DMITRY BOURIAK; VISION INTERNATIONAL Civ. Action No. › shared › news › documents ›...

UNITED STATES DISTRICT COURTFOR THE DISTRICT OF SOUTH CAROLINA

(CHARLESTON DIVISION)

ALAN M. GRAYSON and the AMG TRUST,

Plaintiffs,v.

CHARLES CATHCART; EVELYN CATHCART;YURIJ DEBEVC; SCOTT CATHCART;SCOTT AND WHITNEY CATHCARTF AMIL Y TRUST; CHARLES HSIN;DERIVIUM CAPITAL (USA), INC.;VERIDIA SOLUTIONS LLC;SHENANDOAH HOLDINGS LTD.;VERI STEEL, INC.; PTS INTERTECH, INC.;AQUILIUS, INC.; OPTECH LIMITED; PAULANTHONY JARVIS; NIGEL HARLEY WOOD;COLIN BOWEN; BANCROFT VENTURES LTD.;BANCROFT VENTURES (UK) LTD.;SPENCER PARTNERS, LIMITED;ISLE OF MAN ASSURANCE LTD.;DMITRY BOURIAK; VISION INTERNATIONAL Civ. Action No.PEOPLE GROUP, P.L.; TOTAL ECLIPSEINTERNATIONAL LTD.; BRYAN JEEVES;ALEXANDER JEEVES; KRISTINA PHELAN;THE JEEVES GROUP; JEEVES HOLDINGS LTD.;JAVELIN LTD.; LEXADMIN TRUST REG.;ST. VINCENT TRUST SERVICE LTD.;ST. VINCENT TRUST COMPANY LTD.;WINDWARD ISLES TRUST COMPANY LTD.;SELBOURNE TRUST COMPANY LTD.;PELICAN TRUST COMPANY LTD.;JEEVES GROUP (ASIA) LTD.;WACHOVIA SECURITIES, INC.; andJOHN DOES i through 10.

Defendants.

2:07-cv-00593-DCN Date Filed 02/28/2007 Entry Number 1 of 90

COMPLAINT

i. As described in detail below, Plaintiffs Alan M. Grayson ("Mr. Grayson") and the

AMG Trust (collectively, "Grayson" or "Plaintiff') provided approximately $29 milion

in stock to certain of the Defendants. This served as collateral for what these Defendants

described as "stock loans" that were extended to Grayson. These Defendants promised to

retu the collateral at the time ofloan matuity. In fact, these Defendants had no

intention ofretung the collateral at matuity. Instead, they sold the collateral

immediately. The proceeds from the collateral were used for two puroses: (a) to pay

extravagant and undisclosed "fees" and "commissions" to some Defendants, and (b) in a

classic Pouzi scheme, to fund "stock loans" extended to others, including some of the

Defendants. A substantial part of the fuds was deliberately transferred to offshore

entities, to make it difficult to recover it, and tens of millions of dollars were passed from

one shell entity to another and another, to make them hard to trace. The Defendants

bilked almost 1000 "stock loan" customers out of approximately $1 bilion in collateraL.

As loans matued with substantial amounts due, certain Defendants provided fictitious

excuses as to why the collateral was not available, such as imaginary "hedging problems"

and "disputes with the lender." In fact, however, the Defendants systematically looted

the value of the collateral, and took no substantial steps whatever to meet their known

obligations upon loan maturity. In short, the Defendants created and operated a

fraudulent enterprise that cheated Grayson and others out of hundreds of milions of

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dollars. Due to the Defendants' fraudulent scheme, Grayson already has lost milions of

dollars due under loans that have matued, and stands to lose even more as new loans

reach matuity, with no hope of the collateral being returned to him. Grayson's total

losses presently exceed $30 million.

PARTIES

2. PlaintiffMr. Grayson is a citizen of Florida. He entered into "stock loan"

agreements with Derivium Capital LLC ("Derivium Capital"), i and with Defendant

Derivium Capital (USA), Inc. ("Derivium USA").

3. Plaintiff the AMG Trust is a citizen of the Cook Islands. Mr. Grayson assigned

his rights under many of the "stock loans" to the AMG Trust, with the express written

approval ofDerivium Capital and Derivium USA.

4. Defendants Charles Cathcar and Evelyn Cathcart are citizens of New York.

Charles Cathcar conceived, organzed and managed the "stock loan" scheme, and

received millons of dollars from it. He is an owner of Derivium Capital, Derivium USA

and Defendant Shenandoah Holdings Ltd. ("Shenandoah"). Evelyn Cathcart is the

recipient of assets that Charles Cathcart transferred to her, to defraud Charles Cathcar's

creditors.

i Derivium Capital has petitioned for bankptcy. Due to the "automatic stay" in bankptcy, Derivium

Capital is not a defendant here. Both Mr. Grayson and the AMG Trust have been identified as creditors in theDerivIum Capital banptcy. Grayson reserves the rights to assert claims and actions against Derivium Capital inbanptcy cour (or, if permitted, elsewhere).

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5. Defendant Yurj Debevc, a/k/a Yuri Debevc, is a citizen of South Carolina. He

was in charge of "stock loan" operations. He is an owner ofDerivium Capital, Defendant

Veridia Solutions LLC ("Veridia") and Shenandoah.

6. Defendant Scott Cathcar is a citizen of Californa. He was in charge of "stock

loan" marketing. He is an owner of Derivium Capital, Derivium USA and Shenandoah.

7. Defendant the Scott and Whtney Cathcar Famly Trust, a/a the Whitney and

Scott Cathcar Family Trust (the "Cathcart Trust") is, on information and belief, a

Californa entity. On information and belief, Scott Cathcart formed and fuded ths trust

with money that he converted though the stock loan scheme. He used this money to,

among other thgs, buy marina property in San Diego.

8. Defendant Charles Hsin, a/a C.H. Hsin ("Hsin"), is a citizen of New York. Hsin,

like Charles Cathcart, formerly worked at Citibank. Hsin participated actively in various

aspects of the stock loan scheme, including the concealment of the proceeds of the sale of

collateral provided for stock loans. According to Charles Cathcar, Hsin was the head of

First Security Capital of Canada Inc. ("FSC-Canada"), a Derivium Capital entity that the

Cathcars, Debevc and Hsin employed to divert and hide those proceeds. Hsin also heads

Optech Limited ("Optech"), a Hong Kong corporation formed and operated for the same

puroses.

9. Randolph Anderson ("Anderson") and Patrick Kelley ("Kelley") were employees

ofDerivium Capital, Derivium USA and Veridia. Anderson was Derivium's Director of

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Client Services, and the account executive in charge of Grayson's account. He raked off

hundreds of thousands of dollars of "commissions" from Grayson's "stock loans," and

milions of dollars overall. Kelley assisted Debevc in "stock loan" operations. Neither

Anderson nor Kelley is named as a Defendant in this Complaint, but Grayson reserves

the rights to amend ths Complaint to add them as defendants, and to initiate action

against them in other fora.2

10. Derivium Capital is a South Carolina entity, with its principal place of business in

South Carolina. Derivium Capital was the vehicle by which the relevant Defendants

marketed "stock loans" between 1997 and 2002. As explained above, Derivium Capital

is not a defendant here, due to its bankptcy petition.

Derivium USA is a Delaware entity, with its principal place of business in South

Carolina. Derivium USA was the vehicle by which the relevant Defendants marketed

"stock loans" between 2003 and 2005. Together, Derivium Capital and Derivium USA

are referred to as "Derivium."

11. V eridia Solutions LLC is a South Carolina entity, with its principal place of

business in South Carolina. Veridia was the vehicle by which certain Defendants

serviced "stock loans" beginning in 2003.

12. Shenandoah Holdings Ltd., a/k/a Shenandoah Holdings LLC, is, on information

and belief, a Nevada entity, with its principal place of business in South Carolina.

2 The same thing is tre of Jerr Pryor, Robert Brandenburg, Charles Robertson (a manager of the "Local

Businesses," as described below), George Gordon and Jonathan Sandifer, inter alia.

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Shenandoah was, in essence, a slush fud to which certain Defendants diverted at least

$40 millon from the proceeds of the sale of the collateral for the "stock loans" of

Grayson and others. Among other things, Shenandoah "lent" Charles Cathcart $5

millon, without requiring any collateraL.

13. Veristeel, Inc. ("Veristeel") is a Delaware corporation, with its principal place of

business in Nevada. Scott Cathcar controls Veristeel. Scott Cathcar diverted, to

Veristeel, equipment, intellectual property and other assets that Shenandoah had funded.

14. PTS Intertech, Inc. ("PTS Intertech"), is a North Carolina corporation, with its

principal place of business in Nort Carolina. It was incorporated in or around i 995, and

dissolved in or around 2001. Aquilius, Inc. ("Aquilius") is a South Carolina corporation,

with its principal place of business in South Carolina. It was incorporated in or around

i 994, and dissolved in or around 2004. Charles Cathcart, Debevc and others caused

millions of dollars in stock loan fuds to be dumped into PTS Intertech and Aquilius.

They then, on information and belief, strpped those assets and dissolved the companies.

15. Collectively, Charles Cathcart, Debevc, Scott Cathcart, the Cathcart Trust, Hsin,

Derivium USA, Veridia, Shenandoah, Veristeel, PTS Intertech and Aquilius are referred

to as the "U.S. Defendants."

16. Defendant Optech is a Hong Kong corporation, with its principal place of business

in Hong Kong. On information and belief, Optech is owned and controlled by Hsin.

Optech registered as a California lender. Optech and the U.S. Defendants swapped

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millons of dollars in assets back and fort, in an effort to insulate them from the claims

of "stock loan" borrowers, inter alia.

17. Defendants Paul Anthony Jaris, Nigel Harley Wood and Colin Bowen are, on

information and belief, citizens of Great Britain. They were directors of Defendants

Bancroft Ventures Ltd. and Bancroft Ventures (UK) Ltd. (collectively, "Bancroft").

Jarvis was Bancroft's Chief Financial Offcer. Until recently, Wood was the Managing

Director of Bancroft. Jarvis, Wood and Bowen actively engaged in the "stock loan"

scheme, corresponding and communicating on a regular basis with other Defendants (in

South Carolina and elsewhere), some borrowers, and govemment offcials in the United

States, on behalf of Bancroft. They prepared and disseminated numerous false statements

to borrowers and governent offcials in furtherance of the scheme. Jarvis met with

Scott Cathcart in London in or around 2001, in furterance of the scheme. Bowen met

with Charles Cathcart in Miami in or around 2002, in fuherance of the scheme.

i 8. Defendant Bancroft Ventues Ltd. is an Isle of Man entity, with its principal places

of business in the Isle of Man and in South Carolina. Defendant Bancroft Ventures (UK)

Ltd. is, on information and belief, a United Kingdom entity, with its principal places of

business in London and in South Carolina.

19. Defendant Spencer Parters, Limited ("Spencer") is, on information and belief, an

Isle of Man entity, with its principal places of business in the Isle of Man and in South

Carolina.

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20. Before 2003, the U.S. Defendants utilzed Bancroft (and, at an earlier time,

Diversified Design Associates, Ltd. ("DDA")) as the undisclosed "lender" for their

"stock loans." Beginnng in 2003, they depicted Bancroft (and, on information and

belief, sometimes Optech) as the "lender," even though Charles Cathcart has testified that

Bancroft was not contractually obligated to retu the collateral for the "stock loans" at

matuty. In reality, Bancroft was an offshore shell company whose accounts acted as the

repository for much of the proceeds from the sale of "stock loan" collateraL. Bancroft did

business with "stock loan" borrowers in South Carolina, and thoughout the United

States.

2 i. Defendant Isle of Man Assurance Ltd. ("IOMA") is, on information and belief, an

Isle of Man entity, with its principal places of business in the Isle of Man and in London.

On information and belief, Jaris, Wood and Bowen are principals ofIOMA. IOMA

claims to have an expertise in "asset protection," i.e., in this case, the hiding of assets

from creditors. On information and belief, Jarvis, Wood and Bowen were acting as

agents of IOMA, and acting within the scope of their agency, when they performed the

acts alleged in this complaint. Therefore, IOMA is jointly and severally liable with

Jarvis, Wood and Bowen, respectively.

22. Defendant Dmitry Bouriak ("Bouriak") is, on information and belief, a citizen of

Russia. He is the Chairman and owner of the parent company of Defendant Vision

International People Group, P.L. ("Vision").

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23. Vision is a Cyprus entity, with its principal place of business in Cyprus. Vision

also claims to do business in Russia, Italy, Kazakhstan, Ukraine, Latvia, Belars,

Bulgara, Hungary, Poland, the Czech Republic, Mongolia and Uzbekistan. Jaris is an

officer of Vision. Vision is an entity under common control with Bancroft. Specifically,

on information and belief, Jarvis has populated the Bancroft Board of Directors with his

Vision colleagues. Vision engaged in sham "sales" to Bancroft, in order to deplete

Bancroft assets.

24. Defendant Total Eclipse International Ltd. ("Eclipse") is a Vision subsidiar.

Eclipse is under common control with Bancroft and Vision. Eclipse supposedly

admnistered Bancroft "stock loans." In reality, this was simply another device for

Vision to deplete Bancroft assets.

25. Defendants Bryan Jeeves and Alexander Jeeves are citizens of Liechtenstein. On

information and belief, Bryan Jeeves is the father of Alexander Jeeves. The Jeeveses are

professionals in the field of hiding assets from creditors. Bryan Jeeves and Alexander

Jeeves organized and operated Bancroft. For several years, they had regular contact with

Charles Cathcar in the United States, to advance the "stock loan" scheme.

26. Defendant Krstina Phelan is, on information and belief, a resident of Gibraltar.

She is an employee of the Jeeves Group. She works for Bryan Jeeves and Alexander

Jeeves. She actively participated in the "stock loan" scheme. She made regular visits to

South Carolina, in furtherance of the scheme.

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27. The Jeeves Group is, on information and belief, an unncorporated Liechtenstein

partership or joint ventue controlled by Defendants Bryan Jeeves and Alexander

Jeeves. This parership or joint ventue, and its parters or components, are jointly and

severally liable for its actions. The pricipal place of business of the Jeeves Group is

Liechtenstein. Bryan Jeeves is the Chairan of the Jeeves Group, and Alexander Jeeves

is the General Manager. The Jeeves Group, together with Bryan and Alexander Jeeves,

and Phelan, organized Bancroft. On or about September 10,2001, Alexander Jeeves

declared under penalty of peijury that he was the sole owner of Defendant J eeves

Holdings Ltd. ("Jeeves Holdings"), which was Bancroft's parent company. Charles

Cathcart has stated under oath that Bryan and Alexander Jeeves own Bancroft. An

attorney for Bancroft has represented in court that the Jeeves Group owns Bancroft. On

information and belief, the Jeeveses and the Jeeves Group received substantial sums for

helping to organize, and participating, in the "stock loan" scheme.

28. The Jeeves Group includes Defendants Jeeves Holdings, Javelin Ltd., Lexadmn

Trust Reg. ("Lexadmin"), St. Vincent Trust Service Ltd. ("St. Vincent Service"), St.

Vincent Trust Company Ltd. ("St. Vincent Company"), Windward Isles Trust Company

Ltd. ("Windward"), Selbourne Trust Company Ltd., Pelican Trust Company Ltd. and

Jeeves Group (Asia) Ltd. (collectively, the "Jeeves Group Defendants,,).3 Lexadmin

Trust Reg. is a Liechtenstein entity. Selbourne Trust Company Ltd. is a St. Lucia entity.

3 Other members of the Jeeves Group are Mercia Fund Management Ltd., Jeeves Company Ltd. and SLT

Speditions Est. Grayson reserves the right to add these entities as Defendants, or pursue other relief against them.10


Pelican Trust Company Ltd. is a St. Kitts entity. Jeeves Group (Asia) Ltd. is a Hong

Kong entity. On information and belief, Jeeves Holdings, St. Vincent Trust Service Ltd.,

St. Vincent Trust Company Ltd., Windward Isles Trust Co. and Javelin Ltd. are St.

Vincent entities, using the address of the "Trust House," 112 Bonadie Street, Kingstown,

St. Vincent, and their principal places of business are St. Vincent and Liechtenstein.

29. Javelin Ltd. is the legal entity that presently owns Bancroft, evidently as successor

to "Jeeves Holdings Ltd." Bryan Jeeves employed the St. Vincent Service to

communcate with, and lie to, Grayson, in fuerance of the fraudulent scheme. On

information and belief, all of the Jeeves Group Defendants participated in the "stock

loan" scheme at one time or another; all of them communicated with persons in South

Carolina or performed acts having an effect in South Carolina; and all of them are liable

for the wrongful acts of the Jeeves Group.

30. Collectively, Jarvis, Wood, Bowen, Bancroft, Spencer, IOMA, Bouriak, Vision,

Eclipse, the Jeeveses, Phelan, the Jeeves Group and the Jeeves Group Defendants are

referred to as the "Foreign Defendants."

3 i. Wachovia Securities, Inc. ("Wachovia"), is a Delaware corporation with its

principal place of business in Virginia. The term "Wachovia" includes Wachovia's

predecessor in interest, First Union Securities, Inc. Anderson directed brokerage work

for the sale of the "stock loan" collateral to Wachovia, where his father served as Vice

President. This family relationship allowed the U.S. Defendants to operate their "stock

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loan" scheme without scrutiny. On information and belief, Wachovia received over $5

million in brokerage fees from the sale of "stock loan" collateral, and related transactions.

When Anderson's father retired, Wachovia ordered that all Derivium and Bancroft

accounts be closed, but by then the damage had been done.

32. John Does 1 through 10 are other persons or legal entities that, directly or

indirectly, engaged in a transfer of an interest in property from Derivium or Bancroft,

made for less than reasonable equivalent value, or made to delay, hinder, defraud or

deceive Grayson, or other creditors of Derivium or Bancroft. Their identity can be

ascertained only by reference to the Defendants' and the John Does' book and records.

JURISDICTION AND VENUE

33. The amount in controversy here exceeds $75,000. The opposing paries are

citizens of different States. Therefore, there is diversity jursdiction under 28 U.S.C. §

1332 (2000).

34. This proceeding is related to Derivium Capital's bankptcy case, in accordance

with an order entered in that case on January 24, 2007, inter alia. Therefore, this court

has subject matter jurisdiction under id. § i 334(b).

35. This is a case or controversy arising under the laws ofthe United States.

Therefore, there is subject matter jurisdiction under id. § 133 i (2000).

36. The Court has supplemental jurisdiction of the claims here arising under state law,

which form part of the same case or controversy, under id. § 1367.

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37. All of the Defendants transacted business in South Carolina, including but not

limited to the business of their "stock loans." Some of them are domiciled in, or do

business in, South Carolina. The Defendants also contracted to supply services in South

Carolina, they committed tortious acts in whole or in par in South Carolina, they entered

into contracts to be performed in whole or in par in South Carolina, and they otherwise

commtted acts or omissions subjecting them to personal jurisdiction in South Carolina.

The U.S. Defendants acted as agents of the Foreign Defendants in these regards.

Therefore, this Court has personal jursdiction of the Defendants under South Carolina's

"long-ar statute," S.C. Code § 36-2-803.

38. A substantial part of the events or omissions giving rise to these claims occurred in

this judicial district. A substantial part of the property that is the subject of ths action is

situated in this judicial distrct. Venue lies in ths judicial distrct under 28 U.S.C. §

1391(b) & (d) (2000).

39. Venue also lies in this judicial district under id. § i 409(b), because this is the

judicial district in which Derivium Capital's banptcy case is pending.

40. Some claims against some Defendants herein may be subject to arbitration.

Arbitrabilty is an affrmative defense. See Fed. R. Civ. P. 8(c). Grayson is initiating

related arbitration. Such claims are included herein as a protective matter, in case

arbitration is waived, and to protect against the possibility that the cognizant arbitration

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tribunal might conclude that it lacks arbitration jurisdiction, leaving such jursdiction in

ths Court.

ALLEGATIONS

1. The U.S. and Foreign Defendants' Stock Loan Scheme

41. Between 1997 and the present, the U.S. and Foreign Defendants received

approximately $1 bilion in collateral for their "stock loans," including as much as $400

million in 2000 alone. They were responsible for retuing this collateral when the loans

matued. The U.S. Defendants represented to Grayson and to other borrowers that they

preserved the value of this collateral, by fuding the loans through low-interest credit

lines, engaging in "dynamc hedging," and the like. In reality, however, they simply sold

all of the collateral as soon as they received it, used par of the proceeds to provide initial

funding of loans, and pocketed the rest. Specifically, they did essentially nothin£ even to

attempt to meet their well-anticipated obligation to retu, upon maturity, the stock that

had been given to them as collateral. Charles Cathcart knew that, in his words, a "call or

call-like option" was needed to ensure the return of collateral at maturity, but he and his

cohorts never did anything to arange for that. Indeed, Charles Cathcar never observed,

or even asked, whether the "lender" had obtained a "call or call-like option" for any

"stock loan."

42. When the value of the loan collateral exceeded the loan balance due at maturity

only by a modest amount, the U.S. and Foreign Defendants covered this difference from

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a "slush fund" established for this purpose. In par, this was in the hope that borrowers

would continue to "play their game," and enter into more "stock loans." When value of

the collateral exceeded the loan balance due at maturity by a substantial amount, the U.S.

and Foreign Defendants invented all sorts oflies to cover up the fudamental facts that

they had sold the collateral upon receipt, and done essentially nothng to provide for the

retu of the collateral at matuity. At the same time, the U.S. and Foreign Defendants

siphoned off approximately $100 milion for their own personal purposes, leaving the

entities that they claimed were responsible for the loans insolvent.

43. This siphoning took place from 1998 to the present, and (on information and

belief) wil continue during the pendency of this lawsuit, absent action by the Court. To

the extent that they are now known, the individuals and entities paricipating in or

benefiting from the siphoning are identified in this Complaint. Hundreds of specific

examples of such fraudulent transfers are enumerated in the attachment to this Complaint

(Exhbit I), which is incorporated by reference.4 The enumerated examples total tens of

millons of dollars. They identify the approximate dates of the transfers, and the

particular individuals and entities involved. Other examples are, on information and

belief, in the exclusive possession, custody or control of the Defendants or in Defendants'

books and records, to be ascertained though discovery.

4 This attachment was prepared by the Derivium Capital bankptcy trstee, and submitted in bankptcy

cour on Januar 11,2007.

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44. One of the primary means by which the Defendants siphoned off ths money was

though an extravagant system of "fees" and "commssions." None of these ever was

disclosed to Grayson or (on information and belief) to any other borrower, even though

their collateral was misappropriated to pay for them. For example, for each "stock loan"

that they aranged, Derivium Capital and Derivium USA received two to thee percent or

more of the value of the collateraL. They called ths an "origination fee." In addition,

Derivium Capital and Veridia received one-half of one percent or more of the value of

the collateral each year. These were called "servicing fees" or "administration fees."

When these payments came to light, Charles Cathcar depicted them as fees dictated by

the "lender," Bancroft. In fact, however, Charles Cathcar himself orchestrated the fees.

45. Between 1998 and 2002 alone, the "origination fees" and "admnistration fees"

that Derivium Capital pilfered totaled over $30 million. This amount increased

substantially with "origination fees" and "adminstration fees" paid to Derivium USA and

Veridia from 2003 to the present. This is money that could have been used for the return

of collateral at loan maturity. Instead, it was diverted to these entities, and then in large

par to Charles Cathcar, Scott Cathcar and Debevc personally.

46. Charles Cathcar, Scott Cathcar and Debevc employed a variety of schemes to

strp this money away from Derivium Capital, Derivium USA and Veridia. The simplest

means was though parter payments. Based on investigation to date, the payments from

Derivium Capital to them between 1998 and 2002 alone were as follows:

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Year/Parter C. Cathcar S. Cathcart Debevc Annual Total

19985 ? $106,945 $64,274 $117,219

1999 $431,020 $266,433 $159,333 $856,786

2000 $1,249,471 $802,754 $304,381 $2,356,606

2001 $827,585 $2,061,404 $307,307 $3,196,296

2002 $269,394 $837,200 $164,398 $1,270,992

'98-'02 Total $2,777,470 $4,074,736 $999,693 $7,851,899

47. Derivium Capital and Derivium USA also instituted extraordinarly generous

"commssions" for their "sales" staff, notably Charles Cathcar's son Scott Cathcart, and

Anderson. They paid this staff three-quarters of one percent of the value of the collateral

for their "sales," as well as one-half of one percent to financial advisors referring clients

to Derivium. This helped to put over $ i 00,000 a month into the hands of Scott Cathcart

(and, on information and belief, similar amounts into the hands of Anderson). In 2000

alone, Derivium Capital paid $1.2 million in "commssions." Overall, these

"commssions" evidently totaled as much as $5 million, leaving that much less available

to return collateral at loan maturity.

48. Another artifice that Charles Cathcar, Scott Cathcar and Debevc employed, in

conjunction with Hsin, to strip money from Derivium Capital was the creation ofFSC-

Canada. Hsin held an interest in FSC-Canada, and actively participated in this means of

5 The 1998 payments to Scott Cathcart and Debevc appear to have been reported falsely as "salaries and

wages (other than to parters)" on Derivium Capital's tax return. This category, which is separate from parterpayments on the tax retus, grew to total $8.3 milion between 1998 and 2002 alone. On information and belief,more than just the 1998 payments to Scott Cathcart and Debevc went to the benefit of the U.S. Defendants.

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diversion. According to Cathcar, Hsin was the head of FSC-Canada. Derivium Capital

handed money to FSC-Canada; FSC-Canada lent or provided money to unidentified

"related paries," and then FSC-Canada wrote off those "debts." Between 2000 and

2002, FSC-Canada ran up cumulative losses of over $1,800,000 in ths maner - without

a single penny in revenue, as reported on Derivium Capital's tax retus.

49. In 2002, the "bad debts" ploy shifted to Derivium Capital itself. In 2002 and

2003, Derivium Capital wrote off almost $750,000 in "bad debts." On information and

belief, these "bad debts," like the ones by FSC-Canada, were for cash that Derivium

Capital gave to related parties.

50. Even after these diversions to Charles Cathcart, Scott Cathcar, Debevc, Hsin and

Anderson, Derivium remained a "gusher" of cash. By the beginng of 2000, Derivium

Capital had accumulated $13,420,086 in assets, of which $7,700,937 was cash. Such

cash could have been used to retu "stock loan" collateral to borrowers at matuity.

Instead, the cash simply disappeared, as Derivium Capital's cash balance plummeted

97% to only $239,545, by the end of2000.

51. Charles Cathcar, Scott Cathcar and Debevc were so bent on removing money

from Derivium Capital that they took money even when there was no money to take.

During 2002, Derivium Capital reported a loss of almost $2.2 milion on its tax retu.

Yet Charles Cathcart, Scott Cathcar and Debevc nevertheless took almost $1.3 milion in

parer payments that year, as the table above shows.

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52. By 2003, Derivium Capital had a cumulative loss of $4.5 milion in its capital

account. Charlies Cathcar, Scott Cathcar and Debevc thus not only diverted all

available Derivium Capital fuds to themselves, Hsin and Anderson, but $4.5 milion

beyond that amount.

53. Accordig to Debevc, millons of dollars were sent abroad to the Foreign

Defendants. These fuds evidently often were designated "professional fees" or "legal

fees," to prevent them from being used to satisfy the obligation to return "stock loan"

collateral upon loan maturity. Upon information and belief, Defendants Jaris, Wood,

Bowen, the Jeeveses, Phelan and the other Foreign Defendants have directly and

personally benefited from these funds.

54. As noted above, from time to time, when the amounts due to "stock loan"

borrowers at loan matuity were small, Defendants Charles Cathcar and Debevc elected

to repurchase the collateral, and return that collateral to the borrower. From their point of

view, ths was far better than engaging in numerous public disputes over small amounts,

and it encouraged these borrowers to retu to the Derivium for more loans. When large

amounts were due at maturity, however, Derivium and Bancroft simply "stiffed" the

borrower. They issued insincere promises to pay, misleading statements and outright lies

to these borrowers, including Grayson, to keep them at bay for as long as possible.

55. On information and belief, Derivium and Bancroft paid $5 milion or more in

brokerage fees to Wachovia, as discussed in detail below.

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56. The remaining fuds, approximately $45 milion, in essence became a giant slush

fud, disseminated according to Charles Cathcar's whims. The artifice for these funds

was that after Derivium sold the collateral, it tued these amounts over to Bancroft, the

supposed Isle of Man "lender." Yet according to Debevc, the slush fud never actually

was sent offshore. Initially, these funds were maintained in Derivium (not Bancroft)

accounts, primarily at Wachovia.6 Charles Cathcart and Debevc supposedly considered

these funds to be for the "benefit" of Bancroft. Later, the funds were transferred from a

Derivium account at Wachovia to a Bancroft account at Wachovia, with Debevc having

signatue authority over both accounts. On information and belief, Debevc never

accounted to Bancroft for these funds.

57. Although Debevc, in South Carolina, had signature control over all relevant

accounts at all relevant times, Charles Cathcar created and maintained the fiction that he

had somehow enticed Bancroft, in the Isle of Man, to direct that these funds be entrsted

though Defendant Spencer, in the Isle of Man, to Defendant Shenandoah, an

unegistered "investment manager" owned by Charles Cathcart, Scott Cathcart and

Debevc. This gave the Cathcarts and Debevc a new opportity to rake off "investment

advisory" fees, and they did so.

58. Debevc and Charles Cathcart also claim that Bancroft and Spencer, two Isle of

Man entities organized by persons in Liechtenstein, then authorized Shenandoah to invest

6 On information and belief, these accounts were maintained by affliates ofWachovia, not Wachovia

itself.

20


tens of millons of dollars in several blue-collar businesses in Orangeburg, South

Carolina, and elsewhere nearby (the "Local Businesses"). Orangeburg is a small town

with a population of approximately 13,000. Most of these businesses were later relocated

to Summervile, South Carolina, a town with a population of28,000.

59. The person whom Charles Cathcar placed in charge of many of the Local

Businesses was Jerr Pryor. Pryor had been convicted of money-laundering, and had

served time in prison. Pryor diverted labor and materials from the Local Businesses to

build a house for his personal use.

60. Jonathan Sandifer also worked in the Local Businesses; Sandifer's wife worked

for Derivium. As discussed below, Jonathan Sandifer later assisted Scott Cathcar in the

diversion of Local Business assets to Veristeel. Hsin worked in the Local Businesses as

welL.

