Securities and Exchange Commission v. Fujinaga et al

Filing 333

ORDER Authorizing, Approving, and Confirming the Hoy's Settlement Agreement regarding 327 Order on Motion. (See order for details.) Signed by Judge James C. Mahan on 5/11/16. (Copies have been distributed pursuant to the NEF - PS)

Case 2:13-cv-01658-JCM-CWH Document 330 Filed 05/04/16 Page 1 of 20

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Michael F. Lynch, Esq.
Nevada Bar No. 8555
LYNCH LAW PRACTICE, PLLC
3613 S. Eastern Ave.
Las Vegas, Nevada 89169
702.684.6000
702.543.3279 (fax)
[e-mail]
Attorney for Receiver Robb Evans
& Associates LLC
UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SECURITIES AND EXCHANGE
COMMISSION,

[PROPOSED]

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Case No.: 2:13-cv-01658-JCM-CWH

Plaintiff,
vs.
EDWIN YOSHIHIRO FUJINAGA and
MRI INTERNATIONAL, INC.,

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ORDER AUTHORIZING, APPROVING,
AND CONFIRMING THE HOY’S
SETTLEMENT AGREEMENT

Defendants,

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and

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CSA SERVICE CENTER, LLC
THE FACTORING COMPANY,
JUNE FUJINAGA, and
THE YUNJU TRUST,

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Relief Defendants.
Presently before the Court is Robb Evans & Associates LLC’s (the “Receiver”), the

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court-appointed receiver, motion for an order authorizing, approving, and confirming the

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settlement agreement and mutual release, and granting relief from local rule 66-5 pertaining to

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notice to creditors (the “Motion”). (Doc. #305). Defendant Edwin Yoshihiro Fujinaga filed a

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response (Doc. #309), and the Receiver filed a reply. (Doc. #316).

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The Court entered its order granting the Motion in its entirety (Doc. #327), and directed

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the Receiver to submit a proposed order consistent with the terms of the Settlement Agreement

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and Mutual Release (the “Hoy’s Agreement”) entered into by and among (a) Hoy’s, Inc., Skill

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Properties, LLC, James K. Massengill, Kaylea Massengill, Haldun, Inc., William F. Keenan, and

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Susan Keenan (collectively, the “Hoy’s Parties”) on the one hand, and (b) EBJ&F, LLC, Med-

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Health Pharmaceutical Products, LLC, and Edwin Fujinaga on the other hand (the “Fujinaga

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Parties”, and together with the Hoy’s Parties, the “Parties”), a true and correct copy of which is

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attached and incorporated by this reference as Exhibit “1” hereto.

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Good cause appearing, and without limiting the generality of the foregoing, it is hereby
ordered, adjudged, and decreed that:
A.

The Hoy’s Agreement is approved as fair and equitable and in the best interests of

the receivership estate;
B.

Upon receipt and verification by the Receiver of an original sworn confession

judgment, made by James Massengill and Hoy’s, Inc. before a notary public in the amount of

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$350,000.00 in favor of EBJ&F, the form of which is attached to the Hoy’s Agreement as

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Exhibit A, the Receiver shall be authorized and directed to (1) release, satisfy, and discharge the

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Hoy’s Parties from any and all loan obligations, including personal guaranty obligations, to the

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Fujinaga Parties, (2) release, satisfy, and discharge any and all security interests relating to the

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loan obligations held by the Fujinaga Parties, including any deeds of trust or other encumbrances

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recorded against real property owned by the Hoy’s Parties and (3) enter into a stipulation on

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behalf of the Fujinaga Parties to dismiss without prejudice, the case styled Hoy’s, Inc., Skill

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Properties, LLC, James Massengill, Kaylea Massengill and Haldun, Inc., Inc. v. EBJ&F, LLC,

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Med-Health Pharmaceutical Products, LLC and Edwin Fujinaga, Case No. 2: 13-cv-912;

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C.

The Parties stipulated, and the Court hereby finds, that EBJ&F rightfully owns

49% of the issued and outstanding shares of Hoy’s, Inc.;
D.

