Mark Schouten, Pride Holdings Company, LLC, BZ Syndicate, LLC, Jacob Nossaman, JNOSS Holdings, LLC, Gregory Zane Mead, and Mead Truck Rentals, L.P. v. Derek Wachob, Global Source Recycling Company, LLC, Global Source Recycling Holdings, LLC, Paragon Industries, Inc., Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc.

IN THE DISTRICT COURT OF TULSA COUNTY STATE OF OKLAHOMA MARK SCHOUTEN, an individual, PRIDE HOLDINGS COMPANY, LLC, an Arizona Limited Liability Company, BZ SYNDICATE, LLC, a Delaware Limited Liability Company, JACOB NOSSAMAN, an individual, JNOSS HOLDINGS, LLC, an Oklahoma Limited Liability Company, GREGORY ZANE MEAD, an individual, MEAD TANK RENTALS, L.P., a Texas Limited Partnership, Plaintiffs, vs. DEREK WACHOB, an individual, GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, GLOBAL SOURCE RECYCLING HOLDINGS, LLC, a Delaware Limited Liability Company, PARAGON INDUSTRIES, INC., an Oklahoma Corporation, PARAGON INTERMEDIATE HOLDINGS, INC., a Delaware Corporation, PARAGON HOLDCO, INC., a Delaware Corporation, WIT FAMILY OFFICE, LLC, an Oklahoma Limited Liability Company, WACHOB PROPERTIES, LLC, an Oklahoma Limited Liability Company, WACHOB MOTORSPORTS, LLC, an Oklahoma Limited Liability Company, WACHOB LEASING CO., INC., an Oklahoma Corporation, Defendants. PETITION For their Petition, against Defendants, Derek Wachob, Global Source Recycling Company, LLC, Global Source Recycling Holdings, LLC, Paragon Industries, Inc., Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc., Plaintiffs, Mark Schouten, Pride Holdings Company, LLC, BZ Syndicate, LLC, Jacob Nossaman, JNOSS Holdings, LLC, Gregory Zane Mead, and Mead Truck Rentals, L.P., allege and state as follows: 1. Mark Schouten is an individual residing in Maricopa County, Arizona. He is the managing member of Pride Holdings Company, LLC and BZ Syndicate, LLC. 2. Pride Holdings Company, LLC is an Arizona Limited Liability Company with its principal place of business in Maricopa County, Arizona. 3. BZ Syndicate, LLC is a Delaware Limited Liability Company with its principal place of business in Maricopa County, Arizona. 4. Jacob Nossaman is an individual residing in Oklahoma County, Oklahoma. He is the managing member of JNOSS Holdings, LLC. 5. JNOSS Holdings, LLC is an Oklahoma Limited Liability Company with its principal place of business in Oklahoma County, Oklahoma. 6. Gregory Zane Mead is an individual residing in Lubbock County, Texas. He indirectly owns a controlling interest in Mead Tank Rentals, L.P. 7. Mead Tank Rentals, L.P. is a Texas Limited Partnership with its principal place of business in Lubbock County, Texas. 8. Derek Wachob is an individual residing in Creek County, Oklahoma. He directly and/or indirectly owns and controls all of the other defendants. 9. Global Source Recycling Company, LLC ("GSR") is a Delaware Limited Liability Company with its principal place of business in Creek County, Oklahoma. It is one of the principal lynchpins of the fraud perpetrated on the Plaintiffs. 10. Global Source Recycling Holdings, LLC is a Delaware Limited Liability Company with its principal place of business in Creek County, Oklahoma. Upon information and belief, it is a parent, affiliate, or other related entity of GSR and is used to facilitate the misconduct described and summarized herein. 11. Paragon Industries, Inc. ("Paragon") is an Oklahoma Corporation with its principal place of business in Creek County, Oklahoma. Paragon was founded by Wachob's late father, and is another of the principal lynchpins of the fraud perpetrated on the Plaintiffs. 12. Paragon Intermediate Holdings, Inc. is a Delaware Corporation with its principal place of business in Creek County, Oklahoma. It is the parent company of Paragon and is used to facilitate the misconduct described and summarized herein. 13. Paragon Holdco, Inc. is a Delaware Corporation with its principal place of business in Creek County, Oklahoma. It is the grandparent company of Paragon and is used to facilitate the misconduct described and summarized herein. 14. WIT Family Office, LLC is an Oklahoma Limited Liability Company with its principal place of business in Creek County, Oklahoma. It is used to facilitate the misconduct described and summarized herein, including, but not limited to, by using (directly and/or indirectly) funds misappropriated from the Plaintiffs and others to facilitate the extremely excessive lifestyle of the Wachob family. 15. Wachob Properties, LLC is an Oklahoma Limited Liability Company with its principal place of business in Creek County, Oklahoma. It is used to facilitate the misconduct described and summarized herein, including, but not limited to, by using (directly and/or indirectly) funds misappropriated from the Plaintiffs and others to facilitate the extremely excessive lifestyle of the Wachob family. 16. Wachob Motorsports, LLC is an Oklahoma Limited Liability Company with its principal place of business in Creek County, Oklahoma. It is used to facilitate the misconduct described and summarized herein, including, but not limited to, by using (directly and/or indirectly) funds misappropriated from the Plaintiffs and others to facilitate the extremely excessive lifestyle of the Wachob family. It is believed that it is the owner of some or all of the Wachob family’s extensive collection of luxury automobiles, believed to have a value in excess of $10,000,000.00. 17. Wachob Leasing Co., Inc. is an Oklahoma Corporation with its principal place of business in Creek County, Oklahoma. It is used to facilitate the misconduct described and summarized herein, including, but not limited to, by using (directly and/or indirectly) funds misappropriated from the Plaintiffs and others to facilitate the extremely excessive lifestyle of the Wachob family. It is believed that it is the owner of some or all of the Wachob family’s private airplanes, believed to have a value of many millions of dollars. 18. One or more of the defendants owns property located in Tulsa County, Oklahoma. Further, the causes of action asserted in this Petition, or some part thereof, arose in Tulsa County, Oklahoma. 19. By virtue of the foregoing, this Court has jurisdiction over the subject matter, and the parties to this action, and venue is proper in this Court. BACKGROUND ALLEGATIONS 20. Schouten, Nossaman, Mead, and Wachob were joint owners of a business venture in Missouri. 21. The venture planned to construct a large real estate and construction project, for which the owners would be required to contributed millions of dollars. 22. Schouten, Nossaman and Mead had, as of early 2023, set aside liquid funds to that end. 23. Wachob knew of their doing so and took advantage of it. 24. Paragon, Wachob, and the Wachob-controlled network of entities were in significant need of cash in and throughout 2023. 25. To raise such cash, in part, Wachob falsely stated to Schouten, Nossaman, and Mead that GSR would purchase industrial rolled steel at prices only available to Paragon because of its significant industry presence. Then, the steel would be resold to other entities at a sizeable profit (of $425,000 each) in short order, and the Plaintiffs’ funds would be returned, with such profit, within ninety (90) days. 26. This time frame was in line with the timing needed for the construction project referred to in Paragraphs 21 and 22 above. 27. Wachob intentionally failed to disclose the material fact that Paragon was heavily indebted to its suppliers and unable to pay its bills as they came due in amounts approaching and/or exceeding $50 million, at minimum. This is demonstrated by, among other things, the filings in Nucor Corporation v. Paragon Industries, Inc., United States District Court for the Eastern District of Arkansas Case No. 24-cv-182-BSM (copy of Complaint attached as Exhibit A) and AM/NS Calvert LLC et. al v. Paragon Industries, Inc., United States District Court for the Northern District of Illinois Case No. 24-cv-9108 (copy of Complaint attached as Exhibit B). 28. Relying on Wachob’s false statements described above, Schouten directed Pride Holdings Company, LLC to wire $3,000,000 to GSR’s bank account in Oklahoma on March 17, 2023. 29. Relying on Wachob’s false statements described above, Nossaman directed JNOSS Holdings, LLC to wire $3,000,000 to GSR’s bank account in Oklahoma on March 20, 2023. 30. Relying on Wachob’s false statements described above, Mead directed Mead Tank Rentals, L.P. to wire $3,000,000 to GSR’s bank account in Oklahoma on March 17, 2023. 31. Wachob falsely claimed that he, too, invested $3,000,000 of his or one of his entities’ funds in the same rolled steel purchase. 32. He then falsely confirmed—in writing—to Schouten, Nossaman, and Mead that they and/or their entities “owned” 16,000 pounds of rolled steel that had, in fact, been purchased. 33. Wachob falsely claimed that this steel would be resold to “Acme,” an entity he said was later sold to “Republic.” Acme Steel Co., once one of the nation’s leading steel companies, closed in 2001 after extended bankruptcy proceedings. Despite request, Wachob has never been able to produce any documentation regarding the alleged “Acme” sale or any documentation regarding Republic’s alleged involvement. Rather, all information about this claimed transaction has been intentionally vague and unwritten to further conceal the true use of Plaintiffs’ funds. 34. Then, in early August of 2023, Wachob falsely stated to Schouten that there was an additional opportunity for GSR to make an additional purchase of industrial rolled steel at prices only available to Paragon. Then, the steel would be resold to other entities at a sizeable profit (that would result in a 9% profit to Schouten) in short order, and his funds would be returned, with such profit, in November of 2023. 35. Relying on Wachob’s false statements described above, Schouten directed BZ Syndicate, LLC to wire $2,000,000 to GSR’s bank account in Oklahoma on August 16, 2023. 36. Thereafter, throughout the remainder of 2023 and continuing throughout 2024, Wachob falsely stated to Schouten, Nossaman and Mead (who were acting on their own behalves and on behalf of their respective entities) that there were delays with the manufacturer, which in turn caused payment delays with the end purchaser. These statements were false and were intended to conceal the true nature of Wachob’s misconduct with the Plaintiffs’ funds. 37. Upon information and belief, the industrial rolled steel purchases allegedly orchestrated by Wachob, GSR, and Paragon at discounted prices from suppliers with Plaintiffs’ funds never existed, Derek Wachob never matched Plaintiffs’ funds invested with any of his or his entities’ funds, and/or Defendants converted Plaintiffs’ funds invested with them to their own uses including, without limitation, funding Derek Wachob’s and his family’s lavish lifestyle. The Wachob family’s lavish lifestyle includes expenses incurred to purchase and operate two (2) private jets, two (2) helicopters, four (4) luxury yachts, and at least 50 luxury and classic automobiles—the automobiles alone which are known to have a value exceeding $10,000,000, including one single automobile valued at approximately $4,000,000. It has continued throughout the entities’ (including the named defendants’) financial peril (including, but not limited to, Wachob’s purchase of a new Mercedes Benz automobile worth approximately $200,000 in late October of 2024). 38. To date, Defendants have alleged they resold at least 16,000 tons of rolled steel purchased in whole or in part with Plaintiffs’ invested funds, but have never returned any of Plaintiffs’ funds invested, nor have they paid Plaintiffs any of their share of profits on such sales. 39. Despite demand from Plaintiffs, Defendants have failed and refused to return their invested funds to Plaintiffs, failed and refused to pay over any of the alleged profits on steel sold to Plaintiffs, and failed to account to Plaintiffs for any of the unsold industrial rolled steel they allegedly purchased with Plaintiffs’ invested funds 40. Alternatively, Defendants sold some of the assets purchased with Plaintiffs’ funds invested, and Defendants converted Plaintiffs’ funds invested and share of profits to their own uses after reselling some or all of the industrial rolled steel including, without limitation, funding Derek Wachob’s and his family’s lavish lifestyle, which has continued unabated. 41. This is eerily similar to the allegations in Skip Braver and Chad Braver v. Derek Wachob and Global Source Recycling Company, LLC, United States District Court for the Southern District of Florida Case No. 24-cv-24048-BB (copy of Complaint attached as Exhibit C). 42. Upon information and belief, entities owned or controlled, directly or indirectly, by Wahcob and other members of his family have entered into related party transactions and business arrangements using, directly or indirectly and in whole or in part, the Plaintiffs’ funds for the benefit of themselves and their third party companies, and to the detriment of the Plaintiffs. These entities include, but are not limited to, Wachob Oil & Gas, LLC, Wachob Industries, Inc., Wachob Advertising, LLC, Wachob Transportation Co., LLC, Plant Love Naturals, LLC, WIT D-Luxe Holdings, LLC, WIT ML 1, LLC (d/b/a Massage Luxe), and The Olympia of Destin, LLC. Upon discovery of the details, which will be promptly sought, the Plaintiffs intend to amend their Petition to include all such entities (including those named and others) as party defendants in this litigation. 43. Similarly, other members of the Wachob family (including, but not limited to, Linda Wachob, Nora Wachob, Tim and Whitney Hudgins, and Jordan and Abigail Harris) have also entered into related party transactions and business arrangements using, directly or indirectly and in whole or in part, and/or otherwise personally benefitted from the Plaintiffs’ funds. 44. Upon discovery of the details, which will be promptly sought, the Plaintiffs intend to amend their Petition to include all such persons (including those named in Paragraphs 42 and 43 and others) as party defendants in this litigation. 45. At all times relevant to this action, Wachob was acting on behalf of GSR, Global Source Recycling Holdings, LLC, Paragon, Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc., as each of their individual and collective duly authorized agent. Thus, all of his acts and omissions are attributable to each such entity as a matter of law. 46. At all times relevant to this action, Wachob, GSR, Global Source Recycling Holdings, LLC, Paragon, Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc. were authorized agents of each other and in a joint venture with each other to procure financial gain at the expense of Plaintiffs. Thus, all acts and omissions of Wachob and all of the entities are attributable to each respective entity. 47. Upon information and belief, following discovery, the Plaintiffs shall be able to demonstrate that Wachob should be responsible for GSR, Global Source Recycling Holdings, LLC, Paragon, Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc.’s debts under the standard set forth in Frazier v. Bryan Mem'l Hosp. Auth., 1989 OK 73, ¶ 17, 775 P.2d 281, 288, due to his complete control over those entities, and their total interrelatedness of finances. 48. Upon information and belief, GSR, Global Source Recycling Holdings, LLC, Paragon, Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc. are all—individually and collectively—mere instrumentalities and/or the alter ego of Wachob and of each other. Thus, all should be held liable for the obligations of each other under the standard set forth in Lifetouch Nat'l Sch. Studios Inc. v. Okla. Sch. Pictures, Ltd. Liab. Co., 2024 OK CIV APP 17, ¶ 23, 554 P.3d 764 and the authority cited therein. COUNT I Civil Conspiracy (Against all Defendants) 49. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count I. 50. This Count states a claim under applicable state and common law for civil conspiracy against Wachob, GSR, Global Source Recycling Holdings, LLC, Paragon, Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc., and their respective agents and employees that participated in the misconduct herein (collectively, the “Conspirators”). 51. Upon information and belief, Conspirators formed a combination of persons with the purpose of committing the misconduct detailed herein, and harm to the Plaintiffs, among other wrongful acts which are alleged herein and which will be further detailed following discovery. 52. The Conspirators agreed to, among other things, intentionally engage in the conduct alleged herein. 53. The Conspirators made numerous overt acts in furtherance of their conspiracy including, but not limited to, misrepresenting the purpose and use of the Plaintiffs’ funds, misappropriating the Plaintiffs’ funds for purposes other than represented to the Plaintiffs (including business and personal purposes and further making inter-company and related party transfers of Plaintiffs’ funds or the proceeds thereof), and intentionally concealing those facts from the Plaintiffs throughout 2023 and 2024. 54. As a result of the Conspirators’ wrongful acts, the Plaintiffs have suffered and will continue to suffer damages in an amount to be proven at trial, but which exceed $75,000.00. 55. In addition, the above-described conduct of the Conspirators rises to the level of willful, wanton, heinous, grossly negligent, or reckless conduct for which they should be punished by an award to the Plaintiffs of exemplary and punitive damages in an amount sufficient, taking into consideration the assets and worth of the Conspirators, to render the consequences of their conduct an example to themselves and others and, in any event, in an amount at least equal to the actual damages awarded to the Plaintiffs for the Conspirators’ wrongful acts. See 23 Okla. Stat. § 9.1. COUNT II Breach of Contract (Against Wachob and GSR) 56. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count II. 57. This Count states a claim under applicable state and common law for breach of contract against Wachob and GSR. 58. Wachob and GSR entered into express and implied contracts with Pride Holdings Company, LLC ("Pride"), BZ Syndicate, LLC ("BZ"), JNOSS Holdings, LLC ("JNOSS"), and Mead Tank Rentals, L.P. ("Mead Tank") to repay them for the advanced funds, with profit and/or interest, as described herein. The time for performance by Wachob and/or GSR has passed without performance. 59. Wachob and GSR's failure breaches their agreements with each of the Plaintiffs identified in Paragraph 58 above. 60. This has caused damages to Pride, JNOSS, and Mead Tank of $3,425,000, with interest at the agreed upon rate, which continues to accrue, and damages to BZ of $2,180,000, with interest at the agreed upon rate, which continues to accrue. 61. All conditions precedent to payment by Wachob and/or GSR have either been satisfied by the Plaintiffs, waived by the Defendants (expressly or impliedly) or both. COUNT III Actual and Constructive Fraud (Against Wachob, GSR, and Paragon) 62. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count III. 63. This Count states a claim under applicable state and common law for actual and/or constructive fraud against Wachob, GSR, and Paragon. 64. On behalf of himself, GSR, and Paragon, in March and August of 2023, Wachob, falsely represented to Schouten, Nossaman, and Mead that he, through GSR and Paragon, had available investment opportunities in which short-term purchases of steel could be made at Paragon pricing and then resold, resulting in significant returns in a quick period of time. 65. Said representations were knowingly false and fraudulent and made with intent to deceive the Plaintiffs. 66. In the alternative, Wachob (on behalf of himself, GSR, and Paragon) should have known that the statements were false. 67. Wachob owed a duty of full disclosure by virtue of his superior access of information, his status as an actual or de facto business partner with the individual Plaintiffs, his selective disclosure of facts that created a false impression, his (or his controlled and alter ego entities’) possession of Plaintiffs funds, and his incomplete and materially misleading statements made to the Plaintiffs. 68. Schouten, Nossaman, and Mead reasonably relied on these misrepresentations to their detriment, by performing directing Pride, BZ, JNOSS, and Mead Tank to transfer millions of dollars to GSR. 69. Thereafter, Wachob continued—through the remainder of 2023 and throughout 2024—to conceal the true facts from the Plaintiffs and to falsely state that the reason they had not been repaid was due to untrue reasons, such as purchase and/or distribution issues (as opposed to the actual misappropriation and/or misapplication of funds that had occurred). 70. As a direct and proximate result of Wachob’s, GSR’s, and Paragon’s above-described actual and constructive fraud, the Plaintiffs have been damaged in an amount to be proved at trial, but which exceeds $10,000 and also exceeds the amount-in-controversy requirement of 28 U.S.C. § 1332. 71. In addition, the above-described conduct of Wachob, GSR, and Paragon rises to the level of willful, wanton, heinous, grossly negligent, or reckless conduct for which they should be punished by an award to Plaintiffs of exemplary and punitive damages in an amount sufficient, taking into consideration the assets and worth of Wachob, GSR, and Paragon (and their respective parent companies), to render the consequences of their conduct an example to themselves and others and, in any event, in an amount at least equal to the actual damages awarded to the Plaintiffs for Wachob’s, GSR’s, and Paragon’s wrongful acts. See 23 Okla. Stat. § 9.1. COUNT IV Breach of Fiduciary Duty (Against Wachob and GSR) 72. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count IV. 73. By reason of Wachob’s relationship with the Plaintiffs and GSR’s possession of their funds, both were in a fiduciary relationship with the Plaintiffs, and owe the Plaintiffs a duty of the highest good faith, fair dealing, loyalty and full, candid and adequate disclosure. 74. By virtue of the conduct described herein, Wachob and GSR have violated, and are violating, fiduciary duties owed to the Plaintiffs. 75. Wachob has knowingly or recklessly breached his fiduciary duties of loyalty, good faith, and independence owed to the Plaintiffs. He has engaged in self-dealing, abused his special and confidential relationship with the Plaintiffs, and obtained for himself and others personal benefits, including personal financial benefits, to the detriment of the Plaintiffs. 76. Wachob’s and GSR’s breaches of their fiduciary duties has caused the Plaintiffs harm, in an amount to be determined but which exceeds $10,000 and also exceeds the amount-in-controversy requirement of 28 U.S.C. § 1332. 77. In addition, the conduct of Wachob and GSR, as set forth herein, rises to the level of willful, wanton, oppressive, or reckless conduct for which he should be punished by an award to the Plaintiffs of exemplary and punitive damages in an amount sufficient, taking into consideration the assets and net worth of Wachob and GSR, to render the consequences of such conduct an example to themselves and others and, in any event, in an amount at least equal to the actual damages awarded under this Count. 