61. The U.S. Defendants employed a number of stratagems and maneuvers to extract

from the Local Businesses the money that had originated in the sale of collateral for the

"stock loans."

62. One ploy was to load the Local Businesses with high-interest debt from related

paries. For instance, Shenandoah structured the money that it provided to these

Orangeburg and Summervile businesses primarily as debt, not equity. It routinely

charged these businesses up to 33% a year in interest payments on that debt. This gave

21


Shenandoah an iron grip on Local Business assets, and made the failure of these

businesses virally inevitable.

63. Another ploy was for Charles Cathcart and other key insiders personally to take

security interests on assets in the Local Businesses. This allowed them to step ahead of

other entities when the businesses failed.

64. Yet another ploy was to take the Local Businesses into bankptcy, drven by the

debt that related parties had created. By "laundering" the assets of the Local Businesses

though a business failure and banptcy, the U.S. Defendants put additional distance

between these assets and the claims of "stock loan" borrowers for the retu of their

collateral upon loan maturity.7

65. Another maneuver was for the U.S. Defendants to take money out of these

companies as a loan, and then have the companies write off that loan as a "bad debt."

66. Yet another tactic was for the Local Businesses to sell valuable assets to related

paries in a private sale for a low price, and then declare the transaction a "capital loss."

67. According to Debevc, almost all of these businesses went broke, in two years or

less.

68. The U.S. Defendants employed several of these strategies to divert assets in a

Local Business called Scienda. Scienda received over $10 millon in money from stock

loan transactions. Charles Cathcart then aranged for a very timely secured personal loan

to Scienda, and he employed his $2.6 milion security interest to foreclose on the cash,

22


the inventory, and hundreds of items of machinery, plant, furntue and equipment.

Scienda also sold certain property at a $7.6 millon loss, to an unidentified par. Scienda

went through a voluntary banptcy, and then (after all the assets had been strpped) a

liquidation.

69. At around the same time, Scott Cathcar incorporated Veristeel, and registered it to

do business in Nevada in or around May 2004. He and Jonathan Sandifer became

directors of Veri steel. Scott Cathcart arranged to move equipment from one of these

small-town South Carolina businesses (on information and belief, Scienda) to Veristeel's

location in Nevada. Scott Cathcart and Veristeel also converted related intellectual

property (e.g., a patent, transferred from Shenandoah to Spencer to Veristeel without

adequate consideration), and other assets.

70. The U.S. Defendants also shifted assets from Shenandoah, a U.S. entity, to

Spencer, a foreign entity, to frstrate the efforts of "stock loan" borrowers from

recovering these assets upon loan maturity. Thus, for instance, in or around May 2004,

Scott Cathcar met with the minority owner of one of the Local Businesses, in an effort to

get him to transfer payments out of that business from Shenandoah to Spencer.

71. The U.S. Defendants employed Optech for the same purose as Spencer. On

information and belief, Optech is little more than a foreign shell company, controlled by

Hsin. Optech purported to be a "stock loan" lender, registered for in Hong Kong and

California to issue loans. In less than i 8 months, between November 2003 and April

7 Due to their bankrptcy, Grayson has not named Local Businesses who petitioned for bankptcy as

23


2005, the U.S. Defendants swapped over $10 million between Bancroft and Optech

accounts, in an effort to "launder" this money and insulate it from the claims of "stock

loan" borrowers.

72. Another example of such maneuvering was PTS Intertech. PTS Intertech was a

tiny company in Wilmington, Nort Carolina, supplying flooring for modular homes. It

was founded in or around October 1995. During the following year, and before the

"stock loan" scheme began, Charles Cathcart became Vice President of PTS Intertech.

Robert Brandenburg, whom Cathcart enlisted to ru several of the Local Businesses, then

became "CFO" ofPTS Intertech. By the end of 1998, Cathcar and Brandenburg were

the only principal offcers of PTS Intertech. Cathcar elected to elevate his own title to

that of "Chairman."

73. Between September 1998 and February 2000, a period ofless than 18 months,

Derivium Capital dumped at least $ 1.7 milion into PTS Intertech. On information and

belief, the U.S. Defendants stripped these assets. Then, in December 2001, Cathcart and

Brandenburg dissolved PTS Intertech.

74. By similar means, in 2001, Derivium Capital dumped at least $1.5 milion into

Aquilus, an engine repai shop in Mt. Pleasant, South Carolina. On information and

belief, the U.S. Defendants also stripped these assets. Then, in December 2004, Aquilius

was dissolved.

Defendants in this action. Grayson reserves the right to pursue claims and actions involving such Local Businesses.24


75. Needless to say, neither Grayson nor any other borrower was informed that the

collateral for these "stock loans" would be dissipated in fudig poorly-conceived

businesses in small-town South Carolina, much less that insiders controlling these entities

would employ these various means to strip their assets. If there had ever been any

sincere intention to use these "investments" to help meet the need to return collateral to

"stock loan" borrowers upon loan maturity, then the whole charade of offshore entities,

investment management companes, management fees, unsecured loans at 33% annual

interest, secured loans to insiders using borrowed money, banptcies, "bad debt" write-

offs, selling property to insiders at a "capital loss," etc., would have served no purose,

and never would have occured.

76. Even aside from the stripping of the Local Businesses, there was gross

manipulation of the assets of Derivium, Bancroft, Veridia, Shenandoah, and Spencer.

For instance, Derivium "lent" $2.7 milion to its employees. On information and belief,

ths was without such formalities as collateral or repayment. In another example,

Bancroft issued a $4.6 millon loan to Derivium Capital, without any collateraL. This

amount almost precisely matched the $4.5 milion cumulative deficit in Derivium

Capital's partner accounts, thus underwriting the payments that ended up in the pockets

ofDerivium Capital parters Charles Cathcart, Scott Cathcar and Debevc. The Bancroft

loan to Derivium Capital was never repaid.

25


77. Charles Cathcar also arranged for Shenandoah to provide him with an

extraordinarily generous $5 millon "loan," without any assurance of repayment. This

left that much less money for the return of "stock loan" collateral at loan maturity.

78. Some of the Defendants also were quite generous in extending "stock loans" to

themselves. In 1999 and 2000 alone, for instance, Scott Cathcart and Anderson caused

Bancroft and its predecessor to issue over a dozen loans to them, totaling well over $ i

millon. For Scott Cathcart, the total number of stock loans grew to approximately

twenty.

79. Charles Cathcart bought and owned a luxury home in Tuxedo Park, New York.

On information and belief, when "stock loan" borrowers who did not receive their

collateral at maturity began to sue Derivium Capital, Charles Cathcart transferred title to

that home to his wife, Evelyn Cathcart, as a fraud against his expected creditors. On

information and belief, he has transferred other assets to Evelyn Cathcart as well, for the

same purpose.

II. The Participation of the Foreign Defendants in the "Stock Loan" Scheme

80. The essential purpose of the Foreign Defendants in the "stock loan" scheme is to

serve as an uneachable, supposedly insolvent "scapegoat" to explain away the failure to

repay "stock loan" collateral at loan matuty. The Foreign Defendants have been quite

wiling to play that part, in exchange for the milions of dollars in "professional fees" and

"legal fees" that they received.

26


8 I . The "stock loan" scheme has employed a foreign scapegoat since its inception.

When the scheme began in or around July 1997, borrowers entered into loan agreements

with the Texas entity FSC First Security Capital, LLC. This Texas entity was 95%

owned by an undisclosed shell-company "lender" called DDA. DDA was an Irish

company owned by Clifford Lloyd, a Canadian lawyer. On information and belief, DDA

provided no capital in relation to the "stock loans" for which it served as "lender." Yet

between 1998 and 2000 alone, DDA received at least $2 millon in payments from

Derivium CapitaL.

82. At the beginnng of 1998, Charles Cathcart migrated the "stock loan" marketing

over to the South Carolina entity First Security Capital LLC, later called Derivium

Capital. Despite the similar name, this business was owned entirely by Charles Cathcar,

Scott Cathcar and Debevc, not by the Canadian lawyer. In essence, Charles Cathcar cut

Lloyd out of that part of First Security Capital's business, in order to control the business

for the benefit of himself and his cohorts Scott Cathcart, Debevc and Hsin. Derivium

Capital continued to employ DDA as an undisclosed lender for a period of time, however.

83. In mid-2000, Charles Cathcar evidently decided to cut DDA and Lloyd out of the

"stock loan" scheme entirely. In August 2000, Charles Cathcar met with Bryan Jeeves, a

professional in the field of using offshore entities to hide assets from creditors. Jeeves

claims to have formulated the asset protection law of St. Vincent, supposedly making it

virtally impossible for creditors to recover from St. Vincent entities. (In a conference at

27


which Jeeves was scheduled to speak a year ago, the topics included "Pennes From Hell:

Securities Law Dissected," "To Know Me is to Loathe Me: Understanding Criminal

Conduct," and "It's a Bad, Bad, Bad, Bad World: An Overview of (International)

Financial Crime.,,)8 Charles Cathcar explained the fraudulent stock loan scheme to

Bryan Jeeves in detaiL. Bryan Jeeves knowingly agreed to paricipate in the scheme.

84. Charles Cathcart then became a client of Lexadmin, St. Vincent Service, St.

Vincent Company and Windward. Bryan and Alexander Jeeves, acting on their own

behalf and as agents for the Jeeves Group Defendants, took numerous actions in

fuerance of the stock loan scheme. From time to time, Scott Cathcar met with

representatives of the Jeeves Group Defendants in Liechtenstein, in fuerance of the

scheme.

85. Bryan and Alexander Jeeves, with Phelan, orchestrated the formation of Bancroft

in the Isle of Man. Bancroft was organzed on September 7, 2000. This action was taken

by IOMA. On information and belief, the Jeeveses recruited Jarvis, Wood, Bowen and

others to serve as directors of Bancroft. On information and belief, IOMA, Jarvis, Wood

and Bowen all were informed of the fraudulent stock loan scheme in detail, agreed to

paricipate in it, and did paricipate in it. Alternatively, as diectors, they should have

8 In 2001, Jeeves was a central figure in a major scandal in Great Britain, concerning the fraudulent over-

sale of timeshare interests. This led to the loss of Jeeves's title of British Consul to Liechtenstein. RegardingJeeves's obstrction of the investigation, an English cour ruled in 2003: "I have found myself trly shocked by the

lengths to which this appellant has been prepared to go to avoid a public, or indeed any other, examination into hisknowledge. . . . (Jeeves's conduct) strikes me as in the highest degree disingenuous, and for my par 1 stronglydeprecate it."

28


known these things. Bancroft then became the undisclosed "lender" for the "stock loans"

to Grayson and others.

86. On information and belief, Bancroft and its organizers contributed no capital

whatever toward meeting the obligation to retu collateral to borrowers at matuty. Nor

did Bancroft maintain substantial "loan reserves in the U.S. to faciltate loan settlements,"

as Alexander Jeeves of the Jeeves Group had stated in a letter to Charles Cathcart of

Derivium Capital dated August 8, 2000. Bancroft was simply an offshore shell-company

to which the U.S. Defendants diverted the responsibility to repay the collateral for "stock

loans" upon loan matuity, while they systematically stripped away the funds necessary

to satisfy this responsibilty.

87. The supposed relationship between Derivium Capital and Bancroft was embodied

in a "Stock Loan Admnistration Agreement" and a "Stock Loan Admnistration and

Marketing Agreement," both dated December 6, 2000. Article II of the former

agreement provides that: "Derivium agrees to use the standard of care, skill and attention

that one would reasonably expect of a professional in its position to cause to be executed

the Hedging Transactions." In fact, neither Derivium Capital nor any ofthe U.S.

Defendants ever used the slightest care, skill or attention in hedging; they simply sold all

of the collateral that borrowers gave to them, and pocketed as much of the proceeds as

they could.

29


88. Today, Derivium Capital claims that Bancroft owes it over $46 milion, as a result

of an indemnfication claim arising from Derivium Capital liabilty to a "stock loan"

borrower who failed to receive its collateral upon matuty. Yet Derivium Capital has

done nothng to try to recover on that debt. The reason, according to Charles Cathcart, is

that there is no way for Derivium Capital to recover from a foreign entity like Bancroft.

Yet the U.S. and Foreign Defendants established that entity, and tred to fob offliabilty

for the retu of "stock loan" collateral at maturity to that entity. They did so to try to

ensure that there would be no way for borrowers to recover from such an entity, either.

89. Not content with assigning milions of dollars to an offshore shell company

designated as "lender" for the "stock loans," the Defendants proceeded to strp that

entity's assets as welL. Some of such efforts by the U.S. Defendants are described above.

90. As for the Foreign Defendants, Jarvis, the Chief Financial Offcer of Bancroft,

also is the Chief Executive Offcer and part-owner of Vision. Vision's 2003 financial

statement, prepared by Ernst & Young, identifies "Bankcroft (sic) Ventures (UK)

Limited" as an entity under common control with Vision, and a "related party." It also

shows "sales" by Vision to Bancroft. This is rather implausible, given that Vision is in

the purorted business of selling health food and cosmetics. On information and belief,

these "sales" were sham transactions, designed to strip away Bancroft assets to prevent

Bancroft from meeting its obligations at loan maturity.

30


9 I. As alleged above, Vision's wholly owned subsidiary Eclipse supposedly

administered Bancroft "stock loans." In reality, this "administration" was simply another

device for Vision to deplete Bancroft assets.

92. The Chairman of Vision, and owner of the parent company of Vision, is Dmitry

Bourak, a Russian. Many Russian businessmen have established entities in Cyprus,

where they believe that corporate governance law might be lax. He gave a speech at a

Vision company event dubbed "Milenium-2004," in which he said:

Our leaders come to the Main Event of the Year today, leaving their vilason distant islands, mooring luxurious yachts at foreign ports, because justlike before (they became rich) they thnk the most important luxur in theworld is spending time with people who thnk as they do . . . .

In another speech, Bouriak referred to himself as "him (sic) who is always right."

(Evidently, Bouriak's infallibility does not extend to grammar.)

93. As the Chairman of Vision, and owner of its parent company, Bouriakknew or

should have known of Vision's and Bancroft's involvement in the "stock loan" scheme.

In sum, both the U.S. Defendants and the Foreign Defendants moved millons of

dollars of collateral proceeds to the accounts of an offshore entity that Charles Cathcart

asserts is out of reach, and then stripped even those assets.

II. Wachovia's Participation in the Scheme

94. Stock-trading brokerage firms perform certain "due-diligence" checks on new

customers. Every brokerage firm is required to comply not only with statutes and

31


regulations, but the rules of various stock exchanges. Most brokerage firms go to

substantial lengths to avoid entanglement in ilegal activity.

95. Defendant Wachovia, like all other sizable brokerage firms, has a "compliance

department" established to ensure compliance with laws and rules. This deparment

scrutinizes customer account activities, for evidence of "money laundering" and other

ilegal activity.

96. Derivium, with only modest assets of its own, generated $1 bilion in stock trades

for Wachovia. Stocks with enormous value were transferred from other accounts to

Derivium and Bancroft accounts, and then sold immediately. Derivium's customers were

not informed of ths unortodox practice, but Wachovia surely was aware of it.

97. In fact, Wachovia knew that Derivium was depicting these transactions as "stock

loans" in which the borrowers were "retaining ownership," even though (unbeknownst to

the borrowers) Derivium was selling 100% of the collateral immediately. From 2000 to

2005, Mr. Grayson had dozens of conversations with George Gordon ("Gordon"), a

Wachovia broker in Richmond, Virginia. Mr. Grayson also spoke to other Wachovia

brokers who worked with Gordon. Gordon served the Grayson, Derivium and Bancroft

accounts. Mr. Grayson told Gordon and other Wachovia brokers that he was purchasing

shares that Derivium had approved as collateral for "stock loans." Mr. Grayson then

issued written instructions to Gordon and other Wachovia staff to transfer those shares to

32


a Derivium account. On information and belief, other "stock loan" borrowers had similar

conversations with Gordon and other Wachovia brokers, and gave similar instrctions.

98. Wachovia then, unbeknownst to Grayson and other "stock loan" borrowers,

immediately sold these shares in Wachovia's Derivium and Bancroft accounts.

Wachovia thus well knew that Derivium was simply takng the collateral and sellng it,

because Wachovia was doing the sellng. Yet in five years of conversations with Mr.

Grayson, Wachovia never disclosed this. Indeed, Wachovia claimed to have no

knowledge of Derivium's practices.

99. Wachovia opened accounts not only for Derivium, but for Bancroft as welL.

Bancroft, a foreign entity about which (on information and belief) Wachovia knew

almost nothing, had hundreds of millons of dollars flowing into and out of its accounts.

Defendant Debevc, who was not an officer or even an employee of Bancroft, had

signature authority for both Derivium and Bancroft accounts. He moved as much as $5

milion or more at a time between these accounts, at wil.

100. These, inter alia, were "red flags" that marked Derivium and Bancroft as

unscrupulous clients. In fact, on information and belief, Derivium had diffculty

establishing and maintaining brokerage accounts. Yet it was able to open and use

accounts at Wachovia for many years.

101. On information and belief, this was for two reasons. First, Anderson's father

served as Vice President ofWachovia. This famly relationship allowed the U.S. and

33


Foreign Defendants to operate their "stock loan" scheme protected from proper scrutiny.

Second, on information and belief, Wachovia received over $5 million in brokerage fees

from the sale of "stock loan" collateral, and related transactions.

102. In 2000, Anderson told Mr. Grayson that Grayson's loans were more likely to be

approved if Grayson purchased stock though Anderson's father's fir.9 Mr. Grayson

therefore established a brokerage account at that firm. For the great majority of

Grayson's loans, the collateral was stock that Mr. Grayson purchased in ths Wachovia

account. Mr. Grayson paid Wachovia over $100,000 in brokerage fees.

103. Anderson touted to Mr. Grayson the fact that Anderson's father, an important

official at the ban, was a Derivium customer. Anderson told Mr. Grayson that

Anderson's father had entered into a "stock loan" that had matured, and that Anderson's

father had decided to extend the loan. Anderson depicted ths to Mr. Grayson as a vote of

confidence by Wachovia in Derivium.

104. Mr. Grayson often purchased stocks for Derivium loans in his Wachovia account

over a period of time, and he delivered them to Derivium piecemeal. Unbeknownst to

Mr. Grayson, Derivium and Wachovia would tu right around and sell these stocks, at

the same time that Mr. Grayson continued to buy them.

105. For instance, Mr. Grayson purchased Continental Airlines (CAL) stock in his

Wachovia account from January 2003 though March 2003, and delivered it piecemeal to

9 Which then was First Union, preceding First Union's merger with Wachovia. Pre-merger references to

"Wachovia" actually refer to First Union.

34


Derivium Wachovia accounts. Derivium was sellng those shares immediately.

Therefore, Wachovia was selling CAL shares for Derivium at the same time as Wachovia

was buying them for Mr. Grayson. The same thing was tre ofID Biomedical (IDBE)

shares between August 2003 and December 2003, and of Nova gold (NG) shares between

August 2004 and March 2005.

106. New York Stock Exchange ("NYSE") Rule 78 prohibits "prearranged trading," as

follows:

An offer to sell coupled with an offer to buy back at the same or at anadvanced price, or the reverse, is a prearanged trade and is prohibited.This rule applies both to transactions in the unit of trading and in lesser andgreater amounts.

Unbeknownst to Grayson, Wachovia evidently was engaging in such prearanged trading

between Grayson and Derivium/Bancroft accounts, in violation ofNYSE Rule 78.

Wachovia neverteless charged substantial brokerage fees to both the Mr. Grayson and

the Derivium/Bancroft accounts.

107. Around the time that Anderson's father retired from Wachovia, Wachovia ordered

that all Derivium and Bancroft accounts be closed. By then, however, the damage had

been done.

35


iv. The Defendants' Fraudulent Misrepresentations to GraysonlO

i 08. In October 2000, Mr. Grayson contacted Derivium Capital, and asked for a copy

of the paperwork for its "stock loans." He was provided with a so-called "Master

Agreement." That agreement provided for the following, inter alia:

. that Derivium would be the "custodian" of the stock used as collateral;

. that Derivium was "authorized to act on behalf of' Grayson "for the

puroses of. . . voting shares and receiving dividends or interest on

securities held as collateral";

. that Derivium "agrees to return, at the end of the loan term, the same

number of shares of the same securties received as collateral"; and

. that Derivium could place the collateral "with any domestic or foreign

depository (sic) or clearng corporation. . . ."

All of these Derivium representations were meant to convey to Grayson that his collateral

would be maintained safely. They did, in fact, convey this to Grayson.

109. Derivium Capital informed Mr. Grayson that for it to consider any stock loans

with Grayson, Mr. Grayson would have to sign the "Master Agreement." This agreement

did not commit Grayson or Derivium Capital to entering into any such loans, however;

such loans would be created and governed by what Derivium Capital called

io In this section, the term "Defendants" refers to the U.s. Defendants and the Foreign Defendants, because

(as explained in detail) the U.S. Defendants formulated these misrepresentations together, with the individual U.S.Defendants and Anderson and Kelley acting as agents of the others; and the U.S. Defendants acted on their ownbehalf and as agents of the Foreign Defendants.

36


"schedules." Grayson therefore signed the "Master Agreement," and sent it to Derivium

CapitaL.

110. Mr. Grayson then asked for more information on Derivium. He spoke to

Anderson, who directed Mr. Grayson to Derivium's website. Mr. Grayson, who had been

unaware of the website, reviewed it.

i I I. A few months earlier, in or around June 2000, Derivium Capital had created a

website at the address ofww.derivium.com. On information and belief, the content of

the website was prepared by Scott Cathcar and Anderson, and approved by Charles

Cathcar and Debevc. (The website, in substantially similar form, was continued and

used by Derivium USA beging in 2003, supposedly under the ownership of Bancroft.)

112. The website explained the "stock loan" program. The Defendants specifically

represented that the "stock loans":

deliver thee powerful benefits: liquidity, so you can tap the value of yourequity assets; hedging, so you can protect your equity assets against amarket decline, and opportunity, so you can keep your equity assetsworking for you. We make ths confluence of benefits possible though theapplication of state-of-the-ar financial engineering.

i 13. On the subj ect of "keeping your equity assets workig for you," the Defendants

quoted a supposed customer saying, "With Derivium, we . . . retain the potential for

further growth" in the value of the stock used as collateraL. The Defendants went on to

represent:

you want to continue to benefit from the opportity inherent in your

portfolio, even as you seek liquidity or downside protection (or both). Andour proprietary strctures enable you to do just that.

37


Preserving Potential

Our tools enable you to preserve, in the words of financial managers,"potential upside." We offer tactical, strctured transactions that provide aconfluence of benefits - including the ability to retain ownership of theinvestments that have helped create your wealth, so you can continue totake advantage of their long-term potentiaL.

(Emphasis added.)

i 14. Under the heading of "liquidity," the Defendants represented: "We can help you

tap nearly the full value of your equity assets, and you 'll stil own your positions. You'll

benefit if they appreciate. . .. How can we do this? By applying the power of financial

engineering to create a set of proprietary tools. . .." (Emphasis added.)

i 15. Under the heading of "Scenaros," the Defendants represented that: "You may pay

off the loan in full and recover your collateraL. You may make the full payment of your

balance due at loan maturity and recover your collateral."¡ ¡

116. The Defendants also touted Charles Cathcart's supposed financial acumen, as

follows:

(He) developed the strctues and proprietary hedging models that represent

the foundation of the innovative products offered by Derivium. He is aworld-recognized expert in building and preserving wealth for clientsthrough the application of sophisticated hedging strategies . . . .

i 17. The Derivium website incorporated an aricle from a July 2000 issue of the

magazine Business 2. O. That aricle featued an interview with Charles Cathcart, and

¡ ¡ Borrowers also were permitted to ask for the difference between the balance due and the value of thecollateral, in cash.

38


made the following statement: "Derivium takes on the risk of volatile stocks in these

deals by using financial instrments from investment bans to hedge the risk on the stock

price, often using combinations of stock options . . . ." On information and belief, this

paraphrased a statement by Charles Cathcart to the Business 2.0 reporter.

118. The representations at the Derivium Capital website were gross lies. The

Defendants simply took the stock that they received as collateral, and sold it. There were

no "proprietary tools," no "inovative products,"no "state-of-the-art financial

engineering," no "sophisticated hedging strategies," no "financial instruments from

investment bank," no "combinations of stock options," and - most importantly - no way

, to "take advantage of the (collateral's) long-term potentiaL."

119. The Derivium website was also important for what it concealed. It did not say that

when Derivium received the "stock loan" collateral, it sold the collateral immediately. It

did not say that Derivium made no substantial provision whatsoever for retung that

collateral when a loan matured. It did not say that Derivium would launder the proceeds

from the collateral by entering into a convoluted transaction with an offshore entity that

Derivium later would depict as the "lender." In fact, it did not even allude to any entity

involved in the transaction other than Derivium and the borrower.

120. After Anderson called the Derivium website to Mr. Grayson's attention, Mr.

Grayson learned of the representations there. Grayson relied on the statements at this

39


website, his reliance was reasonable, and these statements deceived him. The Defendants

intended that the statements deceive Grayson and other potential customers.

121. Mr. Grayson then asked Anderson about Derivium's "proprietary tools."

Anderson, acting as an agent of the Defendants, told Grayson that the stock loans were

not just loans, but sophisticated financial tools that Derivium management had used for

more than 15 years. Anderson told Grayson that Charles Cathcar had a special

relationship with a large French financial institution, dating from Cathcart's employment

at Citiban. This ban, according to Anderson, regarded Charles Cathcar as a "financial

genius." The bank had extended very large lines of credit to Derivium, at the prime rate

or less. This allowed Derivium to borrow at around five percent, and lend at ten percent

or more. Anderson also told Grayson that Derivium engaged in a "dynamic hedging"

program, which involved automated trading on a continuous, daily basis. This

supposedly was conceived by Charles Cathcart, and implemented by Debevc. Therefore,

Derivium not only was able to meet its obligations under the loans without disturbing the

collateral, but also (according to Anderson) to make a profit on each loan.

122. Anderson's representations to Grayson were fairy tales. The Defendants simply

took the stock that they received as collateral, and sold it. There were no large lines of

credit, no special relationship with a large French financial institution, and no "dynamic

hedging." It appears to be tre, however, that Derivium Capital and Anderson made a

profit on each transaction - by the simple expedient of charging extravagant

40


"commssions" and "fees," and then makng the undisclosed, supposedly insolvent and

ostensibly unreachable offshore entity Bancroft responsible for retu of the collateral at

matuty.

123. Anderson fuer represented to Grayson that over 100 stock-loan customers had

loans that had matued, that for half of them (including, Anderson said, Anderson's own

father), the value of the collateral exceeded the loan balance, and that without exception,

Derivium had performed on these loans.

124. These statements by Anderson to Grayson were false. On information and belief,

by that date, due to the "tech crash," substantially fewer than half of the matung loans

had collateral value exceeding the loan balance. Neverteless, even by that early date,

the Defendants had reneged on one or more "stock loans."

125. On information and belief, Anderson made these statements to Grayson with the

knowledge and approval of Charles Cathcart, Scott Cathcart and Debevc. He made them

for the purose of furthering the "stock loan" scheme, and padding the Defendants'

pockets.

126. Grayson relied on Anderson's statements, this reliance was reasonable, and the

statements deceived Grayson. The Defendants intended that the statements deceive

Grayson and other potential customers.

127. In May 2001, Mr. Grayson arranged to visit Derivium's offce in Charleston,

South Carolina. By ths point, Grayson had conveyed to Derivium only $2.7 milion in

41


collateral for the "stock loans," or less than one-tenth of Grayson's ultimate total.

128. The Derivium staff (notably Kelley) repeated many of Anderson's

misrepresentations. Mr. Grayson was shown Debevc's desk, which resembled the

cockpit of a spaceship. Mr. Grayson was informed that Derivium's dynamic hedging was

performed by the devices on Debevc's desk. Mr. Grayson was provided with a glossy

portfolio ofDerivium's marketing materials, which repeated many of the

misrepresentations at Derivium's website. The purose of ths impressive tour was to

elicit more business from Grayson, and it succeeded in that purose.

129. The August 6, 200 i issue of Investment News magazine featued an article about

Derivium's stock loan program. Next to a two-column photo of Charles Cathcart, it

quoted him as follows:

The magic bullet in the process (of protecting the value of concentratedstock positions) is a proprietary hedging strategy. . .. "We have our ownCoca-Cola syrp," says Derivium founder Charles Cathcar.

There was no "proprietary hedging strategy"; Derivium simply sold the collateral and did

its best to evade borrowers desirng return of that collateraL. Yet Derivium reprinted this

aricle, and circulated it to prospective borrowers. Grayson read this article, and he was

encouraged to enter into more "stock loans" with Derivium.

130. From 2003 though 2005, approximately six weeks before each loan matued

(until the scheme ended), Derivium, Veridia or Bancroft sent a maturity letter to Grayson.

Each maturity letter offered Grayson three alternatives:

42


. "Pay the Matuity Amount and Recover Your Collateral"

. "Renew or Refinance the Transaction for an Additional Term"

. "Surender Your Collateral"

Under the last alternative, it was explained that: "If your Collateral Value is greater than

the Matuity Amount, you may instrct Bancroft to provide the Net Collateral Value (i.e.,

the amount by which the collateral value exceeded the loan balance) to you in cash, or in

a combination of stock or cash."

i 31. The stated alternative to "Surrender Your Collateral" was false and fraudulent. It

was meant to depict the collateral for the loan as something that Derivium and Bancroft

stil retained, when in fact the collateral had been sold almost thee years earlier.

132. The stated alternative to "Recover Your Collateral" was misleading at best. The

Defendants had sold the collateral upon receipt, so that collateral could not be

"recovered."

133. Grayson relied on these false and fraudulent statements, this reliance was

reasonable, and the statements deceived Grayson.

134. On one occasion, when a Grayson loan matured, Derivium satisfied this

obligation, but did so late.

135. As Grayson waited to be paid, Anderson and Debevc told Grayson that Bancroft

was responsible for the delay, and that Debevc was seeking funds from Bancroft. This

was false and misleading, because Debevc controlled Bancroft's accounts. On

43


information and belief, Charles Cathcar and Debevc were trying to decide whether or not

to honor Grayson's loans.

