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1

SUMMARY
2 SECURE DIVERSIFIED
INVESTMENTS
3

5
I. SECURE LENDING LLC
6

7 1. The following individuals participated in a scheme conducted by Securities Attorney Kyleen

8 Cane (“Cane”), Venture Capitalist and corporate Chairman / CEO Wallace (“Wallace”), with assistance

9 by Grace Sim (“Sim”), accountant /CFO, Mujit Johal, SDI CFO, Jay Kister (“Kister”), Director of

10 Secure Diversified Investments (“SDI”), and Manager of ILENDSERVICES, Secure Diversified

11 Lending (“SDL”), and other individuals related to SDI. The scheme involves identity theft, undisclosed

12 affiliate relationships, undisclosed beneficiary ownership, securities fraud, accounting fraud, and
13 unregistered securities sales.
14 2. Companies. The public company at the center of the scheme is SDI, which Wallace and Cane
15
have fiduciary duties to, and consolidated Secure Diversified Lending, a mortgage lending business,
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ILENDSERVICES a related mortgage lending business, and IOMEGA Investments LLC, owned by the
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West Family holding a promissory note against SDI, which is the target of interest. Wallace and Cane
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secure leverage with Biddle (“Wldbillw”), and Helen West, manager of IOMEGA Investments, through
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her incapacitated state, execute a proxy for Wallace, and sell the IOMEGA interest to SDI in May 2004.
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3. Overview of the Scheme. Cane and Wallace employ various fraudulent schemes and legal
21
devices to gain control of a corporation, involving classically the issuance of near or simple majority of
22
securities, bankrupting the entity and then reverse merge the shell to sell unregistered securities into the
23
market. The scheme employs causing individuals or entities to appear to do actions, within business
24
judgment secretly controlled by Cane. Control of a corporation strikes at the officers, then directors,
25
26 and then convertible debentures. The timely conversion, back dating, or miscalculated issuance of

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
shares, in conjunction with reverse split, conceals shares, asserts majority, and completes the corporate
1
take-over. Cane deceitfully represents to the corporation bone fide agency or attorney services, in
2

3 concert with one or more nefarious consultants and officers to disable those that would thwart the

4 scheme. Cane’s disabling of individuals through direct legal actions, derivative action, whistle blower

5 reports, or other good faith and code of ethics abuses devices both affords the accomplice immunity and

6 confidentiality. The use of promissory notes, convertible notes, underlying securities appear benign,

7 however have very flexible and potent uses both in the securing of the corporate entity during operation,

8 through bankruptcy and upon reorganization, but also in the manner it is converted.

9 4. On May 5, 2006, Cane, Securities Attorney, Wallace, CEO of the parent company and Grace
10 Sim, accountant, created Secure Diversified Lending (SDL) with the purpose to provide mortgage loans
11 to Secure Diversified Investments (SDI). The SDL membership included Patrick McNevin, SDI
12
Director, Amin Lahka, silent capital contributor, Grace Sims, and Wallace.
13
5. On May 5, 2006 Cane to Bryan Clark, Ms. Cane’s legal partners and Wallace stated the Secure
14
Diversified Lending Plan. May 11, 2006, Cane’s firm Cane Clark’s attorney Brian Clark provided
15
documents for a convertible promissory note, secured promissory note, and security agreement for the
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Secure Lending LLC scheme. On June 1, 2006, Cane Clark on behalf of Ms. Wallace filed an initial list
17
of managers for Secure Lending LLC, citing Wallace as the only operating manager.
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6. June 14, 2006 unnamed Jay Kister and Wallace, Director of SDI and Manager of SDL and
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parent Secure Diversified Investments caused a $250,000 loan from 3rd party lending facility to pass
20
through Infinity Lending Service, where an audit is overseen by Kister, then transferred into Secure
21
Lending Account held at Wells Fargo, oversee another audit, then to Secure Diversified Investments,
22

23 until the removal of the funds, and back to the lending source. SDI CEO Wallace responded to the

24 scheme “let’s talk about the process”.

25 7. September 15, 2006, Ms. Wallace causing Jennie Denoia to make statements to William Biddle

26 regarding a loan he was seeking from Secure Diversified Lending, to contain false statements including

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
appraisal, term of the loan and uncertainty of this approval. This was done intentionally by Wallace
1
through two mortgage lending entities Secure Lending and ILENDSERVICES to destabilize Mr. Biddle
2

3 for some purpose.

4
II. SECURE DIVERISIFED INVESTMENTS
5

6 8. On July 5, 2005, Ms. Wallace stated to Ms. Clifford Strand, that she would form a Secure

7 Diversified Audit Committee formation with Mr. Mujit Johal, Ms. Cane, among a dozen other

8 objectives, and she stated that she would oversee the REIT Stock restatement, involving Ms. Claire

9 Ambrosio, Ms. Wallace’s personal attorney. This was in response to financial anomalies occurring with

10 Bank of the West and other breaches attorney client confidentiality at SDI.

11 9. On July 8, 2005, Mr. Clifford Strand stated to Ms. Kelly Black, and Wallace share and note
12 structure of SDI, class A, B, C, and the amounts they held. The same day, mysterious transactions at
13 Bank of the West were occurring, causing further instability in management, and management
14
arguments with 3rd parties escalating using terms such as fraud. On July 11, 2005, Ms. Wallace in
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concert with Yablon caused an outline of demands on Secure Diversified Investments appearing to favor
16
Ms. Wallace over Mr. Strand.
17
10. On July 15, 2005, the secret formation of Western Investment Partners by Grace Sim,
18
incorporating on behalf of Ms. Cane, including members or directors Ms. Wallace, Mr. Jay Kister, Mr.
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Amin Lahka and Mr. Patrick McNevin. August 22, 2005, Mr. Clifford Strand stated to SDI
20
management that the WIP president and one/two other principals were visiting SDI, while Ms. Cane and
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Ms. Wallace plan to attend as well; Mr. Clifford Strand was unaware of Ms. Cane and Ms. Wallace’s
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involvement. On information and belief Mr. Amin Lahka, Mr. Pierre Ergas and others attended
23
purporting business, and causing the appearance of credibility to Ms. Wallace and Ms. Cane.
24

25
26

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
11. September 2, 2005, SDI 8K announced Ms. Wallace’s SDI Presidential Appointment.
1
September 28, 2005 SDI 8K announced Mr. Clifford Strand and Mr. William Biddle’s resignation.
2

3 October 5, 2005 SDI 8K announced, Ms. Wallace as a SDI Director.

4 12. Purportedly, December 14, 2005 Ms. Cane, Ms. Wallace, with Ms. Helen West executed the

5 Settlement and Confidential Agreement between SDI and Iomega Investments LLC which caused the

6 assignment of control of Iomega to SDI, including The PARTIES agree that upon execution by

7 IOMEGA this AGREEMENT, SDI shall pay to IOMEGA the gross amount of forty thousand dollars

8 ($40,000.00) as payment in full on the Unsecured Installment Note dated May 12, 2004; The PARTIES

9 further agree that IOMEGA will be entitled to immediately exercise its conversion rights for its
10 preferred shares at the current market price for SDI’s Common Stock at the time of notice to the transfer
11 agent; SDI makes no representations or warranties regarding the tax effect of the settlement proceeds as
12
directed by this AGREEMENT. Further, IOMEGA agrees to defend and/or indemnify SDI with respect
13
to any liability created by IOMEGA'S payment or non-payment of taxes with respect to the settlement
14
sum.
15
13. Purportedly, December 14, 2005, Ms. Cane and Ms. Wallace caused the SDI Corporate Director
16
Written Consent to Convert Iomega Shares, stating: RESOLVED, that the Directors hereby authorize
17
management of the Corporation to direct the Corporation’s stock transfer agent to convert Iomega’s
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250,000 Series C Preferred Stock, valued at $3.00 per share, into 15,000,000 shares of the Corporation’s
19
Common Stock, trading at $0.05 per share; December 14, 2005, First Amendment of the By Laws of
20
SDI, change of Corporate Offices, Certain Related Party Transactions; draft SDI 8K, statement of
21
Iomega Conversion and statements about registration rights.
22

23 14. Purportedly on December 14, 2005 Settlement Confidentiality Agreement Between SDI and

24 Iomega where as SDI pays $40,000 to Iomega, “allowing for Iomega to exercise its conversion, that

25 Iomega makes no representations or warranties regarding tax effect of the settlement proceeds, Iomega

26 agrees to defend and indemnify SDI with respect to any Iomega’s payment or nonpayment.” On

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
December 14, 2005 with written consent by directors of Secure Diversified Investments caused the
1
conversion of 15,000,000 shares to be issued, which Ms. Wallace executed, on behalf of SDI and further
2

3 executed the proxy statement, giving Ms. Wallace control of the LLC; the execution of agreements

4 occurred as planned and documented by Ms. Cane.

