Evidence Record

AW Harris Awh 2024 48085 Doc. 120651698

5/20/2025 11:13 AM Marilyn Burgess - District Clerk Harris County 972 629 71B6velope No. 101045441 972 629 7171 faxBy: Shanelle Taylor thompsonEdedn5/20/2025 11:13 AM

Type: document
Pages: 6
Lines: 280
SHA-256: 96fecb537c7e

DISTIL analysis

DISTIL Run

Profile

Standard

Version

Doc Type

Legal correspondence to court

Total Nodes

Node Legend

Entity (ENT)

Event (EVT)

Claim (CLM)

Anchor (ANC)

Omission (OMI)

Tension (TEN)

Tell (TEL)

Inference (INF)

Hypothesis (HYP)

Stage 1

Index

Orientation · No nodes

Document Classification

Legal correspondence to court Defense counsel (Thompson Coburn LLP) Post-judgment enforcement dispute in commercial litigation 2025-05-20

multi_jurisdictiongovernment_property_claimforum_selection_clausepayment_dispute

Analytical Frame

Defense response to turnover/receivership application with jurisdictional and property ownership challenges

Analytical Summary

This letter from defense counsel Alexander Pennetti (Thompson Coburn LLP) to Judge Gomez addresses a post-judgment enforcement dispute in Atlantic Wave Holdings v. Cyberlux Corporation. Defendants acknowledge $912,000 outstanding on the judgment after prior payments totaling over $518,551.30, but contest Plaintiffs' attempt to expand recovery to $7.774 million. The central dispute involves whether drone equipment at Cyberlux's Spring, Texas facility belongs to Cyberlux or the U.S. Government—a determination critical to any turnover or receivership order. Defendants invoke a Virginia forum-selection clause to challenge this Court's authority to award breach-of-settlement damages ($6,017,250) and attorneys' fees ($592,000), asserting those claims belong exclusively in Virginia courts where parallel litigation is pending. Defendants plan to deposit over $1.4 million into Virginia court registry and request a hearing to resolve the government property ownership question before any seizure occurs.

Key Points

Defendants acknowledge $912,000 outstanding on domesticated judgment after substantial payments
Central dispute: ownership status of drones/equipment at Spring, Texas facility—Cyberlux claims U.S. Government property
Defense invokes Virginia forum-selection clause to block Texas court from awarding $6M+ breach damages and attorneys' fees
Cyberlux expects $20M+ payment from HII subcontract upon delivery of drones to U.S. Government
Defendants plan to deposit $1.4M+ into Virginia court registry
Request for evidentiary hearing before any turnover or receivership order issued

Stage 2

Core — Entities, Events, Claims

28 nodes

ENT-001

Entity

Cyberlux Corporation

Cyberlux Corporation, defendant in judgment enforcement action, operates facility in Spring, Texas storing drone equipment under government subcontract with Huntington Ingalls Industries (HII)

Page 1, 2 — Defendants Cyberlux Corporation and Mark D. Schmidt... a focal issue of this matter is whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government... Cyberlux's government subcontract with HII

ENT-002

Entity

Atlantic Wave Holdings, LLC

Atlantic Wave Holdings, LLC, plaintiff and judgment creditor seeking enforcement and expanded recovery

Page 1 — Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation and Mark D. Schmidt... on behalf of Atlantic Wave and Secure Community

ENT-003

Entity

Secure Community, LLC

Secure Community, LLC, co-plaintiff and judgment creditor with Atlantic Wave Holdings

Page 1 — Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation and Mark D. Schmidt

ENT-004

Entity

Mark D. Schmidt

Mark D. Schmidt, individual defendant alongside Cyberlux Corporation

Page 1 — Defendants Cyberlux Corporation and Mark D. Schmidt, Individually

ENT-005

Entity

Alexander James Pennetti

Alexander James Pennetti, attorney at Thompson Coburn LLP representing defendants, author of this letter

Page 1, 4 — Alexander James Pennetti... I write on behalf of Defendants Cyberlux Corporation and Mark D. Schmidt... By /s/ Alex Pennetti Alexander J. Pennetti

