Congressman Robert Walker Pleading July 7 1991 Important

ADVANCED MEDIA GROUP Page 1 of 43 05.04.2007

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mWS NIG- x2609 Air Date: May 23,1991 well covers of T h W m h y Evening Post. Lancaster. Pennsylvania was also the home of Inter- 1 F ~ightlinePFinancia1 Times"

e Arms Sales Report national signal and Control, a homegrown business that was a major regional employer and whose founder and chairman, James Garren, was a generous regional 1 benefactor.

~OPPEL: [volce+verI Iraqi Scud missiles. a ~ d e , in- =TON BOND-, ~ . n ~ ~ t e ~ urb- b w e : v t e ~ d , for the imffwtive. But the Iraqi G a m n was pmbably the p a t e s t philanthropist in the

was well on its way to developing a far more decade of the '8Os that Lancaster has ever known. pry and accurate ballistic missile, one that in- JON LYONS, kwr City Councilmur: There $pu carry nuclear warheads, and federal i n v e s t i ~ mmething u&lowable about the nature of the being business, but it was sort of thought to be, "Okay, that's ed to learn that that

[on camera] But it's not what ISC made or supplied a t has made it the target of federal prosecutors for

b t to illustrate a cover-up, but try to be patient with us. ; What we're going to report tonight is part of an ongoing b t i g a t i v e effort by ABC News Nightline and T h Fi- wid Times of London. It is only one piece of what we Weve to be a much larger fabric, but let's focus on what a w b e r of sources, both inside and outside the C.S. gov- mrdent, have already confumed for us. Third, these shipments went on, for years, with the ]edge of Central Intelligence Agency officials.

[on c m m ] What's more, federal investigators say knuary 16th, when U.S. aircraft began they have gwd reason to believe that some of t h s

technology, including ballistic missile tschnoloa shipped illegally from ISC to South Africa, was in turn sold to Iraq, where it wound up as part of Saddam Hus- sein's military machine that the U.S. fought against in

BEEtMAN, Defense Foreign Policy If these reports are true, and I take it

a1 of evidence to suggest that they are, renegade operation on our hands for

whom the rule of law means nothing, for which the of this, the radar backing system, the cluster bomb representatives apparently have no control,

bolo^, the ballistic missiles components, were sold by have no ability to direct policy, have no abiliry to say lhrth Africa to Iraq, but most of what they sold the South what they do. &cans had purchased from a company here in the United G-MIE*: [vokoverl all legally, if F k s .

covertly, back in 1974. That's when the National O ~ ~ r s of the CIA h e w about those sales from the -riv Agency, a v . ~ . intellipnce -t,

''w States to South ~ f r i e a , knew what going, knew asked ISC help it complete b j & & a chain of el=- it W a s p t t i n g there. Even though such sales were and mnic fistebg posrp - at s U t h fiUIYs 8R against the law, the CIA did nothing to stop them. Simonstown Naval Station. South Africa was using

Nightline mmspondent Jeff Greenfield has details of th, posts to follow soviet lub-ne o~ he u o ~ that Was compiled by reporters from ABC News cap, ofm Hop. md The Financial Times. To ensure swecy, ISC and the NSA made sure the ! nFF ABC News: [voke-OL'erl m e n shipmenb could not be traced back to them. They creat- about the Ameriean heartland, you're talking ed a ,-.-.]led G~~~~ systems Associates. In

'but a place like h c a r t e r , Pennsylvania. It's Amish fa& this company wm nothing more than a post offiffice count^. It's small-town Main Street. It's Norman Rock-

-1- 0 %. -- -


at John F. f C e ~ e d y Auport. Gamma was a cutout. a, VAN RAAB: In other words, it's a straw-man com- p m ~ , which is technically not part of a government, but itS to the wishes of the government. GREENFIELD: [voice-owr) But this sanctioned covert

stopped in 1977 when President Carter, a

, used to monitor a missile's performance. MILHOLUN, The Wisconsin Project: This

law enforcement, rignt up until the ?nd of 1988. Mr. VAN RAAB: I wodd be shocked and I would feel that I had been lied to if any sort of operation were going in which the agency or any other intelligence or- ganization was trying to abuse Customs by going around it or going through it. GREENFEW: luoiceoverl Indeed, the laws on the books, passed by the Congress, couldn't have been clearer in banning the sale of American military tecfiaology to South Africa.

