DESCRIPTION - Pleadings in Diversified Printing and Publishing, Inc. 
v. Datacat, Inc., Datacat, Inc. v. Diversified Printing and Publishing, 
Inc., Gannam/Kubat Publishing and Nasib Gannam, and Gannam/Kubat Publishing, 
Inc. v. Robert S. Cope and Auto-Graphics, Inc., Orange County Superior 
Court Case No. 766 695.  
  
 .................Begin Pleading Dated 7/16/96..................  
  
GRAHAM & JAMES LLP  
By: Kenneth B. Julian (State Bar 149840)  
    Karl A. Sandoval (State Bar 170190)  
4675 MacArthur Court, Suite 800 F I L E D  
Newport Beach, California 92660  
(714) 224-2000  
  
Attorneys for Plaintiff   
  
DIVERSIFIED PRINTING PUBLISHING SERVICES, INC.  
  
SUPERIOR COURT OF THE STATE OF CALIFORNIA  
  
FOR THE COUNTY OF ORANGE                Case Number: 766 695  
  
DIVERSIFIED PRINTING AND   
PUBLISHING SERVICES, INC., a  
California corporation,                     COMPLAINT BY PLAINTIFF  
                                            DIVERSIFIED PRINTING  
AND  
Plaintiff,                                  PUBLISHING SERVICES,  
INC. FOR  
                                            BREACH OF WRITTEN  
CONTRACT;  
vs.                                         OPEN BOOK ACCOUNT;  
ACCOUNT  
                                            STATED; WORK, LABOR  
AND  
DATACAT, INC., a California corporation;    SERVICES RENDERED;  
MONEY PAID;  
and DOES 1 through 25, inclusive,           AND QUANTUM MERUIT  
  
Defendants.  
  
  
COMES NOW, plaintiff DIVERSIFIED PRINTING AND PUBLISHING SERVICES,  
INC. ("Plaintiff') and, for its Complaint, alleges as follows:  
  
  
I.  FIRST CAUSE OF ACTION  
  (Against All Defendants for Breach of Written Contract)  
  
  
1. Plaintiff is, and at all times herein relevant was, a  
California corporation organized and existing under the laws of  
the State of California. Plaintiff is in the printing and  
publishing business with its offices located in the County of   
Orange, State of California. 
  
2. Plaintiff is informed and believes, and thereon alleges, that  
defendant DATACAT, INC. ("DATACAT" is, and at all times herein  
relevant was, a corporation organized and existing under the laws  
of the State of California, with its principle place of business  
located in the County of Los Angeles, State of California.  
  
3. The true names and capacities, whether individual, corporate,  
associate, or otherwise, of the defendants sued herein as DOES I  
through 25, inclusive, are unknown to Plaintiff, which therefore  
sues said defendants by such fictitious names.  Plaintiff will  
amend this Complaint to allege their true names and capacities  
when ascertained. Plaintiff is informed and believes, and thereon  
alleges, that each of such fictitiously named defendants is  
responsible in some manner for the occurrences herein alleged and  
that Plaintiff s damages as herein alleged were proximately caused  
by said defendants' conduct.  
  
4. Plaintiff is informed and believes, and thereon alleges, that  
each of the defendants was the agent, the partner, and/or the  
employee of each of its co-defendants and, in doing the things  
hereinafter alleged, was acting within the course and scope of  
such agency, partnership, and/or employment.  
  
5. Within the past four years Plaintiff and Defendants, and each  
of them, entered into a written agreement whereby Plaintiff agreed  
to provide printing and publishing services and advance freight  
charges for defendants, and each of them, and defendants, and each  
of them, agreed to pay Plaintiff the sum of $333,024.28 for such  
services and charges.  True and correct copies of Invoice Nos.  
5405, 5427, 5497, 5550, 5588, 5602, 5630, 5639, 5696, 5773, 5786,  
5896, 21 5900, 5905, and 5908 in the total amount of $333,024.28  
for such services rendered and freight charges are attached hereto  
as Exhibit "A" and are incorporated herein by this reference as  
though set forth in full.  Plaintiff further has performed  
additional printing and publishing services in the amount of  
$21,421.  
  
6. Under the agreement, DATACAT also agreed to pay Plaintiff a  
finance charge of 1.5% per month on any accounts over 30 days past  
due (the "Finance Charges").  There is now due and owing $5,687.48  
in Finance Charges, and such charges continue to accrue.  
  
7. Plaintiff has fully performed all acts, services, and  
conditions required by such agreement.  
  
8. At this time, the total amount DATACAT owes Plaintiff under the  
agreement is $360,132.76, calculated as $348,006.82 for services  
rendered, $6,438.48 in freight charges paid, and $5,687.48 in  
Finance Charges, plus interest on all sums.  
  
9. Plaintiff has made demand upon defendants, and each of them,  
for payment of such sums.  
  
10. Despite due demand by Plaintiff, no portion of such sum has  
been paid, and there is now due, owing, and unpaid from  
defendants, and each of them, to Plaintiff the total sum of  
$360,132.76, plus interest thereon at the legal rate.  
  
II.  SECOND CAUSE OF ACTION  
(Against All Defendants for Open Book Account)  
  
11. Plaintiff realleges and incorporates herein by this reference  
as though set forth in full each and every allegation contained in  
Paragraphs 1 through 10, inclusive, of this Complaint.  
  
12.  Within the last four years, defendants, and each of them,  
became indebted to Plaintiff on an open book account due in the  
sum of $360,132.76 for services rendered, at their special  
insistence and request, freight charges paid on DATACAT's   
behalf and finance charges on overdue invoices.  
  
13. Despite a demand therefor, no portion of said sums has been  
paid. 
  
14. There is now due, owing, and unpaid from defendants, and each  
of them, to Plaintiff the sum of $360,132.76, plus interest  
thereon.  
   
  
III.  THIRD CAUSE OF ACTION  
(Against All Defendants on Account Stated)  
  
15. Plaintiff realleges and incorporates herein by this reference  
as though set forth in full each and every allegation contained in  
paragraphs 1 through 1O, inclusive, of this Complaint. 
  
16. Within the last four years before the commencement of this  
action, an account was stated in writing by and between Plaintiff  
and defendants, and each of them, in which it was agreed that  
defendants, and each of them, were indebted to Plaintiff in the  
sum of $360,132.76. 
  
17. Plaintiff has made demand upon defendants, and each of them,  
for payment of said sum.  
  
18. Despite due demand by Plaintiff, no portion of said sum has  
been paid, and there is now due, owing, and unpaid from  
defendants, and each of them, to Plaintiff the sum of $360,132.76,  
plus interest thereon at the legal rate.  
   
IV.   FOURTH CAUSE OF ACTION  
(Against All Defendants for Work, Labor, and Services Rendered)  
  
19. Plaintiff realleges and incorporates herein by this reference  
as though set forth in full each and every allegation contained in  
Paragraphs 1 through 1O, inclusive, of this Complaint.  
  
20. Within the last four years, Plaintiff rendered printing and  
publishing services to defendants, and each of them, at  
defendants' special instance and request, and defendants, and each  
of them, agreed to pay Plaintiff the sum of $348,006.82 for such  
services.  
  
21. Despite due demand by Plaintiff, no portion of said sum has  
been paid, and there is now due, owing, and unpaid to Plaintiff  
from defendants, and each of them, the sum of $348,006.82 for such  
services.  
  
V.  FIFTH CAUSE OF ACTION  
(Against All Defendants For Money Paid)  
  
22. Plaintiff realleges and incorporates herein by this reference  
as though set forth in full each and every allegation contained in  
Paragraphs 1 through 1O, inclusive, of this Complaint.  
  
23. Within the last four years before the commencement of this  
action, defendants, and each of them, became indebted to Plaintiff  
in the sum of $6,438.46 for money paid, laid out, and expended for  
defendants, and each of them, at their instance and request, for  
freight charges.  
  
24. Despite due demand by Plaintiff, no portion of such sum has  
been paid, and there is now due, owing, and unpaid from  
defendants, and each of them, to Plaintiff the sum of $6,438.46,  
plus interest thereon.  
  
VI.  SIXTH CAUSE OF ACTION  
(Against All Defendants For Quantum Meruit)  
  
25. Plaintiff realleges and incorporates herein by this reference  
as though set forth in full each and every allegation contained in  
Paragraphs 1 through 10, inclusive, of this Complaint.  
  
26.  Within the last four years before the commencement of this  
action, Plaintiff provided printing and publishing services at the  
request of defendants, and each of them, and paid freight charges  
on DATACAT's behalf.  Such services and freight charges directly  
have benefited defendants, and each of them.  
  
27. The reasonable value of those services and expenditures is the  
sum of $354,445.28, towards which defendants have paid Plaintiff  
nothing to date.  
  
28. Demand has been made upon defendants, and each of them, for  
payment of such sums by which they, and each of them, have been  
unjustly enriched, but defendants, and each of them, have failed  
and refused, and continue to fail and refuse, to make any   
payment whatsoever toward this amount.  
  
WHEREFORE, plaintiff DIVERSIFIED PRINTING AND PUBLISHING SERVICES,  
INC. prays for judgment against defendants, and each of them, as  
follows:  
  
1. For damages according to proof at trial;  
2. For interest on all sums at the legal rate;  
3. For costs of suit incurred herein;  
4. For reasonable attorneys' fees pursuant to Cal. Civ. Code  
1717.5; and  
5. For such other and further relief as the Court may deem just  
and proper.  
  
DATED: July 16, 1996 GRAHAM & JAMES LLP  
KENNETH B. JULIAN  
KARL A. SANDOVAL  
  
By: ss/K. Julian  
KENNETH B. JULIAN  
Attorneys for Plaintiff  
DIVERSIFIED PRINTING AND  
PUBLISHING SERVICES, INC.  
  
 ..................End Pleading dated 7/16/96.....................  
  
 .................Begin Pleading dated 9/5/96.....................  
  
Randolph Stiles, Esq.  (SBN 62910)  
LAW OFFICES OF RANDOLPH STILES  
12015 Kling Street, #211  
North Hollywood, California  91607  
818/505-8026  
  
Attorney for Defendant  
Datacat, Inc.  
  
	SUPERIOR COURT FOR THE STATE OF CALIFORNIA  
  
	FOR THE COUNTY OF ORANGE  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation,  
Plaintiff,  
  v.  
DATACAT, INC., a California corporation and DOES 1 through 25,  
inclusive,  
Defendants.  
  
  
Case No. 766 695  
  
ANSWER TO COMPLAINT BY DEFENDANT DATACAT   
  
(Defendant 11 - Judge G. Robert Jameson)  
  
Datacat, Inc., a California corporation through its attorney of  
record ("Defendant"), for itself and for no other party, hereby  
answers the Plaintiff's Complaint, and alleges affirmative  
defenses, as follows:  
	  
	Pursuant to and in accordance with California Code of Civil  
Procedure Section 431.30(d), the Defendant generally denies each  
and every allegation of the Complaint.  
  
	  
AFFIRMATIVE DEFENSES  
  
	As its affirmative defenses to each and every one of the  
claims and causes of action set forth in the Complaint, the  
Defendant hereby alleges the following as its affirmative defenses  
to such claims and causes of action by the Plaintiff as set forth  
in the Complaint:  
  
	FIRST AFFIRMATIVE DEFENSE  
	(No Claim Upon Which Relief Can Be Granted)  
  
  As its First Affirmative Defense, the Defendant hereby  
incorporates by this reference its Answer as set forth above and  
alleges that the Plaintiff's Complaint fails to state facts upon  
which the Plaintiff is entitled to any relief against the   
Defendant.  
  
	SECOND AFFIRMATIVE DEFENSE  
	(Superseding Agreement)  
  
  As its Second Affirmative Defense, the Defendant alleges that  
the Plaintiff entered into an agreement with and/or for the  
benefit of the Defendant whereby the Plaintiff agreed to forego  
and/or defer payment of the monies Plaintiff seeks to   
collect as a result of its Complaint against the Defendant.  
  
	THIRD AFFIRMATIVE DEFENSE  
	(Agreement To Subordinate)  
  
  As its Third Affirmative Defense, the Defendant alleges that the  
Plaintiff entered into an agreement with and/or for the benefit of  
the Debtor whereby the Plaintiff agreed to subordinate payments of  
any and all monies due and owing by the Defendant to the Plaintiff  
in favor of the Plaintiff's "third-party" creditors (creditors who   
are not affiliated with the Defendant or its shareholders) and to  
forego collection of any and all amounts due and owing by the  
Defendant to such Plaintiff unless and until all of the  
Defendant's current obligations to such third-party creditors had   
been satisfied.  
  
	FOURTH AFFIRMATIVE DEFENSE  
	(Agreement For Capital Contribution)  
  
  As its Fourth Affirmative Defense, Defendant alleges that the  
Plaintiff entered into an agreement with and/or for the benefit of  
the Defendant whereby the Plaintiff agreed to use any amount due  
and owing by the Defendant to the Plaintiff for the purpose of  
making a capital contribution, and to make a further on-going  
capital contribution, to the Defendant in the amount required to  
satisfy the Defendant's obligations to third party (non- 
affiliated) creditors.  
  
	FIFTH AFFIRMATIVE DEFENSE  
	(Course Of Dealing)  
  
  As its Fifth Affirmative Defense, Defendant alleges that through  
their course of dealing and otherwise the Defendant and the  
Plaintiff mutually understood, agreed and promised that the  
Plaintiff, who is affiliated with Defendant as a result of the   
100% ownership of and control exercised over the Plaintiff by  
Nasib Gannam who is, directly or indirectly, a 50% shareholder of  
the Defendant (the "Plaintiff/Affiliate"), would provide printing  
and related services to and for the benefit of the Defendant with  
the agreement and promise that the Plaintiff would not   
demand payment for such services, and the Defendant would not  
otherwise be obligated for or called upon to pay the  
Plaintiff/Affiliate for such services, unless and   
until the Defendant had paid all of its current obligations to  
third-party (non-affiliated) creditors and had excess cash  
available to pay affiliated parties, including the  
Plaintiff/Affiliate, who provided services to the Defendant.  
  
	SIXTH AFFIRMATIVE DEFENSE  
	(Breach Of Contract)  
  
  As its Sixth Affirmative Defense, Defendant alleges that the  
Plaintiff breached its agreement with the Defendant under which  
the Plaintiff seeks relief from the Defendant by way of the  
Complaint; and, as a result of such material breach and   
resulting default by the Plaintiff under such agreement, Defendant  
is entitled to suspend performance under such contract, including  
without limitation payment by Defendant to Plaintiff for any and  
all amounts, if any, otherwise due and owing thereunder.  
  
	SEVENTH AFFIRMATIVE DEFENSE  
	(Insolvency)  
  
  As its Seventh Affirmative Defense, Defendant alleges that  
payment by the Defendant to the Plaintiff as prayed for in the  
Complaint would render the Defendant insolvent and otherwise  
unable to pay its debts and obligations as they come due to   
non-affiliated third parties.  
  
	EIGHTH AFFIRMATIVE DEFENSE  
	(Preferential Payment)  
  
  As its Eighth Affirmative Defense, the Defendant alleges that  
payment by the Defendant to the Plaintiff as prayed for in the  
Complaint would constitute a preferential payment by the Defendant  
to an affiliated party (the Plaintiff/Affiliate) in contravention  
of Defendant's duties and responsibilities to other creditors.  
  
	NINTH AFFIRMATIVE DEFENSE  
	(Estoppel)  
  
  As its Ninth Affirmative Defense, the Defendant alleges that the  
Plaintiff is estopped from asserting the claims set forth in the  
Complaint as against the Defendant, including without limitation  
for the reasons alleged in the foregoing Second, Third, Fourth and  
Fifth Affirmative Defenses and otherwise.  
  
	TENTH AFFIRMATIVE DEFENSE  
	(Waiver)  
  
  As its Tenth Affirmative Defense, the Defendant alleges that the  
Plaintiff has waived and/or otherwise relinquished the claims,  
and/or the right to sue Defendant in respect of such claims, as  
set forth in the Complaint.  
  
	ELEVENTH AFFIRMATIVE DEFENSE  
	(Breach Of Implied Covenant Of Good Faith And Fair Dealing)  
  
  As its Eleventh Affirmative Defense, Defendant alleges that the  
assertion of the instant claim by the Plaintiff against the  
Defendant constitutes a breach of the implied covenant of good  
faith and fair dealing existing by, between and among the   
Plaintiff and Defendant, including its shareholders and other  
affiliates, by virtue of contracts or other agreements by,   
between and among such parties pertaining to the subject matter of  
the Complaint.  
  
	TWELFTH AFFIRMATIVE DEFENSE  
	(Promissory Estoppel)  
  
  As its Twelfth Affirmative Defense, the Defendant alleges that  
Plaintiff's representations, agreements and promises to the  
Defendant, and/or its shareholders for the benefit of the  
Defendant, in respect of the providing of services by the   
Plaintiff/Affiliate to the Defendant, and the Defendant's actions  
and reasonable reliance thereon, constitutes promissory estoppel  
and precludes the Plaintiff from instituting and maintaining the  
within action against the Defendant.  
  
	THIRTEENTH AFFIRMATIVE DEFENSE  
	(Unclean Hands)  
  
  As its Thirteenth Affirmative Defense, the Defendant alleges  
that as a result of the Plaintiff/Affiliate's conduct and  
activities as alleged herein and otherwise, the Plaintiff should  
be denied the relief it is seeking based on the equitable   
principle of unclean hands.  
  
	FOURTEENTH AFFIRMATIVE DEFENSE  
	(Failure To Mitigate Damages)  
  
  As its Fourteenth Affirmative Defense, Defendant alleges that  
Plaintiff knew that Defendant could not pay for the services  
Plaintiff rendered and continued to render to Defendant, which are  
the subject of Plaintiff's request for payment as alleged in   
the Complaint, and that the Plaintiff otherwise failed and refused  
to mitigate its damages.  
  
	FIFTEENTH AFFIRMATIVE DEFENSE  
	(Failure To Join Indispensable Party)  
  
  As its Fifteenth Affirmative Defense, Defendant alleges that the  
Plaintiff has failed to join one or more indispensable parties.  
  
	SIXTEENTH AFFIRMATIVE DEFENSE  
	(Offset, Set-Off Or Deduction)  
  
  As his Sixteenth Affirmative Defense, the Defendant alleges that  
as a result of the denial and other allegations made herein, and  
as otherwise exist, the Defendant in entitled to an offset, set- 
off or other deduction from the amounts claimed by the Plaintiff  
in the Complaint including without limitation as a result of  
Plaintiff's breach of its contract and/or agreement with and/or  
for the benefit of the Defendant.  
  
	SEVENTEENTH AFFIRMATIVE DEFENSE  
	(Statute Of Limitations Bar 337)  
  
  As its Seventeenth Affirmative Defense, the Defendant alleges  
that the Plaintiff's claims are barred by the statute of  
limitations as provided for in California Civil Code Section 337.  
  
	EIGHTEENTH AFFIRMATIVE DEFENSE  
        (Statute Of Limitations Bar 339)  
  
  As its Eighteenth Affirmative Defense, the Defendant alleges  
that the Plaintiff's claims are barred by the statute of  
limitations as provided for in California Civil Code Section 339.  
  
	NINETEENTH AFFIRMATIVE DEFENSE  
	(Statute of Frauds)  
  
  As its Nineteenth Affirmative Defense, Defendant alleges that  
the claims which are the subject of the Complaint are barred or  
otherwise precluded by the statute of frauds.  
  
	TWENTIETH AFFIRMATIVE DEFENSE  
	(Fraud/Mistake)  
  
  As its Twentieth Affirmative Defense, Defendant alleges that the  
claims which are the subject of the Complaint are barred or  
otherwise precluded based on the principles of fraud and/or  
mistake.  
  
	TWENTY-FIRST AFFIRMATIVE DEFENSE  
	(No Late Payment Charge)  
  
  As its Twenty-First Affirmative Defense, Defendant alleges that  
the Plaintiff never billed, charged or otherwise imposed any "late  
payments charge" for services rendered by Plaintiff to the  
Defendant, Defendant never agreed to pay and is not otherwise  
obligated to pay Defendant, and never did pay, Defendant any late  
payment charge for any services rendered by Plaintiff to Defendant  
or otherwise; and, in any event, the imposition of any such late  
payment charge by the Plaintiff on the Defendant as alleged in the  
Complaint would be usurious and otherwise unlawful.  
  
	REQUEST FOR RELIEF  
  
		WHEREFORE, the Defendant prays that the Plaintiff take  
nothing as a result of its Complaint; and that Defendant be  
awarded its costs including reasonable attorney's fees/costs, if  
appropriate, and such other and further relief as the Court may  
deem appropriate in this case.  
  
  
Dated:  September 5, 1996  
  
					Respectfully submitted,  
  
				LAW OFFICES OF RANDOLPH STILES, ESQ.  
	  
				By: SS/Randolph Stiles  
				    Randolph Stiles, Esq.  
				Attorney for Defendant Datacat, Inc.  
  
  
 ..............End Pleading dated 9/5/96.....................  
  
