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[CT 1933]

ANDREW H. WILSON, SBN 63209
WILSON CAMPILONGO LLP
235 Montgomery Street
Suite 450
San Francisco, California 94104
(415) 391-3900

Laurie J. Bartilson
BOWLES & MOXON
6255 Sunset Boulevard
Suite 2000
Hollywood, California
(213) 953-3360

Attorneys for Plaintiff
CHURCH OF SCIENTOLOGY INTERNATIONAL

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

CHURCH OF SCIENTOLOGY
INTERNATIONAL, a California
not-for-profit religious
corporation;

        Plaintiff,

vs.

GERALD ARMSTRONG; THE GERALD
ARMSTRONG CORPORATION, a
California corporation; DOES
1-25 INCLUSIVE

        Defendants.


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CASE NO. BC 052395

VERIFIED SECOND AMENDED COMPLAINT
FOR DAMAGES AND FOR PRELIMINARY
AND PERMANENT INJUNCTIVE RELIEF
FOR BREACH OF CONTRACT

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Plaintiff, by its attorneys, Wilson, Ryan & Campilongo and

Bowles & Moxon, for its Complaint, alleges:

NATURE OF THE ACTION

1. In violation of the express terms and spirit of a

settlement agreement ("the Agreement") entered into in December,

1986, defendant Gerald Armstrong ("Armstrong") has embarked on a

deliberate campaign designed to aid plaintiff's litigation

adversaries, breach the confidentiality provisions of the

 
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[CT 1934]

Agreement, and foment litigation, hatred and ill-will toward

plaintiff.

2. More than seven years ago, plaintiff Church of

Scientology International ("CSI") entered into the Agreement with

Armstrong, on its own behalf and for the benefit of numerous

third-party beneficiaries. The Agreement provided for a mutual

release and waiver of all claims arising out of a cross-complaint

which defendant Armstrong had filed in the case of Church of

Scientology of California v. Gerald Armstrong, Los Angeles

Superior Court No. C 420153. Armstrong, a former Church member

who sought, by both litigation and covert means, to disrupt the

activities of his former faith, displayed through the years an

intense and abiding hatred for the Church, and an eagerness to

annoy and harass his former co-religionists by spreading enmity

and hatred among members and former members. Plaintiff sought

with the Agreement to end all of Armstrong's covert activities

against it, along with the litigation itself. For that reason,

the Agreement contained carefully negotiated and agreed-upon

confidentiality provisions and provisions prohibiting Armstrong

from fomenting litigation against plaintiff by third parties.

These provisions were bargained for by plaintiff to put an end to

the enmity and strife generated by Mr. Armstrong once and for

all.

3. This action arises out of deliberate and repeated

breaches by Armstrong of these and other express provisions of

the Agreement. Although plaintiff fully performed all of its

obligations under the Agreement, Armstrong never intended to keep

his part of the bargain and maintains that he considered the

 
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[CT 1935]

referenced provisions to be unenforceable ab initio. As soon as

he finished spending the money he extracted from plaintiff as the

price of his signature, Armstrong began a systematic campaign to

foment litigation against plaintiff by providing confidential

information, copies of the Agreement, declarations, and

"paralegal" assistance to litigants actively engaged in

litigation against his former adversaries. Although plaintiff

has repeatedly demanded that Armstrong end his constant and

repeated breach of the provisions of the Agreement, Armstrong

appears to delight in renewing his annoying and harassing

activities, admitting to them in sworn declarations, and refusing

to end his improper liaisons.

4. With this Complaint, plaintiff seeks the Court's aid in

obtaining the peace for which it bargained more than seven years

ago. Plaintiff requests liquidated damages pursuant to the terms

of the Agreement from Armstrong and his sham corporate alter ego,

the Gerald Armstrong Corporation ("GAC"), as well as injunctive

relief to prevent additional and future breaches of the Agreement

by Armstrong.

THE PARTIES

5. Plaintiff Church of Scientology International is a non-

profit religious corporation incorporated under the laws of the

State of California, having its principal offices in Los Angeles,

California. Plaintiff CSI is the Mother Church of the

Scientology religion.

6. Defendant Gerald Armstrong is a resident of Marin

County, California.

7. Defendant Gerald Armstrong Corporation is a corporation

 
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[CT 1936]

incorporated under the laws of the State of California, having

its principal offices in San Anselmo, California.

8. Defendant Armstrong is the principal shareholder in GAC

and its sole employee, and has been since the incorporation of

GAC in 1987.

9. Defendant GAC is, and at all times since its

incorporation was, the alter ego of defendant Armstrong and there

exists, and at all times since GAC's incorporation has existed, a

unity of interest and ownership between these two defendants such

that any separateness between them has ceased to exist, in that

defendant Armstrong caused his own personal assets to be

transferred to GAC without adequate consideration, in order to

evade payment of his lawful obligations, and defendant Armstrong

has completely controlled, dominated, managed and operated GAC

since its incorporation for his own personal benefit.

10. Defendant GAC is, and at all times herein mentioned

was, a mere shell, instrumentality and conduit through which

defendant Armstrong carried on his activities in the corporate

name exactly as he conducted it previous to GAC's incorporation,

exercising such complete control and dominance of such activities

to such an extent that any individuality or separateness of

defendant GAC and defendant Armstrong does not, and at all

relevant times mentioned herein, did not exist.