[on m r a l But there's another, more disturbing twist to this tale of illegal arms shipments. Once the American-made hardware went to South Africa, it didn't stop there.

[voice-over] South Africa, after all, has a major arms industry and, as former ambassador Herman Nickel says, it was an industry in the mid-1980s very hungry for customers. HERMAN NICKEL, former Ambassador to South Africa: I think that the South Africans at that stage, you know, were quite keen to sell almost anywhere. GREENFIELD: [voice-over] Including Iraq. For in- stance, ISC sold South Africa fuses for cluster bombs, one of the most effective killing machines around. South Africa took that technology and in turn sold hundreds of

ousands of bomb fuses to Iraq, a deal brokered by Ch' ean arms merchant Carlos Cardun, one of the big-

s t suppliers of weapons to a grateful Saddam Hus- k. In other instances, American technology went direct-

! ly from South Africa to Iraq. What kind of technology?

/ Well, look again at this incredible footage from the bombing of Baghdad on January 16th. That, sap one American law enforcement oficial, that was some of the stuff that got throu& to Iraq through the ISC shipments to South Afiica, in this case electronic components of a South African radar system guiding Iraq's anti-aircraft guns.

[on camera] Finally, federal investigators say, even American missile bdmology made its way from Lan- caster, Pennsylvania to South Africa to Iraq. Had the Gulf war not intervened, Saddam Husaein would have been well on the way to developing an operational Con- dor 2 missile, giving him, with the critical help of American-born technology, the power to deliver chemi- cal or even nuclear weapons anywhere in the Middle East. I'm Jeff Greenfield for Nightline.

KOPPEL: We contacted the CIA this morning and gave them the broad outlines of the story you've just heard and seen, and requested a reaction. At 7:15 this evening, the agency faxed to u s the foilowing statement: 'The Central Intelligence Agency declines to comment on these allegations concerning the activities of the International Signal and Control Corporation, however, it ia the CIA'S policy to cooperate fully with the Department of Justice on matters relating to possible vioIatious of U.S. laws. We suggest that Xightline' contact the Department of Justice r e w n g these allegations."

That statement, as you may have n o t i d , is silent on %

.. : 't A '2, 3 '


le allegations of CIA misconduct but, as suggested, we ~ntacted Justice. I t was by then, of course, a f k r business

- ours, but a Justice Department spokesman returned our all. His statement was even simpler than the CIA'S: 'It is ,or somethmg we would comment on one way or the

-

ther." When we come back, well discuss the implications of

his story. &mmercral bred]

- IOPPEL: Joining us now here in our Washington bureau r e Senator Arlen Specter of Pennsylvania, who served on be Senate Intelligence Committee during the years when ;he weapons transfer took place, Jeffrey Kemp, a member

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,f the Reagan administration's National Security Council and author of a forthcoming book on the global arms race, Stephen Bryen, former deputy undersecretary of defense

- whose job was to stop the transfer of weapons technology, and one of the principal reports in this investigation, Lionel Barber of The F i r m i d Times of hndon .

Senator Specter, as I just noted, you were a member of - the Intelligence Committee during this period. Should such

an operation, had it been sanctioned, have come to the at- ,tention of your committee or some other congressional com-

- mittee? Sen. ARLEN SPECTER (R), Pennsylvania: If in fact there was such an operation - and l'm answering a hypo- theticd question because we only have the allegation - it

- would be the responsibility of the CIA to tell the In- telligence Commit- under applicable law. They'd have to

,give a timely notification. -

KOPPEL: Would you be free to tell us if indeed such notification was made? Sen. SPECTER: No, I would not be free to telI you one way or the other, because all of that would be secret, but I

- can give you this generalization that in the period from De- cember of 1986, after IranIContra broke, there was a very intense effort made by CIA to be extremely careful on noti- 1 fiestion of coven activities.

