EXHIBIT 10.12

ARTICLES OF ORGANIZATION
OF
ENERGETIC SYSTEMS INC., LLC

          The undersigned natural person of the age of eighteen (18) years of
more, acting as organizer of a limited liability company under Chapter 86 of the
Nevada Revised Statues (the “Chapter”), hereby adopts the following Articles of
Organization.

ARTICLE ONE

NAME

          The name of the limited liability company is Energetic Systems Inc.,
LLC (the “Company”).

ARTICLE TWO

DURATION

          This Company’s duration is perpetual unless earlier dissolved in
accordance with its Operating Agreement.  The issuance of the Certificate of
Organization by the Nevada Secretary of State will be the Company’s beginning
date.

ARTICLE THREE

PURPOSE

          The purpose for which the Company is organized is to conduct any
lawful business, to promote any lawful purpose and to engage in any lawful act
or activity for which limited liability companies may be organized under the
Nevada Revised Statutes.

ARTICLE FOUR

RESIDENT AGENT

          The name of the Company’s initial registered agent is The Corporation
Trust Company of Nevada.  The street address of the Company’s initial registered
office where process may be served upon the Company is 6100 Neil Road, Suite
500, Reno, Nevada  89511.

ARTICLE FIVE

MANAGER

          The Company is to be managed by a Manager or Managers.  The number of
Managers of the Company shall be fixed by, or in the manner provided in, the
Operating Agreement of the Company.  The initial number of Managers of the
Company is four (4), and the names and addresses of the persons who will to
serve as Managers until the first meeting of the Managers or until their
successor or successors are elected and qualified are:

Name

 

Address

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David P. Taylor

 

9950 Claymore Drive

 

 

Dallas, Texas  75243

 

 

 

James P. O’Reilly

 

34 Golden Boulevard

 

 

St. Catherines, Ontario, Canada

 

 

L2N 7M9

 

 

 

Forunato Villamagna

 

3770 Howard Hughes Parkway

 

 

Suite 300

 

 

Las Vegas, Nevada  89109

 

 

 

David N. Keys

 

3770 Howard Hughes Parkway

 

 

Suite 300

 

 

Las Vegas, Nevada  89109

ARTICLE SIX

EXEMPTION OF MANAGERS FROM LIABILITY

          No Manager shall be liable to the Company or Members for monetary
damages for an act or omission in such Person’s capacity as a Manager, except
for liability for (a) a breach of such Manager’s duty of loyalty to the Company
or its Managers, (b) an act or omission not in good faith that constitutes a
breach of duty of such Manager to the Company or an act or omission that
involves intentional misconduct or a knowing violation of law, (c) a transaction
from which such Manager received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of such Manager’s position, or
(d) an act or omission for which the liability of a Manager is expressly
provided for by an applicable statute.  If the Chapter or other applicable law
is amended to authorize action further elimination or limitation of the
liability of a Manager, then the liability of a Manager shall be eliminated or
limited to the fullest extent permitted by the Chapter or other applicable law,
as so amended.  Any repeal or modification of this paragraph by the Managers or
the Mangers shall not adversely affect the right or protection of a Manager
existing at the time of such repeal or modification.

ARTICLE SEVEN

INDEMNIFICATION OF MANAGER, MEMBER, EMPLOYEE OR AGENT

          Consistent with the provisions of Sections 86.411 and 86.421 of the
Chapter, the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Company to procure a judgment in
its favor, by reason of the fact that they are or were a manager, member,
employee or agent of the Company, or are or were serving at the request of the
Company as a manager, member, employee or agent, against expenses, including
attorney’s fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with the action, suit or proceeding if
they acted in good faith and in a manner which they reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.  The termination of any action, suit or proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did not
act in

Page 2 of Exhibit 10.12

good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the limited-liability company, and that, with respect
to any criminal action or proceeding, they had reasonable cause to believe that
his conduct was unlawful.

ARTICLE EIGHT

OPERATING AGREEMENT

          The initial Operating Agreement will be adopted by the Managers.  The
powers to alter, amend, or repeal the Operating Agreement or adopt new Operating
Agreement is vested in the Managers.

ARTICLE NINE

ORGANIZER

          The name of the organizer is Bradley S. Knippa, and his address for
purposes of these Articles of Organization is 100 Congress Avenue, Suite 1100.
Austin, Texas  78701.

          IN WITNESS WHEREOF, the undersigned being the organizer for the
purpose of forming a limited liability corporation under the laws of the State
of Nevada has executed these Articles of Organization on this the 4th day of
October, 2002.

 

 

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Bradley S. Knippa, Organizer

Page 3 of Exhibit 10.12