11. Adherence to the fiction of the separate existence of

defendant GAC as an entity distinct from defendant Armstrong

would permit an abuse of the corporate privilege and would

sanction fraud, in that Armstrong transferred his material assets

to GAC in 1988, prior to embarking on the campaign of harassment

 
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[CT1937]

described herein, and with the intention of preventing plaintiff

from obtaining monetary relief from Armstrong pursuant to the

liquidated damages clause. GAC exists solely so that Armstrong

may be "judgment proof."

THE CONTRACT

12. On or about December 6, 1986, CSI and Armstrong entered

into a written confidential settlement Agreement, a true and

correct copy of which is attached hereto as Exhibit [A], and

incorporated herein by reference.

13. The Agreement was entered into by plaintiff and

defendant Armstrong, with the participation of their respective

counsel after full negotiation. Each provision of the Agreement

was carefully framed by the parties and their counsel to

accurately reflect the agreement of the parties.

14. Plaintiff specifically negotiated for and obtained from

Armstrong the provisions in the Agreement delineated in

paragraphs 7(D), 7(H), 7(G), 10 and paragraphs 12 through 18,

because it was well aware, through investigation, that Armstrong

had undertaken a series of covert activities, apart from the

litigation, which were intended by Armstrong to discredit Church

leaders, spark government raids into the Churches, create phony

"evidence" of wrongdoing against the Churches, and, ultimately,

destroy the Churches and their leadership.

15. Contemporaneously with the signing of the Agreement,

Armstrong represented that he understood the Agreement's

provisions and was acting of his own free will and not under

duress.

16. The Agreement also provided that plaintiff CSI would

 
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[CT 1938]

pay to Armstrong's attorney, Michael Flynn, a lump sum amount

intended to settle not just Armstrong's case, but the cases of

other clients of Mr. Flynn as well, and that Mr. Flynn would pay

to Armstrong a portion of that settlement amount. The exact

amount of the portion to be paid to Armstrong by Mr. Flynn was

maintained as confidential between Mr. Flynn and Armstrong.

17. CSI paid to Mr. Flynn the lump sum settlement amount.

18. Mr. Flynn paid to Armstrong his confidential portion of

the lump sum settlement amount, which was at least $520,000,

after expenses.

19. The consideration paid to Armstrong was fair,

reasonable and adequate. Plaintiff CSI has performed all of its

obligations pursuant to the Agreement.

FIRST CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

20. Plaintiff realleges paragraphs 1-19, inclusive, and

incorporates them herein by reference.

21. Vicki and Richard Aznaran ("the Aznarans") are former

Scientology parishioners currently engaged in litigation against,

inter alia, RTC and CSI, in the case of Vicki J. Aznaran, et al.

v. Church of Scientology of California, et al., United States

District Court for the Central District of California, Case No.

CV 88-1786 JMI (Ex).

22. In June, 1991, the Aznarans discharged their attorney,

Ford Greene, and retained attorney Joseph A. Yanny to represent

them.

23. While acting as the Aznarans' counsel, Yanny hired

Gerald Armstrong as a paralegal to help Yanny on the Aznaran

 
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[CT 1939]

case.

24. In July, 1991, Armstrong agreed to travel from Marin

County to Los Angeles and asked Yanny to pay him $500 for his

proposed help.

25. In July, 1991, Armstrong did travel to Los Angeles as

he had agreed, stayed with Yanny on July 15 and July 16, 1991,

and provided Yanny with paralegal assistance and a declaration

for the Aznaran case.

26. Yanny is former counsel to CSI, and his substitution

into the case was vacated by the Court sua sponte on July 24,

1991, the Court noting that Yanny's retention as the Aznarans'

counsel was "highly prejudicial" to CSI.

27. Armstrong's acceptance of employment by Yanny to work

on the Aznarans' litigation is a direct violation of Paragraphs

7(G) and 10 of the Agreement.

28. As a direct and proximate result of Armstrong's breach

of the agreement by providing paralegal assistance to Yanny in

the Aznarans' litigation, plaintiff has incurred damages which

are not presently calculable. In no event, however, are they

less than the jurisdictional minimum of this Court.

Consequently, for this breach plaintiff seeks compensatory and

consequential damages according to proof.

SECOND CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

29. Plaintiff realleges paragraphs 1-19, 21-28, inclusive,

and incorporates them herein by reference.

30. After Yanny entered his appearance in the Aznarans'

case and indicated to CSI's counsel that he represented Gerald

 
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[CT 1940]

Armstrong as well, CSI brought suit against Yanny in the case of

Religious Technology Center, et al. v. Joseph A. Yanny, et al.,

Los Angeles Superior Court No. BC 033035 ("RTC v. Yanny"). In

that action, plaintiff sought and obtained a Temporary

Restraining Order and a Preliminary Injunction against Yanny,

which prohibit Yanny from aiding, advising, or representing,

directly or indirectly, the Aznarans or Armstrong, on any matters

relating to the plaintiff.

31. At the hearings before the Court on the temporary

restraining order and the injunction, Yanny filed two

declarations prepared and executed by Armstrong on July 16, 1991.

The declarations were offered by Yanny as part of Yanny's

defense, which was ultimately rejected by the Court when it

issued its injunction.

32. Armstrong's aid to Yanny in the RTC v. Yanny case is a

direct violation of Paragraphs 7(G) and 10 of the Agreement.