78. The Plaintiffs are also entitled to the remedies of constructive trust, and/or an equitable lien, and/or disgorgement of profits on all property of any Defendant or person or entity identified herein who has benefitted, directly or indirectly, in whole or in part, from Wachob's and GSR's fraudulent misuse of the Plaintiffs' funds. COUNT V UNJUST ENRICHMENT (Against all Defendants) 79. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count V. 80. The Defendants have received a benefit through their receipt of money and property belonging to the Plaintiffs and/or purchased with the Plaintiffs’ funds (in whole or in part), all as described herein. 81. The Defendants are not justly entitled to retain such monies and properties, as those funds belong to Pride, BZ, JNOSS, and Mead Tank. Injustice would result if any Defendant allowed to retain such property, monies or the value of such property and funds. 82. In the unlikely event that any of Plaintiffs is found not to have a contract and/or the contracts referred to herein are found to be unenforceable or unable to provide a remedy as to the issues presented, recovery in unjust enrichment is proper. Under such circumstances, Pride, BZ, JNOSS, and Mead Tank would lack an adequate remedy at law for the harm caused by the Defendants’ misconduct, as alleged herein. 83. The Defendants should be disgorged of all benefits—including, but not limited to, profits—received from the Plaintiffs and/or obtained by use, in any way, of the Plaintiffs’ funds. 84. The Plaintiffs request a constructive trust and/or an equitable lien be placed on the Defendants’ assets that were related or are related to the unjust enrichment of any Defendant (or other person or entity referred to herein) at the expense of the Plaintiffs (in any manner) as detailed herein. COUNT VI ACCOUNTING (Against all Defendants) 85. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count VI. 86. This Count states a claim under applicable state and common law for an accounting against all Defendants. 87. Since March and August of 2023, Wachob (and some or all of his alter ego entities) have controlled Plaintiffs’ funds and has engaged in numerous acts in violation of his fiduciary and legal duties to the Plaintiffs, including wasteful personal spending, raiding corporate assets, failure to manage the business entity defendants in accordance with industry standards and applicable state and federal law, and has manipulated the business entity financial statements and underlying documentation in numerous ways for his own benefit and to the detriment of the Plaintiffs (including, but not limited to, concealing the misapplication and misappropriation of their funds). 88. By virtue of the circumstances described in this Petition and in accordance with applicable law, the Plaintiffs are entitled to a full accounting of the use of their funds in any manner by any defendant (or other person or entity referred to herein). This accounting should include the complete examination of all books and records of GSR, Paragon, and all related entities (including, without limitation, those referred to herein)—needed for the purpose of a complete accounting of Plaintiffs’ funds. COUNT VII RECEIVERSHIP 89. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count VII. 90. Plaintiffs are rightfully creditors of the Defendants by virtue of the property and services provided, not paid, and property and funds fraudulently diverted as described herein, and they have an interest in the money and/or property acquired with such funds as are rightfully theirs. 91. The money and/or proceeds held by the Defendants are in danger of being lost, removed or materially injured by the Defendants through usage, transfer or concealment. 92. The entity defendants are insolvent or in imminent danger of insolvency. 93. The Court should appoint a receiver to control the affairs and the property of GSR, Paragon, and all other entity defendants in accordance with 12 Okla. Stat. § 1551. COUNT VIII PRE-JUDGMENT ATTACHMENT 94. Plaintiffs incorporate all other allegations of this Petition as if set out in full in Count VIII. 95. By virtue of the circumstances described in this Petition, the Plaintiffs are entitled to prejudgment attachment of all assets of any Defendant (or other person or entity referred to herein) purchased by and/or improved with any part of their funds, all in accordance with 12 Okla. Stat. § 1151(1), (2), (5), (6), (7), (8), (9), (10), & (11). WHEREFORE, Plaintiffs, Mark Schouten, Pride Holdings Company, LLC, BZ Syndicate, LLC, Jake Nossaman, JNOSS Holdings, LLC, Zane Mead, and Mead Truck Rentals, L.P., demands judgment against Derek Wachob, Global Source Recycling Company, LLC, Global Source Recycling Holdings, LLC, Paragon Industries, Inc., Paragon Intermediate Holdings, Inc., Paragon Holdco, Inc., WIT Family Office, LLC, Wachob Properties, LLC, Wachob Motorsports, LLC, and Wachob Leasing Co., Inc., for (1) actual damages as requested herein, (2) punitive damages as requested herein, (3) pre- and post-judgment interest, (4) an accounting as requested herein, (5) the appointment of a receiver as requested herein, (6) the imposition of a constructive trust and equitable lien as requested herein, (7) the piercing of the corporate veil of all entity defendants to impose individual liability on Wachob, (8) the piercing of the corporate veil of all entity defendants to impose liability on all other entity defendants, (9) the remedy of prejudgment attachment in accordance with 12 Okla. Stat. § 1151, (10) an award of all costs incurred by the Plaintiffs, in defending, bringing, and prosecuting this action or any part thereof, including reasonable attorney’s fees, and (11) all other relief to which the Plaintiffs are entitled at law or in equity. Respectfully submitted, Ryan A. Ray, OBA #22281 Chad J. Kutmas, OBA #19505 NORMAN WOHLGEMUTH, LLP 401 S. Boston Ave., Suite 3200 Tulsa OK 74103 Telephone: (918) 583-7571 Facsimile: (918) 584-7846 Email: [email protected] [email protected] ATTORNEYS FOR PLAINTIFFS, MARK SCHOUTEN, PRIDE HOLDINGS COMPANY, LLC, BZ SYNDICATE, LLC, JACOB NOSSAMAN, JNOSS HOLDINGS, LLC, GREGORY ZANE MEAD, AND MEAD TRUCK RENTALS, L.P. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS NORTHERN DIVISION NUCOR CORPORATION v. CASE NO. 3:24-cv 00182-BSM PARAGON INDUSTRIES, INC. COMPLAINT Plaintiff Nucor Corporation, by and through its Nucor Steel Arkansas Division ("Nucor Steel Arkansas"), brings this action against Defendant Paragon Industries, Inc. ("Paragon"), and alleges: PARTIES 1. Nucor Corporation is a Delaware corporation with its principal place of business in Charlotte, North Carolina. Nucor Steel Arkansas, a division of Nucor Corporation, operates a sheet steel mill in Blytheville, Arkansas, where it produces various forms of sheet steel products and has hundreds of employees. 2. Paragon is an Oklahoma corporation with its principal place of business in Sapulpa, Oklahoma. Upon information and belief, Paragon's business is the manufacture and sale of steel tubular and piping products. JURISDICTION AND VENUE 3. The Court has subject matter jurisdiction over Nucor Steel Arkansas's claims pursuant to 28 U.S.C. § 1332(a)(1) because the amount in controversy exceeds $75,000, exclusive of interests and costs, and the controversy is between citizens of different states. 4. The Court has personal jurisdiction over Paragon because Paragon agreed by contract to be subject to personal jurisdiction herein. In addition, upon information and belief, Paragon regularly engages in business transactions in Arkansas, including the activity giving rise to this action. 5. Venue in this District is proper under 28 U.S.C. § 1391 because a substantial part of the events giving rise to this action occurred here, and Paragon is subject to personal jurisdiction in this district. FACTS 6. Paragon uses sheet steel as the primary input in its manufacture of steel piping and related products. Paragon has purchased substantial volumes of sheet steel from Nucor Steel Arkansas over a number of years. 7. On or about April 10, 2006, Paragon executed a Credit Application, which it submitted to Nucor Corporation. The Credit Application included Terms and Conditions of Sale (the "Terms & Conditions"), and Paragon agreed the Terms & Conditions would apply to all sales to Paragon by Nucor entities including Nucor Steel Arkansas. 8. Pursuant to the Terms & Conditions, Paragon agreed that the parties’ agreement would be governed “by the laws of the state in which Nucor’s shipping facility is located,” i.e., the laws of Arkansas. (Terms & Conditions, § 12.) Paragon also “expressly and irrevocably consent[ed] to the exclusive jurisdiction” of the courts of Arkansas. (Id.) 9. Between May and July of 2022, Paragon placed multiple orders for steel products with Nucor Steel Arkansas. 10. Nucor Steel Arkansas sold and shipped the products ordered by Paragon, and Paragon received and accepted those products. 11. Nucor Steel Arkansas timely and properly supplied the steel products ordered by Paragon, and between April 2022 and August 2022, Nucor Steel Arkansas issued invoices to Paragon seeking payment. 12. Despite performance by Nucor Steel Arkansas and acceptance of the products sold by Nucor Steel Arkansas, Paragon has failed and refused to pay Nucor Steel Arkansas. 13. Paragon has never rejected or revoked acceptance of any of the steel products at issue. Nor has Paragon asserted any defense to its obligations to pay Nucor Steel Arkansas. 14. Nucor Steel Arkansas extended credit terms to Paragon for purchase of steel products pursuant to the Credit Application. Nucor Steel Arkansas's invoices provided net 30 payment terms. 15. Nucor Steel Arkansas's rights under the Terms & Conditions may not be waived unless such waiver is in a writing signed by Nucor Steel Arkansas. (Terms & Conditions, § 13.) Nucor Steel Arkansas has not waived its rights under the Terms & Conditions, including its rights to payment. 16. No fewer than forty-seven (47) invoices related to sales made by Nucor Steel Arkansas and accepted by Paragon remain outstanding. The terms and conditions attached to the invoices are the same as the Terms & Conditions applicable to all orders by Paragon. 17. Under the Terms & Conditions, if Paragon fails to pay, Nucor Steel Arkansas has the right to terminate Paragon orders. In addition, outstanding amounts accrue interest at the contract rate of 12% per annum, and Nucor Steel Arkansas is entitled to attorneys' fees incurred in collecting the balance due. (Terms & Conditions, § 11.) 18. In addition to the invoices, Paragon unilaterally took discounts on prior payments to Nucor Steel Arkansas that were unauthorized. Nucor Steel Arkansas has reversed those discounts through application of debit memos to Paragon’s account. 19. As of the date hereof, Paragon is in default of payment on the Invoices, along with the debit memos, in the total principal amount of $32,563,370.95. A recent account statement listing the outstanding invoices and debit memos is attached as Exhibit A. 20. In addition to the principal amount of $32,563,370.95 due and owing, interest continues to accrue at the contract rate. Such interest exceeds $7.8 million to date. Continuing interest will increase by the amount of $325,633.71 each month. 21. Despite repeated demand, and notwithstanding full performance by Nucor Steel Arkansas, Paragon has failed and refused to pay the amount due and owing. COUNT ONE—BREACH OF CONTRACT 22. Nucor Corporation realleges each allegation in Paragraphs 1-21 above as if set forth fully here. 23. The Terms & Conditions, orders, acknowledgments, memos, and/or invoices comprise a valid and binding contract or contracts between Nucor Corporation and Paragon. 24. The contract or contracts required Paragon to pay Nucor Steel Arkansas for products sold to and accepted by Paragon. 25. Nucor Corporation, by and through Nucor Steel Arkansas, has substantially performed its obligations under the parties’ contract or contracts and is not in violation of any provision thereof. 26. Paragon breached the contract or contracts by failing to pay for the products supplied by Nucor Steel Arkansas thereunder. 27. As a direct and proximate result of the material breach of the Agreement by Paragon, Nucor Corporation has suffered damages in an amount to be proven at trial but currently believed to be in excess of $32,563,370.95, plus interest. ALTERNATIVE COUNT TWO—UNJUST ENRICHMENT 28. Nucor Corporation realleges each allegation in Paragraphs 1-21 above as if set forth fully here. 29. Nucor Steel Arkansas manufactured steel products for Paragon and shipped steel products to Paragon, and did both at the request of Paragon, with the expectation that Paragon would compensate Nucor Steel Arkansas. 30. Paragon has realized the benefits of the steel products supplied by Nucor Steel Arkansas, and Nucor Steel Arkansas did not convey those benefits gratuitously. 31. The reasonable value of the steel products supplied by Nucor Steel Arkansas is no less than $32,563,370.95. 32. If Paragon does not pay to Nucor Corporation $32,563,370.95 together with interest, Paragon will have been unjustly enriched by no less than that amount. WHEREFORE, Nucor Corporation requests that the Court: 1. Declare Paragon in breach of the parties’ contract(s); 2. Enter judgment against Paragon on Nucor Corporation’s claims in an amount to be proven at trial but currently believed to be in excess of $32,563,370.95, plus interest; 3. Award Nucor Corporation its costs and expenses, including attorneys’ fees, to the extent authorized by law; and 4. Award Nucor Corporation such further relief that the Court deems just and proper. This the 3rd day of October, 2024. Respectfully submitted, /s/ Paul D. Waddell Paul D. Waddell (ABN 87170) WADDELL COLE & JONES PLLC 310 East Street, Suite A P.O. Box 1700 Jonesboro, AR 72403 Telephone: (870) 931-1700 [email protected] Attorneys for Plaintiff Nucor Corporation EXHIBIT A UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS NORTHERN DIVISION NUCOR CORPORATION v. PARAGON INDUSTRIES, INC. CASE NO. 3:24-cv 00182 - BSM COMPLAINT Plaintiff Nucor Corporation, by and through its Nucor Steel Arkansas Division ("Nucor Steel Arkansas"), brings this action against Defendant Paragon Industries, Inc. ("Paragon"), and alleges: PARTIES 1. Nucor Corporation is a Delaware corporation with its principal place of business in Charlotte, North Carolina. Nucor Steel Arkansas, a division of Nucor Corporation, operates a sheet steel mill in Blytheville, Arkansas, where it produces various forms of sheet steel products and has hundreds of employees. 2. Paragon is an Oklahoma corporation with its principal place of business in Sapulpa, Oklahoma. Upon information and belief, Paragon’s business is the manufacture and sale of steel tubular and piping products. JURISDICTION AND VENUE 3. The Court has subject matter jurisdiction over Nucor Steel Arkansas’s claims pursuant to 28 U.S.C. § 1332(a)(1) because the amount in controversy exceeds $75,000, exclusive of interests and costs, and the controversy is between citizens of different states. 4. The Court has personal jurisdiction over Paragon because Paragon agreed by contract to be subject to personal jurisdiction herein. In addition, upon information and belief, Paragon regularly engages in business transactions in Arkansas, including the activity giving rise to this action. 5. Venue in this District is proper under 28 U.S.C. § 1391 because a substantial part of the events giving rise to this action occurred here, and Paragon is subject to personal jurisdiction in this district. FACTS 6. Paragon uses sheet steel as the primary input in its manufacture of steel piping and related products. Paragon has purchased substantial volumes of sheet steel from Nucor Steel Arkansas over a number of years. 7. On or about April 10, 2006, Paragon executed a Credit Application, which it submitted to Nucor Corporation. The Credit Application included Terms and Conditions of Sale (the "Terms & Conditions"), and Paragon agreed the Terms & Conditions would apply to all sales to Paragon by Nucor entities including Nucor Steel Arkansas. 8. Pursuant to the Terms & Conditions, Paragon agreed that the parties' agreement would be governed "by the laws of the state in which Nucor's shipping facility is located," i.e., the laws of Arkansas. (Terms & Conditions, § 12.) Paragon also "expressly and irrevocably consent[ed] to the exclusive jurisdiction" of the courts of Arkansas. (Id.) 9. Between May and July of 2022, Paragon placed multiple orders for steel products with Nucor Steel Arkansas. 10. Nucor Steel Arkansas sold and shipped the products ordered by Paragon, and Paragon received and accepted those products. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS NORTHERN DIVISION NUCOR CORPORATION v. PARAGON INDUSTRIES, INC. CASE NO. 3:24-cv ________ COMPLAINT Plaintiff Nucor Corporation, by and through its Nucor Steel Arkansas Division ("Nucor Steel Arkansas"), brings this action against Defendant Paragon Industries, Inc. ("Paragon"), and alleges: PARTIES 1. Nucor Corporation is a Delaware corporation with its principal place of business in Charlotte, North Carolina. Nucor Steel Arkansas, a division of Nucor Corporation, operates a sheet steel mill in Blytheville, Arkansas, where it produces various forms of sheet steel products and has hundreds of employees. 2. Paragon is an Oklahoma corporation with its principal place of business in Sapulpa, Oklahoma. Upon information and belief, Paragon’s business is the manufacture and sale of steel tubular and piping products. JURISDICTION AND VENUE 3. The Court has subject matter jurisdiction over Nucor Steel Arkansas’s claims pursuant to 28 U.S.C. § 1332(a)(1) because the amount in controversy exceeds $75,000, exclusive of interests and costs, and the controversy is between citizens of different states. 4. The Court has personal jurisdiction over Paragon because Paragon agreed by contract to be subject to personal jurisdiction herein. In addition, upon information and belief, Paragon regularly engages in business transactions in Arkansas, including the activity giving rise to this action. 5. Venue in this District is proper under 28 U.S.C. § 1391 because a substantial part of the events giving rise to this action occurred here, and Paragon is subject to personal jurisdiction in this district. FACTS 6. Paragon uses sheet steel as the primary input in its manufacture of steel piping and related products. Paragon has purchased substantial volumes of sheet steel from Nucor Steel Arkansas over a number of years. 7. On or about April 10, 2006, Paragon executed a Credit Application, which it submitted to Nucor Corporation. The Credit Application included Terms and Conditions of Sale (the "Terms & Conditions"), and Paragon agreed the Terms & Conditions would apply to all sales to Paragon by Nucor entities including Nucor Steel Arkansas. 8. Pursuant to the Terms & Conditions, Paragon agreed that the parties’ agreement would be governed “by the laws of the state in which Nucor’s shipping facility is located,” i.e., the laws of Arkansas. (Terms & Conditions, § 12.) Paragon also “expressly and irrevocably consent[ed] to the exclusive jurisdiction” of the courts of Arkansas. (Id.) 9. Between May and July of 2022, Paragon placed multiple orders for steel products with Nucor Steel Arkansas. 10. Nucor Steel Arkansas sold and shipped the products ordered by Paragon, and Paragon received and accepted those products. 11. Nucor Steel Arkansas timely and properly supplied the steel products ordered by Paragon, and between April 2022 and August 2022, Nucor Steel Arkansas issued invoices to Paragon seeking payment. 12. Despite performance by Nucor Steel Arkansas and acceptance of the products sold by Nucor Steel Arkansas, Paragon has failed and refused to pay Nucor Steel Arkansas. 13. Paragon has never rejected or revoked acceptance of any of the steel products at issue. Nor has Paragon asserted any defense to its obligations to pay Nucor Steel Arkansas. 14. Nucor Steel Arkansas extended credit terms to Paragon for purchase of steel products pursuant to the Credit Application. Nucor Steel Arkansas’s invoices provided net 30 payment terms. 15. Nucor Steel Arkansas’s rights under the Terms & Conditions may not be waived unless such waiver is in a writing signed by Nucor Steel Arkansas. (Terms & Conditions, § 13.) Nucor Steel Arkansas has not waived its rights under the Terms & Conditions, including its rights to payment. 16. No fewer than forty-seven (47) invoices related to sales made by Nucor Steel Arkansas and accepted by Paragon remain outstanding. The terms and conditions attached to the invoices are the same as the Terms & Conditions applicable to all orders by Paragon. 17. Under the Terms & Conditions, if Paragon fails to pay, Nucor Steel Arkansas has the right to terminate Paragon orders. In addition, outstanding amounts accrue interest at the contract rate of 12% per annum, and Nucor Steel Arkansas is entitled to attorneys’ fees incurred in collecting the balance due. (Terms & Conditions, § 11.) 18. In addition to the invoices, Paragon unilaterally took discounts on prior payments to Nucor Steel Arkansas that were unauthorized. Nucor Steel Arkansas has reversed those discounts through application of debit memos to Paragon’s account. 19. As of the date hereof, Paragon is in default of payment on the Invoices, along with the debit memos, in the total principal amount of $32,563,370.95. A recent account statement listing the outstanding invoices and debit memos is attached as Exhibit A. 20. In addition to the principal amount of $32,563,370.95 due and owing, interest continues to accrue at the contract rate. Such interest exceeds $7.8 million to date. Continuing interest will increase by the amount of $325,633.71 each month. 21. Despite repeated demand, and notwithstanding full performance by Nucor Steel Arkansas, Paragon has failed and refused to pay the amount due and owing. COUNT ONE—BREACH OF CONTRACT 22. Nucor Corporation realleges each allegation in Paragraphs 1-21 above as if set forth fully here. 23. The Terms & Conditions, orders, acknowledgments, memos, and/or invoices comprise a valid and binding contract or contracts between Nucor Corporation and Paragon. 24. The contract or contracts required Paragon to pay Nucor Steel Arkansas for products sold to and accepted by Paragon. 25. Nucor Corporation, by and through Nucor Steel Arkansas, has substantially performed its obligations under the parties’ contract or contracts and is not in violation of any provision thereof. 26. Paragon breached the contract or contracts by failing to pay for the products supplied by Nucor Steel Arkansas thereunder. 27. As a direct and proximate result of the material breach of the Agreement by Paragon, Nucor Corporation has suffered damages in an amount to be proven at trial but currently believed to be in excess of $32,563,370.95, plus interest. ALTERNATIVE COUNT TWO—UNJUST ENRICHMENT 28. Nucor Corporation realleges each allegation in Paragraphs 1-21 above as if set forth fully here. 29. Nucor Steel Arkansas manufactured steel products for Paragon and shipped steel products to Paragon, and did both at the request of Paragon, with the expectation that Paragon would compensate Nucor Steel Arkansas. 30. Paragon has realized the benefits of the steel products supplied by Nucor Steel Arkansas, and Nucor Steel Arkansas did not convey those benefits gratuitously. 31. The reasonable value of the steel products supplied by Nucor Steel Arkansas is no less than $32,563,370.95. 