 ...........Begin Pleading dated 9/10/96.....................  
  
Randolph Stiles, Esq. (SBN 62910)  
LAW OFFICES OF RANDOLPH STILES  
12015 Kling Street, #211  
North Hollywood, California  91607  
818/505-8026  
  
Attorney for Cross-Claimant Datacat, Inc.  
  
SUPERIOR COURT FOR THE STATE OF CALIFORNIA  
FOR THE COUNTY OF ORANGE  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation,  
Plaintiff,  
  
	v.  
  
DATACAT, INC., a California corporation and DOES 1 through 25,  
inclusive,  
Defendants.  
  
DATACAT, INC., a California corporation,  
Cross-Claimant,  
  
	v.  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation;   
GANNAM/KUBAT PUBLISHING, INC., a California corporation;   
NASIB GANNAM, an individual; and DOES 1 through 5,  
Cross-Defendants.   
  
Case No. 766 695  
  
CROSS-COMPLAINT BY DEFENDANT DATACAT AGAINST DIVERSIFIED PRINTING  
AND PUBLISHING   
SERVICES, GANNAM/KUBAT PUBLISHING, INC. AND NASIB GANNAM FOR  
DECLARATORY RELIEF AND   
BREACH OF CONTRACT  
  
  
  
(Depar(tm)ent 11 - Judge G. Robert Jameson)  
  
  
	Plaintiff Datacat, Inc., a California corporation ("Cross- 
Claimant" or the "Company"), as its cross-complaint ("Cross- 
Complaint"), including counter and cross-claims against  
Diversified Printing And Publishing Services, Inc.   
("Diversified"), Gannam/Kubat Publishing, Inc. ("G/K") and Nasib  
Gannam an individual ("Gannam"), alleges as follows:  
  
I. THE PARTIES  
  
  Cross-Claimant is a California corporation which is a resident  
of and does business in Los Angeles County, California, and  
elsewhere.  Cross-Defendant Diversified Printing And Publishing  
Services, Inc., a California corporation, is a resident of Orange  
County, California, and does business in Los Angeles and Orange  
County, California, and elsewhere. Cross-Defendant Gannam/Kubat  
Publishing, Inc., a California corporation, is a corporation  
which, on information and belief, is a resident of Orange County,  
California and does business in Los Angeles and Orange County,  
California.  Cross-Defendant Nasib Gannam is an individual who, on  
information and belief, is a resident of and does business in the  
Counties of Orange and Los Angeles, California, and elsewhere. 
  
  Does 1 through 5, inclusive, are unknown to Cross-Claimant,  
which therefore sues said defendants by such fictitious names.   
Cross-Claimant will amend this Complaint to allege the Doe cross- 
defendants' true names and capacities when ascertained.   
  
Cross-Claimant is informed and believes, and thereon alleges, that  
each of such fictitiously named Doe cross-defendants is  
responsible in some manner for the occurrences herein alleged and  
that Cross-Claimant's damages as herein alleged were proximately  
caused by said cross-defendants' conduct.  
  
II. JURISDICTION/VENUE  
  
  Jurisdiction is proper in this Court because Diversified has  
sued the Cross-Claimant in this Court, and because the damages  
sought to be recovered as a result of this Cross-Complaint exceed  
$25,000. 
  
  Venue is proper in this Court because Diversified has sued the  
Cross-Claimant in this Court, and because Diversified and the  
other defendants do business in and can otherwise be found in  
Orange County, California.  
  
III. GENERAL ALLEGATIONS  
  
  Cross-Claimant is in the business of publishing printed catalogs  
covering heating, ventilation, air conditioning and refrigeration  
products.   
  
  Auto-Graphics, Inc., a California corporation ("A-G"), owns 50%  
of the issued and outstanding stock of Cross-Claimant. 
  
  G/K owns 50% of the issued and outstanding stock of Cross- 
Claimant and, on information and belief, Gannam owns or controls  
100% of G/K.   On information and belief, Gannam owns or controls  
100% of Diversified.  Diversified is in the business of providing  
catalog printing and related services to publishers like the  
Cross-Claimant.  
 
  On June 12, 1990, A-G and G/K entered into a written agreement a  
copy of which is attached hereto as Exhibit A (the "Agreement").   
The Agreement covered the organization of the Cross-Claimant and,  
among other things, provided that the Company would purchase  
printing services from Diversified.  Exhibit A, paragraph 9 .  
 
  In accordance with the Agreement, Cross-Claimant endeavored to  
and did purchase printing services from Diversified.  The  
Agreement also provides that the Cross-Claimant would purchase  
composition services from A-G.  Exhibit A, paragraph 8. 
  
  In accordance with the Agreement, Cross-Claimant endeavored to  
and did purchase composition services from A-G.  As a result of  
Cross-Claimants having purchased printing and composition services  
from, respectively, Diversified and A-G, prior to October of 1995  
the Company had accumulated a substantial payable to each of such  
stockholder/vendors which it could not pay on a current basis. 
  
  In July of 1994, at a meeting of the board of directors of the  
Company, it was proposed that each of the Company's shareholders  
(A-G and G/K) make a further capital contribution to the Company  
in an amount which would allow the Company to pay all amounts then  
due and owing to such stockholder/vendors for current services,  
and as reasonably contemplated to be due and owing to such  
affiliated parties for current services anticipated to be rendered  
to the Company, and other creditors, in the future. 
  
  In lieu of such proposal, it was suggested and mutually agreed  
by all representatives of A-G and G/K in attendance at the board  
meeting, for their respective companies and for and on behalf of  
the Cross-Claimant, that such stockholder/vendors would forego  
and/or otherwise defer collection of amounts due and owing by the  
Company to each of them for current services rendered by such  
stockholder/vendors to the Company unless and until such time as  
the Company had sufficient cash to pay all current payables to  
non-affiliated parties and the remaining available cash would be  
used, following payment of the Company's obligations for past  
services, to pay pro rata the current payables due and owing A-G  
and G/K for current services rendered by such stockholder/vendors  
to the Company. 
  
  As an inducement and as partial consideration for A-G's  
agreement to such deferred payment arrangement and as a condition  
to A-G's agreement in respect thereof, the Cross-Claimant, with  
G/K's consent and approval through its two representatives in  
attendance at the board meeting, confirmed, acknowledged and  
further agreed that the Company owed A-G $575,000 for past, unpaid  
database development and maintenance services; and the Company  
further agreed and promised to execute and deliver to A-G a  
promissory note representing the Company's obligation to A-G for  
such past (non-current) database development and maintenance  
services previously rendered to the Company by A-G. 
  
  The Cross-Claimant's agreement and promise in favor of A-G was  
memorialized in a written resolution which was considered, voted  
upon and approved at the conclusion of the above-referenced July  
1994 board meeting, including by G/K's two representatives in  
attendance at such meeting, a copy of which corporate resolution  
("Corporate Resolution") is attached hereto as Exhibit B.  
  
  Based upon such agreements and promises, A-G agreed to and did  
continue to provide current composition services to Cross- 
Claimant; and A-G did not, thereafter, demand or otherwise insist  
that the Company pay for such composition services on a current  
basis. 
 
  Based upon such agreements and promises, G/K caused Diversified  
and Diversified otherwise agreed to and did provide current  
printing services to Cross-Claimant; and   
Diversified did not demand or otherwise insist that the Company  
pay for such printing services on a current basis - - until  
approximately February of 1996 when G/K and Diversified notified  
the Company that all future printing services by Diversified for  
the Company would have to be paid for on a C.O.D. (cash on  
delivery) basis and subsequently such payment demand by  
Diversified was for payment in advance before the commencement of  
any printing services by Diversified. 
  
  In February 1996, the amount due and owing by the Cross-Claimant  
to A-G and to G/K, respectively, for current services rendered by  
such stockholder/vendors was approximately $300,000 each.  
 
  Beginning in February 1996, G/K refused to allow Diversified,  
and Diversified otherwise failed and refused, to provide the  
Cross-Claimant with any further printing services, except where  
the Company was willing and able to pay in advance for such  
services. 
  
  A-G continued to provide composition services to the Cross- 
Claimant in accordance with the parties' (the Company, A-G and  
G/K-Diversified) deferred payment arrangement and agreement. 
  
  Thereafter, when the Cross-Claimant had insufficient cash with  
which to pay its non-affiliated vendors for their current  
services, to pay other non-current obligations including the  
Company's monthly promissory note obligation to A-G (for past  
database creation and maintenance services) and with which to pay  
Diversified in advance for its current printing services, the  
Company and A-G requested that G/K agree to contribute or loan, on  
a 50-50 basis with A-G, capital to the Company in the total amount  
of $100,000 so as to provide the Company with financial resources  
with which to satisfy Diversified's payment demand and to allow  
the Company to continue to pay, pro rata, its obligations for  
current services to A-G and Diversified in their capacity as  
stockholder/vendors to the Company. 
  
  G/K refused to enter into such agreement or to otherwise assist  
the Company to satisfy its financial obligations; and G/K caused  
Diversified and Diversified otherwise continued to demand that the  
Company pay in advance for any and all printing services to be  
rendered by Diversified to the Company. 
  
  G/K and Diversified's failure and refusal to forego or otherwise  
defer payment on current services rendered by Diversified to the  
Company constituted a material breach and default by G/K and  
Diversified of such parties' deferred payment agreement with, and  
for the benefit of, the Cross-Claimant. 
  
  Additionally, Diversified failed and refused to perform and  
otherwise fulfill its duties and responsibilities to the Cross- 
Claimant and its customers (including Hasan Alhasawi and Mortemp)  
in respect of past and proposed printing jobs by Diversified's  
failure and refusal to return or otherwise deliver to the Company  
and/or the Company's customers' property held by Diversified for  
and belonging to the Company and/or its customers previously  
provided to Diversified in connection with printing jobs  
including, by way of example, two film covers supplied by Mortemp  
for use in printing such customer's catalog and film promised by  
Datacat to Hasan Alhasawi under the terms of the contract between  
the Company and such customer. 
  
  Such failure and refusal to release property belonging to the  
Company and or its customers, following proper notice/demand by  
the Company to Diversified requesting that such property be  
returned or otherwise provided to the Company and/or its  
customers, and constituting the conversion by Diversified of such  
property, caused and resulted in a material breach and default of  
Diversified's duties and responsibilities to the Company and/or  
its customers under the agreement by and between the Cross- 
Claimant and Diversified whereby Diversified provided printing  
services to the Company and under the Agreement (Exhibit A)  
providing that the Company would purchase printing services from  
Diversified.  
  
  Such withholding of property by Diversified also constituted a  
material breach and default by G/K of the Agreement, thereby  
relieving the Company of any further obligation to purchase  
printing services from Diversified.  
 
  The Company maintains and alleges herein that, as a result of  
Diversified's breach and default of its duties and  
responsibilities to the Company under the agreement(s) by which  
Diversified provided and was proposed to provide printing services  
to the Company and its customers, including the Agreement (Exhibit  
A), the Company is not obligated to purchase any future printing  
services from Diversified including under the Agreement. 
  
  Further, the Cross-Claimant maintains and alleges herein that,  
in any event, the Company is not required under the Agreement or  
otherwise to purchase all of its printing services requirements  
from Diversified. 
  
  Further, the Cross-Claimant maintains and alleges herein that,  
as a result of G/K's agreement to cause Diversified to forego or  
otherwise defer payment, or the right to collect, for current  
printing services provided by Diversified to the Company (all  
printing services covered by Diversified's claim against the  
Company in this action), the Company is not obligated to pay  
Diversified for any such printing services unless and until the  
Company has available cash resources sufficient to satisfy all of  
the Company's obligations to non-affiliated parties, all of the  
Company's other obligations for non-current services (including  
the Company's monthly payment obligation to A-G under the  
promissory note) and the pro rata payment for current services  
(all services received by the Company on or after July 1994)  
received by the Company from its stockholder/vendors A-G and G/K. 
  
  On information and belief, G/K and Diversified and each of them  
disagree with and dispute the Cross-Claimant's positions as set  
forth in paragraphs 34, 35 and 36 above. 
  
  As a result of the disagreements and disputes alleged herein,  
the Plaintiff believes and herein alleges that a present and  
actual genuine controversy exists between and among the Cross- 
Claimant, G/K and Diversified. 
  
  As a result of such disagreements and disputes, the Cross- 
Claimant is uncertain as to its rights, entitlements, duties  
and/or responsibilities to G/K and/or Diversified under the  
Agreement and otherwise as alleged herein; and the Cross-Claimant  
brings this action for declaratory relief and otherwise requests  
that the Court determine, judicially declare and otherwise resolve  
by its orders and judgment thereon the respective parties' rights,  
entitlements, duties and responsibilities to one another under the  
Agreement, the Corporate Resolution and the other agreements   
alleged herein.  
  
  Unless and until the Court renders such declaratory relief, on  
information and belief, the Cross-Claimant believes and alleges  
that the parties will be otherwise unable to resolve their  
disagreements and disputes as alleged herein and will, thereby,  
incur possible future, on-going debts, obligations and liabilities  
in respect of the parties' respective rights, entitlements, duties  
and/or responsibilities to one another and/or third parties under  
the Agreement or otherwise as alleged herein. 
  
  Defendants G/K, Diversified and Gannam, and each of them, are  
the agents and representatives of each of such other defendants;  
G/K and Diversified, and each of such defendants, is the  
instrumentality and "alter-ego" of Defendant Gannam; Gannam owns  
and controls G/K and Diversified; and the acts, activities and  
conduct of G/K and Diversified as alleged herein are attributable  
to Gannam as the principal, controlling person, authorized  
representative and/or agent of such corporate defendants and each  
of them. 
  
  In accordance with 25 of the Agreement, the party or parties  
determined by the Court to be the "prevailing" party in this  
action in respect of the disputes arising under or otherwise in  
respect of the Agreement as alleged herein is entitled, in  
addition to whatever other relief such prevailing party may be  
entitled to under and as a result of the Agreement, to recover its  
reasonable attorneys' fees and costs as provided for in the  
Agreement.  
  
IV. CAUSES OF ACTION  
  
	FIRST CAUSE OF ACTION  
	(Breach Of Oral Contract Against G/K And Gannam)  
  
  Paragraphs 1 through 41 are re-alleged and incorporated herein  
by this reference.  
    
In July 1994, G/K through its authorized representatives, Nasib  
Gannam and Frank Kubat, entered into an oral agreement with Cross- 
Claimant, and for the benefit of Cross-Claimant, whereby G/K  
agreed for itself and Diversified that Diversified would forego  
and/or defer collection of any amounts due and owing by the  
Company for future current printing services to be rendered by  
Diversified to the Company unless and until the Company's  
available cash was sufficient to pay all non-affiliated  
obligations, all "non-current" obligations including the Company's  
monthly promissory note obligation to A-G and, with the remaining  
cash, to make a pro rata payment to the Company's  
shareholder/vendors including A-G and Diversified for   
current services rendered by such affiliates to the Company.  
  
Under the terms of such oral agreement, both A-G and Diversified  
agreed to continue to provide, respectively, such composition and  
printing services as the Cross-Claimant required from time to time  
in its business, A-G and G/K would not be required or otherwise  
requested to make any further capital contribution to the Company  
to be used by the Company to pay its then current and anticipated  
future obligations to such stockholder/vendors and, in lieu of any  
such capital contributions, A-G and Diversified would forego or  
defer any request for payment by, and/or collection against, the  
Company for such on-going current services to be rendered by, for  
and on behalf of such tockholder/vendors to the Company.  
  
Cross-Claimant, and A-G, performed and continue to perform all of  
their obligations under such agreement; and for a period of time  
following such agreement, G/K and Diversified performed their  
obligations under such agreement.  
  
In February 1996, however, G/K and Diversified refused to provide  
any further printing services to the Cross-Claimant on the  
deferred payment basis which had been agreed upon, and on July 22,  
1996, G/K caused Diversified to and Diversified otherwise  
initiated this action against the Company to collect amounts set  
forth in Diversified's Complaint (which G/K and Diversified had  
agreed the Company would not be required to pay absent the  
satisfaction of certain conditions precedent), thereby causing a  
material breach and default of such agreement by G/K and  
Diversified.  
  
As a result of such breach/default, the Company has been injured  
and damaged in the amount to be proven at trial, but in no event  
less than the $360,133 sought by Diversified through its Complaint  
against the Company in this action.  
  
	SECOND CAUSE OF ACTION  
	(Breach Of Oral Contract Memorialized  
 	In Writing Against G/K And Gannam)  
  
Paragraphs 1 through 41 are re-alleged and incorporated herein by  
this reference.  
  
The oral agreement alleged in and as a basis for the Cross- 
Claimant's First Cause Of Action as set forth herein has been  
memorialized in the minutes of the proceedings of the meeting of  
the Company's board of directors.  
  
As a result of such breach/default, the Company has been injured  
and damaged in the amount to be proven at trial but in no event  
less than the $360,133 sought by Diversified through its Complaint  
against the Company in this action.  
  
	THIRD CAUSE OF ACTION  
	(Breach Of Contract Against G/K And Gannam)  
  
Paragraphs 1 through 47 and 50 are re-alleged and incorporated  
herein by this reference.  
  
G/K and Gannam's failure and refusal to perform, and to cause  
Diversified to perform, the agreement alleged as the basis for the  
Cross-Claimant's First and Second Causes Of Action as set forth  
herein, constituted a material breach and default by G/K and  
Gannam under the Agreement (Exhibit A).  
  
As a result of such breach/default, the Company has been injured  
and damaged in the amount to be proven at trial, but in no event  
less than the $360,133 sought by Diversified through its Complaint  
in this action.  
  
	FOURTH CAUSE OF ACTION  
	(Breach Of Oral Contract Against All Defendants   
	Re Printing Services Provided)  
  
Paragraphs 1 through 41 are re-alleged and incorporated herein by  
this reference.  
  
Pursuant to an on-going agreement between the Cross-Claimant and  
G/K and Diversified, including as alleged as the basis for claims  
by Diversified against the Company such as set forth in the  
Complaint on file in this action, G/K and Diversified agreed to  
and did provide certain printing services to the Company.  
  
As part of such agreement, G/K and Diversified expressly or  
implicitly agreed to return to the Cross-Claimant and/or the  
Company's customer all property provided to Diversified by the  
Company and/or its customer for purposes of performing such  
printing services, such as the composition images to be printed by  
Diversified.  
  
On several occasions during the Summer of 1996, pertaining to the  
Hasan Alhasawi printing job and the Mortemp printing job proposed  
to be done at Diversified (but in respect of which Diversified  
failed and refused to perform absent the Company's ability to pay  
Diversified in advance for such job), the Cross-Claimant demanded  
and/requested that Diversified return to the Company or its  
customer property owned and provided to Diversified by the Company  
and/or the customer for purposes of the performance of such  
printing jobs; and Diversified failed and refused to return or  
otherwise deliver such property to the Company and/or its  
customers thereby intentionally interfering with the Company's  
performance of its contracts with its customers and Diversified  
otherwise unlawfully converted such property as its own.  
  
The conversion of property by Diversified belonging to the Company  
and/or its customers resulted in a material breach and default  
under the agreement whereby Diversified was providing printing  
services to the Company.  
  
As a result of such breach/default, the Company has been injured  
and damaged in the amount to be proven at trial but in no event  
less than $25,000.  
  
	FIFTH CAUSE OF ACTION  
	(Breach Of Contract Against G/K And Gannam  
	Re Printing Services Provided)  
  
Paragraphs 1 through 42, and 56 through 59, are re-alleged and  
incorporated herein by this reference.  
  
Diversified's failure and refusal to return property to the Cross- 
Claimant and/or its customer as alleged as the basis for the  
Plaintiff's Fourth Cause Of Action, and G/K and Gannam's failure  
and refusal to cause Diversified to return or otherwise deliver  
such property to the Company and/or its customer constituted a  
material breach of and default under the   
  
Agreement (Exhibit A) under which Diversified performs printing  
services for the Company.  
  
As a result of such breach/default, the Company has been injured  
and damaged in the amount to be proven at trial, but in no event  
less than $25,000.  
  
	SIXTH CAUSE OF ACTION  
	(Breach Of Implied Covenant Of Good Faith   
	And Fair Dealing Against All Defendants)  
  
Paragraphs 1 through 41 are re-alleged and incorporated herein by  
this reference.  
  
The acts and conduct alleged herein constituted a breach of the  
implied covenant of good faith and fair dealing attendant to and  
arising out of the agreements alleged herein, including the  
Agreement (Exhibit A).  
  
As a result of such breach of the implied covenant of good faith  
and fair dealing, the Company has been injured and damaged in the  
amount to be proven at trial, but in no event less than the  
$360,133 sought be Diversified through its Complaint in this  
action.  
  
	SEVENTH CAUSE OF ACTION  
	(Declaratory Relief Against All Defendants)  
  
Paragraphs 1 through 41, 42 and 44 through 65, are alleged and  
incorporated herein by this reference.  
  
