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Fri Feb 19, 2010 14:05

A letter just went around the building from the majority board members that we want removed. It states the following: The purpose of this memorandum is to reiterate that the Special Shareholders election ("it was not an election, it was to remove")to vote whether to remove or not remove 4 members of the Board, specially ---,---,---,---,resulted in one member being removed, ----, and the other 3 members remaining on the Board. ("first of all our petition read to remove four members, when they saw they lost in a plurality vote, they applied the cumulative method to remove only one member in which they, the three remaining members voted the same person back on the Board two weeks later".

to continue the letter: Please be assured that the Board of Directors has confirmed via counsel that the cumulative voting method to elect or remove Directors is in fact established via the By-Laws("now they refer to the By-Laws, not the BCL as they did at the meeting"). Issues voted upon at a meeting other then the election or removal of Board members can be elected by means of a plurality.

In fact, counsel advises that based upon the number of shares voting against removal, in relation to the shares present, it appears that the shareholders voting against removal had sufficient votes to keep all 4 Directors, had they elected to do so. ("we collected 54% of shares through proxies including attendance at the meeting, they had only 42%, what are they comparing?").

Therefore, subsequent to the January 28th. meeting, the Board appointed Mr.----- to serve until the next Annual Election pursuant to section 3 of the By-Laws.

Our argument is according to our By-Laws which they only addressed part of the process to remove, they did not address the bottom part of the Statue which contains: That they MAY vote HIS SHARES cumulative for election or removal, ("MAY", is an alternative), "alternative to what, Plurality"?) it is plausible that plurality precedes. All elections shall be determined by a plurality vote and unless other wise specified in these By-Laws or the Certificate of Incorporation the affirmative vote of a majority represented at any meeting of Shareholders shall be necessary for the transaction of any item of business (other than election of Directors) and shall constitute the act of the Shareholders. There shall be NO CUMULATIVE VOTING(pG 232, SEC 5, BY LAWS).

It was not established at the Special Shareholders Meeting or in the proxy how the voting process will be decided. When the opposing attorney for the building saw that the vote was not going their way at the time of the count they changed the rules for their benefit against the will of the majority of the Shareholders that voted. Being that the method of voting was not established on the proxy before hand and based upon the language of the proxy the logical conclusion is that the Shareholders were at no time made aware of the method to be used to calculate their shares voted or allocated, this meeting was to remove all four members and not individually, therefore, it was understood at the signing of the proxy that the method to be used was plurality, to remove all retained.

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