32. If Paragon does not pay to Nucor Corporation $32,563,370.95 together with interest, Paragon will have been unjustly enriched by no less than that amount. WHEREFORE, Nucor Corporation requests that the Court: 1. Declare Paragon in breach of the parties’ contract(s); 2. Enter judgment against Paragon on Nucor Corporation’s claims in an amount to be proven at trial but currently believed to be in excess of $32,563,370.95, plus interest; 3. Award Nucor Corporation its costs and expenses, including attorneys’ fees, to the extent authorized by law; and 4. Award Nucor Corporation such further relief that the Court deems just and proper. This the 3rd day of October, 2024. Respectfully submitted, /s/ Paul D. Waddell Paul D. Waddell (ABN 87170) WADDELL COLE & JONES PLLC 310 East Street, Suite A P.O. Box 1700 Jonesboro, AR 72403 Telephone: (870) 931-1700 [email protected] Attorneys for Plaintiff Nucor Corporation EXHIBIT A Case 3:24-cv-00182-BSM Document 1 Filed 10/03/24 Page 8 of 10 NUCOR Nucor Steel Arkansas Blytheville, AR (870) 762-2100 PARAGON INDUSTRIES INC 3378 W HWY 117 SAPULPA, OK - 74066 Customer Number: 1111 <table> <tr> <th>Invoice #</th> <th>Date</th> <th>PO #</th> <th>Typ</th> <th>BOL #</th> <th>Due Date</th> <th>Total</th> <th>Current</th> <th>31-35 Days</th> <th>36-40 Days</th> <th>41-45 Days</th> <th>46-60 Days</th> <th>61-90 Days</th> <th>91-120 Days</th> <th>&gt;120 Days</th> </tr> <tr> <td>14487</td> <td>04/01/22</td> <td></td> <td>DM</td> <td></td> <td>05/01/22</td> <td>5,894.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>5,894.00</td> </tr> <tr> <td>14519</td> <td>04/29/22</td> <td></td> <td>DM</td> <td></td> <td>05/29/22</td> <td>30,290.10</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>30,290.10</td> </tr> <tr> <td>14549</td> <td>05/17/22</td> <td></td> <td>DM</td> <td></td> <td>06/16/22</td> <td>17,376.60</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>17,376.60</td> </tr> <tr> <td>14550</td> <td>05/17/22</td> <td></td> <td>DM</td> <td></td> <td>06/16/22</td> <td>12,681.60</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>12,681.60</td> </tr> <tr> <td>14551</td> <td>05/17/22</td> <td></td> <td>DM</td> <td></td> <td>06/16/22</td> <td>1,274.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,274.00</td> </tr> <tr> <td>2263377</td> <td>07/15/22</td> <td>6310</td> <td>INV</td> <td>1259103</td> <td>08/14/22</td> <td>10,374.25</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>10,374.25</td> </tr> <tr> <td>2263466</td> <td>07/16/22</td> <td>6307</td> <td>INV</td> <td>1259170</td> <td>08/15/22</td> <td>1,086,384.71</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,086,384.71</td> </tr> <tr> <td>2263871</td> <td>07/19/22</td> <td>6301</td> <td>INV</td> <td>1259614</td> <td>08/18/22</td> <td>2,102,463.78</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>2,102,463.78</td> </tr> <tr> <td>2264079</td> <td>07/20/22</td> <td>T025</td> <td>INV</td> <td>1259644</td> <td>08/19/22</td> <td>158,329.86</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>158,329.86</td> </tr> <tr> <td>2264080</td> <td>07/20/22</td> <td>T025</td> <td>INV</td> <td>1259648</td> <td>08/19/22</td> <td>120,700.01</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>120,700.01</td> </tr> <tr> <td>2264297</td> <td>07/21/22</td> <td>6310</td> <td>INV</td> <td>1260107</td> <td>08/20/22</td> <td>1,662,865.26</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,662,865.26</td> </tr> <tr> <td>2264298</td> <td>07/21/22</td> <td>6310</td> <td>INV</td> <td>1260084</td> <td>08/20/22</td> <td>1,797,970.43</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,797,970.43</td> </tr> <tr> <td>2264460</td> <td>07/22/22</td> <td>6310</td> <td>INV</td> <td>1260247</td> <td>08/21/22</td> <td>1,796,028.94</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,796,028.94</td> </tr> <tr> <td>2265190</td> <td>07/27/22</td> <td>6302</td> <td>INV</td> <td>1261068</td> <td>08/26/22</td> <td>1,216,006.76</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,216,006.76</td> </tr> <tr> <td>7265192</td> <td>07/27/22</td> <td>6309</td> <td>INV</td> <td>1261068</td> <td>08/25/22</td> <td>96,357.87</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>96,357.87</td> </tr> <tr> <td>2265193</td> <td>07/27/22</td> <td>6311</td> <td>INV</td> <td>1261066</td> <td>08/25/22</td> <td>507,838.72</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>507,838.72</td> </tr> <tr> <td>2265334</td> <td>07/28/22</td> <td>6306</td> <td>INV</td> <td>1261162</td> <td>08/27/22</td> <td>1,755,485.08</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,755,485.08</td> </tr> <tr> <td>2265335</td> <td>07/28/22</td> <td>6307</td> <td>INV</td> <td>1261263</td> <td>08/27/22</td> <td>985,809.95</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>985,809.95</td> </tr> <tr> <td>2265475</td> <td>07/29/22</td> <td>6301</td> <td>INV</td> <td>1261370</td> <td>08/28/22</td> <td>1,924,278.83</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,924,278.83</td> </tr> <tr> <td>2265476</td> <td>07/29/22</td> <td>6310</td> <td>INV</td> <td>1261430</td> <td>08/28/22</td> <td>1,658,893.54</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> Case 3:24-cv-00182-BSM Document 1 Filed 10/03/24 Page 9 of 10 NUCOR Nucor Steel Arkansas Blytheville, AR (870) 762-2100 PARAGON INDUSTRIES INC 3378 W HWY 117 SAPULPA, OK - 74066 Customer Number: 1111 <table> <tr> <th>Invoice #</th> <th>Date</th> <th>PO #</th> <th>Typ</th> <th>BOL #</th> <th>Due Date</th> <th>Total</th> <th>Current</th> <th>31-35 Days</th> <th>36-40 Days</th> <th>41-45 Days</th> <th>46-60 Days</th> <th>61-90 Days</th> <th>91-120 Days</th> <th>>120 Days</th> </tr> <tr> <td>2266376</td> <td>08/18/22</td> <td>6324</td> <td>INV</td> <td>1264531</td> <td>09/17/22</td> <td>1,606,386.17</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,606,386.17</td> </tr> <tr> <td>2266532</td> <td>08/19/22</td> <td>6324</td> <td>INV</td> <td>1264734</td> <td>09/18/22</td> <td>1,493,474.45</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,493,474.45</td> </tr> <tr> <td>2266533</td> <td>08/19/22</td> <td>T028</td> <td>INV</td> <td>1264793</td> <td>09/18/22</td> <td>88,481.86</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>88,481.86</td> </tr> <tr> <td>2266534</td> <td>08/19/22</td> <td>T030</td> <td>INV</td> <td>1264794</td> <td>09/18/22</td> <td>80,471.50</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>80,471.50</td> </tr> <tr> <td>2266535</td> <td>08/19/22</td> <td>T028</td> <td>INV</td> <td>1264795</td> <td>09/18/22</td> <td>29,523.21</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>29,523.21</td> </tr> <tr> <td>2266536</td> <td>08/19/22</td> <td>T029</td> <td>INV</td> <td>1264795</td> <td>09/18/22</td> <td>50,956.35</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>50,956.35</td> </tr> <tr> <td>2266537</td> <td>08/19/22</td> <td>T028</td> <td>INV</td> <td>1264797</td> <td>09/18/22</td> <td>88,212.50</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>88,212.50</td> </tr> <tr> <td>2266538</td> <td>08/19/22</td> <td>T028</td> <td>INV</td> <td>1264796</td> <td>09/18/22</td> <td>86,693.50</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>86,693.50</td> </tr> <tr> <td>2266540</td> <td>08/19/22</td> <td>T029</td> <td>INV</td> <td>1264800</td> <td>09/18/22</td> <td>25,375.38</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>25,375.38</td> </tr> <tr> <td>2266541</td> <td>08/19/22</td> <td>T030</td> <td>INV</td> <td>1264802</td> <td>09/18/22</td> <td>53,765.02</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>53,765.02</td> </tr> <tr> <td>2266542</td> <td>08/20/22</td> <td>6324</td> <td>INV</td> <td>1264882</td> <td>09/19/22</td> <td>1,580,206.76</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,580,206.76</td> </tr> <tr> <td>2269201</td> <td>08/23/22</td> <td>6323</td> <td>INV</td> <td>1265523</td> <td>09/22/22</td> <td>1,409,966.82</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,409,966.82</td> </tr> <tr> <td>2269202</td> <td>08/23/22</td> <td>6326</td> <td>INV</td> <td>1265523</td> <td>09/22/22</td> <td>150,687.27</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>150,687.27</td> </tr> <tr> <td>2269203</td> <td>08/23/22</td> <td>6325</td> <td>INV</td> <td>1265528</td> <td>09/22/22</td> <td>1,524,266.52</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>1,524,266.52</td> </tr> <tr> <td>2295454</td> <td>08/25/22</td> <td>6302</td> <td>INV</td> <td>1265921</td> <td>09/24/22</td> <td>406,262.30</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>406,262.30</td> </tr> <tr> <td>2295456</td> <td>08/25/22</td> <td>6311</td> <td>INV</td> <td>1265921</td> <td>09/24/22</td> <td>136,240.47</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>136,240.47</td> </tr> <tr> <td>2295457</td> <td>08/25/22</td> <td>6322</td> <td>INV</td> <td>1265921</td> <td>09/24/22</td> <td>553,760.67</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>553,760.67</td> </tr> <tr> <td>2295458</td> <td>08/25/22</td> <td>6323</td> <td>INV</td> <td>1265921</td> <td>09/24/22</td> <td>354,802.36</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>354,802.36</td> </tr> <tr> <td>2297071</td> <td>08/26/22</td> <td>6316</td> <td>INV</td> <td>1266084</td> <td>09/25/22</td> <td>681,689.40</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>0.00</td> <td>681,689.40</td> </tr> <tr> <td>2297072</td> <td>08/26/22</td> <td>6317</td> <td>INV</td> <td>1266084</td> <td>09/25/22</td> <td>733,887.26</ 3585 Atlanta Ave Hapeville, GA 30354 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS AM/NS CALVERT LLC ) 1 AM/NS Way ) Calvert, Alabama 36513 ) CASE NO. and ) AM/NS CALVERT RECEIVABLES LLC ) 1 AM/NS Way ) Calvert, Alabama 36513 ) Plaintiffs, v. PARAGON INDUSTRIES, INC. ) 3378 West Highway 117 ) Sapulpa, Oklahoma 74066 ) Defendant. COMPLAINT Plaintiffs AM/NS Calvert LLC ("AM/NS Calvert"), a Delaware limited liability company, and AM/NS Calvert Receivables LLC, also a Delaware limited liability company ("AM/NS Receivables," and collectively with AM/NS Calvert, "Calvert"), by and through their undersigned counsel, file this Complaint against Defendant, Paragon Industries, Inc. ("Paragon"), an Oklahoma corporation, and alleges as follows: NATURE OF THE ACTION 1. Paragon owes Calvert over $31.5 million, plus interest for steel delivered to Paragon and consignment inventory. This includes more than $15.4 million, plus interest, for steel products delivered to Paragon and over $16.1 million in Calvert inventory on consignment with Paragon. 2. Calvert seeks: (a) payment for Paragon’s past due invoices; (b) payment for Paragon’s mishandling of Calvert’s consignment inventory; (c) a full and complete reconciliation of all consigned inventory in Paragon possession; (d) contractual pre-judgment interest; and (e) all costs and expenses, including reasonable attorneys’ fees, incurred in connection with this action. PARTIES 3. AM/NS Calvert is a Delaware limited liability company and has its principal office and place of business at 1 AM/NS Way, Calvert, Alabama 36513. AM/NS Calvert is a producer of high-quality steel products for a variety of industries, including the energy industry. AM/NS Calvert’s members are corporate entities with citizenships in Delaware, the Grand Duchy of Luxembourg, and Japan. 4. AM/NS Receivables is also a Delaware limited liability company, and it also has its principal office and place of business at 1 AM/NS Way, Calvert, Alabama 36513. AM/NS Receivables is a wholly owned subsidiary of AM/NS Calvert. 5. Paragon is an Oklahoma corporation and has its principal place of business at 3378 West Highway 117, Sapulpa, Oklahoma 74066. Paragon is a producer of metal pipes for a variety of industries, including the oil industry. JURISDICTION AND VENUE 6. This Court has subject-matter jurisdiction over these claims pursuant to 28 U.S.C. § 1332(a). This is a civil action between Plaintiffs, Calvert, whose members are citizens of Delaware, the Grand Duchy of Luxembourg, and Japan, and Defendant, Paragon, a citizen of Oklahoma, and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. 7. No Party to this action is a citizen of the State of Illinois, nor of the same State (except for AM/NS Calvert and AM/NS Receivables). 8. Venue and personal jurisdiction are proper in this Court because the operative agreements—Calvert’s October 1, 2021 Terms and Conditions of Sale (the “Terms & Conditions”) attached as Exhibit A, and the May 8, 2023 Consignment Agreement (the “Consignment Agreement”) attached as Exhibit B—contain forum-selection provisions favoring this Court, among other appropriate fora: [JURISDICTION. BUYER, ACTING FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM OR RELATED TO THIS AGREEMENT. SUBJECT TO SECTION 26, BUYER EXPRESSLY AND IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, AND WAIVES THE RIGHT TO ASSERT THAT ANY ACTION IN ANY SUCH COURT IS IN THE IMPROPER VENUE OR SHOULD BE TRANSFERRED TO A MORE CONVENIENT FORUM.] (Ex. A, Terms & Conditions ¶ 27), and 8.6 Choice of Law and Jurisdiction. This Agreement shall be interpreted and enforced solely under and in accordance with the laws of the State of Illinois without regard to any conflict-of-laws statutes or equivalent thereof, whether of the State of Illinois or those of any other state, except where any given matter is exclusively governed by U.S. federal laws. The parties agree to the exclusive jurisdiction of the state and federal courts located in Illinois. (Ex. B, Consignment Agreement § 8.6.) FACTUAL BACKGROUND I. Terms & Conditions and Invoices 9. Paragon conducted business with Calvert in which Calvert manufactured steel goods ordered by Paragon and Paragon paid Calvert for the goods. 10. In its Credit Agreement, Paragon agreed to be bound by Calvert’s terms and conditions of sale: (Paragon Credit Agreement, attached in redacted form as Exhibit C.) 11. Between January 4, 2023 and May 10, 2024, Paragon was billed for products manufactured and delivered by Calvert pursuant to purchase orders issued by Paragon at its specific instance and request. 12. In summary, the value of the invoiced products at issue in this case is $15,482,327.54, plus interest. 13. In addition to the agreement in the Credit Applications, Paragon purchased the products pursuant to invoices (the “Invoices”), which were also governed by the “Terms & Conditions.” Each Invoice expressly provided that: 14. Pursuant to the Terms & Conditions, Paragon agreed that if it failed to timely pay the amounts agreed upon, the full purchase price for all amounts still owing under the Invoices would become immediately due and payable for products already delivered or in process. (Ex. A, Terms & Conditions ¶ 16.) 15. Also pursuant to the Terms & Conditions, Paragon agreed to “be liable for [Calvert’s] reasonable attorneys’ fees and other costs incurred in the collection of amounts owed by [Paragon] or in enforcing this security interest.” (Id.) 16. Additionally, pursuant to the Terms & Conditions, Paragon consented to contractual interest accruing on invoices paid after the net due date at the lesser of the prime rate plus three percent (3%), or the maximum allowable contractual interest rate under law, whichever is less. (Id., ¶ 20.) 17. The Terms & Conditions further provide that these transactions will be governed by, construed under, and enforced pursuant to the exclusive application of the laws of the State of Illinois. (Id., ¶ 25.) II. The Default By Paragon 18. Paragon accepted all products sold pursuant to the Invoices without protest; however, it failed to timely remit payments and defaulted on the Invoices and its stated account with Calvert. 19. The total amount due under the Invoices for products delivered and accepted by Paragon is $15,482,327.54, plus interest. 20. Paragon has failed to remit the $15,482,327.54, plus interest, for products delivered pursuant to the Invoices. III. Defendants Refuse Demand for Payment 21. On April 1, 2024, Calvert sent Paragon a demand letter in which Calvert demanded: (1) full repayment of Paragon’s overdue outstanding receivable balance as of that date; and (2) that all consigned inventory covered by Calvert’s perfected security interest remain untouched. 22. In response to this letter, Calvert and Paragon agreed to a payment plan in which Paragon agreed to make weekly payments of at least $250,000.00 to Calvert. 23. After making the first few payments, Paragon failed to make payments in accordance with the payment plan. As of July 24, 2024, Paragon was $2,750,000.00 in arrears under the payment plan. 24. A second demand letter was sent in which Calvert demanded that Paragon pay the outstanding $2,750,000.00 in unpaid “payment plan” obligations by August 5, 2024. 25. After Paragon failed to make a payment, Calvert extended its internal deadlines to act until August 19, 2024, to allow Paragon to made another payment of $250,000.00. 26. Paragon failed to make any further payments 27. Thus, Calvert has a claim against Paragon in the amount of $15,482,327.54, plus interest. IV. The Consignment Agreement 28. On May 8, 2023, Calvert and Paragon entered into the Consignment Agreement, pursuant to which Calvert agreed to consign $16,112,893.86 worth of products with Paragon. 29. Pursuant to the Consignment, Paragon expressed its desire “to obtain delivery and purchase [of] certain quantities of” Calvert flat-rolled steel and other products “on a consignment basis.” (Ex. B, Consignment Agreement § 1, Annex I.) The consigned inventory was defined, collectively, as the “Products.” (Id., § 1.) 30. Section 2.1 of the Consignment Agreement described “the consignment procedures” for the Products on Annex II to that agreement. In relevant summary, that procedure required: (a) Paragon to “submit VMI (Vendor Managed Inventory) purchase orders separately from regular purchase orders” for all consigned inventory; (b) Calvert to ship the consigned Product to Paragon, but not transfer ownership; (c) Paragon to record the received consignment inventory; (d) Paragon to account for sold material (or consigned inventory held for more than 180 days) both on a shared computer platform and in a weekly report to Calvert. 31. Products are “withdrawn from the consigned inventory,” and payment is due to Calvert on the earlier of “the date such Products[:] (i) are used or sold by [Paragon], (ii) are commingled with other assets of [Paragon] or any other party, (iii) are purchased by [Paragon] as provided for in [the Consignment] Agreement and paid in full, (iv) Product volume reaches 100% fulfilment of a single purchase order, or (v) 180 days after the Products arrive at” Paragon. (Id., § 3.) 32. Paragon promised “[a]t all times that Products are in the possession or control of [Paragon] and not yet paid for,” Paragon “shall always maintain all Products at the Yard and shall not relocate or permit the relocation of the Products from such locations, other than to promptly transport the Products from the unloading area to the segregated storage area in accordance with Section 2.2.” (Id., § 4.1.) 33. Paragon also agreed, “[u]pon reasonable notice and at reasonable times,” to give Calvert “access to [Paragon’s] records concerning the amount and identification of the Products” and the right to “inspect and perform physical inventory” of the Products (id.); to “clearly identify the Products as the property of [Calvert] on such Product” (id., § 4.2); and to “segregate any Products from any other personal property of [Paragon] or that of any third parties[.]” (Id.) V. Default of the Consignment Agreement by Paragon 34. Calvert fully performed its obligations under the Consignment Agreement and provided all Products identified in the Consignment Agreement. 35. Paragon accepted delivery of the Products pursuant to the Consignment Agreement without protest; however, it failed to fulfil its obligations under the Consignment Agreement. 36. Paragon has not provided weekly reports regarding any sold materials as is required under the Consignment Agreement. Nor has it paid for any Products sold. 37. In or around March or April of 2024, Calvert attempted to physically inspect the Products at Paragon’s facilities, as permitted by the terms of the Consignment Agreement. 38. Calvert was not permitted to physically inspect the Products as some or all were apparently stored at a different location, even though relocation of the Products is not permitted under the Consignment Agreement. 39. More than 180 days have passed since delivery of the Products by Calvert, and Paragon owes Calvert for the full amount of the Products taken by Paragon pursuant to the Consignment Agreement. COUNT ONE: BREACH OF THE TERMS & CONDITIONS AND INVOICES 40. Calvert realleges and incorporates Paragraphs 1 through 39, as if fully rewritten in this Paragraph. 41. The Terms & Conditions and Invoices are valid and binding contracts. 42. Calvert fully performed its obligations under the Terms & Conditions and Invoices and provided all products identified in the Invoices. 43. Paragon accepted all products identified in the Invoices. 44. Pursuant to the terms of the Terms & Conditions and Invoices, the full amount due under the Invoices became due and payable upon Paragon’s breach of the Agreement by failing to timely remit payments on the Invoices. 45. Pursuant to the terms of the Terms & Conditions and Invoices, Paragon was obligated to render payments within thirty (30) days from the date of each of the Invoices. 46. Paragon is in breach of its obligations by failing to timely pay all amounts due as agreed. 47. Accordingly, Paragon’s breach of the Terms & Conditions and Invoices directly and proximately caused Calvert $15,482,327.54, plus interest, in damages, which remains unpaid and due, along with interest as well as all fees, costs, and expenses incurred by Calvert during this litigation, including reasonable attorneys’ fees and court costs. COUNT TWO: UNJUST ENRICHMENT (ALTERNATIVE TO COUNT ONE) 48. Calvert realleges and incorporates, Paragraphs 1 through 47, as if fully rewritten in this Paragraph. 49. As an alternative theory of recovery to Count One, and in the event that there would be no adequate remedy at law, Calvert conferred on Paragon the benefits of the provision of products and related services. 50. Paragon accepted and appreciated the benefits conferred upon it by receipt of products delivered by Calvert. 51. Under the present circumstances, in particular Paragon’s failure to pay for the products delivered, it would be inequitable for Paragon to retain the benefits conferred by Calvert without full payment to Calvert, for the value of those benefits. 52. Paragon has been unjustly enriched by receiving the benefit of the products provided without reimbursing Calvert. 53. Accordingly, Paragon has caused Paragon $15,482,327.54, plus interest, in damages, which remains unpaid and due. COUNT THREE: BREACH OF THE CONSIGNMENT AGREEMENT 54. Calvert realleges and incorporates Paragraphs 1 through 53, as if fully rewritten in this Paragraph. 55. The Consignment Agreement is a valid and binding contract. 56. Calvert fully performed its obligations under the Consignment Agreement and provided all Products identified in the Consignment Agreement. 57. Paragon accepted all Products identified in the Consignment Agreement. 58. Pursuant to the terms of the Consignment Agreement, Paragon is required to account for sold material (or consigned inventory held for more than 180 days) and provide a weekly report to Calvert. 