As a result of the present and actual genuine controversy existing  
between and among the Cross-Claimant and the defendants, and each  
of them, as alleged in this Complaint, the Court is empowered and  
otherwise authorized to provide, and is hereby requested to  
provide, under California Code of Civil Procedure Section 1062, et  
seq., and otherwise, the following declaratory relief:  
  
	(1)  a declaration, order and judgment that the Cross- 
Claimant is relieved of any and all further obligation of  
whatsoever nature and kind to purchase printing services from  
Diversified under the Agreement;  
	  
	(2)  a declaration, order and judgment that the Cross- 
Claimant is not obligated under the Agreement to purchase all of  
its printing requirements from Diversified;  
	  
	(3)  a declaration, order and judgment that the Cross- 
Claimant is not obligated to pay for the printing services which  
are the subject of Diversified's Complaint against the Company  
unless and until the condition precedent to the Company's  
obligation to pay for such services (cash available to pay (i) all  
obligations to non-affiliated parties, (ii) the Company's monthly  
note obligation to A-G and (iii) a pro rata distribution to both  
A-G on amounts due and owing to such stockholder/vendors for  
current services) is satisfied;  
  
	REQUEST FOR RELIEF  
  
	WHEREFORE, the Cross-Claimant requests the following relief  
on its Cross-Complaint:  
  
	1.  On the First Cause Of Action For Breach Of Oral Contract  
Against G/K and Gannam, for damages according to proof at trial,  
but in no event less than $360,133;  
	  
	2.  On the Second Cause Of Action For Breach Of Oral  
Contract Memorialized In Writing Against G/K and Gannam, for  
damages according to proof at trial, but in no event less than  
$360,133;  
	  
	3.  On the Third Cause Of Action For Breach Of Contract  
Against G/K And Gannam, for damages according to proof at trial,  
but in no event less than $360,133;  
	  
	4.  On the Fourth Cause Of Action For Breach Of Oral   
Contract Against Diversified, G/K Re Printing Services Provided,  
for damages according to proof at trial, but in no event less than  
$25,000;   
  
	5.  On the Fifth Cause Of Action Against G/K And Gannam Re  
Printing Services Provided, for damages according to proof at  
trial, but in no event less than $25,000;   
  
	6.  On the Sixth Cause Of Action For Breach Of Implied   
Covenant Of Good Faith And Fair Dealing Against Diversified, G/K  
And Gannam, for damages according to proof at trial, but in no  
event less than $360,133;  
  
	7.  On the Seventh Cause Of Action For Declaratory Relief  
Against All Defendants, as follows:  
  
		(i)  a declaration, order and judgment that the Cross- 
Claimant is relieved of any and all further obligation of  
whatsoever nature and kind to purchase printing services from  
Diversified under the Agreement;  
		(ii)  a declaration, order and judgment that the  
Cross-Claimant is not obligated under the Agreement to purchase  
all of its printing requirements from Diversified; and  
		(iii)  a declaration; order and judgment that the  
Cross-Claimant is not obligated to pay for the printing services  
which are the subject of Diversified's Complaint against the  
Company unless and until the condition precedent to the Company's  
obligation to pay for such services 	(cash available to pay  
(i) all obligations to non-affiliated parties, (ii) the Company's  
monthly note obligation to A-G and (iii) a pro rata distribution  
to both A-G on amounts due and owing to such stockholders/vendors  
for current services)is satisfied;  
		  
FURTHER, in respect of all of the above-referenced Causes Of  
Action, the Cross-Claimant requests further relief including costs  
of suit including reasonable attorneys' fees as provided for in  
the Agreement, pre-judgment interest and such other and further  
relief as the Court deems fair and appropriate under the  
circumstances.  
  
Dated:  September 10, 1996  
  
  
				Respectfully submitted,  
  
				LAW OFFICES OF RANDOLPH STILES, ESQ.  
  
				ss/Randolph Stiles  
				Randolph Stiles, Esq.  
				Attorney for Cross-Claimant  
				Datacat, Inc.  
  
 ..............End Pleading dated 9/10/96...................  
  
 .............Begin Pleading dated 11/7/96.................  
  
DIVERSIFIED vs. DATACAT   
SUMMONS ON CROSS-COMPLAINT  
(CITATION JUDICIAL)  
NOTICE TO CROSS-DEFENDANTS  
ROBERT S. COPE, an individual; AUTO-GRAPHICS, INC., a California  
corporation,  
Cross-Defendants,  
- and -  
DATACAT, INC., a California Corporation,  
Nominal Cross-Defendant and  
Cross-Defendant  
  
YOU ARE BEING SUED BY: CROSS-COMPLAINANTS  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, 	INC., a California  
corporation;   
GANNAM/KUBAT PUBLISHING, INC., a California corporation  
  
You have 30 CALENDAR DAYS after this summons is served on you to  
file a typewritten response at this court.  A letter or phone call  
will not protect you; your typewritten response must be in proper  
legal  form it you want the court to hear your case.  If you do  
not me your response on time, you may lose the case, and your  
wages, money and property may be taken without further warning  
from the court.  There are other legal requirements. You may want  
to call an attorney right away.  It you do not know an attorney,  
you may call an attorney referral service or a legal aid office  
(listed in the phone book).	  
  
CASE NUMBER   	 766 695  
Judge C. Robert Jameson   Dept. 11  
The name and address of the court is:	   
  
Orange County Superior Court  
700 Civic Center Drive, West  
PO Box 1994  
Santa Ana, California 92701  
County of Orange  
  
The name, address, and telephone number of Cross-Complainants  
attorney, is:  
  
GRAHAM AND JAMES LLP		(714) 224-2000  
KENNETH B. JULIAN, Bar No. 149840  
KARL A. SANDOVAL, Bar No. 117111  
4675 MacArthur Court, Suite 800  
Newport Beach, California 92660  
  
DATE	11/08/96	ALAN SLATER,	Clerk, 	by ANGELA KN0X,  
Deputy  
	  
GRAHAM & JAMES LLP ~  
Kenneth B. Julian (State Bar # 149840)  
Karl A. Sandoval (State Bar #170190)  
4675 MacArthur Court, Suite 800  
Newport Beach, California 92660  
(714) 224-2000  
  
Attorneys for Plaintiff/Cross-Defendant/Cross-Complainant   
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC.,   
Cross-Defendant/Cross-Complainant   
GANNAM/KUBAT PUBLISHING, INC.,   
Cross-Defendant NASIB GANNAM  
  
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE  
         Case No.: 766695  
Assigned For All Purposes To:  Honorable G. Robert Jameson  
Depar(tm)ent 11  
  
CROSS-COMPLAINT BY GANNAM/KUBAT PUBLISHING, INC. AND DIVERSIFIED  
PRINTING AND PUBLISHING SERVICES, INC. AGAINST CROSS-DEFENDANTS  
AUTO-GRAPHICS, INC. AND ROBERT S.   
COPE FOR DAMAGES AND INJUNCTIVE RELIEF  
  
(BREACH OF FIDUCIARY DUTY, WASTE OF CORPORATE ASSETS, BREACH OF  
CONTRACT, CONVERSION, FRAUD, CONSTRUCTIVE FRAUD, UNJUST  
ENRICHMENT, CONSTRUCTIVE TRUST, MONEY HAD AND RECEIVED, ACCOUNTING  
AND FRAUDULENT CONVEYANCES)  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation,	  
Plaintiff,	  
 
vs. 
  
DATACAT, INC., a California corporation; and DOES 1 through 25,  
inclusive  
		Defendants.  
  
DATACAT, INC. a California corporation,  
		Cross-Claimant,  
vs.  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a  
	California corporation  
GANNAM/KUBAT PUBLISHING, INC., a California corporation;  
NASIB GANNAM, an individual, and DOES 1 through 5,  
		Cross-Defendants.  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a  
	California corporation  
GANNAM/KUBAT PUBLISHING, INC., a California corporation;  
		Cross-Complainants.  
vs.  
  
 ROBERT S. COPE, an individual; AUTO-GRAPHICS, INC., a California  
corporation,  
  		Cross-Defendants,  
		- and -  
DATACAT, INC., a California corporation,  
		Nominal Cross-Defendant and Cross-Defendant.  
  
  
COMES NOW, cross-complainant GANNAM/KUBAT PUBLISHING, INC., suing  
on its own behalf as well as derivatively on behalf of DATACAT,  
INC. and cross-complainant DIVERSIFIED PRINTING AND PUBLISHING  
SERVICES, INC., suing on its own behalf, and  for their Cross- 
Complaint, allege as follows:  
  
A. The Parties.  
  
1.  Cross-complainant GANNAM/KUBAT PUBLISHING, INC. ("GK") is and,  
at all  times herein relevant, was a corporation organized and  
existing under the laws of the State of California. GK is in the  
publishing business with offices located in the County of Orange,  
State of California.  GK is owned by cross-defendant NASIB GANNAM  
("MR GANNAM").  
  
2.  Cross-complainant DIVERSIFIED PRINTING AND PUBLISHING  
SERVICES,  INC. ("DIVERSIFIED") is and, at all times herein  
relevant, was a corporation organized and existing under the laws  
of the State of California. DIVERSIFED is in the   
printing business with offices located in the County of Orange,  
State of California. DIVERSIFIED also is owned by MR. GANNAM.  
  
3.  Nominal cross-defendant DATACAT, INC. ("DATACAT") is and, at  
all times herein relevant, was a corporation organized and  
existing under the laws of the State of California.  DATACAT is in  
the business of publishing printed catalogs, primarily for  
heating, air conditioning, refrigeration and related products.   
  
4.  Cross-complainants GK and DIVERSIFIED (collectively "Cross- 
Complainants") are informed and believe, and thereon allege, that  
cross-defendant AUTO-GRAPHICS, INC. ("AG") is and, at all times  
herein relevant, was a public corporation organized and existing  
under the laws of the State of California, doing business in the  
County of Orange.  
  
5.  Cross-Complainants are informed and believe, and thereon  
allege, that Cross-defendant ROBERT S. COPE ("MR. COPE") is and,  
at all times herein relevant, was the Chairman of the Board of  
Directors of DATACAT and the majority owner, President, and a  
controlling director of AG.     
  
6.  The true names and capacities, whether individual, corporate,  
associate, or otherwise, of the cross-defendants sued herein as  
ROES 1 through 25, inclusive, are unknown to Cross-Complainants,  
which therefore sue said cross-defendants by such fictitious  
names. Cross-Complainants will amend this Cross-Complaint to  
allege said cross-defendants' true names and capacities when  
ascertained. Cross-complainants are informed and believe, and  
thereon allege, that each of such fictitiously named cross- 
defendants is responsible in some manner for the occurrences  
herein alleged and that Cross-Complainants' damages as herein  
alleged were proximately caused by said cross-defendants' conduct.  
  
7.  Cross-Complainants are informed and believe, and thereon  
allege, that cross-defendants AG, MR. COPE, and ROES 1 through 25,  
inclusive (collectively "Cross-Defendants"), were the agent,  
partner, officer, and/or employee of each of their co-Cross- 
Defendants and, in doing the things hereinafter alleged, were  
acting within the course and scope of such agency, partnership,  
office, and/or employment.  
  
B. FACTUAL BACKGROUND  
  
8. In or about 1989, GK was the owner of a valuable database (the  
"Database") containing information useful for producing printed  
catalogs for heating, air conditioning, refrigeration and related  
products. In or about mid-1989, GK and AG commenced discussions  
regarding the possible formation of a company to produce catalogs  
for the referenced products, whereby GK would contribute the  
Database, and AG would contribute certain Database development and  
maintenance services.  
  
9. On or about June 12, 1990, GK and AG entered into a  
shareholders agreement (the "Shareholders Agreement") for the  
formation of DATACAT. A true and correct copy of the Shareholders  
Agreement is attached hereto as Exhibit "A" and is incorporated  
herein by this reference as though set forth in full. Effective on  
or about September 27, 1990, DATACAT was formed and incorporated,  
and adopted the Shareholders Agreement.   
  
10. Pursuant to the Shareholders Agreement, GK and AG each  
respectively own, and have owned, 50% of the shares of DATACAT.  
Under that agreement, AG had right to   
appoint, and did appoint, the majority of DATACAT's Board of  
Directors (the "Board"). In addition to a mutual cash capital  
contribution, GK contributed the Database, and AG was to  
contribute certain services and labor for development and  
maintenance of the Database.   
  
11. Pursuant to Paragraphs 8 and 9 of the Shareholders Agreement,  
DATACAT is and was required to purchase all catalog printing  
services from DIVERSIFIED, and to purchase all catalog composition  
services from AG. Under the shareholders Agreement, DIVERSIFIED  
and AG were to bill DATACAT for such services at reasonable and  
customary prices, and DATACAT was required to pay DIVERSIFIED and  
AG for such services, consistent with Paragraphs 8 and 9 of said  
agreement.  
  
12. Cross-Complainants are informed and believe, and thereon  
allege that, at all relevant times, Michele Clark ("Ms. Clark") is  
and was employed fu11-time as the controller and/or assistant  
controller of AG and was under the direction and control of MR.  
COPE and AG.   
  
13. Cross-Complainants are informed and believe, and thereon  
allege that, at all relevant times, a relationship of trust and  
confidence existed between AG, on the one hand, and DATACAT and  
GK, on the other, in that AG was entrusted by DATACAT and GK to  
handle, and did handle, all of DATACAT's bookkeeping, accounts  
payable, and other financial matters and, at all times, DATACAT  
and GK entrusted AG to perform these functions in accordance with  
the Shareholders agreement, the direction of the   
Board, and applicable law.  
  
14 As a matter of practice, and the agreement of GK and AG, all  
moneys received by DATACAT were required first to be used to meet  
payroll and other necessary expenses, and to pay third-party  
creditors. Any excess funds were then to be applied to the  
invoices of DIVERSIFIED and AG for printing and composition  
services rendered, on an equal priority and roughly dollar-for- 
dollar basis.  
  
15. Cross-Complainants are informed and believe, and thereon  
allege, that during the 1990 through 1993 time-frame, through  
mismanagement, miscalculations, and inefficiencies, AG experienced  
certain cost overruns on DATACAT-related projects and database  
services. On information and belief, during this period of time,  
AG also experienced a down-turn in the profitability of other  
aspects of its business,   
independent of DATACAT-related projects.  
  
16. Cross-Complainants are informed and believe, and thereon  
allege that, in late 1993 and early 1994, Cross-Defendants, and  
each of them, demanded that AG receive additional compensation for  
services allegedly rendered, prior to 1994, for development and  
maintenance of the Database in the amount of several hundred  
thousand dollars (the "Database Recovery Demands"). On information  
and belief, the Database Recovery Demands were grossly over  
inflated, and contained proposed charges to DATACAT for services  
which AG was under an obligation to render free of charge as part  
of its initial capital contribution under the Shareholders  
Agreement, and for other items not properly or appropriately  
chargeable to DATACAT.  
  
17. Cross-Complainants are informed and believe, and thereon  
allege, that a special meeting of the Board was held on or about  
July 28, 1994 (the "Board Meeting"), at the offices of AG. Among  
other items, the agenda proposed consideration of "Auto-Graphics  
Pre-1994 Database Recovery Issue." In this regard, AG provided GK  
with a memorandum outlining AG's latest Database recovery proposal  
(the "Database Recovery Memorandum"). A true and correct copy of  
the Database Recovery Memorandum is attached hereto as Exhibit "B"  
and is incorporated herein by this reference as though set forth  
in full.  On information and belief, the Database Recovery  
Memorandum was prepared by Robert Bretz ("Mr. Bretz"), then a  
member of AG's Board of Directors.  
  
18.  The Database Recovery Memorandum proposed, among other  
things, that DATACAT pay to AG $575,000 for past "development and  
maintenance" work allegedly performed by AG on the Database from  
1990 through December 31, 1993. The Database Recovery Memorandum  
further provided that the $575,000 was to be recovered from  
certain module selection fees, increased growth margins, and other  
AG "cost savings," and was to be paid over approximately three  
years (the "AG Database Recovery Proposal").   
  
19. During the Board Meeting on July 28, 1994, MR. GANNAM, and  
Frank Kubat ("Mr. Kubat"), another member of the Board and then  
President of DATACAT, rejected the AG Database Recovery Proposal.  
  
20. After further discussion, in the spirit of compromise and  
cooperation, MR. GANNAM made a compromise proposal (the "GK  
Compromise Proposal") under which AG could recover some portion of  
the costs it was claiming for Database Recovery to be paid  
primarily out of any future profits of DATACAT (i.e., after  
necessary expenses and after DIVERSIFIED and AG were paid for  
their respective printing and composition services). At that time,  
AG, through MR. COPE and Mr. Bretz, would not agree to the GK  
Compromise Proposal, and the Board Meeting terminated without any  
agreement being reached with respect to Database Recovery.  
  
21.  On August 3, 1994, Mr. Bretz, on behalf of AG, made a  
counter-proposal to the GK Compromise Proposal which reduced the  
amount of proposed Database Recovery from $575,000 to $500,000,  
and changed other terms and conditions (the "AG Database Recovery  
Counter-Proposal"). A true and correct copy of a letter from Mr.  
Bretz, dated August 3, 1994, making the AG Database Recovery  
Counter-Proposal is attached hereto as Exhibit "C" and is  
incorporated herein by this reference as though set forth in full.  
No board meeting, or shareholders meeting, was ever held to  
discuss, adopt, or vote on the AG Database Recovery Counter- 
Proposal, or any other such further proposal. Nor did GK, Mr.  
Gannam, or Mr. Kubat ever give their consent to the AG Database  
Recovery Counter-Proposal, or any other such further proposal.  
  
22. Cross-Complainants are informed and believe, and thereon  
allege, that sometime in late 1994 and early 1995, Cross- 
Defendants, and each of them, took advantage of the trust and  
confidence placed in AG with respect to DATACAT's financial  
affairs, and secretly, and without the consent, knowledge, or  
approval of the Board, Mr. Gannam, Mr. Kubat, or GK, Cross- 
Defendants began to misappropriate, misapply, and unlawfully  
divert to AG moneys belonging to DATACAT. Specifically, on  
information and belief, in early 1995, Cross-Defendants  
misappropriated, misapplied, and unlawfully diverted to AG moneys  
belonging to DATACAT in the sum of (1) $33,749 in January, (2)  
$67,769 in March, (3) $26,257 in April, (4) $15,972 in May, and  
(5) $15,972 in June, totaling almost $160,000.  
  
23. Cross-Complaints are informed and believe, and thereon allege,  
that in early 1995, Mr. Kubat discussed with MR. COPE the lack of  
any agreement with respect to Database Recovery and other  
financial issues involving AG and DATACAT. During said  
conversations, MR. COPE concealed and failed to disclose to Mr.  
Kubat that Cross-Defendants, and each of them, had  
misappropriated, misapplied, and unlawfully diverted, and were  
continuing to misappropriate, misapply, and unlawfully divert the  
above-referenced funds of DATACAT.  
  
24. Cross-Complaints are informed and believe, and thereon allege,  
that in or about June 1995, after Cross-Defendants had  
misappropriated almost $160,000, Mr. Bretz set-up a meeting with  
Mr. Kubat. At the meeting, Mr. Bretz informed Mr. Kubat for the  
first time that AG had taken and appropriated moneys from  
DATACAT`s accounts.  
  
25. Cross-Complaints are informed and believe, and thereon allege,  
that shortly after the meeting with Mr. Bretz, Mr. Kubat asked Ms.  
Clark about the misappropriated funds. At that time, Ms. Clark  
told Mr. Kubat that MR. COPE instructed her take the above- 
referenced sums from DATACAT and pay them to AG, or words to that  
effect. On information and belief, Cross-Defendants caused  
unauthorized entries to be made in the books and records of  
DATACAT to cover-up, justify, and legitimize the referenced  
misappropriated funds.  
  
26.  Additionally, on or about July 18, 1995, Mr. Bretz drafted a  
letter which falsely stated that the DATACAT "Board formally  
approved payment by DATACAT of $575,000 over a three year period  
in equal monthly payments commencing September 1, 1994, and that  
such agreement has been properly performed by DATACAT pursuant to  
such prior Board approval and authority" and attached a proposed  
DATACAT Resolution ratifying Cross-Defendants' unlawful  
misappropriation of DATACAT's funds (the "Proposed Ratifying  
Resolution"). A true and correct copy of that letter and proposed  
resolution are attached hereto collectively as Exhibit "D" and are  
incorporated herein by this reference as though set forth in full.  
No board meeting, or shareholders meeting, was ever held to  
discuss, adopt, or vote on the Proposed Ratifying Resolution and  
GK, MR. GANNAM, and Mr. Kubat did not give, and would not give  
their consent, for DATACAT to ratify or retroactively approve of  
the unlawful conduct of Cross-Defendants, as alleged herein.  
  
27. After learning of Cross-Defendants' fraud and misappropriation  
of funds, GK and Mr. Kubat demanded that Cross-Defendants  
immediately cause said moneys to be restored to DATACAT, but  
Cross-Defendants have failed and refused, and continue to fail and  
refuse, to restore such funds to DATACAT. Additionally, even after  
the Cross-Defendants' fraud was exposed, and over the objections  
of GK, MR. GANNAM, and others, on information and belief, Cross- 
Defendants continued to misappropriate, misapply, and unlawfully  
divert additional sums from DATACAT, at a rate of $15,972 per  
month, to AG during the time period July 1995 through the present,  
totaling over $250,000. Hence, as of the filing of this Cross- 
Complaint, on information and belief, Cross-Defendants, and each  
of them, have caused the misappropriation, misapplication, and  
unlawful diversion of over $410,000 from DATACAT to AG  
(the"Misappropriated Funds").  
  