5 15. February 2, 2006, Schedule 13D was filed for Iomega Investments LLC to issue 15,000,000

6 shares of SDI; On information and belief Ms. Cane agent Ms. Wallace, through Mr. Biddle, caused the

7 West Family, specifically Helen West to consent to the transfer of the IOMEGA Investments LLC, for

8 $40,000 and stock, its acquisition was secret throughout the conversion until bankruptcy, it was learned

9 that Wallace received proxy voting control for the Iomega Investments despite individuals stating
10 otherwise.
11

12 III. IOMEGA INVESTMENTS


13 16. Through communications on primarily conducted on February 28, 2006, Ms. Cane instructed
14
Ms. Wallace and Scott Doney to execute a prescribed scheme including back-date certain transactions,
15
with documentation, including generation of meeting minutes causing the necessary business judgment
16
authority to allow early conversion of 15,000,000 shares, secretly under Ms. Cane and Ms. Wallace
17
control. February 28, 2006, Cane’s Plan for Secure Diversified Investments documented in email
18
communication states: “Bylaws amendment – in the minutes of the 1-21-06 meeting we need to make
19
sure that the amendment to the bylaws is reflected as we discussed to allow the meeting of shareholders
20
to occur within 90 days of the filing of the 10K. The board felt that this was a more appropriate time to
21
hold the meeting,so that the shareholders could receive the annual report. In addition, when you are
22
preparing the annual report (10K), I want to make sure that it contains a detailed disclosure of all
23
conflict violations of prior management in the section on CERTAIN RELATIONSHIPS AND RELATED
24

25 TRANSACTIONS. Jan will arrange for signatures. Prepare a proxy for signature. This should not be

26

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
dated; Prepare an 8k for amendment of the bylaws – 5.03(a) and shares issued 3.02, 5.01; Prepare a
1
14A for filing after the 10K with the new board slate – for election of the board.”
2

3 17. Ms. Cane follows up with additional information on March 1, 2006 including “the Form 8-K,

4 which includes the 15,000,000 common stock conversion, Peter Richman’s appointment, and changes to

5 Bylaws; the First Amended Bylaws, which will be filed as an Exhibit 3.1 to the Form 8-K; the

6 confidential settlement and general release agreement dated Dec. 14; the board consent authorizing

7 entry into the settlement agreement dated Dec. 14; the board consent authorizing conversion at $0.05

8 per share (the then trading amount); the Jan 21 board minutes re changes to bylaws; and Proxy (you

9 will need to fill in the date of annual meeting) (for Iomega).”


10 18. March 2, 2006, “Wldbillw” or Mr. Biddle established email communication with Wallace citing
11 concern for the retention of email communication.
12
19. March 8, 2006, Mr. Biddle stated that Helen had suffered a number of strokes, and that he was
13
taking care of her however, it appears that Ms. Wallace and Mr. Biddle were intimate and disclosure of
14
communication with other directors and board members was discussed. March 15, 2006, Ms. Wallace,
15
invited “Wldbillw”, and Helen west to dinner, where she invited two directors from SDI.
16
20. Ms. Wallace received email from “Wldbillw” regarding finding of funds on his behalf on March
17
9th , from Mr. Biddle requiring that he contact before the 15th, requesting to contact him.
18
21. On June 6, 2006, Helen West, manager of Iomega Investments, signed the SDI SC13D Iomega
19
conversion disclosure form, the date of the event stated to require this filing, was February 2, 2006.
20
22. Secure Diversified Investments made public disclosures to the SEC through their 10KSB on
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July 2006, stating financial relationship with SDL and Infinity Lending Services containing knowingly
22

23 false information. Public disclosure regarding SDI president Wallace, holding proxy voting control

24 over Iomega Investments, disclosure of beneficiary ownership, control or potential conflict another

25 party such as Secure Diversified Lending was not disclosed through any registration statements.

26

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
23. On July 5, 2006, Ms. Wallace stated to Mr. Clifford Strand she would establish that an audit
1
committee will be formed comprising of Cane, Wallace and Johal. On information and belief to affirm
2

3 financial mismanagement and oust the previous management. July 17, 2006, Ms. Wallace transferred

4 funds to Helen West, through “WldBillw”, same day, the following people were communicated to Ms.

5 Wallace, Helen, William, Jami, James West and Cognata, the list was transferred to Jim Brondino, five

6 (5) people total. August 22, 2006, Ms. Wallace affirmed the roll-back occurred. July 20 2006, Mr.

7 Mujit Johal provided Helen and Heather, transfer agent letters, requiring medallion signatures.

8 24. Cane, Cane Clark and Wallace on May 5, 2006 filed a SEC solicitation Complaint against

9 Clifford Strand and Gerold Trolf, which was reciprocated by Strand and Trolf filing their own.
10 (“attached”)
11 25. June 30, 2005, Wallace presented to the board of SDI, as Wallace Black LLC an audit report
12
containing broad stroke complaints regarding various accounting irregularities of which were caused by
13
her or her agents. Wallace fraudulently represented Johal, unknown to her, when in fact they were
14
colluding on fracturing the management of SDI, as independent party concealing their plan to take over
15
the company. Wallace maintained a secret relationship with Jim Brondino to monitor SDI CEO Clifford
16
Strand and William Biddle.
17
26. June 28, 2006, Wallace provided “Wldbillw” deposits for information, and communicated
18
information shared to him in confidence by Biddle and Clifford Strand CEO, and Operating Officer of
19
SDI. These individuals and family was the original financial contributor of Iomega Investments, which
20
Wallace secretly purchased and had a voting proxy for.
21
27. July 28, 2006, Wallace secretly paid William Biddle for exchange for information. Including
22

23 communication with Mr. Clifford Strand.

24 28. August 2006 Cane Clark in efforts to settle with Clifford Strand ensured Wallace, individually

25 was protected by ensuring she was a settling party.

26

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
29. September 13, 2006, Ms. Wallace secretly through Secure Lending and ILENDSERVICES
1
stated to Mr. William Biddle facts relating to a purported loan Ms. Wallace was approving for him. Ms.
2

3 Wallace stated she also needed to talk with Mr. Biddle regarding stock transaction, relating to the

4 Iomega LLC and West Family.

5 30. Secure Diversified Investments entered bankruptcy in 2007, prior to this event, Wallace and the

6 other executive staff increase salaries as to incur additional accrued notes against the corporation.

7 Wallace also caused related party transactions whereby she exchanged or caused the issuance of assets

8 to her sole benefit in exchange for reducing promissory note value. These transactions were not valued

9 independently.
10 31. During involuntary bankruptcy, Cane positioned herself away from corporate securities role and
11 stepped into the debtor in possession where Cane demands payment for fees and accepts the corporation
12
itself as payment. Wallace as CEO of SDI converted lower round C class shares preferred while
13
ignoring conversion rights of prior classes. Wallace unilaterally converted C class shares and ignored
14
class A and B holders. The following statement was extracted from the SEC complaint made on the
15
matter.
16
32. Cane and Wallace orchestrated the roll-back of shares in SDI. Kelly Black, of Wallace Black,
17
managed the process of setting Secure Diversified Investments to be listed on the Frankfurt Exchange.
18
33. Prior to entering bankruptcy, Wallace on behalf of Secure Diversified Investments (SDI)
19
invested 1/3 of equity into Cactus Scottsdale property of $300,000, caused a loan to be taken against the
20
property secured by SDI, upon entering bankruptcy, transferred the property to herself personally.
21
Wallace received 400,000 derivative shares of SDI on March 4, 2005. Johal on October 11, 2005
22

23 received 250,000 derivative shares of SDI, earlier he received 500,000 shares, for their participation in

24 the bankruptcy of SDI.