59. Pursuant to the terms of the Consignment Agreement, upon the passage of 180 days from the date of delivery, the Consignment Agreement will terminate, and Paragon will be deemed to have purchased any remaining inventory and will be invoiced for the product. 60. Pursuant to the terms if the Consignment Agreement, Paragon was not permitted to relocate the Products from the agreed upon location unless it was to transport them for delivery purposes. 61. Paragon is in breach of its obligations by failing to properly account for the consigned goods, relocating the goods, and failure to timely pay all amounts due upon the termination of the Consignment Agreement, as agreed. 62. Accordingly, Paragon’s breach of the Consignment Agreement directly and proximately caused Calvert damages of $16,112,893.86, plus interest, which remains unpaid, due, and owing. COUNT FOUR: CONVERSION OF CHATTTEL (ALTERNATIVE TO COUNT THREE) 63. Calvert realleges and incorporates Paragraphs 1 through 62, as if fully rewritten in this Paragraph. 64. As an alternative theory of recovery to Count Three, and in the event that there would be no adequate remedy at law, Paragon took possession of and used the Products as its own without remitting payment. 65. Paragon took possession of the Products with the intent to use the Products as its own, as demonstrated by the failure to meet any of its obligations under the Consignment Agreement. 66. Paragon has maintained possession of the Products and has failed to remit any payment to Calvert. 67. Accordingly, Paragon has caused Calvert damages of $16,112,893.86, plus interest, which remains unpaid, due, and owing. PRAYER FOR RELIEF 68. WHEREFORE, Calvert respectfully requests that this Court enter judgment against Paragon and in favor of Calvert, as follows: a. An award of damages for Paragon’s breach of the Terms & Conditions and Invoices in the amount of $15,482,327.54, plus interest; b. An award of damages for Paragon’s breach of the Consignment Agreement in the amount of $16,112,893.86, plus interest; c. An order requiring a full and complete reconciliation of all consigned inventory in Paragon possession; d. An award of all fees, costs, and expenses incurred by Calvert during this litigation, including reasonable attorneys’ fees and court costs; and e. Any other appropriate relief that this Court deems just and equitable. Dated: September 27, 2024 BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP /s/ Johanes Maliza Johanes Maliza 71 South Wacker Drive Suite 1600 Chicago, Illinois 60606 Telephone: (312) 212-4949 Facsimile: (312) 767-9192 [email protected] -and- Andrew G. Fiorella (Pro hac vice forthcoming) Vincent J. Michalec (Pro hac vice forthcoming) 127 Public Square, Suite 4900 Cleveland, Ohio 44114-2378 Telephone: (216) 363-4500 Facsimile: (216) 363-4588 [email protected] [email protected] Attorneys for Plaintiffs AM/NS Calvert LLC And AM/NS Calvert Receivables LLC EXHIBIT A United States Terms and conditions ArcelorMittal NA (United States) TERMS AND CONDITIONS OF SALE The following terms and conditions shall be deemed part of every order quoted, accepted or acknowledged, and every sale by ArcelorMittal Sales and Administration LLC and its Affiliates, for itself and as exclusive sales agent for AMYNS Calvert LLC (collectively the "Seller"). 1. DEFINITIONS. As used herein, the term "Buyer" shall mean the purchaser of the goods identified on Seller's order acknowledgement and its attachments, and all others liable for the purchase price. The term "Goods" shall mean all steel materials, products, accessories, parts and any related services identified or referenced in the order acknowledgement and all attachments, exhibits, and amendments, and in these terms and conditions. The term "Contract" shall mean the terms and conditions described in Seller's quotation or order acknowledgement, all attachments, exhibits and amendments, and these Terms and Conditions of Sale. 2. ACCEPTANCE. SELLER'S ACCEPTANCE OF BUYER'S ORDER IS EXPRESSLY MADE CONDITIONAL ON ACCEPTANCE OF THESE TERMS AND CONDITIONS. TERMS ADDITIONAL TO OR DIFFERENT FROM THESE TERMS AND CONDITIONS CONTAINED IN ANY COMMUNICATION FROM BUYER RELATING TO THIS CONTRACT INCLUDING WITHOUT LIMITATION, BUYER'S PURCHASE ORDER, RELEASE, QUALITY MANUALS OR DOCUMENTS REQUIRED TO ACCESS OR PARTICIPATE IN ANY BUYER SUPPLIER PORTALS ARE DEEMED MATERIA, AND ARE HEREBY REJECTED UNLESS OTHERWISE ACCEPTED BY SELLER IN WRITING. Seller's acceptance of Buyer's order or commencement of performance shall not constitute acceptance of any Buyer's terms and conditions. Buyer's consent to these terms and conditions shall be conclusively presumed from Buyer's: (1) receipt of Seller's order acknowledgement without action of rejection sent to Seller within ten (10) days after receipt of this order; acknowledgement or accepted purchase order, (2) instructing Seller to begin work or to ship any of the goods after receipt of Seller's order acknowledgement or accepted purchase order, or (3) acceptance of all or any part of the Goods ordered. Seller may commence performance in reliance upon Buyer's acceptance of these terms and conditions. 3. ENTIRE AGREEMENT. Except as otherwise agreed to by Seller in writing, the terms set forth herein together with the Seller's quotation or Seller's order acknowledgement or accepted purchase order shall constitute the complete agreement between the Seller and Buyer regarding the subject matter hereof, and supersede any prior proposals, negotiations and representations, whether oral or written, forms or online documents, any documents, ability Buyer will claim any remedy. Failure to act, modify, change, suspend, or discontinue any provision or contract term shall not be deemed excluded from such Buyer document and waived by Buyer. This Contract can be modified only by a writing signed by the Seller and Buyer. 4. PURCHASE PRICE. The purchase price of the Goods shall be as stated on Seller's quotations, order acknowledgements and accepted purchase orders provided, however, that if Seller announces a surcharge, such surcharge shall become effective for Goods scheduled for shipment beginning on the date set forth in Seller's announcement of such surcharge or, if there is no such date, immediately upon such announcement. Seller reserves the right to change all quotations at any time. Seller shall be bound only upon issuance of an order acknowledgement or statement and acceptance by all only by part of the Contract. 5. PURCHASE ORDER MODIFICATION/OR CANCELLATION. Buyer cannot modify, cancel or otherwise alter purchase orders after receipt by Seller without Seller's written consent. Any such modification, cancellation or alteration shall be subject to conditions as negotiated at such time when shall include protection of Seller against loss. 6. STANDARDS AND TOLERANCES. Unless specifically agreed to in writing by Seller, all goods sold hereunder shall conform to industry standard systems and tolerances such as those described by ASTM International ("ASTM") the American Iron and Steel Institute ("AISI") and the Society of Automotive Engineers ("SAE") or shall be produced in accordance with Seller's standard practices. All goods shall be subject to mill tolerances and variation consistent with good mill practice with respect to dimensions, weight, straightness, test and carbon tolls, and mechanical properties, normal variations in surface and dimensional tolerances and quality, to deviation from tolerances and variations consistent with practical testing and inspection methods and to regular mill practices on over all under shipments. 7. MECHANICAL PROPERTIES/CHEMICAL ANALYSIS. Seller makes no warranty with respect to data referring to mechanical properties or chemical analyses of tests performed on specimens of the Goods. Any data referred to such information or chemical analyses are therefore, if tests performed on specimens derived from specific shipments of the Goods is approximate with provided sampling procedures. 8. LIABILITY AND DISCLAIMER. Seller assumes no obligations and liability for any information obtained from and/or delivered to Buyer including, without limitation, technical data or advice to the extent Seller's goods, all such facts and advice being given as general to Buyer's risk. Seller will not be liable for any damages of any kind arising out of or relating to the use of or inability to use the information provided, including but not limited to any special, indirect, incidental or consequential damages including, but not limited to, damages charges, cost of shipment, downtime, lost profits or lost sales, whether foreseeable or not, and even if Seller has been advised of the possibility of damages. 9. LIMITED WARRANTY: EXCEPT AS EXPRESSLY SET FORTH IN THESE TERMS AND CONDITIONS, SELLER'S GENERAL CLAIMS POLICY, OR IN SELLER'S ORDER ACKNOWLEDGMENT, SELLER MAKES NO WARRANTIES WITH RESPECT TO THE GOODS EXPRESS OR IMPLIED, AND SELLER ACCEPTS NO RESPONSIBILITY, RISK OR LIABILITY TO BUYER OR OTHERS BY STATUTE OR OTHERWISE INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WHICH ARE EXPRESSLY DISCLAIMED. SELLER ACCEPTS NO LIABILITY, RISK OR LIABILITIES TO BUYER OR OTHERS CONCERNING RELATING TO OR ARISING OUT OF THE PERFORMANCE NONPERFORMANCE, FAILURE, EFFICIENCY, LENGTH OF LIFE OF OR ANY DEFECT IN THE WHOLE OR ANY PART OR PARTS OF ANY PRODUCT OR PRODUCTS MANUFACTURED OR FABRICATED FROM OR INCORPORATING OR OTHERWISE USING THE GOODS SOLD HEREUNDER. 10. EXCLUSIVE REMEDY. BUYER'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO THE FAILURE OF ANY GOODS PROVEN TO HAVE FAILED TO MEET IN MATERIAL RESPECT THE SPECIFICATIONS ON THE SELLER'S ORDER-ACKNOWLEDGEMENT SHALL BE AT SELLER'S SOLE DISCRETION: (1) REPLACEMENT OF GOODS AT THE POINT OF RECEIPT FROM THE SELLER'S FACILITY, (2) REPAIR OF THE GOODS AT A LOCATION TO BE DETERMINED BY THE SELLER OR (3) REFUND OF OR CREDIT AGAINST THE PURCHASE PRICE OF SUCH GOODS UPON AUTHORIZED RETURN THEREOF IN THE EVENT SELLER HAS AUTHORIZED BUYER TO SCRAP ALL OR ANY PORTION OF THE GOODS, THE SCRAP ALLOWANCE IS TO BE CREDITED TO THE SELLER. 11. LIMITATION OF LIABILITY FOR DELIVERY DELAYS. Delivery dates are approximate and Buyer shall be liable for any claims for labor or for any special, indirect, incidental or consequential damages including, but not limited to, demurrage charges, cost of shipment, damage to profits, lost sales, and/or other damages resulting from delay in delivery. ANY FAILURE OF GOODS BY SELLER SHALL NOT CONSTITUTE A WAIVER BY BUYER OF ANY CLAIM FOR DAMAGES OR ACCOUNT ON DELIVERY DATE. 12. CLAIMS BY BUYER. Claims by Buyer with respect to shortages of Goods, or for damaged Goods must be made in writing no later than sixty (60) days following shipment of Goods for visual damage to unwrapped Goods or shortage of Goods and no later than one hundred eighty (180) days of shipment or Goods for all other circumstances, including damage to wrapped goods, non-visual defects and any other circumstance of a Seller's supply shortage. All claims must be made only for substantial cause, must be in writing and must specify the reasons for the claim. THE FAILURE TO NOTIFY SELLER OF ANY CLAIM WILL IN THE TIME PERIOD SPECIFIED BY THIS SECTION, SHALL CONSTITUTE A WAIVER OF ANY BAR SUCH CLAIM. SELLER SHALL INCUR NO LIABILITY FOR SHORTAGE, DAMAGE, OR FAILURE TO MEET SPECIFICATIONS ALLEGED TO HAVE OCCURRED OR EXISTED AT THE TIME OF DELIVERY TO THE BUYER UNLESS BUYER SHALL HAVE ENTERED FULL DETAILS THEREOF ON CARRIER'S DELIVERY RECEIPT WHICH MUST BE SIGNED BY THE CARRIER. AGENT SELLER MUST BE GIVEN AN OPPORTUNITY TO INVESTIGATE THE CLAIM BEFORE BUYER DISPOSSES OF THE GOODS. ANY DAMAGED GOODS SHALL NOT BE RETURNED, REPAIRED OR DISCARDED WITHOUT SELLER'S WRITTEN PERMISSION. Buyer agrees that the provisions of the Seller's General Claims Policy shall govern liabilities transmitted to the Seller by the Buyer for goods sold hereunder unless provided otherwise in Seller's order acknowledgement. No allowance will be made to Buyer for storage charges, labor or labor involved in return movement of rejected Goods from the plant of Buyer or Buyer's processor or Buyer's storage facility. A variance between Seller and Buyer's sale weight of up to one percent (1%) shall be permitted. 13. LIMITATION OF LIABILITY. SELLER'S LIABILITY WHETHER IN CONTRACT, TORT, WARRANTY NEGLIGENCE OR OTHERWISE SHALL NOT EXCEED THE PURCHASE PRICE OF THE GOODS AGAINST WHICH CLAIM IS MADE. AND UNDER NO CIRCUMSTANCES SHALL SELLER BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, DEMMAGE CHARGES, COSTS OF REMOVAL, REINSTALLATION, OR SHIPMENT DOWN TIME, OR LOST PROFITS AND LOST SALES (REGARDLESS OF WHETHER DIRECT OR CONSEQUENTIAL), SELLER AND BUYER EXPRESSLY AGREE TO THIS ALLOCATION OF RISK SEPARATE AND APART FROM ANY LIMITED REMEDIES AND THE PRICE PAID FOR THE GOODS IS CONSIDERATION IN LIMITING SELLER'S LIABILITY. 14. TRANSPERANZA GARANTIA. Unless agreed to in Seller's quotation or order acknowledgement, Buyer agrees that it is Seller's sole responsibility to inquire United States Terms and conditions ArcelorMittal or otherwise agreed, delivery prices are composed by adding the cost of transportation to destination and any taxes paid by the Seller. If Goods are shipped freight prepaid, the charge for freight shall be added to the invoice. Buyer may elect to pick up the Goods, provided that Buyer does so within ten (10) days after Buyer has been notified by Seller of the date of shipment, and Buyer gives 24 hours notice prior to picking up the Goods. Seller reserves the right to ship without further notification at any time after the ten (10) day period. If such method of transportation is not available as requested, Seller reserves the right to use an alternate method of transportation, whether or not at a higher rate. In any such case, Seller shall notify buyer of any such charges as promptly as possible. 15 PASSAGE OF TITLE, RISK OF LOSS. Unless expressly specified in Seller’s quotation or order acknowledgement delivered via FOB Seller’s factory or other point of manufacture and risk of loss to the Goods shall pass to the Buyer after delivery to carrier; regardless of whether freight prepaid or freight collect to destination; and regardless of which party arranges the freight charges or participates in shipment. For Goods placed at destination, any charges at destination for spotting, switching, handling, storage, demurrage, and other accessory services will be for Buyer's account unless otherwise stated in the Seller’s order acknowledgement. Risk of loss damage or delay in transit shall be borne by Buyer. Seller reserves and retains title to Goods until delivery to Buyer. With respect to freight collected shipments it shall be the responsibility of the Buyer to select the carrier involved and for freight prepaid freight collect or any other arrangement it shall be the responsibility of the Buyer to file and pursue any claims & at the carrier’s related to loss, damage, or delay in transit. Seller shall not be responsible for any liability, loss, costs, damages, claims or expenses resulting from any losses Buyer may incur in connection with the shipment of the Goods, including without limitation on the failure to properly secure Goods or the failure to keep all Goods clean, dry and covered during shipment. Buyer agrees to indemnify and save harmless Seller from and against all liabilities, loss, costs, damages, claims and expenses that the Seller may incur in connection with the shipment of Goods. Buyer shall not have the right to divert such shipment without permission of the Seller unless specifically so ordered by Seller in their acknowledged or accepted purchase order. Seller reserves the right to select the mode of transportation. 16 SECURITY INTEREST/DEFAULT. Buyer grants and Seller retains a purchase money security interest in all Goods until paid in full, notwithstanding delivery to Buyer. Buyer agrees to promptly comply with furnishing statement in event of Seller’s request. The rights of payment for the Goods is not paid. Whereupon Seller may declare all payments immediately due and payable in all other respects and immediate return of seller’s documents or title documents from seller’s warehouse or off Buyer’s premises. Buyer shall be liable for Seller’s reasonable attorneys’ fees and other costs incurred in the collection of amounts owed by Buyer or in enforcing this security interest. 17 TAXES AND DUTIES. Prices quoted do not include any taxes or other assessments. All taxes of every kind levied by any federal, state, municipal, foreign or other governmental authority which Seller is required to collect or pay with respect to the production, sale, purchase, delivery, storage, processing, use, consumption, or export of Goods sold hereunder shall be the responsibility of Buyer. This also includes, in the case of export orders, responsibilities for any tariffs, duties or the management of any special import restrictions or other customs formalities associated with the importation of the goods by the Buyer. Buyer agrees to pay all such taxes and further agrees to reimburse Seller for any such payments made by Seller. Buyer hereby affirms that it is purchasing the Seller's Goods referenced herein for resale and/or that Buyer is not the end user of the Goods and is not exempt from any otherwise applicable sales tax. 18 PACKAGING. Seller shall use all reasonable means to comply with any packaging loading or bracing requirements specified in Buyer’s purchase order. Any extras due to compliance with such requirements shall be charged according to the Seller’s extra list. If no packaging, loading or bracing requirements are specified, Seller shall comply with Seller’s standard packaging and shipping procedures customarily applied to the method of transportation used for such Goods. 19 FORCE MAJEURE. Seller shall not be responsible for cancellation or delay in delivery or performance resulting, in whole or in part, directly or indirectly, from causes beyond its reasonable control, including, but not limited to acts of God, acts of Buyer; strikes or other labor disturbances, regardless of whether or nor Seller is capable of setting such strike or disturbance, mill conditions, temporary or permanent mill closures, equipment failure, inability to obtain proper fuel material or parts, government action, war, acts of terrorism, riot, civil unrest, delays in transportation or repair to equipment, epidemics, pandemics, quarantine, floods, fires, severe weather conditions, natural disasters, accidents, or other contingency, the non-occurrence of which was a basic assumption on which the purchase order was made. 20 PAYMENT TERMS. Unless otherwise agreed to in writing by Seller, payment terms are net cash thirty (30) days from the date of invoice payable in United States dollars or the equivalent thereof. Buyer shall follow Seller’s payment instructions and shall prevent on hold and be responsible for misrouted payments. Discounts for payments within ten (10) days from the date of the invoice, when applicable, will be specified on the invoice, no discount being allowed on transportation charges. Interest will accrue on invoices unpaid after the net due date. The interest charge will be calculated utilizing the prime rate (as printed in the Wall Street Journal) plus three percent (3%), or the maximum legal contract interest rate, whichever is less. If Buyer fails to make payment in full or in part or refuses to pay any applicable price increases or surcharges, Seller shall have the right to (i) immediately suspend performance and cancel the unshipped portion of the order, or (ii) proceed with the order giving an extension of time for performance as is necessary but by the temporary suspension Seller shall have the right to enforce payment of the full purchase price including any price increase or surcharge for Goods already delivered; as process Seller shall have the right to employ an attorney to collect the due balance and Buyer agrees to pay all collection costs incurred by Seller including Seller’s attorney fees. 21 OFFSETS. Buyer hereby authorizes Seller to credit toward the payment of any invoices that may be more due Seller hereunder any monies which may now or hereafter be owed to Buyer by Seller or by any subsidiary affiliate or parent of the Seller. 22 ACCOUNT AND SATISFACTION. Checks or payments whenever full or partial received from or for the account of Buyer, regardless of writings, legends or notations upon such checks or payments and regardless of other writings, statements, or documents shall be applied by Seller against the amount owed by Buyer with full reservation of all Seller’s rights and without an accord and satisfaction of Buyer’s liability. 23 CREDIT. Buyer represents that Buyer is solvent and can and will pay for the Goods sold to the Buyer in accordance with these terms and conditions. Production, completion and delivery of the Goods shall not be subject to approval of Seller. Seller may, at its option, suspend performance, modify payment terms, or terminate the Contract if Buyer’s credit is rated less than B by Seller’s own standards or by such rating as Seller may reasonably determine by Buyer’s credit report. Buyer’s failure to pay shall be addressed to Seller in accordance with Buyer’s financial condition. 24 CONFIDENTIALITY. Any pricing information provided by Seller to Buyer is proprietary to Seller and shall be held in confidence by Buyer; shall only be used by Buyer in connection with this sale, and shall not be used for any other purposes or disclosed to third parties without Seller’s written consent. Buyer shall be liable for any loss to Seller or commercial or general damage from unauthorized use of confidential information occasioned by Buyer’s failure to comply with this provision. 25 GOVERNING LAW. This Contract and claims relating to this Contract will be governed by, construed, and enforced in accordance with the laws of the State of Illinois, including the Illinois Uniform Commercial Code, without regard to conflict of law principles. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Contract. 26 MEDIATION. Buyer and Seller will attempt in good faith to resolve promptly through negotiation any dispute arising in connection with this Contract. If a dispute should arise representatives of the Buyer and Seller shall meet at least once and will attempt in good faith to resolve the dispute. For such purpose Buyer or Seller may request a meeting which shall be held within fifteen (15) days of the request at a mutually agreed upon time and place. The meeting shall be attended by representatives of each party with authority to resolve the dispute. IF BUYER AND SELLER ARE NOT ABLE TO CONDUCT A MEETING WITHIN SAID FIFTEEN (15) DAY PERIOD OR IF BUYER AND SELLER DO NOT RESOLVE THE DISPUTE WITHIN THIRTY (30) DAYS AFTER THEIR FIRST MEETING, BUYER AND SELLER AGREE TO SUBMIT THE DISPUTE TO MEDIATION. BUYER AND SELLER FURTHER AGREE THAT THEIR PARTICIPATION IN MEDIATION IS A CONDITION PRECEDENT TO ANY OTHER REMEDY AVAILABLE TO EITHER PARTY. MEDIATEK OUTCOMES IN RELATION TO THE DISPUTE. Mediation involves each side of a dispute sitting down with an impartial person, the mediator, to attempt to reach a voluntary settlement. Mediation involves no formal court process rules or rules of evidence, and the mediator does not have the power to render a binding decision or force an agreement on the parties. Buyer and Seller agree that the entire mediation procedure will be confidential. Buyer or Seller must give written notice of their desire to commence mediation, and a mediation session may take place within forty-five (45) days after the date such notice is given. Buyer and Seller will only appear in mediating meetings if they Terms and conditions an. Seller are unable to agree on the appointment of a mediator within seven (7) days after notice of desire to mediate is given. Buyer or Seller may apply to the American Arbitration Association for appointment of a mediator. The mediation shall be held in Chicago, Illinois. Buyer and Seller agree that the expenses of mediation shall be borne equally by both parties. 