136. Grayson relied on these false and fraudulent statements, this reliance was

reasonable, and the statements deceived Grayson.

V. Grayson's Stock Loans

137. As a result of the Defendants' fraudulent inducement, beging in November

2000, and continuing through March 2005, Grayson entered into almost 100 "stock

loans" with Derivium Capital and Derivium USA. On information and belief, Grayson

entered into more such "stock loans" than any other borrower.

138. The value of the collateral that Grayson provided for each loan ranged from

approximately $100,000 to over $1 milion. The total amount of collateral exceeded $28

milion.

139. The terms of these loans were as follows. Each loan was for a thee-year period.

The loans were "non-recourse" as to Grayson, meaning that Grayson was not personally

responsible for paying back the loan at maturity. The loan amount was for 90% of the

collateraL. The interest rates ranged from 9.75% to 12.5% a year, averaging

approximately 11 %.

i 40. Beginnng at the end of 200 1, and at the end of each year though 2004, Mr.

Grayson and Derivium signed an agreement assigning Mr. Grayson's interest in the then-

44


outstanding loans to the AMG Trust. In March 2005, Mr. Grayson and Derivium entered

into a loan that was not assigned to the AMG Trust.

141. Beginnng with a loan for 10,000 Immunex (IMNX) shares in November 2000,

Grayson entered into the series of loans set fort above. In each case, Derivium faxed or

e-mailed Grayson a one-page unsigned "schedule" entitled "Propert Description and

Loan Terms," beginng with Schedule A-I for the Immunex shares. Almost always, the

schedule was transmitted from Derivium's offce in Charleston, South Carolina. Grayson

signed the schedule and then faxed it to that offce. Charles Cathcar then countersigned

it. The executed schedule was faxed or e-mailed to Grayson from South Carolina.

142. Notably, the schedules stated that "All Dividends wil be received as cash

payments against interest due. . . ." This implied to Grayson that Derivium would

maintain the collateral, because otherwise there would be no dividends "received."

143. Following execution of the schedule, Grayson then transferred the corresponding

collateral stock from his account to Derivium's account at Wachovia. Upon receipt,,

Derivium faxed or e-mailed a "Valuation Confirmation" from South Carolina. Derivium

then sent an "Activity Confirmation" assigning a value to the collateral, and calculating

the loan amount. The "Activity Confirmation" was faxed or e-mailed from South

Carolina. A wire transfer to a brokerage account or bank account disbursed the loan

funds.

45


144. Each loan entailed at least one phone call between Grayson and Derivium

regarding whether the stock was considered "suitable" for a loan. After this, there often

were one or more phone calls between Grayson and Derivium regarding the transfer of

stock, issuance of fuds, etc. Almost always, these calls were to or from Derivium's

offce in Charleston, South Carolina.

145. At the end of each quarer, Derivium, Veridia or Bancroft sent Grayson a

statement for each loan. The statements were prepared at Derivium's and Veridia's

office in Charleston, South Carolina. The statements showed credits for dividends for the

collateral stock, and for stock splits. The purpose of ths practice was to lead Grayson to

believe that the collateral was intact, it did lead Grayson to believe this, and it was

reasonable for Grayson to believe this.

146. Stock sales in the United States are "T+3," meaning that proceeds are issued to the

seller thee business days after the sale. Derivium made a point of fuding its loans

either in exchange for the collateral (i.e., simultaneously) or "T+2," meanng two

business days after it received the collateraL. Confirmng ths, Derivium's counsel

represented to the Californa Corporations Deparent that "(fJunds are generally

provided to Borrowers in advance of the receipt of proceeds of any hedging transaction

that Derivium is involved in." The effect of this was that Derivium could assert that,

technically, its "stock loans" were never fuded directly by the sale of the corresponding

collateral, but rather (in true Ponzi-scheme fashion), by the sale of the collateral from

46


prior loans. By the same token, the U.S. Defendants used the subsequent sale of the

collateral for each loan to fud later loans to others.

147. Several of the stocks that Grayson provided as collateral for his loans have

performed exceptionally well. For instance, in 2002, in three separate loan transactions,

Grayson provided Derivium with 35,000 shares of Sandisk stock (SNDK). The stock

then traded for approximately $15 a share. The shares have since split, making 70,000

shares. Recently, at the end of2006, the stock was wort almost $45 a share, meaning

six times the original value. Also in 2002, in three transactions, Grayson provided

Derivium with 90,000 shares ofNvidia (NVDA) stock. The shares then traded for less

than $9 a share. At the end of2006, the stock was worth over $37 a share, more than

four times the original value. Also in 2002, in thee transactions, Grayson provided

Derivium with 100,000 shares ofImc1one stock (IMCL). The stock then traded for less

than $8 a share. At the end of 2006, the stock was worth over $25 a share, more than

thee times the original value.

148. In 2003, in four transactions, Grayson provided Derivium with 350,000 shares of

Continental Airlines stock (CAL). The stock then traded for approximately $6 a share.

At the end of2006, the stock was wort over $41 a share, or around seven times its

original value. Also in 2003, in five transactions, Grayson provided Derivium with

350,000 shares ofID Biomedical stock (IDBE). The stock traded for approximately $13

47


a share. GlaxoSmithKline then bought all ofm Biomedical's stock, for almost $30 a

share.

149. In addition to these 18 transactions, there are many other Grayson loans for which

the value of the collateral exceeds the loan balance, in some cases substantially. On

average, at the end of2006, the value of the collateral in these Grayson loans had

increased by almost 250 percent.

150. Until up to March 2005, Derivium performed adequately on the 38 Grayson loans

that had matued. This involved payouts to Grayson at loan matuity cumulatively

totaling substantially less than $1 milion. This was consistent with the Derivium's

practice to payout small amounts at matuity, to avoid litigation and encourage repeat

business.

i 5 I. Beginng in March 2005, Grayson loans matued where the value of the collateral

exceeded the loan amount due, and Grayson received nothng.

152. In March, April and May of2005, Grayson had several discussions with Debevc

and Charles Cathcar about the failure to honor these loans at matuity. They told

Grayson that they were working to solve the problem.

153. In May 2005, Charles Cathcar sent a letter to Grayson and other borrowers. He

stated that Derivium and Bancroft would not honor the stock loans upon matuty. He

falsely blamed government licensing and tax inquiries for ths. The real reasons were

48


that the Defendants had sold all of the collateral immediately, stripped away the

proceeds, and made no provision for the retu of the collateral upon maturity.

154. In or around May 2005, Wood resigned as Director of Bancroft. W.H. Chahine

and L.H. Chahe replaced him. On information and belief, Chahine works for Vision's

audit firm. Bancroft closed its Isle of Man offce, and relocated to Vision offces in

Cyprus. Correspondence addressed to Bancroft in the Isle of Man is forwarded to

Vision's in-house counsel in Cyprus.

155. In August 2005, Grayson addressed correspondence to Derivium by courier.

Debevc refused to accept the correspondence. He told the courier that Derivium was "out

of business."

156. Grayson did not received quarterly statements for his loans following the second,

thrd and fourt quarers of2005. This included loans originated by Derivium Capital,

and loans originated by Derivium USA.

157. Grayson has telephoned Bancroft, left phone messages at Bancroft, and sent e-

mails to Bancroft and to Wood. All of these communcations have been ignored.

158. With regard to over 20 Grayson loans that have matued since March 2005 for

which the value of the collateral exceeds the amount due under the loan, Grayson has

received no return of collateral, or any payment whatever. At the end of 2006, for

Grayson loans where the value of the collateral exceeds the amount due under the loan,

49


the collateral was wort over $30 milion more than the amounts due. Grayson received

none of ths.

159. From now though March of2008, several more Grayson loans are due to mature.

Given that the Defendants sold the collateral for those loans, made no provision whatever

to meet their obligations at matuty, and systematically stripped away the assets that

might be used to meet these obligations, Grayson does not believe that Derivium USA

wil, in fact, meet those obligations.

V. Other Defendant Actions in Furerance of their Scheme

160. Between October 2000 and July 2005, the U.S. Defendants and Foreign

Defendants engaged in numerous actions in fuherance of their scheme. These included

the following:

A. False and Misleading: Marketingl2

16 i. The Defendants prepared and dissemiated false and misleadig marketing

material to would-be and curent borrowers. This included reprints of the Investment

News aricle.

i 62. In their marketing material, the Defendants represented, inter alia:

. that a borrower would "maintain your upside potential";

. "you stil have your upside potential";

. "you keep your upside potential in case your stocks increase in value";

12 In ths subsection, the term "Defendants" refers to the U.S. Defendants and the Foreign Defendants, for

the reasons stated above.

50


. "you stay invested and protect your wealth for the long term"; and

. "you stil retain beneficial ownership of your positions. If they appreciate,

you keep all the upside."

163. In a full-page ad in the September 17,2001 issue of Forbes magazine, the

Defendants represented that their "stock loans":

enable clients to. . . (m)aintain upside potential. Durng the loan term, aclient stil owns the pledged stocks and stil enjoys the benefits of gains intheir value at loan maturity. . . . "We hear repeatedly from our clients abouthow our products enable them to sleep at night. . . ."

164. The Defendants offered "stock loans" not only against stock, but also against

employee stock options. In connection with those options, the Defendants represented

that the option holder maintained:

Upside potentiaL. . .. By using the Option Conversion Loan, you maintainbeneficial ownership of your converted shares and, if they appreciate, youkeep all of the upside.

165. All of these representations were false, and the Defendants knew that they were

false. The Defendants made them with the intent to deceive.

B. The General Holding Cover-Up

166. General Holding, Inc. ("General") entered into a two-year stock loan with

Derivium Capital (then called FSC First Security Capital, LLC) in 1997. General

renewed that loan for two years in 1999. The loan matured in November 2001. General

tendered principal and interest, in order to recover the collateraL. At that time, the

51


collateral was wort tens of milions of dollars more than the amount due. Yet Derivium

Capital, unbeknownst to General, had sold the collateral in 1997.

167. To conceal this fact, Charles Cathcar and Debevc (on information and belief) then

concocted the story that there had been an "error" in "hedging," supposedly arsing from

the fact that these loans were for two years rather than thee. Charles Cathcart conveyed

ths story to General. He attbuted the story to Bancroft, when (on information and

belief) he and Debevc simply had invented ths excuse. Charles Cathcar then enticed

Bancroft into sending false and misleading correspondence to General, purveying the

same excuse. The purpose of this exercise was to stave off or postpone any effort by

General to recover the funds due to it, and thereby uncover the fact that the Defendants

did nothing to preserve the value of the "stock loan" collateraL.

C. The Californa License Application

i 68. In or around August 2001, the State of California contacted Derivium Capital, and

asked it to comply with Californa laws regarding the registration of lenders and brokers

doing business in California. Derivium Capital replied that it was not a lender or broker,

but that the undisclosed "lender" Bancroft was.

169. In September 2001, Bancroft fied an application for a license under the California

Finance Lenders Law. Defendant Wood signed the application, and Jaris signed the

cover letter. Alexander Jeeves acknowledged his ownership of Bancrofts parent

52


company. On information and belief, Charles Cathcar helped to prepare the application,

and he reviewed it before submission.

i 70. In support of that application, Bancroft submitted a financial statement. In the

financial statement, Bancroft claimed to have $180 millon in liquid assets.

171. This financial statement submitted to the State of Californa was fraudulent and

absurd. On information and belief, at no time did Bancroft have anything approachig

$ i 80 million in assets. Bancroft, Wood and Jaris lied to governent offcials in order to

tr to obtain the license.

172. In furter support of that application, Bancroft fied what it called a "Confidential

Plan of Business." This plan described the "stock loan" program, and it represented to

the Corporations Commssioner of the State of Californa that Bancroft "achieves these

attactive results by the selective use of puts, calls, 'no cost collars,' margin loans, and

other secondary financial instrments whose value is tied to or derived from the

CollateraL. "

173. This representation to the Commssioner was utterly fictive. Bancroft did not use

any "secondary financial instruments" to ensure retum of the collateral upon maturity. It

simply sold the collateral, and pocketed the proceeds.

174. In a letter dated October 25,2001, addressed to the Californa Corporations

Deparment, counsel for Derivium Capital described the "stock loan" program, and

represented that: "ifthe value of the stock appreciates over a period of time, the borrower

53


has the alternative of repaying the loan plus the applicable interest and retaining

ownership of the appreciated stock." This statement regarding "retaining ownership" of

the stock was a knowing false statement to the Corporations Departent, because

Derivium Capital knew that it sold the collateral upon receipt.

175. Following review of ths information, the Californa Corporations Commissioner

asked Derivium and Bancroft to pay a penalty for having issued "stock loans" in

Californa without being licensed. They refused. In response, they discontiued the

issuance of "stock loans" to Californa residents. The Commssioner then initiated

litigation against Derivium and Bancroft.

176. Both Derivium Capital and Bancroft made false representations to the Californa

Corporations Deparent. They performed these acts in order to protect, perpetuate and

extend their "stock loan" scheme.

D. The Reorganization of the Stock Loan Scheme

177. At the end of2002, Derivium Capital faced both litigation and indetermnate

liability to the State of Californa. It also faced large liability to General and, on

information and belief, others to whom the identity of the so-called "lender" (first DDA,

then Bancroft) never had been disclosed.

i 78. The U.S. Defendants therefore resolved to reorganize their "stock loan" scheme.

They established the new legal entities Derivium USA and Veridia. The responsibility

for loan marketing was assigned to Derivium USA, and the responsibility for loan

54


admnistration was assigned to Veridia. Derivium Capital became dormant, and has

remained so ever since.

179. In theory, the "stock loan" business was a valuable one, which had generated

almost $12 millon in "income" for Derivium Capital and its owners in 2000 alone. It

supposedly used a "proprietar hedging strategy" so valuable that Charles Cathcar had

compared it to the secret formula for Coca-Cola. Yet at the end of 2002, Derivium

Capital simply relinquished that business to Derivium USA and Veridia. According to

Debevc, Derivium Capital never received any compensation of any kind for ths, from

Derivium USA, Veridia, or anyone else.

180. Both the U.S. Defendants and the Foreign Defendants stripped Derivium Capital's

assets, and left it like a corpse.

181. The transfer of Derivium Capital's "stock loan" to Derivium USA and Veridia

served two purposes in the "stock loan" scheme. First, it insulated the "fee" income

being paid to Derivium USA and Veridia from the claims of the State of Californa, and

from borrowers whose collateral was not being returned. Second, it added one more

layer of complexity in the arangement, to frustrate the efforts of "stock loan" borrowers

to recover their collateral upon maturity.

i 82. At approximately the same time as Derivium USA and Veridia began operating,

i.e., at the beginnng of2003, they began identifying Bancroft as the "lender." This

served the same purposes - to add complexity to the arangement, and to frstrate the

55


efforts of "stock loan" borrowers to recover their collateral upon maturity.

183. When asked to explain this reorganization, Charles Cathcart and Debevc came up

with the ridiculous yam that Bancroft was unwiling to continue to do business with

Derivium Capital, because Bancroft believed that Derivium Capital was responsible for

the failure to pay General. This quite conveniently shifted the blame for a $35 milion

liability to an inanmate entity. Yet Bancroft was quite wiling to do business with

Derivium USA and Veridia, which were owned and managed by the same thee people

who had owned and managed Derivium CapitaL.

E. Specious Arguments in Litigation

i 84. As noted above, the U.S. Defendants and Foreign Defendants have employed

numerous deceits and artifices to stave off litigation by borrowers seeking to recover their

collateral at maturity. Neverteless, at least nie borrowers have initiated litigation or

arbitration against Derivium Capital, in order to recover their collateral or its value at

matuity. General obtained an arbitration award for over $46 million (including, $10

milion in consequential damages). The Morouse Famly Trust obtained a judgment for

$ i 5 millon. Robert and Melanie Sabelhaus obtained a judgment for over $10 milion.

The Hanond 1994 Famly LP obtained an arbitration award for over $3 milion. The

Lee Family Trust obtained a judgment for $900,000. The magnitude of these awards and

judgments vividly ilustrates the seriousness ofthe Defendants' fraudulent determination

to make no effort to provide for the return of loan collateral upon maturity.

56


185. In many cases, Derivium used frvolous stalling tactics and specious arguments to

frustrate the efforts of these borrowers. For instance, in one case, Derivium claimed that

the borrower had engaged in insider trading, as if that would justify Derivium's failure to

return his collateraL. Neverteless, Derivium has been unsuccessful in every borrower

action brought against it, despite having used an undisclosed "lender" to try to shift

responsibility away from it.

First Claim - BREACH OF CONTRACT(Derivium USA and Bancroft)

i 86. All of the preceding allegations are incorporated herein.

187. In 2002, Grayson entered into a series of "stock loan" transactions. Several dozen

of them matued between March 2005 and the date of this Complaint.

188. Derivium USA and Bancroft were parties to the agreements for these transactions

with Grayson.

189. Bancroft was designated as the "lender" for these loans.

190. For many of these loans, the value of the collateral exceeded the balance due on

the loans at the time of maturity.

191. For each such loan, Derivium USA and Bancroft have failed to pay Grayson the

excess value of the collateral above the balance due. Nor have they offered to retu the

collateraL.

192. Grayson has demanded payment. He received no response. The contracts with

Grayson have been breached.

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WHEREFORE, Grayson seeks the following relief against Derivium USA and

Bancroft:

1. A monetar award of compensatory breach of contract damages or, atGrayson's election, specific performance;

2. A declaration that Grayson is relieved of performance;

3. Interest and costs; and

4. Such fuer relief as the Cour deems just.

Second Claim - ANTICIPATORY REPUDIATION(Derivium USA, Bancroft)

193. All of the preceding allegations are incorporated herein.

194. During 2004 and 2005, Derivium USA and Bancroft entered into several thee-

year "stock loans" with Grayson. In May 2005, Charles Cathcar, acting on behalf of

Derivium USA and Bancroft, sent a letter to Grayson and to other borrowers. The letter

stated that these Defendants could not or would not perform their obligations under these

loans.

195. Beginning in May 2005, these Defendants also have manifested conduct indicating

that they would not perform their obligations. Such conduct included, but was not

limited to, the failure to provide quarterly statements, the failure to respond to Grayson's

telephone calls, and the refusal to accept correspondence from Grayson.

196. The May 2005 letter and the subsequent conduct constitute repudiation. This

theatened breach is serious. If it occured, it would be a total breach. The letter is

58


reasonably understood as meaning that the breach actually wil occur. Grayson

reasonably believes that total breach wil occur while ths action is pending.

WHEREFORE, Grayson seeks the following relief against Derivium USA and

Bancroft:

i. A monetary award of compensatory breach of contract damages or, at

Grayson's election, specific performance;

2. A declaration that Grayson is relieved of performance;


4. Such further relief as the Court deems just.

Third Claim - FRAUD(All Defendants)


198. The Defendants knowingly engaged in the various deceitful means, enumerated

above and below, to deprive Grayson of his property permanently.

199. More specifically, the Defendants made many false representations of material

fact, as set fort above and below. They knew that these representations were false, or

they made them with reckless disregard for their trth or falsity. They intended Grayson

to rely on them. Grayson reasonably relied on them. As a result, he was injured.

200. These misrepresentations were numerous and varied, and continued over the

course of five years, from 2000 through 2005. What most of them had in common is that

they either were explicit statements that the collateral for the stock loans was safe and

59


capable of being retued in full upon maturity, or they were statements that were

intended to make Grayson believe this. These were not mere promises to perform, but

actual representations of fact as to the status of collateral, and the standard business

practices of Derivium and Bancroft.

20 i. The Defendants also made material omissions of facts which they had a duty to

disclose, durng the same period, as set fort above and below. The Defendants had

knowledge of the facts that they omitted. They intended Grayson to act or refrain from

acting, based upon their omission of these facts. Grayson did so. As a result, he was

injured. 13

202. During this period, Anderson, Kelley, Defendant Charles Cathcar, Defendant

Debevc and George Gordon ofWachovia made such misrepresentations to Grayson.

Defendants Charles Cathcart, Scott Cathcar and Anderson also made such

misrepresentations in the Derivium website, and when speakng to reporters, with the

expectation and purpose that such misrepresentations would be repeated to Grayson and

others. In doing so, these individuals acted as agents for the other Defendants, and they

acted withn the scope of their employment.

203. On information and belief, Charles Cathcar made such misrepresentations from

his home in New York and his offce in South Carolina. Scott Cathcart made such

misrepresentations from his home and his offce in California. Anderson made such

13 In the remainder of this claim, and in related claims, the term "misrepresentations" includes both falserepresentations and omissions.

60


misrepresentations from various locations, including California, South Carolina and

Florida. Debevc and Kelley made such misrepresentations in South Carolina. George

Gordon ofWachovia made such misrepresentations in Virginia. They were made to

Grayson while Grayson was in Florida, Virginia and South Carolina. They were made

between 2000 and 2005, by means oftelephone, faxes, e-mail, once in person, and

indirectly through websites and periodicals, as explained above.

204. Defendants Charles Cathcart, Scott Cathcar and Yurj Debevc knew that these

misrepresentations were false, or they acted in reckless disregard for their trth or falsity.

For instance, Debevc knew that all collateral was sold immediately, because he was the

one who instrcted its sale. Debevc also knew that Bancroft had made no provision for

the retu of collateral upon matuty, because he used funds in Bancroft accounts that he

controlled, from time to time, in order to repurchase small amounts of collateral and

return it to borrowers at matuity. George Gordon ofWachovia knew that all collateral

was sold immediately, because he and the Wachovia staff with whom he worked were the

brokers who sold it. Anderson and Kelley acted in reckless disregard for the trth or

falsity of their misrepresentations or, on information and belief, they may have known

that these misrepresentations were false.

205. The Defendants intended that Grayson rely upon these misrepresentations, because

they sought fraudulently to induce Grayson to enter into more "stock loan" transactions

61


(as well as related matters, such as any applicable arbitration clause),14 and they sought to

profit from these "stock loans." Grayson reasonably relied on these misrepresentations,

as did close to i 000 other borrowers.

206. The Defendants also failed to inform Grayson of numerous material facts. For

instance, the Defendants failed to inform Grayson that all of the collateral for his loans

and for all other "stock loans" was sold immediately; that Derivium and Bancroft made

no provision for the retu of this collateral at loan matuity; that responsibility for

repaying the collateral was shifted to an overseas shell-company with no capital; that the

Defendants siphoned off huge "origination fees," "admnistration fees," "commissions,"

"investment advisory fees," "professional fees," "legal fees" and other transfers for their

own benefit; and that Charles Cathcar took the money from the sale of collateral and

purportedly spewed over $40 millon into Orangeburg, SC and other businesses that

quickly went bankpt. Indeed, for several years, the Defendants did not disclose even

the identity of the so-called "lender." These were material fraudulent omissions that the

Defendants had a duty to disclose to Grayson.

207. Grayson was unaware of the falsity of the misrepresentations, and unaware of the

omissions.

208. The trth is that Grayson's collateral was gone almost immediately after he

provided it, and that the Defendants not only were failing to preserve the value of that

14 Several of the Defendants reside in Liechtenstein. Liechtenstein is not a pary to the Convention on theRecognition and Enforcement of Foreign Arbitral Awards. 9 D.S.C. § 201 et seg. (2000). If these entities had beendisclosed to Grayson, Grayson would not have entered into any arbitration clause, because (inter alia) of the

62


collateral, but they were engaging in activities to convert the value of that collateral to

their own personal benefit, and to frustrate Grayson's ability to recover it. In furterance

of the fraud, between 2000 and 2005, Charles Cathcart, Scott Cathcart and Debevc

transferred millons of dollars in cash and other assets away from Derivium Capital,

Derivium USA and Bancroft, and into accounts of entities that they owned and

controlled, including the other U.S. Defendants. Many of such transfers, totaling tens of

millons of dollars, are enumerated in the attachment to this Complaint. Other such

transfers remain to be uncovered through examination of the books and records of the

Defendants and other entities. These transfers injured Grayson and other "stock loan"

borrowers, because they diverted fuds necessary to conserve the collateral for the loans

and return that collateral at the time ofloan matuty.

209. Each of the Defendants knowingly paricipated in and advanced the fraudulent

scheme, or recklessly disregarded the trth, in the respective manners set fort above.

210. If Grayson had known the trth, he would not have entered into these "stock loan"

transactions with the Defendants. Grayson would have entered into similar transactions

with honest institutions, or he simply would have kept his collateral, and enjoyed the

benefit of it. Since Grayson now is unable to recover his collateral from the Defendants,

or even the incremental value of that collateral above his loan balances, he has been

injured.

potential diffculty in enforcing the resulting award.63


211. The Defendants acted recklessly, wilfully and wantonly.

WHEREFORE, Grayson seeks the following relief against all Defendants, jointly

and severally:

i. A monetary award of compensatory damages for fraud;

2. A monetary award of puntive damages in the maximum amount permtted

bylaw;


4. Such further relief as the Cour deems just.

Fourth Claim - AIDING AND ABETTING FRAUD(All Defendants)


2 i 3. Under the allegations stated above, Grayson is a victim of fraud.

214. Each of the Defendants paricipated in the fraud, in the respective manners alleged

above.

215. On information and belief, that participation was knowing, wilful, wanton and

reckless.

216. Grayson suffered injury as a result of the fraud.


and severally:

i. A monetary award of compensatory damages for aiding and abetting fraud;

64


2. A monetary award of punitive damages in the maximum amount permttedbylaw;


4. Such furter relief as the Cour deems just.

Fifth Claim - UNIFORM SECURITIES ACT FRAUD(All Defendants)


218. The Defendants acted in connection with the offer, sale or purchase of securties,

directly or indirectly. These securities included, but were not limited to: (a) the securities

that constituted the collateral for the "stock loans" issued by Derivium and Bancroft to

Grayson and others; (b) the securities that Derivium or Bancroft repurchased on those

occasions when it endeavored to appear to be returnng the collateral to Grayson and

others; and (c) the "stock loans" themselves.

2 19. In connection with the offer, sale, or purchase of those securities, each of the

Defendants respectively employed the devices, schemes and arifices to defraud that are

alleged above.

220. In connection with the offer, sale, or purchase of those securities, the Defendants

making the respective untre statements of material fact alleged above made such

statements.

22 i. In connection with the offer, sale, or purchase of those securities, the Defendants

also omitted to state the material facts, alleged respectively above, that were necessary to

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make the statements made, in light of the circumstances under which they were made, not

misleading.

222. In connection with the offer, sale, or purchase of those securities, the Defendants

also engaged in the respective acts, practices and course of business that operated as a

fraud and deceit upon Grayson and other borrowers.

223. The Defendants offered to sell, and did sell, those securties by means of the

respective untre statements of material fact and the omissions to state material fact

alleged above.

224. Grayson did not know of the untrths, fraudulent acts and omissions.

225. The Defendants other than Derivium and Bancroft: (a) directly or indirectly

controlled Derivium or Bancroft; (b) served as offcers, parers or directors ofDerivium

or Bancroft; (c) occupied a similar status or performed similar fuctions; (d) were

employees of Derivium or Bancroft who materially aided in the sale; or (e) were broker-

dealers or agents who materially aided in the sale.

226. Each of the Defendants knew, or in the exercise of reasonable care could have

known, of the existence of the facts by reason of which liabilty is alleged.


and severally:

i. An award of statutory damages;

2. Interest, reasonable attorneys fees and costs; and

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Sixth Claim - Racketeer Influenced and Corrupt Oriianizations Act ("RICO")(All Defendants except Wachovia, i.e., the "RICO Defendants")


228. On information and belief, the association of Derivium, Bancroft, the Jeeves Group, the

Jeeves Group Defendants, Vision and Charles Cathcart, and other individuals and entities, is an

associated-in-fact enterprise (the "RICO Enterprise") with an organizational strcture or system

of authority for making and implementing decisions and for exercising common control over its

members. This association has continuously operated since at least 1997 (starting in 2000,

joined by Bancroft, the Jeeves Group, the Jeeves Group defendants and Vision). On information

and belief, the strcture ofthis association-in-fact enterprise is such that either Charles Cathcar

made decisions and directed the conduct ofthe RICO Enterprise and its participants, or

Derivium, Bancroft, the Jeeves Group, the Jeeves Group defendants and Vision conferred to

reach consensual decisions in the operation of the RICO Enterprise. On information and belief,

the RICO Enterprise at all times relevant herein engaged in, and its activities affected, interstate

and foreign commerce.

229. The RICO Enterprise existed and exists as an ongoing entity separate and apar from the

pattern of racketeering activity alleged herein. On information and belief, Defendants Derivium,

Bancroft, the Jeeves Group, the Jeeves Group Defendants and Vision consulted and associated

for legitimate business purposes, in addition and separate from the ilegitimate purposes alleged

herein.

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230. The business of the RICO Enterprise as carred out by its paricipants depended on the

performance of a stock during the term of the "stock loan." The RICO Enterprise sold the

collateral for the "stock loan" when the loan was initiated. If the value of the stock then

declined, or its increase did not exceed the "interest" charged, then the RICO Enterprise

pocketed the difference between the collateral proceeds and the loan (the "equity"), without

fuer consequences involving the borrower. When the value of the stock increased beyond the

balance due at maturity, and particularly when that increase was substantial, a different situation

was faced - the RICO Enterprise was accountable not only for its expropriation of the equity,

but also for its failure to preserve the value of the collateraL. In those circumstances, including

those relating to Grayson, the RICO Enterprise obfuscated and misled the borrower, all the while

having transferred fuds to other entities in an attempt to put them beyond the borrower's reach.

The RICO Defendants engaged in a pattern of intentional fraud to induce Grayson to enter into

the "stock loans," and to thwar Grayson's attempts to secure his rights thereafter.

231. The RICO Defendants' wrongful conduct as alleged herein constitutes a pattern of

racketeering activity, as defined by 18 D.S.C. § 1961 (2000), though which the RICO

Defendants conducted the operations of the RICO Enterprise, and the pattem was a mode of

business adopted by the RICO Defendants. Furthermore, on information and belief, the RICO

Enterprise, as directed by the RICO Defendants, has continuously since 1997 engaged in the type

of ilegitimate, fraudulent and ilegal activities of which Grayson complains, directed at many

other entities and individuals, who have likewise been defrauded and suffered losses. As such,

the pattern, at the time it was so adopted, was inherently characterized with the threat of

continuity and continuation in the futue as a standard and routine means by which the RICO

68


Defendants intended to conduct business in their industr. For instance, even after the

Defendants diverted Derivium Capital's business to Derivium USA and Veridia, and Derivium

Capital then declared banptcy, Derivium Capital petitioned for banptcy under Chapter 11

rather than Chapter 7, and Charles Cathcart represented that Derivium Capital sought to continue

to do business issuing "stock loans." (The bankptcy court converted the bankptcy fiing to

Chapter 7.)