25 34. SCDI SEC filings which contain conflicting information include February 2, 2006, Schedule

26 13D was filed containing statements regarding Iomega LLC issued 15,000,000 shares of Secure

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
Diversified Investments. Documented in the June 30, 2006 10QSB, “On February 2, 2006, Iomega
1
converted its 250,000 shares of Series C Preferred Stock for 15,000,000 shares of the Company’s
2

3 common stock.”

4 35. Documented in the September 30, 2006, 10QSB November 14, 2006, “the Company had the

5 following equity transaction adjusted for the effect of reverse split of 20:1. On December 22, 2005, the

6 Chief Executive Officer and President returned 2,250 shares of common stock to the Company for

7 cancellation and return to unissued and authorized shares. The shares were cancelled January 14, 2006.

8 On February 2, 2006, Iomega converted its 12,500 shares of Series C Preferred Stock for 750,000 shares

9 of the Company’s common stock.”


10 36. Documented in the December 31, 2006, 10KSB, the following statement was made, “All the
11 issued and outstanding shares have been retroactively restated for the effect of the reverse stock split of
12
20:1. During the year ended December 31, 2006 and 2005, the Company had the following equity
13
transaction: On February 2, 2006, Iomega converted its 250,000 shares of Series C Preferred Stock for
14
15,000,000 shares of the Company’s common stock. The shares were converted at a price of $0.05 per
15
share.”
16

17

18

19

20
DATED this 4th day of March, 2010.
21
Signature Name,
22

23

24

25
26

SUMMARY SECURE
DIVERSIFIED INVESTMENTS
Secured lending money
6 messages

Jay Kister <jay@ilendservices.com> Tue, Jun 6, 2006 at 10:43 AM


Reply-To: jay@ilendservices.com
To: Jan Wallace <janwallace@att.net>

Jan,
There are items I need set up, for example an 800 fax number, and a toll
free number. I think I pay now a total of $50 a month or something for
these services, I also will set up an account to buy supplies with office
depot, and set up a fed-ex account. Should I just dedicate one of my
credit
cards to Secured and be reimbursed or do we want to set up a company card.
Of course, once we have a bank account I can set up auto debits from the
account.

I did receive an email from Grace, apparently she does not have a computer
except for a home computer. She is requesting a lap top so that she can
work at the office and from home. The way I have my system set up she can
work from any computer along as it has online access. Would it be more
efficient that the company buy one computer at the office for her to use,
or
a lap top, or require her to have her own, to do the job. You know Grace
more than I do so I will refer this to you. But please let me know
quickly
because I do need her working with me.

So let me know how you want to handle the cost right now. I will get
things
going.

Thank you,
Jay Kister

jan wallace <janwallace@att.net> Mon, Jun 12, 2006 at 12:35 AM


To: jay@ilendservices.com, Airplanes Rus <airplanesrus@hotmail.com>

Jay
What is the 1-800 number for? We have already arranged all the lines this
is a little late
Grace is getting a computer and she is not coming on board in sepember she
will be there from the beginning, the financial must be inplace, sdi is
putting in all the costs and management to get the project launched,it
will be incumbent on the companyto have a control person in place. The
proforma is being effected again because of rising costs which are all
coming from one source,sdi.
Employees are coming into the office on Thursday, I need to know when you
are coming exactly, as I am slated to go east for a wedding
The incorporation is done and the ein 20-5009563, is established the bank
account will be set-up between grace, myself and Munjit

1/5
The phone number is operational
I need the server shipped to arrive here by Wednesday so we can set-up
Heard about the licensing mishap in Arizona, you dropped the ball but you
picked up and saved it, we'll chalk that up to growing pains.

The contract is to be finished, the inequitable participation is


problematic for sdi, it is incurring all the financial burden therefore,
if m henry puts in the banking funds he will receive his 33% stake, your
position will open with 15% with an earn in of up to 33% sdi will vest at
opening equity of20% up to 33%. If the henry group fulfills greater than
the annual numbers of 06 revenues kister/sdi will contribute equal
portions to the henry group to bring them to 40% of the shares of the
company.
Please comment and get back to me,
jan
[Quoted text hidden]

jan wallace <janwallace@att.net> Mon, Jun 12, 2006 at 2:21 PM


To: Brondino@aol.com

[Quoted text hidden]

Jay Kister <jay@ilendservices.com> Tue, Jun 13, 2006 at 7:30 AM


Reply-To: jay@ilendservices.com
To: jan wallace <janwallace@att.net>

Jan,
I will be there on Monday through Wednesday. My visit there I will be
sure
everyone knows how to use the lenders we are approved with currently and
we
have a simple flow system. I will be meeting with clients and prospective
clients. I don't know specifically if there is a whole lot of stuff we
need
to do but get some banking stuff and operating agreement stuff signed.

Thanks for letting me know the EIN#. Is there anyway I could have the
articles of the company faxed to 866-572-4737. the faster the better.

GRACE--I was under the assumption Grace was going to be working from the
beginning so we are on the same page. She will be working for as many
hours
a week is needed and that is expected to go up as we get busier. That's
how
her employment was explained to me.

Operating agreement---You will need to explain to me or send me the


document
explaining the set-up and exactly how it will work, I am not seeing why it
was necessary to make a change at the very end. As far as what I am
putting
in at this point we are going to use the structure for doing loans I have
already created which is about 16K. I am not asking to be reimbursed for
money I have spent but I don't like constantly feeling like you and Mark
are

2/5
the only ones putting something into this and I will put more cash if I
need
to. I am going to make this company set up correctly. I will do my
dandiest to conform to a budget, but it is secondary to a machine that
will
run correctly. My hope was with the way we had it set up is that we would
not have to bicker about what was put in by who and how much. This
company
will be as successful as it can be as long as the partners aren't walking
on
eggshells and paranoid of each other. I hope this new structure
accomplishes that.

Computer--The server is set up. It is in California and will stay there.


I
just need to know what the kind of computers you are getting. Having them
networked is very simple because it will be through the internet. But I
do
need to get certain software on them and get the printers hooked up. So I
need to know when they will be there and what kind they will be.

Bank Account--With the operating account I don't mind never writing a


check,
but I do have to show that I am on the account, for licensing purposes I
take full responsibility for handling of all funds. To have full
responsibility my name will have to be on the account. Also, when is the
anticipated 250K coming because to be honest I need audited started up
financials that show that 250K in the bank if it is going to be more than
by
Thursday I need to go out and get 250K myself. I simply can't wait any
longer. If it is going to be longer that is fine just let me know an
actual
date when it will be here or estimate if that is what you have.

I think I wrote to much for one email, this is going to fun Jan so smile,
let make money!
Jay
[Quoted text hidden]

jan wallace <janwallace@att.net> Tue, Jun 13, 2006 at 8:33 AM


To: jay@ilendservices.com

Jay thanks for the reply, but there are communication problems
-I did not know that the server is staying there, I have to co-ordinate to
new plans,also I have to find out if mark and dick have any problems with
that
-if you have costs we must know and have a record of it just like sdi is
keeping a record, as we are audited
-the newest issue is that dick got messed up with his mortgage, you
apparently do not have the right licence to be a mortage bank in Arizona,
you are supposed to have a separate license other than real estate, these
are matters I do not know about, so I need to know if you are properly
licensed,if not when. This issue is a hot button for mark, dick is working
today to save the same mortgage with another vendor because putting it
through infinity did not work. Mark and dick is concerned with
credibility, one loan, three companies, not good for the type of developer

3/5
loans we want to do, or any loan as a matter of fact. This problem is
directly affecting mark putting in the 250'000 in the bank
Communication is key we have to straighten these issues now.
The reason the agreement has changed is because the moneys of sdi are
going out with no contract in place, hardly prudent therefore the
appearance is one of inequity if you were to show contribution that is
auditable, it would diminish the imbalance. If everyone does there jobs we
will
end up in the same place anyhow. Get back to me on this asap as I am
having a meeting today with dick and mark to clarify matters
still smiling
jan

-----Original Message-----
From: Jay Kister [mailto:jay@ilendservices.com]
[Quoted text hidden]

Jay Kister <jay@ilendservices.com> Tue, Jun 13, 2006 at 12:01 PM


Reply-To: jay@ilendservices.com
To: jan wallace <janwallace@att.net>

Jan,
This is what has happened and this is what I am doing.