Upon receipt and verification by the Receiver of $10,000.00 in immediately

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available funds, by or on behalf of William F. Keenan and/or Susan Keenan, within 10 days of

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entry of entry of this order, the Receiver shall execute and deliver to the Keenans Mortgage

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Releases for recordation in Laramie County, Wyoming, and the Releases set forth in the Hoy’s

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Agreement shall be full and final as they relate to William F. Keenan and Susan Keenan only,

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such that no Event of Default of any other subparagraph of Section 4 of the Hoy’s Agreement

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shall create any remedy against, or affect in any way the Release as it relates to, William F.

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Keenan and Susan Keenan only;
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E.

Should James Massengill and/or Hoy’s, Inc. cause any Event of Default to occur

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under the Hoy’s Agreement, the Receiver shall be authorized and entitled, but not obligated, to

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file the Confession of Judgment in any court of competent jurisdiction and fully pursue the

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receivership estate’s rights to collect thereunder;

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F.

Upon verification by the Receiver of the Hoy’s Parties’ timely compliance with

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all of their obligations set forth in Section 4 of the Hoy’s Agreement, the Receiver shall be

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authorized and directed to (1) sell all of EBJ&F’s shares in Hoy’s Inc. for $225,000.00 in

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immediately available funds tendered to Receiver by or before 12/31/2017, or, (2) sell all of

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EBJ&F’s shares in Hoy’s for $300,000.00 in immediately available funds tendered to the

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Receiver after 1/1/2018 but before 12/31/2018;
G.

So long as there is no Default under Section 4 of the Hoy’s Agreement, and until

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such time that the Hoy’s Parties’ obligations under the Hoy’s Agreement are fully satisfied,

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James Massengill shall have sole control over and authority to make decisions regarding the

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finances of Hoy’s, and the Receiver and EBJ&F have no control over or authority to make

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decisions regarding the finances of Hoy’s. The Receiver is authorized to execute any separate

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documentation to this effect that is requested by any potential or actual source of funding or any

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potential or actual customer of Hoy’s;

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H.

This Order and the terms and conditions of the Hoy’s Agreement shall be binding

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upon, and shall inure to the benefit of, the Parties to the Hoy’s Agreement and their respective

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heirs, personal representatives, successors, and assigns;

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I.

The Receiver is authorized to execute and deliver, and to accept, on behalf of the

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receivership estate all documents, releases, instruments, and other related documents provided

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for under the Hoy’s Agreement; and

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The Receiver is authorized to take all other steps necessary or convenient to

implement and perform under the Hoy’s Agreement.
May 11, 2016.
DATED May _______, 2016.

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DISTRICT COURT DISTRICT JUDGE
UNITED STATES JUDGE

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Respectfully prepared and submitted by:

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LYNCH LAW PRACTICE, PLLC

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/s/ Michael F. Lynch
Michael F. Lynch
Nevada Bar No. 8555
3613 S. Eastern Ave.
Las Vegas, Nevada 89169
702.684.6000
702.543.3279 (fax)
[e-mail]

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Attorney for Receiver Robb Evans
& Associates LLC