ENT-006

Entity

Judge Michael Gomez

Honorable Michael Gomez, presiding judge in 129th Judicial District Court, Harris County, Texas

Page 1 — The Honorable Michael Gomez 129th Judicial District of Harris County, Texas

ENT-007

Entity

Huntington Ingalls Industries (HII)

Huntington Ingalls Industries (HII), government contractor with whom Cyberlux has subcontract for drone delivery

Page 1, 2 — Cyberlux is to receive more than $20 million from Huntington Ingalls Industries (HII)... Cyberlux's government subcontract with HII

ENT-008

Entity

United States Government

United States Government, asserted owner of drone equipment stored at Cyberlux Spring facility under government subcontract

Page 1, 2 — whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government... delivery to the United States Government of all the drones and drone equipment... property of the United States Government that Plaintiffs concede may not be seized

ENT-009

Entity

Thompson Coburn LLP

Thompson Coburn LLP, law firm representing defendants Cyberlux and Schmidt, based in Dallas, Texas

Page 1, 4 — THOMPSON COBURN LLP 2100 Ross Avenue Suite 3200 Dallas, TX 75201... Thompson Coburn LLP By /s/ Alex Pennetti

ENT-010

Entity

Mr. Walton

Mr. David Walton, attorney representing plaintiffs Atlantic Wave and Secure Community, submitted letter on May 15

Page 1, 4 — letters submitted by Mr. Walton (on May 15)... Mr. Walton asserts... David Walton dwalton@bellnunnally.com

ENT-011

Entity

Mr. Grady

Mr. Shawn Grady, attorney representing plaintiffs, submitted letter on May 19 and Application for Turnover

Page 1, 4 — Mr. Grady (on May 19)... Plaintiffs' Application for Turnover After Judgment and For Appointment of Receiver, submitted by Shawn Grady... Shawn Grady <shawn@gradycollectionlaw.com>

EVT-001

Event

Defendants' ongoing judgment payments

Defendants have made and continue to make payments reducing judgment balance to $912,000, representing a reduction of $518,551.30 from the balance claimed as of January 6, 2025

Page 1 — Defendants have made and continue to make payments to Plaintiffs pursuant to the parties' settlement agreement... the balance outstanding on the judgment over which this Court has jurisdiction is $912,000, after accounting før prior payments, credits, and offsets. This balance is $518,551.30 lower than the balance Plaintiffs claim was outstanding as of January 6, 2025

EVT-002

Event

Removal to Southern District of Texas

Defendants removed the action to Southern District of Texas to resolve federal question regarding government property ownership; federal court declined to exercise jurisdiction

Page 2 — Defendants removed this action to the Southern District of Texas so that the federal district court could resolve this federal question. However, the federal court declined to exercise jurisdiction.

EVT-003

Event

Recent HII subcontract modification

Recent modification to Cyberlux's government subcontract with HII under which Cyberlux will be paid after delivery of drones and drone equipment to United States Government

Page 1, 2 — This claim relates to a recent modification to Cyberlux's government subcontract with HII, under which Cyberlux will be paid after delivery to the United States Government of all the drones and drone equipment located at Cyberlux's Spring, Texas facility.

EVT-004

Event

Planned deposit into Virginia court registry

Cyberlux is planning to pay monies into the registry of the Virginia court in excess of $1 million (later specified as $1.4 million), intended to cover judgment balance and portion of claimed attorneys' fees

Page 1, 3 — Cyberlux is planning to pay monies into the registry of the Virginia court, in an amount in excess of $1 million... Cyberlux is planning to pay monies into the registry of the Virginia court in excess of $1.4 million. This amount is sufficient to cover the $912,000 balance on the domesticated judgment, plus ~$500,000

EVT-005

Event

Plaintiffs' May 15 and May 19 letters

Plaintiffs' counsel submitted letters to the Court on May 15 (Walton) and May 19 (Grady) prompting this defense response

Page 1 — in response to letters submitted by Mr. Walton (on May 15) and Mr. Grady (on May 19) on behalf of Atlantic Wave and Secure Community

