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Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: exhibits
Valley of Lakes Letterhead


TO:	 All Valley of Lakes Property Owners

FROM:	 Frank M. Cedrone, Managing General Partner C.B.G. Limited

SUBJECT: Cost Conservation Measures

Recently, as a result of opposition led by our primary lender, First
Eastern Bank, C.B.G. was unable to gain court approval for a $3.5
Million Loan commitment to be funded in two stages by Kennedy Funding,

Stage One - Emergency Funds $600,000.00
	       (Immediately Fundable)

Stage Two - Balance of Funds $2,900,000.00
  	    (Fundable within 2-3 weeks later)

The reasons for First Eastern Bank's opposition are many and complex.  
The primary reasons are listed as follows:

	1.  First Eastern Bank is experiencing financial difficulties due 
	    to a variety of failed or non-performing loans.

	2.  First Eastern Bank cannot permit any lender to gain a "Super 
	    Priority" position, nor is it able to lend additional funds to 

	3.  First Eastern Bank is not in the same lender operational 
	    status as it was prior to the financial crisis.

However, First Eastern Bank has indicated its willingness to work with 
C.B.G. Limited to achieve a mutually beneficial solution.  Chief among 
the requirements to achieve such a solution are that:

	1.  C.B.G. carry all of its overhead and expenses without 
	    assistance from First Eastern Bank or "Super Priority Loans"

	2.  C.B.G. provide an action plan that will show development of 
	    profit centers without financial assistance from First Eastern 


	3.  Proving immediate cost conservation measures to dramatically 
	    reduce overhead and cut costs to a minimum.  Accordingly, the 
	    following measures have been introduced to conserve working 
	    capital and allow time for preparation and approval of the 
	    plan, accumulation of the immediate basic capital needs and 
	    gaining the investor approvals required to proceed.

1.  A reduction in personnel to the absolute minimum level required to
maintain operations, for the next three (3) weeks.

2.  Closing of the Eagle Rock Entrance, Eagle Rock Lodge and certain 
other facilities for the next three (3) weeks.  Eagle Rock Lodge is 
scheduled to reopen during the first week of August for banquets and 
weddings.  Eagle Rock entrance and Walden drive may be open sooner.

3.  A meeting of all Valley of Lakes property owners, is requested by 
C.B.G. to be held in the Fireside Base Lodge at which time future 
operations will be discussed, planned and implemented.

For any additional information, please contact Robin Gagliano at

Your cooperation is requested.


Valley of Lakes RICO Class Action against PNCBANK, et al.

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