232. The RICO Defendants diverted the fuds garered from the "stock loans" to other

enterprises. The details of some of those diversions are alleged above and below. The members

of the RICO Enterprise, in furtherance of the enterprise, also transferred, extinguished, and

secreted assets, in an attempt to conceal their il-gotten gains from Grayson and other borrowers.

233. On information and belief, RICO Defendants, though the RICO Enterprise and, as to the

RICO Defendant corporations, by their respective operations, committed numerous predicate

acts of mail, wire and banking fraud, in violation of 18 U.S.C. §§ 1341, 1343 and 1344 (2000).

This includes, but is not limited to, each one ofthe ban transfers identified in the attachment to

this Complaint. In paricular the RICO Defendants, through the RICO Enterprise and, the

Defendant corporations, by their respective operations, and others acting at the direction and

under the control of RICO Defendants or with RICO Defendants' knowledge and support,

engaged in wire fraud in violation of id. § 1343, when, in contemplation and furtherance of a

scheme to defraud and to obtain money from Plaintiff by means of false representations, the

RICO Defendants and the RICO Enterprise used and caused to be used interstate wire

communications by, between 2000 and 2005: (a) making the misrepresentations to Grayson (and,

on information and belief, others) alleged above by telephone from South Carolina and

69


California to Virginia and Florida; (b) faxing and e-mailing the loan origination, quarerly report

and loan matuty documents alleged above from South Carolina and California to Virginia and

Florida, and from London and the Isle of Man to or from South Carolina, in order to further the

scheme to defraud Plaintiff as alleged herein; (c) communicating the false and misleading

materials at (or referred to at) the Derivium website to Grayson and others.

234. RICO Defendants and the RICO Enterprise used and caused to be used interstate mail by

mailing the loan origination, quarterly report and loan matuty documents alleged above from

South Carolina and California to Virginia and Florida, and from London and the Isle of Man to

or from South Carolina. They did so in order to further the scheme to defraud Plaintiff as alleged

herein. They thus engaged in mail fraud, in violation of id. § 134 i.

235. Derivium and Bancroft are financial institutions within the meaning of id. § 1344. The

RICO Defendants and the RICO Enterprise executed, and attempted to execute, the schemes and

arifices alleged above, to obtain the moneys, fuds, credits, assets, securties, and other property

owned by, or under the custody or control of, Derivium and Bancroft. They did so by means of

the false or fraudulent pretenses, representations and promises alleged above. If prosecuted and

convicted, they therefore are subject to imprisonment of up to 30 years.

236. The RICO Defendants committed fraud in the sale of securities, in the manners described

above.

237. The RICO Defendants also engaged in money laundering and banruptcy fraud, in the

manners described above.

238. Each violation ofid. §§ 1341, 1343 & 1344 (2000), and the fraud in the sale of securities,

as alleged above, constitutes an instance of "racketeering activity" as defined by id. § 1961 (1).

70


The predicate acts alleged above constitute a pattern of racketeering activity, as defined by id. §

1961(5).

239. The RICO Defendants' conduct constitutes a violation ofid. § 1962(c). It has directly

and proximately caused injur to Grayson in his business and property, as alleged above.

240. Derivium and Bancroft are enterprises engaged in, and whose activities affect, interstate

and foreign commerce. The RICO Defendants other than Derivium and Bancroft acquired and

maintained interest in, and control of, Derivium and Bancroft, directly or indirectly. They did so

through the pattern of racketeering activity alleged above, in violation of id. § 1962(b).

241. In violation of id. § 1962( d), the RICO Defendants conspired to violate id. §

1962(b)&(c), in the manner alleged above, and in the Civil Conspiracy claim below.

242. The RICO Defendants' conduct has directly and proximately caused injury to Grayson in

his business and property, as alleged above.

WHEREFORE, Grayson seeks the following relief against all RICO Defendants,

jointly and severally:

1. A monetar award of threefold the damages that Grayson has sustained;

2. A monetary award of the cost of the suit, includig reasonable attorneys'fees;

3. Interest;

4. Furer appropriate orders under id. § 1964(a); and


71


Seventh Claim - NEGLIGENT MISREPRESENTATION(All Defendants)

243. All of the precedig allegations are incorporated herein.

244. The Defendants had a pecunary interest in the "stock loan" transactions.

245. The Defendants made the misrepresentations to Grayson enumerated under the

claim for fraud above, directly or indirectly.

246. The Defendants who made the direct misrepresentations 1 5 to Grayson acted as

agents for the other Defendants and each other.

247. The Defendants owed Grayson a duty of care to ensure that their statements to

Grayson were true.

248. Grayson justifiably relied on the Defendants for accurate information.

249. The Defendants intended for Grayson to rely upon the information that they

provided.

250. The information that the Defendants provided to Grayson was false, in the maner

described under the claim for fraud above.

25 i. Grayson was injured by the false information that the Defendants provided to him.

252. The Defendants' negligent misrepresentations were wilful and wanton. They

acted with such indifference as to whether Grayson would be harmed as to be equivalent

to intending to harm him.

15 As noted above, the term "misrepresentations" in this claim includes both false

statements and omissions.72



and severally:

1. A monetary award of compensatory damages for negligent

misrepresentation;

2. A monetary award of punitive damages on account of the Defendants'

wilful and wanton negligence, in the maximum amount permitted by law;


4. Such furter relief as the Court deems just.

Eil!hth Claim - NEGLIGENCE(Derivium USA, Charles Cathcart, Scott Cathcar and Debevc)


254. Derivium USA, Charles Cathcart, Scott Cathcart and Debevc (collectively, the

"Negligence Defendants") are experienced professionals in the field of finance.

255. Charles Cathcar has called himself "a world-recognized expert in building and

preserving wealth for clients though the application of sophisticated hedging strategies."

He claims to be "one of the early developers of derivative instrments," and he says that

"in 1987, as President ofCiticorp International Trading Company, he pioneered the

design, secured regulatory approval, and successfully marketed a new form of

commodity derivatives which is now a multi-bilion dollar business." He has over 25

years of experience in commercial and investment banng, purportedly including jobs as

a Citibank Chief Economist, W.R. Grace Vice President, and Chase Economist. He

73


supposedly has a Ph.D. in Economics from U. Va., and a Master's degree in Economics

from Berkeley, and has lectured at Harvard Business SchooL.

256. Debevc has over 25 years of experience in the financial services industry. He

claims to have headed the hedging desk for Citicorp International Trading Corp. He also

claims to have experience as a commodity futues broker at Cargil, a partner and futures

trader at Fininvest, and Risk Management Coordinator for Amerada Hess, among other

things.

257. Scott Cathcar has more than fifteen years of experience in managing client

relations, and was the "principal architect" of Derivium's marketing programs.

258. The Negligence Defendants selected Bancroft as the lender for Grayson's "stock

loans." They did so knowing that Bancroft was a newly formed shell company. On

information and belief, they did not require the Foreign Defendants to capitalize

Bancroft, so that Bancroft could meet its foreseeable liabilities. They knew or should

have known that Bancroft had no other assets or reserves that could be used for ths

purose. They knew that Bancroft was a foreign entity, from which it would be diffcult

for Grayson and other borrowers to recover, in the event of Bancroft non-performance.

They knew that Bancroft had no "calls or call-like options" by which it would meet its

obligation to retu collateral at maturity, because (inter alia) when small amounts were

due on such occasions, the Negligence Defendants dipped into Bancroft accounts at

Wachovia to make these pay-offs.

74


259. The Negligence Defendants owed Grayson a duty of care in their selection of a

lender. It was reasonably foreseeable to them that their carelessness in choosing a lender

would likely injure Grayson, because Grayson might be unable to recover the value of

appreciated collateral at maturity.

260. The Negligence Defendants failed to exercise reasonable care in their choice of a

lender. On the contrary, their lack of care was wilfu and wanton. In a sense, they did

act with malice, intending to harm Grayson, because the less that Grayson recovered at

matuty, the more that they could siphon off for themselves. In the alternative, they

acted with such indifference as to whether Grayson would be hared as to be equivalent

to intending to har Grayson.

261. In all other respects, the Negligence Defendants failed to act with due care to

preserve the value of the collateral for Grayson's "stock loans," and ensure its return at

maturity.

262. The natual and probable consequence of the Negligence Defendants' negligence

in the selection of a lender, and the preservation of the value of Grayson's collateral, was

that Grayson has been unable to recover the collateral for his stock loans at matuity, and

that Derivium USA and Bancroft have anticipatorily repudiated performance on loans

that have not yet matured.

75


WHEREFORE, Grayson seeks the following relief against the Negligence

Defendants, jointly and severally:

I. A monetary award of compensatory damages for negligence;

2. A monetary award of punitive damages on account of the Defendant'swilful and wanton negligence, in the maximum amount permtted by law;


4. Such fuer relief as the Cour deems just.

Ninth Claim - BREACH OF FIDUCIARY DUTY(Derivium USA, Charles Cathcar, Scott Cathcar and Debevc)


264. Grayson was a Derivium client.

265. Grayson relied upon the Negligence Defendants to act as or to select a responsible

lender, and to ensure the safekeeping of the value of the collateral for his loans. The

Negligence Defendants claimed superior knowledge in these regards. This established a

special relationship of trst, confidence and responsibility for the Negligence Defendants

in discharging these obligations. Grayson reposed special trst and confidence in the

Negligence Defendants.

266. The Negligence Defendants owed a fiduciary duty to Grayson. Among other

things, they owed him undivided loyalty and honesty, and the duty to refrain from

conflicts of interest.

76


267. According to the Negligence Defendants, they acted, in effect, as loan brokers.

Loan brokers have a fiduciar obligation to make a full and accurate disclosure of the

terms and circumstances of a loan, and always to act in the utmost good faith toward the

borrowers.

268. The Negligence Defendants egregiously violated their fiduciary duty to Grayson.

Examples of these violations include, but are not limited to: establishing and employig a

shell-company as "lender"; establishing and employing a "lender" in a foreign

jursdiction; selling Grayson's collateral immediately upon receipt; doing nothng to

provide for the return of that collateral upon matuity; pocketing extravagant "fees,"

"commissions" and other undeserved payments that dissipated the assets of Derivium and

Bancroft; diverting fuds to foolish and self-indulgent so-called "investments," and

deceiving Grayson as to all of these arangements.

269. On information and belief, these actions were knowing, wilful, wanton and

reckless.

270. These actions were not reasonable.

271. In addition to the grounds for breach of fiduciar duty alleged above, the

Negligence Defendants commtted a second, independent breach of fiduciary duty. As

early as the time that Derivium began lending to Grayson, the Negligence Defendants

knew that Derivium was insolvent. The directors and offcers of an insolvent company

owe their loyalty and honesty to creditor such as Grayson, not to shareholders and

77


members like Charles Cathcar, Scott Cathcart and Debevc. The Negligence Defendants

breached that duty of loyalty to Grayson and to Derivium's other creditors, in the

manners alleged above.

272. On information and belief, these actions were knowing, wilful, wanton and

reckless.

273. These actions were not reasonable.

274. The Negligence Defendants' breach of fiduciary duty has resulted in injury to

Grayson. Grayson has been unable to recover the collateral for his stock loans at

matuity, and Derivium USA and Bancroft have anticipatorily repudiated performance on

loans that have not yet matued.

WHEREFORE, Grayson seeks the following relief against the Negligence

Defendants, jointly and severally:

1. A monetar award of compensatory damages for breach of fiduciar duty;

2. A monetar award of puntive damages on account of the Defendants'wilful and wanton breach of fiduciar duty, in the maximum amountpermitted by law;



Tenth Claim - AIDING AND ABETTING BREACH OF FIDUCIARY DUTY(All Defendants)


78


276. Under the allegations stated above, Grayson is a victim of breach of fiduciary duty

by Derivium USA, Charles Cathcart, Scott Cathcart and Debevc.

277. Each of the Defendants participated in, aided and abetted the breach of fiduciar

duty, in the respective maners alleged above.

278. On information and belief, that participation, aiding and abettg was knowing,

wilful, wanton and reckless.

279. Grayson suffered injury as a result of the breach of fiduciary duty.

WHEREFORE, Grayson seeks the following relief against the Defendants, jointly

and severally:

I. A monetary award of compensatory damages for aiding and abetting breach

of fiduciar duty;

2. A monetary award of punitive damages on account of the Defendants'wilful and wanton aiding and abetting of a breach of fiduciary duty, in themaximum amount permtted by law;



Eleventh Claim - CONVRSION(All Defendants)


281. Grayson owned the stock that he provided as collateral for the stock loans. At the

time that each Grayson stock loan was initiated, and continuing for each loan thereafter,

Grayson held several property interests ("Grayson's property interests"):

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. The difference between the value of the collateral and the amount of the loan, i.e.,

Grayson's equity;

. Grayson's right to the futue appreciation in the value of the collateral, if any;

. Grayson's equitable right to have the value of the collateral preserved.

282. In litigation with other borrowers, Derivium Capital and Bancroft have claimed

that they had a contractual right to sell "stock loan" collateral upon receipt. Whether or

not ths is tre, they had no right to sell the collateral without ensuring the abilty to

retu that collateral upon matuty. By selling the collateral for Grayson's "stock loans"

without ensurng the ability to return that collateral upon maturity, the Defendants

disposed of Grayson's property interest in the preservation of that collateral, just as surely

as if they had taken his stock certificates and burned them.

283. By selling the collateral immediately, and then divertng the full amount of the

proceeds to their own uses, the Defendants converted Grayson's propert interests.

284. This disposition of Grayson's property interests was wrongful because, inter alia:

(a) it was accomplished though deception of Grayson, and (b) it was done in order to

divert the value of that collateral to the Defendants.

285. All of the Defendants knowingly benefited from the conversion of Grayson's

property interests. The Defendants worked in concert to accomplish this goal. Each of

the Defendants materially contributed to the result, i.e., the conversion of Grayson's

property interests, in the respective maners alleged above. The persons most directly

80


involved in this effort, i.e., Charles Cathcar, Debevc and Anderson, acted as agents for

the other Defendants.

286. Each of the Defendants took possession and control of respective assets that

rightfully belong to Grayson, and put them to use without Grayson's permission.

287. Such use was to the exclusion of the interests that Grayson has in those assets.

288. This conversion has resulted in injury to Grayson. Grayson has been unable to

recover the collateral for his stock loans at matuty, and Derivium USA and Bancroft

have anticipatorily repudiated performance on loans that have not yet matured.

289. The Defendants acted recklessly, wilfully and wantonly.

WHEREFORE, Grayson seeks the following relief against all Defendants, jointlyand severally:

1. A monetary award of compensatory damages for conversion;

2. A monetary award of punitive damages, in the maximum amount permttedby law;



Twelfth Claim - CIVIL CONSPIRACY(All Defendants)


29 i. The Defendants engaged in a combination and conspiracy involving six

conspirators:

. though 2002, the offcers, employees and agents of Derivium Capital;

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. beginng in 2003, Derivium USA and its officers, employees and agents;

. beginning in 2003, Veridia and its offcers, employees and agents;

. at all relevant times, Vision and Bancroft, and their offcers, employees and

agents;

. the Jeeves Group, the Jeeves Group defendants, and their offcers, employees and

agents; and

. Wachovia and its officers, employees and agents.

292. These conspirators combined for the purose of injuring Grayson, and other "stock

loan" borrowers. Specifically, the conspirators sought to deprive them of their property

interests in these loans, by diverting the value of those property interests to the

conspirators. They did so not only in the manners alleged above, but also by means of

the following overt acts, inter alia:

. the formation of the corporate Defendants;

. the preparation and execution of agreements between and among the Defendants,

including but not limited to the agreements between Derivium and Bancroft;

. the preparation and dissemination of deceptive marketing materials, not only to

Grayson but also to other borrowers;

. the preparation and dissemination of deceptive agreements between the

Defendants on one hand, and Grayson and other borrowers on the other;

. the establishment of brokerage accounts used to execute the scheme;

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. the sale or short sale of Grayson's stock and other borrowers' stock;

. the preparation and dissemination of deceptive quarerly and annual reports, and

related correspondence; and

. the transfers set fort in the attachment to ths Complaint.

293. The Defendants' conspiracy has caused Grayson injury, including the following

special damages (inter alia):

. Grayson provided the Defendants with collateral worth $28,703,339. The stock

loans that he received from the Defendants totaled $25,833,325. The Defendants'

conspiracy thus deprived Grayson of $2,870,0 14, as of the dates the loans were

initiated, plus other valuable rights and interests. 16

. A Grayson loan for 10,000 shares of Network Appliance stock (NTAP) matured

on March 4,2005. The value ofthe stock exceeded the loan balance by $103,969

on that date. The Defendants' conspiracy deprived Grayson of this amount, plus

other valuable rights and interests, as of that date. (Such rights and interests

included, but were not limited to, the futue appreciation of that stock.)

. A Grayson loan for 20,000 shares of Juniper stock (JNPR) matured on March 4,

2005. The value of the stock exceeded the loan balance by $204,740 on that date.

The Defendants' conspiracy deprived Grayson of this amount, plus other valuable

rights and interests, as of that date.

. A Grayson loan for 20,000 shares of Sandisk stock (SNDK) (post-split) matured

83


on March 4,2005. The value of the stock exceeded the loan balance by $339,136

on that date. The Defendants' conspiracy deprived Grayson of this amount, plus

other valuable rights and interests, as of that date.

In addition to these examples, Grayson has suffered special damages for other stock loans

that have matued without the return of collateraL. He wil suffer fuer special damages

as other loans mature durig the pendency of ths lawsuit.

294. The conspirators acted recklessly, wilfully and wantonly.


and severally:

1. A monetary award of compensatory damages for civil conspiracy;

2. A monetar award of punitive damages for civil conspiracy, in the maximumamount permitted by law;



Thirteenth Claim - UNFAIR TRAE PRACTICES(All Defendants)


296. The Defendants' acts and omissions alleged above are unfair and deceptive acts

and practices. They had the capacity or effect or tendency to deceive Grayson. They

were conducted in trade and commerce. They are capable of repetition.

16 The Defendants' subsequent payments of $616,420 to Grayson did not remedy this loss.

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297. The Defendants thus have used and employed unfair and deceptive methods, acts

and practices declared unawful by Section 39-5-20 of the South Carolina Code.

298. Grayson has suffered an ascertainable loss of money and property as a result of

those violations by the Defendants.

299. The Defendants' violations were wilful and knowing.


and severally:

1. A monetary award ofthree times the actual damages that Grayson

sustained;

2. A monetary award of punitive damages for unfair trade practices, in themaximum amount permitted by law;

3. Interest, reasonable attorneys fees and costs; and

4. Such fuer relief as the Court deems necessar or proper.

Fourteenth Claim - FRAUDULENT CONVEYANCE(All Defendants)

300. All of the precedig allegations are incorporated herein.

30 i. At the time that each Grayson stock loan was initiated, and continuing for each

loan thereafter, Grayson held the Grayson property interests enumerated above.

302. With respect to each loan, Grayson was a creditor of Derivium and Bancroft at

least from the time that Grayson transferred the collateral for the loan.

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303. By engaging in the multifarous machinations alleged above, all of the Defendants

transferred property and interests in property between Derivium and Bancroft, and away

from Derivium and Bancroft to themselves, in the respective manners described above.

304. Examples of such transfers include, but are not limited to, the "origination fees,"

"admnistration fees," "commssions," "investment advisory fees," "professional fees,"

"legal fees" and "sales" identified above, as well as the salaries, bonuses, member

distrbutions and other property and property interests received by the Defendants,

diectly or indirectly, from Derivium and Bancroft.

305. On information and belief, these transfers were made not only to the Defendants

identified by name, but also to persons and entities whose identity is not yet known, and

must be ascertained through discovery, i.e., John Does i though 10.

306. These transfers were made in order to hinder, defraud and deceive Grayson and

other borrowers.

307. On information and belief, all of these transfers were made with fraudulent intent.

308. On information and belief, the transfers to all Defendants other than Wachovia

were not made for valuable consideration.

309. Grayson was a creditor of Derivium and Bancroft at the time of these transfers.

310. Derivium and Bancroft failed to retain suffcient property to pay Grayson in full.

31 i . Each of the Defendants has assets in his, her or its possession, custody or control

that is or may be the property of Grayson.

86



and severally:

1. An accounting for all such transfers;

2. An order declaring that the Defendants have committed fraud;

3. An order declaring all such transfers void;

4. An order requirig all such property and property interests to be retued toDerivium, Bancroft and Grayson, with interest;

5. An order attaching the property and property interests transferred;

6. An injunction against fuer disposition by the Defendants of the

transferred property and property interests, and other property of theDefendants;

7 Appointment of a receiver to take charge of the transferred property andproperty interests, and other property of the Defendants;

8. A monetary award of compensatory damages to Grayson;

9. A monetary award in favor of Grayson of punitive damages for fraudulentconveyance, in the maximum amount permitted by law;


i 1. Such further relief as the Court deems just.

Fifteenth Claim - AIDING AND ABETTING FRAUDULENT CONVEYANCE(All Defendants)


313. The Defendants not only engaged in the fraudulent conveyance of property and

property interests between Derivium and Bancroft, and from Derivium and Bancroft to

87


themselves, but they also aided and abetted this fraudulent conveyance, in the respective

manners described above.

314. Each of the Defendants who aided and abetted this fraudulent conveyance

received some of the fraudulently conveyed property and property interests.


and severally:

i. An accounting for all such transfers;

2. An order declaring that the Defendants have aided and abetted fraud;

3. An order declaring all such transfers void;

4. An order requirng all such property and propert interests to be returned toDerivium, Bancroft and Grayson, with interest;

5. An order attaching the property and propert interests transferred;

6. An injunction against further aiding and abetting of the disposition by theDefendants of the transferred property and property interests, and otherproperty of the Defendants;

7 Appointment of a receiver to take charge of the transferred property andproperty interests, and other property of the Defendants;

8. A monetary award of compensatory damages to Grayson;

9. A monetary award in favor of Grayson of punitive damages for aiding andabetting fraudulent conveyance, in the maximum amount permtted by law;


i i . Such furter relief as the Court deems just.

88


Sixteenth Claim - OUANTUM MERUIT(All Defendants)

3 15. All of the preceding allegations are incorporated herein.

316. Grayson provided the Defendants with collateral worth $28,703,339. The stock

loans that he received from the Defendants totaled $25,833,325. At later times, the

Defendants provided Grayson with an additional $616,420. Grayson has received

nothing fuher from the Defendants. The Defendants thus deprived Grayson of

$2,253,594 (plus other rights and interests, including but not limited to the appreciation

of the value of that collateral).

3 17. The Defendants provided Grayson with the additional $6 i 6,420 thee years after

Grayson provided the Defendants with the corresponding collateraL. The Defendants thus

deprived Grayson of the use and enjoyment of that $616,420 for thee years.

318. The $2,253,594 of which Grayson was deprived, plus the use and enjoyment of the

$616,420 of which Grayson also was deprived, are benefits that Grayson conferred on

the Defendants. Defendants Derivium and Bancroft intially realized those benefits, and

then those benefits were disseminated among the other Defendants. The Defendants are

retaining those benefits under circumstances that make it inequitable for them to retain

the benefits without paying their value.

319. The Defendants acquired Grayson's property through the use of fuds from

acquired through "stock loans," and retained the benefit of that propert. It would be

inequitable for them to retain such property without paying Grayson for it.

89



and severally:

I. A monetar award to Grayson corresponding to the value that theDefendants received and retain from Grayson;


3. Such fuer relief as the Court deems just.

JURY REQUEST

Grayson requests a jur for all issues that may be tred by a jury.

Respectfully submitted,

s/ Charles P. SummeralL. ivCharles P. Summerall, IV, Dist. Ct. ID# 4385Wiliam C. Cleveland, Dist. Ct. ID# 179Buist Moore Smythe McGee P.A.5 Exchange Street, Charleston, SC 29401Phone: 843-722-3400; Fax: 843-723-7398E-Mail: csummerall(abuistmoore.com

And

John Thornton, Esq., of counselMelissa Roover, Esq.

Grayson & Kubli, P.c.Suite 2301420 Spring Hil RoadMcLean, VA 22 i 02703-749-0000

Attorneys for PlaintiffsAlan M. Grayson andThe AMG Trust

90


Derivium Capital, LLCExhibit I

Entity D... Account Name I Bank Account I I Payment I I Oepoall

AquiIU$,lne 02116/01 Deri..ium Ciipilal, LtC First Union Com Chkirg (7715) $ (245,000.00)Aqu~us, Inc 02120101 DeiiviumCapila!.LlC Firt Union Comm Ctiklng (7775) (45,000.0)Aqullu5, Lnc 02l23fOl DerivlumCapltal,LLC FIrst Union Comm Chklng (7775) (35,00.00)Aqullus,lnc 02127/01 Derivlum Capital, LLC First Union Comm Clking (mS) (970,000.00)Aqulls,lnc 05/30/01 DerMum Capital, ltC Fin;tUníonCommClking(7775) (100,000.00)Aquilu$,lnc 0817101 DerMum Capilal, LlC Firsl Uniori CAP (4857) (30,00.00)Aquilus,lric 09/1211 DeiVÎlJmCspllat,LLC Firsl Union CAP (4857) (60,00.00)Aquilus,tnc 1210101 Deri\lum Capillil,LlC Firr1UnlonCAP(4S57) /2MOO.QOl

" AqUllus.,lncTotal 11,508,000.0)

C.H.Hsin 12/17/99 Der1\Il,mCapiiaI.LLC Flrt Union CAP (4406) , ¡9.990.oo)

C.H.Hsln 12/28100 DerMumCapilal.LLC First Union Comm Chklng (7775) (10,000.00)C.H.Hsin 02102101 Deiivium Capital, LLC Firt Union Comm Clildng (7775) (10,000.00)C.H.Hsin 02128/01 DeriumCapital,LLC First Union Comm Chklng (7775) (10,000.00)C.H.Hsin 03130101 Derivium Capital, LLC Firt Union Comm Chk!ng (7775) (\0,000.00)C.H.Hsin 04/27101 Derivium Capital, LLC Firt Union Comm Chklng (7715) (10,000.00)C.H.Hsin OS/30101 Denv.um Capital, LLC Firsl Union Comm Chkig (7775) (10,000.00)C.H.Hsin 01/09/01 DevlumCapital, LLC First Union Comm Cliking (7775) (10,000.00)

C.H.Hsin 07/1/01 Derivlum Capiiar, LLC F!ft Union Comm Chklng (7775) (10,000.00)C.H.Hsln 08/31101 Derivium Capital, LLC First Union Comm Chking (1715) (10,000.00)C.H.Hsin OS/28i01 Deiivium Capital, LLC First Union Corom Chklng (7775) (10,000.00)C.H.Hsiri 10130101 Derivlum Capitai, LLC First Union Comm Chking (1775) (10.000,00)C.H.Hsin 11i3/U1 Derivium Capital, LLC Flrst Union Camm Chkig (7715) (10.000.00)C.H.Hsin 12131/01 Deriiiium Capital, LLC Fir't Union Camm Cliking (7715) (10,000.00)C.H.Hsin 01130102 Oerivum Capital,LLC First Urilon Comm ctklng (7775) (10.000.00)C. H.Hsin 0312/02 Deiivium Capital. LLC First Union Comm Chkirig (7175) (20,000.00)C. H.Hsin 04/12102 Derivium Capital, LLC First Union Comro Chklrig 1771$) (10,000.00)C.H.HsinTotal S (119,99.00) $

,C3lridustiies/Scíenda 11/05;98 Oerivium Capital, LLC First Uniori CAP (4406) $ (15.000.00)C3__ln_dlJsi:~:wScli:i,~ 0313j99 Oerl~i,urn~pital,Ll:C First Union ~~~ ~446) (5,000.0.0)

C3 Iri~~_S:as~s~_e:n~~ .04/1619~. ."Oeri~um 'pi.p!ta"I,-lLC i:~(u.n1on~~_t4406) : .(l~;èi.oÓ)C3lndusties/SCiendß 05i04rØ9 OeriIUrn;Csp~al, LLC Firituri~rí .CN:.¡44~6) "~15,OO.OO) .'