EVT-006

Event

Breach of contract actions in Virginia

Both sides have breach of contract actions pending in Virginia courts, the exclusive forum under settlement agreement's forum-selection clause

Page 2, 3 — both sides have breach of contract actions pending in Virginia, the exclusive forum where all such disputes may be brought... upon information and belief, Plaintiffs already have a breach of contract action pending in Virginia

EVT-007

Event

Southern District fee award proceeding

Southern District of Texas ordered attorneys' fees and costs for second removal; Atlantic Wave submitted documentation May 19, 2025; Cyberlux response deadline May 26, 2025

Page 3 — The Southern District of Texas's order awarding fees and costs pertains to the second removal of this matter. Of note, Atlantic Wave to submitted documentation of its costs and attorneys' fees on Monday, May 19, 2025. The Court directed Cyberlux to respond and object by May 26, 2025.

EVT-008

Event

Virginia state court sanction order

A Virginia state court ordered Cyberlux to pay $9,392.50 to Plaintiffs; Plaintiffs seek enforcement of this amount in Texas court

Page 3 — Mr. Walton asserts that a Virginia state court ordered Cyberlux to pay $9,392.50 to Plaintiffs, and that Cyberlux has failed to pay that amount.

CLM-001

Claim

Outstanding judgment balance: $912,000

Defense asserts and Plaintiffs concede the outstanding balance on the judgment over which the Texas court has jurisdiction is $912,000 after prior payments, credits, and offsets

Page 1 — Plaintiffs concede that the balance outstanding on the judgment over which this Court has jurisdiction is $912,000, after accounting før prior payments, credits, and offsets

CLM-002

Claim

Plaintiffs seek $7,774,000 total recovery

Plaintiffs attempt to transform the $912,000 outstanding judgment into a judgment for $7,774,000 through expansion of recoverable amounts

Page 2 — Plaintiffs cannot be allowed to transform the underlying judgment in this proceeding (of which $912,000 is outstanding) into a judgment for $7,774,000, as Mr. Walton suggests

CLM-003

Claim

Plaintiffs claim $6,017,250 breach damages

Plaintiffs assert $6,017,250 in alleged damages from Cyberlux's breach of the settlement agreement, which Defense argues must be resolved in Virginia courts per forum-selection clause

Page 2 — This Court may not award the $6,017,250 in alleged damages Plaintiffs assert resulted from Cyberlux's breach of the settlement agreement

CLM-004

Claim

Plaintiffs seek $592,000 attorneys' fees

Plaintiffs request recovery of $592,000 in attorneys' fees based on settlement agreement provision making breaching party responsible for fees

Page 2 — Plaintiffs' request to recover $592,000 in attorneys' fees. Mr. Walton states: 'Cyberlux agreed to be "responsible for the payment of Atlantic Wave's attorneys' fees and costs in any action caused by the breach of this Settlement Agreement."'

CLM-005

Claim

Cyberlux expects $20M+ from HII

Plaintiffs assert through counsel Walton that Cyberlux is to receive more than $20 million from HII 'any day now' for drone delivery under modified subcontract

Page 1 — Mr. Walton asserts that Cyberlux is to receive more than $20 million from Huntington Ingalls Industries (HII) 'any day now.' This claim relates to a recent modification to Cyberlux's government subcontract with HII

CLM-006

Claim

Virginia forum-selection clause governs settlement disputes

Settlement agreement contains exclusive forum-selection clause mandating that disputes be resolved in Circuit Court of Richmond, Virginia or U.S. District Court for Eastern District of Virginia, Richmond Division

Page 2 — the parties' settlement agreement contains an exclusive forum-selection clause that dictates that the settlement agreement 'is governed by the laws of the Commonwealth of Virginia . . . [and] [v]enue for any future disputes hereunder . shall solely lie in either the Circuit Court of the City of Richmond, Virginia, or the United Stated [sic] District Court for the Eastern District of Virginia in the Richmond Division.'

