jim

James R Cutlar
10108 Snow Crest Place, Las Vegas, NV 89134
(702) 363-4164, (702) 524-8909, Fax: (702) 363-4165
October 9, 1998
RE/SYS Corporation
6600 W Charleston Blvd
Suite 121 Las Vegas, NV 89102
NOTICE OF INTENT OF CONTRACT CANCELLATION OF 4703 GABRIEL CONTRACT

Dear RE/SYS Corporation:

Due to the lack of exercising due diligence in regards to the PROPERTY MANAGEMENT AGREEMENT: I am seeking an amicable termination of our contractual agreement.

Specific Items of contract showing lack of due diligence:

I. PROPERTY MANAGEMENT AGREEMENT

Item 2A: To use due diligence in the performance of this contract.
Item 2F: Agree to do maintenance… together with such conditions as may appear from periodic inspection.
Item 3 F: To make or cause to be made and supervise repairs and alterations, and to do improvements on said premises.
Item 5: Agent shall use his best efforts to prevent but shall not be liable for:
A: Neglect or abuse to the Owners property
C: The Lawn/vegetation, maintenance, vandalism, or deterioration of the property

II. LEASE AGREEMENT WITH TENANTS

Restrictions paragraph: Specifically the waterbed item and proof of Renters Insurance.
Alterations paragraph: LESEE shall make no alterations to the leasehold without LESSOR's consent in writing.
Maintenance paragraph: In its entirety
Property Maintenance paragraph: specifically Item 3 (glass replacement), Item 4 (lawn maintenance), Item 5 (light switches, plugs, circuit breakers…), Item 9 (carpet shampoo every 5 months)
Access paragraph: If access was denied (LESSEE shall not reasonably deny LESSOR his/her rights of entry to the premise).
Appliance Smoke Alarm paragraph: Lessee's responsibility for Washer, Dryer, Carpet, Drapes and Refrigerator and Water Softener.

III. False and misleading advertisement: RE/Sys Brochure

- Services Brochure "RE/Sys will inspect your property's interior and exterior at least twice a year"

Items Supporting evidence for lack of due diligence

Visible from the exterior:
- The carpet from the master bedroom removed and placed in the side yard next to the carport without owner's consent. It had oil and mildew on it indicating exposure to the elements for a period of time.
- Three sheets of raw plywood nailed from the carport roof to neighbor's wall
- Wooden gate to backyard unhinged
- 30 cubic yards of accumulated trash on property, EG: limbs/trash piled four foot high in side yard
- Paint splatters on two-year-old exterior paint, front and back
- Paint splatters on carport cement
- Stucco damage
- Front yard landscaping destroyed
- Entry door frame damage
- Hole in laundry room wall
- Windows broken or irreparably damaged.
- Drain to water softener broken off
- Electric service box cover removed
- Telephone line-in cut
Entryway:
- Front door painted black
- Non-locking doorknob installed on entry door
- Entry door and frame vandalized.
- Ceramic tile missing on entryway floor
- Door knob incomplete on hallway closet
- Two year old carpet badly stained, paint splatter throughout.

Laundry Room:
- A three-foot hole to the outside in laundry room wall
- Three year old washing machine taken apart in the laundry room
- Control panel for two-year-old dryer was destroyed

Kitchen:
- Floor tiled with mixed styles (black, white, green tiles)
- Unfinished shelf installed as counter extension
- Refrigerator/freezer shelves found in yard. Leaves and dust indicate long term exposure to elements
- Refrigerator door dented
- Cabinet door dented
- Water damage under sink

Items Supporting evidence for lack of due diligence (cont.)

Living/Dining Room
- Five-foot window broken
- Air conditioner registers painted black
- Moldings and walls painted red, black and blue
- Wood paneling painted over
- Blue strip painted around Living room wall at waist height
- Carpet covered with miscellaneous carpet, hiding paint spills on original carpet
- Eight-foot sliding glass door valence painted black.
- Rollers for sliding glass doors damaged
- Sliding glass door frame bent

Hallway
- The ceiling in the hallway painted blue (overrun on walls and doors)
- Carpet stained, and painted

Laundry Room
- Window broken
- Three-foot hole in wall to the exterior
- Four-inch hole in wall to kitchen
- Plumbing missing for washing machine drain
- Washing machine dismantled
- Two-year-old dryer's control panel extensively damaged appears vandalized

Bedroom 1
- Bedroom door damaged.
- Miscellaneous paints splattered on wall and floor. Evidence and witness testimony indicates the bedroom was used as a paint shop.
- Plywood covering most of the floor.
- Ceiling tiles fallen in or missing
- Light globe missing
- Windows taped over with duct tape, one requiring replacement

Bedroom 2
- Bedroom door missing.
- Closet doors missing.
- Wood paneling painted
- Three-inch hole in the wall
- Outlet completely taped and spackled over
- Carpet spackled to the wall.
- Light switch and outlets filled with spackle

Items Supporting evidence for lack of due diligence (cont.)

Hallway Bathroom
- Glass shower enclosure missing
- Medicine cabinet missing, wall patched and spackled over
- Light globe missing
- Towel rack missing
- Window broken
- Showerhead repaired with mesh tape and plaster. Fixtures covered with rubber gloves.
- Vanity ruined by water damage
- Outlets and light switches filled with spackle
- Walls painted green

Master Bedroom
- Bedroom door and frame damaged, appears to be vandalized
- Closet doors missing
- Wall around window painted black
- Window replaced with plywood with three fans attached.
- Hole in wall from doorknob.
- Hole in wall next to bathroom
- Mirrors glued to block wall, Harley stickers attached.
- Carpet replaced
- West wall badly damaged

Master Bathroom
- Door vandalized
- Vanity missing
- Towel rack missing
- Wall tiled with mixed styles (brown, green, and white tiles)
- 3" hole in wall behind mirror
- Walls painted flat red
- Floor tiled, incomplete surrounding toilet
- Grout in shower spackled

Bedroom 3
- Door broken
- Three-inch hole in wall from door knob
- One window broken, other replaced with plastic

Roof
- Styrofoam insulation sprayed on air conditioner elbow and Master bedroom skylight
- Miscellaneous trash: garbage pail, flowerpot, tools, and limbs…

- Other Items

Supporting documents, testimony, evidence of lack of due diligence:
- Pictures, video and a detailed list of damages from Kalb Industries, USAA and myself.
- Neighbors' testimony of the duration of damage to the property.
- Personal testimony of front yard's destruction and accumulation of trash witnessed during a drive by inspection in July (just a couple of weeks before the August "fair" inspection rating).
At this time, for obvious reasons, I request to be let out of our agreement without further delay. Additionally, I do not wish to pay commissions for the remainder of the year's contract, I have no desire to sell this property through Resys.
I have an estimate of damages totaling $7,324.25, which does not include Washer and Dryer repair and damage to the refrigerator. I anticipate additional cost due to supervision and personal affects of repairs.

Sincerely

James R Cutlar