27 JURISDICTION. Buyer, acting for itself and its successors and assigns hereby waives all rights to trial by jury in any litigation arising from or related to this Agreement. Subject to Section 26, Buyer expressly and irrevocably consents to the jurisdiction of the State and Federal courts located in Chicago, Illinois and waives the right to assert that any action in any such court is in the Improper venue or should be transferred to a more convenient forum. 28 STATUTE OF LIMITATIONS. Buyer and Seller agree that any action regardless of form, arising out of this sale must be brought within one (1) year after the later of the date the goods are delivered to Buyer or the date of awareness of the claim. 29 NONWAIVER. Seller reserves the right to enforce these terms and conditions at any time and none shall be deemed waived unless such waiver is in writing and signed by an authorized officer of Seller. 30 SEVERABILITY. If any provision or part of a provision of this Contract is declared invalid, illegal or unenforceable under applicable law, the affected provision will be considered amended or modified to conform to applicable law. The validity, legality and enforceability of all other remaining provisions or parts of provision will remain in full force and effect. 31 ACCOUNTS. Unless otherwise agreed to in writing by Seller, Buyer shall have no right to audit any books or records of Seller, including but not limited to, applicable purchase orders and order acknowledgements. 32 INDEMNIFICATION. Buyer shall indemnify Seller against any loss, damages, suit, liability or claim (including reasonable attorney fees and costs) caused by acts of Buyer not authorized by this agreement or by any willful or negligent act of the Seller. 33 GENERAL COMPLIANCE WITH LAWS. Buyer shall at all times comply with all laws applicable to this Contract. Buyer's performance of its obligations hereunder and Buyer's use of the Goods without limiting the generality of the foregoing, Buyer shall, at its own expense, maintain all certifications, credentials, licenses and permits necessary to conduct its business relating to the purchase or use of the Goods and (c) not engage in any activity or transaction involving the Goods by way of shipment, use or otherwise that violates any applicable law. 34 E-VERIFY COMPLIANCE. This Contract is for the provision of goods (rather than for services or construction), to the extent that the Goods are ultimately used in the performance of a federal contract. Seller is not subject to the E-Verify requirement set forth in the Federal Acquisition Regulation in clause 52.222-54. It is the Buyer's obligation to ensure compliance with any applicable E-Verify obligation, regulation or law to the extent they apply to Buyer. Should any additional immigration or E-verify obligation apply in the course of Buyer's business, it is Buyer's obligation to ensure compliance with that obligation and to immediately notify Seller if any requirement, the long-term risks in 8 CFR 274a-21 may apply to Seller due to Seller's transaction with Buyer. 35 ANTI CORRUPTION LAWS. Buyer agrees that in connection with this Contract Buyer shall comply with all applicable anti-corruption laws, including, but not limited to: the Foreign Corrupt Practices Act of 1977 (15 U.S.C. Sections 78dd-1 et seq.) and the UK Bribery Act 2010. Seller may terminate this Contract if it has a good faith belief that Buyer has violated intends to violate or has caused a violation of any applicable anti-corruption laws. 36 U.S. GOVERNMENT TRADE SANCTIONS. (a) BUYER OR PRESSIS NOT THE BUYER NOR ANY DIRECTOR, MANAGER, OFFICER, EMPLOYEE OR AFFILIATE THEREOF IS THE SUBJECT OF ANY SANCTIONS ADMINISTERED BY THE U.S. DEPARTMENT OF THE TREASURY'S OFFICE OF FOREIGN ASSETS CONTROL ("OFAC") SANCTIONS) OR IS LOCATED, ORGANIZED, OR RESIDENT IN A COUNTRY OR TERRITORY SUBJECT TO SANCTIONS, INCLUDING CUBA, IRAN, SYRIA, NORTH KOREA, OR THE CRIMEA REGION OF UKRAINE (CO-EXTENSIVELY AS SANCTIONED PERSON). (b) BUYER AND SELLER ACKNOWLEDGE THAT NO DIRECT OR INDIRECT (THROUGH A THIRD PARTY OR THIRD COUNTRY) TRANSACTIONS INCLUDING THE EXPORT OR IMPORT OF GOODS, TECHNOLOGIES OR SERVICES, OR FINANCIAL TRANSFERS WILL TAKE PLACE BETWEEN BUYER OR SELLER, OR ANY APPROPRIATE PERSONS SUBJECT TO U.S. JURISDICTION AND SANCTIONED PERSONS, OR FOR THE BENEFIT OF SANCTIONED PERSONS WILLTU (APPROPRIATE U.S. GOVERNMENT AUTHORIZATION SUCH AS BUT NOT LIMITED TO A SANCTIONED EMBRYONIC INDIVIDUALS, INTERBODIES BETWEEN BUYER AND SELLER (c) BUYER AND SELLER ALSO AGREE THAT IN ADDITION TO COMPLYING WITH OTHER APPLICABLE IMPORT AND EXPORT STATUTES AND REGULATIONS THEY WILL COMPLY WITH THE U.S. EXPORT ADMINISTRATION REGULATIONS ATTLIB T SCOT PROVISIONS (15 C.F.R. PART 740) AND THE INTERNAL REVENUE CODE PROVISION (26 U.S.C. 999), PROHIBITING SUPPORT FOR CERTAIN TRADE BOYCOTTS THAT ARE NOT ENDSORED BY THE U.S. GOVERNMENT, INCLUDING THE ARAB LEAGUE BOYCOTT OF ISRAEL, INDIA AND PAKISTAN'S BOYCOTTS OF EACH OTHER'S PRODUCTS, AND OTHER SIMILAR UN-AU.S. GOVERNMENT ENDORSED TRADE EMBARGOES. TO THE EXTENT THE REGULATIONS APPLY TO TRANSACTIONS IN WHICH THEY ARE ENGAGED FURTHER BUYER AND SELLER AGREE THAT THEY WILL COMPLY WITH MANDATORY REPORTING REQUIREMENTS PROVIDED IN THAT STATUTE AND IN THOSE REGULATIONS. (d) THE SELLER MAY TERMINATE THIS CONTRACT WITHOUT NOTICE AND WITHOUT ANY LIABILITY TO THE BUYER IF THE BUYER BREACHES THE ABOVE PROVISIONS OR BECOMES A SANCTIONED PERSON, THE BUYER SHALL HOLD THE SELLER HARMLESS FROM ANY CLAIMS SUFFERED BY BUYER OR SELLER AS A RESULT OF ANY VIOLATION OF THE ABOVE PROVISIONS BY THE BUYER. THE BUYER WARRANTS THAT IT WILL NOT DIVERT THE GOODS TO DESTINATIONS OTHER THAN THE DESTINATION INDICATED IN THE PURCHASE ORDER AND SHALL INCLUDE THESE TRAFFIC SANCTION PROVISIONS IN ANY SUBSEQUENT CONTRACTS UNDER WHICH THE GOODS ARE SOLD. 37 EXPORT CONTROL COMPLIANCE. CERTAIN GOODS PRODUCED BY SELLER AS WELL AS TECHNOLOGY OR SOFTWARE ASSOCIATED WITH THESE PRODUCTS MAY BE SUBJECT TO EXPORT CONTROLS UNDER THE U.S. EXPORT ADMINISTRATION REGULATIONS (15 CFR §§ 730-774) OR THE INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (22 CFR § 123 ET SEQ.) BASED ON THEIR SPECIFIC DESIGN CHARACTERISTICS DESTINED BY ACCEPTING THESE GOODS BUYER AGREES THAT IT WILL NOT DIRECTLY OR INDIRECTLY EXPORT REEXPORT, TRANSFER, TRANSMIT OR RELEASE GOODS, TECHNOLOGY OR SOFTWARE WITHOUT OBTAINING THE NECESSARY EXPORT LICENSES, REEXPORT AUTHORIZATIONS OR OTHER GOVERNMENTAL APPROVALS REQUIRED BY LAW. 38 COVERED DEFENSE INFORMATION. NOTHING CONTAINED IN DEAR N201-7717-1032. Buyer shall not share or provide Covered Defense Information to Seller without prior written notice. Appropriate notice is deemed given after an appropriate exchange or covered defense information in the performance of this agreement. 39 PRIVACY POLICY. Any personal information entered by Seller pursuant to this Contract will be used for the purpose of the supply of Goods contemplated by the Contract or associated communication. For additional information on Seller's privacy practices see Seller's privacy policy available at https://usa.arcelormittal.com/terms-conditions/privacy-policy which may be updated by Seller from time to time. 40 ASSIGNMENT OR DELEGATION. BUYER SHALL NOT ASSIGN OR DELEGATE ANY OF ITS RIGHTS OR DUTIES HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF SELLER. 41 MISCELLANEOUS. Seller and Buyer are independent parties and nothing in the terms and conditions herein accorded counterparts between order acknowledgment shall make either party agent partner, joint venture, or legal representative of the other. 42 INCORPORATION BY REFERENCE. Any clause required to be included in an Order of this type, or any applicable and valid federal statute or local law or administrative rule having the effect of law shall be deemed incorporated herein. EXHIBIT B CONSIGNMENT AGREEMENT This Consignment Agreement ("Agreement") is made this 08 day of May, 2023 (the "Effective Date") between Paragon Industries, Inc., ("CONSIGNEE"), with principal offices at 3378 W Highway 117, Sapulpa, OK 74066 and AM/NS Calvert LLC, a Delaware limited liability company ("COMPANY", and together with CONSIGNEE the "Parties", and each, a "Party"), with its principal offices at 1 AM/NS Way, Calvert, AL 36513 to establish the terms that will govern the consignment and sale of Products (as defined below) by COMPANY to CONSIGNEE during the term on this Agreement. 1. Purpose. The Parties agree that this Agreement will govern the consignment of Products by COMPANY to CONSIGNEE during the term of this Agreement. CONSIGNEE wishes to obtain delivery and purchase certain quantities of products consisting of certain types scheduled on Annex I attached hereto and any other products agreed between the Parties from time to time in writing on a consignment basis (other than, for the avoidance of doubt, Products subject to consignment agreements described in the last sentence of Section 10 hereof) (collectively, the "Products"). During the term of this Agreement, CONSIGNEE may purchase from COMPANY, and COMPANY may sell to CONSIGNEE, the Products to be consigned hereunder as identified in consignment orders agreed upon by COMPANY, upon the terms and conditions set forth therein and herein, in particular Section 3 hereof. The Products shall be delivered to and maintained at the locations listed in Annex I or any other specific locations identified in consignment orders that are agreed upon by the COMPANY (the "Yard" or collectively, the "Yards"). CONSIGNEE will have no obligation to take Products on consignment from COMPANY, and COMPANY will have no obligation to provide Products on consignment to CONSIGNEE until a valid consignment order is issued and accepted hereunder. 2. Consignment of Products. 2.1 Consignment for Sale. COMPANY shall consign to CONSIGNEE the Products in accordance with the consignment procedures set forth on Annex II attached hereto and the terms set forth herein. 2.2 Delivery. Transport of the Products from COMPANY to CONSIGNEE shall be arranged and paid for by COMPANY and delivery shall be at the Yard as designated by CONSIGNEE. The Parties currently contemplate that the Products will be delivered to and stored at the locations listed in Annex I. CONSIGNEE shall have responsibility for unloading all Products and CONSIGNEE shall assume responsibility for any damage to the Products during the unloading process. CONSIGNEE shall acknowledge the delivery of the Products at the Yard by a written acknowledgment provided to COMPANY, signed by a duly authorized representative of CONSIGNEE which shall specifically describe the Products and quantities delivered to CONSIGNEE. CONSIGNEE will promptly notify COMPANY of any variances between such reports and the description on the applicable bills of lading. 3. Invoices and Payment. CONSIGNEE will electronically provide COMPANY an EDI release transaction describing Products withdrawn from the consigned inventory on the business day of such withdrawal and COMPANY shall invoice CONSIGNEE for the Products withdrawn. Products are deemed withdrawn from consigned inventory on the earlier of the date such Products (i) are used or sold by CONSIGNEE, (ii) are commingled with other assets of CONSIGNEE or any other party, (iii) are purchased by CONSIGNEE as provided for in this Agreement and paid in full, (iv) Product volume reaches 100% fulfilment of a single purchase order, or (v) 180 days after the Products arrive at the Yard, at which time the Products are considered being purchased by CONSIGNEE in accordance to Section 3 hereof. CONSIGNEE shall pay each submitted invoice by COMPANY within thirty (30) days of date after the invoice is sent by COMPANY. If an EDI release has not previously been issued by CONSIGNEE for any inventory remaining at the Yard 180 days from the date such Products delivered to CONSIGNEE’s Yard, as noted in the applicable bill of lading, CONSIGNEE shall be deemed to have purchased such Products on such 180th day and COMPANY shall accordingly issue an invoice to CONSIGNEE for such Products, and CONSIGNEE shall pay such submitted invoice by COMPANY within thirty (30) days thereafter. 4. Protection of Consigned Products. 4.1 Storage and Location. At all times that Products are in the possession or control of CONSIGNEE and not yet paid for by CONSIGNEE, CONSIGNEE agrees that, except with the prior written consent of COMPANY, CONSIGNEE shall always maintain all Products at the Yard and shall not relocate or permit the relocation of the Products from such locations, other than to promptly transport the Products from the unloading area to the segregated storage area in accordance with Section 2.2. Products shall be deemed to be in the possession or control of CONSIGNEE commencing on the time the Products are being unloaded pursuant to Section 2.2 through and including the date the Products are purchased by CONSIGNEE as provided for in this Agreement and paid in full or 180 days after the Products arrive at the Yard, at which time the Products are considered being purchased by CONSIGNEE in accordance to Section 3 hereof. COMPANY may inspect and perform a physical inventory at the Yard of such Products at such reasonable times as COMPANY may request during normal business hours of CONSIGNEE with at least seven (7) days advance notice. At all times during the term of this Agreement, CONSIGNEE shall keep accurate records concerning the amount and identification of the Products. Upon reasonable notice and at reasonable times, COMPANY shall be given access to CONSIGNEE’s records concerning the amount and identification of the Products. 4.2 Segregation of Products. CONSIGNEE shall clearly identify the Products as the property of COMPANY on such Product and segregate any Products from any other personal property of CONSIGNEE or that of any third parties; provided however, if for any reason the Products consigned hereunder are commingled with any other personal property of CONSIGNEE or any third parties, CONSIGNEE (a) shall ensure that no other party has any right, interest, claim or liens against such commingled assets (including the Products) and (b) such Products shall be deemed withdrawn consigned inventory and CONSIGNEE shall comply with Section 3 hereof with respect to the Products that are commingled with other personal property. 4.3 Public Filings and Notices. CONSIGNEE hereby irrevocably authorizes COMPANY to file such financing statements, continuation statements, amendments and such other documents as COMPANY may deem necessary or desirable to protect or perfect the interest of COMPANY in the Products, and appoints COMPANY as the CONSIGNEE’s attorney in fact, with a power of attorney to execute on CONSIGNEE’s behalf such Uniform Commercial Code financing statement forms, continuation statements, amendments and other similar instruments as COMPANY may from time to time deem necessary or desirable to protect or perfect such interests in the Products. Such power of attorney is coupled with an interest and shall be irrevocable. In addition, CONSIGNEE agrees to make, execute, furnish, deliver or cause to be done, furnished, executed and delivered all such further acts, information, documents and things as COMPANY may require for the purpose of perfecting or protecting the rights of COMPANY hereunder or otherwise giving effect to this Agreement, all promptly upon request therefor. CONSIGNEE authorizes COMPANY at any time and from time to time to file, transmit, or communicate, as applicable, financing statements, continuation statements, and amendments: (i) describing the Products as being of equal or lesser scope or with greater detail, or (ii) that contain any information required by the Uniform Commercial Code for the sufficiency or filing office acceptance. CONSIGNEE will execute and deliver to COMPANY such additional documents and information in form reasonably acceptable to COMPANY, if any, as may be requested by COMPANY to protect COMPANY’s ownership interest in Products, including, but not limited to notices to creditors or other consignors of CONSIGNEE. COMPANY shall have the right to, and CONSIGNEE hereby authorizes and grants permission to COMPANY to, make any notification reasonably requested to protect COMPANY’s interest in the consigned Products (such as those contemplated by UCC 9-324) to any creditor or any other consignor of CONSIGNEE that has filed a UCC Financing Statement that, in COMPANY’s discretion, may evidence a conflicting interest in the consigned Products. 4.4 Title and Risk of Loss. Full legal, beneficial and equitable title to the Products will remain with COMPANY and will not pass to CONSIGNEE until the earlier of (a) such time as the Products are purchased by CONSIGNEE as provided for in this Agreement and paid in full or (b) 180 days after the Products arrive at the Yard, at which time the Products are considered being purchased by CONSIGNEE in accordance to Section 3 hereof. In the event that only a portion of the Products is purchased, then title as pertains to that portion only will transfer to CONSIGNEE. Notwithstanding anything to the contrary herein and that title has not passed, upon delivery of the Products to the agreed location by CONSIGNEE, risk shall pass to CONSIGNEE and CONSIGNEE shall bear the entire risk of loss, theft, damage and/or destruction of the Products from any cause whatsoever. CONSIGNEE shall also be responsible for, and agrees to indemnify and hold harmless the COMPANY, from and against any liability, claim or expense arising from CONSIGNEE’s use or possession of the Products during the term of consignment. COMPANY shall not be responsible for CONSIGNEE’s use of the Products except as otherwise specifically set forth in this Agreement. 5. Term and Termination. 5.1 Term. The Agreement shall have an initial term commencing on the Effective Date and ending on December 31, 2024, prior to which the Parties may mutually decide in writing to extend the Agreement. 5.2 Termination. Either Party may immediately terminate this Agreement, upon written notice, in the event that either Party is made the subject of, or subjects itself to any insolvency, bankruptcy or similar proceedings under federal or state laws, or upon default by either Party of any material provisions of this Agreement which default remains uncured for more than ten (10) days following written notice of such default from the non-defaulting Party to the defaulting Party. After termination of the Agreement, the Parties agree and warrant that they shall remain obligated to continue to fully perform any then outstanding obligations yet to be performed as required by the Agreement and both Parties agree to take all reasonable steps to complete an accounting of activities pursuant to this Agreement within a reasonable period of time following such termination. Pursuant to the terms of this Agreement, upon termination, any inventory remaining at the Yard shall be invoiced 180 days from the date such Products were delivered. 6. Insurance. CONSIGNEE shall insure the Products, whether located at CONSIGNEE, CONSIGNEE's subsidiary(ies) or affiliates or CONSIGNEE's vendor(s) for all loss or damage and CONSIGNEE shall maintain product liability and auto insurance and commercial general liability insurance, with a company rated AA or better by A. M. Best, or with insurance coverages with such limits, terms and conditions as are consistent with practices, in either case, naming COMPANY as an additional insured and loss payee with respect to the Products. Such policy shall have minimum coverage of $1,000,000.00 per occurrence, which can be met through an umbrella or standard policy or any combination thereof. The insurance shall be evidenced by Certificate(s) of Insurance naming COMPANY as an "Additional Insured" under its Vendor Broad Form endorsement or other applicable policy and CONSIGNEE shall provide a copy of such certificate(s) to COMPANY prior to the shipment of Product hereunder. 7. Subsidiaries and Vendors. CONSIGNEE shall ensure all of its subsidiaries, vendors and affiliates who will be participating under this Agreement shall comply and be bound by the terms of this Agreement, including segregation of consigned Products, and permitted filings. 8. Miscellaneous. 8.6 Choice of Law and Jurisdiction. This Agreement shall be interpreted and enforced solely under and in accordance with the laws of the State of Illinois without regard to any conflict-of-laws statutes or equivalent thereof, whether of the State of Illinois or those of any other state, except where any given matter is exclusively governed by U.S. federal laws. The parties agree to the exclusive jurisdiction of the state and federal courts located in Illinois. 8.7 Headings. The article headings in this Agreement are for convenience only and do not form a part of this agreement. 8.8 Force Majeure. Any delay or failure in the performance by either party hereunder shall be excused if and to the extent arising from causes beyond the reasonable control of the party claiming force majeure, including, without limitation, acts of God, fires, floods, explosions, riots, wars, hurricane, sabotage terrorism, restraint of government, governmental acts, labor strikes, temporary or permanent mill closures, equipment failure, inability to obtain fuel, material or parts, unusually severe weather conditions. 9. Notice. Any notice required or permitted to be given under this agreement shall be given to each party at the following addresses which either party may alter by giving notice to the other party in the manner set forth below: If to CONSIGNEE: Paragon Industries, Inc. 3378 W Highway 117 Sapulpa, OK 74066 Attn: [_____] Telephone: [_____] Email: [_____] If to COMPANY: AM/NS Calvert LLC 1 AM/NS Way Calvert, AL 36513 Attn: [_____] Telephone: 251-289-3000 Email: [_____] Such notice shall be in writing and given in person, by e-mail and/or prepaid U.S. Mail, and shall be deemed effective (i) in case of delivery in person or by e-mail, when actually received or successfully transmitted, respectively, and (ii) in case of delivery by U.S. Mail, three (3) days following posting in the U.S. Mail receptacle. 