33. Armstrong attached as an exhibit to one of his July 16,

1991 declarations a copy of the Agreement, the terms of which he

had agreed, pursuant to paragraph 18(D), to keep confidential.

This disclosure of the terms of the Agreement is a violation of

its non-disclosure provisions, requiring that Armstrong pay to

CSI $50,000 in liquidated damages.

34. Despite demand by plaintiff, Armstrong has failed and

refused to pay them the $50,000 owed in liquidated damages for

this breach of the Agreement.

THIRD CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

35. Plaintiff realleges paragraphs 1-19, 21-28 and 30-34,

 
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[CT 1941]

inclusive, and incorporates them herein by reference.

36. After Yanny's substitution into the Aznarans' case was

summarily vacated, Ford Greene was reinstated as Aznarans'

counsel of record. Ford Greene's law offices are located in San

Anselmo, California.

37. On or about August, 1991, Armstrong began working in

Ford Greene's office as a paralegal on the Aznarans' case. When,

thereafter, the Aznarans hired attorney John Elstead to represent

them as well, Armstrong provided paralegal services to Elstead as

well as Greene. Armstrong's employment in Greene's office has

continued to the present. Armstrong's activities constitute a

daily and continuing breach of his contract, rendering

plaintiff's bargain a nullity.

38. Plaintiff CSI has already incurred, and continues to

incur, damages as a direct and proximate result of Armstrong's

provision of aid to Greene in the Aznarans' case. Those damages

are not presently calculable and will cease only when Armstrong

is ordered to stop his improper conduct. In no event, however,

are they less than the jurisdictional minimum of this Court.

Consequently, for this breach plaintiff seeks compensatory and

consequential damages according to proof.

FOURTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

39. Plaintiff realleges paragraphs 1-19, 21-28, 30-34 and

36-38, inclusive, and incorporates them herein by reference.

40. In addition to the paralegal services which Armstrong

has provided to Ford Greene and John Elstead on the Aznarans'

litigation, Armstrong also provided the Aznarans with a

 
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[CT 1942]

declaration, dated August 26, 1991, and filed in the Aznarans'

case. In that declaration, Armstrong describes some of his

alleged experiences with and concerning plaintiff, and purports

to authenticate copies of certain documents. These actions and

disclosures are violations of paragraphs 7(G), 7(H) and 10 of the

Agreement, requiring that Armstrong pay to CSI $50,000 in

liquidated damages.

41. Despite demand by plaintiff, Armstrong has failed and

refused to comply with the liquidated damages provision by paying

$50,000 to plaintiff as demanded for this breach of the

Agreement.

FIFTH CAUSE OF ACTION

(For Breach of Contract Against Armstrong)

42. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38 and 40-41, inclusive, and incorporates them hereby reference.

43. On or about March 19, 1992, Armstrong, acting through

Ford Greene as his agent, transmitted a press release to various

members of the media, including the Cable News Network, San

Francisco Chronicle, San Francisco Examiner, and the Marin County

Independent Journal. A true and correct copy of the press

release is attached hereto as Exhibit [B]. Said press release

violated the Agreement in that it constituted disclosures by

Armstrong, through Ford Greene as his agent, of his experiences

with Scientology as prohibited by paragraph 2. The following are

the excerpts from the press release which violate paragraph 2:

a) "Can the Scientology organization purchase the
free speech rights of Gerald Armstrong-the former
in-house biographer researcher/archivist of cult
leader, L. Ron Hubbard ..."

 
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[CT 1943]

b) "A former high-ranking Scientologist for 12 years,
Armstrong split with the group when it insisted he
continue lying about the accomplishments Hubbard
claimed to the public at large."

c) "For years Scientology has treated Armstrong as a
`suppressive person' who was `fair game."'

d) "Armstrong is resisting Scientology's high-powered
attack in an effort to affirm his right to free
speech to maintain vigilance for the truth."

e) "(Scientology is) fabricating false scenarios in
other court proceedings that Armstrong was an
agent of the IRS out to destroy it."

44. In addition, the press release devotes an entire

paragraph to a description of the lawsuit resulting from the

Settlement Agreement and to a description of the Settlement

Agreement itself:

"After Armstrong beat Scientology's lawsuit
against him in 1984, he was poised to
prosecute his own claims. For millions of
dollars, however, in 1986 Scientology settled
with he and over 17 other Scientology
knowledgeable individuals on the condition
that those persons would forever keep silent,
avoid giving sworn testimony by evading
subpoenas, and never aid or assist anyone
adverse to Scientology."

The distribution of the press release violated the provisions of

paragraphs 7(D) and 18 of the Agreement.

45. By reason of the foregoing breach by Armstrong,

plaintiff is entitled to $50,000 in liquidated damages and

compensatory damages not presently known but believed to be in

excess of the jurisdictional minimum of this Court.

SIXTH CAUSE OF ACTION

(For Breach of Contract by Armstrong)

46. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41 and 43-45, inclusive, and incorporates them hereby by reference.

 
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[CT 1944]

47. On or about March 19 and 20, 1992, Armstrong and

Greene, acting as Armstrong's agent, granted the media additional

interviews, which also violated paragraph 2 of the Agreement.

