxxxx, Managing Member
AGREED: AGREED:
XXXXXXX X. XXXXX PAN ENVIRONMENTAL
XXXXXXX X. XXXXX, X.X.X. CORPORATION
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Xxxxx Xxxxxxxx, President
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PAN Environmental Corporation
Schedule of Disbursements ($15,000)
Pay Now Deferred
---------- --------
Xxxxx Xxxxx, CPA $ 3,000.00
Xxxxxxx Xxxxxxx, CPA 3,750.00 $6,250.00
Transfer Agent (estimated) 2,000.00
Quality Tax Service
accounting and preparation of
10-K's, 10-Q's, and certified
audits for 1994, 1995, 1996 and
1997 6,250.00
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TOTAL $15,000.00 $7,860.00
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ADDENDUM TO AGREEMENTS DATED
DECEMBER 7, 1995 AND DECEMBER 1, 1997
1. It is hereby agreed that all funds received from the initial sale of PAN
Environmental stock controlled by TCKTS, L.L.C. dba Bristol Media,
Ltd., Xxxxx Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx, Managing Members, or its
representatives shall go first to pay off Xxxxx'x $95,000 interest and
$225,000 principal before any other obligations are paid, with the
exception of the $75,000 settlement payments in paragraph 2 below.
2. TCKTS, L.L.C. dba Bristol Media, Ltd., through Xxxxxxx Xxxxxxx, Escrow
Agent, agrees to retire Xxxxx'x $95,000 interest payment and an
estimated $75,000 of settlement payments to retire debt on a pro-rata
basis from the initial sale of 450,000 shares of PAN common stock
issued to cover PAN's debt before Bristol Media, Ltd. receives any
of the excess proceeds above Bristol's exercise price of $0.50 per
share.
3. It is also agreed that Xxxxxxxx X. Xxxxxxxx, Xxxxx Xxxxxxxx, and Bristol
Media, Ltd. will provide the additional funds required to bring PAN
into compliance as a reporting company through 1997 if Xxxxx (Commerce
Bank) contributed $15,000.
DATED this 19th day of December 1997.
XXXXXXX X. XXXXX TCKTS, L.L.C.
XXXXXXX X. XXXXX, XXX dba BRISTOL MEDIA, LTD.
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXXXXX X. XXXXXXXX
------------------------------ ----------------------------
Xxxxxxx X. Xxxxx Xxxxxxxx X. Xxxxxxxx
Managing Member
XXXXXXXX X. XXXXXXXX XXXXX XXXXXXXX
/s/ XXXXXXXX X. XXXXXXXX /s/ XXXXX XXXXXXXX
--------------------------------- -------------------------------
Xxxxxxxx X. Xxxxxxxx, individually Xxxxx Xxxxxxxx, individually
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RECITALS AND AGREEMENT
WHEREAS, REB and KJW obtained a default judgment against defendants PAN,
Xxxxxxxx, Advantage, MRR, Roaul and Xxx on July 12, 1995 in the amounts
respectively of $122,708.00 plus costs of $287.40 and $121,809.00 plus costs of
$287.40, and
WHEREAS, PAN had a total indebtedness of approximately $700,000.00, and
WHEREAS, PAN, to survive, needs to obtain settlements on its debts, and
specifically a settlement on the debts to REB and KJW, and
WHEREAS, Xxxxxxxx is employed as a consultant by Xxxxxxxx to settle out
PAN's debts,
NOW, THEREFORE, the parties agree as follows:
1. REB and KJW each agree to accept 25,000 restricted Rule 144 common
shares of PAN from Xxxxxxxx at an agreed value of $2.00 per share as payment in
full for their assignment to Xxxxxxxx of such judgments.
2. Xxxxxxxx agrees to assign 25,000 shares of his restricted Rule 144
common stock each to REB and KJW as full and final payment for assignment to
Xxxxxxxx the judgments obtained by REB and KJW.