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Exhibit 1

Exhibit 1

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is dated January
2016 (the "Effective Date"), and is entered into by and among (a) Hoy's, Inc., Skill Properties,
LLC, James K. Massengill, Kaylea Massengill, Haldun, Inc., William F. Keenan, and Susan
Keenan (collectively, the "Hoy's Parties") on the one hand, and (b) EBJ&F, LLC, Med-Health
Pharmaceutical Products, LLC, and Edwin Fujinaga on the other hand (the "Fujinaga Parties", and
together with the Hoy's Parties, the "Parties").
I.
RECITALS
WHEREAS, Robb Evans & Associates LLC was appointed receiver ("Receiver") in that
certain case styled Securities and Exchange Commission vs. Edwin Yoshihiro Fujinaga and MRI
International, Inc., pending in the United States District Court in and for the District of Nevada
as case no. 2:13-cv-01658-JCM- CWH (the "SEC Receivership Litigation") by that certain Order
Appointing an Equitable Receiver entered on February 23, 2015 (SEC Receivership Litigation
Dkt. 194), which commanded and authorized Receiver to, among other things, take and retain
immediate possession, custody, and control of certain commercial properties owned or controlled
by Edwin Fujinaga and others.
WHEREAS, the duties and responsibilities of Receiver were enlarged by that certain
Order Appointing a Full Equitable Receiver to Assume Control over the Defendants' Assets and
Enforce the Final Judgment entered on May 15, 2015 (the "Order Appointing Receiver") (SEC
Receivership Litigation Dkt. 226). The Order Appointing Receiver supersedes the previous
order, and directs the Receiver to take and retain immediate control over any civil action in
which one or more of the Defendants is a party including, but not limited to, Hoys, Inc., Skill
Properties, LLC, James Massengill, Kaylea Massengill and Haldun, Inc., Inc. v. EBJ&F, LLC,
Med-Health Pharmaceutical Products, LLC and Edwin Fujinaga, Case No. 2: 13-cv-912 (the
"Hoy's Litigation"), in the United States District Court for the District of Nevada, and act as
though Receiver were the real party-in-interest in any such action and, if the Receiver
determines, following consultation with the SEC, that any of the following measures are in the
best interest of the receivership estate, to negotiate a settlement of any such action and to consent
to the sale, transfer, or disposal of any real or personal property involved in that action, with the
proceeds to be placed in escrow pending the final settlement or adjudication of the action.
WHEREAS, certain claims, counterclaims, and disputes have arisen between the Parties
in the Hoy's Litigation;
WHEREAS, to avoid the burden, uncertainty and expense of litigating claims relating to
the Hoy's Litigation, regardless of whether such claim has been alleged or articulated, the Parties
desire to execute this Settlement Agreement memorializing in full the Parties' settlement, which,
among other things, provides for the mutual settlement and release of each other from any and all
claims, actions, causes of action, suits, debts, sums of money, accounts, covenants, contracts,
agreements, representations, warranties, damages, injuries, liabilities and demands whatsoever,
in law, equity, arbitration, administrative proceeding or otherwise, whether known or unknown,

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contingent or fixed, liquidated or unliquidated of any and every nature whatsoever existing at
any time on or before the Effective Date (collectively, the "Claims"); and
WHEREAS, Receiver is not acting in its individual capacity, but solely in its capacity as
Receiver and as though Receiver were the Fujinaga Parties, in accord with and subject to the
limitations set forth in the Order Appointing Receiver;
NOW, THEREFORE, in consideration of the foregoing recitals, the promises, rights and
benefits set forth herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

II.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and agreements herein and other
good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the
Parties agree as follows:
1.

Recitals. The foregoing recitals are hereby made a part of this Agreement.

