Evidence Record
IP HII EDVA 00483 Doc. 0144 Exhibit 3
Subject: Indemnification Demand Concerning Curtin v. Watts, et al., Case No. 1:25-cv-00782, United States District Court for the Middle District of North Carolina (the "Action")
DISTIL analysis
DISTIL Run
Profile
Standard
Version
1
Doc Type
Legal Demand Letter / Indemnification Notice
Total Nodes
24
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 Demand Letter / Indemnification Notice HII Mission Technologies Corp. (Tim McAtee, Sr. Director, Subcontracts and Procurement) Federal contract litigation - subcontractor indemnification dispute 2025-09-23
legal_demandindemnification_claimunderlying_litigationcontract_disputesubstantial_damages_claimed
Analytical Frame
Contractual indemnification enforcement stemming from third-party litigation
Analytical Summary
HII Mission Technologies Corp. formally demands indemnification from Cyberlux Corporation for defense costs and potential liabilities in a third-party lawsuit (Curtin v. Watts, Case No. 1:25-cv-00782, MDNC) seeking not less than $20 million in damages. The demand invokes two contractual provisions: Section 7 of a Termination Settlement Agreement dated February 26, 2025, which covers claims by Cyberlux creditors, and Section 12 of the underlying Subcontract P000043846, which covers third-party claims arising from Cyberlux's misconduct, negligence, or legal violations. HII asserts the Curtin action qualifies under both provisions as it involves an alleged Cyberlux creditor and allegations of Cyberlux misconduct related to contractual and financial obligations. HII elects to conduct its own defense while reserving the right to seek full reimbursement from Cyberlux.
Key Points
- HII formally demands indemnification from Cyberlux under two contract provisions for defense of third-party litigation
- Underlying lawsuit (Curtin v. Watts, MDNC Case No. 1:25-cv-00782) seeks damages of not less than $20,000,000
- Indemnification claim based on Settlement Agreement Section 7 (creditor claims) and Subcontract Section 12 (misconduct/negligence)
- HII elects to conduct its own defense while preserving indemnification rights
- Cyberlux is under receivership in separate Texas state court proceedings
Stage 2
Core — Entities, Events, Claims
12 nodes
ENT-001
Entity
HII Mission Technologies Corp.
HII Mission Technologies Corp., a division of HII, is the demanding party seeking indemnification. Represented by Tim McAtee, Sr. Director, Subcontracts and Procurement.
Page 2, 3 — HII Mission Technologies Corp. ... On behalf of HII Mission Technologies Corp. ("HII"), I am writing to notify you ... Tim McAtee Sr. Director, Subcontracts and Procurement
ENT-002
Entity
Cyberlux Corporation
Cyberlux Corporation, located at 800 Park Offices Drive, Suite 3209, Research Triangle Park, NC 27709. Attention: Kimberly Lewis, Vice President. Party subject to indemnification demand and currently under receivership.
Page 2, 3 — Cyberlux Corporation 800 Park Offices Drive, Suite 3209 Research Triangle Park, NC 27709 Attention: Kimberly Lewis, Vice President ... Robert Berleth, Appointed Receiver in Cause No. 202448085, styled Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation
ENT-003
Entity
James Curtin
James Curtin, plaintiff in the underlying litigation (Curtin v. Watts, et al.) who has named HII as a defendant and is seeking damages of not less than $20,000,000.
Page 2 — James Curtin has named HII as a defendant in a lawsuit now pending in the U.S. District Court for the Middle District of North Carolina (Case No. 25-cv-00782), seeking damages of "not less than $20,000,000"
ENT-004
Entity
Subcontract P000043846
Subcontract P000043846 between HII and Cyberlux, as amended by Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 (the Settlement Agreement). Contains indemnification provisions in Section 7 (Settlement Agreement) and Section 12 (Subcontract).
Page 2, 3 — Subcontract P000043846 ("Subcontract"), as amended by Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 (the "Settlement Agreement") ... Under Section 7 of the Settlement Agreement ... under Section 12 of the Subcontract
EVT-001
Event
Indemnification Demand Issued
On September 23, 2025, HII Mission Technologies Corp. issued a formal indemnification demand to Cyberlux Corporation regarding the Curtin v. Watts litigation, delivered via email and FedEx.
Page 2 — Date: September 23, 2025 ... VIA EMAIL AND FEDEX ... Subject: Indemnification Demand Concerning Curtin v. Watts, et al., Case No. 1:25-cv-00782
EVT-002
Event
Curtin v. Watts Lawsuit Filed
James Curtin filed a lawsuit against HII and others (Curtin v. Watts, et al.) in the U.S. District Court for the Middle District of North Carolina, Case No. 1:25-cv-00782, seeking damages of not less than $20,000,000. A First Amended Complaint was filed in this action.