During the course of his interview with the Cable News Network,

for example, Armstrong stated, "I'm an expert in the

misrepresentations Hubbard has made about himself from the

beginning of Dianetics until the day he died." Attached hereto

and incorporated herein by reference as Exhibit [C] is a true and

correct transcription of the CNN broadcast which featured this

statement made voluntarily by Armstrong in a media interview.

48. By reason of the foregoing breach of the Agreement,

plaintiff is entitled to $50,000 in liquidated damages.

SEVENTH CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

49. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45 and 47-48, inclusive and incorporates them

herein by reference.

50. On or about February, 1992, Armstrong agreed to appear

voluntarily as an "expert witness" in litigation known as Hunziker

v. Applied Materials, No. 692629 S.C.S.C (the "Hunziker

case"). The alleged subject of his "expertise" was Scientology.

The defendants named in the Hunziker case include, inter alia,

World Institute of Scientology Enterprises, Inc., which is a

Scientology affiliated entity protected by the Agreement.

51. On or about February 21, 1992 and February 23, 1992,

Armstrong met voluntarily with James Rummond and John Elstead,

attorneys for the plaintiffs in the Hunziker case. During his

meetings with these attorneys, Armstrong discussed his alleged

 
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[CT 1945]

history and experiences with plaintiff and with other Scientology

entities and individuals protected by the Agreement, and offered

to appear for the plaintiffs as an "expert" on the subject of

Scientology practices and beliefs.

52. On March 3, 1992, Armstrong voluntarily, and without

the issuance of a subpoena by anyone, appeared for deposition in

the Hunziker case and accepted a fee for his testimony from the

defendants in that case of $1,000. During the course of the

deposition, which lasted for approximately four hours, Armstrong

testified at length concerning his alleged experiences with and

concerning plaintiff and other Scientology affiliated entities

and individuals protected by the Agreement, and concerning

knowledge and information which he claimed to have concerning

plaintiff and other Scientology affiliated entities and

individuals.

53. During his deposition on March 3, 1992, Armstrong

produced documents which he claimed to have reviewed in

preparation for his testimony, in violation of paragraph 7(D) of

the Agreement.

54. On or about March 12, 1992, Armstrong again appeared

for deposition in the Hunziker case. This time, Armstrong

claimed that he had been given a deposition subpoena not by the

deposing attorney, but by attorney Elstead, and that Elstead had

"filled out" the subpoena earlier that morning. Armstrong

refused to produce a copy of the alleged subpoena, which had not

been served on any of the parties to the case. In fact,

Armstrong himself requested that Elstead issue him a subpoena on

Sunday, March 8, 1992, after a temporary restraining order was

 
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[CT 1946]

issued in this case. On March 8, 1992, Armstrong delivered

additional documents to Elstead, again in violation of paragraph

7(D) of the Agreement.

55. Plaintiff learned in April, 1992, through review of the

aforesaid deposition transcript, that since the signing of the

Agreement, Armstrong had "taken it upon [him]self" to reacquire

documents which he had previously returned to plaintiff "from

whatever source." He produced many of those documents

voluntarily, first to Elstead on March 8, 1992, and then to

opposing counsel during the March 12, 1992 deposition.

56. These actions and disclosures are violations of

Paragraphs 7(D), 7(G), 7(H) and 10 of the Agreement, requiring

that Armstrong pay to CSI $250,000 in liquidated damages.

EIGHTH CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

57. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, inclusive, and incorporates them

herein by reference.

58. On or about April 7, 1992, while testifying in the

matter known as Church of Scientology v. Yanny, (No. BC 033035),

Armstrong made the Settlement Agreement sued upon herein an

exhibit to the deposition transcript. Said action was a breach

of paragraph 18(D) of the Agreement which prohibits disclosure of

the contents of the Agreement.

59. By reason of the foregoing breach of the Agreement,

Plaintiff is entitled to $50,000 in liquidated damages, together

with compensatory damages in an amount not presently known to

plaintiff but believed to be in excess of the jurisdictional

 
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[CT 1947]

minimum of this court.

NINTH CAUSE OF ACTION

(Against Armstrong for Beach of Contract)

60. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56 and 58-59, inclusive, and

incorporates them herein by reference.

61. In breach of the provision of paragraph 7(E) of the

Agreement, Armstrong failed to return a letter written by L. Ron

Hubbard to the Federal Bureau of Investigation in 1955 and an

internal communication known as "Technical Bulletin."

62. In breach of the provisions of paragraph 7(H) of the

Agreement, Armstrong gave a declaration in the Aznaran litigation

on August 26, 1991 in opposition to a motion to exclude expert

testimony.

63. Said declaration attached as exhibits the two documents

referred to in paragraph 61 above, in breach of the provisions of

Paragraph 7(D) of the Agreement.

64. By reason of the breaches by Armstrong in paragraphs

7(E) and 7(H) of the Agreement, plaintiff has been damaged in an

amount not presently known but believed to be in excess of the

jurisdictional minimum of this Court.

65. By reason of the breach by Armstrong of paragraph 7(D)

of the Agreement, plaintiff is entitled to liquidated damages in

the amount of $50,000.

TENTH CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

66. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59 and 61-65, inclusive, and

 
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[CT 1948]

incorporates them herein by reference.

67. Plaintiff learned in March, 1992, that during 1990 and

1991, Armstrong voluntarily provided aid and advice to Bent

Corydon and to Corydon's attorney, Toby Plevin, in the conduct of

litigation against plaintiff and affiliated entities in the case of

Bent Corydon v. Church of Scientology International et al.,

Los Angeles Superior Court Case No. C 694401.