CLM-007

Claim

Drone equipment belongs to U.S. Government

Defense asserts that drones and drone equipment (including unassembled component parts) at Spring, Texas facility are property of the United States Government, not Cyberlux, and therefore not subject to turnover or receivership

Page 1, 2 — a focal issue of this matter is whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government... decide whether the drones and drone equipment (including unassembled component parts) are property of Cyberlux that may be subject to a turnover or receivership order, or property of the United States Government that Plaintiffs concede may not be seized

CLM-008

Claim

Plaintiffs dispute government ownership of equipment

Although Plaintiffs represented they will not take custody of U.S. Government property, Plaintiffs actively dispute that the drone equipment is government property

Page 2 — Plaintiffs have represented to this Court and to the Southern District of Texas that they will not take custody of property that belongs to the United States Government, Plaintiffs actively dispute that the drone equipment is government property

CLM-009

Claim

Improper seizure would create $20M+ liability

If Plaintiffs seize the drones based on incorrect claim of Cyberlux ownership, Cyberlux will face liability in excess of $20 million and Court will be forced to resolve additional substantial litigation

Page 2 — If Plaintiffs are permitted to proceed and they seize the drones and drone equipment based on their incorrect claim that the drones and drone equipment are property of Cyberlux, Cyberlux will face liability in excess of $20 million, and this Court will be forced to resolve additional substantial litigation involving Plaintiffs, the U.S. Government, Cyberlux's contractor, and Cyberlux concerning the improper levying of the drones

Stage 3

In Situ — Quotations, Tells, Tensions, Questions

9 nodes

TLL-001

Tell

Defense characterizes payment history as demonstrating good faith

Defense emphasizes substantial continuing payments to counter Plaintiffs' assertion that defendants will 'hide or dissipate assets'

Page 1 — The substantial payments Defendants have made and continue to make demonstrates that any suggestion by Plaintiffs that Defendants will 'hide or dissipate assets' out of the reach of Plaintiffs is untrue.

TLL-002

Tell

Planned Virginia deposit as evidence of solvency

Defense presents planned $1.4M Virginia registry deposit as evidence Cyberlux can and will satisfy judgment, making turnover/receivership unnecessary

Page 1, 3 — Additionally, considering that Cyberlux is planning to pay monies into the registry of the Virginia court, in an amount in excess of $1 million, Plaintiffs have no real concern... There is no risk that the judgment underlying this proceeding will not be fully satisfied

TEN-001

Tension

Ownership dispute over drone equipment

Fundamental tension between Defendants' claim that drone equipment is U.S. Government property immune from seizure and Plaintiffs' active dispute of that characterization, despite their stated willingness not to seize government property

Page 1, 2 — a focal issue of this matter is whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government... Plaintiffs have represented to this Court and to the Southern District of Texas that they will not take custody of property that belongs to the United States Government, Plaintiffs actively dispute that the drone equipment is government property

TEN-002

Tension

Jurisdictional conflict: Texas vs. Virginia

Tension between Plaintiffs' attempt to expand recovery in Texas court and Defendants' invocation of Virginia forum-selection clause limiting Texas court to enforcement of domesticated judgment only

Page 2 — Plaintiffs cannot be allowed to transform the underlying judgment in this proceeding (of which $912,000 is outstanding) into a judgment for $7,774,000... The forum-selection clause prohibits this Court from awarding the relief sought... This proposal not only defies Texas law, but also undercuts the sovereignty of the Virginia courts

TEN-003

Tension

Timing paradox: payment contingent on equipment delivery

Circular tension: Cyberlux needs to deliver drone equipment to U.S. Government to receive $20M+ payment that would satisfy judgment, but Plaintiffs seek to seize that same equipment to satisfy judgment immediately

Page 1, 2 — Cyberlux is to receive more than $20 million from Huntington Ingalls Industries (HII) 'any day now.'... under which Cyberlux will be paid after delivery to the United States Government of all the drones and drone equipment located at Cyberlux's Spring, Texas facility... If Plaintiffs are permitted to proceed and they seize the drones and drone equipment... Cyberlux will face liability in excess of $20 million

QST-001

Question

Who owns the drone equipment?

Central unresolved question: Are the drones and drone equipment (including unassembled component parts) at the Spring, Texas facility property of Cyberlux subject to turnover/receivership, or property of the U.S. Government immune from seizure?