Page 2 — James Curtin has named HII as a defendant in a lawsuit now pending in the U.S. District Court for the Middle District of North Carolina (Case No. 25-cv-00782), seeking damages of "not less than $20,000,000" (the "Action"). A copy of the First Amended Complaint in the Action is attached for reference.
EVT-003
Event
Termination Settlement Executed
HII and Cyberlux executed Modification No. 4 To Effectuate a Termination Settlement on February 26, 2025, amending Subcontract P000043846 and establishing indemnification obligations.
Page 2 — Subcontract P000043846 ("Subcontract"), as amended by Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 (the "Settlement Agreement")
EVT-004
Event
Receivership Appointment
Robert Berleth was appointed as Receiver for Cyberlux Corporation in Cause No. 202448085 (Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, and Mark Daniel Schmidt) in the 129th Judicial District in and for Harris County, Texas.
Page 3 — Robert Berleth, Appointed Receiver in Cause No. 202448085, styled Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, and Mark Daniel Schmidt, in the 129th Judicial District in and for Harris County, Texas
CLM-001
Claim
Indemnification Obligation Under Settlement Agreement Section 7
HII claims Cyberlux must indemnify HII under Section 7 of the Settlement Agreement for all damages, expenses, liabilities, and losses (including attorneys' fees) arising from the Curtin action because it is a threatened, pending, or completed proceeding arising out of or relating to Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
Page 2 — Under Section 7 of the Settlement Agreement, Cyberlux must indemnify and hold harmless HII: from and against any and all damages, expenses, liabilities, and losses (including without limitation attorneys' fees and other out-of-pocket expenses, internal charges, judgments, taxes, and amounts paid or to be paid in settlement) incurred or suffered by the Indemnified Party in connection with any . . . threatened, pending, or completed inquiry, claim, action, suit, or proceeding arising out of or relating to (i) Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities[.]
CLM-002
Claim
Indemnification Obligation Under Subcontract Section 12
HII claims Cyberlux must indemnify HII under Section 12 of the Subcontract for all claims, damages, losses, liabilities or expenses (including reasonable attorney's fees) arising from third party claims to the extent such claims arise from Cyberlux's intentional misconduct, negligence, fraud, or violation of applicable law or regulation.
Page 2 — under Section 12 of the Subcontract, Cyberlux must indemnify and hold harmless HII: from and against any and all claims, damages, losses, liabilities or expenses (including reasonable attorney's fees, consultant fees, and expert witness fees) arising out of or relating to any third party claims, causes of action, lawsuits, or other proceedings . . . regardless of legal theory, to the extent such Claims arise from [Cyberlux]'s (or any of [Cyberlux]'s subcontractors, suppliers, employees, agents, or representatives) . intentional misconduct, negligence, or fraud . . . or ... violation of applicable law or regulation.
CLM-003
Claim
Curtin Action Falls Within Indemnification Scope
HII asserts the Curtin action falls within the scope of both indemnification provisions: it is a pending legal action by an alleged creditor of Cyberlux relating to Cyberlux's liabilities to its creditors (Section 7), and it asserts claims premised on allegations of Cyberlux's misconduct, negligence, and violation of federal statutes in connection with its contractual and financial obligations (Section 12).
Page 3 — The Action falls within the scope of both indemnification provisions. It is a pending legal action brought by an alleged creditor of Cyberlux that relates to Cyberlux's liabilities to its creditors, which is covered under Section 7 of the Settlement Agreement, regardless of whether such liabilities are disputed. In addition, the Action asserts a claim premised on allegations of Cyberlux's misconduct, negligence, and violation of federal statutes, in connection with its contractual and financial obligations.
CLM-004
Claim
HII Election to Self-Defend with Indemnification Rights
HII elects to defend itself in the Curtin action at this time and plans to seek indemnification from Cyberlux for those defense costs pursuant to Section 7(b) of the Settlement Agreement. HII reserves all rights and remedies.
Page 3 — Pursuant to Section 7(b) of the Settlement Agreement, HII is electing to defend itself in the Action at this time and plans to seek indemnification from Cyberlux for those costs. HII reserves all rights and remedies.
Stage 3
In Situ — Quotations, Tells, Tensions, Questions
7 nodes
QUO-001
Quotation
Settlement Agreement Section 7 Indemnification Language
The Settlement Agreement Section 7 requires Cyberlux to indemnify HII from and against damages, expenses, liabilities, and losses in connection with any threatened, pending, or completed proceeding arising from Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities.