C3Iridvsti~ISc(erla 05/1799 DerMum Capital, LlC First Uniori CAP (4406) 17,000.00

C3lridus!rieslScîenda 05127/99 Derivium Capital, LLC Firs! Unlori CA (446) (15,00.00)C31ridustriesiSCienda C6106199 OeriviumCapital,lLC First Uniori CAP (4406) 72,580.00

C31ndustiies/SCierida 06/09/99 Oeiivium CapitaL. ltC Flret Uriiori CAP (4406) (5,000,00)C31ndvstriesScenda 06l15f99 Oerivium Capital, LLC First Union CAP (4406) (1,000,00)C3lndustries/Sclenda 06118/W Derivium Capital. LLC First Union CAPí44Q6i (15,000.00)eJlndustriesiScienda 0612/99 Derlvium Capital, LLC First Union CAP-(4406) (17,000.00)C31ndustneslScienda 07/0919$ Oerivium Capital, LLC Firsl Union CAP (4406j (33,000.00)

C3 tndusltesiSciena 01119/9 DerivimCapilal.LLC First Union CAP (4406) l8,OOO.CO)

C31ndustries/Scienda 07/23/9 Oerivium Capital. LLC First Union CAP (4406) (15,000.00)C31ridustriesiScienda 08/02.'99 DerivimCapiial, LLC First Uriion CAP (4406) (15,000.00)

C3lridustiies/Sdenda 08109/99 DeriviumCapìlal,LLC FlrstUriion CAP (440ô) (12,000.00)C3!ndustres/Scera 08'17199 DariviumCapital, LLC Pirst Union CAP (4406) (27,000.00)C3lndustne&cienda 08,'23/99 Derlvium Capital. LLC First Union CAP (446) (15.000.00)

C3lndustiies/Scenda 08130/99 Derivium Capial, LLC First Union CAP t4406) (26,00.00)C3 Induslries/Scienda 09107/99 Deri\fumCapital,LlC Flrst Unìon CAP (4401!) (15,00.00)C3lndustresiSenda 09114199 Deri'lum Capitl. LLC FirstUnionCA¡4406) t15,000.0)Ç3lndustres/SCenda 09/2019 Deri~ium Capltel, LtC First Union CAP (4408) (15,000.0)C3Im:lustii6SSdewa 09127199 DerivimCapi18i, LLC Firsl Union CAP (446) (10,000.00)C3lndustries/Sceria 10105199 Derivium Capltai, LLC First Uriion CAP (4406) pO,oo.OO)

C3!rid\!slres/Scierna 10118/99 DeriviumCapitat,LLC First Unin CAP (4406) (15,00.00)C31ndustiiascieida 10/25/99 Deri",iumCapitl, LLC First Unin CAP (4406) (15.000.00)C31nduslrieslSenda 11/02/99 DeviumCapilal. LLC Firil Union CAP (446) (15,00.00)C31ndusiriesìSdenda l1i15f99 De~iumCaplial, LLC First Ul'on CAP (4406) (15.000.00)

C3Iri;;ustries!ier.a 11/29iS9 Denvim Capital, LLC FjrstUnlon CAP (4406) (20,00.00)C3lriustrieSiScieN:a 12/07;99 DtlriviumCapital, LLC Firs! Union CAP (4406) (23.000.00)

C3tndustiies/Scienda 12/14199 Derivium Capital, LLC Firsl Union CAP (4406) 120,000.00)

Page 1 af18

2:07-cv-00593-DCN Date Filed 02/28/2007 Entry Number 1-2 Page 1 of 18

Derìvlum Capital, LLCExhibit I

Entity Date AecounlNamii Bank Account I I Payment I I Depo$11

C31nduslriesiSciendli 12120i99 DeriviumCapluil, LLC Firsl Union CAP l4406) (20,000.00)C3lndUSlriesISc!enda 12127/99 OerviumCapital, LLC First Union CAP (4406) (20,00.00)C31nduslriéSIScienda 01/04/00 OeriiiUff Capital. LLC Arst Union CAP (446) (20,000.00)C31ndustriesiScienda 01/10/00 OerviumCapltal,llC First Union CAP (4406) (20,000.00)C31nduslriesiScienda 01/25/00 Derivium Capital, LLC First Union CAP (440Sj (10,000.00)C31ndustriesfScenda 02l1ioo Deriium Capital. LLC Firsl Union CAP (4406) (20,000,00)C31ndListresiSclenda 02109/0 DerlviumCapitlil,l.C First Unior CAP (4406) (20,000.00)C31ndustresfScienda 02/15/00 Denvium Capilal, LLC Firsl Union CAP (4406) (20,000.00)C31rtuslresJ8cienda 02/17/0 DeiiviumCapltal,llC Firs! Union CA (4408) (120,000.00)C31ndustrestScienda 02122!O DeivîumCapital.LlC FlrsIUnionCA(4406) (20,000.00)C3lndustres/Scíenda 02;29;0 DerMum Capital, LlC FirsIUnionCA(4406) (20,000.00)C3lndustrestScienda 03i071O DerlviumCapital,llC Flrsj Union CAP (4406) (20,00,00)C31MuslresiScienda 03115/00 Derlvlum capital, lLC First Union CA (4406) (20,00.00)C31rdusmeslScienda 03/21100 Denvîum Capllal, LLC First Union CA (4406) (20,000.00)C31ndustiesiScenda 03/100 Derlvium capital, LlC FlrsiUnionCAP(4406) (20,000..00)C31ndustries/Sciendii 04/05/00 DerivlumCapital,llC First Union CAP (4406) (20,000.00)C3 IndustraslScienda 04112/00 Derlvlum CapitaL, lLC FifStUnianCA(4406) (45,000.00)OlndustreslScienda 04126/00 Derivium capitl, LlC First Union CA (4406) (50,000.00)C31nduslrieslScenda 05102100 OenviumCepftal,llC First Union CAP (4406) (120,000,00)C3lndustresfSdenda 05109/00 DerlumCapltal,llC First Union CAP (4406) (65,000,00)C3lndustres/Scenda 05117tQ OerlvumCapitl,LLC First Union CAP (4406) (35,00.00)C3lfdustres(SCienda 05123.00 Deri';umCapltl,llC First Union CAP (4406) (15,000,00)C3lndusinesfSCinda 06/01/00 DerivlumCapltel.lLC First Union CA (4400) (20,000.00)C3tnduslresiScienda 0610/00 Der!viumCapiia!.LlC First Union CAP (4406) (15,000.00)C3lndustiiesiScleria 00113100 DeriviumCapital,lLC First Union CAP (4406) (70.00.00)C31ndustiesiScieMll 06/:10100 Denvlum Capltat, LLC First Union CAP (4406) (30,000.00)C31nduslnasiScienda 06/21100 OeriviumCapital,LLC First Union CAP (4406) (54,000.00)C3lndustnesiScieiia 0617/00 OeriviumCapill, LtC First Union CAP (4406) (25,00.00)C3 IndustiiesiScleroa 07/05100 DerlviumCapiil. LLC FirstUllioIiCAP(4406) (50,00.00)C3lndustrles/Sclenda 07/11100 OeriiLlm Capita!, LLC Firs! Union CAP (41106) (25,000.00)C3lndus!rieslScienda 07f0/00 Oerñlu"! Capital, q.C FlrstUnionCAP(4406) (48,0tK.OO)

,C3:lndústries/sClen,da 07/26/00: Derlvium Capital;LlC .f!i:! u.nio~_ CAP (4406) (55,~.OO)C3Indusliies/Scieiida 07131/0.0 iq~~Mum ,c;apitlll! lLC .F:ifsl UnIon ÇAP (~O6) (52.00.00)C3lnduslreslSclenda oalO',iOO' OeriVimCapital,LLC 'FirstUnion'CAP(4406) (5S,OÓ.OO)C3fnduslriesiSCienda 08/09,'00 DeriviumCapitl,LlC Firt Union CA (4406) (100.000.00)C31ndiislnesiScienda 08116100 Deivum Capital. LtC Firsl Union CA (4406) (35,00.00)C31nduslriasfSieria 08/31/00 DeriviumCapi\al,llC Flrst Union CAP (4406) (30,00.00)C3!riduslieslSCienda 09/1300 DeriumCepltal,tlC First Unfon CA (4406) (55,00.00)C3lndustiesfScienda 09/19100 Derivium Capital, LLC First Union CAP (4406) (35,00.00)C3lndustieslSçenda 09i27;00 Derivium C8pital, LLC Fi~t Union CAP (4406) (190.000.00)C3tndustnesiSCienda IOf04100 DeumGapitl,lLC Flrnl Union CAP (4406) (75,000.00)C3tndusirfesiScienda lor121OO DefivlumCapital,lLC First Union CAP (4406) (50,00.00)C3indusirlesiSdenda 10r12J DeriviumCapital,LlC First Union CAP (4406) (1,447,500,00)

C3!ndustresiScienda 10120/00 DerÎviumCapital,LLC First Union CAP (440) (50,00_00)C3JnduslriesiScienda 10124100 OeriiumCap!lal,LLC First Union CAP (4406) (1,303.200.00)C31ndusiriescienda 10125100 DeriiumC8pilal,lLC First Union CAP (4406) (25,000.00)C3lndustfieslScienda \1/02/00 DerMumCapilal,LLC First Union CAP (4406) (130,000.00)C3lnduslrssScienda 11/0810 DeriumCap¡tal,LiC F'rst Union Comm Chking (7775) (35,00.00)C3!ndus!riesJScierrlg 11114100 DenviumCapital,llC Firsl Union Comm Chkjng (7775) (45.00.00)C3!nduslriesIScienda l1m¡lw DeriiumCapital,LLC First Union Comm Chking (7775) (100,00.00)C3lmlustriesiScienda 11122i DeriumCapilal,llC First Union Comm Chking (7775) (40,000.00)C3lnduslresiScienda 1128/00 DervlumCapital,LLC First Union Comm Chkin9 (7775) (2,379,600.00)C3lnduslriesiScienda 11/30100 Derîium CapiU!, LLC First Union Comm Chking (7775) (45.00.00)C31nduslrîesiSienda 1211100 DetiiumCapital,LLC First UniOn Comm Chking (7775) (61,2tLLOO)

C3tndustriesrSenda 1217/00 DerviumCapílal,LLC First Union Comm Chkíng (7775) (,30.00.00)C3tndLlstriesScenda 12/12100 DerivlumCapltal,LLC First Union Comm ChlOng (71ìSj (50,00.00)C31ndustres/SCønda 12119/00 DerivîumCapllal.llC Firnt Union Com Coking (7775) (60,COO.00)

C:ilndlJslres/Scenda 12/27/00 DerivumCapltal.llC First Ul'ori Comm Clking (7775) (80,00,00)C3lndustrieslScienda 01f03/01 Detivum Capita, LLC First Urion Comm Chking (7775) (iaO,Ooo,CO)

C3lndustrasfScenda 01(08/01 DeriviumCapital,lLC First Union Comm Chking (n75) (60,000.00)

Paga2of18


De.rMumCapltal, LLCExhlbill

Ëntlty D... Account Name Bank Account Pa ment De 0511

C31ndustriosiSciend3 ()1f18101 Oervium CapitaL, LLC First Union Comm Chking (7775) (100,00.00)C3lnduslriesçiendii 01124i01 Deri-l~m ,Capital, lLC Arst Union Comm Chklng (7775\ (40,000.00)

C3lnduslriesfSclenda 01131101 DarV!umCepll,lLC First Union Comm Chking (7775) (100,00.00)C31ndustrlesiScienda 026i01 DeriviumCapital,LiC First Union Com Chking \1775) (175,000.00)

C31ndustriesrStierida 02115101 DerllumCapria,lLC Fìrst Union Comm Chking (7775) (00,000.00)

C3lndustres!Scienda om1101 Derivium Capllar, lLC First Union Comm Chklng (7775) (30,000.00)

C3IndustresfSc\enda 02/7101 Derivium Capital, LLC Firt Union Comm Chkkig (7775) (215,00,OOj

C3 Industrt!s/Scì~nda 03/08101 DeviumCap"rtar,LLC Flrs1 Union COffm Chking (7nSt (110,00.00)C3lndustriesfSclenda 03/14101 DervlumCapital,llC First Union Comm Chklng (7715) (50.00.00)

C31ndustries/Sclenda 03/21/01 OevfumCapilal,LlC Firit UnTon Comm Chkìng (7775) (95.000.00)

C3lndustries/Sclenda 0~27101 Derivium Capital, UC Firt Unki Comm Chklng (7775) (60,00.00)C31ndustnes/Scieria 04106101 DevlumCapital,LlC First UnIon Com Chkig (7775) (125.000.00)

C3lnduslr8s/S.cienda 04/16/01 DeriviumCapital,lLC First Union Comm Chkfrg (7775) (115.00.00)C3lndustr~ISclenda 04/16101 Derivium Capital, .lLC First Union Cemm Chkmg (7775) (138.049.68)

C3rndustres/Seiands 04/20101 Detvium Capitil. tLC First Union Comm Chklng (7775) (70,000.00)

C3!ndlJslies/Seienda 04/26(01 Dei;vium Capital, UC First Union Comm Chling (7775) (170,000.00)

C3Ind~sines.r~da 05/0301 Devlufl Capllal,UC First Union Cemm Chg (7775) (385.000.00)

C3lndusiriesfScienda 05111/01 Ooovium Capitci, LLC First Union Comm Clking (7775) (45,00.00)C3lndustres/Scienda 05121101 Oerv!um caPital, LLC First Union Comm Chk.1ng (1775) (90,000.00)

C31ndustriesfScienda 05/24(01 Oerivium CapitaL. LLC First Union Comm Chkìng (7775) (50,000.00)

C31ndustries/Scenda 06/0501 Derivium Capital, ltC First Union Comm Chking (7775) (125,000.00)

C3lndustries/SCienda 06107101 Oerlvlurn Capitel, LLC First Union Comm CIklrig (7775) (95,000.00)

C31ndustres/Sctenda 06/13101 Derium Capital, LLC First Union Comm Chking (7775) (25,000.00)

C31ndustres/Scenda 06115101 Darlvlum Capital, LLC Flrst Union Comm Chklng (7775) (95,000.00)

C3lndusiriesiSCienda 06/2101 Derium Capital, LLC Firt Unkin Coro Chkìng (7775) (100,000.00)

C3lndustresiScenda 06129101 DeriviumCapital,LLC First Union Comm Chking (7775) (135,000,00)

C3lnduslrieslScieiia 07/05/01 DeriviumCapital,LLC First UnIon Comm Chldng (7775) (48,489.00)

C3lnduslriesiScienda 07/05101 Oerivium Capital, LLC First Union Com Chldng (7775) (125,000.00)

C3lm:lustries/Scienda 07/17/01 Derlvlum Capital. LLC First Unlon Comm Chking (7775) (155,000,00)

C31ndustries/Scenda 07/20101 Derivium Capital. LlC First Vnlon Comm Chking (7775) (75,000.00)

C31ndustras/Sclenda 10111101 " D~ri.~,i~~_ Ca~¡~l,'. L.G Fi~t:Unl:i.~~ ~4~7) 77.40,00

. ':~3.1~_~4,~,0.~!s~C!.h~~. 9)JO,3in:2.::~~tt::.~:,~.::f~~:

f!rstpnlÓf CA (~,85_7J '~.~!ep.a.-Co

,C3__!~d~Strj_~S/?~e,~_tt~,' .:)lj(1t/:Ó~: fltSttì~.ici'~'(~á.5.7 ':'4g;OWOO

C3lndvstriasIScènia . '02f13102 'Oerivium'Capltal,LLC First Union CAP (4'87) 90."278.44

C3fndustries/$cienda 04102'02 OeriviumCapital,LLC FirsIUniooCA(4857) 44,245.46

ci Indu,lfiesJSclenda Total $ (11,710.038.68) $ 371.503.90

ChariasDCalhcart 06/16/99 Oerivim Capital, LLC FirsIUnìonCAP(4857) , (15,000.00)

Charle50Cathcart 07/25/00 DariVumCapitl,LLC FirslUnionCAP(4857) (50,000.00)

Charles 0 Calhcart 08130101 DeriumCaplial,LLC First Union CAP (4857) (20,000.00)

Charles 0 Calhci" 09/28/01 Oervium Capitl. LLC First Umon CAP (4857) (10,000.0)Charie50 Cathcsrt 10/11/01 DerViumCapitl,iLC Firsl lMìon CA (4857) (10,000.00)

ChsrlesOCathcart 12/03101 Derium Capital, LLC Fitt Union CAP (4657) (20.000.00)

Charles 0 Cathcarl 01/08102 Derivum Capilal, lLC First Unìon CAP (4857) 50.000.00

Charles 0 Caihcart 04/08102 Deríum Capital, LLC Firt Union CAP (4851) (50.00.00)Charles D Cathcar 04/23102 DerMurnCapi18l.lLC Firsl UnIon Comm Chking (7775) (35.00.00)

Chrle5 0 CathCart 0412'02: Bancroft Venlur Umited FU BìZ Checing (785) (35,000.00)

Charles 0 CathCart 0412312 Bancroft Ventures Limíted FUBiiChadiing(7B58) (45.00.00)CtartesDCathcari 051Q2f02 DerumCapitl.lLC First Union Comm Chk.ing (7775) 20,000.00

CtarlesOCalhcart 05/03f02 DeriviumCepitel.LLC Arst Unìon Comm Chking (7775) (20,000,00)

Chañas 0 CathCart 05103f02 6enCtOf VenTUes Umited FU 6i Checking (7856) (20,000.001

Charles 0 CathCar OSf03f2 Bançrof Vafltures Limited FU Biz Checing (785S) (50,00.00)

ChariesOCaihcart 0511412 Derlvum Capital, LLC Firsl UniO Comm Coking (7775) (50.000.00)

CtarlesOCathcrt 0514i02 Oeril.mCapial,LLC Firl Unlen Com Coking (7775) 50,000.00

ClarlesDCathCar 0511412 Bancroft Ventures Limited FUBiChecking(7856) (50,00.001

Charla5D CathCart 0512110 Bancrofl VlllureS Umited FU BiZ Checing (785) (50,00.001

Charles 0 CaihCan 05129102 Bancof Ventures Limited FU Biz Checkìng(7856) (40,000.0)

Charles 0 CathCan 06f03I02 Bancof VeriuteS lìmtted FU Biz Chadlflg (7856) (5O,COO.CO)

Clar:esOCathcart 06118/02 DefilumCapltal,LLC First Union Comm Chking (7775) (30,oo.ooì

Charles 0 Caihcart 06/1&02 Oetium Capilat, lLC FirslUnionCommChkJri(7775) 30.000.00

Page30f18


DerMum Capital, LLCExhibit i

I EntIty Date I Account Naml' Bank Açcount I I Payment I I Deposit

Charl DCalhCart 06/18/02 Bomcrofl Ventures limìtiW FU Biz Checking (7856) (30.000.00)

Charls0 CalhCart 06125102 Bacroft Ventures Umited FU Biz Checking (7856) (40,000.00)

Charles C CathCart 07111102 Bancrofl Veniure~ Limited FU Biz Checli:ng (7856) (5,000.00)

Charles D CathCart 07/16102 Bancrof Vel'tures limiled FU Biz Checking (7656) (25.000.00)

Charles D CathCart 07/24102 Bancrfl Ventres Limited FU Biz Checking (7856) (10,000.00)

Charles 0 CathCart 07131102 Bancroft Ventures limited FU Biz Checking (7856) (20,000.00)

Charles 0 CathCart 081021u2 Bancroft Ventures limited FUBizCheckng(7856) (25,000.00)

Charles DCelhCart OalO8J2 Bancrft. Ventures Umiteà FU 6izChecklng (7815) (25,000.00)

Charles 0 CathCart 08112/02 Bancrof Ventures Umil. FUBizChecllng(7856) (20,000.00)

CharlesOCatiiCai 0813/02 Bancroft Ventres Llmj\ed FU Biz Checking (7856) (15,000.00)

ChafÍ~ 0 CalhCert 0812712 Bancroft Ventures L!mited FU Bi Checldrig (785) (15.000.00)

Charles 0 Ca\lCart 09105102 Bancroft Ventre Umit FU BI CheckIng (785) (25.000.00)

Charles 0 Ctihcart 10118102 Derivium Capital. LLC First Urilor Comm ChIlng (7775) (15,000,00)

CharlespCathCan 10/18i02 BanetftVenlUrasL!mlted FUBìzGh~klngf!856) (15.000.00)

Charles 0 CathCart 101110 BancroftVantu6$"Llmited FUBiZCh~klri(r6as) (3,000.0)cnarle~ 0 CatnCart 10125i02 BancroftVenlUresLìmited FUBlzChecllng'(856) (14,00.00)Charles 0 CathCart 10/28102 Bancrft Ventures Umlted FU Bi; Cheeling (7856) (20.000.00)

Charles o CathCart l1i01/02 Bancro Ventures Umited FUBizChecking(7856) (20,000.00)

Charles o CathCart 11106102 BancrV~ntu.resLimited FUBìzChecklng(7856) (12.000.00)

Charles 0 CalhCart 11125i02 BancoflVenluresLimlted FUBizCheckingl7856) (19,000.00)

Charlas0 CathCan 12103/02 Bancrft Venture limited FU Biz Checking (7856) (23,00.00)Ch!rles0 CiithCart 12/20/02 BancrofVentureUmlteCl FUBìzChecking(7856) (25,000.00)

Charlas 0 CathCart 02128/03 BancrofiVeritureslimited FUBizClecking(7856) (25,000.00)

Charles 0 CathCart 03104/03 Bancrft Veriiures Umited FUBizChecklri(7856) (45,000.00)

Charles o CathCart 03106/03 Bancroft Venlues limited FU BIZ Checking (7856) (15,000.00)

Charles o CathCart 03112/03 Bancroft Ventures limited FU Biz Checkng (7856) (10.000.00)

ChariesC CathCart 03119/03 Bancrft Ventures limited FU Bl Clecking (7856) (10,000.00)

Charles 0 CathCart 03i21í03 BancroftVenturesUmiled FU BizCheckirig (7858) (10,OOO.CO)

Charles 0 CalhCart 03128/03 Bancroft Ventures Umited FU BIi.Chaclrlng (7856) (43,000.00)

Chst.es 0 CathCart 04102103 Bancrof Ventures Limited FU Biz Checking (7858) (12,000.00)

Chrles 0 CathCart .Qf07/03 ~n~ ve.ri-i~re,~.U:nita. . F;U.~Ch~~~g.!~.~~) (30.'~OO.oO),

-Ch~~~p-:p~M;;~~ : ':;(J~.~~i9:3._ ::'.Bånêroftveilures_-Lited_:' . f~-~Iz C~t:è~.~'_a8.s6'- .:(~M.~.OÇ)

Cha,tl~'.o::ca:i:~t.art ': :D_5IO)j03 (8åt1~~h.va.nt~~'4~~~ ; . ~'~;Ø.li;'~h~ë!riil".(!$56V: : ).i,.b.ag:oo)""Charles-'O 'è"inCart 05108/03 Banèroft VentÜrs Limited- FU'Si:! cheCkirig-(i856) (35;W:OO)

Charles 0 CathCart 0518103 BancrftVentUtesllmiteC FU Biz Checng (7856) (45,00.00)

Charles 0 CathCart 05/14103 Banaoft Venturs Umlted FU Biz Checking (7856) 70,000.00

Cnerles D CathCart 0513103 Banaof Venturs Limited FU Biz Checking (785) íl0,OOO.00)

Charles 0 CathCart 05/301U3 Banaoft Ven\urei; Umiled FU Biz Checking (7856) (15,00.00)Charles 0 CathCart 06/0610 Bancrof Ventur limited FU Biz Checking (785) (15.000.00)

Charles 0 CathCart 0710103 Bancrof Ventures Umiled FU Biz Checing (785) (250,000.00)

Charles o Caltiart 0611410 Bacroft VentuÆslímited FU Biz Checking (785) (5.000.00)

ChartesDCathCart 09,"02/03 Bancroft Ventures Umiteò FU Bi Checking (785) (3,000.00)

Chiirles0 CathCai 09103/03 Bancroft Ventures UmiteCl FU Biz Checking (785) (12,00.00)

Charles 0 CathCart 09í03i0 Bancroft Ventures limited FUBtzChecng(7656) (20,000.00)

Cranes0 CathCan 09/10103 Bancroft Venhres iim~ed FU8IzCheckin9(7856) (175.000.00)

Charles DCathCarl 09f12i03 Bancrof Ventures limited FU Biz CheckIng (7856) (10,000.00)

Charles DCattiart 09f18103 Bancroft Ventures limited FU B!zCting (7856) 120,00.00)

Chartes 0 CathCart 10114/03 BancrftVenlureslimiled FUB1zCneldng(7856) (7,000.0)

Charles 0 CathCari 10116/03 Banc Ventures limited FU Biz Checkil' (7656) 7.000.00

ChartesDCathCert 10116f03 Bancrft Veniures Llmlled FU Biz Cnocng (7856) (10,000.00)

Charles 0 CathCar 10/2U03 BancollVenturesLimFted FU Biz Checng (7856) (10.000,00)

Charles 0 CathCart 10i241t3 B&ni; Venlures Limited FUBlzChecrig(78561 (10,000.00¡

Charlss 0 CathCart 10r24l03 Bacrofi Ventues Limited FUBizC/lecng(7856) pO,OOO.OO)

Charles 0 cathCart 10131103 BacrftVenluesümited FU Biz CheeL'lg (7856l (39.00.00)Clirtes0 CatJCart 11/06103 Bancof Ventures Umi1ed FU8izChecklng(7856) (10,000.00)

Clarles0 CathCan: 11110f03 Banaofi Ventures Umited FU ea Checking (7856l (11.00,00)

Charles 0 CathCart 11fl7f03 BancroflVer.turesLimiled FU BizChecìng (7856) (25,000.00)

Charles 0 CalhCarl 11/20103 Baricrfl Ventur Limiled FUBizChecing(7856) (17,50.00)Charles DCathCar1 12/01/03 Bancroft Venli.'res Limited FU Biz Checii(7856) (10,00,00)Charles DCaihCart 12104!03 BaricroftVentureslimlted FU Biz Checir:g(7656) (90,00.00)

Pag1i4of18


Derivlum Capital, LLCExhiblll

1 Bank AccountFUBlzChecking(7656)FU8ìzChecklng(7856)

FUBizChecking(7856)FUBii:Checklng(7856j

FUBlzChecking(7856)FUBlzChecking(7856jFUelzCheckln(7856jFU Bi Checking (785)FU BIz Checking (755)

FU Biz Cheddng (7856)

FUBli-Chi;cklng(7856)

FUBizChec:ing(78S6JFU Biz Checing (7856)

FU Biz Checking (7856)FU Bi Ctecking (7856)FU Biz Checking (7656)

EntitCharleS D CathCart

Charles 0 CathCart

Charles 0 CatlCartCharles 0 CathCart

Charles 0 CathCart

Charles o CathCartCharles 0 CalhCart

Charles 0 CathCartCharles 0 CathCart

Charles 0 CathCart

Charlas0 CalhCart

Charles 0 CathCart

Chanes 0 CathCartCharles 0 CathCart

Cherles 0 CainCart

Charles 0 CathCartCharles 0 Cathcart Tolal

Charleston AlumInum Trading

Charlesto AlumInum Trading

ChiirlesloriAlumlnumTrading

Charleston Aluminum Trading

Charleston AlumInum TradIng

CharieslonAlumlnumTradingCharleslor AlumInum Tradlng

ChartestOfAlumlnumTradig'CharlestonAluminum Trading




C~a~lt¡toi AIl,rnisl,m Trading

Cn~rles. :\å~- Ai~n)iri~m. .Tr.a..qÎlg....

. .~~fj~tOn .Aj~~in~in Trading '. .

Charlestón-Aluminum Tràding

CharleslonAlumlnumTrading


ChaiiestonAiumiriumTradingCharleton Aluminum TradingCliarteliloll Aluminum Trading Total

Charleston Construction Co

Charleston Conltciion CoCharleston COfttction Co

Charleston Construction Co

Charleston Constrction Co

Charleston ContruClion CoChariestonConsttclionCoCharleston Coniruclion Co

CharlestonConstltctíonCo

Charleston Construion CoCharlestonConstruCllonCoCharleston Con:tNCion Co

Charleston Constructon Co

CharlestcnConstruclloCoCtrlestonConslruclionCoCharlesto ConstNlion CoCharleston Construci;on Co

ClarlestonConstruclionCoChartestonConsinclíonCoChiirleston Construction Co

Data12/24131212913

12110303105(04

06/3Of04

07/29to4

08126/04

09/141409/22104

11/02iQ4

11/19(04

11/30104

01/oe105

02111105

0304105

03111/05

ACGountNlIme

BancroftVanlurasUmltadBBrcroft Ventures Umited

Bancroft Ventures Umited

BarirofVenturesUmltedBancroVenturesJ.ml1edBancof Ventures Llmlled

Bancft Venure ümited

Bancroft Ventures Umiied

Bancrof Venture UmileBancr Ventres Umite

Bar.iroft Vaittres Urni\aBancro Ventures Umitsd

BancoflJanturesUmitedBancof Ventures Umited

Bancro Ventures Umited

Bancro Venture Umited

10/1210 DeriviUff Capital, LlC11/22100 OerlviumCapilal,llC12/19/00 OeriviumCapital, LLC

\2122100 DeriviumCapilal, LLC

01108101 Oerium Capital, LlC01/24101 Oerivium capitai, LLC

01131/01 OerlviumCapital, LlC02/08/01 Oerivium Capital, LtC

02121/01 DBfviumCapital, LtC05124/01 DerivilJCapítal, LlC0611/01 DsrivumCapllal,LlC06/19/01 OeriviumCapital, LLC

06/~_2fp1.: De.fl'um C;~p!!_a,l, ,~LC

P7Içi"ß1' i;ériv!I.(i'Çapil!lI:,:4-C

. . ';;)~24Îci1 '. p~r~i~_~.#~pi.¡~f~ .l.lC'

08/15101 Oemlum càpilal, LLC08129.'01 OeriviumCapilal,lLC

12/31101 DeriviumClIpilal,lLCDeriiumCapijal,LlCOerliumCapital,LlC

101:5199

11102/99

11,'08/99

11/15.'99

11129/99

1207/912114/99

12/27/99

Q7il1fl)07/19100

09;080009121/00

tO/16/00

11/01/00

11/03/00

11/30iOO

12/05100

12i19/00

12i2a1O

01105101

Derlvium Capital, LLC

DeviurrCapital,U.COeiumCapltal,LLCDerviumCapiial,LLC

OerívumCi:pítal, LlC

DerivumCapital,lLCDerivlumCapitl,LlCDeriviumCapitar,lLCDerillum Cap~al, lLC

Derivr..mCapitr.iL.CDervimCapill,lLCDeriviumCapital,L.LC

Den..ium Capital, U.C

DerivimCapit,LLCOerivum Capitel. LlC

OeviumCapital,LlCDeri"ium Capital. LLC

OeriviumCapital.LLC

Dervil,mCapital,LL.C

Derlvium Capital, LLC

Firs Union CAP (446)First Union Comm Chklng (7775)

Arst Union Comm Chking (7775)Flrsl Union Comm Chklng (7775)

First Union Comm Chking (7775)


First UnIon Comm Chking (7775)

Firs Union Comm Chking (7775)


First Union Comm Chltng (7775)

First Union Comm ChlMg (7775)

Arst Union Comm Chkin9 (7775)

Firs Union Comm Chklng (7775)

.R.~t'ún~ ,ÇOi~.Çh.~I~~'~?n5)

-R~t.Un¡(ln 9~m :C~~ng (7775)Fiii Union CÓim Chking (mS)First Uníon Comm Chking (7775)

First Uníon CAP (4857)

First Union CAP (4406)

First Ur,lon CAP (4406)

Firsl Union CAP (446)

Firsl Union CAP (4406)Flrsl Union CAP (446)First Union CAP (4406)



First Uníon CAP (4406)


Firsl Unioo CAP (441First Union CAP (4406)


First Urjon CAP (4406)



First Unin Comm ChkÌfg (7775)

FiTI Unio Comm ChKing (7775)

First Union Comm Chkirig (175)

FÍTt Union Comm ChKil1 (7775)

I I Payment I I tleposlt(186,000.00)

110,000.00

15,000.00

(15,000.00)(23,500.00)

(25,000.00)

(30,000.00)

(10,000.00)

(30,000.00)

(10,000.00)

(20,000.00)

(20,000.00)

(100,000.00)

(35,000.00)

(35,000.00)(SO,OOo.O)

, (2,785,000.00) $ 802,000.00

. (170,000.00)

(25,00.00)(43,200.00)

(120,00.00)(125,000.00)

(115,000.00)

(SO,OOO.OO)

(60,000.00)

(340,000.00)

(60,000.00)40,000.00

45,00.00

(85,00.0.0)100.o0:0~"

(100,000.00).:"100,000.00.