In Arizona there are two licenses that I have been told you can do loans
under the Real Estate and the Mortgage Banking. As Infinity Lending, the
Lenders I am currently approved with have told me I can do loans in AZ
under
the name of Infinity Lending. Because of the scenario that happened
yesterday I have sent an email to every lender I am approved with to
double
check this is a fact. The Lender we were dealing with yesterday was
strict
in their requirement to have the Mortgage Banking license. This is the
first time I have encountered this and yes I agree it is not good at all.

So I am going to also get the Mortgage Banking License. I will do this so


that there will never be an issue with any lender. There is no class or
test that you take in order to receive this license, it is just paperwork.
We do have the qualifications to get this license today if I have the
below.
This is what I will need in short and the time frame we are looking at.
1. Personal History application and finger print cards from all
principles/owners/management.
2. Audited Financial (this is just for the opening of the company, it is
to
show the 250K in cash assets. I have a CPA, but if you have one faster
and
cheaper that would be great.)
3. Bond
4. a few other minor items
Timing--This process can take 90-120 days reason is the background check
they do on the principles. If the principles are just Myself and Dick
This
could be very fast I am sure. The question is can I get an audit
financial

4/5
this week showing 250K in the bank, if not I need to make other
arrangements
to see what I can do to make it happen.

Until this happens and we have the Mortgage banking license we can do
loans
under Infinity Lending Services, Inc. and this will not affect pricing or
splits in any way.

as far as the operating agreement that seems fine, and I will keep track
of
all expense so that it can be audited.

:) I love this high paced world you live in, keeps you young right.

Thank you,
Jay Kister

-----Original Message-----
From: jan wallace [mailto:janwallace@att.net]
Sent: Tuesday, June 13, 2006 9:33 AM
To: jay@ilendservices.com
[Quoted text hidden]

5/5
EIN Application
Mersino, Jeanette <jmersino@caneclark.com> Thu, Jun 8, 2006 at 12:37 PM
To: jan wallace <janwallace@att.net>

Jan

Please see attached-fill out and return asap.

Do you have the EIN for secured Diversified?

Secured Lending business will be __________? (Mortgages?)

First date wages will be paid?

Number of employees expected?

Jeanette Mersino
Paralegal

Cane Clark LLP


3273 E. Warm Springs

Las Vegas, NV 89120


702·312·6255

702·944·7100 FAX
Jmersino@caneclark.com

1/4
Call Jan with any questions. Thanks, Ky

Kyleen Elisabeth Cane

Cane Clark, LLP

3273 E. Warm Springs

Las Vegas, NV 89120

(702) 312-6255 (Office)

(702) 944-7100 (Fax)

www.CaneClark.com

SDOC3784.pdf
190K

4/4
Dear Bill, 9/14/06

Since I cannot get hold of you, I want you to know that we are doing everything we

can to clear up this situation on your loan. For many reasons, you and Helen are

important to this company & we will endeavor to do right by you and continue to pursue the
lender to get this done. Even if you decide to go somewhere else, I do want you to know that
a full investigation of the facts were done in house and we feel you should at least have the
facts relayed to you as a response to what you felt went wrong.

1. Time issue seems to be of concern in this statement. Here is the time line per the processors
notes in the file. The application was received by the processor on the 31st of August. It was
processed into Point that day. After conversations with the lender on how to structure the
loan, the loan was submitted on September 5th after a three day weekend. The approval was
received two days later on the 7th. So from receipt of the 1003 to the approval it was only 4
business days. In regards to the quote “count Mondays & every other Wednesdays”;
mortgage loans are subjected to regulatory laws. In the case of refinance loans, the law states
the borrower is given 3 full business days to change their mind. This is referred to as “The
right of recession” Sometimes depending on when you sign; it may take up to 5 or 6 calendar
days to fund.

2. In regards to the Good Faith Estimate, GFE, that is exactly what it is. An estimate. Loan
terms change periodically through out a loan. This can change for many reasons. In your case
it was different because 1.) The disclosures were sent prior to receiving approval, (which by
law we are required to disclose within a certain time period) these disclosures included the
GFE. 2.) The rate was not incorrect. In actuality, the rate was LOWER than what was
quoted on the GFE. Documents were signed at the rate of 11.25.

3. In regards to the concern of a better rate and payment with a different company. The loan
was done on an interest only calculation. This is done by taking the loan amount multiplied by
the rate and divided by 12 to give the monthly interest only payment. It is not mathematically
possible to get a 3,000 payment on an Interest Only loan using the rate of 11.44 with the loan
amount of 464,750. That Interest Only payment would be 4,430.62. If the other lender’s
payment is in fact 900 cheaper, all things being equal, then it would be prudent to take that
1/2
other loan.

4. In regards to the concern of an appraisal review being pulled. The approval was sent with an
appraisal review condition. This was a prior to doc condition. The processor knew and was
aware of your urgent request for the docs to be signed. The processor discussed that if we
got the docs, there would be a possibility that the loan would not fund in time because of the
possible appraisal issues and if anything on the appraised value changed, docs may have to
be re-drawn. As previously stated, the appraisal was the underlying condition. The lender did
us a favor by moving that condition prior to funding. Docs were sent out. The lender went
over the appraisal review and ordered a field review. This was ordered the 12th by the
lender. Appraisal reviews are a common practice by all lenders. Hard money loans (Low fico
scores & credit issues) rely on appraisal reviews more than conventional lenders to protect
their investment. We are working diligently with the lender to have them reconsider the
determined value. The loan was scheduled to fund on the 14th of September. At the most,
this will delay the funding until Tuesday, but only if we get the appraisal issue turned around.
What may come of it is that the cash out may be less, but you would not have to payoff
collection accounts. In time, with 12 months of loan payments made in a timely manner, we
will be able to refinance the loan with a much better rate & additional cash out.

Bill, you know I have always tried to do best by you& Helen, and will still continue to do so.
However, I understand your frustration, but no one was trying to lie or disrespect you, and it
is not fair to wrongfully characterize anyone as you did in your letter.

I am sad to hear about APS and as always I will put out an offer to help.

Please take it in the spirit in which it is offered. Please give my best to Helen.

Love,

Jan Wallace

2/2
RE: YOUR LOAN
1 message

Susan Tate <susan@ilendservices.com> Fri, Sep 15, 2006 at 10:33 AM


Reply-To: susan@ilendservices.com
To: wldbillw@aol.com

Bill and Helen

It is Sue with Secured Lending. I wanted to let you know you do have a loan. They did cut the appraisal on the
value due to different issues that the field appraiser

addressed which is not unheard of on a hard money loan. We have all worked hard on your loan since we
received it and more so with the issues that have come about. I am working on getting the documents to
your mom in California. As soon as I know I will relay the information to you.

Please respond to this e-mail ASAP. I need written verification from you that you want to go forward with
the new loan. Once we hear back from you I can go over the new loan in detail with you. Including cash out
& terms and we can hit the green light for getting docs to California. Again, please let me know as soon as
possible.

I hope it is clear we are, and have been working very hard on this loan for you. We are at the mercy of the
lender. Whatever they say goes. Unfortunately all of our pushing back to support the value didn’t get us
anywhere. But please know we tried.

Hope to hear from you soon.

Sincerely,

Sue

1/1
(no subject)
2 messages

WLDBILLW@aol.com <WLDBILLW@aol.com> Thu, Sep 14, 2006 at 7:12 PM


To: JANWALLACE@att.net, susan@ilendservices.com

SO NOW IVE HEARD IT ALL THIS WEEK...THE FIELD APPRASIAL WAS OK NOW IT ISNT....IN 2 DAYS????
...........SO WHAT YOUR SAYING IS WE DONT HAVE A LOAN NOW????

WHAT HOW MUCH....TERMS?? AND WHEN..............OR SHALL I SAY...THEY CAN LEND WHATEVER,
WHENEVER AT WHATEVER THEY LIKE???

LET ME KNOW

Bill,

Here is an updated on your file. We heard back from the lender. The appraised value was depreciated by the filed
review. All of the comps the field review found were upgraded properties, recent sales, had more curb appeal,
larger bedrooms and on slightly larger lots. The property has not been upgraded in quite a long time and this also
affects the results of appraised value.

Also, the lender indicated the mortgage has not been current since 6/06. This is also a factor in determining the
loan grade & terms.

There is a loan here to be done. Please direct us as you wish & we will continue working on it.