- KOPPEL: You and I spoke the other day and we were dis- cussing in general terms the inclination of the Bush ad-

I ministration now to be responsive to this kind of thing, in - other words, to make sure that Congress has known, and if

memory serves me correctly, you were suggesting that the

1 administration really is disinclined to do that. Sen. SPECTER: Well, I believe that the President is in- - clined to make known covert operations. There has been a

refusal on the part of counsel to the President, and I'll be specific. Boyden Gray, the lawyer who is counsel to the

- I Resident, who very strenuously resisted an effort to have a statutory notification put into law. The oficials around

I the President and the National Security Counal, according to my understanding - and I've had it from very - authoritative sources - were willing to have a statutory

I 48-hour notice, but Mr. Gray, Boyden Gray, the counsel to the President, was adamant in refusal on the ground that -

it would impinge on the President's constitutional

I authority. KOPPEL: Mr. Bryen, I know you're somewhat skeptical just of the general notion that this kind of weapons

technology would flow fro. ne United S t a t e to South Af- rica. Ia that correct? STEPHEN BRYEN, former Pentagon Well, I'm more skeptical about it flowing to Iraq. I worked on the Condor case. In fact, I tried to block it. And I think we mor- tally wounded that project. And I never heard of any technology coming out of South Africa. The primary source was West Germany and Italy and, to a lesser extent, Ar- gentina. KOPPEL: But what about the notion of this kmd of technology flowing from the United States to South Africa? Mr. BRYEX: Well, we tried very hard during this period to interdict any technology that we knew of going to South Africa or to any other country that was blocked from receiving military technology &om the United States. And this is a story that I never have heard before. KOPPEL: Does i t surprise you that weapons technology would flow, perhaps even without the knowledge of senior officials a t the Defense Department? Mr. BRYEN: Nothing ever surprises me nowadays, but it's certainly not a story that we knew of at the time that I served in the Reagan administration. KOPPEL: Dr. Kemp, give us your sense of what justification- because indeed, the whole notion, (A), of weapons technology flowing from the United States to South Africa and then (B), as Mr. Bryen suggests, that technology flowing from South Africa to Iraq, on the face of i t doesn't make a whole lot of sense. The South Africans and the Israelis, for example, are very close. The Israelis and the Iraqis are and have been for a long time bitter enemies. How could one justify something like that, even from a purely logical point of view? GEOFFREY ECEMP, Carnegie Endowment for Inter- national Peace: Well, I have no idea what the real story is, but certainly in the '709, remember, we were concerned about the Cape route, the flow of oil around the Cape route and Soviet warships, so that could be a reason for having some understanding with the South Africans. I think that was the reason. In the 1980s, it could- it might have had something to do with us wanting to know what the South Micans knew about Lsraeli nuclear weapons and what the cooperation was, if any, between South Africa and Israel. That's purely hypothetical on my case but, you know, in the past technology has been used as a hard currency to get things or to persuade governments to do things that it might not otherwise want to do. This may be a case where that was going on. EOPPEL: All right. We're going to take a break. When we come back I'd like to go to my colleague Lionel Barber and nail down a few loose ends here. Well continue our con- versation in a moment. [Commercial break] KOPPEL: Continuing now with Lionel Barber of The Fi- ruzncid Times.

Lionel, some of our guests here are skeptical, which is understandable, becaw so were you and I when we frrst began getting wind of this story. Speak for a moment, if you would, about the documentaxy evidence that rela~es specifically to the transfer of the technology from the


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a break and we'll continue in a moment. 4/12/91 #2580 U.S. Troops' Pullout Leaves Refugees ICommercd break] in Crisis XOPPEL: Stephen Bryen, let's bring our discussion 4/15/91 a 5 8 1 Did Reagan/Bush Campaign Make around to M a y ' s events and the general spread of Hostage Deal? weapons technology. There is a move afoot now to lower 4/16/91 t2582 Bush Aid for Kurds 1 Late U.S. A d to some of the bamers in trading with Communist countries. Saddam War Machine

-- So if you would, perhaps you could bring us around to a 4/17/91 Y2583 'ANY Times," NBC Name P a l ~ Beach concluding point having to do just with the general spread Rape Victim of technology and how, when we transfer weapons to one 4/18/91 X2584 Questions Rise Alongside Kurdish

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country, we have very little control over what happens to Refugee Camps those weapons then. 4/19/91 a 5 8 5 Pay-Per View TV Mr. BRYEN: Well, right at the moment, in fact tomorrow, 4/22/91 f2566 The Fires of Kuwait we will be releasing with our allies an incredible array of 4/23/31 #2587 Who Should Pay for Government Of- technology that can be used to make weapons. Itll be ficials' Travel? released to the Communist countries like theSoviet Union 4/24/91 #2588 Kurds Suspicious of Saddam's New and China. As as you are well aware, the Soviets supplied