68. Armstrong's voluntary provision of aid to Plevin to

work on Corydon's litigation is a direct violation of paragraphs

7(G) and 10 of the Agreement.

69. As a direct and proximate result of Armstrong's breach

of the Agreement by providing voluntary assistance to Plevin in

Corydon's litigation, plaintiff has incurred damages which are

not presently calculable. In no event, however, are they less

than the jurisdictional minimum of this Court. Consequently, for

this breach plaintiff seeks compensatory and consequential

damages according to proof.

ELEVENTH CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

70. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 67-69, inclusive,

and incorporates them herein by reference.

71. On May 27, 1992, after plaintiff's motion for

preliminary injunction in this matter had been argued, and while

a determination of that motion was still pending, Armstrong

voluntarily provided a declaration to Gary M. Bright and Jerold

Fagelbaum, attorneys for defendants David Mayo, Church of the New

Civilization, John Nelson, Harvey Haber, Vivien Zegel and Dede

 
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[CT 1949]

Reisdorf in the consolidated cases of Religious Technology

Center, et al. v. Robin Scott, et al., and Religious Technology

Center, et al. v. Wollersheim, et al., United States District

Court for the Central District of California, Case Nos. CV 85-711

JMI (Bx) and CV 85-7197 JMI (Bx) (the "Scott case"). The

plaintiffs in the Scott case are plaintiff, Church of Scientology

International, Church of Scientology of California, and Religious

Technology Center, all entities specifically protected by the

Agreement.

72. In his May 27, 1992 declaration, Armstrong purports to

authenticate an earlier declaration which describes some of his

alleged experiences with and concerning plaintiff, as well as a

portion of a transcript which was ordered sealed in the earlier

action between plaintiff and defendant. These actions and

disclosures are violations of paragraphs 7(G), 7(H) and 10 of the

Agreement, requiring that Armstrong pay to CSI $50,000 in

liquidated damages.

73. As a direct and proximate result of Armstrong's breach

of the Agreement by providing voluntary assistance to Bright and

Fagelbaum in the Scott case, plaintiff has incurred additional

damages which are not presently calculable. In no event,

however, are they less than the jurisdictional minimum of this

Court. Consequently, for this breach plaintiff also seeks

compensatory and consequential damages according to proof.

TWELFTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

74. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73,

 
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[CT 1950]

inclusive, and incorporates them herein by reference.

75. Since August, 1991, Armstrong has worked as a paralegal

for attorney Ford Greene. Mr. Greene's practice consists

substantially of pressing claims by former Scientologists against

the plaintiff and other individuals and entities identified in

paragraph 1 as beneficiaries of the Agreement (collectively, "the

Beneficiaries").

76. Among Mr. Greene's clients who are pressing claims

against one or more of the Beneficiaries are Ed Roberts and

Denise Cantin.

77. While working in Mr. Greene's office, Armstrong

provided substantial paralegal assistance to Mr. Greene in the Ed

Roberts and Denise Cantin matters. In the case of Roberts, for

example, Armstrong went to Colorado and interviewed Roberts in

November, 1991, and has interviewed him at least seven times

since then. In December, 1992, Armstrong even made a settlement

demand to plaintiff's counsel on behalf of Roberts, without

bothering to go through Roberts' attorney, Mr. Greene.

78. Armstrong's employment by Greene to work on the Roberts

and Cantin matters is a direct violation of paragraphs 7(G) and

10 of the Agreement.

79. As a direct and proximate result of Armstrong's breach

of the agreement by providing paralegal assistance to Greene on

the Roberts and Cantin matters, plaintiff has incurred damages

which are not presently calculable. In no event, however, are

they less than the jurisdictional minimum of this Court.

Consequently, for this breach plaintiff seeks compensatory and

consequential damages according to proof.

 
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[CT 1951]

THIRTEENTH CAUSE OF ACTION

(For Breach of Contract Against All Defendants)

80. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 7-69, 71-73 and 75-

79, inclusive, and incorporates them herein by reference.

81. In or about November, 1992, in Los Angeles, California,

Armstrong attended a convention of the Cult Awareness Network, an

anti-religious group whose members advocate the kidnapping and

"deprogramming" of persons belonging to groups which they label

"cults." While at the convention, Armstrong provided a lengthy

videotaped interview to deprogramming specialist Jerry Whitfield.

A true and correct copy of the transcript of the videotape is

attached hereto as Exhibit [D]. Said videotaped interview violates

the Agreement in that it purportedly contains disclosures by

Armstrong of his claimed experiences with Scientology as

prohibited by paragraph 7(D) of the Agreement.

82. In addition, the videotaped interview devotes an entire

section to a description of the earlier action resulting from the

Settlement Agreement and to a description of the Settlement

Agreement itself. The making of the videotape violated the

provisions of paragraphs 7(D) and 18 of the Agreement.

83. In addition, plaintiff is informed and therefore

believes that Armstrong has distributed the videotape to persons

other than Whitfield, the number of which plaintiff has still to

ascertain. The provision of the videotape by Armstrong to any

person additionally violates paragraphs 7(D) and 18 of the

Agreement.