Page 1, 2 — a focal issue of this matter is whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government... Defendants respectfully ask that the Court hold a hearing, at which the parties may adduce competent evidence, to address and decide whether the drones and drone equipment (including unassembled component parts) are property of Cyberlux that may be subject to a turnover or receivership order, or property of the United States Government

QST-002

Question

When will Cyberlux deposit funds in Virginia registry?

Timing unclear: Defense states Cyberlux is 'planning to pay' over $1.4M into Virginia court registry but provides no specific timeline, promising only to provide documentation 'as soon as it is made'

Page 3 — Cyberlux is planning to pay monies into the registry of the Virginia court in excess of $1.4 million... Cyberlux will provide documentation of this deposit as soon as it is made

QST-003

Question

What is status of pending Southern District fee determination?

Southern District of Texas ordered fees/costs for second removal but has not yet determined amount; Atlantic Wave submitted documentation May 19, Cyberlux response due May 26—amount remains undetermined

Page 3 — This Court may not enforce the Southern District of Texas's award of attorneys' fees and costs at this juncture... Atlantic Wave to submitted documentation of its costs and attorneys' fees on Monday, May 19, 2025. The Court directed Cyberlux to respond and object by May 26, 2025. The Court may not enforce the Southern District of Texas's award until the Southern District determines the amount of fees and costs awarded

QST-004

Question

Has breach of settlement agreement been established?

Parties dispute whether either side breached settlement agreement; parallel breach actions pending in Virginia; no determination yet in exclusive proper forum

Page 2, 3 — the parties dispute whether their respective opposition has breached the settlement agreement; both sides have breach of contract actions pending in Virginia, the exclusive forum where all such disputes may be brought. Unless and until it is decided that Cyberlux breached the settlement agreement in a Virginia court, Plaintiffs may not recover the stated $592,000 in attorneys' fees and costs

Stage 4

Interpretive — Inferences, Omissions, Patterns

7 nodes

INF-001

Inference

Defense seeks to prevent immediate enforcement action

By requesting hearing before any turnover/receivership order and emphasizing planned Virginia deposit, Defense aims to prevent Plaintiffs from seizing drone equipment while legal questions remain unresolved

Page 1, 2, 3 — Defendants request that the Court schedule a hearing to resolve the issues raised in this letter... It is imperative that the Court decide this issue before entering any order requiring turnover or appointing a receiver... Defendants respectfully ask that the Court hold a hearing, at which the parties may adduce competent evidence, to address and decide whether the drones and drone equipment... are property of Cyberlux... or property of the United States Government

INF-002

Inference

Federal court declination suggests weak federal question

Southern District of Texas's decision to decline jurisdiction over government property question may suggest federal court viewed issue as insufficiently federal or factually unsuitable for federal determination

INF-003

Inference

Receivership scope as key dispute

Defense's emphasis on limiting recovery to $912,000 domesticated judgment and invoking Davis v. West precedent suggests concern that receiver could be appointed with authority exceeding judgment amount

Page 2 — Given Plaintiffs concede $912,000 of the judgment is outstanding, this Court may not appoint a receiver to seize and sell Defendants' assets beyond what is owed under the judgment. Davis v. West, 317 S.W.3d 301, 309 (Tex. App .- Houston [1st Dist.] 2009, no pet.)

OMI-001

Omission

No explanation for payment reduction calculation

Defense asserts balance was reduced by $518,551.30 from January 6, 2025 amount but provides no breakdown of how 'prior payments, credits, and offsets' produced this specific figure

Page 1 — the balance outstanding on the judgment over which this Court has jurisdiction is $912,000, after accounting før prior payments, credits, and offsets. This balance is $518,551.30 lower than the balance Plaintiffs claim was outstanding as of January 6, 2025

OMI-002

Omission

Walton and Grady letters not included

Document responds to Walton (May 15) and Grady (May 19) letters but does not quote or attach them, making it impossible to verify Defense characterizations of Plaintiffs' positions

Page 1 — I write on behalf of Defendants Cyberlux Corporation and Mark D. Schmidt in response to letters submitted by Mr. Walton (on May 15) and Mr. Grady (on May 19) on behalf of Atlantic Wave and Secure Community