Thank you,

Sue Tate

jan wallace <janwallace@att.net> Thu, Sep 14, 2006 at 10:18 PM


To: WLDBILLW@aol.com

Bill there is a loan.

The field appraisal is sent out by the lender, the first appraiser was fine with the loan to value, a second appraiser;
the field appraiser was requested by the lender, this is not unheard of on hard money. The field appraiser is sent
“blind”” what this means is that they are a third party independent appraiser, no affiliation purely objective, his
decision is the final one on loan to value. His report contained the statements of information that sue forwarded to
you at end of day today in an e-mail. Sue, jennie and I worked all afternoon to talk to the lenders management to

1/2
increase the field appraisal but they would only accept the final field appraisal.

What it means to you is that the house value appraisal at 715 was re-assed at 600 thousand, the cash out will
adjust to approx. 170,000 the interest rate will adjust slightly up ,not much, which will affect the monthly slightly
up, not much

We will fight to get them to adjust their fees down, and none of the collection debt has to be paid.

YOUR loan is primary to everyone in the office, I had sue check comps and values with other appraisers in town.
The news was mixed, some appraisers, with pressure from lending institutions are trying to get over valued
properties of last year in line, the downturn in the market is making it an investors( lenders) market and some are
saying that rates may move up. If you would like , I’ll put you in contact with some of these advisors.

Bill we all feel terrible that the loan got complicated, and we will continue to work for you, at your request. Jennie
said she can call some hard money guys that she used to work with at her previous company to see if we could
get better value but that would take more time.

You can accept and sign this loan tomorrow. We can arrange for a title company in California to do the docs to
make it convenient for your mom.

The funding would be after the 3 day right of rescission from date of signing.

You can, after 6 months and after an improved credit rating can go back and re-finance and request a new
payout.

Whatever the disappointment and the approx, 50,000 dollar payout reduction, you should sleep on this
information and focus on what this will bring to you and your family. You have had many battles but you are
getting some wins and the future can be even better. Try to focus on the positive even when it frustrates you to
death.

I am always here to help in the short term, all the best to you and your mom

jan

From: WLDBILLW@aol.com [mailto:WLDBILLW@aol.com]


Sent: Thursday, September 14, 2006 8:12 PM
To: JANWALLACE@ATT.NET; susan@ilendservices.com
Subject: (no subject)

[Quoted text hidden]

2/2
FW: (no subject)
1 message

jan wallace <janwallace@att.net> Fri, Sep 15, 2006 at 8:22 AM


To: sue.securedlending@cox.net

From: jan wallace [mailto:janwallace@att.net]


Sent: Thursday, September 14, 2006 11:18 PM
To: 'WLDBILLW@aol.com'
Subject: RE: (no subject)

Bill there is a loan.

The field appraisal is sent out by the lender, the first appraiser was fine with the loan to value, a second appraiser;
the field appraiser was requested by the lender, this is not unheard of on hard money. The field appraiser is sent
“blind”” what this means is that they are a third party independent appraiser, no affiliation purely objective, his
decision is the final one on loan to value. His report contained the statements of information that sue forwarded to
you at end of day today in an e-mail. Sue, jennie and I worked all afternoon to talk to the lenders management to
increase the field appraisal but they would only accept the final field appraisal.

What it means to you is that the house value appraisal at 715 was re-assed at 600 thousand, the cash out will
adjust to approx. 170,000 the interest rate will adjust slightly up ,not much, which will affect the monthly slightly
up, not much

We will fight to get them to adjust their fees down, and none of the collection debt has to be paid.

YOUR loan is primary to everyone in the office, I had sue check comps and values with other appraisers in town.
The news was mixed, some appraisers, with pressure from lending institutions are trying to get over valued
properties of last year in line, the downturn in the market is making it an investors( lenders) market and some are
saying that rates may move up. If you would like , I’ll put you in contact with some of these advisors.

Bill we all feel terrible that the loan got complicated, and we will continue to work for you, at your request. Jennie
said she can call some hard money guys that she used to work with at her previous company to see if we could
get better value but that would take more time.

You can accept and sign this loan tomorrow. We can arrange for a title company in California to do the docs to
make it convenient for your mom.

The funding would be after the 3 day right of rescission from date of signing.

You can, after 6 months and after an improved credit rating can go back and re-finance and request a new

1/3
payout.

Whatever the disappointment and the approx, 50,000 dollar payout reduction, you should sleep on this
information and focus on what this will bring to you and your family. You have had many battles but you are
getting some wins and the future can be even better. Try to focus on the positive even when it frustrates you to
death.

I am always here to help in the short term, all the best to you and your mom

jan

From: WLDBILLW@aol.com [mailto:WLDBILLW@aol.com]


Sent: Thursday, September 14, 2006 8:12 PM
To: JANWALLACE@ATT.NET; susan@ilendservices.com
Subject: (no subject)

SO NOW IVE HEARD IT ALL THIS WEEK...THE FIELD APPRASIAL WAS OK NOW IT ISNT....IN 2 DAYS????
...........SO WHAT YOUR SAYING IS WE DONT HAVE A LOAN NOW????

WHAT HOW MUCH....TERMS?? AND WHEN..............OR SHALL I SAY...THEY CAN LEND WHATEVER,
WHENEVER AT WHATEVER THEY LIKE???

LET ME KNOW

Bill,

Here is an updated on your file. We heard back from the lender. The appraised value was depreciated by the filed
review. All of the comps the field review found were upgraded properties, recent sales, had more curb appeal,
larger bedrooms and on slightly larger lots. The property has not been upgraded in quite a long time and this also
affects the results of appraised value.

Also, the lender indicated the mortgage has not been current since 6/06. This is also a factor in determining the
loan grade & terms.

There is a loan here to be done. Please direct us as you wish & we will continue working on it.

Thank you,

2/3
Sue Tate

3/3
Your loan with Secured Lending
1 message

Jennie DeNoia <jennie.securedlending@cox.net> Fri, Sep 15, 2006 at 12:38 PM


To: wldbillw@aol.com

Bill,

Good afternoon!

I wanted to touch base with you on the appraisal issues on your loan & help give you an understanding of what
has gone into this.

I jumped into the file to help out yesterday morning because I heard we were waiting for the lender to review the
field review they ordered. I reviewed the appraisal and immediately went to work on pulling additional comps and
reviewing other internet sources to help us support a value of 715K. I prepared my argument while waiting to hear
back from the lender. I reviewed every comparable sale with them, & went over every reason why they were
cutting the value. I fought diligently to even try to get them to increase it 50,000. But as stated in a prior e-mail
addressed to you, they were concerned about updating the home, curb appeal, etc).

I understand their need to protect their investment. They are basing this entire loan the collateral (your home)
that we are providing them. The loan amount is capped at the 70% because of the credit risk on the file. Luckily
enough you have an incredible amount of equity in your home & this put you in a great position to get the loan.
So the only thing the lender has to hang their hat on is the home if the mortgage should not be paid. The current
market trend for real estate in AZ (and everywhere else for that matter) is on the down swing. Making it even more
of an issue to secure the collateral for any lender, much less a hard money lender.

I wish I could have done more fighting for you, but the lender would not bend. It is hard sometimes being at their
mercy.

The good news is that we do have a loan. And in 6 months to a year from now you can possibly refinance, get a
better rate & possibly more cash out. ☺

Sincerely,

Jennie

1/1
(no subject)
2 messages

WLDBILLW@aol.com <WLDBILLW@aol.com> Thu, Sep 14, 2006 at 7:12 PM


To: JANWALLACE@att.net, susan@ilendservices.com

SO NOW IVE HEARD IT ALL THIS WEEK...THE FIELD APPRASIAL WAS OK NOW IT ISNT....IN 2 DAYS????
...........SO WHAT YOUR SAYING IS WE DONT HAVE A LOAN NOW????

WHAT HOW MUCH....TERMS?? AND WHEN..............OR SHALL I SAY...THEY CAN LEND WHATEVER,
WHENEVER AT WHATEVER THEY LIKE???

LET ME KNOW

Bill,

Here is an updated on your file. We heard back from the lender. The appraised value was depreciated by the filed
review. All of the comps the field review found were upgraded properties, recent sales, had more curb appeal,
larger bedrooms and on slightly larger lots. The property has not been upgraded in quite a long time and this also
affects the results of appraised value.

Also, the lender indicated the mortgage has not been current since 6/06. This is also a factor in determining the
loan grade & terms.