28.  As a direct and proximate result of Cross-Defendants'  
conduct, DATACAT has suffered financial hardship and has been  
unable to pay DIVERSIFIED for printing services rendered.  
  
29.  Despite the demands of Cross-Complainants, and each of them,  
as well as MR. GANNAM and others, Cross-Defendants, and each of  
them, have failed and refused, and continue to fail and refuse, to  
refrain from taking $15,972 per month from DATACAT and paying it  
to AG.  
  
30. Cross-Complainants allege on information and belief, that  
Cross-Defendants, and each of them, have dominated and controlled  
the operations of DATACAT, and have appropriated, used, and  
transferred, DATACAT's assets and resources to AG unlawfully and  
without Board approval.  
  
31. Any formal demand made by GK to DATACAT's Board is excused  
since such a demand would have been a futile and useless act for  
the following reasons:  
       (1 ) AG has the right to appoint, and has appointed, a  
majority of the Board, which consists of MR. COPE, his son Paul  
Cope, and another director affiliated with AG (the "AG-Affiliated  
Directors");   
       (2) The Chairman of the Board, MR. COPE, is accused of  
committing and/or conspiring to commit the wrongs complained of in  
the Cross-Complaint;  
       (3) The wrongful acts of Cross-Defendants constitute  
violations of law and fiduciary duties which conduct is incapable  
of ratification;   
       (4) The AG Affiliated Directors cannot be relied upon to  
reach an independent decision as to whether to commence the  
demanded actions against Cross-Defendants because these directors  
are controlled by MR. COPE, and have consistently acceded to and  
will continue to accede to his directives and demands and such  
control by MR. COPE has impaired the ability of the AG-Affiliated  
Directors to exercise their own business judgment and rendered  
them incapable of reaching an independent judgment as to whether  
to accept the demands of Cross-Complainants;  
	and  
     (5) On information and belief, the AG-Affiliated Directors  
have long been aware of the wrongdoing of Cross-Defendants, as  
alleged herein, but have chosen not to protect DATACAT or seek to  
recover the misappropriated funds, and have refused to take action  
with respect to these claims because any such action would require  
them to sue themselves (Paul Cope would have to sue his father)  
and affiliated enterprises.   
  
32.  A true and correct copy of this Cross-Complaint was hand- 
delivered to DATACAT, prior to its filing with the Court.  
  
  
I.      FIRST CAUSE OF ACTION  
  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
All Cross-Defendants For Breach of Fiduciary Duty)  
  
33. Cross-Complainants reallege and incorporate herein by this  
reference as though set forth in full each and every allegation  
contained in paragraphs 1 through 32, inclusive, of this Cross- 
Complaint.  
  
34. GK is informed and believes, and thereon alleges, that by  
virtue of MR. COPE's position as Chairman of the Board and AG's  
status as a controlling shareholder of DATACAT, they owed  
fiduciary duties to DATACAT and to GK to exercise due care and  
honesty in the management, administration and operation of  
DATACAT's affairs and in their dealings with GK. Furthermore, by  
virtue of his position as Chairman of the Board, MR. COPE owed a  
fiduciary duty to DATACAT and to GK, not to favor his own  
interests, or the interests of AG, at the expense of DATACAT or  
GK. AG further owed a fiduciary duty as trustee of DATACAT's  
financial matters and custodian of its financial books and records  
as alleged herein.  
  
35. Nevertheless, commencing in late 1994, and early 1995, Cross- 
Defendants, and each of them, secretly and unlawfully caused the  
misappropriated the funds of DATACAT, as alleged herein. The  
actions of Cross-Defendants, and each of them, in taking the  
misappropriated funds, constituted ultra vires actions, which were  
without notice to, or approval of, the Board or GK, and resulted  
in unauthorized and secret transactions in favor of Cross- 
Defendants, and each of them. Cross-Defendants, and each of them,  
later engaged in conduct to attempt to cover-up and legitimize the  
taking of the misappropriated funds, including, without  
limitation, causing unapproved and unauthorized entries in the  
financial books and records of DATACAT, and knowingly and falsely  
taking the position that the Database Recovery Proposal was  
adopted and approved by the Board at the Board Meeting of July 28,  
1994.  
  
36. GK further is informed and believes, and thereon alleges, that  
the unlawful and unauthorized taking of the misappropriated funds  
by Cross-Defendants, and each of   
them, constitutes self dealing, and represents a clear conflict of  
interest on the part of Cross-Defendants, and each of them, in  
breach of their fiduciary duties to DATACAT and GK. On information  
and belief, Cross-Defendants, and each of them, continue to engage  
in such self-dealing conduct, despite a demand that they cease  
such conduct and return the misappropriated funds to DATACAT.  
  
37. Cross-Defendants therefore have breached their fiduciary  
duties as directors, de facto officers, controlling shareholders,  
and/or trustees of DATACAT's financial affairs in numerous  
respects, and have failed to exercise that requisite degree of  
care, skill, honesty and obedience to law and good faith which  
persons similarly situated would have exercised, as required by  
applicable law.  
  
38. As the result of the Cross-Defendants' breaches of their  
fiduciary duties, DATACAT and GK have been damaged in a sum  
according to proof at trial. Furthermore, GK is entitled to  
injunctive relief to prevent Cross-Defendants, and each of them,  
from further misappropriating and dissipating the assets of  
DATACAT, without proper authorization of the Board.  
  
39. GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, in doing the acts herein alleged,  
acted with malice, oppression, fraud, and in conscious disregard  
of the rights of DATACAT and GK, such that DATACAT and GK are  
entitled to an award of punitive and exemplary damages against  
Cross-Defendants, each of them, in a sum according to proof at  
trial.  
  
II.     SECOND CAUSE OF ACTION  
  
(By GK Individually And Derivatively On Behalf of DATACAT Against  
All Cross-Defendants For Waste of Corporate Assets)  
  
40. GK realleges and incorporates herein by this reference as  
though set forth in full each and every allegation contained in  
paragraphs 1 through 39, inclusive of this Cross-Complaint.  
  
41. GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, misappropriated and converted for  
AG's use and benefit the misappropriated funds, as alleged herein,  
and therefore have caused the dissipation and waste of DATACAT's  
corporate assets. By reason of their wrongful conduct, as alleged  
herein, Cross-Defendants, and each of them, have wasted DATACAT's  
valuable assets and otherwise caused DATACAT to be unable to meet  
its financial obligations to DIVERSIFIED and other creditors and,  
as a result of such conduct, DATACAT and GK have been  
substantially damaged.  
  
42. As a proximate result of the conduct of Cross-Defendants, and  
each of them, DATACAT and GK have sustained damage in an amount  
according to proof at trial.  Furthermore, GK is entitled to  
injunctive relief to prevent the further misappropriation funds by  
Cross-Defendants, to prevent the further transferring,  
dissipating, wasting, and misuse of any of DATACAT's assets and  
property without proper authorization of the Board, and ordering   
AG to restore all misappropriated funds to DATACAT.  
  
43. GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, acted with malice, oppression,  
fraud, and in conscious disregard of the rights of DATACAT and GK,  
such that DATACAT and GK are entitled to an award of punitive and  
exemplary damages in an amount according to proof at trial.  
  
		.  
III.     THIRD CAUSE OF ACTION  
(By GK Individually And Derivatively On Behalf of DATACAT, And By   
DIVERSIFIED Against AG For Breach Of The Shareholder Agreement)  
  
44. Cross-Complainants, and each of them, reallege and incorporate  
herein by this reference as though set forth in full each and  
every allegation contained in paragraphs 1 through 43 inclusive,  
of this Cross-Complaint.  
  
45. Pursuant to the Shareholder Agreement, and the subsequent  
agreement of the parties, AG was entrusted to handle the day-to- 
day financial affairs of DATACAT and was entrusted with custody of  
financial books and records. AG breached the Shareholder   
Agreement by unlawfully misappropriating, diverting, and taking  
funds from DATACAT, and converting them to its own use and  
benefit. AG further breached the Shareholder Agreement by failing  
and refusing to return such misappropriated funds, and by failing  
and refusing to cease from further misappropriating the funds of  
DATACAT.  
  
46. At all relevant times, DIVERSIFIED was an express third-party  
beneficiary of the Shareholder Agreement. AG further breached  
paragraph 9 of the Shareholder Agreement by taking steps to  
prevent DATACAT from paying DIVERSIFIED for printing services  
rendered in connection with DATACAT's projects, including, without  
limitation, taking above-referenced misappropriated funds.  
Pursuant to paragraph 9 of the Shareholder Agreement,  DATACAT was  
required to purchase all printing services from DIVERSIFIED. In or  
about August, 1996,  AG further breached the Shareholder Agreement  
by preventing DATACAT from sending its printing jobs and projects  
to DIVERSIFIED and caused DATACAT to cease using DIVERSIFIED for  
its printing on DATACAT projects.  
  
47. Cross-Complainants, and each of them, have fully performed all  
acts, services, and conditions required by the Shareholder  
Agreement and have made a demand upon AG to return the  
misappropriated funds, to cease from further misappropriating the  
funds of DATACAT, to pay DIVERSIFIED monies owed for printing  
services and to cause DATACAT to continue to print with  
DIVERSIFIED, but Cross-Defendants, and each of them, have failed  
and refused to accede to such demands.  
  
48. As a proximate result of the acts of the Cross-Defendants, and  
each of them, in breaching the Shareholder Agreement, Cross- 
Complainants, and each of them, have been damaged in an amount  
according to proof at trial.  
  
IV.     FOURTH CAUSE OF ACTION  
(By GK Individually And Derivatively On Behalf of DATACAT Against  
All Cross-Defendants For Conversion)  
  
49. Cross-Complainant GK realleges incorporates herein by this  
reference as though set forth in full each and every allegation  
contained in paragraphs 1 through 48, inclusive, of this Cross- 
Complaint.  
  
50. GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, misappropriated, misapplied, and  
diverted to AG large sums of money belonging to DATACAT, as  
alleged herein, and have converted such sums for AG's use and  
benefit. On information and belief, Cross-Defendants, and each of  
them, acted secretly and fraudulently in taking the  
misappropriated funds, and have utilized such funds in favor of AG  
for purposes not disclosed, authorized, sanctioned or approved by  
the Board, and in violation of the Shareholder Agreement, and  
other applicable law.  
  
51.  Notwithstanding GK's demands for repayment of the  
misappropriated funds, Cross-Defendants, and each of them, have 
failed and refused, and continue to fail and refuse, to repay the 
converted funds to DATACAT. As a result of said conversion of 
funds, 
by Cross-Defendants, and each of them, DATACAT and GK have been 
damaged 
in a sum according to proof at trial. Furthermore, GK is entitled 
to  
injunctive relief to prevent the Cross-Defendants, and each of  
them, from further appropriating and diverting the funds of  
DATACAT without proper authorization.   
  
52.  GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, acted with malice, oppression, and  
fraud and in conscious disregard of the rights of DATACAT and GK  
and others, such that DATACAT and GK are entitled to an award of  
punitive and exemplary damages in an amount subject to proof at  
trial.  
  
V.     FIFTH CAUSE OF ACTION  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
All Cross-Defendants For Fraud)  
  
53. GK realleges and incorporates herein by this reference as  
though set forth in full each and every allegation contained in  
paragraphs 1 through 52, inclusive, of this Cross-Complaint.  
  
54. By virtue of their respective positions as Chairman of the  
Board and/or controlling shareholders of DATACAT, and the trust  
and confidence placed in AG with respect to DATACAT's financial  
matters, Cross-Defendants, and each of them, had a duty to  
disclose to GK and DATACAT their diversion and taking of the  
misappropriated funds. By virtue of the contractual relationship  
between GK and AG, the covenant of good faith and fair dealing  
implied therein, and other applicable law, AG further owed a duty  
to GK to disclose fully the taking of the misappropriated funds  
  
55. GK is informed and believes, and thereon alleges that, from  
late 1994 through mid 1995, Cross-Defendants took the  
misappropriated funds and failed to disclose, suppressed, and  
concealed to material facts concerning the misappropriated funds  
in their continued dealings with GK and DATACAT with intent to  
defraud DATACAT and GK. Cross-Defendants, and each of them,  
further created a duty to disclose fully to Cross-Defendants, and  
each of them, the existence, nature, and scope of their taking of  
the misappropriated funds, in early 1995, when MR. COPE undertook  
to speak to Mr. Kubat on various financial matters with respect to  
AG and DATACAT, including, without limitation, Database Recovery,  
but failed to disclose and concealed the taking of such funds.  
  
56. Cross-Complainants are informed and believe, and thereon  
allege, that Cross-Defendants, and each of them, breached their  
respective duties to disclose to GK and DATACAT the material facts  
concerning the misappropriated funds. GK is informed and believes,  
and thereon alleges, that Cross-Defendants, and each of them, took  
the misappropriated funds and made the omissions concerning said  
funds, with the intent to defraud GK and DATACAT, to fraudulently  
and unjustly enrich AG, and to deprive DIVERSIFIED and GK of  
monies lawfully owing to them under the Shareholders   
Agreement.  
  
57. During the time of Cross-Defendants' fraudulent conduct, GK  
was unaware of the true facts, and would have taken steps to  
recover the misappropriated funds, to prevent further  
misappropriation of funds, and to obtain monies lawfully owing to  
GK and DIVERSIFIED under the Shareholder Agreement.  
  
58. As a proximate result of the fraudulent conduct of Cross- 
Defendants, and each of them, as alleged herein, DIVERSIFIED has  
been deprived of monies owing it under the Shareholder Agreement,  
DATACAT has been deprived of funds necessary for its operations,  
and GK and DATACAT otherwise have been damaged in an amount  
according to proof at trial.   
  
59. GK is informed and believes, and thereon alleges, that in  
doing the acts alleged above, Cross-Defendants, and each of them,  
acted fraudulently, in bad faith, and with a deliberate intent to  
vex, injure and annoy GK and acted in conscious disregard of GK's  
and DATACAT's rights. The actions of Cross-Defendants, and each of  
them, therefore constitute despicable conduct and justify the  
imposition of punitive and exemplary damages.  
  
VI.     SIXTH CAUSE OF ACTION  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
All Cross-Defendants For Constructive Fraud)  
  
60. GK realleges and incorporates herein by this reference as  
though set forth in full each and every allegation contained in  
paragraphs 1 through 59, inclusive, of this Cross-Complaint.  
  
61. In the alternative, and in addition to the forgoing, the  
actions of Cross-Defendants in taking the misappropriated funds,  
concealing and failing to disclose same to GK and DATACAT, and  
later attempting to cover-up such conduct, constitutes  
constructive fraud in view of their respective fiduciary duties to  
GK and DATACAT, and the trust and confidence GK and DATACAT placed  
in AG with respect to DATACAT's financial affairs.  
  
62. GK is informed and believes, and thereon alleges, that Cross- 
Defendants, and each of them, took the misappropriated funds and  
made the omissions concerning the misappropriated funds, with the  
intent to defraud GK and DATACAT, to fraudulently and unjustly  
enrich AG, and to deprive DIVERSIFIED and GK of monies lawfully  
owing them under the Shareholders Agreement.  
  
63. During the time of Cross-Defendants' fraudulent conduct, GK  
was unaware of the true facts, and would have taken steps to  
recover the misappropriated funds, to prevent further  
misappropriation of funds, and to obtain monies lawfully owing to  
GK and DIVERSIFIED under the Shareholder Agreement.  
  
64. As a proximate result of the fraudulent conduct of Cross- 
Defendants, and each of them, as alleged herein, DIVERSIFIED has  
been deprived of monies owing it under the Shareholder Agreement,  
DATACAT has been deprived of funds necessary for its operations,  
and GK and DATACAT otherwise have been damaged in an amount  
according to proof at trial.   
  
65. GK is informed and believes, and thereon alleges, that in  
doing the acts alleged above, Cross-Defendants, and each of them,  
acted fraudulently, in bad faith, and with a deliberate intent to  
vex, injure and annoy GK and acted in conscious disregard of GK's  
and DATACAT's rights.  The actions of Cross-Defendants, and each  
of them, therefore constitute despicable conduct and justify the  
imposition of punitive and exemplary damages.  
  
VII.     SEVENTH CAUSE OF ACTION  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
All Cross-Defendants For Unjust Enrichment/Constructive Trust)  
  
66. GK realleges and incorporates herein by this reference as  
though set forth in full each and every allegation contained in  
paragraphs 1 through 65, inclusive, of this Cross-Complaint.  
  
67. As alleged herein, GK and DATACAT entrusted AG to manage  
certain financial affairs on behalf of DATACAT and was entrusted  
to manage and use such funds for the benefit of DATACAT for lawful  
and approved purposes, consistent with the Shareholder Agreement,  
and for purposes approved by the Board. Cross-Defendants, and each  
of them, have been unjustly enriched at the expense of DATACAT and  
GK by the diversion of the misappropriated funds to AG, as alleged  
herein, despite AG's undertaking to receive and control such funds  
on behalf of DATACAT, in trust.  
  
68. As a proximate result of unjust enrichment of Cross- 
Defendants, and each of them, GK and DATACAT are entitled to  
receive restitution of any of the benefits received by Cross- 
Defendants in connection with their, direct and indirect, receipt  
of the misappropriated funds, including, but not limited to, the  
amount of the misappropriated funds and any other amount to be  
proven at trial, plus accrued interest thereon.  
  
69. By virtue of Cross-Defendants' unjust enrichment, GK and  
DATACAT are entitled to have a constructive trust imposed upon the  
misappropriated funds, and any other such funds, received for the  
direct and indirect benefit of Cross-Defendants, and each of them,  
and/or their agents, assignees, or transferees, in connection with  
the moneys entrusted to and misappropriated by Cross-Defendants.  
  
VIII.  EIGHTH CAUSE OF ACTION  
  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
AG For Money Had And Received)  
  
70. Cross-Complainants reallege and incorporate herein by this  
reference as  though set forth in full each and every allegation  
contained in paragraphs 1 through 39, inclusive, of this Cross- 
Complaint.  
  
71. Cross-Complainants are informed and believe, and thereon  
allege, that within the last four years, AG became indebted to  
DATACAT in the principle sum of approximately $410,000, for money  
had, received and taken by AG for its use and benefit, without the  
approval or consent of the Board, as alleged herein.  
  
72. Despite demand for the full amount due and owing, no part of  
said sum has been paid, and there is now due, owing, and unpaid to  
DATACAT the principle sum of approximately $410,000, plus interest  
thereon at the legal rate.  
  
IX.     NINTH CAUSE OF ACTION  
  
(By GK Individually And Derivatively On Behalf Of DATACAT Against  
All Cross-Defendants For An Accounting)  
  
73. GK realleges and incorporates herein by this reference each  
and every allegation contained in paragraphs 1 through 72,  
inclusive, of this Cross-Complaint herein as though set forth in  
full.  
  
74. Cross-Complainant has performed and fulfilled all of the  
covenants and obligations required to be performed by it under the  
Shareholder Agreement, except as to those which have been excused.  
  
75. Cross-Complainant is informed and believes, and thereon  
alleges, that as a result of Cross-Defendants' misdeeds as alleged  
hereinabove, Cross-Defendants have wrongfully and unlawfully taken  
moneys belonging to DATACAT and misappropriated them for AG's  use  
and benefit, without the knowledge or approval of the Board.  
  
76. Despite due demand therefor, Cross-Defendants, and each of  
them, have failed and refused to account for said sums. Cross- 
Complainants therefore are entitled to an accounting of all sums  
taken or received by AG from DATACAT.  
  
X.     TENTH CAUSE OF ACTION  
  
(By Cross-Complainants Against All Cross-Defendants For Fraudulent  
Transfers)  
  
77. Cross-Complainants reallege and incorporate herein by this  
reference, as though set forth in full, each and every allegation  
contained in paragraphs 1 through 76, inclusive, of  this Cross- 
Complaint.  
  
78. Within the last four years, DATACAT became indebted to  
DIVERSIFIED for printing and publishing services rendered, and  
associated freight charges and other costs, in the sum of  
approximately $360,132.76, plus interest at the legal rate.  
  
79. Cross-Complaints are informed and believe, and thereon allege,  
that from approximately early 1994 through the present, AG has  
unlawfully transferred approximately $410,000 of moneys belonging  
to DATACAT, entrusted to the control of AG for DATACAT's benefit,  
to AG's own accounts.  DIVERSIFIED further is informed and  
believes, and thereon alleges, that AG's transfer of such funds  
was made with the actual intent to hinder, delay, and defraud  
DIVERSIFIED in collection of its receivables for printing and  
publishing services rendered, and related costs.  
  