OMI-003

Omission

No evidence provided for government property claim

Defense repeatedly asserts drone equipment is U.S. Government property but provides no documentary support, contract provisions, or government determinations in this letter

OMI-004

Omission

Virginia breach action details absent

Defense references both parties having breach actions in Virginia but provides no case numbers, filing dates, or status information for these parallel proceedings

Page 2, 3 — upon information and belief, Plaintiffs already have a breach of contract action pending in Virginia... both sides have breach of contract actions pending in Virginia

Extracted text

6 pages · 12621 characters

Filing Header

THOMPSON COBURN LLP

2100

Ross Avenue Suite 3200 Dallas, TX 75201

5/20/2025 11:13 AM Marilyn Burgess - District Clerk Harris County 972 629 71B6velope No. 101045441 972 629 7171 faxBy: Shanelle Taylor thompsonEdedn5/20/2025 11:13 AM

Alexander James Pennetti 972 629 7168 direct apennetti@thompsoncoburn.com

May 20, 2025

VIA ELECTRONIC MAIL c/o shanelle.taylor@hcdistrictclerk.com The Honorable Michael Gomez 129th Judicial District of Harris County, Texas Harris County Civil Courthouse 201 Caroline St 10th floor Houston, TX 77002

Re: Cause No. 2024-48085; Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation and Mark D. Schmidt, Individually; In the 129th Judicial District Court, Harris County, Texas

Dear Judge Gomez:

zeven there Au fice Marilyn LESS District Cler!

I write on behalf of Defendants Cyberlux Corporation and Mark D. Schmidt in response to letters submitted by Mr. Walton (on May 15) and Mr. Grady (on May 19) on behalf of Atlantic Wave and Secure Community. Defendants request that the Court schedule a hearing to resolve the issues raised in this letter.

There is no legitimate dispute that Defendants have made and continue to make payments to Plaintiffs pursuant to the parties' settlement agreement. Through Mr. Walton's letter, Plaintiffs concede that the balance outstanding on the judgment over which this Court has jurisdiction is $912,000, after accounting før prior payments, credits, and offsets. This balance is $518,551.30 lower than the balance Plaintiffs claim was outstanding as of January 6, 2025. (See Plaintiffs' Application for Turnover After Judgment and For Appointment of Receiver, submitted by Shawn Grady). The substantial payments Defendants have made and continue to make demonstrates that any suggestion by Plaintiffs that Defendants will "hide or dissipate assets" out of the reach of Plaintiffs is untrue. Additionally, considering that Cyberlux is planning to pay monies into the registry of the Virginia court, in an amount in excess of $1 million, Plaintiffs have no real concern

As this Court is aware, a focal issue of this matter is whether or not certain property stored at Cyberlux's Spring, Texas facility is property of Cyberlux or of the United States Government. Mr. Walton asserts that Cyberlux is to receive more than $20 million from Huntington Ingalls Industries (HII) "any day now." This claim relates to a recent modification to Cyberlux's government subcontract with HII, under which Cyberlux will be paid after delivery to the United

States Government of all the drones and drone equipment located at Cyberlux's Spring, Texas facility.

Plaintiffs are aware of this requirement. However, although Plaintiffs have represented to this Court and to the Southern District of Texas that they will not take custody of property that belongs to the United States Government, Plaintiffs actively dispute that the drone equipment is government property. Defendants removed this action to the Southern District of Texas so that the federal district court could resolve this federal question. However, the federal court declined to exercise jurisdiction.

Defendants respectfully ask that the Court hold a hearing, at which the parties may adduce competent evidence, to address and decide whether the drones and drone equipment (including unassembled component parts) are property of Cyberlux that may be subject to a turnover or receivership order, or property of the United States Government that Plaintiffs concede may not be seized. It is imperative that the Court decide this issue before entering any order requiring turnover or appointing a receiver. If Plaintiffs are permitted to proceed and they seize the drones and drone equipment based on their incorrect claim that the drones and drone equipment are property of Cyberlux, Cyberlux will face liability in excess of $20 million, and this Court will be forced to resolve additional substantial litigation involving Plaintiffs, the U.S. Government, Cyberlux's contractor, and Cyberlux concerning the improper levying of the drones.