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Iraq with the bulk of their weapons, and the Chinese have 4/25/91 # been selling missiles and other sensitive equipment in the 4/26/91 # Middle East. So where we're going is utterly in the wrong direction, it seems to me, in terms of developing a coherent

- - control regime over weapons and particularly over

weapons technology that threatens, I think, the world peace. XOPPEL: And Dr. Kemp, a closing comment from you on

- the same subject, if you would. Dr. KEMP: We can't control everything. We've got to de- cide what are the most dangerous and most important items. Nuclear weapons, surface-&surface missiles, let's focus our efforts on those. I think we can get cooperation 5i with the Russians and possibly the Chinese and certainly the Europeans. If we try to cover everything, we're not 5/8/91 going to get anywhere, we're going to antagonize a lot of people and we'll end up much worse than we are today. 51919 1 #2599 Cyclone Disaster in Bangladesh KOPPEL: Senator Specter, 30 seconds. 5110191 #2600 The Danger of Lawn Pesticides

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Sen. SPECTER: I think we ought to do our best to cover 5/13/91 #2601 'Political Correctness" on V.S. everything. I wouldn't accept that assertion at all, that we Campuses can't cover everything. If it can be used for weapon 5114191 (12602 Troubled Times in South Africa proliferation, it ought to be stopped and it's an absolute 5115191 #2603 What Price Success? outrage, what has happened in the past and what con- 5/16/91 #2604 Controversy over Bush CIA Nominee tinues to happen. And we ought to try to stop everything Roben Gates related ro the proliferation of weapons. 5/17/91 #2605 AIDS and Organ, Tissue Transplant KOPPEL: Gentlemen, I thank you all very much, Dr. Safety Kemp, Mr. Bryen, Senator Specter, Lionel Barber. As I in- 5120/91 #2606 Huge CEO Salaries in Hard Times dicated a t the top of this broadcast, this is part of a con- 5/21/91 #2607 w i v Gandhi Assassinated tinuing puzzle that we are trying to piece together. Well 5/22/91 iY2608 New Information on KAL 007 Shoot-

- have further reports in the future. down That's our report for tonight. I'm Ted Koppel in

Washington. For all of us here at XBC News, good night. Full Back List Available: Send $1 and a self-addressed 45-cent stamped envelope to: Nightline Back List, 267

Copyright 0 1991 American Broadcasting Companies, Inc. Broadway, New York, NY 10007.

Research Assistance: Give us any topic and well quickly - tell you about every related transcript we have from 20

major TV programs. Just call (212) 227-7323. =th your major credit card, we can then send you those transcripts

RECENT TRANSCRIPTS AVAILABLE: immediately. - fSend $4 for each tmnscript ora'ered) 3 4/11/91 #2579 Formal Gulf Cease-Fire Doesn't Help

Refugees ADVANCED MEDIA GROUP Page 35 of 43 05.04.2007

. On Saturday morning, I went t o t h e American Helix f a c i l i t y - " - t o p i c k up some computer hardware. Upon a t tempt ing t o unlock t h e s i d e

. - d o o r e n t r a n c e wi th my 24 hour a c c e s s s e c u r i t y ca rd , t h e door would no t unlock. Assuming something may have been wrong wi th t h e s e c u r i t y system, I drove t o t h e r e s i d e n c e of A 1 Thornburg, t h e eng ineer f o r American Helix. I asked A 1 t o d r i v e over t o s e e i f h i s access ca rd was operable .

We e n t e r e d t h e b u i l d i n g wi th A l ' s access ca rd and found t h a t my a c c e s s ca rd was inoperab le throughout t h e b u i l d i n g . A 1 t h e n s a i d t h a t "S tan , your locked o u t " . I s a i d , "I was i n he re u n t i l 5:OOpm l a s t evening and my a c c e s s ca rd worked f i n e . I proceeded t o p ick up t h e t a p e back-up and s a i d " L e t ' s go. I d o n ' t want t o be a r r e s t e d f o r burglary , l i k e I was 3 y e a r s ago. I d o n ' t know whpt t h e He l l i s going on".

