PELICAN TAPRC BOARD OPEN LETTER.

I publicly direct the following “open communication” to the Principals of Quantum Investment Trust (QIT).  I ask that they identify themselves to the TAPRC Board so that we can begin an immediate and fruitful discussion and exchange of ideas for the benefit of all parties concerned (it is hopefully apparent to all involved that the last thing we need at this juncture is to be using lawyers as mouthpieces/filters when time is clearly running out for both sides).

Let me preface these next remarks by repeating a statement which was previously made to the Board by one of Mr. Sutton’s attorneys that “you should not assume this olive branch is a sign of weakness… it is not”.  Consider this communication part of our (the current TAPRC Board’s) ongoing commitment to our fellow Pelican owners to do whatever is necessary to keep our beloved Resort open and to try to resolve this conflict amicably…. and I personally hope this outreach will allow calmer heads to prevail and productive communications to begin.

July 3, 2011

Dear Quantum Investment Trust (QIT) Principals (Sir/Madam):

Some Basic Facts (“aka the reality on the ground”):

1. Whether or not the “foreclosure” and the events leading up to it were legal, the plain simple fact is… the Pelican Resort has rapidly lost value “post foreclosure” and continues to do so while under Sutton and his management company’s control .   The TAPRC Board acknowledges and anticipates your response to the above that….. “Sutton and his companies have essentially made all current resort operations and related systems almost totally dependent on their continued involvement with the Resort”. I ask you what good has his/their involvement done anybody to date, and what good will their continued involvement do when the Resort is either closed or bankrupt, depleted of its previously loyal owner base,  and your investment is still in limbo/jeopardy ?

2. FYI, this Board has reached out to many commercial lenders and private equity firms in the past twelve months and we have been met with a uniform “response” …no one (and I repeat for emphasis NO ONE) will entertain providing a replacement loan for the Resort so long as the battle continues between a questionable “Resort foreclosure challenged” owner with rapidly decreasing and currently minimal membership support, a duly elected timeshare owner Board with strong membership support, a Resort employee base that recently sued the old/current/new (all the same) entity in control over its futile efforts to not honor in force labor agreements (ultimately reversed by an on-island Court in favor of the employees), a management company with a terrible Resort managerial performance track record on paper and an open hostility to, and intentional non-responsiveness to a duly elected Owner Board, etc.   I could keep on going with the list of reasons why they all said no to offering a replacement loan for the Resort but I am sure you are aware of this reality by your own investigations into this option.

3. Based on information from very reliable sources within Mr. Sutton’s camp, SBROC (aka Pelican Resort) has been very unsuccessful (borderline desperate) in collecting 2011 AMF $, and very likely does not have sufficient working capital to operate the Resort for the balance of the 2011 calendar year without an external infusion of cash. They also felt this cash crunch will most likely result in SBROC closing the Resort somewhere between September/October 2011 and December 2011 while SBROC waits for “early billed” 2012 AMF $$ to arrive, or unless QIT acquiesces to this very real problem to protect its loan by making a major additional investment to keep the Resort afloat. I remind you and simultaneously warn you that another unannounced resort closure stunt by Sutton and his subordinates will be met with an even more negative and angry timeshare owner, Resort employee, business community, and island government response than what transpired as a result of Sutton’s ill thought out and widely rebuked February, 2011 Resort closure.

4. Pelican Resort has never been able to reach 80% sold inventory status (with corresponding AMF $ being paid) necessary for minimum Resort financial stability during the ten plus years Mr. Sutton’s management (and related) companies have managed our Resort.   Most people knowledgeable with the Pelican "saga" agree that Sutton’s Alpha Sales Company’s failed and poorly executed marketing plans and absurdly high self serving compensation made any chance of an 80% or higher “sold inventory” goal realistically unachievable. The Resort's reported sales history speaks for itself.  Add to this the reality that Alpha’s sales staff’s misleading sales practices and dissemination of "inaccurate/questionable" Resort financial information caused many Pelican owners to reject further investment in the Resort – "the one indispensable group" we believe you would agree are the “key” ingredient necessary for and to restoration of the Resort to any level of financial stability.

