Larry M. Levy and Diane Levy - Page 3

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          average of 20 hours per week (40 hours per week during the peak             
          retail periods) from 1985 through 1987 and more than 20 hours per           
          week from 1987 through 1989.  He provided financial, sales, and             
          management services to JTFJ.  From 1985 through 1989, JTFJ did              
          not compensate him for his services.  During 1990 through 1995 he           
          worked for, and received wages from, American Laser Corporation,            
          California JAMAR, Inc., and JAMAR Industries.  During 1991 and              
          1992, Larry Levy operated a consulting business, raising capital            
          for, but not advancing funds to, his client corporations.                   
          II. The Note and The Agreement                                              
               On May 2, 1985, Robert Levy, as president of JTFJ, executed            
          a note (the note), which was secured by JTFJ’s assets but                   
          subordinated to “all current or future financial obligations to             
          Republic Bank.”  The security interest in JTFJ’s assets was not             
          perfected.  Payment of principal and accrued interest was due on            
          or before May 1, 1988.                                                      
               On May 2, 1985, Larry Levy, Robert Levy, and JTFJ, executed            
          the Joint Venture Agreement (the agreement) to provide cash-flow            
          for JTFJ.  The agreement provided that Larry Levy make additional           
          advances to JTFJ, guarantee corporate debts, and deliver                    
          professional services relating to JTFJ’s operations and                     
          continuing capital needs.  In exchange, he would receive a 50-              
          percent interest in JTFJ’s profits, which was payable at his                
          discretion, after the advances were repaid.  Further, pursuant to           

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