Page 2 — from and against any and all damages, expenses, liabilities, and losses (including without limitation attorneys' fees and other out-of-pocket expenses, internal charges, judgments, taxes, and amounts paid or to be paid in settlement) incurred or suffered by the Indemnified Party in connection with any . . . threatened, pending, or completed inquiry, claim, action, suit, or proceeding arising out of or relating to (i) Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities[.]
QUO-002
Quotation
Subcontract Section 12 Indemnification Language
Subcontract Section 12 requires Cyberlux to indemnify HII from claims, damages, losses, liabilities or expenses arising from third party claims to the extent such claims arise from Cyberlux's intentional misconduct, negligence, fraud, or violation of applicable law or regulation.
Page 2 — from and against any and all claims, damages, losses, liabilities or expenses (including reasonable attorney's fees, consultant fees, and expert witness fees) arising out of or relating to any third party claims, causes of action, lawsuits, or other proceedings . . . regardless of legal theory, to the extent such Claims arise from [Cyberlux]'s (or any of [Cyberlux]'s subcontractors, suppliers, employees, agents, or representatives) . intentional misconduct, negligence, or fraud . . . or ... violation of applicable law or regulation.
TEN-001
Tension
Cyberlux Receivership vs. Indemnification Demand
HII is demanding indemnification from Cyberlux while Cyberlux is currently under receivership in separate Texas state court proceedings, creating potential tension regarding Cyberlux's ability to satisfy the indemnification obligation and the appropriate party to respond to the demand.
Page 3 — Robert Berleth, Appointed Receiver in Cause No. 202448085, styled Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, and Mark Daniel Schmidt, in the 129th Judicial District in and for Harris County, Texas
TEN-002
Tension
Dual Indemnification Basis
HII invokes two separate contractual indemnification provisions (Settlement Agreement Section 7 and Subcontract Section 12) with different triggering conditions, suggesting either overlapping coverage or strategic redundancy in establishing indemnification rights.
Page 3 — The Action falls within the scope of both indemnification provisions. ... Section 7 of the Settlement Agreement and Section 12 of the Subcontract require Cyberlux to indemnify HII
QST-001
Question
What are the specific allegations in the Curtin First Amended Complaint?
The letter references a First Amended Complaint in Curtin v. Watts that is allegedly attached for reference, but the specific factual allegations, legal theories, and basis for the $20 million+ claim are not detailed in this indemnification demand letter.
Page 2 — A copy of the First Amended Complaint in the Action is attached for reference.
QST-002
Question
What is the nature of Curtin's creditor relationship with Cyberlux?
HII characterizes Curtin as an alleged creditor of Cyberlux to trigger the Section 7 indemnification provision, but the specific contractual, financial, or other relationship that would establish Curtin as a Cyberlux creditor is not explained in this demand letter.
Page 3 — It is a pending legal action brought by an alleged creditor of Cyberlux that relates to Cyberlux's liabilities to its creditors
QST-003
Question
What specific misconduct or violations is Cyberlux alleged to have committed?
HII asserts the Curtin action alleges Cyberlux's misconduct, negligence, and violation of federal statutes in connection with contractual and financial obligations, but does not specify the particular federal statutes, acts of misconduct, or contractual breaches alleged.
Page 3 — the Action asserts a claim premised on allegations of Cyberlux's misconduct, negligence, and violation of federal statutes, in connection with its contractual and financial obligations
Stage 4
Interpretive — Inferences, Omissions, Patterns
5 nodes
INF-001
Inference
Strategic Timing of Indemnification Demand
HII issued this indemnification demand approximately seven months after executing the Termination Settlement Agreement (February 26, 2025 to September 23, 2025), suggesting the Curtin litigation was filed or HII was named as a defendant during this intervening period, prompting the immediate activation of indemnification provisions.
Page 2 — Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 ... Date: September 23, 2025
INF-002
Inference
Termination Settlement Context Suggests Prior Dispute
The underlying subcontract was terminated via a settlement agreement modification, suggesting there was a prior dispute, breach, or performance issue between HII and Cyberlux that required negotiated resolution, which may be relevant background to understanding the current indemnification claims.
Page 2 — Subcontract P000043846 ("Subcontract"), as amended by Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 (the "Settlement Agreement")
INF-003
Inference
Receivership Complicates Collection Prospects
The fact that Cyberlux is under receivership in Texas state court proceedings while HII is demanding indemnification suggests HII may face practical difficulties in collecting on any indemnification obligation, potentially explaining why HII is electing to self-defend rather than tendering defense to Cyberlux.
Page 3 — Robert Berleth, Appointed Receiver in Cause No. 202448085 ... HII is electing to defend itself in the Action at this time and plans to seek indemnification from Cyberlux for those costs
OMI-001
Omission
No Discussion of HII's Alleged Role or Liability
The indemnification demand letter does not discuss or characterize what HII is alleged to have done or the basis for HII's potential liability in the Curtin action, focusing exclusively on Cyberlux's indemnification obligations without addressing the underlying factual nexus between HII's conduct and the claims.
