Michelex Corp (fka MLXO)

[sawdin]

Dear Fellow Shareholder:

Like many of you, we are extremely concerned regarding actions taken by Messrs. Lacle, Saleem and Syed in their positions as officers of Michelex and as members of Michelex’ Board of Directors. Specifically, Michelex’ extreme lack of transparency, including, but not limited to, the failure to provide independent verification of Michelex’ assets, coupled with the decision to withhold funding to Pristine Pharma Corporation lead us to believe that Michelex will cease to be tradable, thus causing our shares to be worthless. Good-faith efforts at negotiation have failed, leaving shareholders no choice other than direct action. Therefore, we are initiating shareholder action to remove Messrs. Lacle, Saleem and Syed from Michelex’ Board of Directors and elect a new Board of Directors to ensure that Pristine Pharma Corporation receives timely and adequate funding. Our goal is to give Michelex an opportunity to be a successful company that creates shareholder value.

Currently, the group of concerned shareholders that we represent has control of approximately 380 million shares; that does not include approximately 130 million shares held by participants of this board who have previously expressed concerns regarding the performance of Michelex’ current Board of Directors. We already have enough shares to force a shareholders’ meeting to be held and are quite close to obtaining a majority of outstanding shares (i.e., 500,000,001), which would allow us to reconstitute the Board of Directors. Messrs. Lacle, Saleem and Syed do not control a majority of outstanding shares, and given their performance we doubt they have many supporters. We strongly urge you to consider pledging your support, and if needed, the voting rights of your shares, so that we can call a shareholders’ meeting at which Messrs. Lacle, Saleem and Syed will be removed from the Board of Directors and replaced with qualified persons who are committed to creating value for Michelex shareholders. Please note that new investors are quite interested in providing funding to Pristine Pharma Corporation. However, any potential funding is contingent upon the removal of Messrs. Lacle, Syed and Saleem from the Board of Directors and as officers of Michelex.

If you would like to be a part of the solution, please contact Mr. Sawyer and provide him with the total number of shares that you hold, the name those shares are registered under, your physical address of record (i.e., your mailing address) and your email address. Any information you provide will be kept strictly confidential. If needed, you will be provided information on how to vote by proxy. Please use the following links if you need additional information regarding voting by proxy.


SEC: Exercising Your Shareholder Voting Rights in Corporate Elections

SEC: Spotlight on Proxy Matters


Thank you for your consideration in this matter and please feel free to contact Mr. Sawyer if you have additional questions.

Sincerely,
Dino A. Sawyer
[e-mail]

Glenn Pauly
Jiten Parikh
Melissa Smith
Robert Karbousky


Additional Information:
A contractual agreement was consummated in 2010 between Michelex, a group of Michelex shareholders (including Michelex’ previous officer) and Messrs. Lacle, Shah and Syed in which approximately 388,000,000 shares of Michelex stock (consisting of 179,962,722 restricted shares that were unissued and held in treasury and approximately 208,551,488 unrestricted shares provided by the aforementioned shareholder group) were provided to Messrs. Lacle, Shah and Syed in exchange for $3,000,000 of paid up capital and $10,505,500 of investable funds held by United Mortgage Bankers, LTD. (Mr. Lacle received 84,582,479 restricted shares, Dr. Shah received 35,992,545 restricted shares and Mr. Syed received 59,387,698 restricted shares. The unrestricted shares were jointly held as a block of shares.)

Since verification of the $13,505,500 in funds allegedly provided to Michelex by United Mortgage Bankers, LTD has not been confirmed by the auditors, and since Pristine Pharma Corporation has not received $1,000,000 of funding from Michelex per the July 15, 2010 Press Release, an offer was recently presented to Messrs. Lacle, Shah, Syed and Saleem (who is currently the Director, CEO and Chairman of Michelex) in which Messrs. Lacle, Shah, Syed and Saleem would return all of the shares of Michelex still in their possession and Messrs. Lacle, Syed and Saleem would resign from the Board of Directors. In addition, only 1/3 of the monies (approximately $50,000) from the sale of the approximately 208 million unrestricted shares provided by the aforementioned shareholder group that were not used for the acquisition of Pristine Pharma Corporation or for the purpose of retro-fitting the Massena facility would have to be returned to said shareholder group. $9,000 that was transferred to Total Care by the aforementioned shareholder group would also be returned. In exchange, Messrs. Lacle, Shah, Syed and Saleem would receive all of the shares of United Mortgage Bankers, LTD along with the return of assets actually provided to Michelex by United Mortgage Bankers, LTD per the above-mentioned contractual agreement. As you can see, the offer presented to Messrs. Lacle, Shah, Syed and Saleem was extremely equitable. (100 % of the returned shares would go to Michelex, except for 21 million shares that would go to the shareholder group that initially provided approximately 208 million shares. Please note that none of the signatories to this letter were members of the aforementioned shareholder group that was a party to the initial contractual agreement. As such, we did not contribute any shares nor would we have received any shares if the offer to rescind the agreement was accepted.)

2. Michelex’ Draft Audit states that ‘in May, 2010 the Company issued 179,962,772 shares of its common stock to the stockholders of United Mortgage Bankers, LTD. (United) in anticipation of acquiring United….In addition, the Company issued 10,000 shares of preferred stock to the former owners of United each share of which has 100,000 voting rights.’ Please note that the 10,000 shares of preferred stock have not been issued and cannot be issued; Michelex’ Articles of Incorporation do not allow for the issuance of preferred shares.

3. Michelex’ Articles of Incorporation (excerpts below) provide for the removal of the Board of Directors with or without cause. Messrs. Lacle, Saleem and Syed can be removed and replaced at the same meeting. The new Board of Directors could then dismiss them as officers of Michelex and replace them with persons committed to creating shareholder value.

Article III Directors: Section 12. Removal of Directors.
At a meeting called expressly for that purpose, directors may be removed with or without cause, by a vote of the holders of a majority of the shares entitled to vote at an election of directors.

Article IV Officers: Section 3. Removal of Officers.
Any officer or agent may be removed by the board of directors whenever in its judgment, the best interests of the corporation will be served thereby. Election to an office in the corporation shall not create any contractual right of any type or sort in the person elected.