There is a loan here to be done. Please direct us as you wish & we will continue working on it.

Thank you,

Sue Tate

jan wallace <janwallace@att.net> Thu, Sep 14, 2006 at 10:18 PM


To: WLDBILLW@aol.com

Bill there is a loan.

The field appraisal is sent out by the lender, the first appraiser was fine with the loan to value, a second appraiser;
the field appraiser was requested by the lender, this is not unheard of on hard money. The field appraiser is sent
“blind”” what this means is that they are a third party independent appraiser, no affiliation purely objective, his
decision is the final one on loan to value. His report contained the statements of information that sue forwarded to
you at end of day today in an e-mail. Sue, jennie and I worked all afternoon to talk to the lenders management to

1/2
increase the field appraisal but they would only accept the final field appraisal.

What it means to you is that the house value appraisal at 715 was re-assed at 600 thousand, the cash out will
adjust to approx. 170,000 the interest rate will adjust slightly up ,not much, which will affect the monthly slightly
up, not much

We will fight to get them to adjust their fees down, and none of the collection debt has to be paid.

YOUR loan is primary to everyone in the office, I had sue check comps and values with other appraisers in town.
The news was mixed, some appraisers, with pressure from lending institutions are trying to get over valued
properties of last year in line, the downturn in the market is making it an investors( lenders) market and some are
saying that rates may move up. If you would like , I’ll put you in contact with some of these advisors.

Bill we all feel terrible that the loan got complicated, and we will continue to work for you, at your request. Jennie
said she can call some hard money guys that she used to work with at her previous company to see if we could
get better value but that would take more time.

You can accept and sign this loan tomorrow. We can arrange for a title company in California to do the docs to
make it convenient for your mom.

The funding would be after the 3 day right of rescission from date of signing.

You can, after 6 months and after an improved credit rating can go back and re-finance and request a new
payout.

Whatever the disappointment and the approx, 50,000 dollar payout reduction, you should sleep on this
information and focus on what this will bring to you and your family. You have had many battles but you are
getting some wins and the future can be even better. Try to focus on the positive even when it frustrates you to
death.

I am always here to help in the short term, all the best to you and your mom

jan

From: WLDBILLW@aol.com [mailto:WLDBILLW@aol.com]


Sent: Thursday, September 14, 2006 8:12 PM
To: JANWALLACE@ATT.NET; susan@ilendservices.com
Subject: (no subject)

[Quoted text hidden]

2/2
(no subject)
1 message

jan wallace <janwallace@att.net> Wed, Sep 13, 2006 at 8:27 PM


To: WLDBILLW@aol.com

Bill

I,ve been trying to call you all day. You must contact me on the loan, even if you go to someone else. I told sue
to call you to update,you are over reacting this is normal

Your loan has challenges it is normal for a hard money lender to ask for a physical inspection, when your credit
is so bad and there is no stated income. We worked this loan in 10 days no one does that. I also approved
somethings personally so that this loan can go forward. You will not be able to get that some where else.

I also need to talk to you about the stock transaction.

If there is no response tomorrow, I will assume that something is wrong and I will send someone to the house to
make sure you guys are alright.

Bill I am getting worried, this is not your behavior. Contact me as soon as possible

jan

1/1
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Wallace/Black
Progress Report SDI
Time Period: April to June 30

Jan Wallace was hired into the position as President to guide the company’s
management and the Board of Directors to conduct the business of Secured Diversified
Investment, Ltd. (SDI) as best represents a Publicly Traded company.

1. The first three months are to assess the viability of the company’s mission
statement as represented in its business plan, the management structure and the
officers’ ability to carry out this mission and the everyday running of the
company.

2. Additionally, to assess the financial viability of the company; an examination of


fiscal policy, assessment of cash flow, the company’s balance sheet and the
capability of the CFO to oversee auditors and legal council to guide them through
the reporting structures required by the SEC.

3. Finally, an assessment of the contracts, obligations, assets, reporting structures,


liabilities, stock positioning, share distribution and its values as they relate to the
public market were determined.

(1) The business plan of SDI is over-stated, lacking in detail, financial


proformas and clearly is not a reliable product to release to the investor
community. When asked, it was Gernot Trolf, the C.O.O., who over saw the
creation of the business plan. Upon further investigation, as hard as he tries,
Mr. Trolf was ill-equipped and ill-qualified to handle such a task and even
though management is aware of his short comings, they still left it in his hands
for years to accomplish. Wallace/Black tasked with the job of recreating a
new business plan has been blocked because we are still to go through Mr.
Trolf who does not want to step down. This work project has been on the
agenda for 7 wks.

This same scenario exists with the website. Our receptionist, whose husband is a
computer programmer, was asked to assist for a redesign of the website as a local
solution, but once again, up to a week ago Mr. Trolf said he was in charge of it.

SDI committed $2,500+ $1,500 to Mr. Jamieson to write a business plan to no avail
as the product was weak and thusly trashed at a loss to the company.

The management structure in the company is top-heavy “more Chiefs than


Indians”.

Cliff Strand, while qualified in the real estate market, is totally unqualified
to run a public company. He lacks the knowledge to make sound decisions and
looks to outside council for advice (an extremely costly burden to the company as
demonstrated by Chris Wilson’s bills.) Even then the advice cannot be assessed
appropriately because he has no system of “checks and balances”, the lack of
personal prior experience makes it difficult for him to assess, rely or gauge the
information. Thus, a chain of events, such as ill-fated contracts, deals with market
makers, officers that have come and gone, and deal negotiations, has impacted the
management down the chain of command and the whole company to its present
dire condition.

I have yet to discover records from staff meetings, organizational plans, status
reports or any other kind of reports or updates crafted by the CEO, the COO or
the Vice President of this company as a regular course of business.

The personal business relationships between management, the Board, officers and
outside contacts, are given priority when making business decisions resulting in
financial harm to the company.

Examples:

Chris Wilson, lawyer, friend of Kachimata, the auditor, was instrumental in the
“E” on the SDI trading symbol.

Don DuBeau, friends to Cliff and Bill. (the disastrous DuBeau deal.) cost the
company $50,000USD.

Gernot Trolf: Mr. Trolf old shareholder of SCDI now C.O.O., has proven his
consistent inability to handle just about every task under his management (T-Rex
damage amounts to about $50,000 loss to the company. When I requested that Mr.
Trolf be removed, I was met with opposition on that decision based on “oh, he
will sue” or “he’s been here so long, he drives all the way from San Diego,” “why
don’t we just pay him and move him into NCB” or “let’s just find something for
him to do.”

Gernot Trolf: Mr. Trolf has no fit in his role as C.O.O. or the ability to handle the
majority of the tasks he considers under his job description. He has mishandled
virtually every asset in the SDI family of properties. He just barely avoided the
threat of a harassment suit from a former receptionist. He develops problematic
relationships between he and property managers. He has caused rental losses
from T-Rex. The company should remove this position, the title and eliminate the
payroll burden.
.
Cliff Strand: Mr. Strand CEO runs the company like that of a private entity. He
does not grasp that the responsibility of a CEO is, “the buck stops here”. No
matter the prior management inabilities, the blame cannot be shifted. It cannot
always be someone else’s fault, never his. If he truly possesses the capabilities of
his title and has the sufficient knowledge to counter poor decisions, he would
have a better, more successful company. He does not.
Bill Biddle: Mr. Biddle serves as Vice President of Acquisitions. Bill Biddle’s
ability to harness “good properties” is not a sufficient qualification to retain him
as a full-time employee or an officer of the company. First, he can do this from
anywhere; instead he drives 2 days a week running up expenses for the company,
commanding a large salary that the company cannot afford. There has been no
activity for almost 2 years in acquisitions.

As a director he has no knowledge of the public market or the ultimate


responsibility of holding a seat and the ramifications of his decisions on a public
Board. His personal behavioral habits cannot be tolerated. His constant yelling
and barrage of threats to fellow officers and employees, and his inability to follow
procedure and guidelines is a recipe for disaster. His style of presentation does not
instill outside investors with confidence. While his personal contributions are
heart felt and personality charming, the company should take the appropriate
business steps to neutralize the situation.