Plaintiffs cannot be allowed to transform the underlying judgment in this proceeding (of which $912,000 is outstanding) into a judgment for $7,774,000, as Mr. Walton suggests. This proposal not only defies Texas law, but also undercuts the sovereignty of the Virginia courts. Given Plaintiffs concede $912,000 of the judgment is outstanding, this Court may not appoint a receiver to seize and sell Defendants' assets beyond what is owed under the judgment. Davis v. West, 317 S.W.3d 301, 309 (Tex. App .- Houston [1st Dist.] 2009, no pet.).

This Court may not award the $6,017,250 in alleged damages Plaintiffs assert resulted from Cyberlux's breach of the settlement agreement. As this Court is aware, the parties' settlement agreement contains an exclusive forum-selection clause that dictates that the settlement agreement "is governed by the laws of the Commonwealth of Virginia . . . [and] [v]enue for any future disputes hereunder . shall solely lie in either the Circuit Court of the City of Richmond, Virginia, or the United Stated [sic] District Court for the Eastern District of Virginia in the Richmond Division." The forum-selection clause prohibits this Court from awarding the relief sought. In re AIU Ins. Co., 148 S.W.3d 109, 118 (Tex. 2004) ("When a trial court denies a motion to enforce a valid, enforceable forum-selection clause that specifies another state or country as the chosen forum, the trial court's final judgment is subject to automatic reversal."). Notwithstanding, upon information and belief, Plaintiffs already have a breach of contract action pending in Virginia.

The same is true regarding Plaintiffs' request to recover $592,000 in attorneys' fees. Mr. Walton states: "Cyberlux agreed to be 'responsible for the payment of Atlantic Wave's attorneys' fees and costs in any action caused by the breach of this Settlement Agreement." Again, the parties dispute whether their respective opposition has breached the settlement agreement; both sides have breach

of contract actions pending in Virginia, the exclusive forum where all such disputes may be brought. Unless and until it is decided that Cyberlux breached the settlement agreement in a Virginia court, Plaintiffs may not recover the stated $592,000 in attorneys' fees and costs. In re AIU Ins. Co., 148 S.W.3d at 118.

Mr. Walton asserts that a Virginia state court ordered Cyberlux to pay $9,392.50 to Plaintiffs, and that Cyberlux has failed to pay that amount. This request also fails because this Court has authority only to enforce the domesticated judgment and the amounts identified therein. Courts are not permitted to step into the shoes of their sister-state courts to enforce sanctions orders issued in unrelated proceedings. Plaintiffs offer no support for this position, certainly because none exists.

This Court may not enforce the Southern District of Texas's award of attorneys' fees and costs at this juncture. The Southern District of Texas's order awarding fees and costs pertains to the second removal of this matter. Of note, Atlantic Wave to submitted documentation of its costs and attorneys' fees on Monday, May 19, 2025. The Court directed Cyberlux to respond and object by May 26, 2025. The Court may not enforce the Southern District of Texas's award until the Southern District determines the amount of fees and costs awarded.

The additional claims against Cyberlux cited in Mr. Walton's letter are not relevant to this proceeding. However, even if they were, there is no risk that Cyberlux could not satisfy these liabilities and this judgment. As Mr. Walton identified, the sum to be paid to Cyberlux following delivery of the drones and drone equipment to the United States Government well exceeds the total of the outstanding balance of the judgment plus the unrelated liabilities pp. 3-4 of Mr. Walton's letter identifies. There is no risk that the judgment underlying this proceeding will not be fully satisfied (unless Plaintiffs are permitted to wrongfully seize the drones and drone equipment).

Cyberlux is planning to pay monies into the registry of the Virginia court in excess of $1.4 million. This amount is sufficient to cover the $912,000 balance on the domesticated judgment, plus ~$500,000, which represents nearly the entire amount of attorneys' fees Plaintiffs claim to have incurred - which Cyberlux disputes. Cyberlux will provide documentation of this deposit as soon as it is made.