80. As a proximate result of the fraudulent transfers made by  
Cross-Defendants, and each of them, DATACAT has been financially  
unable to pay DIVERSIFIED and other creditors for moneys owing to  
them. As a further proximate result of the fraudulent transfers  
made by Cross-Defendants, and each of them, Cross-Complainants  
have been damaged in a sum according to proof at trial.  
  
81. Cross-Complainants are informed and believe, and thereon  
allege, that the above referenced transfers were made, with the  
intent to defraud Cross-Complaints, and with intent to injure  
Cross-Complainants and to deprive them of the benefits of the  
Shareholder Agreement.  
  
82.  Cross-Complainants are informed and believe, and thereon  
allege, that in doing the acts alleged above, Cross-Defendants,  
and each of them, acted fraudulently, in bad faith, and with a  
deliberate intent to vex, injure and annoy Cross-Complainants and  
acted in conscious disregard of their rights. The actions of  
Cross-Defendants, and each of them, therefore constitute  
despicable conduct and justify the imposition of punitive and  
exemplary damages.  
  
WHEREFORE, Cross-Complainant GK, individually and derivatively on  
behalf of DATACAT, and Cross-Complainant DIVERSIFIED, prays for  
judgment against Cross-Defendants, and each of them, as follows:  
1. For compensatory damages according to proof at trial;  
2. For punitive and exemplary damages on the First, Second,  
        Fourth, Fifth, Sixth, and Tenth Causes of Action;  
3. For an accounting of all sums paid to AG from DATACAT;  
4. For interest on all sums at the legal rate;  
5. For costs of suit incurred herein;  
6. For reasonable attorneys' fees pursuant to the Shareholder  
Agreement, Cal. Civ. Code  1717 and other applicable law; and  
7. For such other and further relief as the Court may deem just  
and proper.  
  
DATED: November 7, 1996	GRAHAM & JAMES LLP  
	By:  ss/ Kenneth B. Julian  
	KENNETH B. JULIAN  
              Attorneys for Plaintiff/Cross-Defendant/Cross  
	Complainant DIVERSIFIED PRINTING AND  
	PUBLISHING SERVICES, INC., Cross  
              Defendant/Cross-Complainant  
	GANNAM/KUBAT PUBLISHING, INC., Cross  
              Defendant NASIB GANNAM  
  
 ...........End Pleading dated 11/7/96.......................  
  
 ...............Begin Pleading dated 11/8/96.................  
  
GRAHAM & JAMES LLP  
Kenneth B. Julian (State Bar # 149840)  
Karl A. Sandoval (State Bar # 170190)   
4675 MacArthur Court, Suite 800  
Newport Beach, California 92660  
714) 224-2000  
  
Attorneys for Plaintiff/Cross-Defendant/Cross-Complainant   
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC.,   
Cross-Defendant/Cross-Complainant GANNAM/KUBAT PUBLISHING, INC.,   
Cross-Defendant NASIB GANNAM  
  
SUPERIOR COURT OF THE STATE OF CALIFORNIA  
   FOR THE COUNTY OF ORANGE  
   
DIVERSIFIED PRINTING AND                   Case No.: 766695  
PUBLISHING SERVICES, INC., a  
California corporation,                    Assigned For All Purposes To:  
                                           Honorable G. Robert Jameson
                                           Department 11 
  
vs.                                        ANSWER BY DIVERSIFIED PRINTING  
                                           AND PUBLISHING SERVICES, INC.,  
DATACAT, INC., a California corporation;   GANNAM/KUBAT PUBLISHING, INC.,  
and DOES 1 through 25, inclusive,          AND NASIB GANNAM TO CROSS-  
                                           COMPLAINT BY DATACAT, INC.  
Defendants.  
  
DATACAT, INC. a California corporation,  
  
Cross-Claimant,  
  
vs.  
  
DIVERSIFIED PRINTING AND PUBLISHING   
SERVICES, INC., a California corporation;   
GANNAM/KUBAT PUBLISHING, INC., a California   
corporation; NASIB GANNAM, an individual,   
and DOES I through 5,  
  
Cross-Defendants.  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a  
California corporation; GANNAM/KUBAT PUBLISHING,   
INC., a California corporation,  
  
Cross-Complainants,  
  
vs.  
  
ROBERT S. COPE, an individual; AUTO-GRAPHICS,   
INC., a California corporation,  
  
Cross-Defendants,  
  
- and -  
  
DATACAT, INC., a California corporation,  
Nominal Cross-Defendant and Cross-Defendant.  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., GANNAM/KUBAT PUBLISHING,
INC., and NASIB GANNAM (collectively the "Cross-Defendants") hereby answer
the Cross-Complaint (the "Cross-Complaint") by Cross-Complainant DATACAT,
INC. ("Cross-Complainant"), as follows:  
  
GENERAL DENIAL  
  
Pursuant to California Code of Civil Procedure   431.30(d), Cross- 
Defendants deny, generally and specifically, each and every allegation of the  
Cross-Complaint, each cause of action therein, and each and every part
thereof, and deny that Cross-Complainant has been damaged in any manner
or sum or is entitled to any relief whatsoever thereon.  
  
AFFIRMATIVE DEFENSES  
  
FIRST AFFIRMATIVE DEFENSE  
(Failure To State A Claim)  
  1. Cross-Complainant's causes of action, and each of them, fail to state
  facts sufficient to constitute a cause of action against the answering  
  Cross-Defendants.    
	  
  
SECOND AFFIRMATIVE DEFENSE  
(Limitation of Actions)  
  2. Cross-Complainant's causes of action, and each of them, are barred by
  the applicable statutes of limitation, including, without limitation,  
  C.C.P.  337,338, 339, 340, and 343.  
  
THIRD AFFIRMATIVE DEFENSE  
(Estoppel)  
  3. Cross-Complainant's causes of action, and each of them, are barred by
  the doctrine of estoppel.  
  
FOURTH AFFIRMATIVE DEFENSE  
(Waiver)  
  4. Cross-Complainant's causes of action, and each of them, are barred by
  the doctrine of waiver.  
  
FIFTH AFFIRMATIVE DEFENSE  
(Laches)  
  5. Cross-Complainant's delay in commencing this suit was unreasonable and   
inexcusable and has caused substantial prejudice to Cross-Defendants.
Cross-Complainant's purported causes of action, and each of them, therefore
are barred in whole or in part by the doctrine of laches.  
  
SIXTH AFFIRMATIVE DEFENSE  
(Unclean Hands)  
  6. Cross-Complainant's causes of action, and each of them, are  
barred by the doctrine of unclean hands.  
  
SEVENTH AFFIRMATIVE DEFENSE  
(Privilege)  
  7. Cross-Complainant's causes of action, and each of them, are  
barred by the doctrine of privilege.  
  
EIGHTH AFFIRMATIVE DEFENSE  
(Full Performance)  
  8. Cross-Complainant's causes of action, and each of them, are  
barred because Cross-Defendants performed all of their contractual,
statutory, and other duties, if any, owed to Cross-Complainant.  
  
NINTH AFFIRMATIVE DEFENSE  
(Good Faith)  
  9. Cross-Complainant's causes of action, and each of them, are  
barred because Cross-Defendants acted in good faith and conformity with
all laws, and all express and/or implied agreements, if any, which might
have existed concerning the matters allegedly set forth in the
Cross-Complaint.
  
TENTH AFFIRMATIVE DEFENSE  
(Lack of Consideration)  
  10. Cross-Complainant's causes of action, and each of them, are  
barred by a lack of, and/or failure of, consideration.  
  
ELEVENTH AFFIRMATIVE DEFENSE  
(Failure To Mitigate Damages)  
  11. Cross-Complainant's causes of action, and each of them, are  
barred in whole or in part by Cross-Complainant's failure to mitigate
damages, if any.  
  
TWELFTH AFFIRMATIVE DEFENSE  
(Cross-Complainant's Lack Of Performance)  
  12. Cross-Complainant's causes of action, and each of them, are  
barred because Cross-Complainant did not perform the duties reasonably
required of it as to the matters alleged in the Cross-Complaint.  
  
THIRTEENTH AFFIRMATIVE DEFENSE  
(Consent)  
  13. Cross-Complainant's causes of action, and each of them, are  
barred because Cross-Complainant consented to each of the acts complained
of in the Cross-Complaint.  
  
FOURTEENTH AFFIRMATIVE DEFENSE  
(Ultra Vires)  
  14. The Cross-Complaint, and each and every part thereof, is barred
  because Cross-Complainant brought the Cross-Complaint without the
  approval of the Board of Directors and, as such, it constitutes an
  ultra vires act.
  
FIFTEENTH AFFIRMATIVE DEFENSE  
(Lack of Injury)  
  15. Cross-Complainant's causes of action, and each of them, are  
barred because Cross-Complainant has not suffered any damages or other
injury as a result of any actions taken by Cross-Defendants, or any of them.  
  
SIXTEENTH AFFIRMATIVE DEFENSE  
(Statutory Violations)  
  16. The Cross-Complainant, and each and every cause of action  
therein, is barred   
by Cross-Complainant's statutory violations.  
  
SEVENTEENTH AFFIRMATIVE DEFENSE  
(Statute of Frauds)  
  17. Cross-Complainant's causes of action, and each of them, are  
barred by the   
Statute of Frauds.  
  
EIGHTEENTH AFFIRMATIVE DEFENSE  
(Mistake)  
  18. Cross-Complainant's causes of action, and each of them, are  
barred by mutual and/or unilateral mistake.  
  
NINETEENTH AFFIRMATIVE DEFENSE  
(Comparative Fault)  
  19. Any and all damages claimed to have been sustained by Cross- 
Complainant in the Cross-Complaint were caused, either wholly or in part,
by the intentional, negligent and careless conduct of Cross-Complainant.
If any damages are awarded to Cross-Complainant against Cross-Defendants,
those damages should be diminished in proportion to the amount of comparative
fault attributable to Cross-Complainant.  
  
TWENTIETH AFFIRMATIVE DEFENSE  
(Damages as a Result of Cross-Complainant's Own Conduct)  
  20. Any and all damages alleged to have been sustained by Cross-Complainant
were caused, either wholly or in part, by the intentional, negligent and
careless conduct of Cross-Complainant.  Cross-Defendants therefore are not
liable to Cross-Complainant for damages in any amount.  
  
TWENTY-FIRST AFFIRMATIVE DEFENSE  
(Breach of Good Faith Covenant)  
  21. Any recovery by Cross-Complainant is barred by Cross-Complainant's
prior breach of the implied covenant of good faith and fair dealing.  
  
TWENTY-SECOND AFFIRMATIVE DEFENSE  
(Breach of Fiduciary Duty)  
  22. Any recovery by Cross-Complainant is barred by Cross-Complainant's
prior breach of fiduciary duties.  
  
WHEREUPON, Cross-Defendants pray for judgment as follows:  
  1. That the Cross-Complaint in its entirety be dismissed herein;  
  2. That Cross-Complainant take nothing by reason of its Complaint herein;  
  3. That Cross-Defendants be awarded their costs of suit herein, including
        their reasonable expert witness fees and attorneys' fees; and  
  4. Such other and further relief as the Court may deem just and proper.  
  
DATED: November 8,1996         GRAHAM & JAMES LLP  
  
                               By:  ss/K. Julian  
                                    KENNETH B. JULIAN  
                                    Attorneys for Cross-Complainant/Cross-  
                                    Defendant/Cross-Complainant DIVERSIFIED  
                                    PRINTING AND PUBLISHING SERVICES, INC.,
                                    Cross-Defendant/Cross-Complainant  
                                    GANNAM/KUBAT PUBLISHING, INC.,
                                    Cross-Defendant NASIB GANNAM  
  
  
 ......................End Pleading dated 11/7/96...........................  
  
 .......................Begin Pleading dated 12/26/96.......................  
  
  
Robert H. Bretz, Esq.,  SB #55087  
520 Washington Boulevard, #428  
Marina del Rey, California 90292  
310/578-1957  
  
Attorney for Defendant Auto-Graphics  
and Robert S. Cope  
  
  
	SUPERIOR COURT FOR THE STATE OF CALIFORNIA  
  
	FOR THE COUNTY OF ORANGE  
  
  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation,  
  
		Plaintiff,  
  
	v.  
  
DATACAT, INC., a California corporation and DOES 1 through 25,  
inclusive,  
  
		Defendants.  
  
  
DATACAT, INC., a California corporation,  
  
		Cross-Claimant,  
  
	v.  
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC., a California  
corporation;   
GANNAM/KUBAT PUBLISHING, INC., a California corporation;   
NASIB GANNAM, an individual; and DOES 1 through 5,  
  
		Cross-Defendants.   
  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES, INC.,  a California  
corporation;   
GANNAM/KUBAT PUBLISHING, INC., a California corporation,  
  
		Cross-Complainants,  
  
	v.  
  
ROBERT S. COPE, an individual; AUTO-GRAPHICS, INC., a California  
corporation,  
  
		Cross-Defendants,  
  
	- and -  
  
DATACAT, INC., a California corporation,  
  
                Nominal Cross-Defendant and   
		Cross-Defendant  
   
Case No. 766 695  
  
Assigned For All Purposes To:  Honorable C. Robert Jameson,  
Department     
  
  
ANSWER BY AUTO-GRAPHICS, INC. AND ROBERT S. COPE TO CROSS- 
COMPLAINT OF GANNAM/KUBAT PUBLISHING, INC., DIVERSIFIED PRINTING
AND PUBLISHING SERVICES, INC.  
  
(Non-Derivative Action Answer)  
  
    COMES NOW Auto-Graphics, a California corporation ("Auto-Graphics"), and
Robert S. Cope, an individual, through their attorney of record (herein
collectively the "Cross-Defendants"), and for themselves and for no other
party, hereby answer the cross-complaint (the "Cross-Complaint") against
them by Gannam/Kubat Publishing, Inc. ("G/K") and Diversified Printing And
Publishing Services, Inc. ("Diversified"), in their individual capacities
(not for and on behalf of Datacat, Inc.), G/K and Diversified (individually
and collectively referred to herein as "Cross-Claimants"), and the
Cross-Defendants allege affirmative defenses thereto, as follows:

  Pursuant to and in accordance with California Code of Civil Procedure   
Section 431.30(d), the Cross-Defendants generally deny each and every
allegation of the Cross-Complaint.  
  
	AFFIRMATIVE DEFENSES  
  
   As their affirmative defenses to each and every one of  
the claims and causes of action set forth in the Cross-Complaint, the Cross-
Defendants and each of them (herein also referred to as the "Cross-Defendants")
hereby allege as their affirmative defenses to such claims and causes of
action by the Cross-Claimants as set forth in the Cross-Complaint the
following:
  
	FIRST AFFIRMATIVE DEFENSE  
	(No Claim Upon Which Relief Can Be Granted)  
  
        As their First Affirmative Defense, the Cross-Defendants hereby
incorporate by this reference their Answer as set forth above, and further
allege that the Cross-Claimants' Cross-Complaint fails to state facts upon
which the Cross-Claimants are entitled to any relief against the
Cross-Defendants.
  
	SECOND AFFIRMATIVE DEFENSE  
	(Legal Obligation Of Datacat)  
  
        As their Second Affirmative Defense, the Cross-Defendants allege that
payments by Datacat to Auto-Graphics for pre-1994 database recovery services
and otherwise (herein "Services") represented legal obligations by Datacat to
Auto-Graphics for Services rendered by Auto-Graphics to Datacat and fair
value received by Datacat in the form of and otherwise constituting and   
comprising such Services.  
  
	THIRD AFFIRMATIVE DEFENSE  
	(No Fiduciary Or Other Duty To Diversified)  
  
        As their Third Affirmative Defense, the Cross-Defendants allege
that they do not owe Diversified any fiduciary or other similar duty as
alleged in the Cross-Complaint or otherwise.  
  
	FOURTH AFFIRMATIVE DEFENSE  
	(Arm's Length Relationship/Services)  
  
        As their Fourth Affirmative Defense, the Cross-Defendants allege
accounting, financial or other services and/or functions rendered or
otherwise performed by Auto-Graphics and/or its corporate personnel for
Datacat were performed based on a good faith, arm's length contractual or
similar basis for a reasonable fee and/or reimbursement of expenses as
approved and authorized by Datacat and by G/K.  
  
	FIFTH AFFIRMATIVE DEFENSE  
	(Arm's Length Transaction/Approval)  
  
        As their Fifth Affirmative Defense, the Cross-Defendants allege the
Database Recovery Proposal (or Memorandum) referenced in paragraph 17 of the
Cross-Complaint was the result of good faith, arm's length negotiations between
representatives of Auto-Graphics and G/K and had been pre-approved by Frank
Kubat as President of Datacat and in his capacity as G/K's representative for
presentation and recommendation to and approval and adoption by the Datacat
Board of Directors at the July 28, 1994 Meeting as acknowledged by Frank
Kubat during the course of such Meeting.  
  
	SIXTH AFFIRMATIVE DEFENSE  
	(Approved Obligation/Payments)  
  
        As their Sixth Affirmative Defense, the Cross-Defendants allege that
the Database Recovery Proposal (or Memorandum) referenced in paragraph 17 of
Cross-Complaint was adopted, approved and authorized as the resolution of the
Datacat Board of Directors for and on behalf of Datacat at the July 28, 1994
Meeting (the "Database Recovery Resolution").  
  
	SEVENTH AFFIRMATIVE DEFENSE  
	(Ratification Of Obligation/Payment)  
  
        As their Seventh Affirmative Defense, the Cross-Defendants allege that
following July 28, 1994, the Cross-Claimants including G/K approved and
ratified, by their subsequent approval, acquiescence and/or lack of objection
thereto, the Database Recovery Resolution adopted by the Board of Directors of
Datacat at the July 28, 1994 Meeting.  
  
  
	EIGHTH AFFIRMATIVE DEFENSE  
	(No Contractual Duty To Diversified)  
  
        As their Eighth Affirmative Defense, the Cross-Defendants allege that
they owe Cross-Claimant Diversified no contractual or other similar duty.  
  
	NINTH AFFIRMATIVE DEFENSE  
	(Database Obligation/Payments Inherently Fair)  
  
        As their Ninth Affirmative Defense, the Cross-Defendants allege that
the obligation of and payments by Datacat to Auto-Graphics for the Database
Recovery Services under the Database Recovery Resolution and otherwise was
and is inherently fair and reasonable in respect of the Services rendered by
Auto-Graphics to Datacat and the Services and benefit received by Datacat.
  
	TENTH AFFIRMATIVE DEFENSE  
	(Arm's Length/Good Faith)  
  
        As their Tenth Affirmative Defense, the Cross-Defendants allege that
the providing of the Services by Auto-Graphics to Datacat, which are the
subject of the Cross-Claimants' Cross-Complaint against them, and the
obligation of and payment by Datacat to Auto-Graphics for such Services was
the result of good faith, arm's length negotiations and agreement by and
between Auto-Graphics and Datacat, including G/K in its capacity as a
prospective and/or actual stockholder of Datacat and the resulting Agreement
attached as Exhibit A to the Cross-Complaint.  
  
	ELEVENTH AFFIRMATIVE DEFENSE  
	(No Fiduciary Or Other Similar Duty By Auto-Graphics To G/K)  
  
       As their Eleventh Affirmative Defense, the Cross-Defendants allege that
Auto-Graphics does not owe G/K any fiduciary or other similar duty as alleged
in the Cross-Complaint or otherwise.  
  
	TWELFTH AFFIRMATIVE DEFENSE  
	(Estoppel)  
  
        As their Twelfth Affirmative Defense, the Cross-Defendants allege that
the Cross-Claimants are estopped from asserting the claims and causes of action
set forth in the Cross-Complaint as against the Cross-Defendants, including
without limitation for the reasons alleged in the foregoing Fourth, Fifth,
Seventh and Tenth Affirmative Defenses and otherwise.  
  
	THIRTEENTH AFFIRMATIVE DEFENSE  
	(Waiver)  
  
        As their Thirteenth Affirmative Defense, the Cross-Defendants allege
that the Cross-Claimants have waived and/or otherwise relinquished the claims
and causes of action, and/or the right to sue Cross-Defendants in respect of
such claims, as set forth in the Cross-Complaint.  
  
	FOURTEENTH AFFIRMATIVE DEFENSE  
	(Promissory Estoppel)  
  
        As their Fourteenth Affirmative Defense, the Cross-Defendants allege
that Cross-Claimants representations, agreements and promises to the
Cross-Defendants, and/or to Datacat for the intended benefit of one or more of
the Cross-Defendants and otherwise, in respect of the providing of on-going
database related services by Auto-Graphics to Datacat, and the
Cross-Defendants' actions and reasonable reliance thereon, constitutes
promissory estoppel and precludes the Cross-Claimants from instituting and
maintaining the within action against the Cross-Defendants.  
  
	FIFTEENTH AFFIRMATIVE DEFENSE  
	(Unclean Hands)  
  
        As their Fifteenth Affirmative Defense, the Cross-Defendants allege
that as a result of the Cross-Claimants conduct and activities as alleged 
herein and otherwise, the Cross-Claimants should be denied the relief they
are seeking based on the equitable principle of unclean hands.  
  