10. Other Agreements. As of the Effective Date, the Parties hereto acknowledge and agree there may be additional agreements between the Parties hereto relating to the purchase of products, agreements of which shall be, and for the avoidance of doubt, the rights and obligations thereunder, shall be different from the rights and obligations of the Parties under this Agreement. Case: 1:24-cv-091 Document #: 1-2 Filed: 09/27/24 Page 4 of 11 PageID #:23 IN WITNESS WHEREOF, the Parties have signed this Agreement the day and year first above written, COMPANY NAME By: ________________________________ Print Name: Derek Wachob Title: CEO AM/NS Calvert LLC By: ________________________________ Print Name: H SHELBY COFFEE Title: CMO Annex I Product Calvert Flat-Rolled Steel Products, including hot rolled black Locations Port of Muskogee 4901 Harold Scoggins Drive Muskogee, OK 74401 Paragon Industries 4631 Harold Scoggins Drive Muskogee, OK 74403 Paragon Industries 600 Coporal Drive Stephenville, TX 76401 Annex II Consignments Procedures Terminology: • CONSIGNEE refers the consignment program a vendor managed inventory program (VMI). • A “shipment” from the final COMPANY location to CONSIGNEE is a “trip” or “release” of material from the consigned inventory into CONSIGNEE ownership. This process triggers invoicing and change of ownership. • A shipment from the producing mill to CONSIGNEE is considered an internal movement of inventory and does not trigger an invoice. Material remains in COMPANY ownership. • The consignment period begins when material is received by CONSIGNEE and terminates either when used or a maximum of 180 days after receipt. • Material tripped prior to the 180 day limit is reported via EDI by CONSIGNEE and invoiced promptly by COMPANY. • The status of consignment material (aging, receipt date, transit status) can be accessed in COMPANY Power BI - Outside Processing program. Procedures • CONSIGNEE submits VMI (Vendor Managed Inventory) purchase orders separately from regular purchase orders. POs must be clearly marked as VMI orders on the PO document as well on the cover letter. This is done by the CONSIGNEE the Purchasing Associate or Materials Manager. For good practice do not send VMI orders commingled with regular orders to avoid order entry error. • POs for COMPANY are sent to the COMPANY Customer Service Representative via email. • Unique PPIs for the consignment program (as opposed to regular orders) are issued for each product. • Consignment coils received from the mill must be confirmed via EDI (CONSIGNEE uses interface with Steel Partner) to COMPANY. This is done promptly by the Inventory Control Specialist. • As CONSIGNEE draws material the consignment inventory by “tripping” the material. The trip is completed by the CONSIGNEE Inventory Control Associate who triggers the release in Steel Partner. • Once per week CONSIGNEE will send an Excel summary of tripped material from the Purchasing Associate or Material Manager to the COMPANY Customer Representative. This serves as a double check/backup to the EDI process. • CONSIGNEE must complete the same process for material that reaches the 180-day limit. This is again completed by the CONSIGNEE Inventory Control Associate who triggers the release in Steel Partner. • COMPANY can monitor aged material in Power BI and it is incumbent that there is weekly communication between the COMPANY Customer Representative and the CONSIGNEE Purchasing Associate about the tripping of aged material. If there are complications the CONSIGNEE Materials Manager and COMPANY Account Manager should be notified. The intent is to automate the 180-day trip. The CONSIGNEE intent is to minimize material reaching 180 days. • When EDI notification of a trip is received it sends a "stock transfer" or Bill of Lading notification and ultimately an invoice to CONSIGNEE. Below are additional procedures covering the order entry and pricing process • COMPANY creates "fully configured parts" prior to needing the material. This workflow is linked via the Material #. • New parts need to have 2-3 weeks additional lead time for the part to be built. • The CSR transforms the PO into a Sales Order and makes sure to change the plant to '9112' and the transportation mode to '41'. • The Sales Order is printed and proofed before being released and defaulting to 'DR' status. • While the Sales Order is in 'DR' status the CSR emails the Forecasting Team to request allocation for the order. • Once Forecasting confirms availability the CSR obtains confirmation dates for the material. This facilitates the release of Sales Order into Broner/MES for production. • The day after the Sales Order enters production, the Order Acknowledgment is sent to CONSIGNEE. • The Calvert External Processing team, manages the OSP Inventory for coils that are shipped but not tripped. Coil data is referenced by the ASN. • The 846 EDI handoff is sent weekly from CONSIGNEE and COMPANY External Processing contacts CONSIGNEE with any discrepancy issues. • The EDI aspect at COMPANY is handled IT. IT also handles communicating with their CONSIGNEE IT counterpart when a title trips but does not show in SAP. EXHIBIT C ArcelorMittal Sales & Administration LLC Credit Application *Please note: Any delays in returning the required information for the credit decision process will impact lead times.* ArcelorMittal Sales & Administration LLC Credit Policy requires: Year End Financial Statements; Resale Certificate & Tax Exemption Certificate. Legal Entity Name: Paragon Industries, Inc. EIN REDACTED DUNS# REDACTED Address: 3378 W. HWY 117 City Sapulpa State OK Zip Code 74066 Phone No: 918-291-4458 Fax No: 918-291-0918 Web address: www.paragonindinc.com Organization: Corporation Sub S-Corp Sole-Proprietorship Partnership LLP LLC Other Type of Business: Distributor Wholesaler Fabricator Erector Broker Other Parent Name ____________________________________ EIN ___________ DUNS# ___________ Address ___________________________________ City __________State_____ Zip Code________________ Company Contacts (Must include phone numbers, fax numbers and email addresses) President / CEO Derek Wachob CFO / Controller Barry Willis Acct Payable Contact Taylor Ritchey Invoice Delivery EMAIL: [REDACTED] Contact Name and EMAIL Address required: [REDACTED] Bank Reference: Name of Bank [REDACTED] Address [REDACTED] Telephone # [REDACTED] Account # [REDACTED] Please provide authorization statement if required to obtain bank reference information. Trade References: (Please include at least two steel/metal company references) **Are you presently doing business with any Affiliate of ArcelorMittal? If so, please list as a reference below.** Name ____________________________________________ Address _______________________________ Contact Name __________________________ Telephone # __________________ Fax # __________________ Email: ______________________ Name ____________________________________________ Address _______________________________ Contact Name __________________________ Telephone # ___________________ Name ____________________________________________ Address _______________________________ Contact Name __________________________ Telephone # __________________ Applicant 1) certifies that the information contained herein is true and correct; 2) authorizes ArcelorMittal Sales & Administration LLC to contact references provided herein; and 3) agrees to be bound by ArcelorMittal Sales & Administration LLC's terms and conditions of sale located at the link below: https://usa.arcelormittal.com/-/media/files/A/Arcelormittal-USA-V2/what-we-do/price-list/2020_Terms-Sale.pdf Authorized Signature ________________________________ (Print Name) Derek Wachob Title CEO Date 10/12/2022 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No.: ______________________ SKIP BRAVER and CHAD BRAVER, Plaintiffs, Vs. DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, Defendants. _____________________________/ COMPLAINT Plaintiffs, SKIP BRAVER and CHAD BRAVER, sue Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, and alleges: NATURE OF ACTION 1. Defendants owe Plaintiffs at least $30,352,865.00 which they took from Plaintiffs from November 8, 2023, to and including August 16, 2024, in connection with a fraudulent investment scheme Defendants negotiated with Plaintiffs in Florida, whereby Plaintiffs entrusted their funds to Defendants in connection with short term securities transactions in the form of investments in the purchase and sale of industrial rolled steel products that Defendants promised would yield quick returns. For each purchase transaction Plaintiffs invested in, Derek Wachob promised to match Plaintiffs' investment dollar for dollar, which allegedly enabled Defendant, Global Source Recycling Company, LLC, to make 24 separate purchase transactions sourced solely by Defendants to purchase approximately 82,123 tons of industrial rolled steel valued in excess of $55 million from November 8, 2023, to August 16, 2024. Upon sale of the steel at Derek Wachob’s sole discretion, Defendants were supposed to return Plaintiffs’ funds invested, and split the profits made on the sales with Plaintiffs based on their amounts invested in 24 separate steel purchase transactions. 2. To induce Plaintiffs to invest in the securities transactions at issue, Defendants represented to Plaintiffs that Paragon Industries, Inc. ("Paragon"), a company owned or controlled by its CEO Derek Wachob, would be the buyer of the industrial rolled steel unless a boutique steel buyer willing to pay a higher price for the steel was found. In making the representation that Paragon was a buyer for the industrial rolled steel, which would guarantee a profit on the sale of all industrial steel purchased, Defendants failed to disclose the material fact that Paragon was heavily indebted to its suppliers and unable to pay its bills as they came due in amounts exceeding $45 million before Plaintiffs’ first investment transaction, and was indebted to its suppliers in amounts exceeding $60 million by April 2024. Had Plaintiffs known Paragon was insolvent and unable to pay its suppliers as debts owed to them came due, Plaintiffs would never have entrusted any of their investment funds with Defendants. Indeed, on October 2, 2024, Nucor Corporation ("Nucor"), a sheet steel supplier to Paragon, filed suit in the United States District Court for the Eastern District of Arkansas (the “Nucor Lawsuit”) alleging that Paragon was indebted to Nucor in the amount of $32,563,370.95, for goods sold and delivered between April 2022 and August 2022. On September 27, 2024, AM/NS Calvert LLC and its affiliate, AM/NS Calvert Receivables LLC, suppliers of flat-rolled steel and other steel products to Paragon, filed suit against Paragon Industries, Inc., in the United States District Court, Northern District of Illinois (the “Calvert Lawsuit”), alleging that Paragon had breached a consignment agreement for rolled steel products by failing to pay the sum of $16,112,893.86 by no later than November 8, 2023 - the very same day when Skip Braver made his first investment of 3 million dollars with Defendants, and alleging that Defendants had breached a steel product supply agreement for failing to pay for goods sold and delivered from January 4, 2023, to May 10, 2024, in the amount of $15,482,327.54. 3. To date, Defendants have alleged they resold at least 22,000 tons of rolled steel purchased in whole or in part with Skip’s invested funds, but have never returned any of Plaintiffs’ funds invested, nor have they paid Plaintiffs any of their share of profits on such sales. 4. Despite demand from Plaintiffs, Defendants have failed and refused to return their invested funds to Plaintiffs, failed and refused to pay over any of the alleged profits on steel sold to Plaintiffs, and failed to account to Plaintiffs for any of the unsold industrial rolled steel they allegedly purchased with Plaintiffs’ invested funds. 5. Upon information and belief, the industrial rolled steel purchases allegedly orchestrated by Defendants at discounted prices from suppliers with Plaintiffs’ funds never existed, Derek Wachob never matched Plaintiffs’ funds invested with any of his funds, and/or Defendants converted Plaintiffs’ funds invested with them to their own uses including, without limitation, funding Derek Wachob’s lavish lifestyle. Derek Wachob’s lavish lifestyle includes expenses incurred to purchase and operate two (2) private jets, two (2) helicopters, four (4) luxury yachts, and at least 50 luxury and classic automobiles. Alternatively, Defendants sold some of the assets purchased with Plaintiffs’ funds invested, and Defendants converted Defendants’ funds invested and share of profits to their own uses after reselling some or all of the industrial rolled steel including, without limitation, funding Derek Wachob’s lavish lifestyle. 6. Plaintiffs seek rescission of their investment transactions with Defendants and return of their invested funds from Defendants, along with any profits realized from their investment transactions with Defendants, an award of damages for breach of contract and conversion, repayment of a loan, an equitable accounting of how their funds were used by Defendants, appointment of a receiver to prevent waste, and an award of all costs and expenses, including reasonable attorney’s fees, incurred in connection with this action. PARTIES 7. Plaintiff, SKIP BRAVER (“Skip”) is a resident of Miami-Dade County, Florida, and is sui juris. Skip is 75 years old, and has been retired from the boat building business since 2021. Skip is Chad Braver’s father. 8. Plaintiff, CHAD BRAVER (“Chad”) is a resident of Miami-Dade County, Florida, and is sui juris. Chad is Skip’s adult son. 9. Defendant, DEREK WACHOB (“Mr. Wachob”), is a resident of Sapulpa, Creek County, Oklahoma, and is sui juris. At all times material, Mr. Wachob has been the Manager of Co-Defendant, Global Source Recycling Company, LLC. Also at all times material, Mr. Wachob has been the Chief Executive Officer of Paragon, a producer of metal pipes for a variety of industries, including the oil industry, since taking over the family business from his late father in or about 2016. 10. Defendant, GLOBAL SOURCE RECYCLING COMPANY, LLC ("Global Source"), is a Delaware Limited Liability Company with its principal place of business located in Creek County, Oklahoma. At all times material, Global Source has been in the business of buying and selling industrial rolled steel products, including rolled steel products bought from and sold to Paragon. At all times material, Mr. Wachob has owned or controlled Global Source. JURISDICTION AND VENUE 11. This Court has subject-matter jurisdiction over these claims pursuant to 28 U.S.C. §1332(a). This is a civil action between Plaintiffs, who are citizens and residents of the State of Florida, on the one hand, and Defendant, Mr. Wachob, a citizen of Oklahoma, and Defendant, Global Source, a Delaware limited liability company with its principal place of business in Oklahoma. The amount in controversy is in excess of $75,000.00, exclusive of interest, costs and reasonable attorney’s fees. 12. Venue is proper in this Court because the oral Master Investment Agreement between the parties was negotiated and entered into in Miami-Dade County, Florida, some of the individual investments agreements between the parties were negotiated and entered into in Miami-Dade County, Florida, Defendants owed repayment of Plaintiffs’ funds invested to Plaintiffs in Miami-Dade County, Florida, and Plaintiffs were injured and damaged in Miami-Dade County, Florida. 13. This Court has long arm jurisdiction over each of Defendants because Derek Wachob, individually and as Manager of Global Source: a. Negotiated and entered into the Master Investment Agreement with Skip at issue herein while Mr. Wachob was physically located at his business office in Miami-Dade County, Florida. b. Negotiated and entered into the Master Investment Agreement with Chad at issue herein by calling Chad while he was physically located in Miami-Dade County, Florida. c. Made verbal solicitations and offers to Skip and Chad to invest in specific securities investment transactions that are at issue herein while physically located in Miami-Dade County, Florida. d. Made phone call solicitations and offers, and sent email and text message solicitations and offers, to Skip and Chad to invest in specific securities investment transactions that are at issue herein while Skip and Chad were physically located in Miami-Dade County, Florida. e. Maintains a business office in Miami-Dade County, Florida. f. Committed tortious acts directed to Skip and Chad while they were in the State of Florida. g. Sold unlicensed securities to Skip and Chad in violation of Fla. Stat. §517.07 in the State of Florida. h. Breached a loan agreement entered into and requiring performance in the State of Florida. 14. Plaintiffs have retained and are obligated to pay their attorneys a reasonable attorney's fee for their services herein. 15. All conditions precedent to the commencement of this action have been performed, occurred, or been waived. FACTUAL BACKGROUND Skip and Mr. Wachob become close personal friends 16. In or about 2009, Skip met Mr. Wachob in connection with Mr. Wachob’s purchase of luxury performance yacht from a yacht manufacturing company owned or controlled at the time by Skip. 17. From 2009 to November 2023, Skip and Mr. Wachob became close personal friends. 18. As their friendship evolved over time into 2021, and continuing to present until Defendants wrongdoing as alleged herein became known, Skip and Mr. Wachob came to speak with one another on almost a daily basis. 19. In or about July 2021, Mr. Wachob, through a company owned or controlled by him, leased an office warehouse located in Doral, Miami-Dade County, Florida, and Skip and Mr. Wachob jointly agreed to fund interior improvements to the office and warehouse for their respective use (the “Founders Building”). Skip and Mr. Wachob each invested at least $2 million in interior improvements to their Founders Building. 20. Chad first met Mr. Wachob and his family in or about 2009, in connection with Skip’s social interactions with Mr. Wachob. From 2021 to 2024, Chad and Mr. Wachob became close personal friends as well, with Mr. Wachob offering to mentor Chad in connection with his business pursuits. 21. The close personal friendship and level of trust between Plaintiffs and Mr. Wachob was confirmed on June 22, 2024, when Mr. Wachob, on the one hand, and Skip and Chad, on the other hand, exchanged the following text messages: Sat, Jun 22 at 8:13 AM Derek Wachob Thank you both for being my friend I life you don’t find true friends like you DW I love you both 22. Chad and Skip responded to Mr. Wachob’s text message as follows: Love you too! Thank you for being our friend, we are so fortunate to have each other :) Skip Bravo I lost my brother a long time ago who is my best friend and my business partner, knowing you is like God gave me another chance to have a brother Master Investment Agreement 23. On or about November 3, 2023, Mr. Wachob traveled to Miami-Dade County, Florida, and requested an in-person meeting with Skip at their Founders Building. 24. On or about November 4, 2023, Mr. Wachob and Skip met at the Founders Building to discuss an investment opportunity Mr. Wachob wanted to offer Skip. 25. At their meeting which lasted for approximately two (2) hours, Mr. Wachob presented Skip with an opportunity to make joint investments with him in the purchase and resale of industrial rolled steel products on a short-term basis. Because of Mr. Wachob’s business relationships developed with suppliers of industrial rolled steel through Paragon, Mr. Wachob explained to Skip that he frequently had opportunities to purchase industrial rolled steel production overruns from suppliers at below market prices, which he could then resell at substantial profit in the range of 30% or more. Mr. Wachob invited Skip to invest with him in these opportunities when they were presented to Mr. Wachob, with Mr. Wachob and Skip equally investing their personal funds in these investments, and with each sale Mr. Wachob and Skip would be entitled to a return of their funds invested, and an equal split of the profits upon sale of the products. Mr. Wachob had substantial business experience with making investments in the purchase of rolled steel products, and it was agreed that he would handle all purchase negotiations and sales transaction for the benefit of all parties to the agreement. Mr. Wachob explained that the purchases would be made by and through Global Source to distance the purchasers from Mr. Wachob, who had ongoing business relationships with Paragon, and requested that Skip wire the funds he agreed to invest with Mr. Wachob to Global Source for that purpose. 26. Skip had no experience in buying or selling rolled steel products, but was willing to entrust Mr. Wachob, a friend he loved like his deceased brother, with his funds for purposes of making joint investments with Mr. Wachob as proposed. Skip verbally agreed to invest his funds for the purchase of industrial rolled steel on the terms proposed by Mr. Wachob, and advised Mr. Wachob that he was looking forward to participating in purchasing industrial steel products with him on the verbal terms they agreed to (the “Master Investment Agreement”). Skip invests $3 Million in the Traunch #1 Agreement 27. On or about November 8, 2023, Mr. Wachob offered Skip the first opportunity to invest in the purchase of 8,000 tons of industrial rolled steel for the discounted purchase price of $750 per ton, or $6 million total, with Skip investing $3 million and Mr. Wachob allegedly contributing a matching investment of $3 million, all pursuant to the terms of their Master Investment Agreement. 28. On or about November 8, 2023, the spot price for industrial rolled steel was approximately $853 per ton. 29. On or about November 8, 2023, Skip accepted Mr. Wachob’s offer (the “Traunch #1 Agreement”) and, pursuant to the terms of the Master Investment Agreement, wired the sum of $3 million to Global Source pursuant to the Traunch #1 Agreement. 30. In May 2024, Mr. Wachob advised Plaintiffs that he had sold the steel covered by the Traunch #1 Agreement and the Master Investment Agreement in or about January 2024, and that the profit on the sales transaction was $625,000.00. Skip Invests $3 Million In the Traunch #2 Agreement 31. On or about November 14, 2023, Mr. Wachob offered Skip a second opportunity to invest in the purchase of 8,000 tons of industrial rolled steel for the discounted purchase price of $750 per ton, or $6 million total, with Skip investing $3 million and Mr. Wachob allegedly contributing a matching investment of $3 million, all pursuant to the terms of the Master Investment Agreement. 32. On or about November 14, 2023, the spot price for industrial rolled steel was approximately $853 per ton. 33. On or about November 17, 2023, Skip accepted Mr. Wachob’s offer (the “Traunch #2 Agreement”) and, pursuant to the terms of the Master Investment Agreement, wired the sum of $3 million to Global Source for the Traunch #2 Agreement. 34. On September 5, 2024, Mr. Wachob advised Skip and Chad that he had sold the steel covered by the Traunch #2 Agreement and the Master Investment Agreement in or about January 2024, and that the profit on the sales transaction was $668,000.00. Chad is invited to participate in the Master Investment Agreement and learn the steel commodities business 35. In or about January 2024, because of his social interactions with Mr. Wachob and Skip, Chad learned about the Master Investment Agreement, the Traunch #1 Agreement, and the Traunch #2 Agreement. 36. On or about January 3, 2024, Mr. Wachob reached Chad by telephone while Chad was in Florida, and Mr. Wachob offered for Chad to participate in the Master Investment Agreement as an investor, so that Chad could learn about the steel commodities trading business. Chad was invited to make investments in the purchase of industrial rolled steel on the terms and conditions of the Master Investment Agreement. 