In sum, Cyberlux respectfully asks that the Court hold a hearing to decide the status of ownership or property interest that the United States Government has in the drones and drone equipment prior to entering any turnover order or order appointing a receiver. Additionally, Cyberlux asks the Court to reject Plaintiffs' remaining claims for recovery, which are unfounded and exceed the balance of the judgment.

Cyberlux appreciates the Court's consideration of its position in this matter.

Sincerely,

Thompson Coburn LLP

By /s/ Alex Pennetti Alexander J. Pennetti

cc: Counsel to Plaintiffs Travis Vargo <tvargo@vargolawfirm.com> Shawn Grady <shawn@gradycollectionlaw.com> David Walton dwalton@bellnunnally.com James Sadigh <jamessadigh@aol.com>

Unofficial Copy Office of Marilyn Burgess District Clement

Automated Certificate of eService

This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.

Envelope ID: 101045441 Filing Code Description: No Fee Documents

Filing Description: Response to Atlantic Waves May 15 letter to 129th Judicial District Court Status as of 5/20/2025 2:25 PM CST

Case Contacts

Name

BarNumber

TimestampSubmitted

Status

David A.Walton

dwalton@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

LaDonna Arey

LArey@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Sandra Meiners

smeiners@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Travis Vargo

tvargo@vargolawfirm.com

5/20/2025 11:13:38 AM

SENT

Roxanna Lock

rlock@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Shawn Grady

shawn@gradycollectionlaw.com

5/20/2025 11:13:38 AM

SENT

Shawn Grady

shawn@gradycollectionlaw.com

5/20/2025 11:13:38 AM

SENT

Jeff Brown

jbrown@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Bernadette Martin

bernadette@gradycollectionlaw.com

5/20/2025 11:13:38 AM

SENT

Records Department

Records@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Hannah Petrea

hpetrea@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Michael Poynter

mpoynter@vargolawfirm.com

5/20/2025 11:13:38 AM

SENT

Laurie DeBardeleben

ldebardeleben@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Micah Jackson

mjackson@berlethlaw.com

5/20/2025 11:13:38 AM

SENT

Sheli Davis

sdavis@berlethlaw.com

5/20/2025 11:13:38 AM

SENT

Lena Brasher

lbrasher@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Frankie Huff

fhuff@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Tristian Harris

tharris@berlethlaw.com

5/20/2025 11:13:38 AM

SENT

Corinne Martin

cmartin@berlethlaw.com

5/20/2025 11:13:38 AM

SENT

Hannah Fischer

hfischer@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Greg Nieman

gnieman@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Jemisha Gandhi

jgandhi@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Automated Certificate of eService

Envelope ID: 101045441 Filing Code Description: No Fee Documents

Filing Description: Response to Atlantic Waves May 15 letter to 129th Judicial District Court Status as of 5/20/2025 2:25 PM CST

Case Contacts

Jemisha Gandhi

jgandhi@bellnunnally.com

5/20/2025 11:13:38 AM

SENT

Bernadette Martin

bernadette@gradycollectionlaw.com

5/20/2025 11:13:38 AM

SENT

Jocelin A. Tapia

jtapia@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Alex Pennetti

apennetti@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Edward W.Gray, Jr.

EGray@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

Katharine Clark

kclark@thompsoncoburn.com

5/20/2025 11:13:38 AM

SENT

David M.Keithly

dkeithly@mortensontaggart.com

5/20/2025 11:13:38 AM

SENT

Unofficial Copy Office Portionsbol on Less Districiler

Original source file

No source file is attached yet. The record is ready for the PDF/media link when the attachment importer is connected.

File: aw-harris-awh-2024-48085-doc-120651698.pdf
Source UID: source:96fecb537c7ed61105bf684d467c6a275ee1736d4782b78c453615b20f91e1dd
Full SHA-256: 96fecb537c7ed61105bf684d467c6a275ee1736d4782b78c453615b20f91e1dd

DISTIL analysis

Extracted text

AW Harris Awh 2024 48085 Doc. 120651698 — Formatted Extract

Original source file