  
  
	SIXTEENTH AFFIRMATIVE DEFENSE  
	(Superseding Agreement)  
  
          As their Sixteenth Affirmative Defense, the Cross-Defendants allege
that G/K entered into an agreement with and/or for the benefit of Datacat
and/or with and for the benefit of the Cross-Defendants whereby G/K agreed
to forego and/or defer payment of the monies G/K seeks to collect from the
Cross-Defendants as a result of its Cross-Complaint.  
  
	SEVENTEENTH AFFIRMATIVE DEFENSE  
	(Breach Of Implied Covenant Of Good Faith And Fair Dealing)  
  
        As their Seventeenth Affirmative Defense, Cross-Defendants allege
that the assertion of the instant claim by the Cross-Claimants against the
Cross-Defendant constitutes a breach of the implied covenant of good faith
and fair dealing existing by, between and among the Cross-Claimants and
Cross-Defendants, by virtue of contracts or other agreements by, between and
among such parties pertaining to the subject matter of the Cross-Complaint.
  
	EIGHTEENTH AFFIRMATIVE DEFENSE  
	(Failure To Mitigate Damages)  
  
        As their Eighteenth Affirmative Defense, Cross-Defendants allege that
Cross-Claimants knew that Datacat could not pay for the services Diversified
rendered and continued to render to Datacat, which are the subject of
Cross-Claimants' Cross-Complaint, and that the Cross-Claimants otherwise
failed and refused to mitigate their damages vis-a-vis Datacat and the
Cross-Defendants.
  
	NINETEENTH AFFIRMATIVE DEFENSE  
	(Failure To Join Indispensable Party)  
  
        As their Nineteenth Affirmative Defense, Cross-Defendants allege
that the Cross-Claimants has failed to join one or more indispensable parties.

	TWENTIETH AFFIRMATIVE DEFENSE  
	(Offset, Set-Off Or Deduction)  
  
        As their Twentieth Affirmative Defense, the Cross-Defendants allege
that Cross-Claimants are indebted and otherwise obligated to Cross-Defendants
and that the Cross-Defendants are entitled to an offset, set-off or other
deduction from any amounts claimed by the Cross-Claimants in the
Cross-Complaint against the Cross-Defendants.  
  
	TWENTY-FIRST AFFIRMATIVE DEFENSE  
        (Statute Of Limitations Bar/339)  
  
        As their Twenty-First Affirmative Defense, the Cross-Defendants  
allege that the Cross-Claimants' claims as set forth in the Cross-Complaint
are barred by the statute of limitations as provided for in California Code of
Civil Procedure Section 339.  
  
	TWENTY-SECOND AFFIRMATIVE DEFENSE  
	(Statute of Frauds)  
  
          As their Twenty-Second Affirmative Defense, Cross-Defendants  
allege that the Cross-Claimants' claims which are the subject of the Cross-
Complaint are barred or otherwise precluded by the statute of frauds.  
  
	TWENTY-THIRD AFFIRMATIVE DEFENSE  
	(Fraud/Mistake)  
  
        As their Twenty-Third Affirmative Defense, Cross-Defendants  
allege that the Cross-Claimants' claims which are the subject of the
Cross-Complaint are barred or otherwise precluded based on the principles
of fraud and/or mistake.  
  
	TWENTY-FOURTH AFFIRMATIVE DEFENSE  
	(Statute Of Limitations Bar 338)  
  
        As their Twenty-Fourth Affirmative Defense, the Cross-Defendants
allege that the Cross-Claimants' claims as set forth in the Cross-Complaint
are barred by the statute of limitations as provided for in California Code
of Civil Procedure Section 338.  
  
	TWENTY-FIFTH AFFIRMATIVE DEFENSE  
	(Good Faith & Fair Dealing)  
                                
        As their Twenty-Fifth Affirmative Defense, the Cross-Defendants  
allege that at all times referenced in the Cross-Complaint, Cross-Defendants
acted in good faith to protect and benefit the interests, including assets
and property, of Datacat.  
  
	TWENTY-SIXTH AFFIRMATIVE DEFENSE  
	(Fault of Diversified)  
  
        As their Twenty-Sixth Affirmative Defense the Cross-Defendants  
allege that the harm, injury and/or damages claimed by the Cross-Claimants
in the Cross-Complaint was/were caused and otherwise resulted from the fault
and action, including actions and failure to act, of the Cross-Claimants
(including without limitation Diversified as to Cross-Claimants' Third Cause
Of Action).
  
	TWENTY-SEVENTH AFFIRMATIVE DEFENSE  
	(Knowledge Of Cross-Claimants)  
  
          As their Twenty-Seventh Affirmative Defense, the Cross- 
Defendants allege that the Cross-Claimants knew about and were otherwise
aware, and/or were reckless or negligent in not informing themselves, of the
facts and circumstances alleged in the Cross-Complaint in respect of which
Cross-Claimants allege in the Cross-Complaint that they were not aware and
upon which they base their claims against the Cross-Defendants.  
  
	REQUEST FOR RELIEF  
  
        WHEREFORE, the Cross-Defendants pray that the Cross-Claimants take
nothing as a result of their Cross-Complaint; and that the Cross-Defendants
be awarded their costs including reasonable attorneys' fees/costs (if  
appropriate under the Agreement which is attached as Exhibit A to the Cross- 
Complaint, California Code of Civil Procedure Section 1717 and/or otherwise
as provided for under California law), and such other and further relief as
the Court may deem appropriate in this case.  
  
  
  
  
  
Dated:  December 26, 1996  
  
                                                   Respectfully submitted,  
  
                                                   ROBERT H. BRETZ, P.C.  
  
                                               By: ss/Robert H. Bretz  
                                                   Robert H. Bretz, Esq.
                                                   Attorney for Auto-Graphics
                                                   and Robert S. Cope
  
  
 ........................End Pleading dated 12/26/96........................  
  
 ........................Begin Pleading dated 3/5/97........................  
  
  
Randolph Stiles, Esq. (SBN 62910)			FILED  
LAW OFFICES OF RANDOLPH STILES			Orange County  
                                                Superior Court  
12015 Kling Street, #211                           Mar 05 1997  
North Hollywood, California 91607                  Alan Slater,  
Executive Officer/Clerk  
818/505-8026                                       ss/ D. Lamm  
                                                    BY D. LAMM          
  
Attorney for Datacat, Inc.  
  
SUPERIOR COURT FOR THE STATE OF CALIFORNIA  
FOR THE COUNTY OF ORANGE  
  
DIVERSIFIED PRINTING AND				Case No. 766 695  
PUBLISHING SERVICES, INC., a  
California corporation,	  
  
Plaintiff,                                    Assigned For All Purposes To:  
                                              Honorable C. Robert Jameson,  
v.                                            Department 11  
  
DATACAT, INC., a California   
corporation and DOES l through  
25, inclusive,  
  
Defendants.                                  ORDER GRANTING  
                                             DATACAT'S MOTION FOR POSTING
                                             OF SECURITY FOR COSTS INCLUDING
DATACAT, INC., a California                  REASONABLE ATTORNEYS' FEES  
corporation,                                 UNDER CAL. CORPS. CODE 800  
  
Cross-Claimant,  
  
DIVERSIFIED PRINTING AND  
PUBLISHING SERVICES, INC., a 		  
California corporation;  
GANNAM/KUBAT PUBLISHING, INC., ) a California corporation;   
Nasib Gannam, an individual; and DOES 1 through 5  
  
Cross- Defendants.  
  
DIVERSIFIED PRINTING AND   
PUBLISHING SERVICES, INC., a California corporation;  
GANNAM/KUBAT PUBLISHING, INC.,  a California corporation,  
Cross-Complainants,  
   
v.  
  
ROBERT S. COPE, an individual;   
AUTO-GRAPHICS, INC., a California corporation,	  
Cross-Defendants,   
  
 - and -  
  
DATACAT, INC., a California corporation,  
Nominal Cross-Defendant and Cross-Defendant  
  
  
        Upon motion by Datacat, Inc. for an order requiring the posting of
security for costs including reasonable attorneys' fees under California  
Corporations Code Section 800, and following hearing thereon whereat the
Court considered the written and oral submissions of the parties, and for
good cause having been shown, the motion is GRANTED and Gannam/Kubat
Publishing, Inc. is hereby ordered to deposit with the Clerk of  this
Court a cash bond, or suitable undertaking by a surety company licensed
to do business in this State or otherwise in conformity with California
Code of Civil Procedure Section  995.310 et seq. (the "security", in the   
amount of $50,000 as  security for costs including reasonable attorneys'
fees and costs  paid or incurred by Datacat in the defense of or otherwise
in  connection with the derivative action cross-complaint by Gannam/Kubat  
Publishing against Auto-Graphics, Inc., Robert S. Cope and Datacat, Inc.
including any indemnity obligation by Datacat to Robert S. Cope, in his
capacity as an officer/director or other corporate representative of
Datacat, as a result of having been named as a cross-defendant in such
derivative action under California Corporations Code Section 317.  If such
security has not been timely deposited in full and confirmed to have been
so posted by written notice to the Court and to Datacat's counsel by
5:00 P.M. on MAR 10 1997, then the instant derivative action shall be 
automatically dismissed upon application of Datacat.    
  
Datacat shall give notice of this order to counsel for all parties.  
  
IT IS SO ORDERED.  
  
Dated:	MARCH 05	, 1997  
  
C. ROBERT JAMESON  
C. Robert Jameson  
JUDGE SUPERIOR COURT  
  
 .........................End Pleading dated 3/5/97..........................
  
 .......................Begin Pleading dated 3/10/97.........................
  
ATTORNEY OR PARTY WITHOUT ATTORNEY:  

(714) 751-8800
GRAHAM & JAMES LLP				  
KENNETH B. JULIAN, Bar No. 149840			FILED  
KARL A. SANDOVAL, Bar No. 117111			Orange County  
Superior Court  
650 Town Center Drive , Sixth Floor			March 10, 1997  
Costa Mesa, California 92626-1925			Alan Slater,  
Executive Officer/Clerk  
							BY:  ss// David Thew  
ATTORNEY FOR: DIVERSIFIED PRINTING  
  
ORANGE COUNTY SUPERIOR COURT  
County of Orange  
  
PLAINTIFF/PETITIONER	  
DIVERSIFIED PRINTING AND PUBLISHING SERVICES,	  
  
DEFENDANT/RESPONDENT:  
DATACAT, INC., AND RELATED CROSS-ACTIONS  
  
REQUEST FOR DISMISSAL				CASE NUMBER  766 695  
  
Other (specify)  Derivative Cross-Claims only  
  
A conformed copy will not be returned by the clerk unless a method  
of return is   
provided with the document.   
  
TO THE CLERK: Please dismiss this action as follows:  
  
a. Without prejudice  
b. (6) Other (specify). Derivative Cross-Claims by Gannam/Kubat Publishing,
Inc., only, contained within the First, Second, Third, Fourth, Fifth, Sixth,
Seventh, Eighth, and Ninth Causes of Action of GK's Cross-Complaint.  
  
Date: March 5, 1997				GRAHAM & JAMES LLP  
KENNETH B. JULIAN 				ss//  Kenneth B. Julian  
(TYPE OR PRINT NAME OF ATTORNEY   
OR PARTY WITHOUT ATTORNEY)                      (SIGNATURE)  
Attorney or party without attorney for:         Cross-complainant  
  
3. Dismissal entered as requested on (date):  March 10, 1997  
  
6.   a. Attorney or party without attorney notified on (date):  
     b. Attorney or party without attorney not notified. Filing party
     failed to provide a copy to conform means to return conformed copy
  
Date:  March 10, 1997 	Clerk, by  	ss// David Thew	, Deputy  
  
REQUEST FOR DISMISSAL  
  
 ......................End Pleading dated 3/10/97............................  
  
                      PLEADING EXHIBITS A through D  


 ................Exhibit A - Shareholders Agreement ........................


AGREEMENT

The undersigned parties, Gannam/Kubat Publishing, Inc. (herein  "G/K") and
Auto-Graphics, Inc. (herein "AG"), intending to be legally bound and obligated
thereby, have made and entered into this Agreement dated effective as of
June 12,1990.

WHEREAS, G/K is the owner of a data base generally covering certain heating,
ventilation, air conditioning, refrigeration, electrical, electronic,
appliance and plumbing products customarily distributed by so-called HVACR
(heating, ventilation, air conditioning and refrigeration) and plumbing,
electric and appliance wholesalers (herein collectively the "Listed Products"),
together with certain information, know-how, photographic and other composition
materials and representative catalogs used to produce, publish and distribute
the Listed Products catalogs (herein the "Catalog");

WHEREAS, A-G possesses certain data base development, maintenance and
composition capabilities required in the production of the Catalog:
 
WHEREAS, G/K and A-G have been exploring and considering the advisability of
jointly organizing a business to own and periodically produce, publish and
distribute the Catalog;
 
WHEREAS, G/K and A-G have now determined to proceed with a joint endeavor in
respect of such Catalog, and have made and entered into this Agreement to
memorialize their understanding and agreements in respect of organizing/owning
and conducting such venture;

NOW, THEREFORE, the undersigned parties in consideration of the premises, the
mutual agreements and promises contained herein and such other good and
valuable consideration the legal sufficiency and adequacy of which are hereby
acknowledged, and subject to the terms and conditions contained herein, hereby
agree as follows.

1. The Company. The parties will organize a new corporation under the laws of
the state of California adopting the corporate name "Datacat, Inc." (herein
the "Company"), and will each subscribe to purchase and will purchase one-half
of the number of shares of capital stock such corporation is authorized to
issue for the purchase price of Twenty-Five Hundred Dollars ($2,500) each or
an aggregate cash capitalization of Five Thousand Dollars ($5,000) for the
Company.

2. Further Current Capital Contributions. In addition to the parties' initial
cash capitalization as provided for hereinabove, the parties will make the
following additional capital contributions to the Company:

2.1. G/K.  G/K will contribute the manuscript, photographs and other composition
materials, representative catalogs and all of its information, know-how and
other assets and property of whatsoever kind and nature constituting, necessary
and/or advisable to own and periodically produce, publish and distribute the
Catalog (herein collectively the "Catalog Information".); and

2.2. A-G.  A-G will contribute its expertise, knowledge and production know-how
related to the composition of catalogs.

The parties acknowledge that their respective non-cash capital contributions
as provided for above in this paragraph are of approximately equal value, and
that such contributions will not be valued for purposes of establishing the
Company's capital account for financial reporting and other purposes which
capital account at inception of the Company will reflect only the cash
contribution made by the parties ($5,000) in organizing the Company and
subscribing to the issuance and purchase of the Company's capital stock as
provided for above. Further, G/K's capital contribution of the Catalog
Information as provided for herein will be made free and clear of all claims,
liens, security interests, debts, obligations and liabilities of whatsoever
nature or kind; and G/K hereby represents and warrants to A-G and to the
Company that G/K is the sole and exclusive owner of the Catalog Information
as of the date of this Agreement and hereby agrees and promises to indemnify
and hold harmless A-G and the Company from any and all claims, liens, security
interests, debts, obligations and/or liabilities of whatsoever nature or kind,
including reasonable attorneys' fees and costs paid or incurred in respect
thereof, that may subsequently be asserted by any person or party against
and/or paid or incurred by the Company and/or A-G arising out of, resulting
from, or otherwise relating in any way to the Catalog Information constituting
and comprising G/K's capital contribution to the Company. The foregoing
indemnity and hold harmless provision from G/K is not intended to cover any
claim of copyright infringement against the Company by any of the manufacturers
or suppliers whose products and related pricing information are contained and
set forth in any of the Company's Catalogs. G/K hereby further represents and
warrants to the Company and to A-G that it has not received and is not
otherwise aware of any copyright infringement or similar claim(s) by any
manufacturer, supplier or any third person in respect of or otherwise relating
to the Catalog Information being supplied by G/K as a capital contribution as
provided for in this Agreement.

2.3. Future Capital Contributions. Except for the capital contributions
referenced in paragraphs 1, 2.1 and 2.2, the parties are not in any way
obligated to make any future capital contributions to the Company; however,
in the event that the Company's Board of Directors shall determine at any
time within twelve (12) months from the date of this Agreement that the
Company needs additional working capital with which to organize the Company
then the parties to this Agreement each hereby agree and promise, promptly
upon receipt of written notification of such determination by the Company's
Board of Directors, to pay to the Company in cash an additional capital
contribution up to Fifty Thousand Dollars ($50,000) each without the receipt
of any additional capital stock or other security or form of consideration
for such additional cash capital contribution.

3.  Organizational Costs. All legal, accounting and other similar costs and
expenses incurred in the incorporation and legal organization of the Company,
together with the cost and expense of preparation of this Agreement, and for
office space, receptionist and secretarial services (at A-G's corporate
offices in Pomona, California), will be paid by the Company (herein
"Organizational Costs"). However, by special agreement between A-G and G/K as
the sole shareholders of the Company, such Organizational Costs, and only
such Organizational Costs as defined herein, together with any interest paid
or accrued in respect of the A-G loan to the Company and the resulting
promissory note from the Company to A-G as provided for in paragraph 5 or
this Agreement shall not be deemed by the Company or such parties to be an
expense of the Company for purposes of computing the "net income" of the
Company in determining amounts payable to G/K as Consulting Agreement
compensation, in accordance with paragraph 6 of this Agreement.

4. Management. The initial Board of Directors of the Company shall consist of
the following five (5) persons:
(1) Frank J. Kubat, Jr.
(2) Nasib Gannam
(3) Robert S. Cope
(4) Lee White
(5} Paul Cope (or a fifth person to be designated by A-G subject to the
approval of G/K which approval will not be unreasonably withheld).

The Board of Directors shall be responsible for the management of the Company
in accordance with the applicable laws of the state of California and, where
applicable, the provisions of this Agreement. Following the incorporation of
the Company, the Board of Directors shall adopt organizational minutes and
corporate bylaws covering the management, operation and business of the
Company. Thereafter, the Company's Board of Directors will hold and conduct
regular meetings to manage and otherwise conduct the business of the Company.

5. Start-Up Costs. A-G will advance and thereby loan the Company sufficient
funds, up to a maximum of Fifty Thousand Dollars ($50,000) in cash and/or
equivalent value, to facilitate payment by the Company of the Company's
"start-up" operations during the first six (6) months of operations. Such
start-up activities and financing will include: (1) all Organizational Costs
(as provided for in paragraph 3 of this Agreement); (2) one full-time
sales/marketing person; t3) promotional materials; and (4) travel, lodging,
meals and other miscellaneous sales/marketing expenses relating to the
business of the Company. As the Company's cash flow requirements reasonably
permit, as determined by the Company's Board of Directors in their sole and
exclusive judgment, the Company shall repay the A-G loan. If repaid within
the first eighteen (18) months such loan is outstanding, then such loan shall
be interest free. If such loan is not repaid in full within such 18 month
period, such loan, and all amounts outstanding from the inception of such
loan, shall bear interest at the rate of twelve percent (l2%) per annum (not
to exceed the maximum rate permitted by law from time to time during the
period such loan/note remains outstanding.

6. Sales/Marketing Assistance. The Company will enter into a three (3) year
agreement with G/K whereby G/K, through Mr. Frank Kubat, will be responsible
for supervising and supporting the Company's sales/marketing activities
(herein the "Consulting Agreement"). The Consulting Agreement will provide
for annual compensation payable by the Company to Messrs. Kubat and Gannam as
the principals of G/K at the end of each of the three full calendar years
(ending December 31) covered by the Agreement commencing January 1, l991 and
ending December 31, 1993 in a total, aggregate amount equal to a certain
percentage of the Company's net income determined in accordance with generally
accepted accounting principles consistently applied (except as otherwise
agreed to by A-G and G/K as expressly provided for in paragraph 3 of this
Agreement only), as follows: 1991 - 50%; 1992 - 30%; 1993 - 20%. As part of
the services to be rendered pursuant to the Consulting Agreement, G/K will
arrange for Mr. Frank Kubat, and Mr. Kubat hereby promises, to attend a
minimum of three major conferences/exhibitions of and by providers of Listed
Products goods and services each year; and, further and additionally, it is
agreed that Mr. Kubat will devote a minimum of twenty (20) hours of his time
per month in sales/marketing activities promoting the Company's Catalog. Such
minimum personal services to be rendered by Mr. Kubat to and for the exclusive
benefit of the Company are hereby accepted and agreed to by Mr. Kubat in his
individual capacity.

7. Certain Conflicts of Interest. In the course of its business, the Company
will obtain certain services from A-G and from G/K. The parties, in entering
into and executing this Agreement, hereby acknowledge, agree to and approve
the intended course of action whereby the Company will purchase and otherwise
acquire certain goods and services from the undersigned parties/stockholders
of the Company (and/or their affiliates); and hereby knowingly and
intentionally waive and relinquish any and all claims of potential or actual
conflicts of interest attending such proposed and/or actual related party
transactions; provided, however, that such related party transactions are in
accordance with the express provisions as contained in this Agreement
applicable to any such transactions. All other agreements, transactions and
dealings between the Company and any employee, officer, director, shareholder,
agent or representative of the Company which are not contemplated by and
expressly provided for in this Agreement shall be made, undertaken and
performed in accordance with applicable California law.