Munjit Johal: Mr Johal serves as CFO, and has demonstrated a high degree of
competence and great patience in dealing with individuals who are inexperienced
in understanding the financial processes necessary to keep this company reporting
according to the rules set out by the SEC, or of even simple accounting practices.
Poor legal counsel via Chris Wilson, and Cliff Strand, CEO, who wants to argue
with procedures he does not understand, has stymied and put him in harms way,
as a signing officer of the company. Cliff authorizes expenditures with little
responsibility to its loss or consequence to the company’s bottom line, or
profitability.

It was Mr. Johal who was first to forgive accruals, and took no personal stock
incentive to reduce the debt of the company. It took 6 weeks to work out contracts
that reduced approximately $750,000 dollars of debt off the books of the
company, which will result in a positive quarter for the first time on the
company’s books. Mr. Johal is an officer of this company and deserves his salary.

Jim Brondino: Mr. Brondino is a consultant to the company. M r. Brondino


brings some much needed conservatism and organization to the company’s
property acquisitions and on-going property management. He is focused and
diligent in his tasks and has the experience to make sound decisions. He is
instrumental in delivering a high quality work product that will help the company
to become more efficient and consistent in its documentation. These products will
move the company forward while, removing the ill-fated guess work that
presently exists

. (2) Financially the company is virtually insolvent. Its debts cannot be


serviced by its income stream. The auditors also have a “going concern” on the
books. The company has just come off of an “E” on its symbol, which impedes
the company’s ability to raise capital. The stock is depressed with no trading
volume. The float of the company, (2 million shares), has been impaired, which
makes it impossible to make a market in the stock. Millions of shares of stock will
be free-trading shortly, which will once again put pressure on the stock.
Munjit, the CFO, the auditors and Kyleen Cane, the company’s present S.E.C.
attorney, are poised to file the needed amendments, because of the “E,” to get the
company back in proper reporting order. The shortage of capital requires that
Munjit has no choice but to freeze company funds in order to use cash proceeds
where it is most needed. He is ultimately tasked to take care of the financial status
of the company and is personally libel under the Sarbanes-Oxley Act. His
decisions must be heeded, as it is his responsibility. I support him 100%.

The Board must look at all alternatives, including a Chapter 11 re-organization in


order to protect the company’s assets if so required. The Board cannot sit back
and wait for $2 million “on the come” from the sale of the Cannery as a solution.

Part of my mandate is to bring capital into the company. The “E”on our symbol
was our first impediment to bring investors. The second was the heavy burden of
the payroll debt of the company and the over inflated salaries. Every investor
Wallace/Black introduced to SDI was not interested in putting “new money to pay
old debt” All of this was relayed to Cliff and Bill and Gernot. Actions were taken
to re-write contracts. Bill said he would not sign and give up anything unless he
sees an investor that can deliver. Against my better judgment, I brought in an
investor, Mr. Leonard Yablon, at my own expense. My assessment was that the
company, under due diligence would not stand up, the enclosed report is the
outcome.

Immediate cash infusion is mandatory to the survival of SDI

(3) Following are contracts, liabilities, shares and law- suits on going and or
settled.

-Duane Schwaab- settled at a cost of $1,800 gain to the company, plus share
certificates were issued dating back 16 months.

-Carlos Royal- Approximately $21,000 of an outstanding commission payment


was settled for $10,000 cash $5K+$5K over two months and the rest in stock
certificates which were delivered.

Bob Jaimieson (on-going) $1,500 for a business plan this is still outstanding, but
feel very confident that we will lower it by half.

-Louis Leon law-suit is on going. $15,000 has already been spent. We are looking
for a summary judgment. The suit is dependant on Cobra issues
The release of the services by Chris Wilson, attorney, who was a totally
ineffectual attorney for SDI. His poor advice will be felt through this company
for a while.
• He has moved out of our offices. He owes rent and is holding over $5,000.00
deposited in our trust account and will not release these fund. Presently, SDI is
getting the documents to file a complaint to the Bar in California.

• REIT shares; the float of the company shall be restated on the company’s books to
add 2 million free-trading shares. This may create a negative impact on the share
holdings of Cliff Strand, Bill Biddle, Bob Leonard, Sumy Leonard and Wayne
Sutterfield, but is a great positive impact to the company. It will be placed back
to where it should have always been. It allows the company to access market
makers to make a market in the companies stock, which will add value to the
company and its shareholders.

• A new competent SEC. attorney is in place, and will reduce costs associated with
the filings of the company by half over that of last years costs, under Chris
Wilson.

• Also on going corporate counsel has been retained and available to the company
for only $2,000.00 per month.

• Installed organizational charts and documents to assist with due diligence


pertaining to our present and future properties, including financial forms to track
our monthly rent rolls.

• Removed old employment contracts and accruals to a reduction of debt of over


approximately $750,000USD.

• Issuance of stock to multiple parties that have been outstanding for over a year.

• Clarification of the company’s bylaws, compensation and audit committee for the
officers and directors to properly account for the company.

- T-Rex (on going) The company is in a default position of about


$46,000.00. Notice has been given by Gary Vandenberg. Company has
set up a task force to handle the problem: Jan Wallace – negotiation
• Jim Brondino – day to day monitoring of T-Rex Business.
• Cliff Strand - to market and rid the company of the T-Rex from SDI It is
presently on the book at zero valuation. Presently Jan has negotiated a stand still
until after the board meeting (E-mails enclosed).

• A standstill oral agreement is in place over a 30,000USD agreement with a


marketing company that was signed a year ago by Mr. Strand. We have informed
the company that we will not pay towards this agreement. At best, they may want
to accept 3,000USD as a form of settlement.
Every day more issues come up and is handheld swiftly there is no longer any time to
leave issues to ponder.

In closing, I was hired to spend 3 days a week on the business of SDI at $8,500 a month.
I presently spend twice that time on the business of SDI and have the cell phone and
office phone records to prove it. The present management of SDI is ineffectual. What
they don’t know or understand, their inability to change to formal structure, to remove
personal involvement from business issues, which only clouds their ability to make
decisions to problems that present themselves on a daily basis, will only bring further
harm to the company.
My first 3 months and my ability to effectuate change could have taken much less time
than it has, if the education process with management had not been so consuming. So, all
personalities aside, this Board is presented with hard business decisions. This is a public
company and an on-going business. My recommendation is to create a plan to remove
Cliff Strand as CEO, Bill Biddle as Vice President of Acquisitions and Gernot Trolf as
COO of SDI. Munjit to immediately put tight financial constraints in place to reduce
overhead and personel until the company has cash infusion.
-Allow Jan Wallace to work with Jim Brondino to assess the company’s assets
and fix, sell or renegotiate leases for the company’s properties.
-Allow Jan Wallace to run the day to day operation of the business as is necessary
in a public company.
Otherwise leave everything status quo and proceed as you see fit.

Yours respectfully

Jan Wallace
Chairman, Wallace/Black
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CONFIDENTIAL
SETTLEMENT AND GENERAL RELEASE AGREEMENT

This Settlement and General Release AGREEMENT ("AGREEMENT") is entered into by and
between IOMEGA INVESTMENTS, LLC ("IOMEGA") and SECURED DIVERSIFIED
INVESTMENT, LTD. ("SDI") referred to jointly as the ("PARTIES") as of the date this
AGREEMENT, December 14, 2005, on the following terms:

RECITALS

WHEREAS on May 12, 2004 IOMEGA ("Lender") and SDI ("Borrower") entered into an
Unsecured Installment Note, last installment was to be paid on May 14, 2006.

WHEREAS IOMEGA currently owns 250,000 shares of SDI preferred C stock (the "Preferred
Shares") at a value of $3.00 per share evidenced by certificate number 1001.

WHEREAS, the PARTIES have, between themselves, negotiated a complete resolution of any
and all disputes, claims or potential claims arising between them and the subject matter of the
Unsecured Installment Note dated May 12, 2004 and the shares of SDI and intend, by the terms of this
AGREEMENT, to memorialize the resolution of all disputes, claims or potential claims between the
PARTIES arising during their relationship.

AGREEMENT

1. WHEREFORE in consideration for the promises set forth herein, the PARTIES agree
as follows:

a. The PARTIES agree that upon execution by IOMEGA this AGREEMENT,


SDI shall pay to IOMEGA the gross amount of forty thousand dollars ($40,000.00) as payment in full
on the Unsecured Installment Note dated May 12, 2004.

b. The PARTIES further agree that IOMEGA will be entitled to immediately


exercise its conversion rights for its preferred shares at the current market price for SDI’s Common
Stock at the time of notice to the transfer agent.