Mutual Release of Claims. Subject to SEC and Court approval of this Agreement,
2.
and except for and contingent upon the duties set forth in Section 4 below, the Parties, for
themselves, as well as their respective owners, parents, subsidiaries, affiliate, agents, employees,
shareholders, officers, directors, managers, members, representatives, and beneficiaries fully
release and forever discharge one another and their respective owners, parents, subsidiaries,
affiliate, agents, employees, shareholders, officers, directors, managers, members, representatives,
and beneficiaries, if any, of and from:
2.1. any and all claims, known or unknown, asserted or unasserted, of whatever nature,
now existing or hereafter arising, relating in any way to the Claims, its subject matter, or
any matters that were or that could have been asserted in the Hoy's Litigation; and
2.2. any and all damages alleged to be sustained or actually sustained by any reason
relating in any way to the Claims or the continued effects thereof; and
any and all claims arising directly or indirectly from any federal, state or local law
2.3.
relating in any way to the Claims, its subject matter, or any matters that were or that could
have been asserted in the Hoy's Litigation.
Matters Not Released. Notwithstanding anything to the contrary herein, the
3.
foregoing mutual release of claims shall not include any liability or obligation created by this
Agreement.
Settlement Consideration. The mutual releases stated above in paragraph 2, above,
4.
entitled "Mutual Release of Claims," are made and given for and in consideration of
4.1. Forgiveness of Loan Obligation. Receiver shall forgive the Hoy's Parties from any
and all loan obligations, including personal guaranty obligations, to the Fujinaga Parties.
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4.2. Release of Security Interests. Receiver shall release any and all security interests
relating to the loan obligations held by the Fujinaga Parties, including the mortgages or
deeds of trust recorded against certain real property owned by the Hoy's Parties.
4.3. EBJ&F's Shares. The Parties hereby stipulate and agree that EBJ&F rightfully
owns 49% of the issued and outstanding shares of Hoy's, Inc.
4.4. Confession of Judgment. James Massengill and Hoy's, Inc. shall each execute a
sworn confession of judgment before a notary public in the amount of $350,000.00 in favor
of EBJ&F, the form of which is attached hereto as Exhibit "A". The original notarized
confession of judgment will be delivered to Receiver upon the Effective Date, to be held
by Receiver and not filed unless an Event of Default occurs.
4.5. New Cash. James Massengill shall infuse, or shall cause to be infused, $200,000.00
in new cash into Hoy's Inc. by calendar year end 2016;
4.6.
Additional Settlement Consideration. William F. Keenan and/or Susan Keenan
shall pay to Receiver the sum of $10,000.00 in immediately available funds within 10 days
of entry of a Court order approving this Agreement, and upon satisfaction of this payment
obligation, Receiver shall, within two (2) weeks of entry of an order approving this
Agreement, deliver to William F. Keenan's counsel (a) Mortgage Releases in the form
attached to this Agreement as Exhibit "B", and (b) two certified copies of the court order
approving this Agreement.
4.7. Department of Labor Liability. James Massengill shall satisfy, or cause to be
satisfied, Hoy's liability to the Department of Labor, which liability is currently
approximately $33,779.50;
4.8.
IRS Liability. James Massengill shall pay, or shall cause to be paid, Hoy's liability
for back taxes to the IRS in the estimated amount of approximately $12,738.43;
4.9. Hoy's Management. Until the Hoy's Parties purchase EBJ&F's shares of Hoy's,
Inc. as set forth in Section 4.18, James Massengill shall work full-time at Hoy's Pharmacy
as its pharmacist and store manager for a yearly salary of no more than $150,000 through
calendar year end 2017;
4.10. Hoy's Bank Statements. At least 15 days prior to the Effective Date, the Hoy's
Parties shall deliver to Receiver all monthly bank account statements, for any and all bank
accounts relating to Hoy's for the period October 2013 through November 2015. After the
Effective Date, the Hoy's Parties shall deliver to Receiver as soon as practical after its
issuance by the bank, each subsequent bank statement(s), from (a) December 1, 2015, until
(b) such time as all terms and conditions of this Agreement shall have been satisfied;
4.11. Annual Financial Reporting. Until the Hoy's Parties purchase EBJ&F's shares of
Hoy's, Inc. as set forth in Section 4.18, the Hoy's Parties shall deliver to Receiver as soon
as available, but in no event later than 120 days after Hoy's fiscal year end, Hoy's current
financial statements (including without limitation, an income and expense statement and
balance sheet) and Hoy's current tax return signed by James Massengill.

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4.12. Quarterly Financial Reporting. Until the Hoy's Parties purchase EBJ&F's shares
of Hoy's, Inc. as set forth in Section 4.18, the Hoy's Parties shall deliver, within 45 days of
the end of each fiscal quarter, Hoy's quarterly financial statements, cash flow projections,
ledger, and quarterly operating statements;
4.13. Other Financial Reporting. Until the Hoy's Parties purchase EBJ&F's shares of
Hoy's, Inc. as set forth in Section 4.18, within fifteen (15) days of EBJ&F's request, the
Hoy's Parties shall also deliver to the requesting party such other financial information
regarding Hoy's operations as may be reasonably necessary to evaluate its financial health
or operations.
4.14. Accuracy of Financial Reporting. The Hoy's Parties aver that all financial
statements and information delivered to Receiver under this Agreement, shall fairly and
accurately represent the financial condition of the subject thereof and shall have been
prepared in accordance with generally accepted accounting principles consistently applied.
The Hoy's Parties acknowledge and agree that Receiver may request and obtain additional
information from third parties regarding any of the above, including, without limitation,
credit reports.
4.15. Shares of Hoy's. Until the Hoy's Parties purchase EBJ&F's shares of Hoy's, Inc.
as set forth in Section 4.18, Hoy's shall not issue or sell any shares of Hoy's, or otherwise
dilute EBJ&F's shares in Hoy's, Inc. without Receiver's express written consent;
4.16. Sale of Assets. Until the Hoy's Parties purchase EBJ&F's shares of Hoy's, Inc. as
set forth in Section 4.18, Hoy's shall not sell, convey or assign all or substantially all of
Hoy's assets, but Hoy's may pledge its assets as collateral for business loans;
4.17. Sales Benchmarks. Until the Hoy's Parties purchase EBJ&F's shares of Hoy's, Inc.
as set forth in Section 4.18, the Hoy's Parties agree that gross sales from Hoy's, Inc.'s
operations shall reach or exceed the following benchmarks. Receiver shall have the ability,
in its sole and absolute discretion, to waive any shortcomings on these benchmarks:
o
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$750,000 in bi-annual sales, first half of 2016 (calendar year)
$1 million in bi-annual sales, second half of 2016
$1.25 million in in bi-annual sales, first half of 2017
$1.5 million in in bi-annual sales, second half of 2017