(35,000.00)

(1oo.o3.13)

. (1,428,213.13\ 285,00.00

, (2,000.00)

(10,000.00)

(3,000.001

(1.000.00)

(5,000.001

(5,OO,OO¡

(5.000.00)¡5,000.00)

(75,00.00)(50,000.00)

(450,00.00)(14,000.00)

(10,000.00)

(10,000.00)

(20,000.00)

(15,000.00)

(15,00.001(25.000.00¡

(34,OO.OOí

(35.000.00)

Page50f18


. .DerlviumC"pJtal, LLCExhibit i

Enti Data Account Name Bank Account Payment De o$lt

CharleslonConslructionCa 01/18101 Oørivium Capilal, LLC First Unìon Com Ctiing (7775) (35,00.00)Criar1eslonConslruC1ionCo 01/25/01 Derlvium Capital, LlC First Union Comm Chklng (7775) (39,000.00)

Char1estonConstruclionCo 02r20!01 D~rivifJm Capita!. LLC First Union Camm Chldng (1775) (60,000.00)

Char1eslonConslructionCo 02126/01 Oi!~¡..ium Capital, lLC FitstUnionCommctking(7775) (35,000.00)

Charleston Conslruction Co 03101'01 Oer¡lilum Capital, LLC First Union Camm Chking (7775) (42,000.00)

Charleston Conslructlon Ca 03/09/01 Oeriv!um Capital,LtC First Union Camm Chking (7775) (25,000:00)

CharlestçnConstruçtionCo 03(22/01 DerivlumCiipital,LlC First Union Comm Chking (7775) (46,00.00)Charieslon ConstructiOn CO 04/04/01 Derlvii.m Capitel, LlC First UnIon Comm Chkin (7775) (20,000.00)

Charleston Conslructin Co 04/16101 Defvlum CapitaL. LlC First UnIon Comrr ChÎng (7775) (47,00.00)ChaclsstonContrvcllonCo 04/18/01 Del'Mum Capital, LlC Amt Union Comm COk.ing (7775) 124,700.00)

Charleston Constrctin Co 05/03101 Derlvium Capital, LtC First UnIon Comm Ctking (7775) (25,00.00)Cherleston Constructin Co 05104101 DerviumCapital,LlC First Union Comm Clking (7775) (25.00.00)ChartestonConstnctinCo 05/04101 OerlviumCapital,LlC First Un/on Comm Chking (7175) (7700.00)Charleston Conslrui;on Co 05J15i1 Derivium Ca.pital, LiC First Union ~.in Chk1n (7775) (166,00.00)Charl65ton COI)lructio Co 05(22/01 De,rivl.m Gap~l, LlC Firsl Union Camm cn~Îng (7715) 121,00.:0)Charleston CorStrctioo Co 05(31/01 Deñvlum .ça~iI, LLC First Union CommClking (7175) (178,000.00)

Charleston Constl\ct Co 0614/01 DerlviumCaplll,LiC First Union Çomm Chk.lng (7775) (142,000.00)

CtiarlestonCònslructlonCo 06(28/01 Oerilurn Capital, LLC First Union Comm C1lcing (7775) (204,000.00)

CtarleslonConstr\-ctionCo 07(13101 OerÍ\lum Capital, LLC Fiaiiunion Comm Chlclng (7775) (50,000.00)

C1aiiestoConstructionCo 07(30101 OeriviumCapltil,LlC First U~ion Comm Chlcl~ (7775) (69.20.00)CharlastonConstructioCo 09(05101 OeriviumCapital,LLC First Union CAP (4857) 110.000.00

Charleston Constructio Co 02(19,'02 OerMum Capital, LLC First Union Comm Chking (7775) (50.00)ChtlrlQston Constrction Co Total (2,146,820.00) $ 110.000.00

DerMum Capla! (USA) 01/29/03 Bancrof Ventues Limited FU 6l Checking (7656) (5,000.00)

Derium Capital (USA) 01129/03 BancrofVentureslimiled FUBl2Cheçking(7S5) (14,000.00)

Derll/um Cap~l (USA) 02/13103 Bancroft Ventures Umiled FU Blz Checking (7¡l56) (36.50.00)Oerlvium Capltsl (USA) 02/26(03 BancrftVentufeslimiled FU 6iz Checking (7856) (12,500.00)

Oer!vum Capital (USA) 03/13/03 Bancrof Ventures Umited FUBl2Checklng(7a56) (56,500.00)

-Derivium Capitai (USA) 03/21f03 Bancrot Ventures LimHed FU Biz CheckIng (765) (2,500.00)

P~~I~lugi_p~p,lf:al F~S/~,) ,0312810 :B:,ncro~ .y~,tur~~,-,Lill.l,te..

;).:.,~.Z::,¿_::~;~",~t-;::_::-, .

(24,9.00,90)

(J~rjVi_ti'_,tap_íia(.,(i;.~A.1 .01f9_erp.~- :'f?n~~.v~~1~,~?,:H.iÌ~~_ : .' _~~~~.:?O)

b,erivj~m ëap.i.i~I'iLl,SAì' :01!2~lO3" 'J3~n,~rc'Venìrjfé'S'ùmit~'. : ":'::,::~.~n.~:9ti.~:l(~~_r~8~,1 :, 12.&,000.00):.

De'rivium- Capital (USA) 04/28(03 . &;~cró:vêiÌl~~~¿ii;"ii~" FUBlz Checking (785l (20,00:00)'Derivium Capital ¡USA) 05/14/03 Bancrof Ventures limited FU 6iz Checking (7656j (95.00.00)Oerivium CepUal (USA) 05116103 Bancro Ventures Limited FU 6iZ Checking (765) (10,000.00)

De(Mum Capital (USA) OS/29/03 Bancrof Ventures Umlleo FU Bìz Checking (7656j (16,000.00)

Derivium Capilal ¡USA) 06/13/0 Bancroft Ve!luf.es Limiled FU Biz Ct;ecking (7856) (30,OOO.ooì

Deri'lum Capital (USA) 06/18103 Bancro Ventures Limned FU Biz CheckIng (765) (20,000.00)

DerMum Capital (USA) 00/27103 BancrOll Venture limited FUBizChecltng(7856) (15,OQO.00¡

DeriVum -Capital (USA) 07110103 Bancroft Venlùre$limited FU Biz Checking (7S5i (35,000:00)

OerMum C3pilal(USA) 0714(03 Banèroft Ventures LimiJed FU.~~cteclcln9(76561 (9,500.00)-

Derilum Capilal ¡USA) 07/30103 Bancroft Ventures Limited FU Bi+ Checking (7856) (35,000.00)

Oeriviwm Capiial¡USAj 08/14/0,3 Bancroft Ventures limited FU Biz Checlûng (7a56) (10,000.00)

Derlvium Capital (USA) 08/15103 Bancroft Ventures Limited FU Blz Clecking (78S) (6,000.00)

Derii;m Capitel¡USA) 0S7103 Bancrof Ventures limited FUBiZctecking(7656) (17,000.00)

Defivium Capital (USA) 09/12(3 Bancrof Verttes LJmited FUBizCtecklg(785) (35,000.00)

OerlvÎum Capital (USA) 09(25103 Bancrof Ventures LJmited FU 6íz Clecklng (78S) (16,000.00)

Dl!ium Caital (USAi 10/0af03 BancrofVerturesUmited FU Bi Clecking(76S) (10,000.00)

OerMum Capiial'(USA) lO/14f03 Bancroft Ventures Limiled FUBiClecklng(7856) (60.000.00)

Derivium Capita! (USA) 101/03 BancroftVenrureLml1ed FU BiZ ci~ldng (7656) (25.000.00)

Deivum Capital (USA) 11114103 Bancroft VenllJes Umited FU BÍZ Checking (7656) (47,000.00)

Derivium Capita! (USA) 1126103 BancroftVeritufesLimlted FUSfi:Cheiking(7856) (16,000.00)

DeriVium Capit¡¡t (USA) 12fl1/03 Bancroft Ventures Limited FU BiZ CheckIng (785) (46,500.00)

DerMum Capital (USA) 12/2213 BancroftVen!ureslimited FU Biz Cheng (785) (20.00.00)Deiivll,lm Capital (USA) 12m/03 Bancroft Veitur limited FU BiZ Checing (185e) (7,500.00)

Oerivium Capital (USA) 01/12104 BancrofVef!uresLimiled FUBiChecng(7656j (10,000.00)

Deriium C~pital (USA) 01/13104 BancrftVenturesUmiled FU Biz Che(k.lng (785&) (36,500.00)

06rivium Capital (USA) 01116/0 BancrofVenturBslimited FUBizClecíng(7856) (7,50.00)OeriYium Capital (USA) 01/30104 Bar:crofVenluresLimited FU8iZChe(king(785S) (45,00.00)

Page6of18


Derlvlul1 Capital, LLCExhibit'

Entity Do" Account Name Bank AccQunl P m.ot De os11

Dtr1vium Capital (USA) 02/09/04 BancroflVentureslimited FU8ilChecklngj785!1 (26,000.00)

Derivium Capital (USA) 02113/04 Bancryentures Limited FUeliCheclng(lB56) (18,000.00)

Derivium Capital (USA) 03/02104 BancroftVenluresLimiled FU eiz Ctecllng (1656) (15,000.00)

Oeflvium Capital (USA) O3f1 ~/04 BançroVenbJresLlmÎLed FU Biz Checking (76561 (29,000.00)

Derivium Capital (USA) 031014 BancroftVanturesLimited FU ß/i Chec~ln9 j78561 (25,000.00)

DerlOl¡um Capltal (USA) 04/13/04 Bariof\VentvesLimited FU Biz Checking (7856) (47.000.00)

Derivium Capi~1 (USA) 04/28104 Bancroft Ventures Limited FU Biz Checldrig (7656) (49.000.00)

OariVlum Capital (USA) 05/13/04 BancrofVantresLimited FUBiiChecklri.(7856) (62,000.00)

DerMum Capital (USA) 0510104 BanctVanturesllmlted FU Biz Checking (7856) (8,00.00)DerMum Capltal (USA) 05127/04 BancroVel'uresLimited FU BJzChecking (7856) (15,000.00)

OerMum Capitl (USA) 06104104 Bancrft Ventures Limlled FU Bi;i Checking (7856) (1.000.00)

Oerivlum Capi:l (USA) 06/14104 BancroftVooiuresUmlled FU Biz Checking (7856) (15,000.00)

DerMum Capital (USA) 06/16104 BancroftVentureioLlmitè( FU Biz Checing (7856) (6,000.00)

Derivlum Capital (USA) 06129104 Bancrft Ventures Umited FU Biz Checking (7856) (21,500.00)

Defiv.um C~pitai (USAl 07/01'94 Bancroft Venturas Umilè( FU Bli Checking (7856) (2,500:00)

Derivium Capita! (USA) 07/13104 BancroVeflufesLimlled FUSizCheckilig(78S6) (36,000.00)

Derium Cilpital (USA) 07l~/0 Bancroft Venlur~s .Lim~éd FU BIz Checking (7856) (27,00.00)DerivÎum Capi\aIWSA) 08/13/04 aarièroftVenturësumit FU BlChecldng (7856) (20,00.00)Derivium Capilal'(USA) 08/30104 6ancroftVentureaLimiled FU 8izClecking (7856) (15,000-:00)

Derlvium Capital (USA) 09108/04 Bancroft Venture~' Llmited FU Biz Checking (7856) (7,000.00)

Derlvlum Capital (USA) 09/13/04 BancrVenluresLimited FUBizChecling(7856) (25.000.00)

Derivium Capital fUSA) 09/21iQ4 BancroftVenluresUmitad FU BiZ Checling (7856) (21,000.00)

Derlvium capital (USA) 09/29/04 BancrftVenlurosLimiled FUBí;¡Checl;ing(7856) (13,000.00)

Derivium Capital ¡USA) 11/12/04 Bancrft Venture Limited FUBiiCheckJng(7656) (18,000_00)

Derivium Capllal ¡USA) 11/15/04 BancroftVenluresLimited FU Biz Cheking (7856) (12,500.00)

Derivium Capital (USA) 11115/04 SancrftVenluresLlmited FU Biz ChecJing (7856) (35,000.00)

Dervium C~pital (USA) 11/23104 B.ncroftVenturesLlmited FU6¡ZChecking(7856) (3,500,00t

"Dervium Capital (USA) 11129/04 BancroftVenlureslJited FU Biz Chcling (7856) (12.500.00)

.Derlvium Capital (USA) 11/3004 BancroftVenluresLmiited FU Bi: Chckng (7856) (77000.00)

Devium Capital (USA) 12101/04 BancroftVentursLimited FU BIJ Checking (7856) (13.000.00)

De:¡v!\J~ ~~!t~~ jtJ.t;A) 12101/04 ~ncr!?~Vent~~,_Limited _i:~ ~1_z_C.he~i~.g57~56) (16.000,00)

b.i:jvl~!n,/~~~~,¡__íPSA) 1?(~:(~ :ßanCr~,~ Yen.lur lÏl).iéo.

' '..,:..:_'~t::~:.:~:~~t;H~~;:. .. ~i~~,~_;tl.'p~j,~)lJ_'i5a?ii,a_l '-!.SA): ,1,_2l.Q9~_:~ncrOtt-Y~t1tu':.~~: ~~n;iill,':;

Dari\.ui'lÓspìfál(OSA) 12/10'04 'Bancrcr Veitures'ijmited' FU'Biz'Ch"ek1ri(7856j" "'(2:SO:O)Darivlum capital (USA) 12/13104 Bancroft Venturas Limited FU Biz Che~ng (7856) (14,500.00)

Derium Capital (USA) 12/2910 Bancroft Venturs limited FU Biz Chcking (7856) (10,000.00)

Derivium Capital (USA) 12!2iu4 BanCfoftVenturaslimrtoo FUBizChecKing(7B56) (10,500.00)

Dervium Capital (USA) 12f,'04 BanCfoll Ventures Umlied FUBizChecking'(7i56) (125.00.00)Qerivium Capital (USA) 01f13105 Bancrofl Ventures Limited FU Biz Checking (7856) (19,500,00)

Derivim Capital (USA) 01/14/05 83nCloft Ventures Umited FUBizCtecklng(78S6) (10,000.00)

Derivium Capital (USA) 01/27/05 BancroftVerilvresLimiled FU BizChecklng (7856) (21,000.00)

Derivium Capital (USA) 02121'05 Bancrof Ventures Umited FUB;zCliecklng(7856) (3,50.00)Derivium Capital (USA) 02/16105 BancroftVenlureslimited FUBiotChecking(7856) (53,00,00)Derivium Capital (USA) 02125,05 BancroftVenluresLimited FUBizClecking(7S55¡ 112,500.00)

Derivium CapilaJ ¡USA) 03/03/05 BançroftVeritUrEsLimiled FUBizGheçklng(7856) (7,600.00)

Derívium Capitl (USA) 03111105 BancrofiVentvreLimited FUBlzClecking(7856) (20,00.00)Defilium Capital (USA) 03124/05 Bancroft Ventures Umited FU Biot Checl;ri (7856) (6.500.00)

Oervium Capital ¡USA) 03129105 BancroVentureSLimite FU Biz Checking (785) (16.250.00)

Deri.vium Capital (USA) 04;'05/05 Bancroft Ventures limited FU Biz Checking (7856) (17,000.00)

Derivium Capitl (USA) 04/13/05 SancrofVenurasLimrted FU Bi;¡ Checking (7eS6i (17.000.00)

Derivlum Caial (USA) 04!28/05 BanCfol'VenturesUmited FU 8ì Ctjng (785) (12,000.00)

DerMum Capital (USA) 05103/05 BancroVeriuresLimitGt FU Biz ChekIng (7856) (17,250.00)

Derivium Capital (USA) 05(12105 BancrofiVentUfesUmitec FU Biz CheIng (785) (13.500.00)

Deriíum Capital (USA) 05118105 BancrofiVentureslimited FU Biz Checking (7856) (6,000.00)

Derivium Capital (USA¡ 06/03105 Bancroll Ventures Llmltl1 FU Biz Checkjng (7856) (2.200.00)

Derivium Capital (USA) oe/211C5 Bancoft Ventures Llmiled FU Bl;¡ Checking (7856) (500.00)

Oerivium Capital (USA) Total (2,026,800.00\

DivefSifedDesignAssociates 09/25/9B Oerivium Capital, LLC F¡tt Union CAP (4406) $ (2,OO.OO~

Divei;lfedDesignAssociates 09129i98 Den'vum Capilal, LLC First UriÕO CAP /446) (7,825.00)

Page 7 of 18


Derivium Capital. LLCExhibit I

Entity Date Ar;COiint Name Bank Account P ment De olilt

Dlversifíed Deign Assoclaies 10/05/98 DeivlumCapi18l,lLC First Ul'on CAP (4406) (100,000.00)

Diversified Design AssOCates 11/02/98 De/Mum Capitel, U.C First Unlon CAP (446) (6,450.00)

Divetlfed Deign AssOCates 11/23198 DelMum Capital, LLC Fìrsl Union CA (4406) (5,50.00)Diversifed Design Assoclates 12fl0í98 Dervium Capitr, lLC First Union CAP (44) (10,000.00)

Diversified Deign Assoclalee 12130/98 Derlvìum~p1tal.i.iC First Union CAP (4406) (7,000.00)

DiyelSifed Design AssoclBtes 01/2619 DerivlumCapllal, Ll. First Union CAP (4406) (6,50.00)Diversifed Design AssoCiales 02125/99 Deillum Capital, lLC Flrsl Union CA (4406) (6,500.00)

Oiversi1Jed Design As$odaleS 03/30í99 Derlvium Capital, LLC Firsl Unlon CAP (4406) (8.00.00)Diversifed Design Associetes 0412919 Dervlum Capital, LlC FiT1t Urion CAP (446) (7,000.00)

Diversifed Design Associates 05111/99 Deiivlum Capital, LLC First Union CAP (4406) (3,000.00)

OlverffedDesígnAssociales 05128199 DefviumCapital,LLC First Union CAP (4406) (6,SOO.00)

Diversifd Deign AssOCales 06116/99 DeiviumCapital,LLC Fìrst Union CAP (4405) (11,50.00)Diversified Design Asso?aies 06F24/99 DerlvlumCapila:J,LLC First Union CAP (4406j (3,000.00)

Diversifed-Deign Assocales 0630/99 Dervium Capital, LlC First Union CAP (4406j (6,50.00)Diversifed Design Associates 07/09199 Derivium Capital, LlC First Union CAP (4406) (2,000.00)

olversifed;De~í9~ AssOCates 07/27/99 Deiivium Capital, LLC First Union CAP (4406) (3,000.00)DlversilledDesignAssociales 07/3(199 Dervium Capital, LLC First Union CAP (4406) (6,50.00)Diversified ?esig:n AssOCates 08112199 Oeiivlum CapitaL, LLC First Union CAP (4406) (3,50.00)Diversified-ÇsignAssociates 06/24/99 Deiilum Capital, LLC First Union CAP (4406) (5,000.00)

Dlve~ified D&lgn Associates 0813/99 OeriviumCapltal,LLC Fìrsl Union CAP (440B) (6,50.00)DlversiledOeslgnAssoeiates 09129:99 Derivium Capital, LLC First Union CAP (44061 (10,50.00)DiversiliedDeslgnAssociales 09/3019 Derivium CapitaL. LLC First Union CAP (4406) (4,000.00)

Diversified DeliignAssoiiates 09/30/9 Derivium CapitaL. LLC First Union CAP (4406) (5,000.00)

Diversifed Design Assooates 10/28/99 Derivium Capìtl, LLC Fil1t Union CAP (4406) (10,000.00)

Diversified Design Asocates 101199 Oerivlum Capitl. LLC First Union CAP (4406) (6,500.00)

Dlyersifed Design Asso~ates 11/08/99 Denvium Capital, LLC First Union CAP (4406) (22,000.00)

DiversìfledDesignAsso~ales 11/29:99 DerivlumCapital,LLC First Union CAP (4406) (6,50.00)Diverifed Desi9n Associates 12102f9 OerllumCapìlal.LLC FirsIUnlonCAP(4406) (S,OOO.OO)

OlvelSifieáDe:si9nAssoeiales 12/07/99 OeiiiumCapital,LLC First Union CA (4406) (5,467.23)

'.Diversified DesIgn Associates 12/16/99 Deiiium Capital, LLC Fiisl Unioo CAP (4406) (20,000.00)

Olverslf~. pe~¡g~_ Nso~ate:s t2l20/99 De~.u.m.Capli-l, LLC First Union GA.PJ~~O~) .,(30,O~.~0)Oìvers.iii~~ ,:p~~!.g~ ~~?~!~t.~~ 12120/a9 De.rt';¡urn '~pítti" LlC. First UQion ~J~4.06) '(10S,p.bO.OO)

Div,ersìtléd_:9_e~19n,As~i;:Ciat!'s, 12/~l~ D7ri:~,I~ Gs.pìtl. LL.C' .FJrn.t ~nf6~,:tAl~t~~a~) (6,S.oO..qo)

Oiveified'Deign ASsociates 01/11100 Otnv¡um Cepital, LLC 'FírstÚni,iri,ÓÜ;-14406) (15,00.00)Diversified Desi9n Associates 01/12fO Derivlum Capital. LLC First Union CAP (4406) (17.50.00)DiversiteoOeslgnAssocìaies 01/21iOO Oerivlum Capital, LLC First UnIon CAP (4406) (7,000.00)Diversified Design Assoiaies 01/31100 Derivium Capital, LLC FirslUnionCAP(4406) (8,500.00)

Diversified Oasign Assoates 02104/00 Dertium Capital, LLC FIrst Union CAP (4406) (18,00.00)OiversiliedDesignAssoates 02;04/00 Derivium Capilal. LLC First Union CAP (4406) (1.000,000,00)

Diversified Design AsSOales 07121/00 Derivlum Capüal, LLC Rr;t Union CAP (44) (490,00.00)Olversìfad Design Assocates OanviumCcpilal,LLC

Diversified Design Associates Total (2,020,241.23) $

FirslSecurilyCapofCaT\da 07121/00 DerlvimCapilal,LLC Fir;tUnionCAP(4406) (19,700,00)

First Socutity Cap of Canada 06/21100 Derivium Capital,LLC First Union CAP (4406) (19,700.00)

First Security Cap of Canada 09i01i00 Derivium Capital. LLC Firl Unio CAP (4406, (97,000.0)First SecurilyCap or Canada 09118100 Derivium Capital, LLC Fir;t Union CA (446) (19,700.00)

First Seunty Cap of Canada 10,106100 Derlvum Capital, LLC First Union CA (4406) (19,700.00)

Fìrst Seurity Cap of Canada 11/10100 DefÌvium Capital, LLC First Union Cori Chl:irg (7775) (19,700.00)

First Security Cap of Cana~a 01105101 Oer'lumC¡ipl\al,LLC First Union Comm Chking (7775) (25Q,000.OO)

FirslSeCUrityCapofCanada 01/24/01 Derivium Capitl. LLC First UniO! Comm Chking (7775) (19,700.00)

First Seurity Cap of Canada 01131101 Derivr-im Capital, LLC First Union Comm Chking (7775) (3,30.00)Firsl Securily Cap of Canada 02115/01 DeriviumCapl!a!,LLC First Union Comm Chking (7775) (40,013.34)

FirslSecurityCapofCar,ada 02f28iu1 Denvim Capital, LlC First Union Comm Chklng (7775) (23,000.00)

ArsiSecciilyCapofCanada 0320/01 nevkmCapitt,LLC First Unioo Comm Chking (7775) (23,000.00)

First Securty Cap of Canada 04118.'1 DerivimCapitaJ.LlC First Union Comm Chkirig (7775) (23,00.00)Firt Secunty Cap of Canada QeiviumCapital,LLC

First Security Cap of Canada Total $ (577,513.34) ,

H20istribuHng H)l05i99 Deri"ium Capital, LLC FirsIUnionCA(4406) , (10,000.00)

Page8of18


Derivlum Capital, LLCExhibit i

Entity calD AceounlName Bank Account i I Paymtlnt I I DepositH20lstributing 10/18/99 Qerivium Capital, LLC First Ur'lor CAP (4406) (5,000.00)H2Dislfbuting 10/25/99 Derivium Capital, LlC FlrsIUnionCAP(4406) (5.000.00)H20istrbuiíng 11102199 Dertvlum Capital, LLC First UnJon CAP (4406) (5,000.00)H2Díslribvtng 11108/99 DerivÜ.im Capital, LLC Rrs Union CA (4406) (5.000.00)H20isiributìng 11108f99 DerivÌlJmCapltal,LLC First Union CAP (4406) (15,000.00)H2Distribuling 11/1519 Oerivum Capital, LLC First Union CA (44061 (5,000.00)H2Dîslribu!ing 12/07/9 De\.;um Capilal, LLC Firsl Union CAP (4406) (65,000.00)H2Dislribuiing 12f20,'99 OeriviumCapilal,LLC Ars Union CA (44061 (30,000.00)H2Distributing 01/08/00 DerlviumCapìlal,LLC Arst Unioi CAP (44061 (10,000.00)H2Dîslibuling 01/10100 DervlumCapital,LLC FirstUnioiCAP(4406) (5,000.00)H20istribulir,g 01119/00 Oerivlum Capital, LLC First Union CAP (4406) (10,000.00)H2Distribu\ing 02101iOO OerivimCapital,LLC First Union CAPi4406j (60,000.00)H20iStribu\ing 02í09/00 DeriviumCapltal,LLC First Union CAP (4406) (10,000.00)H20istrbl.ling 02;15100 Derivium Capllal, LLC First Union CAP (4406) (10,000.00)H20islrlbuling 02122100 DerlviuaiCapital,LLC FirstUnionCAP(4406) (10,000.00)H2DiStrbuling 02(2910 Derlvum Capllal, LLC First Union CAP (4406) (10,000.00)H20iSlnbuling 03107/00 Derlvlum Capltal. LLC First Union CAP (4406) (50.000.00)H20istribuling 03115/00 Derih,/m Capital, LLC First Union CAP (4406) (25,000.00)H2DÍ'lribuling 03121/00 Oerlvium Capital. LLC Fìrst Union CAP (4406) (10,000.00)H2Distribuling 03J30IOO Dertum Capilal, LLC First Union CAP (4406) (15,000.00)H2Distribuling 0410&00 Derivium Capilal, LLC First Union CAP (4406) (25,000.00)H2Distibuling 04/1210 Derivium Capital, LLC First Union CAP (4406) (15,000.00)H2Disiributing 04'18/00 Oerivium Capital, LLC First Union CAP (4406) pO,OOO.OO)

H2Distribuling 04f26/00 Deflvium Capital, LLC Fírs!Union CAP (4406) (5,000.00)H20istributing 0519100 DerMum Capita!, LLC First UnIon CAP (4406) (20,000.00)-H2DiStribuling 06101100 Derivium Capitai, LLC Firs! Union CAP (4406) (15,000.00)H2Distributíng 06/20roO Derllum Capl18I, LLC Ars Union CAP (4406) (25,000.00)H2Dístributing 06/27/00 Derivium Capilal, lLC Firr UnIon CAP (4406) (15,000.00)H2Dístríbuilng 071QSoo DeiiviumCapiiel.LLC First UniQl CAP (4406) (65,000.00)H20ístriuting 07119/00 Deriium Capital, lLC First Union CAP (4406) (35,000.00)H2Distribuiing q7a~/~? p.erivil.i:Cal?ila.I,LLC Firsl Union CAP (4406) (10,000.00)

/:2DjSiiiLiuUng ~.8iÖ1iOÇl :-oéijv1um"_Capi_Ia,l,J.LC . R~.~.ry.on. ÇAPJ4~~~) (15,°.°.9.0). H2 O-is~(~ut.i!1g O~~WOO,:" ()~?0tim:B.aBi§~:~U: . Flrstl!nI,o.!l ,çAP (449,6) (10,on.'O)":'H2 DiStfib~tjng 08116100 Denvlvm CiÍpitel:LLC First Union CAP (4406) (10.000.00)H20istfibuting 08/31/00 DerlviumCapilel,LLC Firs Union CAP (4406) (15,000.00)H20istiibul1ng OSIOSiOO DerlvlumCapilal,LLC First Uiion CAP (4406) (135.000.00)H20istributing 09113f0 Oerivium Capi!al, LLC Firs Union CAP (4406~ (10.000.00)

H20istrrouling 09/27100 OeriviumCaplial,LLC First Union CAP (4406) (15,000.00)H2Distrlbuling 10104/00 DeriviumCapilal,LLC First Union CAP (4406) (10.000.00)H2DiStribuling IO/12iOO Oerivium Capilal, LLC Firsl Union CAP (4406) (15,000.00)H2Di$tlbu\Îng 10125100 Derlvium Capilal, LLC Fil1t UniOt CAP (4406) (20,000.00)H2Distrbuting 11i01roO DerMum Capital, LLC First Unlon CAP (4406) (15,000,00)H2DiStrbuting 11i08/oo Derivium Capital, LLC First Union Comm Chking (7775) (15.000.00)H2 Oistrlbutlng Total , (895,000.00) $

HiTecnr.clogias 03/01J01 Qerium Capital. LLC First Union Comm Chklng (7775) $ (35,500,00)H2Tectnotcgies 03f09iQ1 Derlvium Capital, LLC First Union Comm Chkin9 (7775) (85,000.0)H2Technologies 0414101 DerMull Capita!, LtC First Union Cöm Chklng (7775) (9a,OOO.QO)