SDI makes no representations or warranties regarding the tax effect of the


settlement proceeds as directed by this AGREEMENT. Further, IOMEGA agrees to defend and/or
indemnify SDI with respect to any liability created by IOMEGA'S payment or non-payment of taxes
with respect to the settlement sum.

2. IOMEGA, as the first party, and SDI as a second party, on their own behalf and on
behalf of their respective dependents, successors, heirs, executors, administrators and assigns, and each
of them, hereby fully and forever releases and discharges each other, as well as SDI's parent, subsidiary
or affiliated companies or organizations, as well as its agents, officers, directors, stockholders,
employees, successors, assigns, insurers and attorneys, and each of them, of and from any and all
claims, rights, actions, causes of action, obligations, debts, interest, damages. charges, losses, debts,
penalties, forfeitures, liabilities, costs, attorneys' fees, and demands of any nature, whether arising in
law or in equity, arising out of or relating to any acts or omissions that took place prior to the date of
this AGREEMENT.

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3. It is the intention of the PARTIES hereto that this AGREEMENT shall be effective as a
full and final accord and satisfaction and release of each and every released matter, including all
unknown and/or unsuspected claims. Accordingly, the PARTIES hereby waive and relinquish any and
all rights or benefits that any party may have under the provisions of Section 1542 of the California
Civil Code, which reads as follows:

"A general release does not extend to claims which the


creditor does not know or suspect to exist in its favor at the
time of executing the release, which if known by him must
have materially affected his settlement with the debtor."

In connection with this waiver, each party hereto acknowledges that facts in addition to
or different from those presently known may later be discovered which relate to the subject matter of
this AGREEMENT. The PARTIES also recognize the possibility that, in the future, damages that are
not currently known may be suffered in relation to matters released in this AGREEMENT.
Notwithstanding these possibilities, it is each party's intention to fully, finally and forever settling and
release all released matters, disputes and differences, whether known or unknown, suspected or
unsuspected, that have existed, now exist, or may exist. It is the intention of the PARTIES hereto that
this AGREEMENT shall be effective as a full and final accord and satisfaction and release of each and
every released matter, including all unknown and/or unsuspected claims. In connection with this
waiver, each party hereto acknowledges that facts in addition to or different from those presently
known may later be discovered which relate to the subject matter of this AGREEMENT. The PARTIES
also recognize the possibility that, in the future, damages that are not currently known may be suffered
in relation to matters released in this AGREEMENT. Notwithstanding these possibilities, it is each
party's intention to fully, finally and forever settle and release all released matters, disputes and
differences, whether known or unknown, suspected or unsuspected, that have existed, now exist, or
may exist. Nothing in this AGREEMENT constitutes, or should or shall be deemed to constitute, any
admission of any act, fact or liability, with respect to any matters released herein.

4. The contents and the existence of this AGREEMENT, and the PARTIES' discussions
pertaining to it, are and shall remain confidential, and neither party will communicate or allow
communication in any manner (written or oral) to anyone with respect thereto, except that this
AGREEMENT may be disclosed as required to the PARTIES' attorneys, insurers, accountants and/or
governmental taxing authorities, or otherwise may be disclosed as compelled by law. SDI has informed
IOMEGA that it would suffer serious damages if this Paragraph is violated.

5. Each party agrees to bear its/his own costs, expenses and attorneys' fees incurred in
connection with the ACTION and this AGREEMENT except as stated in I .b above.

6. Each party hereto expressly warrants and represents that they is fully authorized to
enter into this AGREEMENT and each of its terms, and that they has not assigned to any other party or
person any claims released herein.

7. IOMEGA warrants that it has not filed any lawsuits, charges, complaints, petitions, or
other accusatory pleading against SDI with any governmental agency or in any court, based upon,
arising out of or related in any way to any events occurring prior to the execution of this
AGREEMENT. IOMEGA further agrees that it will not hereafter file, cause to be filed, or otherwise
voluntarily participate in the filing, investigation, and/or prosecution of any other such charges,
complaints, petitions or accusatory pleading brought by any other party in any court or with any
governmental agency in which SDI or any affiliated company is named as a party.

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8. This AGREEMENT contains the entire AGREEMENT between the PARTIES hereto
with respect to all matters addressed herein, and fully supersedes any and all prior or contemporaneous
agreements, understandings or representations, oral or written, implied or express, pertaining to the
subject matter hereof. This AGREEMENT may only be subsequently modified by a writing signed by
all PARTIES hereto.

9. Each party agrees to do all things necessary to carry out and effectuate the terms of this
AGREEMENT, and expressly promises not to do or fail to do anything, directly or indirectly, which
will interfere with any other party's realization of the benefits hereof.

10. This AGREEMENT, including the releases herein, shall be binding upon and inure to
the benefit of each of the PARTIES to this AGREEMENT and to each of their successors in interest,
including heirs and assigns.

11. The PARTIES acknowledge that they have read and understand this AGREEMENT
and are fee to seek the advice of independent counsel prior to execution and waiver of this right.
Accordingly, the rules of construction of contracts relating to resolution of ambiguities against the
drafting parties shall be inapplicable to this AGREEMENT.

12. Any construction, interpretation and performance of this AGREEMENT shall be


governed by the laws of the State of California, both substantive and procedural. Both PARTIES
accede to the jurisdiction of the Orange County Superior Court for any actions to enforce, or for breach
of, any term of this AGREEMENT.

13. If for any reason any provision contained in this AGREEMENT is later deemed
unenforceable, the remainder of this AGREEMENT shall nonetheless remain binding and enforceable
on all PARTIES hereto.

14. In the event of any action brought to enforce any provision of this AGREEMENT, or
for breach of any provision of this AGREEMENT, the prevailing party therein shall be entitled to an
award of its/his costs and reasonable attorneys' fees incurred therein, in addition to any other relief.

15. Each party hereto agrees to execute such further papers or documents that shall be
necessary or proper in order to fulfill the terms and conditions of this AGREEMENT.

16. Each of the PARTIES to this AGREEMENT covenants and agrees that the persons
executing this AGREEMENT are authorized and empowered to enter into and execute this
AGREEMENT for and on behalf of the person and/or entity they represent, and by their execution
hereof, each respective entity or person they represent, and all persons, partnerships, corporations,
trusts, joint ventures, and any person or thing affiliated therewith shall be bound by the terms hereof.

17. The PARTIES acknowledge that they have read and understand this AGREEMENT
and are free to seek the advice of independent counsel prior to execution and waiver this right.

18. Each party has had the opportunity to investigate this matter, determine the advisability
of entering into this AGREEMENT and has entered into this AGREEMENT freely and voluntarily. Each
of the PARTIES acknowledges that in executing this AGREEMENT they rely solely on their own
judgment, belief and knowledge and on such advice as they may have received from their own counsel
and that they have not been influenced by any representation or statements made by the other party or
its counsel.

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19. No breach of any provision of this AGREEMENT shall be deemed waived unless it is
waived in writing. Waiver of any one breach shall riot be deemed a waiver of any other breach of the
same or any other provision of this AGREEMENT.

20. Time is of the essence with respect to any act or performance hereunder.

21. This AGREEMENT may be executed in multiple originals or counterparts, each of


which shall be deemed an original or the equivalent thereof. This AGREEMENT, shall not be effective
in any way as to any of the PARTIES until fully executed by all PARTIES.

WHEREFORE, each party hereto, by the signatures below, certifies that this AGREEMENT
has been read in its entirety, that any questions regarding the meaning or effect of any terms have been
answered to their satisfaction, that each party enters into this AGREEMENT with the intent to be fully
and forever bound by all of its terms, as of the date set forth opposite their signature below.

IOMEGA INVESTEMENTS, LLC

Dated: December 14, 2005 By: __________________________________


HELEN WEST MANAGING PARTNER

SECURED DIVIERSIFIED INVESTMENT


LTD.

Dated: December 14, 2005 By: __________________________________


JAN WALLACE MANAGING PARTNER

STATE OF ARIZONA
COUNTY OF MARICOPA

This instrument was acknowledged before me this 14th day of December, 2005, by Helen West and Jan Wallace.

In witness whereof, I herewith set my hand and official seal.

NOTARY PUBLIC