37. In January 2024, Chad accepted Mr. Wachob’s offer to participate in the Master Investment Agreement as an investor with respect to future investment opportunities, to the extent he had limited funds available to participate in such investments. Chad had no prior experience in making investments in industrial rolled steel, but was willing to invest his funds in the transactions because he trusted his close personal friend to handle the investment purchase and sale transactions for their mutual benefit. 38. In or about January 2024, Mr. Wachob introduced Chad to several web based commodity price reporting services, including the CRU Group. The CRU Group publishes data about the prices of rolled steel, so that Chad could "learn the business" by following market prices and forces that Mr. Wachob was also monitoring in connection with his purchases and sales of industrial rolled steel being made pursuant to the Master Investment Agreement. 39. Although Chad began to study the steel market prices and their movements over time, and pass limited information on the Mr. Wachob about same, Chad never participated in any decision to purchase or sell any of the industrial rolled steel bought or sold by Defendants at issue herein. Skip Invests $3 Million and Chad Invests $200,000 in Traunch #3 Agreement 40. On or about February 20, 2024, while Mr. Wachob was physically in Florida to visit with Skip and Chad, Mr. Wachob offered Skip a third opportunity, and Chad a first opportunity, to invest in the purchase of 9,482 tons of industrial rolled steel for the discounted purchase price of $675.00 per ton, or a total of $6,400,350.00, with Skip investing $3 million, Chad investing $200,000.00, and Mr. Wachob allegedly contributing a slightly larger matching investment of $2,200,350.00, all pursuant to the terms of the Master Investment Agreement. 41. On or about February 20, 2024, the spot price for industrial rolled steel was approximately $894 per ton. 42. On or about February 20, 2023, Skip and Chad accepted Mr. Wachob's offer (the "Traunch #3 Agreement") and, pursuant to the terms of the Master Investment Agreement, Chad wired his $200,000 to Skip, and Skip wired Chad and his funds in the total amount of $3.2 million to Global Source for the Traunch #3 Agreement. Skip Invests $900,000 and Chad Invests $100,000 in the Traunch #4 Agreement 43. On or about March 26, 2024, Mr. Wachob contacted Skip and Chad by text message sent to Skip and Chad while they were in Florida, and offered Skip a fourth opportunity, and Chad a second opportunity, to invest in the purchase of 2,963 tons of industrial rolled steel for the discounted purchase price of $675 per ton, or a total of $2 million, with Skip investing $900,000, Chad investing $100,000, and Mr. Wachob allegedly contributing a matching investment $1 million, all pursuant to the terms of the Master Investment Agreement. 44. On or about March 26, 2024, the spot price for industrial rolled steel was approximately $817 per ton. 45. On or about March 26, 2024, Skip and Chad accepted Mr. Wachob’s offer (the Traunch #4 Agreement") and, pursuant to the terms of the Master Investment Agreement, Chad wired his $100,000.00 to Skip, and Skip wired Chad and his funds in the total amount of $1 million to Global Source for the Traunch #4 Agreement. Skip Invests $568,000.00 in the Traunch #5 Agreement 46. On April 8, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida, and offered Skip a fifth opportunity to invest in the purchase of 1,600 tons of industrial rolled steel for the discounted purchase price of $710.00 per ton, or the total sum of $1,136,000.00, with Skip investing $568,000.00, and Mr. Wachob allegedly contributing a matching investment of $568,000.00, all pursuant to the terms of the Master Investment Agreement. 47. On or about April 8, 2024, the spot price for industrial rolled steel was approximately $860 per ton. 48. On April 8, 2024, Skip accepted Mr. Wachob’s offer (the “Traunch #5 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $568,000.00 to Global Source for the Traunch #5 Agreement. 49. On September 5, 2024, Mr. Wachob told Plaintiffs that the steel purchased pursuant to the Traunch #5 Agreement and the Master Investment Agreement had been sold, and that the profit on the sale was $224,000. Skip Invests $1,118,250.00 in the Traunch #6 Agreement 50. On or about April 10, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip a another opportunity to invest in the purchase of 3,150 tons of industrial rolled steel for the discounted purchase price of $750 per ton, or the total sum of $2,362,500.00, with Skip investing $1,118,250.00, and Mr. Wachob allegedly contributing a matching investment of $1,244,250.00, all pursuant to the terms of the Master Investment Agreement. 51. On or about April 10, 2024, the spot price for industrial rolled steel was approximately $860 per ton. 52. On or about April 11, 2024, Skip accepted Mr. Wachob’s offer (the “Traunch #6 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $1,118,250.00 to Global Source for the Traunch #6 Agreement. Skip invests $4,016,250.00 in the Traunch #7 Agreement 53. On or about April 23, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 10,500 tons of industrial rolled steel for the discounted purchase price of $765.00 per ton, or the total sum of $8,032,500.00, with Skip investing $4,016,250.00, and Mr. Wachob allegedly contributing a matching investment of $4,016,250.00, all pursuant to the terms of the Master Investment Agreement. 54. On or about April 23, 2024, the spot price for industrial rolled steel was approximately $837 per ton. 55. On or about April 23, 2024, Skip accepted Mr. Wachob’s offer (the “Traunch #7 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $4,016,250.00 to Global Source for the Traunch #7 Agreement. Skip invests $915,705.00 in the Traunch 7A Agreement 56. On or about April 29, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida and offered Skip another opportunity to invest in the purchase of 2,394 tons of industrial rolled steel for the discounted purchase price of $765.00 per ton, or the total sum of $1,831,410.00, with Skip investing $915,705.00, and Mr. Wachob allegedly contributing a matching investment of $915,705.00, all pursuant to the terms of the Master Investment Agreement. 57. On or about April 29, 2024, the spot price for industrial rolled steel was approximately $813 per ton. 58. On or about April 30, 2024, Skip accepted Mr. Wachob’s offer (the “Traunch #7A Agreement”¹) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $915,705.00 to Global Source for the Traunch #7A Agreement. Skip invests $1,051,250.00 in the Traunch #8 Agreement 59. On or about May 13, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida ,and offered Skip a ninth opportunity to invest in the purchase of 2,900 tons of industrial rolled steel for the discounted purchase price of $725 per ton, or the total sum of $2,102,500.00, with Skip investing $1,051,250.00, and Mr. Wachob allegedly contributing a matching investment of $1,051,250.00, all pursuant to the terms of the Master Investment Agreement. 60. On or about May 13, 2024, the spot price for industrial rolled steel was $772 per ton. 61. On or about May 14, 2024, Skip accepted Mr. Wachob’s offer (the “Traunch #8 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $1,051,250.00, to Global Source for the Traunch #8 Agreement. Skip requests return of his invested funds and profits but is denied 62. On May 13, 2024, Skip sent a text message to Mr. Wachob requesting that Defendants return his funds invested and profits from the Traunch #1 Agreement. ¹ This reference was used by the parties in their text messages exchanged regarding this transaction, and the memo section of Skip’s wire transfer instructions for these funds.. 63. Defendants ignored Skip’s request, and Mr. Wachob cryptically responded by text message sent to Skip while he was in Florida that he was currently “in buy mode.” 64. On May 16, 2024, Skip again requested that Defendants return his funds invested and profits from the Traunch #1 Agreement. 65. Mr. Wachob cryptically responded by text sent to Skip while he was in Florida, that Skip should send him another $4 million, and further stated “That’s how good I did...” 66. Skip then sent a text to Mr. Wachob inquiring whether they could take profits from Deal #1, Deal #2, or any of them.” 67. Mr. Wachob responded that “[w]e will be able to take profit soon but not yet without taking a hit.” 68. When Skip asked when they would be able to take out profits, Mr. Wachob responded: “Profit will start rolling.” 69. Trusting that his best friend was looking out for his best interest, Skip did not become alarmed about Defendants' failure to return his invested funds and share of profits, and continued to consider additional investment opportunities present by Mr. Wachob pursuant to the Master Investment Agreement. Skip invests $467,625.00 in the Traunch #8A Agreement 70. On or about May 20, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida and offered Skip another opportunity to invest in the purchase of 1,290 tons of industrial rolled steel for the discounted purchase price of $725 per ton, or the total sum of $935,250.00, with Skip investing $467,625.00, and Mr. Wachob allegedly contributing a matching investment of $467,625.00, all pursuant to the terms of the Master Investment Agreement. 71. On about May 20, 2024, the spot price for industrial rolled steel was approximately $772 per ton. 72. On or about May 20, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #8A Agreement"\(^{2}\)) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $467,625.00, to Global Source for the Traunch #8A Agreement. 73. On September 5, 2024, Mr. Wachob told Plaintiffs that the steel purchased pursuant to the Traunch #8A Agreement and the Master Investment Agreement had been sold, and that the profit on the sale was $161,250. **Skip again requests return of his invested funds and profits but is ignored** 74. On May 23, 2024, Skip again requested Defendants return funds to him, and specifically advised Mr. Wachob that he was "overcommitted." 75. Mr. Wachob did not respond to Skip’s request for a return of his invested funds and profits. 76. Trusting that his best friend was looking out for his best interest, Skip was still not alarmed about Defendants’ failure to return his invested funds and share of profits, and continued to consider additional investment opportunities present by Mr. Wachob pursuant to the Master Investment Agreement. **Skip invests $973,125.00 in the Traunch #9 Agreement** 2 This reference was used by the parties in their text messages exchanged regarding this transaction, because the purchase was reportedly from the same seller related to the steel purchased pursuant to the Traunch 8 Agreement. 77. On or about May 23, 2024, Mr. Wachob met with Skip in person and by telephone in Florida, and offered Skip another opportunity to invest in the purchase of an unknown quantity of industrial rolled steel for total sum of $1,946,350, with Skip investing $973,125.00 and Mr. Wachob allegedly contributing a matching investment of $973,125.00, all pursuant to the terms of the Master Investment Agreement. 78. On May 23, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #9 Agreement"3) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $973,125.00, to Global Source for the Traunch #9 Agreement. Skip invests $556,437.50 in the Traunch #9A Agreement 79. On or about June 4, 2024, Mr. Wachob contacts Skip by text message while Skip was in Florida, and offered Skip another opportunity to invest in the purchase of 1,535 tons of industrial rolled steel for the discounted purchase price of $725 per ton, or the total sum of $1,112,875.00, with Skip investing $556,437.50, and Mr. Wachob allegedly contributing a matching investment of $556,437.50, all pursuant to the terms of the Master Investment Agreement. 80. On June 4, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #9A Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $556,437.50 to Global Source for the Traunch #9A Agreement. Skip invests $2,000,000.00 in the Traunch # 9B Agreement 81. On or about June 10, 2024, Mr. Wachob contacted Skip by telephone while Skip was in Florida, and offered Skip another opportunity to invest in the purchase of __________________________ 3 This reference was used by the parties in their text messages exchanged regarding this transaction, because the purchase was reportedly from the same seller related to the steel purchased pursuant to the Traunch 8 Agreement. 6,100 tons of industrial rolled steel for the discounted purchase price of $695 per ton, or the total sum of $4,239,500.00, all pursuant to the terms of the Master Investment Agreement. 82. On about June 10, 2024, the spot price for industrial rolled steel was approximately $750 per ton. 83. On or about June 10, 2024, Skip accepted Mr. Wachob’s offer (“Traunch #9B Agreement”) but only with an investment of $2 million, and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $2 million, to Global Source for the Traunch #9B Agreement. Upon information and belief, Mr. Wachob only invested $2 million in this transaction as well. 84. On June 14, 2024, Mr. Wachob confirmed in a text message to Skip while he was in Florida and stated that the industrial rolled steel purchased pursuant to the Traunch 9B Agreement was “pre sold at 18% on $750 per ton.” Skip invests $562,000.00 in the Traunch #10 Agreement 85. On or about June 14, 2024, Mr. Wachob contacted Skip by telephone while Skip was in Florida, and offered Skip another opportunity to invest in the purchase of 2,100 tons of industrial rolled steel for the discounted purchase price of $695 per ton, or the total sum of $1,495,500.00, with Skip investing $729,750.00, and Mr. Wachob allegedly contributing a matching investment of $729,750.00, all pursuant to the terms of the Master Investment Agreement. 86. On about June 14, 2024, the spot price for industrial rolled steel was approximately $750 per ton. 87. On or about June 14, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #10 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $562,000.00, to Global Source for the Traunch #10 Agreement. Skip invests $1,342,575.00 in the Traunch #12 Agreement⁴ 88. On or about June 21, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 4,590 tons of industrial rolled steel for the discounted purchase price of $585 per ton, or the total sum of $2,685,150, with Skip investing $1,342,575.00, and Mr. Wachob allegedly contributing a matching investment of $1,342,575.00, all pursuant to the terms of the Master Investment Agreement. 89. On about June 21, 2024, the spot price for industrial rolled steel was approximately $699 per ton. 90. On or about June 21, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #12 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $1,342,575.00, to Global Source for the Traunch #12 Agreement. Skip invests $477,945.00 in the Traunch #12A Agreement 91. On or about June 27, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 1,634 tons of industrial rolled steel for the discounted purchase price of $585 per ton, or the total sum of $955,890.00, with Skip investing $477,945.00, and Mr. Wachob allegedly ⁴ The parties neither discussed, negotiated nor consummated a Traunch #11 Agreement. contributing a matching investment of $477,945.00, all pursuant to the terms of the Master Investment Agreement. 92. On about June 27, 2024, the spot price for industrial rolled steel was approximately $674 per ton. 93. On or about June 27, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #12A Agreement")5) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $477,945.00, to Global Source for the Traunch #12A Agreement. Skip invests $482,842.50 in the Traunch #13 Agreement 94. On or about July 2, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida and offered Skip another opportunity to invest in the purchase of 1,623 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $965,685.00, with Skip investing $482,842.00, and Mr. Wachob allegedly contributing a matching investment of $482,842.00, all pursuant to the terms of the Master Investment Agreement. 95. On or about July 2, 2024, the spot price for industrial rolled steel was approximately $677.00 per ton. 96. On or about July 2, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #13 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $482,842.00, to Global Source for the Traunch #13 Agreement. Skip invests $1,338,750.00 in the Traunch #14 Agreement 5 Skip referred to this as an "add on to Traunch 12" in his wire sent to fund Traunch #12 Agreement. 97. On or about July 10, 2024, Mr. Wachob contacted Skip by text message sent to Skip while he was in Florida and offered Skip another opportunity to invest in the purchase of 4,500 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $2,677,500.00, with Skip investing $1,338,750.00, and Mr. Wachob allegedly contributing a matching investment of $1,338,750.00, all pursuant to the terms of the Master Investment Agreement. 98. On or about July 10, 2024, the spot price for industrial rolled steel was approximately $677.00 per ton. 99. On or about July 10, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #14 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $1,338,750.00, to Global Source for the Traunch #14 Agreement. Skip invests $487,900.00 in the Traunch # 15 Agreement 100. On or about July 12, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 1,640 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $975,800.00, with Skip investing $487,900.00, and Mr. Wachob allegedly contributing a matching investment of $487,900.00, all pursuant to the terms of the Master Investment Agreement. 101. On or about July 12, 2024, the spot price for industrial rolled steel was approximately $677 per ton. 102. On or about July 12, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #15 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $487,900.00 to Global Source for the Traunch #16 Agreement. Skip invests $892,500.00 in the Traunch #16 Agreement 103. On or about July 19, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 3,000 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $1,785,000, with Skip investing $892,500.00, and Mr. Wachob allegedly contributing a matching investment of $892,500.00, all pursuant to the terms of the Master Investment Agreement. 104. On or about July 19, 2024, the spot price for industrial rolled steel was approximately $656 per ton. 105. On or about July 19, 2024, Skip accepted Mr. Wachob’s offer ("Traunch #16 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $892,500.00 to Global Source for the Traunch #16 Agreement. Skip invests $993,650.00 in the Traunch #17 Agreement 106. On or about July 29, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 3,340 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $1,987,300.00, with Skip investing $933,650.00, and Mr. Wachob allegedly contributing $933,650.00, all pursuant to the terms of the Master Investment Agreement. 107. On or about July 29, 2024, the spot price for industrial rolled steel was approximately $644 per ton. 108. On or about July 29, 2024, Skip accepted Mr. Wachob’s offer (“Traunch #17 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $993,650.00 to Global Source for the Traunch #17 Agreement. 109. On September 5, 2024, Mr. Wachob told Plaintiffs that the steel purchased pursuant to the Traunch #17 Agreement and the Master Investment Agreement had been sold, and that the profit on the sale was $534,400. Skip invests $236,810.00 in the Traunch #18 Agreement 110. On or about July 31, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 796 tons of industrial rolled steel for the discounted purchase price of $595 per ton, or the total sum of $473,620.00, with Skip investing $236,810.00, and Mr. Wachob allegedly contributing a matching investment of $236,810.00, all pursuant to the terms of the Master Investment Agreement. 111. On or about July 29, 2024, the spot price for industrial rolled steel was approximately $644 per ton. 112. On or about July 31, 2024, Skip accepted Mr. Wachob’s offer (“Traunch #18 Agreement”) and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $236,810.00 to Global Source for the Traunch #18 Agreement. Skip invests $921,250.00 in the Traunch #19 Agreement 113. On or about August 5, 2024, Mr. Wachob contacted Skip by text message sent to Skip in Florida and offered Skip another opportunity to invest in the purchase of 3,350 tons of industrial rolled steel for the discounted purchase price of $550 per ton, or the total sum of $1,842,050.00, with Skip investing $921,250.00, and Mr. Wachob allegedly contributing a matching investment of $921,250.00, all pursuant to the terms of the Master Investment Agreement. 114. On or about August 5, 2024, the spot price for industrial rolled steel was approximately $644 per ton. 115. On or about August, 2024, Skip accepted Mr. Wachob's offer ("Traunch #19 Agreement") and, pursuant to the terms of the Master Investment Agreement, Skip wired his funds in the amount of $921,250.00 to Global Source for the Traunch #19 Agreement. Skip loans $750,000.00 to Mr. Wachob 116. On or about August 14, 2024, Mr. Wachob was in the State of Florida and requested that Skip loan him $750,000 for two (2) days. 117. On or about August 14, 2024, Skip agreed to loan Mr. Wachob $750,000.00, and Skip wired the funds loaned to Mr. Wachob, care of Global Source. 118. On August 16, 2024, Skip requested that Defendants return his $750,000 loaned to Mr. Wachob, but they have failed to do so as of the date this Complaint is filed. Plaintiffs discover Nucor Lawsuit and Calvert Lawsuit, and make demand for a return of all their funds from Defendants 119. In early October 2024, Plaintiffs learned about the Nucor Lawsuit and the Calvert Lawsuit, and Paragon's evident inability to pay its trade creditors since prior to Plaintiffs investment in the Traunch #1 Agreement, and all subsequent investment agreements with Defendants. 120. On October 8, 2024, Plaintiffs made demand on Defendants to return all of their funds invested and profits, if any. 121. As of the date this Complaint is filed, Defendants have failed or refused to return any of Plaintiffs invested funds, nor pay Plaintiffs any profits allegedly earned, pursuant to the investment agreements between the parties. Count 1 – Plaintiffs’ claim against Defendants for unlawful sale of securities in Florida 122. Plaintiffs realleged the allegation set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 123. This is claim pursuant to Fla. Stat. §517.211 for rescission of the securities transactions at issue herein and a judgment against Defendants, jointly and severally, for the amount of all funds Plaintiffs invested with Defendants. 124. The investment opportunities Defendants marketed and sold to Plaintiffs in Florida pursuant to the terms of the Master Investment Agreement and the Traunch #1 Agreement, the Traunch #2 Agreement, the Traunch #3 Agreement, the Traunch #4 Agreement, the Traunch #5 Agreement, the Traunch #6 Agreement, the Traunch #7 Agreement, the Traunch #7A Agreement, the Traunch #8 Agreement, the Traunch #8A Agreement, the Traunch #9 Agreement, the Traunch #9A Agreement, the Traunch #9B Agreement, the Traunch #10 Agreement, the Traunch #12 Agreement, the Traunch #12A Agreement, the Traunch #13 Agreement, the Traunch #14 Agreement, the Traunch #15 Agreement, the Traunch #16 Agreement, the Traunch #17 Agreement, the Traunch #18 Agreement, and the Traunch #19 Agreement, are each a security as that term is defined in Fla. Stat. §517.021 (collectively, the “Traunch Securities Transactions”). 