3. Xxxxxxxx agrees to cancel or declare satisfied the REB and KJW
judgments against Advantage, MRR, Xxxxx, Xxx and Xxxxxxxx and to look only to
PAN for payment of such judgements.
4. REB and KJW agree to give Xxxxxxxx an option to purchase the 50,000
shares of PAN Rule 144 common stock at $2.00 per share for 120 days and at
$2.25 per share for 60 additional days.
5. REB and KJW and Xxxxxxxx agree that the 50,000 shares of PAN Rule 144
common stock shall be held in escrow by an escrow agent an agreed upon by REB,
KJW and Xxxxxxxx.
6. In the event that the 50,000 shares of Rule 144 Common Stock is not
assigned by Xxxxxxxx to REB and KJW by no other than six (6) weeks from the
date hereof, Xxxxxxxx agrees to return the assignments of judgement to REB and
KJW.
PAN ENVIRONMENTAL CORPORATION M.R.R. CONSTRUCTION
By /s/ XXXXX XXXXXXXX By /s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxxx, President Xxxxx Xxxxxxx
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XXXXX XXXXXXXX, INDIVIDUALLY ADVANTAGE PARKING LOT SERVICES
/s/ XXXXX XXXXXXXX By /s/ XXX XXXXXXXX
--------------------------------- ---------------------------------------
Xxx Xxxxxxxx
XXXXX XXXXXXX, INDIVIDUALLY XXX XXXXXXXX, INDIVIDUALLY
/s/ XXXXX XXXXXXX /s/ XXX XXXXXXXX
--------------------------------- ---------------------------------------
XXXXXX X. XXXXXX, INDIVIDUALLY XXXXXXX X. XXXXXXXX, INDIVIDUALLY
/s/ XXXXXXX X. XXXXXXXX
--------------------------------- ---------------------------------------
/s/ XXXXXXXX X. XXXXXXXX
---------------------------------------
Xxxxxxxx X. Xxxxxxxx
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ASSIGNMENT OF JUDGMENT
FOR VALUE RECEIVED, the undersigned Assignor hereby assigns, transfers and
sets over to XXXXXXXX X. XXXXXXXX (Assignee) all right, title and interest in
and to the following described judgment:
Case No.: NC15529
JUDGMENT: $122,708.00 plus costs of $287.40
Date: May 22, 1995
Time: 8:30 a.m.
DEPT.: SOUTH G
XXXXXX X. XXXXXX, Plaintiff v. PAN ENVIRONMENTAL
CORPORATION, et al. (copy attached hereto)
The Assignor warrants and represents that said judgment is in full force
and effect and is fully assignable.
The Assignee hereby assumes and agrees to perform all the obligations of
the Assignor under the judgment and guarantees to hold the Assignor harmless
from any claim or demand made thereunder.
SIGNED UNDER SEAL this 25th day of February, 1997.
ASSIGNOR ASSIGNEE
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Xxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxxxxx
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ASSIGNMENT OF JUDGMENT
FOR VALUE RECEIVED, the undersigned Assignor hereby assigns, transfers and
sets over to XXXXXXXX X. XXXXXXXX (Assignee) all right, title and interest in
and to the following described judgment:
Case No.: NC15530
JUDGMENT: $122,809.00 plus costs of $287.40
Date: May 22, 1995
Time: 8:30 a.m.
DEPT.: SOUTH G
XXXXXXX X. XXXXXXXX, Plaintiff v. PAN ENVIRONMENTAL
CORPORATION, et al (copy attached hereto)
The Assignor warrants and represents that said judgment is in full force
and effect and is fully assignable.
The Assignee hereby assumes and agrees to perform all the obligations of
the Assignor under the judgment and guarantees to hold the Assignor harmless
from any claim or demand made thereunder.
SIGNED UNDER SEAL this 25th day of February, 1997.
ASSIGNOR ASSIGNEE
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Xxxxxxx X. Xxxxxxxx Xxxxxxxx X. Xxxxxxxx