84. In addition, while at the CAN convention, Armstrong

 
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[CT 1952]

spoke with approximately fifty (50) people, and willingly

disclosed to them his claimed experiences with Scientology, in

violation of paragraphs 7(D) and 18 of the Agreement.

85. By reason of the foregoing breaches by Armstrong,

plaintiff is entitled to at least $150,000 in liquidated damages,

and further liquidated damages subject to proof.

FOURTEENTH CAUSE OF ACTION

(For Breach of Contract Against All Defendants)

86. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73, 75-79

and 81-85, inclusive, and incorporates them herein by reference.

87. On or about December 22, 1992, Armstrong sent a letter

to, inter alia, Malcolm Nothling, Ed Roberts, Lawrence

Wollersheim, Richard Aznaran, Vicki Aznaran, Richard Behar, Ford

Greene, Paul Morantz, Joseph A. Yanny, Toby L. Plevin, Graham E.

Berry, Stuart Cutler, Anthony Laing, John C. Elstead, Fr. Kent

Burtner, Margaret Singer, Cult Awareness Network and Daniel A.

Leipold. Each of these individuals or organizations is (a)

engaged in litigation against plaintiff and/or other

Beneficiaries; (b) an avowed adversary of plaintiff and/or

other Beneficiaries; and/or (c) an attorney who represents or has

represented litigants and/or adversaries of plaintiff and/or

other Beneficiaries. A true and correct copy of the letter sent by

Armstrong is attached hereto as Exhibit [E]. Said letter

violates the Agreement in that it contains purported disclosures

by Armstrong of his claimed experiences with Scientology as

prohibited by paragraph 7(D).

88. In addition, the letter devotes an entire section to a

 
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[CT 1953]

description of the earlier action resulting from the breaches of

the Settlement Agreement and to a description of the Settlement

Agreement itself. The sending of the letter to plaintiff's

adversaries violated the provision of paragraph 7(D) of the

Agreement.

89. By reason of the foregoing breach of the Agreement,

plaintiff is entitled to $950,000 in liquidated damages.

FIFTEENTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

90. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 71-73, 75-79, 81-85

and 87-89, inclusive and incorporates them herein by reference.

91. According to Armstrong, sometime between December 22,

1992 and March 10, 1993, he spoke at an event at which

approximately 30 to 40 people were present. At this event,

Armstrong spoke of, inter alia, his claimed experiences with

Scientology, in violation of at least paragraphs 7(D) and 18 of

the Agreement, and received monetary compensation for his speech.

92. By reason of the foregoing breach of the Agreement,

plaintiff is entitled to $50,000 in liquidated damages.

SIXTEENTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

93. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 71-73, 75-79, 81-

85, 87-89, 91-92, inclusive, and incorporates them herein by

reference.

94. In or about June, 1993, Armstrong gave an interview to

one or more reporters from Newsweek magazine, which also violated

 
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[CT 1954]

paragraph 7(D) of the Agreement. Plaintiff is informed, and

therefore believes, that during the course of his interview with

the Newsweek reporter(s), whose identity is known to defendants

but not to plaintiff, Armstrong stated that the Founder of the

Scientology faith, L. Ron Hubbard, wanted "rich Scientologists to

buy huge quantities of [The Way to Happiness] for distribution.

He wanted to go down in history as a scientist or a philosopher

or both." Attached hereto and incorporated herein by reference

as Exhibit [F] is a true and correct copy of the Newsweek article

which featured this statement made voluntarily by Armstrong in a

media interview. The provision of this interview by Armstrong

violated the provisions of paragraphs 2, 7(D) and 18 of the

Agreement.

95. By reason of the foregoing breach of the Agreement,

plaintiff is entitled to $50,000 in liquidated damages.

SEVENTEENTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

96. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73, 75-

79, 81-85, 87-89, 91-92 and 94-95, inclusive, and incorporates

them herein by reference.

97. In or about August, 1993, Armstrong gave an interview

to one or more reporters from Entertainment Television, with the

intention that the reporters broadly republish the interview on

national television, which also violated paragraph 7(D) of the

Agreement. During the course of his interview with the

Entertainment Television reporter(s), whose identity is known to

defendants but not to plaintiff, Armstrong made statements

 
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[CT 1955]

concerning his claimed experiences with Scientology.

Further, Armstrong provided to Entertainment Television a copy of a

manuscript entitled: "ONE HELL OF A STORY An Original Treatment

Written for Motion Picture Purposes Created and Written by Gerald

Armstrong" (hereinafter, "the treatment"). Plaintiff is informed

and believes that the treatment so provided includes detailed

descriptions of Armstrong's alleged experiences in and concerning

Scientology, including a description of Church scriptures which

are considered sacred and confidential by the Church. Portions.

of the Armstrong interview and the treatment were shown on

Entertainment Television's "Entertainment Tonight" show on August

5, 1993. The provision of this interview and the treatment by

Armstrong to Entertainment Television violated the provisions of

at least paragraphs 7(D) and 18 of the Agreement.

98. By reason of the foregoing breach of the Agreement,

plaintiff is entitled to $50,000 in liquidated damages.

EIGHTEENTH CAUSE OF ACTION

(Against All Defendants for Injunctive Relief)

99. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 43-45, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73, 75-

79, 81-85, 87-89, 91-92, 94-95, 97-98, inclusive, and

incorporates them herein by reference.

