MINUTES OF SPECIAL GENERAL MEETING STRATA CORPORATION NW 2671 “SUNRIDGE ESTATES” Held: ‘Thursday, June 2", 2005 at 7:00 PM in the Library of Scott Creek Middle School, 1240 Lansdowne Drive, Coquitlam, BC Present: The Owners, Strata Plan NW 2671 As per the Registration Sheet Joan MacDougall, Bayside Property Services Ltd. Alan Cadwell, B.C.'s Condo Advocate Inc. Stephen Hamilton, Hammerberg Altman Beaton & Maglio Peter Slack, Council President, called the meeting to order at 7:10 PM. Bayside reported that there was a total of 43 Owners represented at the meeting, including 7 by proxy. In accordance with the Strata Property Act of British Columbia, a quorum requires that eligible voters holding 1/3 of the Strata Corporation's votes be present in person or by proxy. The registration sheet was signed, proxies were certified and ballots wore issued. PROOF OF NOTICE It was moved, seconded (#320/#201) and cartied unanimously that the Notice of Meeting dated May 13", 2005, was proper notice as per the requirements of the Strata Property Act. PREVIOUS MINUTES OF THE ANNUAL GENERAL MEETING It was moved, seconded (#320/#401) and carried unanimously to approve the Minutes of the Annual General Meeting held November 29", 2004, as previously circulated APPROVAL OF AGENDA It was moved, seconded (#201/#101) and carried, by majority vote, to approve the Agenda as presented. SPECIAL RESOLUTION #1 by % VOTE WHEREAS: A. The Owners, Strata Plan NW 2671, commonly known as Sunridge Estates (the “Strata Corporation’), has received a preliminary legal opinion from G. Stephen Hamilton of Hammerberg Altman Beaton & Maglio dated April 14", 2005 containing some of the merits of proceeding with litigation to recover costs incurred by the Strata Corporation to repair its building envelope; B. The Strata Corporation deems it advisable, pursuant to the Strata Property Act, S.B.C. 1998, c. 43, to commence legal action against any person, corporation or other legalMINUTES OF SPECIAL GENERAL MEETING - JUNE 2, 2005, STRATA CORPORATION NW 2871 a entity responsible in whole or in part for the development, design, construction or deficiencies at 1215 Lansdowne Drive, Coquitlam, BC: and C. The Strata Corporation intends to commence legal action for the purpose of identifying additional defendants and to better assess whether the action is warranted taking into account the prospect of financial recovery. BE IT RESOLVED THAT The Owners, NW 2671, commonly known as Sunridge Estates (the “Strata Corporation’): 1, that the Strata Corporation be and is hereby authorized pursuant to section 171 of the Strata Property Act, S.B.C. 1998, c.43, to cormmence legal action as representative of all ‘owners against any person, corporation or other legal entity which may be responsible in whole or in part for the development, design, construction or deficiencies in, or damage to, the common property or assets of the Strata Corporation, including, without limitation, legal action against the developer, architects, engineers, inspectors, construction managers, property managers, consultants, contractors, subcontractors, manufacturers, materials suppliers, equipment suppliers and workers, and the Strata Council be and is hereby authorized and directed to retain and instruct legal counsel for the purpose of doing so; 2. that the Strata Corporation be and is hereby authorized to commence legal action on behalf of one or more owners (the “Individual Owners") pursuant to section 172 of the Strata Property Act, S.B.C. 1998, c. 43, against any person, corporation or other legal entity which may be responsible in whole or in part for the development, design, construction or deficiencies in, or damage to, the sirata lots owned by Individual Owners, including, without limitation, legal action against the developer, architects, engineers, inspectors, construction managers, properly managers, consultants, contractors, subcontractors, manufacturers, matenals suppliers, equipment suppliers and workers, and the Strata Council be and is hereby authorized and directed to retain and instruct legal counsel for the purpose of doing so provided that the Individual Owners consent in writing before such legal action is commenced on their behalf; 3 that the legal action be initially funded through the Contingency Reserve Fund, which will be repaid by each Strata Lot's portion, based on unt entitizment, once these funds have been levied in an amount not to exceed $150,000.00; 4. iin the alternative, that the legal action be funded on a contingency fee basis in accordance with the proposed contingency fee agreement attached to this resolution; and 5. that the Strata Corporation retain Morrision Hershfield Limited to provide litigation support services. Such services will be initially funded through the Contingency Reserve Fund, which will be repaid by each Strata Lot's portion, based on unit entitlement, once these funds have been levied in an amount not to exceed $30,000.00 plus GST Stephen Hamilton of Hammerberg Allman Beaton & Maglio provided an overview of the purpose of this resolution after Peter Slack, Council President, read the resolution to the Owners.MINUTES OF SPECIAL GENERAL MEETING ~ JUNE 2", 2005 STRATA CORPORATION NUV 2671 3 The purpose of the resolution was to determine if, by a % vote of the Owners present, litigation should be pursued to recover costs incurred by the Strata Corporation to repair its building envelope. The litigation will be against any person, corporation or legal entity responsible in whole or in part for the development, design, construction or deficiencies at 1215 Lansdowne Drive. After considerable discussion, the Owners voted on this resolution. It was moved, seconded (#510/#514) and carried, with 41 in favour and 2 opposed, to pursue litigation. Subsequently, it was explained that the litigation had to be funded either by paying Hammerberg Altman Beaton & Maglio, on an hourly basis, an amount not to exceed $150,000.00 or on a contingency basis. As this question was called it became apparent that the Owners were divided on the funding issue and not ali Owners understood how the contingency option worked and that more explanation was required. Stephen Hamilton of Hammerberg Altman Beaton & Maglio suggested that the previous vote be disregarded. Further discussion on the funding was continued and it was explained that the contingency option meant that Stephen Hamilton of Hammerberg Altman Beaton & Maglio would take 25% of any recovered costs, or 35% if the case went to trial plus the costs of disbursements, which could be as high as approximately $50,000.00. In his opinion, the preliminary legal investigation indicated that the litigation appeared to be worth pursuing and therefore his firm was prepared to take the risk. He also explained that should the end result be a cost recovery of $2,500,000.00, his fee, based on 25%, would be $625,000.00 plus approximately $50,000.00 in disbursement costs vs, a maximum of $150,000.00 if paid on an hourly basis. The Owners were advised that they could first vote to proceed with litigation with the legal costs based on an hourly rate with costs not to exceed $150,000.00, and should this option fail then they could vote on the legal costs being based on a contingency, and disbursements. It was moved, seconded (#510/#514) and carried, with 33 in favour, 7 opposed and 3 abstentions, that litigation would be pursued on a hourly rate with costs not to exceed $150,000.00. It was then noied that Morrison Hershfield would be asked to provide litigation support services and forensic evidence at a cost not to exceed $30,000.00 plus GST. It was explained to the Owners that it was necessary to gather evidence when pursuing litigation It was moved, seconded (#504/#227) and carried, with 33 in favour, 3 opposed and 7 abstentions, that Morrison Hershfield be retained to provide litigation support services at a cost not to exceed $30,000.00 plus GST. SPECIAL RESOLUTION #3 by % VOTE WHEREAS: A The Owners, Strata Plan NW 2671, commonly known as Sunridge Estates (tne “Strata Corporation’), is undergoing an extensive building envelope repair,