Zalman Melnik and Lea Melnik - Page 13

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          at that meeting, Clend issued 500 shares in bearer form, as                 
          follows:  210 shares, representing 42 percent of its outstanding            
          shares, in the form of Share Certificate No. 1 and the remaining            
          290 shares, representing 58 percent of the outstanding shares, in           
          the form of Share Certificate No. 2.  Moshe Melnik’s trust was              
          credited with 290 shares and Zalman Melnik’s trust was credited             
          with 210 shares of Clend’s stock in the records maintained by               
          Bermuda Trust.                                                              
               Pursuant to the stock purchase agreement, on a date that               
          does not appear in the record but which could not have been any             
          earlier than November 22, 1996,19 Moshe Melnik transferred 8,700            
          of his 11,600 HouTex shares to Clend in exchange for an annuity             
          to commence on January 1, 2008, when he attained the age of 57,             
          with quarterly payments of $226,401, payable until his death.               
          The HouTex shares that Moshe Melnik transferred to Clend pursuant           
          to the stock purchase agreement were valued at $3,480,000 for               
          purposes of computing the annuity amount.                                   




               18(...continued)                                                       
          directors were apparently revised sometime after Dec. 12, 1996,             
          “to give effect to the appointment to” Mr. Maycock and Mr.                  
          Wright.  However, the copy of minutes in the record does not                
          indicate on its face that the minutes were revised on a later               
          date.                                                                       
               19Mr. Pennoni delivered the stock purchase agreements and              
          related stock certificates reflecting the sale of stock to Clend            
          to Mr. Maycock by courier on Dec. 2, 1996.                                  





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