100. In or about June 1993, defendant Armstrong caused the

formation of and became a director and officer of a Colorado

corporation which he called Fight Against Coercive Tactics, Inc.

("FACTI"). One of the avowed purposes of this corporation is to

foment civi1 litigation against plaintiff and the other entities

and individuals protected by the Agreement. Armstrong formed

 
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[CT 1956]

FACTI to implement his plan to foment such litigation.

101. Armstrong has established FACTI to create an electronic

"library" that would feature, inter alia, hundreds of documents,

declarations, exhibits and arguments prepared by Armstrong which

discuss and pertain to the Beneficiaries, and to attempt to

"shelter" these contractual breaches under a corporate name and

the rubric of First Amendment privilege.

102. Armstrong has provided an entire assortment of

documents to FACTI for its electronic library, including a copy

of the settlement agreement herein, scores of declarations, and

documents which Armstrong retained in violation of paragraph 7(E)

of the Agreement. Providing these documents to FACTI with the

intention that FACTI distribute them to others, including but not

limited to other litigants, is a breach of paragraphs 7(H) and

7(D) of the Agreement.

103. In or about January, 1994, Armstrong, using FACTI, sent

a mass mailing to an as yet unascertained number of people,

including members of the Scientology faith. In the mailing,

Armstrong exhorts recipients to bring civil actions against the

Church, stating that he is collecting negative information about

the plaintiff "to assist ongoing litigation." Further, Armstrong

requests the addresses of and ways to contact the family members

of senior Church executives, an action which is clearly intended

for the purpose of harassment.

104. To further the fomenting of litigation, the mailing

contains a list, based on rumor, falsehood and innuendo, of

persons supposedly harmed or injured by their belief in the

Scientology religion. Plaintiff is informed and believes that

 
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[CT 1957]

Armstrong, using FACTI as his cover, provided that list to Graham

Berry, an attorney representing defendant Uwe Geertz in the case

of Church of Scientology International v. Steven Fishman, et al.,

United States District Court for the Central District of Los

Angeles, Case No. 91-6426 HLH (Tx), which Berry then used against

the Church in that action.

105. Armstrong's provision of assistance to Geertz and

scores of other as yet unidentified would-be litigants is a

direct violation of paragraphs 7(G) and 10 of the Agreement.

106. As a direct and proximate result of Armstrong's breach

of the agreement via FACTI, plaintiff has incurred damages which

are not presently calculable. In no event, however, are they

less than the jurisdictional minimum of this Court. Consequently,

for this breach plaintiff seeks compensatory and consequential

damages according to proof.

NINETEENTH CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

107. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73, 75-79, 81-

85, 87-89, 91-92, 94-95, 97-98, and 100-106, inclusive, and

incorporates them herein by reference.

108. On or about February 22, 1994, Armstrong voluntarily

provided a declaration to Graham E. Berry, Gordon C. Calhoun, and

the law firm of Lewis, D'Amato, Brisbois & Bisgaard, attorneys

for defendant Uwe Geertz in the case of Church of Scientology

International v. Steven Fishman and Uwe Geertz, United States

District Court for the Central District of California, Case No.

CV 91-6426 HLH (Tx). The declaration consists of a 14-page

 
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[CT 1958]

discussion of his claimed experiences with and concerning

plaintiff.

109. In his February 22, 1994 declaration, Armstrong also

purports to authenticate a document which he titles "Find a

Better Basket," and which he claims is both a literary work and a

declaration. Armstrong further claims that "Find a Better

Basket" describes some of his alleged experiences with and

concerning plaintiff.

110. These actions and disclosures are violations of

paragraphs 7(G), 7(H) and 10 of the Agreement, requiring that

Armstrong pay to CSI $50,000 in liquidated damages.

111. As a direct and proximate result of Armstrong's breach

of the Agreement by providing voluntary assistance to Berry and

Calhoun in the Fishman case, plaintiff has incurred additional

damages which are not presently calculable. In no event,

however, are they less than the jurisdictional minimum of this

Court. Consequently, for this breach plaintiff also seeks

compensatory and,consequential damages according to proof.

TWENTIETH CAUSE OF ACTION

(Against All Defendants for Injunctive Relief)

112. Plaintiff realleges paragraphs 1-19, 21-28, 30-34, 36-

38, 40-41, 47-48, 50-56, 58-59, 61-65, 67-69, 71-73, 75-79, 81-

85, 87-89, 91-92, 94-95, 97-98, 100-106 and 108-111, inclusive,

and incorporates them herein by reference.

113. On or about April 28, 1993, plaintiff learned that

Armstrong intended to appear that day on radio station KFAX and

disclose his claimed experiences with Scientology. Plaintiff's

counsel, Laurie Bartilson, faxed a letter to Armstrong and his

 
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[CT 1959]

attorney, informing him that plaintiff would consider any such

appearance to be a violation of the Agreement, and would subject

Armstrong to the liquidated damages provision contained therein.

In response, Armstrong sent a letter to Ms. Bartilson which

stated, inter alia,

Your threat that you will subject me to the liquidated
damages provision of the settlement agreement for
appearing on KFAX is obscene. Even its inclusion in
the settlement agreement; that is $50,000.00 per word I
write or speak about your organization is obscene ....