A s we were l e a v i n g t h e computer room, Dave Dering appeared. This was q u i t e unusual , s i n c e myself and A 1 Thornburg o f t e n work on Saturdays , and Dave Dering has no t been i n t h e p l a n t on a Saturday f o r t h e p a s t few months. I s a i d t o Dave "Dave, why am I locked o u t ? " He s a i d " t a l k t o J i m Boyer". I , q u i t e empha t i ca l ly s a i d , "why am I locked o u t ? " . "Stan, y o u ' l l have t o t a l k t o Jim". I s a i d "Dave, you a r e t h e p r e s i d e n t ,

- my c o n t r a c t i s wi th you, not Jim Boyer". Dave s a i d "Now, Stan, j u s t calm down. Th i s i s n ' t a conspiracy a g a i n s t S tan Caterbone." I t o l d A 1 t h a t I ' m g e t t i n g o u t of he re . This i s t o o much l i k e 3 y e a r s ago. I d i d n ' t do anything, and I c a n ' t understand what i s going on.

We l e f t t h e b u i l d i n g , and A 1 was e s p e c i a l l y s u s p i c i o u s of t h e e v e n t s and e s p e c i a l l y why suddenly Dave Dering showed up a t t h e b u i l d i n g on t h a t p a r t i c u l a r Saturday, on ly moments a f t e r we a r r i v e d a t t h e bu i ld ing .

. . . . . . . . . . . . . . . . . . . . . . . 5

Af ra id of t h e "LOCKOUT" and t h e l a c k of any even t s o r a c t i v i t i e s t h a t would e x p l a i n such a d r a s t i c and damaging a c t i o n of American Hel ix , I faxed a l e t t e r t o Dave Dering c i t i n g him i n breach of our bus iness agreement and i n conspiracy t o e l i m i n a t e o r sabatoge my bus iness and my repu ta ion . The f a x a l s o conta ined a cc: t o High execu t ives , t h a t was never s e n t . . . . . . . . . . . . . . . . . . . . . . .

TO : All Personnel

FROM : David D. Dering

DATE : January 22, 1991

SUBJECT: Stan Caterbone, Advance Meida

Please be advised that American Helix and Stan' Caterbone have defined a new working relationship for 1991.

Stan Caterbone will be furthering the development of "Advance Media Group" and utilizing American Helix as his manufacturing source for CD-ROM discs.

He will be acting as an OUTSIDE representative for our services to the CD-ROM industry.

L

Stan is not an employee and therefore does not have a security card and should only be in our facility during normal working hours, which are Monday thur Friday, 8 : 0 0 - 5 : O O .


Dave gave three (3)-reasons ror the "LOCKOUT", although never willing to engage in any real conversations relating to those issues:

1. The computer system went down, causing a problem in the security system.

2. Jim Boyer did not reinstall my access identification number for the security system.

3. Jim Boyer was to talk to you on Friday, the day before the lockout, concerning eliminating your access to the facility.

Dave said "Jim Boyer said that he can take over the CD-ROM business -- no problem".

Dave talked about trust and who to trust. Dave reluctantly agreed to continue our relationship, howevef only on an arms legnth basis. I was no longer allowed in the building except during normal business hours. I was no longer to have a private office.

Dave Dering never addressed the issues or the circumstances that preceeded the "LOCKOUT", and never addressed the reasons as to why there was any reason to modify the agreement concerning my business American Helix that was established back in June of 1990. There were

. no disputes, activities, or conversations that gave any indication that American Helix, Dave Dering, or Jim Boyer intended to change or modify our relationship. . . . . . . . . . . . . . . . . . . . . . .

Stan Caterbone called a meeting Allon Lefever to discuss the following: d

1. The R.R. Donnelly merger and acquisition of American Helix.

2. The "LOCKOUT".

Allon asked questions regarding my contact with R.R. Donnelly and Barry Glick. I quickly made it clear that Barry Glick contacted me in December after seeing my advertisement in the CD-ROM Enduser magazine, pulblished by Linda Helgerson. Barry was elated to see someone in the local area that was involved with CD-ROM technologies and asked to visit with me. Allon asked many questions about Donnelly and Barry Glick. I made it clear that during our visit, and from the discussions regarding the strategic plan of Donnelly, I suggested that there may be an opportunity for a merger or aquisition with American Helix. I also discussed the capabilities for the facility to be a dedicated CD-ROM manufacturing facility. I notified Allon that Barry was awaiting a call from the next day concerning the appropriate contact to discuss the subject of an acquisition. Allon assured me that the High's would not contact Donnelly directly and would await a call from Barry Glick.

Regarding the "LOCKOUT" I gave the three reasons that Dave Dering had provided during our meeting a few days before. I told Allon that after "I had built a strong foundation for the CD-ROM business -- everybody suddenly wants it back, six months ago, nobody wanted anything to do with it, not to mention the capital that I had invested in it".