5. Pelican Resort suffered financially for years under the original developer’s (Vlietman’s) control - ultimately resulting in a bankruptcy and mass abandonment of timeshare intervals by angry Pelican owners. Many current owners had to live through and have their annual visits to the Resort adversely impacted by that financial debacle.    These same Pelican owners have conveyed to the current Board their absolute refusal to be taken advantage of again… making it clear to the current Board that Sutton’s management company’s continued involvement at the Resort will cause them to leave in droves never to return to the Resort or the island.  I am sure you are very aware of and concerned with this “reality”.

6. Pelican Resort has suffered a ten plus year financial/operational shortfall while under Sutton’s RR Management Company’s management (including the force feeding of the ill conceived and ill timed PMR construction project on our Resort) resulting in the Resort’s current dilemma of very distressed financial condition and a $30MM + debt to pay off. All of this while Sutton and his companies have reaped millions in total compensation during that same time period. Please remember…prior to Sutton’s forcing the PMR construction project on our Resort, our Resort was finally almost completely debt free! We both know that loyal Pelican owners will not sit by and continue with, or support the status quo as there is a well deserved and unequivocal lack of trust or faith in Sutton, Corso and their subordinates by a very significant majority of remaining Pelican timeshare owners.

7. No prospective purchaser of the Pelican Resort will proceed knowing that there are ongoing hostilities (which are likely to continue for an indefinite period into the future) between the duly elected TAPRC Board and the alleged owner company. How do you think a prospective purchaser would view Mr. Sutton’s most recent egregious and thinly veiled attempts to bully the prior and current duly elected TAPRC Boards (instead of sitting down to negotiate a realistic settlement/compromise as we have asked him and his intermediaries to do many times in the past twelve months)?

My proposed suggestions to reach a solution are as follows:

1. QIT to direct/force/convince Mr. Sutton to cancel his 7-8-2011 sham Special General Meeting. That time can and will be much more effectively spent by the TAPRC Board members (who are in route to the Resort for this meeting) and QIT representatives sitting down face to face without attorneys. More importantly, QIT’s being the catalyst to cancel that meeting and actually sitting down with the TAPRC Board will provide much incentive for the current Board to communicate that positive news to the remaining Pelican owner base.

2. I urge you with all sincerity to take advantage of this “olive branch” opportunity and not let it slip away. There is no better time like the present to begin on a path toward resolution. Please be further advised (and please do not take this as a threat – it is meant to convey the “reality” from our side of the table…) – whatever the results of Sutton’s sham SGM meeting or the Island court decisions immediately prior to it or the ones that will undoubtedly follow, the current TAPRC Board has the resources and overwhelming Pelican owner support to continue this battle indefinitely (in court, on island, and through the internet) to protect the Resort’s loyal timeshare owners and their timeshare investments from further financial abuse/deterioration and from Mr. Sutton’s bullying tactics.

3. The TAPRC Board has prepared a comprehensive list of what it feels are the Pelican Owners' realistic minimum requirements necessary for the parties to reach a settlement. Prior to Corso’s intentional failure to pay a scheduled 2Q 2010 QIT mortgage payment at Sutton’s direction- which set off Sutton’s foreclosure grab of our Resort – the previous and current TAPRC Boards made numerous attempts/overtures to meet with QIT to renegotiate the Resort’s debt instrument’s terms. In spite of those attempts the Boards had never heard anything directly from QIT – only threats and demands from lawyers that have unequivocally not succeeded in bringing anything or anyone any closer to any realistic settlement. This Board sincerely wants to hear from QIT’s principals. Does QIT want to be replaced as lender or do you plan to ride out this “island wide timeshare industry recession” and continue to be involved with Pelican Resort? How can the current TAPRC Board help get us all (the owners, the employees, the lenders, etc.) to a better place when it still doesn't know what your true intentions are?

Let me conclude with the following: The current TAPRC Board publicly welcomes any direct correspondence from QIT re: any of the above suggestions. Please do not disappoint the current Board by directing your attorney to ghostwrite a response similar to what Mr. Sutton directed with respect to the FIP demand letters made on the TAPRC board.  Time is of the essence and all parties know it. Any QIT response received by the TAPRC Board will be dealt with confidentially and given the highest level of urgency. It is the Board’s sincere hope that we can have a starting point for meaningful direct dialogue, and so we can put our collective heads together to resolve the daunting financial and related Resort issues in front of us.

I respectfully await your quick and hopefully positive response.