8.  A-G Services. From time to time, the Company will purchase from A-G data
base development, processing, composition and related services (hereinafter
collectively referred to as "Composition Services") used in periodically
producing and publishing the Catalog. Following the contribution of such
Composition Services as are required for the first such Catalog actually
produced and published by the Company, notwithstanding any contrary provision
(s) contained in this Agreement, A-G shall not be required to contribute any
further such Composition Services as a capital contribution or otherwise and,
thereafter, A-G shall be entitled to bill for and receive from the Company
reasonable and customary compensation for all such future Composition Services.
In pricing its Composition Services to the Company, A-G will attempt to charge
the Company an amount for such Services which would allow the Company to
attain a minimum gross profit of 25% on the production of such Catalog while
maintaining a competitive profile in the market for the pricing of and
purchase of such Catalog by customers of the Company. In no event, however,
is A-G obligated to charge (and accept) compensation for its Composition
Services which would be less than the minimum amount that A-G bills its
other trade customers for similar work and services. Prior to performing
any substantial amount of Composition Services for which A-G will bill the
Company, A-G will attempt to obtain the prior written approval of one of
G/K's designated board representatives as to the reasonableness of such
services/charges. Attached hereto and incorporated herein as Exhibit A, is a
schedule that has previously been approved by G/K as setting forth a
reasonable basis and method to determine compensation to be paid by the
Company to A-G for Composition Services to be performed by A-G from time to
time in the periodic production and publishing of the Catalog. Ownership of
all computer and data processing programs and other written instructions,
manuals and implementation procedures, developed, created and/or used by A-G
in the creation of the electronic data base derived from the Catalog
Information to be supplied by G/K (but not the derived data base itself,
which data base shall be owned exclusively by the Company) and/or the
performance of Composition Services by A-G for the Company (herein
collectively the "A-G Computer Resources") shall be and remain the sole and
exclusive asset and property of A-G, and the Company (and/or G/K) shall have
no claim of ownership, use or other interest in or to any such A-G Computer
Resources, except as otherwise expressly provided for in the unnumbered
paragraph hereinbelow. G/K hereby acknowledges and agrees that such A-G
Computer Resources, and the information constituting and comprising such A-G
Computer Resources (but not the derived data base itself, which data base
shall be owned exclusively by the Company) shall be treated and maintained
for all purposes as the confidential, proprietary and trade secret information,
materials and property of A-G. The Company being organized by the parties as
provided for in this Agreement hereby also acknowledges and agrees that such
A-G Computer Resources, and the information constituting and comprising such
A-G Computer Resources (but not the derived data base itself, which data base
shall be owned exclusively by the Company) shall be treated and maintained
for all purposes as the confidential, proprietary and trade secret information,
materials and property of A-G, and further agrees and promises to use its
best efforts to maintain the confidential, proprietary and trade secret
nature of all such A-G Computer Resources and related information; and,
following its incorporation, the parties hereby promise to cause the Company
to ratify and approve this Agreement.

Should the Company actually cease or otherwise permanently discontinue
operations for any reason, then G/K shall have the right to a nonexclusive
license to the A-G Computer Resources (as they then exist at such point in
time) for a cash amount/payment to A-G equal to A-G's unrecovered costs and
expenses, if any, associated with building, preparing and maintaining such
A-G Computer Resources (including in respect of the derived data base itself)
as reflected on A-G's own books and records at the time that the Company
actually ceases or otherwise permanently discontinues operating. Such
nonexclusive license to use A-G's Computer Resources shall be for a term of
five (5) years and shall be conditioned upon its use being solely for
continued production of the Catalog by G/K following actual dissolution of
the Company; and such nonexclusive license shall include all A-G computer
software object code, but exclude all A-G computer software source code,
constituting and comprising A-G's Computer Resources in respect of the
Catalog as provided for in this Agreement. Such nonexclusive license
arrangement shall contain such other terms and conditions as the parties may
hereinafter mutually agree upon in writing.

9.  G/K Services. The Company will purchase printing services from Diversified
Printing and Publishing Services, Inc., 2632 Saturn Street, Brea, California
92621, which company is 100% owned by Mr. Nasib Gannam ("Diversified"), in
respect of the production of the Catalog. Diversified shall be entitled to
bill for and receive reasonable and customary compensation for such printing
services. In pricing its printing services to the Company, G/K will attempt
to charge the Company an amount for such services which would allow the
Company to attain a minimum 25% gross profit on the production of such
Catalog while maintaining a competitive profile in the market for the pricing
of and purchase of such Catalog by customers of the Company. In no event,
however, is Diversified obligated to charge (and accept) compensation for its
printing services which would be less than the minimum amount that Diversified
bills its other trade customers for similar work and services. In the event
that Mr. Nasib Gannam ceases to own at least twenty-five percent (25%) of all
of Diversified's issued and outstanding voting stock at any point in time,
then and only then, notwithstanding any of the foregoing provisions of this
paragraph and/or of this Agreement to the contrary, the Company shall be
entitled to purchase or otherwise acquire printing service" from any vendor
or other provider of such services which the Company shall, at its sole
election and discretion, be entitled to select; and, likewise, the Company
shall not be obligated in any way to purchase any further printing services
from Diversified. Mr. Gannam hereby individually agrees and promises to
immediately notify the Company in writing if, at any future point in time, he
ceases to own 25% of the issued and outstanding voting capital stock of
Diversified.

10. Other A-G Goods/Services. In providing the Company with "start-up" and
ongoing office facilities, receptionist and secretarial services, utilities
and other miscellaneous services from time to time, A-G shall be entitled to
and shall attempt to allocate and charge the Company an amount approximately
equal to AG's costs to obtain, provide and/or supply such goods and services
to the Company from time to time.

11. Accountants. The Company will retain a nationally recognized accounting
and auditing firm (to be designated from time to time by A-G at its sole
election and discretion) to provide the Company with start-up and ongoing
accounting, auditing and related services. Such accountants and auditors may,
and probably will, also provide similar such services to A-G on a regular or
periodic basis. Such accountants and auditors will be responsible for
assisting in the preparation, reviewing and/or auditing of the Company's
periodic financial statements which will include, among other things, the
Company's net income for purposes of paragraph 6 and gross revenue for
purposes of paragraph 15 of this Agreement.

12. Fiscal Year. The Company will adopt a calendar year (ending December 31st)
as its fiscal year for financial reporting and all other purposes.

13. Product Definition and Pricing. As part of the consideration for entering
into this Agreement, A-G through its designated representatives to the
Company's Board of Directors is entitled to determine, from time to time,
product definition and pricing for the Company's Catalog subject to final
review and approval by the Company's full Board of Directors which final
approval will not be unreasonably withheld.

14. Ownership of Company Assets. Following organization of the Company and
contribution of the Catalog Information by G/K and the contribution of
initial composition services by A-G, except as otherwise expressly provided
for in this Agreement (see paragraph 8 re A-G Computer Resources), all of the
assets and property contributed by the parties, including without limitation
the Catalog Information and the information data base derived therefrom
(referred to in this Agreement as the "derived data base"), shall be the
exclusive assets and property of the Company. Should the Company cease or
otherwise permanently discontinue operations for any reason then, upon
dissolution under applicable state corporate law and/or pursuant to this
Agreement, both A-G and G/K shall be entitled to receive and the Company
shall actually distribute and provide such two shareholders with a copy of
the derived data base as it then exists at such point in time as the Company
is dissolved which derived data base as received by each such shareholder
shall be the sole and exclusive property of each such recipient thereof
without further obligation to the Company or its other shareholders.

15. Future Rights to Ownership of Stock in the Company.

15.1 Right of First Refusal. Subject and subordinate to the rights of either
party under the Option to Purchase as expressly provided for in subparagraph
15.2 of this Agreement and without payment of any additional consideration
therefor, G/K and A-G each hereby grant and convey to the other a right of
first refusal to acquire the stock ownership interest in the Company that
either party owns and may desire to sell or otherwise dispose of from time
to time in the future ("Right of First Refusal"). If at any time subsequent
to the date of this Agreement either G/K or AG desires to sell or otherwise
dispose of any shares of stock in the Company (including any interest therein)
then owned by such prospective seller, the prospective seller will first
provide the other party/shareholder with written notice of such party's
desire and intention to sell or otherwise dispose of such stock (and/or any
interest herein) including the prospective sale price and all other terms and
conditions of such proposed sale transaction (the "Notice of Proposed Sale").
The party furnishing the Notice of Proposed Sale shall not obligate itself
in any way to sell any shares or other ownership interest therein in respect
of the Company until such time as the Notice of Proposed Sale has been
provided and the prospective seller has otherwise performed and satisfied
all of the terms and conditions of the Right of First Refusal. The party
receiving the Notice of Proposed Sale shall have thirty (30) business days
from the date of the Notice of Proposed Sale to provide written notice to the
party having provided such Notice of Proposed Sale as to the recipient's
intention to purchase the stock ownership interest which is the subject of
such Notice and within offer for the price and on the terms and conditions
set forth in the Notice of Proposed Sale (the "Responsive Notice"). If no
such Responsive Notice is timely received by the party providing the Notice
of Proposed Sale (or if the Responsive Notice states that the recipient is
not accepting the offer to acquire the stock ownership which was the subject
of such Notice of Proposed Sale), then the party having previously provided
such Notice of Proposed Sale shall be entitled for a period of sixty (60) days
from the deadline for receipt of the Responsive Notice (30 days following the
date of the Notice of Proposed Sale) to extend any offer and consummate any
sale of the stock ownership interest in the Company which was the subject of
the Notice of  Proposed Sale for the same price and otherwise upon the same
terms and conditions as were set forth in the Notice of Proposed Sale (the
"Sale Period"). If the stock ownership interest which was the subject of the
Notice of Proposed Sale has not been actually sold and transferred within the
Sale Period (60 day. from the deadline for receipt of the Responsive Notice),
then the party having previously provided the Notice of Proposed Sale shall
no longer be entitled to extend any offer and/or consummate any sale, or
otherwise obligate the proposed seller in respect of the sale or other
disposition of the subject stock ownership interest; and the party desiring
and intending to sell or otherwise dispose of such stock ownership interest
shall be required to ' provide the other party with a new (redated) Notice of
Proposed Sale covering the proposed sale of such ownership interest: and,
thereafter, the same procedures shall be followed by the recipient of such
new (redated) Notice of Proposed Sale as are set forth above. If, having
provided the other party with a Notice of Proposed Sale, the proposed seller
subsequently determines to offer and/or sell a different ownership interest
(different number of shares of the Company's stock for example) and/or
desires to change the purchase price or any of the other terms and conditions
of the proposed sale of such stock ownership interest from the price and other
terms/conditions as set forth in the previously issued Notice of Proposed Sale,
then the party who desires to offer and/or sell such ownership interest shall
be required to issue a revised (redated) Notice of Proposed Sale covering any
revised proposal to offer and/or sell or otherwise dispose of such stock
ownership interest; and the recipient of any such revised (redated) Notice
shall have thirty (30) days from the date of such revised (redated) Notice of
Proposed Sale to respond thereto in accordance with the provisions of this
Right of First Refusal.
 If the recipient of any Notice of Proposed Sale does not timely provide the
Responsive Notice accepting the offer made therein and thereby agreeing to
acquire the stock ownership interest that was the subject of such Notice of
Proposed Sale and the party providing such Notice proceeds pursuant to and
in accordance with the provisions of this Right of First Refusal to actually
make an offer and consummate a sale or other disposition of such stock
ownership interest, then such selling party shall also promptly provide the
other party/stockholder with written notice confirming such actual sale or
other disposition and the price, terms and conditions upon which such sale or
other disposition was, in fact, entered into, made and consummated. If the
party receiving any such Notice of Proposed Sale desires to acquire the
ownership interest which is the subject of such Notice and timely provides
the sending party with the Responsive Notice so stating in accordance
herewith, then the responding party shall be entitled to consummate the
acquisition which is the subject of such Notice at any time within thirty (30)
days of the date of such Responsive Notice and such responding party shall
set forth the actual time and date of such closing at the Company's corporate
offices in the Responsive Notice to the proposed seller as provided for
hereinabove (the "Closing"). If the responding party does not timely
consummate the purchase at the Closing as defined above for any reason other
than the fault of the proposed seller, then the responding party shall be
obligated and liable to the proposed seller under this Agreement as provided
for under the laws of the state of California.

15.2 Option to Purchase. Notwithstanding the above provisions of paragraph 15.1
of this Agreement and the Right of First Refusal provided for therein and
without the payment of any additional consideration therefor, the respective
parties to this Agreement each hereby grant and convey to each other an
irrevocable option to purchase all of the other party's shares of  the
Company's stock and all right, title and interest in,  to and under this
Agreement of whatsoever nature or kind  including without limitation the
Consulting Agreement provided for under paragraph 6 of this Agreement (herein
collectively the "Option Property") at any time during the period commencing
January 1, 1991 and ending December 31, 1993 (the "Option Term") for an
aggregate purchase price" (herein the "Option Purchase Price") equal to Six
Hundred and Fifty Thousand Dollars ($650,000) plus  five percent (5%) of the
Company's gross revenues, determined by the Company's independent auditors to
be in accordance with generally accepted accounting principles consistently
applied, for each of the next five (5) succeeding fiscal years commencing
with the end of the fiscal year which follows the closing of the purchase of
the Option Property pursuant to this paragraph and the Option to Purchase
provided for herein. The Option  shall be exclusive and unconditional and
remain in continuous existence for and during the Option Term; and, unless
exercised prior thereto by either party, the Option shall automatically
expire and terminate at the end of such Option Term. Payment of the $650,000
portion of the Option Purchase Price for the Option Property under the Option
shall be one-half (50%) in cash  and one-half (50%) in the form of the
buyer's promissory note payable, in arrears, in equal annual installments
over a  period of five (5) years from the date of such note together  with
interest on the unpaid principal balance of such note at the rate of eight
percent (8%) per annum. Pending payment of such promissory note, the stock of
the Company being purchased pursuant to the Option is to be pledged by the
buyer thereof as collateral to secure payment of such note payable to the
seller; however, the buyer of such option shares as the owner of  such
pledged shares of stock will be entitled to vote and otherwise retain and
exercise all rights and benefits constituting and attributable to the
ownership of the stock being purchased. Payment of the 5% of gross revenues
portion of the Option Purchase Price shall be made by the buyer within the
first ninety (90) days following the close of each of the five successive
fiscal years covered by such payment provision, and shall be paid in cash or
check drawn upon the buyer's account payable to the seller(s). If the Option
is exercised by G/K, then as part of the consideration for the purchase of
such Option Property under the Option, G/K as the buyer shall furnish to A-G
as the seller the personal guarantees, joint and several, of Frank J. Kubat,
Jr. and Nasib Gannam covering the unconditional payment of the promissorynote
from G/K payable to A-G as part of the Option Purchase Price. Such
guarantees shall be in a form reasonably acceptable to A-G and its attorneys.
The provision of  such personal guarantees by G/K shall be a condition to
A-G's obligation to consummate the closing of the purchase of  such Option
Property as otherwise provided for herein. The Option can be exercised by
either party at any time during the Option Term by written notice dated and
delivered in person or deposited for delivery via the U.S. Mail (Certified
Mail-Return Receipt Requested) at anytime within the Option Term (herein
"Exercise of the Option"). Upon Exercise of the Option by either party as
provided for herein, the party exercising the Option shall be entitled to
purchase and acquire the Option Property and the other party shall be
obligated to sell, transfer and convey the Option Property free and clear of
all liens, claims and encumbrances of whatsoever nature or kind to the party
exercising the Option upon payment and receipt by such selling party of the
Option Purchase Price at a "closing" to be held at the Company's corporate
offices within thirty (30) days of the date of  the Exercise of the Option
(the date of the written notice of exercise by the party exercising the
Option). During the Option Term, both parties agree and promise not to pledge,
sell or otherwise convey any interest in the Option Property and to hold the
Option Property subject to the Option and the respective parties' rights
therein as provided for in this Agreement. The parties' rights under the
Option shall survive and continue in full force and effect notwithstanding
any claim by either party from time to time that the other party has breached
any material provision(s) of this Agreement providing the nonbreaching party
with a right of rescission and/or to suspend performance under the Agreement
as against the alleged breaching party. During the Option Term, all rights
and entitlements of the parties under the Right of First Refusal as provided 
for in subparagraph 15.1 above are subordinated to the parties' rights and
entitlements under the Option; and, in addition to the information required
to be furnished in the Responsive Notice, during the Option Term the party
receiving any Notice of Proposed Sale shall notify the party providing such
Notice of the receiving party's intention to exercise such receiving party's
rights under the Option and otherwise provide the information normally
required in the Notice of Exercise to be included in the Responsive Notice in
lieu of proceeding further with the receiving party's rights and entitlements
under the Right of First Refusal (and if such Notice of Exercise is not so
timely provided in the Responsive Notice, then all rights under the Option
shall be suspended, not terminated, for a period of ninety (90) days). Once
one party has exercised the Option in accordance with this Agreement, then
the other party is precluded from seeking to exercise the option or providing
any Notice of Proposed Sale. If the party exercising the Option is G/K then,
in addition to the Option Purchase Price, A-G shall be entitled to receive an
additional payment from the Company, receipt of which payment shall be a
condition to G/K's right to consummate the purchase of the Option Property
from A-G and A-G's obligation to consummate the sale of such Option Property,
in an amount equal to A-G's unrecovered costs and expenses, if any, associated
with building, preparing and maintaining such A-G Computer Resources
(including in respect of the derived data base itself which will continue to
be owned by the Company) as reflected on A-G's own books and records at the
time that A-G receives G/K's Notice of Exercise of the Option up to a maximum
of $50,000.

 Once the option has been exercised by a party, if such party does not timely
consummate the purchase of the Option Property as provided for herein
otherwise than as a result of the nonperformance of the selling party, the
other (selling) party shall have such rights and remedies as against the
nonperforming (buying) party who sought to exercise the Option under this
Agreement as such aggrieved party is entitled to under California law. Upon
the consummation of the purchase of the Option Property by the party who
first exercised the Option, the other party is relieved of any further duties
and obligations under this Agreement of whatsoever nature or kind.

16. Negative (Competition) Covenant and Related Matters. By entering into
this Agreement, the undersigned parties hereby acknowledge, agree and promise
that neither of them will, directly or indirectly, undertake to or actually
compete in any manner whatsoever with the Company in the production,
publishing and/or distribution of the Catalog or in any business activity
which could reasonably be understood to be competitive with the Company's
Catalog business (including price sheets, pricing services, inventory control
systems and other similar types of data processing products). All business
opportunities in respect of or relating to the Company's Catalog business
shall be the entitlement of the Company. Except for the Catalog business to
be operated by the Company as contemplated and provided for by this Agreement,
the parties are free to independently pursue and actually engage in all other
business activities without obligation or liability of any kind or nature
whatsoever to the Company or to each other. G/K hereby acknowledges and agrees
that A-G is now and intends to continue in the future to, and is entitled to
under the provisions of this Agreement, explore, pursue and actually engage
in the business of owning and  periodically producing, publishing,
distributing and otherwise dealing in, for its own account, right, title and
benefit, catalogs for and covering goods and services other than the Listed
Products (collectively the "A-G Catalogs"). If any such A-G Catalog (or any
catalog subsequently explored, pursued, produced, published, distributed
and/or otherwise dealt in by G/K with A-G's subsequent express written
acknowledgment  and approval to G/K) includes as an incidental (or secondary)
category of products or services covered by such A-G Catalog any of the
pictures and/or information on individual products constituting and comprising
the Company's Catalog  (herein referred to as "modules) then, provided that
such modules do not exceed thirty-five percent (35%) of the total number of
modules constituting and comprising the non-Company catalog, A-G; (or in the
case of G/K then G/K) shall be entitled to utilize any such modules
constituting and comprising the Company's derived data base as it exists from
time to time for the purpose only of such non-Company catalog in consideration
of payment by A-G (or in the case of G/K then by G/K) of a licensing fee for
the use of such modules in an amount to be determined as fair and reasonable
by the Company through a unanimous vote of the Company's Board of Directors.
G/K for its own account and as a prospective shareholder of the Company
hereby agrees and promises not to assert any claim, right and/or entitlement
against A-G and/or any of its officers, directors, employees, agents or
representatives (by way of "corporate opportunity" or otherwise) arising out
of, resulting from or otherwise in respect of the A-G catalogs and/or A-G's
current and/or future involvement with catalogs and the catalog business so
long as such A-G Catalogs are basically separate, distinct and different from
the Catalog covering the Listed Products (and only such Listed Products) to
be owned, produced, published and distributed by the Company as expressly
provided for in this Agreement. None of A-G's activities in respect of such
A-G Catalogs as they presently or may exist at any time in the future are
intended by the parties to this Agreement, or shall be deemed by any third
party including without limitation the Company, as a "corporate opportunity"
of the Company or otherwise in contravention of G/K's rights and entitlements
as a shareholder of the Company.

