Eric B. Benson, et al. - Page 11

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          entitled “Memorandum Re: Unbundling of ERG”.  Burton and Glendon            
          executed a document entitled “Supplemental Memorandum Re:                   
          Unbundling of ERG (December 4, 1987)”.  On December 5, 1987,                
          Burton and Glendon executed a document entitled “Memorandum Re:             
          Other Commitments made to WEM”.9                                            
               By letter dated March 18, 1988, ERG and NPI, through Burton,           
          gave instructions to their patent counsel of the firm Townsend &            
          Townsend to transfer certain patents, patent applications, and              
          intellectual property to Glendon.  The parties stipulated that on           
          December 29, 1988, Glendon incorporated Aker Industries, Inc.               
          (Aker).10  After July 1987, and during all periods relevant to              
          these cases, Burton exercised almost sole control over the                  
          management and operations of ERG and NPI.                                   
               On March 23, 1993, Glendon and his wife, Janet, filed a                
          motion asking a California court to enforce the unbundling                  
          agreement as a settlement agreement.  In response to a 1994                 
          petition filed by Burton, the court ordered the parties to                  
          recommence arbitration.  In 1994, arbitration proceedings                   
          recommenced.  On June 7, 1995, a second interim arbitration                 

               9Except as otherwise noted to the contrary, we refer to the            
          documents executed by Burton and Glendon during mediation                   
          collectively as the “unbundling agreement”.                                 
               10On Feb. 29, 1988, Burton signed a City of Oakland Business           
          Tax Declaration stating that ERG’s research and development                 
          division had been established as a new company, “Acker [sic]                
          Industries”.  However, Glendon testified that Aker was                      
          incorporated in July 1987.                                                  





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