4.18. Buyout. The Hoy's Parties shall either (A) purchase, or cause to be purchased, all
of EBJ&F's shares in Hoy's Inc. for $225,000.00 in immediately available funds tendered
to Receiver by or before 12/31/2017, or, (B) purchase, or cause to be purchased, all of
EBJ&F's shares in Hoy's for $300,000.00 in immediately available funds tendered to
Receiver after 1/1/2018 but before 12/31/2018.
4.19. Hoy's Litigation. Both Parties shall stipulate to dismiss the Hoy's Litigation without
prejudice.
4.20. Financial Control. The Parties agree that, so long as there is no Default under this
Agreement, and until such time subject to the requirements of this paragraph 4, James
Massengill has sole control over and authority to make decisions regarding the finances of
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Hoy's, and the Receiver and EBJ&F have no control over or authority to make decisions
regarding the finances of Hoy's. The Parties agree to execute any separate documentation
to this effect that is requested by any potential or actual source of funding or any potential
or actual customer of Hoy's.
5.
Required Approvals. This Agreement shall be contingent upon SEC and Court
approval in the SEC Receivership Action.
6.
Events of Default. The failure of any Party to abide in full by all of the terms and
conditions set forth in Paragraph 4 hereinabove shall be an Event of Default, and Receiver shall
be thereby authorized and entitled, but not obligated, to file the Confession of Judgment in any
court of competent jurisdiction and fully pursue its rights to collect thereunder. Notwithstanding
anything to the contrary herein, upon satisfaction of the obligations set forth in Paragraph 4.6
hereinabove, the Releases set forth in this Agreement shall be full and final as they relate to
William F. Keenan and Susan Keenan only, such that no Event of Default of any other
subparagraph of Paragraph 4 shall create any remedy against, or affect in any way the Release as
it relates to, William F. Keenan and Susan Keenan.
7.

No Liability. By entering into this Agreement, the Parties do not admit:
7.1.

any liability for any claim, cause of action, or demand; or

7.2. any wrongdoing or fault; or
7.3. any violation of any law, precedent, rule, regulation, or statute. Further,
nothing contained in this Agreement may be construed as an admission against the interest
of any of the Parties.
8.
Attorneys' Fees. Each of the Parties to this Agreement shall bear his/its own
attorneys' fees and costs incurred in connection with or relating to the Claims and the settlement
thereof.
9.

Acknowledgements. The Parties understand and expressly agree and warrant:

9.1. The releases contained herein extend and apply to and also cover and
include all unknown, unforeseen, unsuspected, and unanticipated injuries, claims,
damages, losses, and liability, if any, arising from or related to the subject matter of the
Claims.
9.2. No promise or inducement has been offered except as set forth in this
Agreement.
9.3.

This settlement is made in good faith and is equitable and fair.