Allon Lefever was only concerned with why I had sent the Fax. "Why did you send the Fax? I just don't understand why you sent the Fax". Allon was not concerned with or wanted to discuss the issue of why I was "LOCKED OUT".

- Allon asked me the problems surrounding American Helix and what solutions I thought could help restore the company to stability. I discussed the lack of systems, the lack of a strong business foundation, and most


importantly the lack of management. He asked me about Dave Dering and I responded "Dave Dering is an engineer, not a manager, he has no real management skills".

Allon then asked me how to approach the meeting with Donnelly. I suggested that they just sit and listen to their ideas.

I asked Allon to assure me that this meeting would be kept confidential between the two of us. He said that "I will have to tell Dave sooner or later, and that he was not going to get in the middle of the two of us". . . . . . . . . . . . . . . . . . . . . . .

Allon Lefever had requested a meeting to be certain that I was not representing the High's or Americdn Helix. I had told Allon that I was not concerned with the merger issue, that the Advanced Media Group was continuing discussions with Barry Glick on various information technologies, that were strictly my business. 1,also infomred him that Barry Glick had told me that "Stan, we are quite honestly more interested in you rather than the facility or American Helix". I also informed Allon that Barry asked if I would make a trip the Chicago, the corporate headquarters to discuss the technologies and specifically the manufacturing technologies of CD-ROM.

I made it perfectly clear that the two (2) contacts for a merger'or acquisition that I had provided to the High's were contacts that approaced me. I also notified them that Dave Dering had requested me to look for a joint venture partner as far back as November.

I also made it perfectly clear that I would not solicit any leads . unless I was to be compensated. Alion suggested that it may help me

to look for contacts, and I quite emphatically restated my contentions that I would not do any work without compensation.

Jim Tritch aknowledged that I was the only person responsible for the developement of the CD-ROM business, and the only person with any real technical expertise in information technologies and CD-ROM, and that neiter American Helix or High Industries had the capabilities to manufacture CD-ROMs without me.

Jim Tritch also admitted that the Advanced Media Group, Ltd., would have to be a purchased separately in the case of any merger or acquisition of American Helix.

Jim Tritch also stated that in his initial meeting with Donnelly that they like me and wanted to continue to work toward a business relationship.

Both Allon and Jim stated that they would like to continue to work with me in the CD-ROM business.

- . . . . . . . . . . . . . . . . . . . . . .

Through an employee that was present during the meeting, I had learned that Dave Dering "spent 20 minutes "slimming" you and calling you a RUNAWAY EX-CONVICT THAT WOULD END UP IN JAIL SOON". Dave Dering also told the group that I had almost ruined the company, and I should not be trusted.

I was also informed the previous day that David Dering was telling persons that the reason that I was out of town in December was because "I was on the run from authorities". . . . . . . . . . . . . . . . . . . . . . .


j -In Infnrmotion Technologies Company

April 26, 1991

David D. Dering American Helix Technology Corporation 1857 Colonial Village Lane Lancaster, PA 17601

Dear Dave:

As per our previous meeting of earlier this morning, the following will serve as a summary of issues discussed and issues to tiefine and clarify for the future:

1. CD-ROM Mastering - Because of the lack of cooperation from DMIIAnaheim, you will contact the Huntsville plant for a meeting to consider moving CD-ROM to that plant. This issue must be resolved before submitting a Bid for the new NIST bid, due on May 10th.

2. Common Mission - We have both verbally committed t n c c \ r ! t i n u i ~ a working relationship that \\,ill dc\.clo!- American Helix as a dominant CD-KOM replication facility. We, the Advanced Media Group, Ltd., will continue its business and develope the CD-ROM replication business as a joint venture with American Helix. 3. Terms & Conditions - We have agreed that for the short term, the current terms and conditions, as stated in our agreement of November 2, 1990, will suffice.

3. Long Term Issues - We have discussed several issues that will need to be resolved over the long term in order to accomplish our mission. Some of the issues would be: corporate identity; marketing efforts; electronic bulletin boards; and production systems.