H2TeClnologies 04116/01 Dervium Capital, LLC First Union Comm Chking (7775) (12,000.00)H2Tectnclogies 05i3(01 Derivium Capital, lLC First Union Comm C!iklng (7775) (64,000.00)H2Teclnologies 06i07/01 DerMum Capital. LLC First Union Comm Chking (7775) (15.000.00)

H2Technoiogies 06128/01 Derivlum Capital, LLC First UniO Comm Chking (1775l (22,000.00)

H2Tedinclogìe$ 07,'30/01 DerNium Capital, LLC First Union Comm Cllicng (7775) (14,280.00)

H2Technologies 09/13/01 DelvumCapital,LLC First Union Com Ctlkiri (1775) 8,000.00

H2Tachoiogies 09f1311 Deriium Capital,lLC First Union Comm Chklnii (7775) (8,000.00)H2Te-chnoiogies Oetivium-C/lp~al.LlC

H2 Technologies Total (353.760.00) e.oo.oo

OplGchLimited 111u7/03 Bancrof'VenturesUmilOO FU Bli Checking (76S6, , PO,OO,OO)

Oplechl.imited 1Z15!03 Bancrof Ventures Umited FU BIz Checking (7856) 188.00.00

Paga90f18


Derlvium Capital, LLCExhibit i

Entity D.~ I Açeoul1tNamø I Bank Account I I Payimnl I I Deposit I

OpteihUmlled 12/23103 Bancr Venlures Limited FUBJzChackng(7856) 306,000.00

OptechUmlted 0111410 ßancrofl Veritures Limlled FU BizCheekng (7856) 50,000.00

OptechLimited 03118/04 Bancnfj Ventures Umiletl FUBizCheckìng(7856) 167,312.79

OptechUmUed 0313104 Bancrof Venlures Limiied FU BizCheckíng (7656) 97,618.85

OptechLjmiled 031/04 Bancrof Ventures Limited FUBlzCnecldng(7856) 129.382.0

C!plechLimiled 04101\ BancrafVentursLimited FUBiz.Checkíng(7856) 67,652.28

OptehUmited 04/06104 Bancro Ventures UmitBd FUBi:iChBckng(7856) 89,792.33

OptechUmiled 04/141 Bancrft Venture$ Umited FU Biz Chcking (7856) 80,089.85

OpiechUMited 04f19IM BancrftVeriluresLlmited FU BizCh$Cking (7656) 49.589.73

OptechLimitBd 04/21/04 Bancroft Ventures limited FU SizCtieckng (7856l 25.040.92

OplechLìmrled 04128/04 Bancroft Venture limited FUSrzCtiecing(78S6j 65,332.65

Optecl Llmiied 04130/04 BancrltVenturasUmited FU BizCtieckiii (7aS6) 24.926.55

OplechUmftoo 06/17/04 BancrolVentueslii\ed FUBi,Checking(7856) (45.000.00)OpteChUmited 06/25104 Bancr Ventures Umft~ FU Bi;¡ Checking (7856j 45,000.00

OptectLimlled 07/01/04 Bancrft Venturs Limited FUBizChecing(7856j 96,476.65

OplechLirnited 07/14/04 BancroltVeiluresl.imited FUB¡ZCtiacng(7856) 613.960.83

OplechLimiled 07!6r0 BancroftVenluresliited FU Biz Checking (71356) 274,486.99

Opleclllmlled 07128104' Bancroft Ventures Limited FU Biz Checking (7856i (670,000.00)OploclUmiled 07/29104 Bancroft VentlJres limited FU Biz Checking (7656) 94.064.99

OpleclUmiled 08123/0~ Bancr Venture liiled FU BiZ Checking (7856) 232.639.04

OptechUmited 0830/04 BancroftVenturesllmfted FualzCneckng(7856) 429,402.86

OplechLimlled 09113/04 BancroftVEltureslimiled FU Bit Checing (7856) 144,234.64

Oplechllmrted 0912/04 BancrofVEltureLlmiled FU Biz CtieckJng (7856) 32,416.99

OptectiLimited 10'18f0 Bancrft Ventures limited FU Biz Checking (7856) 345,879.27

OplechLJmìied 10120/04 Bancroft VeitlJre Wmiied FU Bi% Checking (7856) 278,509.49

OplechLimiled 10121/04 BancroflVerturesLimiied FU Biz Chec (7856) 158,346.59

OplechLimited 101251 Bancr Ventures Um~ed i:Bl%Checr.(7856) 346.927.34

OplecLimìled 10127104 Bancroft Ventures Umlled FU 81z Checing (7856) 173,359.04

Úplechlim!ted 10128'04 Bacroft Ventures Limited FU Biz Cheng (7856) 87,552.41

OptechLimiied 10129!0 BancrftVeituresLimited FU Bi Checng (7856) 133,089.76

OP.lech L,i'rnil~d 1110~lO .:fl,nCf?ftVj1tu~~!ted FU~;¡ Ch~k¡ng (7856) 166,42.72

QPJ~~;tf~~~,Ie:d . 11foSiQ4 ,.,~'~n~flY~t~~s_ E~~l~. Fu-éiz .C~~¡n9 FØ56) .?4q,6~O:2.7 :

OP!~:tii:,¡~éd 11/-1-104 .,tm~~~ Ve?t~~5:Um,¡~~. F.ùBjz.ciieCklM't7~6) .2t1;3.o9;,2

OptechLimiled 11/5;04'. 'Bancrof Ventures Umltei FÚ'BlzCheckiri(7856) 119,094.93

OptechLimlted 11130/04 BencrftVenluresLlmited FUBizCheckng(7856) 429,9$4.71

Oplechllm¡led 1210814 BancroftVenluresLimiled FU Biz Checng (7856) 141,635.61

OptechUmiled 12113.'04 Bancroft Ventures Limited FU Biz CheckIng (7856) 134,036.74

OptechLimited 1210/04 BancroftVentlJresLimited FUB1zChec1ng(7856) 198,25.76Optechlimlled 12127/04 Bancr Ventues limited FU Biz Checng (78S6) 219,140.38

OplechUmiled 12/30/04 Bani;roftVenluresLimited FU Biz Checking (7856) 275,000.00

Optec LimlleO Om3/05 BaneroftVenlureUmiled FUBizCheckJng(7856) (222.829.26)OplechUm¡ted 02128105 Bancro Ventures LImited FU BizCheckg (1856) (31,912.87)

OpleihLimiied 03110/05 Bancroft Venl\res Umited FUBizCheckng(78S6¡ 17,112.47

OpiechUmiled 03111/05 Bancro Ventures Limited FU Biz Checkíng (7856) (73.853.99)

OplechUmited 03121/05 Bancrot Venture Umiled FU Biz Cheltn9 (1856) 34,962.98

Opteehumiled 04/04105 BancroftVenturesUmite- FUBizChecng(7856) (278,850.00)

OptecUm~ed 04/05105 Bar.crofVenlure!:Limited FU Biz Checkir,9 (7856) 276,850.00

OplechUmited 04/11105 Bacroft Ventures Limited FU Biz Checkng (7856) (1,665.797.72)Opiechliiled 04/11105 Bancroft Venlures liitad FU Biz Chøi;in9 (7856) 326,596.12

OplechLimiled 04/11105 6ancroltVenluresLímled FU Biz Checing (7856) 1.249,348.29

O?techlimlte 04/12105 BaicrftVentvresLìm!tad FU Biz Cheng (7856) (17,112,41¡

OptecLJmited 04112/05 Bancrof Ventures Limited FU Biz Checkng (7856) 22,816.62

Optiich Limited $ (3,015,356.311 8.361.112.27

OrengeturgMetalTrea.tmentCo 05.'25199 DerlvimCapital,LLC First Union CAP (448) (12,OOQ.OO¡

Ora.ngeburg Malal Treatmenf Co 06,'09199 Oeri\lum Capital, LtC First Urion CAP (44CS) 20.000.00

Orangeburg Metal Treatment Co 06/28/9 Deriviun' Capital. LLC Firsi Union CAP (4406) 20.000.00

Qr¡mgeblrg Metal Traatrenl Co 11l04/W Derivium Capital, LtC FifSt Union CAP ¡4406¡ (100.164.38)Orangeb-rg Metal Treatment Co 02115/00 oeri~ium Capital, LLC First Uniori CAP (446) (50,00.00)Orangabur9 Malal Treatment Co 02/22100 DeriviumCapila(,LLC First Union CAP (4405) (SOme.CO)

Page10of18


Derivium .Capltal, LLC

IExhibit I

Entity 0... AccounlName I Bank Account I I Payment I I DeposIt

Qrangßburg Metal Treatment Co 02/9100 Dervium Capital, lLC First Union CAP (4406) (65,000.00)

Orangeburg Metal Treatment Co 04/12/ OeriViumCap!lal,lLC First Union CAP (¥06) (25,000.00)

Orangeburg Metal Traatmen! Co 04/1800 DerviumCapital,lLC FirstUnlorCAP(4i06j (40,000.00)Orangeburg Metal Treatment Co 04/26/00 Derivum Capilal, LLC First Union CAP (4406) (55,000.00)

Orangeburg Metal Treatment Co 05(17/00 DeriVium Capita, LLC First Union CAP (4406) (25,000.00)Orangeburg Melal Treatmart CO 06fOHOO Derivium Capilal, LLC First Union CAP (44) j25.000,00)

Orangeburg Metal Trealmem Co 06'1310 Darl..um Capital, LlC First Union CAP (446) (20,000.00)

Orangeburg Metal Treatmen Go 01102101 DeiviumCapltal,LLC Flrsl Union Comm Chklng (n75l (175,000.00)

Orangeburg Metal Tretmen Co 07ro5l1 Derlvium Capital. LtC Firsl UnIon Comm Coking (7775) 30,000,00

Orangeburg Metal Tretment Co 07/16/01 Derivium Capital, ltC First Union Comm Chking 17775) sa,OOO.OO

QrangoourMetalTreatmentCo DeriVÎum CapitaL. lLC

Orangeburg Mela! Treatment CO Dervium Capital, LLC

Orangeburg Matal Treatment Co Total $ (642,164.38) S 120,000.00

Orangeb~r9 National Bank 03116100 DeiVumCapilal. LLC First Union CAP (4406) (1,000,000.00)

Orangeburg National &mk Total (1,000,000.00) $

PTSlntal1ch 0910318 Derivium Capital, LLC First Union CAP (4406) (58,OOp.OO)

PTSlntertech 091221a DerMum Capital, LLC First Union CAP ~4406) (305,900.00)

PTS Iflertec 0912919 DerilliumCepiLal,LLC First Union CAP (4406) (30,000.00)

PTSln!erlec 10/14198 DarlviumCapital,LLC First Union CAP (446) (75,00.00)PTSlnlertoch 10121198 Derivlum CapitaL. LlC First Union CAP (4406) (10,000.00)

PTS Intertec 10122'/98 Oerivium Capita, LLC First Union CAP (4406) (50,00.00)PTSlnlertec 1010198 Derlvium Capital, LLC First Union CAP (4400) (50,00.00)PTSlntertec 11106/98 Darlvium Capital, LLC First Union CAP (4406) (20,00.00)PTS Interlech 1111318 Derivium Capial. LlC First Union CAP (4406) (50,00.00)PTSlnterech 11/17198 Derivlum Capital, LLC First Union CAP (4406) (30,000.00)

f'TSlnterech 11123198 Derivium Cepital, LLC First Union CAP (44) (34.500.00)

PTSlntertech 11130198 DevimCapltal.lLC Firs! Union CAP (446) (40,00.00)PTSlntertec 12110,'96 Darlvum Capital, LLC First Union CAP (446) (10,000.00)

,P!S:I~~e.rt~. ' 1?1,23198 OeyilJmç:spit.~I,LLç: i:l~_s.t.~n_¡.an:.çn ¡44ç) J5,OOO,qC)...---._-.....-.......PTs_r_n_~_~~ ..::.:.1i0_~'9.a", ~~ni:a.~p!.t~i., t~C ~¡~t:ij.n:r~:~~&:r~e).,:.: J~6,OO:OOj:'-,:_ .

PTs:iôte~~ '. '01101'199~'Ð-~ivium:.9e:p1_\al.'JLp. ; R,~~u.n,r~êP~P ~~.496) : -i44,OOo'~ÒÒl:: .-,

PTSliiìartecti '01Ì1'39 óèriv'iUm' CaPItaL u':c -First Un'ioi-O,P (44) (31,00:00) .PTSln1ertech 01120199 OeviumCapltal.LLC First Union CAP (446) (11.000_00)

PTSlntartech 01128/9 Darivim Capil, LLC First Union CAP (4406) (20,000,00)

PT$lntertec 01129199 DariviumCapital.LLC First Union CAP (4406) (15,00.00)PTS Intertec 02102,199 DeviumCapital,LLC First Union .CAP (4406) (72,000.00)

PTSlnterlech 0211019 Devium CapItal, ltC First Union CAP (446) (14,000.0)PTSlntertec 02111199 Derivlum Capital, LlC First Union CAP (446) 110,000.00)

PTSlnterfach 0212419 Derivium capital, LLC First Union CAP (4406) 161,750,00)

PTS Intertèc 03104199 OeriviumCapltol,LLC First Union CAP (4406) (15,OaO'.!J0)

PTSlntertec 03'11199 Derivi\lmCapltal,LLC First Union CAP (446) (12,00.00)PTSlritertec 03117/9 DevfumCapial,LLC First Union CAP (.'406) (10,000,00)

PTSlntertech 0324/99 DeriviumCapital,LLC Firs\ Union CAP (446) (13,000.00)

PTSlntert 0316/99 Derivim Capital. LLC First Union CAP (4406) (102.000.00)

PTSlnlerlec 031199 Derivlum Capil, LLC Ffrt Uriion CAP (4406) (9,2oo.QO)

PTSlnterted 040619 Der..íum Capital, LLC Fifst Union CAP (44) (13,000.001

PTSlnlertec 05112.199 DerMum Capital, LLC First Union CAP (44) (20,00,00)PTSlntenec a6!08i99 Derivím Capil, LLC First Union CAP (4406) (7,SC.ao)PTSlnterech 06l11l99 DeriVium Gapltal. LlC First Uiiion CAP (4406) 150.000.(0)

PTSlrienech 06f18fS9 Darivíum Capital, LLC First Union CAP (446) 50.000.00

PTSlntertach 06/1819 DErívium Capital, LLC First Union CAP (446) (50,000.00)

PTSlntertacr 06128/99 Darivíum Capll. LLC Firsl Union CAP (446) (10,000,00)

PTSinierech 071219 Derivium Capital. LLC First Union CAP (4406) (6.500.00)

PTSlnterteò 08105i99 Qb..viumCapíl,LLC First Uni01 CAP (4406) 118,000.00)

PTSlntertec 09/0919 Dervium Caplta!, LLC Firt UniOf CAP (44) (10,000.00)

PTSlniertac 10125199 Derivi\lm Capital, lLC First Union CAP (44) (16,000.00)

PTSlnteiec 1112,199 Deríium Capial, LLC Firsl Union CAP (4406) (8,00.00)PTSlnlertech 12109199 Derivium Capital, LLC First UniOl CAP (4406) (5,000.00)

Page11of18


':Derivi~m.':Ç~p~.*al) '_LLe

Eichibill

Entity Dale Account Name I Bank Aceoun! I I Payment I I DepositPTSlnterec 01120100 DeriviumCapital,LLC First UnIon CAP (4406) (163.000.00)PTSI"terec: 021OtllO Derl.~lum ~apila!, LLC FIrs Union CAP (4-06) (65,50.00)PTSlritertech 02110100 DeriiumCapiiái, LLC First Union CAP (4406) (10,000.90)PTslnterled OS/22101 Derivium Capita!. LLC First Union Comm Chking (7775) (2,000.00)PTSlntertechTotal $ (1,697,950.00) . 50.000.00

Robert & Penelope Brardanburg 10119/98 Derivum Capital, LLC First Union CAP (4406) (10,000.00)Robert & Punelope Brandenburg Total (10,000.00)

Scott 0 Call1cart 10/12101 DerivlumCapilal,LLC Fírs UníOl CAP (4B57) 012,000.00)Scott 0 Cuineart Total , (112.000.00) .

sheria~doahHoldlngs 03130101 DerivivmCapilal,lLC First UnIon Comm Clklng(7775) $ (25,09.00)Shenandoah HoldIngs 08/0319' Deríviu~:C:aplta!. LLC First Union Comm Chkin9 (7775) (40,000.00)Shenendoah.H.otdlng5 08f~pl1 Der~~n:, Cap;ta~' LlC Firsll,nlon Comm Cllklng (7775) (100,000.00)Shenando~l-.H.old~ng~ 08114JQ"i DeriumC.api,laL,lLC Arst Union Comm Chkìi'9 (.775) (50,000-0)Sher'an?oah_Hol~ìn9s 08l6l01 D_è.rìiumGapital,LLC First Union Comm Chklng (777S) (175,000.00)Sh~n~ndoah'.H':dings 0811:7101 Oeriyjum Cspilal, LLC FIrst, Union Comm Chklng (7nS) (50.00.00)shen~ndoa-i;Holdings 081711. :Deri~'iuri:C:aplial, lLC First Union Comm Clikíng (7nS) (50,000.00)

shenançoah ~oldings 08iH!01 Derivh.im Capital, LLC RrstUnlonComm Chking(777S) 50,000.00

ShenimdoahHoIdiigs 08/21f01 Deri'ium Capílal, LLC Rrst Union Comm Ghldg (7775) (50,000.0)Shenandoah HoIdìngs Oai29101 Derlvíum Capita!, LLC FIrst Union Comm Chklng (7775) (50.000,00)

Shenandoah HoIåings 08I3OJOl Derivum Capital, LlC FIrs Union Comm Chklng (7775) 35,000.00

sheand.oa,h!:oldln!;5 08131101 Derium Capilal, lLC Rrst Unlon Comm Chking (7775) (30,000.00)sher,ànooahHoIdlngs Oa131/01 DerMum CllP'llat. lLC Flr~t Unlon Comm Chking (7775) (100.000.00)

SnenandoahHoldings 09/04101 Derivium Capital, UC First Union Comm Chklng (7775) (45,000.00)Shenandoah~91d¡f\S 09/06/01 Oervium Capital, LLC First Union COm Chklng (7775) (120,000.00)

shenandaah:HÒldlngs 09/19/01 DeriviumCapital,LLC FIrst Union Comm Chklng (7775) (120,000.00)

'Shenandoah HoIdlngs 09/26101 DeriviumCapiial,LLC FIrst Union Comm Chklng (7775) (100,000.00)Shenan?oahHoIdlngs 10/11101 DerivumCapital,llC First Union CAP (4857) 200.000.00

.:~m~~~~!¡¡i¡

:10lJ8fOl "..aruofVe,ntur_es:lmlted .. r~..~!~9.~.~ki~.(7~~N_, .25,lN.,O~.

:,1~j~~,1' :~b~~~iÙ#~¡;¡t,~l/L~~,:J: ; '''Rrst.~riiO:n:ç:AP;~~~?7ì:, ' -',120.a'òa.:o~'::

Ù!2.7lß~. :.. p.Griyi~~,:,G~R!.t¡t!,:L,t.~' ,'..' . 'FI~.(~af~~~c~ri!,¥thkÚlg"(77:75) (:K,9%l;ÇO)

ShenandoÍh'Holdlngs 12106iò1 'OiÙivilim CaPiial. ue Flrs(Unio'rlCómrii Chking '(775) (20,000.00)

Shenandoah HOldIngs 12/07/01 DeriumCapital,LL.C First Union Ccm Chking (m5) (100,000.00)

ShanandoahHoIdlngs 1220101 Darivìum Capital. LlC First Union Comm Oiking (7775) (49,000.00)

ShenandaallHoIdlngs 12/2Of01 DeriviumCapltal.LlC First Unio CAP (4857) 100,000.00

sheand~h Holdlng5 12/2.8/01 Dervium Capitl. lLC First Union Comm Chking (7n5) (30,00.00)Shenandoah HoIdi'rigs 01/03Í2 DerimClIpital,LLC First Union COm Ctiking (777S) (33,000.00)

Shen8ndoahHoIdlngs 01/17/02 Dervium-Capilal,llC First Unioo Corom Chkiog (7775) (38,000.00)

shemindoahHoidings 01/3110 DeriviumCapital,LLC First Unioo CAP (4857) 90,000.00

Shenandoah HOld,ings 02'15/02 Derivium-Capltal,LLC First Unl~n Com Chking (7775) (6,500.00)Shenandoah Holdings 03114/02 DeriviumCaplll,LLC First Union Comm Chklng (7775) (12,000.00)

ShenanóoahHoidings 03'19102 DeriviumCapltal,lLC First Union Corm Chking (7775) (7,000.00)

ShenandoiihHoldlng5 03'2710 Derivil.m Capitl, LLC Firs! Union Comm Chking (7775) (16.00.00)ShensndoahHoldings 04/1512 OerivlmCapital,LlC Fiis! Union Comm Clkiri (7775) (12,000,0)Sherend08hHolclngs 05iCll/02 Derivium Cap~.al, LLC First Union COm C1king (7775) (15,00.00)Shenal\oa Holdings 05117102 Derivim CaPi~al, LlC First Union Cam O:king (777S) (50.0.00)Shenandoah Holdings OB/24fQ DerillumCapil.il,LlC Fírs! Unio Comm Chking (7775) (40,OOa.O)

Shenandoah Holdings 07l01f02 O-eriviumCapilal.LlC First Union Comm Chking (7775) (8.000.00)

SlanandoahHoldings 07/03102 DerlviumCapilal,LLC First Union Comm Chking (7775) (30,000.00)

Shenandoah Ho!f.lris 07/29102 Oerium Capital, LLC Firs! Unton Comm Chking (7775) (25,000.00)

Shenandoah Holdings OeIOliC2 Deri..ium Capital¡ LLC First Unio Camm Cnking (7775) (12,500.00)

Shenandoah HoId¡ngi. 08116'02 Derivium Capital, LLC First Union Comm Chklng (7775) (10.000.00)

Shenandoah Hcldings 09'04f0 Bancrof Ventures Um!ted FU6iiChecking(7856) (25.000.00)

Shenandoah Holdirigs 09J05it2 Bancroft Vanties Umited FU Bti Checking f78S) (25,000.00)

ShenancoahHoldings 09111102 Bancroft VentlJres limited FUSii;Checking(7656) tS,COO.C-o

Shenandoah Holdings 1011Qi02 Bancrof Ventures Liited FU Biz Checking (7856) (5,000.00)

StinandoahHolings 10/23102 Bancr:VeriuresLlmiled FUBiz-CheCki(7ô56) (70.00.00)Shenandoah Holdings 1Cl/28102 Derîm CapitaL. LLC Fi~1 Union Comm Chking (771S) (15,000.00)

Page12of18


DeriviufTÇàpltal, LLCExhibit I

.Elltl 0... Account Name 8iinkAccoùñt Pa ment De osH

Shenandoah Holdings 11/14!O2 OenVium:Capllal, LtC First Union Comm Chk~g'(7775) (60,000.00)

Shenandoah Holdings 12!Ø302 Derll~(l Capital, LLC First Urno." Comm Ch~I~~p7.75) (a,QOO.OO)

Shena,nd?ahHoJdl.ngs 12/1.1/02 Dertll.."!:èaPitl, LLC Fllst Union Comm Chkiri9:(mS) (25.000.t))

SherandoahHadlngs 1~112/02 Derlvliim"Capltal,LLC First UnIon Comm Chk"¡ng (7175) /40,000.00)

Shenando!lhHoi~¡ngs 12i~O!02 DeriviumCap.¡tal,LLC FiIl Union Comm 0ki~~-rm5) (40,000:00)

Shenandoal'Holdîngs 01:02103 Derivlum Capitel, Lt.C F\rst Union Comm Chking (7775) (10;500.00)

ShenaridoahHoldings 01102103 Deriiirn Capital, LLC FIrst Union Com Chklng (n75) 40,500.00

Shenali~oahHOlditÍs 0211010 Bancrofi Venture Umlled FU Biz-Chcking (7856). 11,000.0

Sheia'ndt?ahHoldirgs 02/14/03 BanQ-oft Ventures Umi'ted FUBriChE;ckngj78!?) (15,00.00)Shen.aridoahHoldirigs 02114103 Bancrof Venturll Limited FUBí.~ecking(7e56) (112,000.00)

ShenaridoshHo!dings 02f1W03 Bancft Vi;nture Limited FU B~ Checing (7856) 7.500.00

Shenandoah HoldIngs 02128/03 BanCloftÝenturesllmited FU BiZ Checkng (7856) (19,00.00)

Sh_~min?O!h l:o,I~¡~gs 03l04/~ Ba.ncrofVenluresLimited FUBizCheng(78S~) (14,500.00)

Sh~~n~o'a~'~di,ngs 031131'0 eancihit :vèritur8s Liited FU6lCtiklng(7è56) (6.500.00)

Si:en_ii~doahHoiiiln,g5..'" , ,

FU."~~~ ~~cldng (1~56)0312!03 Bancroft Yenlurs Umited 10.000.00

Sh~nand~hH.~_ings 04103103 Bacroi 'V~nhjr~S ,u~i~~ 'FU'.Biz.Checking(785,6) (11.500.00)

~h~~.~~~~h HaI~l~g_s 04/141Q; Banci V'enwres ù~tt~ FU Bii-Checking (7~5~l. (115,000.00)

Sb~naniloahl-óldings 0~/l6i03 Banctpf\ÍentlJresl;irn~ed FU Biz Checking '(7856) (2,50~.OO)

ShE;ni;nd~hH?I~ínss ~~/2Slo3 Ban~ 'l~n~~res Lirn.lIed FU Biz Checking (78sii (50,09~.OO)

SheiiaridoahHo!dl,rigs 05'14103 Bancr Venlures Lim~e~' 'FU-a'Checng(785?) (35,009,00)

Shenandoah Holdi,ngs 06'13/03 Sancrft Ventures limlled FU Biz Checkif\~ (7856) (55,00.00)Shenandoah Holding$ 06)30103 Sacroft Venturs Limited FU Biz Checking (7856) (12,000.00)

Shenandoh Hotdlngs 07;08(03 Sdncroft Ventures limIted FUBIiChtictirig(7856) (50.000.00)

ShenandoaliHoldlngs 07/14/03 Bacroft Ventures Limited FU Biz ChecJrig (7856) (30,000.00)

$hen'andoah-Holdings 08104/03 Bacrft Ventures limiled FUBiz Checng (785&) (30,000.00)

Shenandoah Holdings 08l14í0 Bacr Ventures Lìmllec FU Biz Checklng (7856) (50.000.00)

Shenandoh I-okiings 08121/03 BanClofVenturesLimiled FUBizChec~ng(7856) (18.000.00)

Shen,aiidoahHol.dings 09'9?(03 Bancroft Ventures limited FUBizChecking(7856) (~5.000.00)

Shenandoah Holdings 09108103 Bancroft Ventures limited FU'BiZ Checking (7858) (40,000.00)

Shenand~i:HoIdin,g$ 09'12103 6ancroftVentuesUniited FU Biz Checking (785) (12,00.00)

~,h~n_~~~?!~ ,l;?l~~~9~ 09/,2,503 ~a:~~~oft ,Vent,~~,~, ~~!~e?

m:~i~~¡~¡j,

a5,00O.OO

",sf~~_~a~,~,~h:IiÒ_lil¡n_g~ .~'~k~~?

~:~~Et¡;tt~¡¡~ .

':':.',,:p~~,~~,~

, $,h:~_f1_a--__~~_)i:~~d¡~.~i ~Ø~1:~!p_3':-1~~~9?:,~H ,',

Shcnandoàh:Holdlngs "10i3H03 'FU'Bit,aiecklng (78s6l 45,000:00:'

Shenandoah Holdings 11106103 BanClof Venture limited FU Bi. Checking (7856) (10,00.00)

Shenandoah Holdings 12/043 Bancroft Ventufes Limited FU Biz Checking (785) (65,00.00)Shenandoah Holdings 121~3/03 B$croft Ventures limited FU Biz Checkii (7856) (as,OO.OO)

SheriardoahHoldiris ,"", BancroflVenturesUmited FU Biz Checking (1856) (13.000.00)

Shenandoah Holdings Total $ (2:848,500:00) , 849,500.00

SpecerPsrtersÜmite 0112010 Bancrit VenlOres Limited FU Biz Checking (7656) , (2,000:00) .