9.4. Each of the Parties is legally competent to execute this Agreement and to
accept full responsibility therefor.
9.5.
This Agreement and the releases set forth in it have been carefully read in
their entirety by each of the Parties, who has had the benefit and advice of counsel of
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his/its choosing, and that this Agreement and the releases set forth in it are in full and final
and complete compromise, settlement, release, accord and satisfaction, and discharge of
all claims and actions as stated above.
9.6. In entering into this Agreement and the settlement and releases that are
encompassed herein, each of the Parties is acting freely and voluntarily and without
influence, compulsion, or duress of any kind from any source, including, but not limited
to, any other party or Parties, his/its/their attorneys, representatives, or anyone acting or
purporting to act on behalf of any of the Parties.
9.7. The Parties have the authority and capacity to prosecute and/or defend the
Claims made and they have the authority to stipulate to the release and discharge with
prejudice of the Claims.
9.8. The Parties have not assigned to any other person or party all or any portion
of any claim or counterclaim whatsoever that they may now or in the future have against
any party arising out of the facts involved in the Claims.
9.9. Each of the Parties has participated in the preparation of this Agreement and
that in construing or interpreting this Agreement, no provision of the Agreement shall be
construed or interpreted against the drafting party, or any other party to the Agreement.
10.
Integration. This Agreement represents the full and complete integration of the
agreement between/among the Parties and is the complete expression thereof. All other
agreements, negotiations, and representations between/among the Parties pertaining to the subject
matter of this Agreement, and to the extent not expressly set forth herein, are void and of no force
or effect whatsoever. This Agreement may not be amended or modified except in writing and
signed by each of the Parties.
11.
Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada. Venue for any litigation that may arise out of the breach of
any obligations set forth in this Agreement shall be in the United States District Court for the
District of Nevada.
12.
Counterparts. This Agreement may be executed in any number of counterparts
confirmed by facsimile signatures transmitted by telephone, each of which shall be deemed a
duplicate original.
13.
Severability. If any provision of this Agreement or the application thereof to any
person, entity, or circumstance shall be invalid, illegal, or unenforceable to any extent, the
remainder of this Agreement and the application thereof shall not be affected and shall be
enforceable to the fullest extent peimitted by law.
14.
Successors, Affiliates, and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective heirs, personal representatives,
successors, and assigns.
15.
Prevailing Party. Should any party initiate any action at law or in equity to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled to recover from the
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non-prevailing party his/its reasonable attorneys' fees and costs in addition to any other appropriate
relief.
N WITNESS WHEREOF, the Parties have executed and delivered this Agreement on the
dates set forth below.
''** SIGNATURE PAGE FOLLOWS ***

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*** SIGNATURE PAGE ***I

HOY'S, INC.

EBJ&F, LLC, MED-HEALTH
PHARMACEUTICAL PRODUCTS,
LLC, AND EDWIN FUJINAGA

By: Ja es Massengill
Its: President

By: ROBB EVANS & ASSOCIATES,
LLC, as court-appointed receiver for
EBJ&F, LLC, Med-Health
Pharmaceutical Products, LLC and
Edwin Fujinaga

SKILL PROPERTIES, LLC

By: Brick Kane
Its: President and Chief Operating
Officer

By: James Massengill
Its: Manger

JAMES MASSENGILL

James Mas engill

KAYLEA MASSENGILL
4
4K w UlA
-t-k-i)
Kayle
assengin

HALDUN, INC.

By: James/Massengill
Its: President

WILLIAM F. KEENAN
William K. Keenan
SUSAN KEENAN

Susan Keenan

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To the foregoing Settlement Agreement and Mutual Release.
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*** SIGNATURE PAGE ***1

HOY'S, INC.

EBJ&F, LLC, MED-HEALTH
PHARMACEUTICAL PRODUCTS,
LLC, AND EDWIN FUJINAGA

By: James Massengill
Its: President

By: ROBB EVANS & ASSOCIATES,
LLC, as court-appointed receiver for
EBJ&F, LLC, Med-Health
Pharmaceutical Products, LLC and
Edwin Fujinaga

SKILL PROPERTIES, LLC

By: Brick Kane
Its: President and Chief Operating
Officer

By: James Massengill
Its: Manger

JAMES MASSENGILL

James Massengill

KAYLEA MASSENGILL

Kaylea Massengill

HALDUN, INC.
By: James Massengill
Its: President

Willianir Keenan

//2/.//6

SUSAN KEENAN

To the foregoing Settlement Agreement and Mutual Release.
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Exhibit A
Mutually acceptable releases of lien/mortgages to be prepared by the
property owner(s) or their representatives and executed by Robb Evans &
Associates, soley in its capacity as the Reciever.

Exhibit A

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Exhibit B

Exhibit B

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA

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EBJ&F, LLC,

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Case No.:
Plaintiff,

CONFESSION OF JUDGMENT

vs.

