OVERVIEW

DualStar Technologies Corporation ("DualStar" or the "Company"), through its wholly owned subsidiaries, operates electrical and mechanical construction-related businesses. The Company completed the discontinuance of its communications business in August 2003.

On November 8, 2000, the Company consummated a $12.5 million senior secured loan transaction with Madeleine (the "Madeleine Loan"). As a result of unpaid, accrued interest, the Madeleine Loan grew. The Company ultimately extinguished $17.3 million of indebtedness owed to Madeleine under the Madeleine Loan according to the following transactions:

(1) On August 1, 2003, the Company and its...