125. The Traunch Securities Transactions were not registered as required by Fla. Stat. §517.07. 126. Notwithstanding Defendants’ failure to register the Traunch Securities Transactions as required by applicable law, Defendants offered same for sale in the State of Florida. 127. Pursuant to Fla. Stat. §517.211, Plaintiffs are entitled to rescission of each of the Traunch Securities Transactions and a refund of all monies actually paid to Defendants, plus interest. 128. Pursuant to Fla. Stat. §517.211(1), "[e]ach person making the sale and every director, officer, partner, or agent of or for the seller, if the director, officer, partner, or agent has personally participated or aided in making the sale, is jointly and severally liable to the purchaser in an action for rescission, if the purchaser still owns the security, or for damages, if the purchaser has sold the security." 129. Pursuant to Fla. Stat. §517.211(7), Plaintiffs are entitled to recover their reasonable attorney’s fees from Defendants. WHEREFORE, Plaintiffs, SKIP BRAVER and CHAD BRAVER, demand a judgment rescinding each of the Traunch Securities Transactions and for damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, in the amount of $30,352,865.00, plus prejudgment interest, Court costs and reasonable attorney’s fees and such other relief as is just and proper. Count 2 – Plaintiffs’ claim for securities fraud against Defendants – Failure to disclose Paragon’s insolvency 130. Plaintiffs realleged the allegation set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 131. This is claim pursuant to Fla. Stat. §517.301 for fraud based on Defendants’ fraud by omission at the time they offered to enter the Master Investment Agreement with Plaintiffs, and offered to enter the Traunch #1 Agreement, the Traunch #2 Agreement, the Traunch #3 Agreement, the Traunch #4 Agreement, the Traunch #5 Agreement, the Traunch #6 Agreement, the Traunch #7 Agreement, the Traunch #7A Agreement, the Traunch #8 Agreement, the Traunch #8A Agreement, the Traunch #9 Agreement, the Traunch #9A Agreement, the Traunch #9B Agreement, the Traunch #10 Agreement, the Traunch #12 Agreement, the Traunch #12A Agreement, the Traunch #13 Agreement, the Traunch #14 Agreement, the Traunch #15 Agreement, the Traunch #16 Agreement, the Traunch #17 Agreement, the Traunch #18 Agreement, and the Traunch #19 Agreement, are each a security as that term is defined in Fla. Stat. §517.021 (collectively, the “Traunch Securities Transactions”). 132. Defendants affirmatively represented to Plaintiffs that Paragon, was a buyer for the industrial rolled steel investments represented by the Master Investment Agreement and each of the Traunch Agreements, but violated Fla. Stat. 517.301 in Florida by failing to disclose the material facts that Paragon was not then able to pay its suppliers for goods sold and delivered, and for goods consigned, dating as far back as 2022, as alleged in the Nucor Lawsuit and the Calvert Lawsuit. 133. Pursuant to Fla. Stat. §517.211(2), “[a]ny person purchasing or selling a security in violation of Fla. Stat. §517.301, and every director, officer, partner, or agent of or for the purchaser or seller, if the director, officer, partner, or agent has personally participated or aided in making the sale or purchase, is jointly and severally liable to the person selling the security to or purchasing the security from such person in an action for rescission . . ." 134. Pursuant to Fla. Stat. §517.211(7), Plaintiffs are entitled to recover their reasonable attorney's fees from Defendants. WHEREFORE, Plaintiffs, SKIP BRAVER and CHAD BRAVER, demand a judgment rescinding each of the Traunch Securities Transactions and for damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, in the amount of $30,352,865.00, plus prejudgment interest, Court costs and reasonable attorney's fees, and such other relief as is just and proper. Count 3 – Claim for breach of Traunch #1 Agreement 135. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 136. This is a claim by Skip against Defendants for breach of the Traunch #1 Agreement. 137. Defendants materially breached the Traunch #1 Agreement with Skip by failing to repay him his funds invested, plus his share of the profits, on the industrial rolled steel sold by Defendants that was purchased from Skip’s funds provided pursuant to the Traunch #1 Agreement. 138. As a result of Defendants’ breach of the Traunch #1 Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 4 – Claim for conversion of Traunch #1 investment and profits 139. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 140. This is a claim by Skip against Defendants for conversion of his funds invested pursuant to the Traunch #1 Agreement, and Skip’s share of the profits, from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 141. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #1 Agreement, Skip had ownership and the right to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the “Traunch #1 Investment and Profits”). 142. Defendants have retained Skip’s Traunch #1 Investment and Profits without his authorization. 143. By refusing to return Skip’s Traunch #1 Investment and Profits as demanded, Defendants have converted Skip’s Traunch #1 Investment and Profits to their own use. 144. As a result of Defendants’ conversion of Skip’s Traunch #1 Investment and Profits, Skip has been damaged. 145. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 5 – Claim for breach of Traunch #2 Agreement 146. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 147. This is a claim by Skip against Defendants for breach of the Traunch #2 Agreement. 148. Defendants materially breached the Traunch #2 Agreement with Skip by failing to repay him his funds invested, plus his share of the profits, on the industrial rolled steel sold by Defendants that was purchased with Skip’s funds provided pursuant to the Traunch #2 Agreement. 149. As a result of Defendants’ breach of the Traunch #2 Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 6 – Claim for conversion of Traunch #2 investment and profits 150. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 151. This is a claim by Skip against Defendants for conversion of his funds invested in the Traunch #2 Agreement and Skip’s share of the profits from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 152. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #2 Agreement, Skip had ownership and the right to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the “Traunch #2 Investment and Profits”). 153. Defendants have retained Skip’s Traunch #2 Investment and Profits without his authorization. 154. By refusing to return Skip’s Traunch #2 Investment and Profits as demanded, Defendants have converted Skip's Traunch #2 Investment and Profits to their own use. 155. As a result of Defendants’ conversion of Skip’s Traunch #2 Investment and Profits, Skip has been damaged. 156. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 7 – Claim for breach of the Traunch #5 Agreement 157. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 158. This is a claim by Skip against Defendants for breach of the Traunch #5 Agreement. 159. Defendants materially breached the Traunch #5 Agreement with Skip by failing to repay him his funds invested, plus his share of the profits, on the industrial rolled steel sold by Defendants that was purchased with Skip’s funds provided pursuant to the Traunch #5 Agreement. 160. As a result of Defendants’ breach of the Traunch #5 Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 8 – Claim for conversion of Traunch #5 investment and profits 161. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 162. This is a claim by Skip against Defendants for conversion of his funds invested in the Traunch #5 Agreement and Skip’s share of the profits from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 163. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #5 Agreement, Skip had ownership and an immediate right to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the "Traunch #5 Investment and Profits"). 164. Defendants have retained Skip's Traunch #5 Investment and Profits without his authorization. 165. By refusing to return Skip's Traunch #5 Investment and Profits as demanded, Defendants have converted Skip's Traunch #5 Investment and Profits to their own use. 166. As a result of Defendants' conversion of Skip's Traunch #5 Investment and Profits, Skip has been damaged. 167. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment, Court costs, and such other relief as is just and proper. Count 9 – Claim for breach of the Traunch #8A Agreement 168. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 169. This is a claim by Skip against Defendants for breach of the Traunch #8A Agreement. 170. Defendants materially breached the Traunch #8A Agreement with Skip by failing to repay him his funds invested, plus his share of the profits sold by Defendants pursuant to the Traunch #8A Agreement. 171. As a result of Defendants’ breach of the Traunch #8A Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 10 – Claim for conversion of Traunch #8A investment and profits 172. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 173. This is a claim by Skip against Defendants for conversion of his funds invested in the Traunch #8A Agreement and Skip’s share of the profits from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 174. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #8A Agreement, Skip had ownership and an immediate to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the “Traunch #8A Investment and Profits"). 175. Defendants have retained Skip’s Traunch #8A Investment and Profits without his authorization. 176. By refusing to return Skip’s Traunch #8A Investment and Profits as demanded, Defendants have converted Skip’s Traunch #8A Investment and Profits to their own use. 177. As a result of Defendants’ conversion of Skip’s Traunch #8A Investment and Profits, Skip has been damaged. 178. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 11 – Breach of the Traunch #9B Agreement 179. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 180. This is a claim by Skip against Defendants for breach of the Traunch #9B Agreement. 181. Defendants materially breached the Traunch #9B Agreement with Skip by failing to repay him his funds invested, plus his share of the profits sold by Defendants pursuant to the Traunch #8B Agreement. 182. As a result of Defendants’ breach of the Traunch #9B Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 12 – Claim for conversion of Traunch #9B investment and profits 183. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 184. This is a claim by Skip against Defendants for conversion of his funds invested in the Traunch #9B Agreement and Skip’s share of the profits from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 185. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #9B Agreement, Skip had ownership and an immediate right to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the “Traunch #9B Investment and Profits”). 186. Defendants have retained Skip’s Traunch #9B Investment and Profits without his authorization. 187. By refusing to return Skip’s Traunch #9B Investment and Profits as demanded, Defendants have converted Skip’s Traunch #9B Investment and Profits to their own use. 188. As a result of Defendants’ conversion of Skip’s Traunch #9B Investment and Profits, Skip has been damaged. 189. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 13 – Claim for Beach of the Traunch #17 Agreement 190. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 191. This is a claim by Skip against Defendants for breach of the Traunch #17 Agreement. 192. Defendants materially breached the Traunch #17 Agreement with Skip by failing to repay him his funds invested, plus his share of the profits sold by Defendants pursuant to the Traunch #17 Agreement. 193. As a result of Defendants’ breach of the Traunch #17 Agreement, Skip has been damaged in the amount of his investment in the transaction and his share of the profits, plus interest. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 14 – Claim for conversion of Traunch #17 investment and profits 194. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 195. This is a claim by Skip against Defendants for conversion of his funds invested in the Traunch #17 Agreement and Skip’s share of the profits from the sale of the industrial rolled steel bought and sold pursuant to the Agreement. 196. After Defendants sold the industrial rolled steel purchased pursuant to the Traunch #17 Agreement, Skip had ownership and an immediate right to possession of the funds he initially invested in the transaction and the profits generated from the sale of said steel (the “Traunch #17 Investment and Profits”). 197. Defendants have retained Skip’s Traunch #17 Investment and Profits without his authorization. 198. By refusing to return Skip’s Traunch #17 Investment and Profits as demanded, Defendants have converted Skip’s Traunch #17 Investment and Profits to their own use. 199. As a result of Defendants’ conversion of Skip’s Traunch #17 Investment and Profits, Skip has been damaged. 200. Skip reserves the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 15 – Skip’s claim for breach of Loan Agreement 201. Skip realleges the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 202. Mr. Wachob materially breached his $750,000.00 loan agreement, by failing to repay the loan within two (2) days. 203. As a result of Mr. Wachob’s breach of his $750,000.00 loan agreement, Skip has been damaged. WHEREFORE, Plaintiff, SKIP BRAVER, demands judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment interest, Court costs, and such other relief as is just and proper. Count 16 – Claim for equitable accounting 204. Plaintiffs reallege the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 205. This is a claim for an equitable accounting from Defendants regarding all of their funds invested with Defendants in connection with the Master Investment Agreement and the Traunch #1 Agreement, the Traunch #2 Agreement, the Traunch #3 Agreement, the Traunch #4 Agreement, the Traunch #5 Agreement, the Traunch #6 Agreement, the Traunch #7 Agreement, the Traunch #7A Agreement, the Traunch #8 Agreement, the Traunch #8A Agreement, the Traunch #9 Agreement, the Traunch #9A Agreement, the Traunch #9B Agreement, the Traunch #10 Agreement, the Traunch #12 Agreement, the Traunch #12A Agreement, the Traunch #13 Agreement, the Traunch #14 Agreement, the Traunch #15 Agreement, the Traunch #16 Agreement, the Traunch #17 Agreement, the Traunch #18 Agreement, the Traunch #19 Agreement, and the Traunch #20 Agreement (Collectively, the ‘Traunch Agreements”). 206. Based on the foregoing allegations, a fiduciary relationship existed between Plaintiffs and Defendants, because of their longstanding personal relationships and mutual trust, and because Plaintiffs reposed their trust and confidence in Defendants to receive their funds invested for the purchase and sale of industrial rolled steel for the purpose of sharing resale profits between Plaintiffs and Mr. Wachob, with Mr. Wachob managing all investment transaction for the mutual benefit of all parties. 207. Because of the fiduciary relationship between Plaintiffs and Defendants, Plaintiffs are entitled to an equitable accounting regarding the use of all of their funds invested to purchase industrial rolled steel and resell same, and it is not clear that the remedy at law is as full, adequate, and expeditious as in equity. 208. Alternatively, the contract demands between Plaintiffs and Defendants in connection with the Master Investment Agreement and the Traunch Agreements involve extensive or complicated accounts and it is not clear that the remedy at law is as full, adequate, and expeditious as in equity. WHEREFORE, Plaintiffs, SKIP BRAVER and CHAD BRAVER, pray for an equitable accounting with respect to their funds invested with Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, for a judgment against Defendants for all funds misappropriated by Defendants or owed to Plaintiffs, and such other relief as is just and proper. Count 17 – Claim for common law breach of fiduciary duty 209. Plaintiffs reallege the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 210. This is a claim by Plaintiffs against Defendant, Mr. Wachob for breach of his fiduciary duty owed to Plaintiffs in connection with his use of Plaintiffs’ funds invested with him in connection with the Master Investment Agreement and the Traunch #1 Agreement, the Traunch #2 Agreement, the Traunch #3 Agreement, the Traunch #4 Agreement, the Traunch #5 Agreement, the Traunch #6 Agreement, the Traunch #7 Agreement, the Traunch #7A Agreement, the Traunch #8 Agreement, the Traunch #8A Agreement, the Traunch #9 Agreement, the Traunch #9A Agreement, the Traunch #9B Agreement, the Traunch #10 Agreement, the Traunch #12 Agreement, the Traunch #12A Agreement, the Traunch #13 Agreement, the Traunch #14 Agreement, the Traunch #15 Agreement, the Traunch #16 Agreement, the Traunch #17 Agreement, the Traunch #18 Agreement, the Traunch #19 Agreement, and the Traunch #20 Agreement (Collectively, the ‘Traunch Agreements”). 211. Mr. Wachob owed Plaintiffs a fiduciary duty in connection with his receipt and use of their finds invested pursuant to the Master Investment Agreement and the Traunch Agreements, because: a. Mr. Wachob developed and maintained a close personal friendship with Plaintiffs. Indeed, Skip considered Mr. Wachob to be his best friend and a replacement for his deceased brother. b. Mr. Wachob had life-long experience with the business of Paragon, and had unique and superior knowledge of opportunities to purchase industrial rolled steel at discounted prices, and resell same at substantial profit in the wholesale and retail markets. c. Plaintiffs trusted Mr. Wachob and would not have made their investments pursuant to the Master Investment Agreement and the Traunch Agreements but for that trust and confidence to act in their best interests. 212. Mr. Wachob breached his fiduciary duty to Plaintiffs by not investing his funds in equal amounts with Plaintiffs as promised, by failing and refusing to return Plaintiffs’ invested funds and profits after selling steel purchased pursuant to some or all of the Traunch Agreements, and by failing to disclose the poor financial condition of Paragon, after representing that Paragon would be a buyer for some or all of the steel purchased with funds acquired from Plaintiffs pursuant to the Master Investment Agreement and the Traunch Agreements. 213. As a result of Mr. Wachob’s breach of fiduciary duty owed to Plaintiffs, the Plaintiffs have been injured and damaged. 214. Plaintiffs reserve the right to plead a claim for punitive damages upon proper evidentiary showing. WHEREFORE, Plaintiffs, SKIP BRAVER and CHAD BRAVER, demand judgment for his damages against Defendants, DEREK WACHOB and GLOBAL SOURCE RECYCLING COMPANY, LLC, a Delaware Limited Liability Company, jointly and severally, plus prejudgment, Court costs, and such other relief as is just and proper. Count 18 – Claim for appointment of an equitable receiver 215. Plaintiffs reallege the allegations set forth in paragraphs 1 through 121, above, as if more fully set forth herein. 216. This is an equitable claim for appointment of a receiver to take control of all of Plaintiffs’ funds, and assets purchased with Plaintiffs’ funds, in the possession, custody or control of Defendants, to prevent waste, fraudulent transfers, self-dealing, fraud and/or loss or destruction of money or property. 217. The appointment of an equitable receivership “has long been recognized as one that is inherent in a court of equity, which ‘lies in the sound discretion of the chancellor to be granted or withheld according to the facts and circumstances of the particular case.’” Granada Lakes Villas Condo. Ass'n, Inc. v. Metro-Dade Investments Co., 125 So. 3d 756, 758 (Fla. 2013) (quoting Ins. Mgmt., Inc. v. McLeod, 194 So. 2d 16, 17 (Fla. 3d DCA 1966)). The appointment of an equity receiver should be “‘reserved for cases involving fraud, self-dealing, or waste.’” Id. at 759, citing McAllister Hotel v. Schatzberg, 40 So.2d 201, 202–03 (Fla.1949); Apalachicola N.R. Co. v. Sommers, 79 Fla. 816, 85 So. 361, 362 (1920) (proper to appoint receiver to prevent fraud, destruction or loss of property, or self-dealing). 218. An evidentiary showing of facts alleged herein will demonstrate the likelihood that Plaintiffs will prevail on the merits of their claims stated herein against Defendants. 219. An evidentiary showing of facts alleged herein will demonstrate the likelihood that Plaintiffs have the right to their funds invested with Plaintiffs pursuant to the Master Investment Agreements and the Traunch #1 Agreement, the Traunch #2 Agreement, the Traunch #3 Agreement, the Traunch #4 Agreement, the Traunch #5 Agreement, the Traunch #6 Agreement, the Traunch #7 Agreement, the Traunch #7A Agreement, the Traunch #8 Agreement, the Traunch #8A Agreement, the Traunch #9 Agreement, the Traunch #9A Agreement, the Traunch #9B Agreement, the Traunch #10 Agreement, the Traunch #12 Agreement, the Traunch #12A Agreement, the Traunch #13 Agreement, the Traunch #14 Agreement, the Traunch #15 Agreement, the Traunch #16 Agreement, the Traunch #17 Agreement, the Traunch #18 Agreement, the Traunch #19 Agreement, and the Traunch #20 Agreement (Collectively, the 'Traunch Agreements"). 220. A receiver is necessary to preserve Plaintiffs' funds invested and assets, if any, purchased with those funds, from misappropriation or further misappropriation by Defendants. 221. Plaintiffs are at the risk of serious loss in the event a receiver is not appointed immediately to preserve Plaintiffs' funds invested and assets, if any, purchased with those funds. 222. The injury to Plaintiffs if a receiver is not appointed greatly outweighs any possible harm to Defendants by the appointment of a receiver. 223. Plaintiffs have no adequate remedy at law due to the imminent and total loss to Plaintiff's funds invested and assets, if any, purchased with those funds, which will likely be incurred by Defendants' continued self-dealing, unauthorized control over Plaintiffs funds and assets purchased with those funds, and gross mismanagement of Plaintiffs' invested funds by Defendants. 224. Considerations of the public interest weigh in favor of the appointment of a receiver in order to enjoin misfeasance and malfeasance by Defendants who have mismanged Plaintiffs' funds invested, and the assets purchased with those funds, and violated his fiduciary duties to Plaintiffs, all to the extreme detriment of Plaintiffs. WHEREFORE, Plaintiffs, SKIP BRAVER and CHAD BRAVER, pray for entry of an order appointing an equitable receiver to take control over all of Plaintiffs’ funds, and assets purchased with Plaintiffs funds, that are in the possession, custody or control of Defendants, and such other relief as is just and proper. Respectfully submitted, /s/ Stephen J. Kolski Stephen J. Kolski Florida Bar Number: 856673 [email protected] Stephen J. Kolski & Associates, P.A. 8950 SW 74th CT, Suite 1708 Miami, Florida 33156 Telephone: (305) 371-9576 Attorneys for Plaintiffs