Page 2 — James Curtin has named HII as a defendant in a lawsuit
OMI-002
Omission
No Specification of Defense Costs Incurred or Projected
While HII demands indemnification for defense costs and reserves the right to seek reimbursement, the letter does not specify any actual costs already incurred, projected defense costs, or timeline for seeking reimbursement from Cyberlux.
Page 3 — HII is electing to defend itself in the Action at this time and plans to seek indemnification from Cyberlux for those costs
Extracted text
3 pages · 4455 charactersFiling Header
Exhibit
HII Mission Technologies Corp.
HI HII
VIA EMAIL AND FEDEX
Date: September 23, 2025
Cyberlux Corporation 800 Park Offices Drive, Suite 3209 Research Triangle Park, NC 27709
Attention: Kimberly Lewis, Vice President
Subject: Indemnification Demand Concerning Curtin v. Watts, et al., Case No. 1:25-cv-00782, United States District Court for the Middle District of North Carolina (the "Action")
Dear Ms. Lewis,
On behalf of HII Mission Technologies Corp. ("HII"), I am writing to notify you that, in accordance with Subcontract P000043846 ("Subcontract"), as amended by Modification No. 4 To Effectuate a Termination Settlement dated February 26, 2025 (the "Settlement Agreement"), Cyberlux must indemnify HII for expenses, liabilities, and losses (including attorneys' fees) in connection with the above-referenced Action.
As you may know, James Curtin has named HII as a defendant in a lawsuit now pending in the U.S. District Court for the Middle District of North Carolina (Case No. 25-cv-00782), seeking damages of "not less than $20,000,000" (the "Action"). A copy of the First Amended Complaint in the Action is attached for reference.
Under Section 7 of the Settlement Agreement, Cyberlux must indemnify and hold harmless HII:
from and against any and all damages, expenses, liabilities, and losses (including without limitation attorneys' fees and other out-of-pocket expenses, internal charges, judgments, taxes, and amounts paid or to be paid in settlement) incurred or suffered by the Indemnified Party in connection with any . . . threatened, pending, or completed inquiry, claim, action, suit, or proceeding arising out of or relating to (i) Cyberlux's liabilities to its creditors, even if Cyberlux disputes such liabilities[.]
Additionally, under Section 12 of the Subcontract, Cyberlux must indemnify and hold harmless HII:
from and against any and all claims, damages, losses, liabilities or expenses (including reasonable attorney's fees, consultant fees, and expert witness fees) arising out of or relating to any third party claims, causes of action, lawsuits, or other proceedings . . . regardless of legal theory, to the extent such Claims arise from [Cyberlux]'s (or any of [Cyberlux]'s subcontractors, suppliers, employees, agents, or representatives) . intentional misconduct, negligence, or fraud . . . or ... violation of applicable law or regulation.
A division of HII
HI HII
HII Mission Technologies Corp.
The Action falls within the scope of both indemnification provisions. It is a pending legal action brought by an alleged creditor of Cyberlux that relates to Cyberlux's liabilities to its creditors, which is covered under Section 7 of the Settlement Agreement, regardless of whether such liabilities are disputed. In addition, the Action asserts a claim premised on allegations of Cyberlux's misconduct, negligence, and violation of federal statutes, in connection with its contractual and financial obligations. Accordingly, the Section 7 of the Settlement Agreement and Section 12 of the Subcontract require Cyberlux to indemnify HII for any damages, expenses, liabilities, and losses HII incurs in connection with the Action. Pursuant to Section 7(b) of the Settlement Agreement, HII is electing to defend itself in the Action at this time and plans to seek indemnification from Cyberlux for those costs.
HII reserves all rights and remedies. Please let us know of any questions.
Thank you,
Tim McAtee
Digitally signed by Tim McAtee Date: 2025.09.23 16:42:41 -04'00'
Tim McAtee Sr. Director, Subcontracts and Procurement
CC:
Robert Berleth, Appointed Receiver in Cause No. 202448085, styled Atlantic Wave Holdings, LLC and Secure Community, LLC v. Cyberlux Corporation, and Mark Daniel Schmidt, in the 129th Judicial District in and for Harris County, Texas (rberleth@berlethlaw.com)
Jared Goul, Program Manager (jared.goul@hii.com)
Josh Rancourt, Subcontracts Administrator (joshua.rancourt@hii.com)
Craig Faunce, Subcontracts Manager, (craig.h.faunce@hii.com)
Jason Beckner, TDL Lead (jason.Beckner@hii.com)
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