In addition, Armstrong asserted that settlement agreements were

an "antisocial policy" of plaintiff. He stated that he would not

stop making media appearances and speeches, and that he had more

planned for the near future if plaintiff did not immediately

accede to his demands:

I expect to be doing various media appearances in the
near future and talks to various groups, including one
I have already agreed to with a university psychology
class. I think it would be very beneficial, therefore,
to resolve our differences as soon as possible by your
organization's clear repudiation of its antisocial policies
and practices, so that I can have good things
to report at these talks.

114. In or about June, 1993, Armstrong made good his

threats, and gave an interview to a reporter(s) from Newsweek

magazine, as described in paragraph 94, supra.

115. On July 2, 1993, again making good his threats,

Armstrong appeared in Los Angeles, California at the Los Angeles

Superior Court. He attended a hearing in the Wollersheim II

case, and afterwards gave an interview to a reporter who claimed

to be "working on a story," but refused to identify himself.

116. In or about August, 1993, Armstrong gave an interview

to reporters from Entertainment Television, as described in

 
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[CT 1960]

paragraph 97, supra.

117. In or about August, 1993, Armstrong delivered to

Entertainment Television a motion picture "treatment" concerning

his experiences in and concerning Scientology, and told reporters

for Entertainment Television that he was trying to "sell" the

treatment, and have his claimed experiences portrayed in a motion

picture.

118. In his February 22, 1994 declaration, which Armstrong

provided to attorneys for litigant Uwe Geertz, Armstrong

purported to authenticate a document which he titles "Find a

Better Basket." Armstrong further claims that "Find a Better

Basket" supposedly describes some of his alleged experiences with

and concerning plaintiff is the treatment for a screenplay which

he hopes to sell.

119. As described in paragraphs 100-103, supra, Armstrong

has, in concert with others, created a computer bulletin board

which has as its purpose facilitating continuous breaches of the

Agreement by electronic means.

120. As a direct and proximate result of Armstrong's breach

of the Agreement by disclosing his experiences, by making media

appearances, by repeatedly providing assistance to litigants,

would-be claimants and their attorneys, and by creating and

operating FACTI, which breaches are persistent and continuing,

CSI is and will continue to be irreparably harmed, and unless

Armstrong and those acting in concert with him are preliminarily

and permanently enjoined from continuing that unlawful conduct,

further irreparable harm will be caused to CSI.

///

 
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[CT 1961]

ON THE FIRST CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE SECOND CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE THIRD CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE FOURTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE FIFTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For compensatory and consequential damages according to

proof.

3. For attorneys' fees and costs of suit.

ON THE SIXTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE SEVENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $250,000.

2. For attorneys' fees and costs of suit.

ON THE EIGHTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

 
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[CT 1962]

ON THE NINTH CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For liquidated damages in the amount of $50,000.

3. For attorneys' fees and costs of suit.

ON THE TENTH CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE ELEVENTH CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For liquidated damages in the amount of $50,000.

3. For attorneys' fees and costs of suit.

ON THE TWELFTH CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE THIRTEENTH CAUSE OF ACTION

1. For liquidated damages of $150,000, and further liquidated damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE FOURTEENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $950,000.

2. For attorneys' fees and costs of suit.

ON THE FIFTEENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

 
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[CT 1963]

ON THE SIXTEENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE SEVENTEENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE EIGHTEENTH CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof.

2. For attorneys' fees and costs of suit.

ON THE NINETEENTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For compensatory and consequential damages according to

proof.

3. For attorneys' fees and costs of suit.

ON THE TWENTIETH CAUSE OF ACTION

1. For a preliminary and permanent injunction prohibiting

and restraining all defendants, including Armstrong, from

violating any of the provisions of the Agreement, including the

provisions of paragraphs 7(D), 7(E), 7(G), 7(H) and 18(D).

///

///

///

///

///

///

///

///

 
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[CT 1964]

ON ALL CAUSES OF ACTION

1. For such other and further relief as the Court may deem

just and proper.

DATED: April 4, 1994

BOWLES & MOXON

By: [signed]
Laurie J. Bartilson

Andrew H. Wilson
WILSON , RYAN & CAMPILONGO

Attorneys for Plaintiff
CHURCH OF SCIENTOLOGY
INTERNATIONAL

 

 
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VERIFICATION

I, LYNN R. FARNY, declare as follows:

I am Secretary of the Plaintiff, Church of Scientology

International, in the above-entitled matter. I have read the

foregoing Verified Second Amended Complaint for Damages and for

Preliminary and Permanent Injunctive Relief for Breach of

Contract and know the contents thereof, which are true of my own

knowledge except as to those matters which are stated on

information and belief, and as to those matters, I believe them

to be true.

I declare under the penalty of perjury pursuant to the laws

of the State of California that the foregoing is true and

correct.

Executed on April 4, 1994, at Los Angeles, California.

[signed]
LYNN R. FARNY

 
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Exhibit [A]
Mutual Release And Settlement Agreement 12-1986

Exhibit [B]
Press Release 03-20-1992

Exhibit [C]
Purported Transcript CNN Broadcast [CT 1986-1988]
See video of the CNN broadcast 03-20- 1992

Exhibit [D]
Purported Transcript of Armstrong Interview with Spanky Taylor and Jerry Whitfield [CT 1989-2023]
See videos Armstrong Interview 11-06-1992

Exhibit [E]
Armstrong Letter 12-22-1992

Exhibit [F]
Newsweek article 06-14-1993 [CT 2034, 2035]

   

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