5. American Helix Restructure - In the event that American Helix is restructured, the Advanced Media Group, Ltd., must be included in the restructure. In pursuing investors, American Helix must be certain that the Advanced Media Group, Ltd., its products, and its services, must be represented as a separate entity. Otherwise, a pre-negotiated deal must be made between High Industries, American Helix, and the Advanced Media Group, Ltd., in order to disclose and insinuate that the Advanced Media Group, Ltd., is included or represented in any such negotiations.

1857 Colonial Village Lane


6. CD-ROM Exclusivity - In regards to the marketing and selling of CD-ROM products and services, the Advanced Media Group, Ltd., must have the exclusive rights to operate its business as a joint venture partner of American Helix, without competing with any affiliated persons of American Helix. It must be understood that any inquires to American Helix will ' b e handled by myself, o r affiliated Advanced Media Group personnel. It must be understood that I have made a considerable financia! investment and sacrifice to develop the CD-ROM business, our relationship will be contingent upon the guarantee of exclusivity of all CD-ROM business. If we elect to involve other personnel, such as Jim Boyer or Marc Finegold, it must at our discretion.

Dave, the sole reason for the above is simply this, if we are going to accomplish our mission, it will be imperative that we spend our time accordingly, and most important without distractions. If Marc or Jim were to solicit CD-ROM business, I would have to spend my time looking for a more secure business relationship that will not compete with my business. I have enough competition in the industry. I don't need i t from my partners! (Remember Vreeland 1 I . . \>!!,

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J U L Y 29 E37 -

AUG 03 87

T E L E P H O N E CONFERENCE W I T H S. C A T E R E O N E P R E P A R A T I O N O F L E T T E R T O S. C A T E R E O N E T E L E P H O N E CONFERENCE W I T H S . C A T E R B O N E * O U T S I K i E O F F I C E CONFERENCE WIT14 S . C A T E R b O N E I N C L U D I N G TRAVEI- T E L E P H O N E CONFERENCE W I T H J * MEHAN. T E L E P H O N E C0NFEF:ENCE W I T H YOI-I?NDA AN11 P H I L CATERE;ONE. T E L E F I 4 O N E CONFERENCE W I T H S. C A T E R 8 0 N E TELEF'HONE CONFERENCE W I T H G * N E I D I G i R E V I E W O F DOCUKENTSj C O N F E R E N C E W I T H R. M C A L L I S T E K AND A * B O N S I O V A N N I KE: C H O I C E O F C O U R T S j T E L E C O N F E R E N C E W I T H D + C A M P B E L L AND S* CATEREONE L E G A L R E S E A R C H RE: U I V E R S I T Y J U R I S D I C T I O N AND VENUE; C O N F E R E N C E W I T H S + C A T E R B O N E j TELECONFERENCE W I T H T * LGNZA T E L E F H O N E CONFERENCE WITH G * N E I D I G < O ' H A R A A T T O R N E Y ? , F'e CATERHONE,' G* N E I I I I G AND S . CATERBONE

TOTAL HOURS F O R S E R V I C E S RENDERED

BALANCE IlUE

PAYMENT IS I I U E U P O N RECF-IF 'T* INTEREST WILL BE CHARGE11 AT TClE R A T E O F 1% PER MONTH ON E A L A N C E S R E M A I N I N G UNf'AIKl A F T E R T H I R T Y R A Y S ,


- -- Financial Management Group Ltd. --- - W Eden Park 11, 1755 Oregon Pike Lancaster. P A 17601 ---I - ' .,A' W A , , L G ~ Y I X ~ w GROW L ~ O 717-569-4100 800-521-8567 -322-1 128 [ P A only]

ROBERT E. KAUFFMAN PRESlDENT

Mr. Millard Johnson 3 4 5 0 Duff Avenue Lancaster, PA 17601

Dear sill:

I am sorry that I was not in the office last Thursday or Friday to accept a telephone call. I did, however, receive your message that you were going to take some kind of "action".

In order for Financial Management Group to be successful, !I've returned to the full time work of building the firm. We are referring all questions regarding Stanley J. Caterbone to our counsel Craig Russell of Russell, Kraft, Gruber and Huber (569- 5 3 8 3 ) . Should your counsel need to speak with us, he may call Mr. Russell.

{I have been told that Mr. Patterson no longer represents the Caterbone family and no action is pending on their &ehalf concerning Stanley.

Best regards,

~obekt E. Kauffman

I President REK: lmk

Sccurltles Onered through Planner's Securkles Group. inc A Reglnered &okerlDealer Member SlPC Member NASD 1 4 3


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