17. Employment Agreement. Subject to a determination by the Company's Board
of Directors that the Company's current and reasonably anticipated net income
and cash flow would allow the Company to timely perform such agreement in
accordance with its terms, Mr. Frank J. Kubat, Jr. shall be entitled to
request from the Company, and the Company is thereby obligated to enter into
and perform, an employment agreement with Mr. Kubat covering Kubat's sole and
exclusive, full-time employment with the Company for a period of two (2)
years from the date of such agreement for compensation equal to a total of
One Hundred Thousand Dollars ($100,000) per year (the "Kubat Employment
Agreement"). Mr. Kubat's right to request and actually enter into the Kubat
Employment Agreement, and the Company's obligation to enter into and perform
such Employment Agreement with Mr. Kubat (subject only to the conditions
expressly provided for herein), shall be for a period of two (2) years
commencing January 1, 1991 and ending December 31, 1992, after which time all
parties' rights and obligations in respect of such possible Kubat Employment
Agreement shall automatically expire and terminate and be of no further force
or effect. Mr. Kubat's right to enter into and receive such Employment
Agreement from the Company is further conditioned upon Mr. Kubat's complete
and timely performance of his personal duties and obligations under the
Consulting Agreement as expressly provided for under paragraph 6 of this
Agreement through the period of time prior to the date that Mr. Kubat
notifies the Company that he desires to enter into the Employment Agreement
provided for herein. At the time that Mr. Kubat decides to enter into the
Employment Agreement with the Company as provided for herein, he will so
notify the Company in writing stating the date upon which he is available to
commence such full-time employment for the Company. If the Company enters
into an employment agreement with Mr. Kubat at any time during the period of
time that the Company is still obligated to G/K and/or Mr. Kubat for his
services under the Consulting Agreement provided for under paragraph 6 of
this Agreement, then during the balance of the term of such Consulting
Agreement the Company's  obligation and payments thereunder shall be
automatically reduced by twenty-five percent (25%).

18. Complete Agreement/Amendment. This Agreement supersedes all prior
understandings, arrangements and/or agreements regarding the specific subject
matter hereof, and the parties, further acknowledge and agree that this
Agreement accurately and completely sets forth such parties' understanding,
arrangement and agreement in respect of the subject matter hereof and that
none. of the parties hereto in entering into this Agreement is relying upon
any statement, representation, understanding, arrangement, commitment,
agreement, promise, warranty and/or guarantee constituting or in any way
relating to the subject matter of this Agreement which is not specifically
set forth in this Agreement. This Agreement may not be modified, amended or
otherwise changed except in writing, so stating, and executed by the party
against which any such modification, amendment or change is sought to be
enforced. This Agreement (including herein the exhibit hereto) shall be
deemed to have been drafted and otherwise prepared by all of the parties and
no party shall suffer the existence of any ambiguity in the language of this
Agreement as a result of having been deemed or otherwise determined to have
drafted or prepared or to have been responsible for the drafting and/or
preparation of this Agreement. Each of the parties hereto further
acknowledges the opportunity to consult with independent legal counsel or
other professional advisors in respect of the matters which are the subject
of this Agreement, and the Agreement itself, and hereby waives, releases and
relinquishes any future claim that such party did not have the opportunity
to consult with, or benefit from having consulted with separate, independent
legal counsel or other professional advisor in respect of the Agreement or
the subject matter thereof.

19. No Waiver. Except as may be expressly and specifically stated elsewhere
in this Agreement, failure by any party to enforce any right, entitlement,
benefit and/or remedy granted by or otherwise available under this Agreement
shall not constitute a waiver of such right, entitlement, benefit and/or
remedy, and waiver of any provision of this Agreement shall not constitute a
waiver of any other provision(s) or of any right, entitlement, benefit and/or
remedy under this Agreement. Any party to this Agreement shall be entitled to
waive in writing the timely or other performance of any agreement, promise or
the satisfaction of any condition expressly made in favor of or for the
benefit of such waiving party.

20. Successors and Assigns. This Agreement and the rights, entitlements,
benefits, duties and obligations as set forth herein shall inure to the
benefit, and be the continuing legal obligation of, the undersigned parties,
and each of them, and their respective heirs, assignees, transferees and all
other successors in interest whether by voluntary action of the parties or by
operation of law.
 
21. Notice. Any notice, instrument or communication required or permitted
under this Agreement shall be deemed to have been effectively given and made
if in writing and if served whether by personal delivery to the party for
whom it is intended, or by being deposited, postage prepaid, registered or
certified mail, return receipt requested, in the United States mail,
addressed to the party for whom it is intended at the following addresses
(or such other address as any of the parties shall hereafter designate in
writing):

If to Auto-Graphics:
Auto-Graphics, Inc. 
3201 Temple Ave. 
Pomona, California 91768 
Attention: Robert S. Cope, President

With a copy to:
Robert H. Bretz, Esq. Robert H. Bretz, P.C.
10350 Santa Monica Blvd. #130  
Los Angeles, California 90025

If to G/K: .
Gannam/Kubat Publishing, Inc. 
2632 Saturn Street 
Brea, California 92621 
Attention: Frank J. Kubat, Jr.

With a copy to:
Edward H. Petersen, Esq. 
Edward H. Petersen, P.C. 
800 South Beach Blvd., Suite H 
La Habra, California 90631

22. Severability.  If any portion of this Agreement is held to be
unenforceable, said portion shall be severed from this Agreement, the
remainder of which shall be deemed to and continue in full force and effect.

23. Counterparts. Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same original Agreement.

24. Choice of Law. This Agreement shall be governed by and interpreted for
all purposes under California law.

25.  Attorneys' Fees. If legal action be instituted by any party to enforce
the provisions of this Agreement or otherwise in respect of this Agreement,
then the prevailing party in any such legal action.

26.  Recitals.  The Recitals as first set forth in this Agreement are hereby
incorporated into and made a part if this Agreement.

27.  Paragraph Headings.  Paragraph and sub-paragraph headings used in this
Agreement are for convenience only and are not a part of this Agreement and
shall not be used in construing it.

IN WITNESS WHEREOF, the undersigned parties through their duly authorized
representatives have executed and delivered this Agreement in Pomona,
California, dated effective as of June 12, 1990.

Gannam/Kubat Publishing, Inc.

By:   ss/ Frank J. Kubat, Jr.

By:  ss/ Nasib Gannam


Auto-Graphics, Inc.

By:  ss/ Robert S. Cope, President


Acknowledged and Agreed
(as to the provisions applicable to such individuals in paragraphs 6 (Kubat)
9 (Gannam) and 17 (Kubat and Gannam) of the Agreement.

By:  ss/ Frank J. Kubat, Jr.

By:  ss/ Nasib Gannam

 ................Exhibit B - Database Recovery Memorandum....................

A-G DATABASE RECOVERY ISSUE

In consideration of the cost incurred by Auto-Graphics, Inc. in the creation,
development and maintenance of the Datacat, Inc.  HVACR database through
December 31, 1993, Auto-Graphics will be entitled to recover an amount equal
to $575,000 from Datacat, as provided for herein ("Database Recovery").

The Database recovery shall commence September 1, 1994.  The liability
represented by such Database Recovery shall be booked by Datacat at August 30,
1994.  Payments in respect of such Database recovery shall be made by Datacat
on a priority basis (before any dividends or other payment or distribution or
payment out of or in respect of capital or equity to the shareholder owners
of Datacat) from the following sources:

1.	Model Selection Fee.  An amount equal to $5.80 shall be paid by
 Datacat to Auto-Graphics for each module selected by any Datacat customer out
 of Datacat's current and future HVACR database;

2.	Increased Gross Margin Any amount paid by Datacat to Auto-Graphics in
 respect of any customer job which is designated in writing by Datacat as an
 "Increased margin job, whereby Auto-Graphics is authorized to bill and
 collect from Datacat an amount for Auto-Graphics' composition and/or other
 services over and above twenty-five percent (25%) profit margin to
 Auto-Graphics for the work performed on such job, shall be credited to and
 thereby reduce Datacat's obligation to Auto-Graphics for Database Recovery;
 and

3.	A-G Cost Savings.  Any amount which Auto-Graphics expressly consents
 to and approves in writing as representing, in Auto-Graphics' sole and
 exclusive judgment, a recognized cost savings in Auto-Graphics' basic
 composition services business attributable to suggestions made by Datacat
 personnel shall be credited to and thereby reduce Datacat's obligation to
 Auto-Graphics for Database Recovery.


In the event that Auto-Graphics does not actually receive in each twelve
month period commencing September 1, 1994 an amount equal to one-third
(33 1/3%) of such Database Recovery ($191,667), then upon Auto-Graphics
written request to Datacat and its shareholders, the shareholders of Datacat
shall then immediately contribute, pro rata to their then current stock
ownership positions in Datacat, an additional amount of cash as a further
capital contribution to Datacat which will enable Datacat to then immediately
pay Auto-Graphics the balance of any such minimum one-third Database Recovery
amount due in any such particular twelve month period during the three year
period ending August 31, 1997.

 ................Exhibit C - AG Database Recovery Counter-Proposal.............

ROBERT H. BRETZ
A PROFESSIONAL CORPORATION

520 WASHINGTON BOULEVARD, #428
MARINA DEL REY, CALIFORNIA 90292
Telephone 310/578-1957
Fax 310/578-5443

August 3, 1994


via Fax No  697-7265

Edward H. Petersen, Esq.
800 South Beach Blvd., Suite H
La Habra, California 90631

Re: Datacat, Inc.

Dear Ed:

This will confirm my telephone report to you following the Datacat Board
Meeting as to the database recovery issue.

Auto-Graphics, Inc.'s proposal is as follows:

(1)	Total Recovery: $500,000 (recorded as a liability on Datacat Is
financial books and records); and

(2)	Gannam/Kubat guarantee responsibility would be for a total of
$300,000 based upon the current projected and budgeted module selection fee
payable to Auto-Graphics for the balance of 1994 ($75,000), 1995 ($100,000)
and 1996 ($125,000).

Accordingly, if Datacat did not meet its budgeted module selection fee
("MSF") payment to A-G of $75,000 during the remainder of 1994, then the
shortfall would be guaranteed by the stockholders of Datacat on a 50/50 basis
(one-half each A-G and G/K) ; and G/K's share, therefore, would be 50% of the
shortfall ($75,000 less actual MSF payment to A-G in 1994 up to a maximum of
$37,500 if no MSF payments were made to A-G by Datacat for the remainder of
1994).  The same analysis would apply for 1995 and 1996, except G/K's
exposure would increase as the budgeted MSF payments increase.

The Gannam/Kubat guarantee of Datacat's obligation to Auto-Graphics would be
joint and several.

Please see if Nappy and Frank will agree to Auto-Graphics proposal.  If so,
it is my understanding that agreement has been reached that the two
shareholder groups, Auto-Graphics and Gannam/Kubat, will provide Datacat with
a line of credit of $100,000 each totaling $200,000 to ensure Datacat's
smooth financial operation through 1994.  We will send along proposed
resolutions covering the mechanics of any such future Datacat "call" and the
mechanics as to how it would work.  If you have any ideas you would like to
send along before we begin drafting, please feel free to provide them to us.

I was please to hear that the "day after thoughts" about the
qualifications/guidance re Frank Kubat's proposed employment arrangement with
Datacat are still positive.  I concur, again, with Frank that it would be a
good idea for him and Bob Cope to get together to dismiss the proposed
co-manager role that has been proposed for them, and their feelings and
suggestions as to how they can work together in the most productive manner
for the benefit of Datacat.

As discussed, I will try to provide you and Frank with a further draft of the
proposed employment contract by no later than this coming Monday, August 8,
1994.

As indicated, I hope to be able to take advantage of a planned two week
vacation starting Tuesday, August 9, 1994, but I will be available by
telephone, fax, and Federal Express to keep matters moving along during the
August 9-22 period that I will be out of town.

Hopefully, this brings us up to date on the matters we are discussing.

Very truly yours,

ss/ Bob Bretz
Robert H. Bretz

cc:	Frank Kubat
c/o Auto Graphics, Inc. (Via Fax No. 909/595-3506) 
	Bob Cope

RHB/sn/ag2l76


 ................Exhibit D - Proposed Ratifying Resolution...................

 .....................Letter........................

ROBERT H. BRETZ
A PROFESSIONAL CORPORATION
520 WASHINGTON BOULEVARD, #428
MARINA DEL REY, CALIFORNIA 90292
Telephone 310/578-1957
Fax 310/578-5443


July 18, 1995


Via Fax No. 697-7265

Edward Petersen, Esq.
800 South Beach Boulevard, Suite H
La Habra, CA 90631

Re:	Datacat, Inc.
(Data Base Recovery Matter)


Dear Ed:

Per our conversation this date, we are enclosing resolutions covering the
Auto-Graphics data base recovery item.

As previously indicated to you and Messrs. Gannam and Kubat on several
occasions, the Auto-Graphics representatives to the Datacat Board believe
that the Board formally approved payment by Datacat of $575,000 over a three
year period in equal monthly payments commencing September 1, 1994, and that
such agreement has been properly performed by Datacat pursuant to such prior
Board approval and authority.

Auto-Graphics likewise believes that the $15,972 monthly payments by Datacat
to A-G which have taken place and are scheduled for payment in the future
have not been unduly burdensome to Datacat (or its shareholder/creditors),
and that such payments should become increasingly affordable as Datacat sales
increase in accordance with projections submitted to the Board at its July
1994 meeting.

Nevertheless, we understand that Messrs. Gannam and Kubat are currently
uncomfortable with the level of cash payments by Datacat in respect of such
data base recovery obligation to Auto-Graphics and have asked Auto-Graphics
to consider a new arrangement to become effective August 1, 1995.
Auto-Graphics has expressed a willingness to consider such request, and hereby
submits a proposal which we believe will meet with your client's approval.
(Mr. Kubat has already told me that he will go along with whatever Mr. Gannam
decides is okay).  The proposal is set for the in the form of the Datacat
corporate resolutions enclosed herewith (the "Proposal").

If for any reason the within proposal is not acceptable to Gannam/Kubat, then
Auto-Graphics will expect the existing payment arrangement to continue in
effect and to be regularly and timely performed by Datacat: (it being
understood that the within Proposal is made subject to and without prejudice
to any and all rights Auto-Graphics has or may hereafter have in respect of
the obligation of Datacat to Auto-Graphics in respect of such data base
recovery matter).

As Auto-Graphics understands it, assuming that the data base recovery matter
is restructured to the mutual satisfaction of the parties, the agenda
considered and acted upon by the Datacat Board in July 1994 will have been
endorsed and ratified by both Diversified and Auto-Graphics.

With your assistance, I would like to be able to report Gannam/Kubat's
approval of the within Proposal before the end of this week. (Toward this end,
we are forwarding the original Minute Book copy of the within Proposal
directly to Diversified for execution by Messrs. Gannam and Kubat and return
to us for further signature by Auto-Graphics people).  Thanks.

Very truly yours,

ss/ Bob Bretz
Robert H. Bretz

Enclosure

CC:  Auto-Graphics, Inc.
(Via -Fax No. 909/595-3506)

Diversified Printing Company

(Via fax No. 714/996-0342)


 ................Proposed Resolution..............

RESOLUTIONS
OF THE
BOARD OF DIRECTORS
OF
DATACAT, INC.

The  undersigned persons, constituting all of the members of the Board of
Directors of Datacat, Inc., a California corporation (the "Company"), acting
without holding a formal meeting, through this unanimous written consent as
provided for under California Corporations Code Section 307(b), do hereby
approve, consent to, adopt and ratify as the action of the Company the
following resolutions effective as of July 21, 1995 (the "Resolutions"):

WHEREAS, the Board of Directors of the Company has previously authorized
payment to Auto-Graphics, Inc.  ("A-G") in respect of the costs incurred to
create the Company's initial HVACR data base in the agreed upon amount of
$575,000 (herein the "Data Base Recovery Cost") , and now desires to revise
the regular periodic payments to be made by the Company to A-G in respect of
such Data Base Recovery Cost;

NOW, THEREFORE, BE IT RESOLVED that the Company's obligation to A-G in
respect of the balance of such Data Base Recovery Cost in the amount of
$399,308 shall be paid, commencing effective August 1, 1995, in equal monthly
installments over a period of forty-one (41) months of $9,739 per month until
the balance of such Data Base Recovery Cost obligation has been paid in full
in December of 1998;

RESOLVED FURTHER, that if the balance due and owing by the Company to A-G in
respect of such Data Base Recovery Coat is not paid in full prior to the end
of the twenty-ninth (29) month (December, 1997), then in addition to the
regular payment by the Company to A-G the then existing balance of such Data
Base Recovery Cost, A-G shall be entitled to receive and the Company shall
pay interest on such remaining balance payable monthly at the maximum rate
allowable by law but in no event more than ten percent (10%) per annum;

RESOLVED FURTHER, that payment by the Company to A-G of amounts due and owing
in respect of such Data Base Recovery Cost shall be subordinated to the
payment of current payable to third party (non-related parties and the
Datacat rent, payroll and miscellaneous expenses advanced by and reimbursed
to A-G which are deemed to be third party payables) vendors but shall be paid
prior to payment by the Company of payables due and owing to Diversified and
A-G for catalog services rendered by such related parties to Datacat,

RESOLVED FURTHER, that appropriate officers, agents and representatives of
the Company are hereby authorized and directed to implement, carry-out and
effectuate the foregoing resolutions by, in the name of and for and behalf
of the Company including without limitation the making, execution and
delivery of a promissory note by the Company evidencing the Company's
obligation to A-G in respect of such Data Base Recovery Cost in the form
attached hearto as Exhibit A; and

RESOLVED FURTHER, that for purposes of the approval of the within Resolutions,
the A-G representatives on the Company's Board of Directors, Messrs.
Robert S. Cope, Douglas K. Bisch and Paul Cope, shall be deemed to have
abstained from the voting on and approval of these Resolutions.

IN WITNESS WHEREOF, the undersigned have executed the Resolutions effective
as of the date first indicated above.

						
						Nasib Gannam
	
												
						Frank J. Kubat, Jr.


						Robert S. Cope	


						Douglas K. Bisch
								

						Paul Cope
					
 ...............Proposed Promissory Note...................


PROMISSORY NOTE

$350,613 
December 31, 1995
Pomona, California

FOR THE VALUE RECEIVED, Datacat, Inc., a California corporation (the "Maker"),
promises to pay to Auto-Graphics, Inc., a California corporation, or its
order (the "Payee"), at the Maker's corporate office the principal sum of
Three Hundred and Fifty Thousand Six Hundred and Thirteen Dollars ($350,613)
in equal monthly installments of Nine Thousand Seven Hundred and Thirty-Nine
Dollars ($9,739) each commencing January 1, 1996 and continuing thereafter
until the principal balance of this Promissory Note has been paid in full in
December of 1998.

This Promissory Note may be prepaid by the Company at any time. If this
Promissory Note is not prepaid in full on or before December 31, 1997 then,
in addition to the principal payments to the Payee as provided for herein,
the Payee shall be entitled to receive and the Maker shall be obligated to
and shall pay to the Payee each month commencing January 1, 1998 interest on
the unpaid principal balance of this Note at the maximum rate allowable by
law during such period of time not to exceed ten percent (10%) per annum.

If the Maker fails to make three consecutive monthly payments as provided for
herein, then the Payee shall have the right to declare a default under this
Promissory Note and accelerate payment of all past due and remaining payments
under this Note which shall hereby all become due and owing by the Maker at
the date of any such notice default by the Payee.

The Maker hereby waives presentment, notice non-payment or other formal
demand prior to the initiation of legal action by the Payee to recover amounts
due and owing on this Promissory Note, except that the Payee agrees to and
shall provide written notice of intention to file legal action on this
Promissory Note to Nasib Gannam and Frank Kubat c/o Diversified Printing
Company, 2632 Saturn Street, Brea, California 92621, any no later than thirty
(30) days prior to actually filing any such suit.

If the Payee is forced for any reason to initiate legal action to collect or
otherwise in respect of this Promissory Note and the obligation represented
thereby then, in addition to whatever other relief the Payee may be entitled
to receive as a result of such action , the Payee shall also be entitled to
such Payee's reasonable attorneys' fees and costs, and other costs of suit,
as part of any settlement of or judgment on such legal action.

This Promissory Note is made, and shall be governed, interpreted and enforced
for all purposes under the laws of the State of California.

IN WITNESS WHEREOF, the undersigned having been duly authorized has executed
this Promissory Note in Pomona, California effective as of the date first
above written.

						DATACAT, INC.
						(a California Corporation)


						By: 
						    Nasib Gannam


						By: 
						    Robert S. Cope

This Promissory Note is made, and shall be governed, interpreted and enforced
for all purposes under the law of the State of California.

IN WITNESS WHEREOF, the undersigned having been duly authorized has executed
this Promissory Note in Pomona, California effective as of the date first
above written.

						DATACAT, INC.
						(a California Corporation)

						By: 
						    Nasib Gannam

						By:
						    Robert S. Cope								


 ..........................End Exhibits.......................................