Spencer Partners ümiliid 01/30104 Bancrof Ventures lln:ìted FUBizChec~g,1856) (8,500.0) :

Spencer Partners lirned 02/231a4 Bancrof Venture Umtled FU Biz Cheekll1g (78561 (2,000.00)

Spencer Parters Umiteõ 02/23/04 Bancroft Ventures Limited FUB¡ZC~¡ng(78S6) (2.50.00)

Spencer Partners Umlted 05/19/04 Sdncoft Ventures L)miled FU BizCheclllig (7856) 25.97300

Spence Parters Umited OS/28:04 BarioftVenture:;Limiled FU Biz Checing (7856) (10,00.00)

SpencerParterUmited 06/15/04 Bancroft Ventures limited FU Biz Cheing (7856) (10,00.00)

SpericerPertnersUmìied 06/22,'04 Bancrof Ventues limited FU Biz- Checkltl (78'56) i5,250.00)

Spem:erPartnarsUmlted 06/30104 B-ncroftVentureslimited FU Biz Checking (7856) (15,00.00)

Spencer Partner Limited 07(22104 8aricrofVenturesLimiled FU Biz Chng (7856) (15,00.00)

SpencerParnasUmited MI05J04 BancroftVenluresUmited FU Biz Checing (7856) (15,00.00)SpencerPaiersUmited 08119'04 Bancro Venure~ Limit FU Biz Checking (78-) (10.000.00)

SpencePartnerslimilad 09/15/04 BancrorVenturesLimited FU Biz ciiecng (7856) (26,50.00)SpencrParnersUmited 10/04/0 Bancroit Ventures limited FU Biz Checng (7S56) (15.000.00)

Spencer Partners lìmited 10125104 BancroftVenluresLimited FU Biz Checking (78se) (10,50.00)

Spencer Partner liited 10,128,'4 Baf'croftVenturesUtite( FU Biz Checking (7856) (23,50.00)SpencerPartnerlìmited 10129/04 BancrofVenlures-Umiled FU Biz Checicng (7858) (10.000.00)

SpencerPar1nersUmited 11í12104 BancoftVélllJreslimlled FUBlzCteclng(785t) (15,000.00)

SpcncerParfner5Limit 12107/04 Bancroft Ventures Limited FU Biz Checking (7856) (25,500.0)

Spencer Partner Llmited 12/1010 Bancrof Ventures Limited FU Biz Checkig (7856) (6.600.00)

Page130f18


Derlvlum Capital, LLCExhIbit I

ent D;:le Account Nam& Bank Account Pa ment De osìt

SpencerParlersLimileø 1210104 ßancrQft Ventures Limited FU Biz Checing (7856) (27,000.00)

Spencer Partoo limited 12/110 BançroflVenluresl.irnitd FU alzChacllng (7656) (15,500.00)

Spencer Partners Llmiled 12/9104 BancroflVenluJlsLlmite FU SizChecng (7856) (55,000.00)

SpencerPartnerl.mited 01f13í5 Bancroft Venluras Urnlle FU 6iCheckirig (785t) (15.500.00)

SpencerPartnèfsUmiled 02111105 Bancro Ventures Limlled FU BIzCliecng (7856i (15,000.00)

SpencerPartnersL)miled 021815 BancrftVenluresLimiled FUBlChecking(7656) (15,000.00)

SpencerParterUmited 06/14105 Bancroft Ventures Umlted FUBlCh~ingí7856) 135,000.00

Spencor Partners L1mlted Total (370,85.00) , 160,973.00

SpencerVenlure ?artnern, ltd 09/15104 Bancr Venture Limited FU Biz Checking (7856) . (6,500.00)

Spencer Venture Partrnra, Ud Total $ (6,50.00)

Spray Foam Insulation 07/24/01 Derivium Capital, lLC Flrs\ Union Comm Chkirg (ms) (10,000.00)

Spray Foam ln$ulation Tol.1 (10,000.OOj $

Steel Homes 12115/00 Derivlum Capiiiil.lLC FIrst Union Comm Chkirg (7nS) $ (50,000,00)

SteelHomes 12/06101 DeriviumCapilsl,lLC Fiit Union Comm Chklng (777S) (20.000.00)

SteelHomes 02119/02 DMvlum Capite~ ltC First Unlon Comm Chking tmSj (SOO.OO)

Steel Homes. Total . (70,50.00) $

Ten State Street 03/13/02 BancroftVenturelimiled FU SlzCheciri (7856) (12,50.00)TenSleteStreet 04/01,'2 BancroftYentureUmiied FU Biz Checng (7856) (12,500.00)

Ten State Street 05/01102 Bancrof Veotures Limiled FU Biz Checng (7856) (12.50,00)

TenSlaleSlreel 05131/02 Bancrft Ventures Umited FU 8izCJecng (78S6) (12,500.00)

Ten State slreet 06/28102 Bancroft Ventures limited FUBizCheeing(7856) 112,500.00)

Ten State Stret 06/28102 Bancroft Ventures Limited FUBizGhecng(7856) (45.541.85)

Ten $l8te Stret 07131/02 Bancroft Ventures limited FUBizChecklng(7856) (12,500.00)

TenSialeSireet 08/27J02 BancroftVeotureslimited FU Biz Checklng (785) (12,500.00)

Ten SlateSiret 10/102- Bancroft Ventures limited FUBlzCl'ecking(7856) (12.500.00)

Ten Slate Street 10/31J02 BancroftVenluraalimited FUBizChecking(7856) (12,500.00)

Te~, S_ta.t~.~_~_t_: 12/05/02 Banci: Ventures .Limite F,~ ,~iz:Ç.~ec~lng E.".5ß) (12.50~:?P) '.

. Ten'State~tr~èt oÙo~¡ò~.; :~~é~?ii~iir_~A~~:: ''':'. '-:F:~:::a.l~-,.~.B~,n.~.'\t~6~" .02,50~-,pO)"

Tån':stai:e:Sireèt 01/1:sa3. BatlFr!ìftYenliirts :~~ìted-. .. F~. ai~.Ch~.ki~9.F~'. (30.00..00)

TenSlaleStreet 01130103 BanèrofVeniuresllmlted FU Biz ChecIng (7856)' (15.000.00)

TenSlaleSlreel 02112J3 Bancroft Ventures Umlted FUBizCheclng(7856) (12,500.00)

Ten Stale Street 02/2613 Bancroft Ventures lImlted FU BizCJecking(7856j (12,500.00)

Ten Stale Slreel 03/28i3 BancroftVenturesUmlted FU Biz Checking (7856) (12,500.00)

Ten Slale Slreet 03l1J03 Bancroft Ventures Umited FU Blz Cheddng (7856) (57,733.22)

TenSlaleSlreel 04/24103 Bancro Venlures limited FUBizChecing(7e.6) (52,978.07)

TenSlaleStreet 04/28103 BancnftVertureslimiled FU Biz Checing (78-) (12,50.00)

Teo Stale Street 05l09r03 BancrVentureslimited FU Biz Chec~ing (7856) (18,838.09)

TenSIB.LeS!reet 06/06/03 BancroVenluresLimited FU Biz Checldng (7858) (12,500.00)

Tenst8leStreat 0613103 Bancroft Ventures limited FUBlzChecng(7856) (12.50.00)

Ten Slate S1reel 08/04i03 BancroftVenlureslimited FU B;zChecing (7856ì (12,500.00)

TenSteteSlreel 08r25i03 Bancro Ventures Umiloo FU Bjz Checng (7856) (12,500.00)

TenStaleSlreel 10116í03 BancroftVenturasL¡mited FUBizChecing(7856) (12.50a,00j

Ten State Street 10/28/03- 6ancroftVenturesLimlted FU Biz Checing (785) (so.ooa.OO)

Ten Slale Street 10/31'03 BancroftVenluresLimited FUBizGhecing(785S) (98,932.11)

Ten Slate Slreel 11/0303 Baricrof Venlures limite FUBlzCll!cking(7856) 98,932.11

Ten Slat Slreet 11/20r03 BancroftVenlureslimitO FUBizChecking(78S) (12,500.00)

TerSiateSlreet 12/3í03 BancrofVenlurelimited FU Biz Checing (7856) (12.500.00)

TenStateSlreel 12/04103 BancroftVenluresLimiled FU Biz Checking (78&6) (103,990.45)

Ten State Slri,el 12/19103 BancroftVenturesUmitad FU Biz Checking (7856) (66.064.40)

Ten State Street 01/08/04 Bancrof Ventures Limited FUBii:Checking(7856) (12,500.00)

Ten $Iate Slreel 01/30104 Bancrof Ventures Limited FUBizChecking(7856) (30,078.00)

Ten State Street 02106:'04 Bancro Venture Umited FU Biz Checin9 (785¡ (10,024.00)

Tan Siate Streel 02113/4 Bancrcl Ver"lure Limited FUBizChecking(7856¡ (22,609,51)

Ten SI&le Street 02118/04 6ancrVenturesUmited FUBizChecking(7856) (12,500.0)

Ten Slate Stree 03111104 BancroftVerituresLimJted FUBizCheckíng(7856¡ í12,500,OO)

Ten Slate Street 03131104 Bancft Ventures Limited FUBizCheckir"g(7856) (12,500.00)

Page 14 of 18


DerivlumÇ~pliill, LLCExhibit I

Entit Datè Account Namø Sank Aceount Pa ment De oslt

Ten Stale Street 05/07/04 Bancroft Ventues Limited FU Biz Chcking (7856) (12,500.00)

TenStBteSIfeet 0517/04 BancroftVenluresLim,ted FU Biz Checlng (785) (25,000.00)

TenStaleSt(eel 06110/04 Bancro Verrures Limited FU8izChecking (1656) (12.500.00)

TenSlaleStreet 07/13(04 BancroftVßIlùreUmlleo: FU Biz Checking (7856) (12.500,00)

TenStaieSlreel 07121/04 BancrVanluresLimited FU Biz Checkin (7656) (108,347.64)

Ten Stale Street 0815/04 Bancrft Ventures Limitd FU BiZChackìng (78S6) (12.50a.O)

Ten $lale Street 08130/04 Bancrft Ventures liit FU Bi2Checklng (7e56l (25,000.00)

Ten SlaleStreel 09/7/04 Bancrft Ventúras Limited FU Biz Checkfng (7&56) (12,500.00)

Ten Stale Straet 09/29/04 BancroftVenlureslimrted FU Biz Checklng (7B56) (25,000.00)

Ten Slate Street 1016/04 BancroftVenturei;lImlled FUBizCnecking(7856) (12,50.001

TenSta\6Street 10/29104 Bancroft Venlures Umited FU6izChecil1g(7856) (30.00.00)

Tel1S1ateStreet 1112/04 BancroftVenluresUmited FU Biz Cheding (785) (25,000.00)

TenStaleSlfeel 11/15104 aancroft Veflures Umited FU BizChecng (78S6i (12.50.00)

Ten Slale Street 12.02/04 .BancroltVenluresUmlled FU Bii Checking (785) (25.000.00)

TenSlateStrool 12l09/04 Bancroft Ventures Limited FUBiz.Ciiecking(7856) (12.500.00)

TenstateSlret 01f06(QS Bancrof Ventues Umited FUBizChecking(7856) (25,000.00)

TenSlaleStrel 01!0710 Bancroft Ventures Umited Fu"SiZ Ctieckng (78S6) (12,500.00)

lensÎaieStreel 01/31/05 Bancrofl\ÍenturesLimited FU BiZ Ch.ecldng (7856) (25,000.00)

Ten Slate Stret 02115105 BancroflVe:ntu'resi.¡miled FUBizC1ecklng(7856) (16,50.~0)

Ten State Street 0212515 .BancroVenturesLimlted FU Biz Checking (7556) (25,000.0)

Ten Staie Stret 03(04/05 BancroftVentureUmited FU BiChecking (7856) (16,250.0)

TenSlaleStreel,LLP 12;12100 DenviumCapílal,LLC First Union Comm Ching (7775) (452,754.51)

Ten State Streel,LLP 12/14100 DerMum Capital, LLC First Union Com Ching (7775) (429,17759)

TenSlateSlreel,lLP 12/16100 Derivium Capital, UC First Union Comm Chking (7775) (429,17759)

TenStateStrel,LLP 02127/02 Derm Caitl, LLC Firt Union Camm Ctklng (7775) (100,000.00)

Ten StateSlreet. UP 0322i02 OenviumCaplla.UC FIrst Union Camm Chklng (m5) (50,000.00)

TeiStateStreel.UP Q4112ì2 Oenvium CapItal. LLC First Uri¡oo Comm ChKing (7775) (50,000.00)

Ten State Street, LLP 0712102 DeumCapilal,LlC Flf$t Union Comm Chking (7775) (5,952.35)

TenSlaleSltee,UP 1012312 OeriviumCapltal, LLC First Union Cornm Chklng (7775) (43,610.82)

Ten Slale Street, LLP 12/11:"02 OeriiumCap1tal,LLC First Union Com Chking (7775) (12,576.34)

Ten .~t~.te;:~,tr~~! ~,~~.. . 02128103 .De.rivumGipi\a1.LLC FI~t.Uníon.Comm Coking (7775) (29.675.10)

T~n.:stái~:aI~~t;Jtf: 05f~~íp.~ . .óti~i~,ri.'Ca~'it~i,. :L~.~ : f¡i~.t'yi'ri:i~r:rn '?~~g"t7775J, :~,2,2~.6.~:~:?~).,.:

T.en.$lai~ ~S't~'9(.il :LLP ,.061.6)03: Qe.~,~:~,C.~éi~I:':.tl9 ': Fj,~ltJD~.:.Ç~.!rm.qi~In.:~77751 : ~;(2.~;.~~8~62): ..

T erl'Siåte" Streel~ iLP 08/0(03' Oë!\iiJm C¡Ú¡1ti.I, Üc First.Uriío;"Coim Chklng (7775) "~25';60;t30)' .

Ten Slate Street. lLP 0910103 Oerivium Capi1al. UC First Union Comm Chking (7775) (44,464.26)

Ten Stale Slreet, UP 11i04/03 Dervium Capital. LLC First Union Comm Chklng (7775) (98,932.11)

TlIn Stato Slreet, LLP Total (3,210,158.74) 98,932.11

The Whitnay and Sco Cathcart 051/01 Dervlum Capìtal. lLC First Union Comm Coking (77'15) (397,186.22j

The Whilney and Scolt Cathcart 04it4/02 Deivii.m Capital, LLC Arst Union CAP (455) (65,000.00)

The Whi1ey and Scc Cathcart 0511710 Derivium Capital. LLC Flrt Union Comm Chkiri (7775) (5.501.68)

The Whllney and scon Cathcart 07/08'02 Denvium Capital, LLC First Union CAP (487) (25,000.00)

The Whitney and scn Cathçart 07109/02 DeviumCapílal.llC Firsl Union Camm Chking (7775) (1,918.15)

The ""Itney and Sctt Cathcart 08/16/02 DarviumCapltal.LLC First Unlon Camm Chklng (7775) (1.9'1.00)

The Whitney and Sott Cathcrt 09:26/02 OeriviumCapital, LLC FIrs Union CAP (4857) (15.000.00)

The Whiney and $rt! Cathcart 10f31102 DerlviumCapital,LLC Fírst Union CA (4857) (5,000.00)

The Whitr.ey and Scott Cathcart 10/31/0'2 DervimCapltal,UC First Union CA (4857) (15,000.00)

The Whitney and $cott Calhcart 12/11/02 Derivim Capital, LLC Forol Union Comm Chkiri (7775) (2,475.00)

The Whilney ana Scott Cathcart 02114:03 Darivum Capil8l. LLC First Union Com'Chking (7775) (4.357.92)

TheWhitny and ScollCalhcart 02/28103 OenviumCapita!,LLC First Union Comm Chklri (7775) (4,085.55)

The Whitney and Scott Cathrt oe/1310 Derium Capitl, LLC First Union Comm Ctking (n!5) (1,708.25¡

Th Wnitney and Scolt Cathcart 08115103 QerMUm Capital, LLC First Union Corom Chking (7775) (1,119.11)

The Whiirieyand SCt CathcClrt 10/08/0a DerMum Capital, LLC First Union Com Chking (7775) (582.00)

The Whitney lIntl Scott Cathcart Total, (545,108.88) ,

Themiaseal ()2!04J99 DerivumCapital,LLC First UnJn CAP (4406) , (5,50o.O)

Thermaseai 02110199 Derivum Capital, LLC First Union CAP (4406) (2,000.00)

Thermasea! 03/12199 DerMum Capital, lLC First Union CAP (4406) (4,260.00)

Thermaseal 03112/99 Oerivium Capitel, LLC First Unio CAP (4406) p2.oaliCO)

niermasea\ O~/17t9 DeriviumCapital,LLC Firsl Union CAP (4400) (2,6S4.93)

Page15of18


Derivluni C~pital, LLCExilibitl .

Entity D... ActountName I Bank Accounl I I Payment I I Deposit

Thermaseal 04/0519 Derlvlum Capital, lLC First Union CAP (4406) 15,000,00)

Thermaseal 04112,'99 Diinvium Çaprlat, I.LC FlrstUnlonCAP(4406) (9,940.00)

Themiaseal 04120199 Derivium ~.~i!al, LLC First Union CAP (440) (76,000.00)Thermaseal 0&11/99 DerMum Capital, LlC First Union CAP (4406l (90;000.00)

Thermaseal 06/18/99 OerviumCapltal,LLC First Union CAP (4406) (80,00.00)Thermaseal 08/02/99 Derivlum Capital. LLC First Union CAP (4406) (12,000.00)

Therrnaseal 09/20m DerlvlumCapllel,LlC First Union CAP (44081 (6,000.00)

Thermaseal 10125199 Derivium Capital, lLC Ffrl UnIon CAP (4406) (13.00.00)Thermaseel 01/10100 Oerium Capital, ue Firs! Union CAP (4406) 127,00.00)Thennaseal Total $ 1345,39.93) $

VeridiaSoIutions 01114/03 BancrofVenluresl¡mlled FU Biz Checking (7856) $ (35,00.00)Vetidili"Solucn 01129/03 BancroVeriluresUmiieli FUBizCheeltng(7856) (40,00.00)vendíaß9h.i1ions 02113/03 Bancrof'ÍeritursUriled FU Bi~ Checking (7~5e) (35,000.0)VeridiliSÒluUons 0~26f03 Bancroft y!!!"i~ limited FU ßi; Chng (785) (31,50.00)Veidia-Soluons 03/05/03 BancrofVer.túresUmlled .Fl. Bi~ thecking (7856) (6,4tQ.OO)

VeridlaSoIullori 03/1,3103 Bancrot Ventures limited FU,~lz:cecklng (7~~5) (32,00.00)Veridia:Soutions 03/28103 Bancro Véntu;.eis Umited FU Biz Checklng (785~1 (33,000.00)

Vendia$oluiions 04/1103 Bancroft V6;1ures limited FUBlzCh~kln9(7855) (45,000.00)

V6fdia":&lulons 04/28/03 BancrVentureslimited FU Biz Checking (7855) (42,00.00)VerdiaSblul10ri 05114/03 8ancroltVenturesllmiied FU aizChecklng (7856) (42,000.0)Veidia Solutions 0519/03 Bancroft Ventures limited FU Biz CheckIng (7855) (35.00.00)VeridieSolutions 05/13/03 Bancrof!VeniuresUmited FU Biz Checking (7855) (50,000.00)

Veldia Solution 06/27103 Bancro Ventures limited FU Biz Cheking (785) (30.00.00)VeriaSolutions 060(03 Bancroft VentU/as Umited fUBizChecldng(7856) (12,000,00)

VeridiaSolutlons 07/09103 Bancro Ventures L1miled FU Biz Cheking (7856) (36,000.00)

VeridiaSoh.ilíons 07/15103 Bancrof Ventures limited FU Biz Checking (785) (14,00.00)VendlaSolutiorl 07/2910 B¡incrofVeniureslimite FU BIz Checking (785) (40,000.00)

VendlaSoluUons 08(14/0.3 Bancroft Venlures limited FU Biz Checking (7856) (35,000.00)

VeridlaSoluUons 08/27/03 Bari Venluras limIted FU Biz Chking (7856) (40,000.00)

Y~~:d;i!3. ,S~I~li.o,ns.-.09.'.1YOl

E¡~~~¡~Eti~~

,,__.,~~l3,~_C':,~~I~_9J?~)__: _: .J~5.00.0.00)

".ven~í~.:,SOliJtiPns :::. ~(~o.;3 ~:,::~',,:'~~):,~;~.::~~:~i;.m,i,~::"":':" . :t5QAao:.O~):".

yetjß¡if:SQlU\içiri',-' 10f.1:4!Q;r '. (~~-a.:~):.'VeH'iiíà'Solutions 10/29/03 Bari~iÜ-ijénlures"Urnitéi: '"FÚ'SizChecklng(785ô)' (50',000.00)

VeridiaSoIutlons 10/31/03 Banc!t Ventures limited FU Biz Ctecking (7856) (20.000.00)

VeridieSolulions 11/4/03 BaricrVenturesUmitad FUBizChecing(78S) (32,00.00)VeridìaSolul1ons 11/26103 BanCfoflVeniUresllmlted FU BiZ Checking (7856) (33,000.00)

VetdiaSoMions 12/11103 Bancroft Verl.res limited FU BizCnecing(785) (38.0.0.00)

VeridiaSo!utions 01/13/04 Bancroft Ventures Limited FU Biz Checing (7856) (39.000.00)

VerdiaSolulíons 01/16/04 BancroVenlreslimlted FUBlzChecing(7&56) (20,00.001VerdlaSo!utiOfs 01/28/04 BencroftVanurlslImlted FUBizCheclng(7t51l (50,00.00.)VerldiaSolutJs 02/13/04 BancrVeniuresLimited FU BlzChecíng(756) (33.000.00,

Veridle Solutions 02f26104 Bancroft Venure Umlted FU Biz Checking (785) 47.520.43

VeridiaSolutions 02/26/04 Bancrof Ventures limited FU BizClieciT\g(7856) (30,000.00)

VeridlaSolutions- 0311/04 Bancroft Ventures limited FUBizChecking(7856) 10,000,00

Venòia SoluUonS 03101104 BancroflVenturesLimited FU Bi Ghecing(76-6) (15,000.00)

VeridiaSolutions 03f02f04 8ancroVenturesUm¡ted FU Bi Cheóing (7856) (6.000.00)

Verldla Solution 03/11104 8ancroVentureslim¡ted FUBiCtilng(7856) (33,00.00)VeriiaSoluti0f6 03119/04 Baricrof Veriture limited FU Biz ChekIng (7856) (6,000.00)

VeridÎaSoIu\ions 0310104 Bancroft Ventures limited FU Biz Checking (7856) (40.000.00)

VeridiaSolutioris 0413/04 Bancrof Venture UmitBd FU8izChecíng(7856) 125,000.00)

VeridlaSolutions 0423/04 Bancof Ventures limited FUBizChefng(7856) (5.00.CO)

VeridiaSolutions 04f2fG4 Bancroft Veiiiures Lim¡tad FUBizChøcking(7856) (33,000.00)

VeridiaSoltions 05113/04 Bancroft Ventures limited FUSizChecking(7S56) (:39,000.00)

VeridìaSoIutions 05127/04 Bancrof Ventlres limited FU Biz Checing (7856) (:1.000.00)VarldiaSotions 06/04104 Bancrof Ventures limited FUBizCheckïng(7856) (5,00.00)Verldia$ollJlolis 06'14/04 B¡¡ncrft Venture Lim,ted FU Biz Cheking (7855) (35,000,00)

VeridiaSokltlons 08/22/04 Bar.cof Venures Umited FU Biz Checing (7856) (5,000.00)

VeridiaSok.tions oo/i8i'04 B.!iIcrof Ventires limited FU Biz Checking (7856) (6.0oo.CO)

Veridia Sclu!òcns 06/29/04 Bancrof Ventures Umited FU aiz Checking (735) (40.00.0.0)

Page150f18


Enllty

Verldi¡iSoluliotls

Veridi.a.~olu!ions

Ve~~!ii. Sotuli?n~'.

Verl~r¡;.S.Ò1ull,Of!

Veridie.Solulloos

Verldl.a:Sol.u!iOns

Ve.aia-t:~~lì,ol',s

Veriqja:S?lii~çin$

Ventlla-~91lJtions

Verd!aSoli.iiofiVerid_i~'So1ollons

Verdía'Solullolis

V~ri,~!a::Sol,uIlOns .

Verldl.aS'çilui(Oß

Ve~~~~~IUIlÒnS,

VendiaSo.lulIons'Ven,~i,~:~.i~Ho.ns

Vei,diaSo\utlonsv~~.~¡i. _Eì~!uU~rl

VerØia-S~i!útions

Verdia SOluUoo

VerdiaSofuliom.VendleSolUlo.'1s

Vend¡~Si?MIOf\

VerdiàSoluiionsVeridli:Solullons

VeridiaSolulionsVerldj~.sOiutloI1S

-ieiidlaSolulionsVeidiaSolullons-V~al~.,~9Iyt,i~~_~,.:., .

:~:iW::.;:~t.:;~.,~~'~~.:~~:r~;i(:. . .WllcoSeiicasWîtcoServices

WilooServiteWilcoSeJ'ceWitcoServices

WiicoServcesWilrj()Services

WilcóSérvceWilco~¡cesWitcoServceWilcoServcesWitcSeivlcesWrlcoSericesWilcoServceWilcoServcesWi!coServC6WilcoServcesWllco5eioosWílcoServ.çsWlteoSel"cesWilro Servces

WI!coServcesWilcoServiceWltcoServJces

Witca Services Total

;07131;,,O!ll04'081"\/0.4

08/13/04

0912104

10104/04

1011314

'1-~a91~

12113Q4

12tl9/04

12/29104

01113/05

01~1.4i95 ,

01)j.~1~5.'

0,",f?7(0~

,OÙ3Ú05iO.2!~ 1.~9~ '.

'a2(16!05

a2/.181.502l23f05

02/25;05

02/28'105

03110/05

03111'05

0311'0503l9f0503?9f0504112/05

041310505f12/05

.oB~~O?:,

:.:qi3!.?8f0!5.::

DérlvilJm~~Rital. LLCExhlbitl.

'Date "AccounINameBsncroftVentures,Limíted

Bantr~ V~n!ures Umi!ed

6a~Y~~S_ Ur1~edBanCrafV~n!uresLiiÌited

Bancroft Ventures Limited

BanÚ~~ v~niv~ Umited

,s.nc~:V~n.ture~ Umit~, ~n~a~ty~iures'Umlled'

a&ncroft Venl!tes ümitedBSl'cr~~ Ventures L:n:1t

Baricrof: Vfllures Umited

Banctoft Ventures Limned

~n~~~ V~Úrt~ ,um¡ted

.8M,Cioft Ventu~s:iJriltßd

,-aa~ÇIa~ V!'tú~s'pm.itEi" 'aai)èri' Y.i¥IUrj3S Limited

::BaiiCroftYerluresUmitec

aan'ci~vèilluresLiniii6c

~ncioft V~lir~s u~iioo;. :B¡nCroft Venli,ir~s Umit~ .

Bancroft Venlursii Limited

Bancrof Venlures Limited

Bancroft Ventures limited

Ban.croft Ventures Limited. Bancroft Ventures-llmiled

Bancroft Ventures Limited

Ban~r.oft VentlJre.9 Umlled

BancroVenturestimitedBancr.ftVentureslimitedBancroft Veniures limited

.:':,~~..t~.:~.: ~;~¡~:\:'

07102/02 Bancroft Veniures limited

08f15102 BanQloft Ventures limited

08'29/02 BancroftVenluresLimited

08129102 B~ncroft Ve~tues limIted

11/14102 6ancroftVenturesLimited

02121/03 BancroflVenluresLimlted

036/03 B!lncrftV~lUrefUmit~,00109/03 Banc~ft V~tures limitjl'09/08/03 Bancroft Ventures Limited

10/29/03 Bancroft Ventures Umited

01/31103 Bancroftyenlu.res Umlled

02120/03 Bancr y.enwres Limll~03051O~ Bancrof Ventures limned04/01103 Bancro Venlures Limited

OS/22/03 Bancroft vénlures limitedC6104f03 Bancroft Ventures Limited

06112/03 BancroflVenture5 Limited

00/26103 Bancr VenWres limitedC\'C4/Q3 Bancroft Ventures Limited

09(26/03 Bancro Ventures Limited

L0f10'O~ Bancroft Ventures Umíte

10/31'03 Bani;ro Venlures Ll¡ted12/29/03 Bancroft VentureS Limited

01/14/04 BancroftVenturesUmited

i-. Bank AccountFU.Biz Checking (7855)

FU tl¡%.C~~ing (785)

FU .Bli Ch~~!n9 (7855)

FU'BJi Checking (7855)

FU Bì;Ch,eckîng (785:)FU 'Bii CheCking (7S5)

FU ~I~ Ch~k~9 (;856)

FUBiz Checking (78~5)

FU':~z,~h~kl,n.9(?856)

FU'ß\Z:-CheCing (785)

FU Bi.Z Checking (7856)

FUB1zChecking(7856)

F~ ,Blt: ètí~king q85~lFU ~i~ c:~~¡~,g r78~).

FU ,B!z ç~c~~g, (7~6jFU"BiZ C~e.~jng (7~56)

Fu:aiz.tJ:etk:lng'(nI56)

F~Úi!z~~~~~'Ó"a56) .FUÈiizÇheckirig'(7856)FU ~i~ C~kl~g (7856)

FU Biz Chekin.g (7856)FU Biz Cl-ng (7856r

FU Biz Checking (78E)

FUBizChecking(7856)

FU Biz checking (7856)FU Biz Checking (7856)

FU-.B~Ghecldri9(1856J

FU'Sli Checking (755)

FU Biz Chec~ing (785)

FU Biz Checking (7856)

f~. .Bizpli.~kÎ~~.F~.S?) ",

:F_~.,(~i!'tr#:I!1:i?~6l,,::~':

FUBi:iChecking(7856)

FU Biz Checking (1356)

FU B1;! Checking (7856)

FUßizChecklngt736)FU BizCi1écking (7856)FU Biz Cheing (7856)

FU 'Bjz ChØdlng (7856)

FU'B.i~ G~ecklng (7856)

FU BI% Chocking (7856)

Mor9a~K~e9an(2952)

FU B~ Checking (7856)

FU Biz Cti~cling (;856)

FU Biz Checking (785t)FU'BizChecng(7851FU Biz Checng (785)FU Biz Checing (7856)

FU Biz Checing (7851fU Biz Checing (7856)FU Biz Checlri (785)

FU Biz Checng (7856)

FUBlzChecking(785&)

FU Blz Checking (;856)

FU Biz Checng (78561

FUBlzCheng(7aS8)

II Payment I I(29,912.95)

(29,~81.9~)

i5~0.0.0.09)

(30,000.00)

(17,500.00)

(10,000.00)

(30.000.00)

(25,000.00)

(38,500.00)

(5,500,00)

(7,500.00)

(35,000.00)

(17,38.00)(5,060.50)

(29,qOO.OO)

(6,974..08)

(30,000.00)

(1',152.ß4)(13,115.75)(10,231.01)

(28,000.00)

(11,884.62)

(16,716.67)

(2,831.95)

(35,000.00)

(4,518.74)

(29,000.00)

(40,00.00)(35,500.00)

(95,000.00)

':$

.-....,..... ..-'.'..',',:-,':':.. -'.'.,i;1t3,060:87J"i':-'S

$ (5,000.00)

(260,000.00)

(2n,000.00)(320,O?O.00)

(40,000.00)

(2,000.0)(11,000.00)

(305,000.0.0)

(1,217,000.00)(150,000.00)

$ (2,587,000,00)

I

Deposit

32,149.07

95,00:00".-;:'234:6'.50.:.:,":

40.00.0068,00.0056,000.00

244,000.00

22,00.0012,00.00

460,00.0045,000.00

1.350.000.00

115,000.00

38,00.0040,000.00

15,00,0014,000.00

2,5?g,OOO.OQ

Paga17of18


DeriviUl!Capltal, LLCeiiil.bill

YuriD6bevcYurl Debevc Total

Grand Total

Enll Date08116/01

Account Nam&

Oer\iÎumCapital,LLC

Bank AccounlFifSIUnionCAP(48S7)

p, .nt Oe oslt. 100,000.00

. 100,000.00

(44,215.941.49) $ 14,13Q.90.78

Pallé18of18


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