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HOY’S INC., and JAMES
MASSENGILL,

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Defendants.
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HOY’S, INC., a Wyoming corporation (“Hoy's”), and JAMES MASSENGILL

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(“Massengill”, and together with Hoy's, the “Defendants”), hereby state the following:

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Defendants hereby confess judgment, jointly and severally against themselves in favor of

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EBJ&F, LLC, a Nevada limited liability company (“Plaintiff”), for the principal amount of

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$350,000.00, with interest accruing on the unpaid balance at the legal rate from the date this

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Confession of Judgment is entered until paid in full.

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The parties agree that this Confession of Judgment shall only be filed if the Settlement

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Agreement entered into by and among (a) Hoy’s, Inc., Skill Properties, LLC, James K. Massengill,

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Kaylea Massengill, Haldun, Inc., William F. Keenan, and Susan Keenan on the one hand, and (b)

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EBJ&F, LLC, Med-Health Pharmaceutical Products, LLC, and Edwin Fujinaga on the other hand

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(the “Settlement Agreement”) is in breach.

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Once the terms of the Settlement Agreement are fully satisfied, Plaintiff shall return to

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Defendants this Confession of Judgment within 30 days of receipt of written demand by

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Defendants upon Plaintiff. The demand for return of the Confession of Judgment shall be made

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upon:

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M. Val Miller
Robb Evans & Associates LLC
5560 S. Ft. Apache Road, Suite 120
Las Vegas, NV 89148

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With copy to: Michael Lynch ([e-mail])

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Should either Party need to bring suit to defend, enforce or collect this Confession of
Judgment, the Prevailing Party shall be entitled to its reasonable attorneys’ fees.
Defendants knowingly and voluntarily stipulate, agree, and consent not to file any claim,

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answer, or other document contesting the entry or execution of this Confession of Judgment in

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this or any other proceeding if the Confession of Judgment was entered in accordance with the

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limitations herein and in the Settlement Agreement.

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This Confession of Judgment shall be interpreted and enforced according to the laws of the

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State of Nevada, and defendants hereby consent and submit to the jurisdiction and venue of the

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United States District Court for the District of Nevada.

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This Judgment may be filed by Plaintiff, its agents, receivers, or assigns in any appropriate

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court or multiple appropriate courts. This Judgment provides Plaintiff the power and authority to

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record, execute, and otherwise enforce said Judgment and pursue all rights and remedies,

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including but not limited to foreclosing and levying on any and all assets held or controlled by

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Defendants not exempt from execution if, and only if, the Settlement Agreement is in breach.

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This Confession of Judgment shall constitute the full and final Judgment of this matter.

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The invalidity or unenforceability of any provision of this Confession of Judgment shall

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not affect the validity or enforceability of any other provision of this Confession of Judgment.

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The signatory for each party hereinbelow represents that he or she is authorized to execute
this Confession of Judgment on behalf of each respective party.
Defendants further represent and declare that they have carefully read this Confession of
Judgment and know the contents thereof and that they sign the same freely and voluntarily.

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The Parties agree to execute such other documents and to take such other action as may be
reasonably necessary to further the purposes of this Confession of Judgment.
The Parties acknowledge that the terms of the Confession of Judgment were negotiated at

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arm’s length in good faith by the Parties, and were reached voluntarily after consultation with

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experienced counsel.

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(SIGNATURE PAGES FOLLOW)

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COUNTY OF

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STATE OF

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I, JAMES MASSENGILL, an individual, affirm under penalty of perjury under the laws of
the United States of America and the State of Nevada that the foregoing Confession of Judgment is
true and correct.

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)
) ss.
)

JAMES MASSENGILL, an individual

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James Massengill
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SUBSCRIBED AND SWORN TO before
me this
day of January, 2016, by

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(name of person making statement)
Notary Public in and for said County and State

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COUNTY OF

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STATE OF

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I, James Massengill, as president of HOY'S INC., affirm under penalty of perjury under the
laws of the United States of America and the State of Nevada that the foregoing Confession of
Judgment is true and correct.

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)
) ss.
)

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HOY'S, INC.

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By:
James Massengill

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Its: President

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SUBSCRIBED AND SWORN TO before
me this
day of January, 2016, by

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(name of person making statement)

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Notary Public in and for said County and State
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