TWINFLAME CONSULTING LLC ~ TO: WHOM IT MAY CONCERN RE: LEGAL OPINION REGARDING ZCASH, CHIPS, AND PROMISSORY NOTES COLLATERALIZED THEREBY, USED AS "TENDER OF PAYMENT" AS PER THE UNIFORM COMMERCIAL CODE, ("UCC") DATE: SEPTEMBER 8, 2015 INTRODUCTION As background, few would argue against it being legally acceptable to tender payment in the USA using United States dollars, ("USD"), as the mode of payment to satisfy UCC statutes. However, as explained in great and scholarly detail in the document titled "What is a Dollar," which may be viewed at http://www.chips-corner.com/GIDEON/contents/en-us/d20.html. there is marked lack of consensus as to what a USD really is. From a practical standpoint, prior to the days of AlMs, credit cards, and debit cards, and prior to 1971, paper money and coins issued by the U.S. Department of Treasury, were used throughout the USA as currency, generally referred to as USDs. Bank checks, valued in USD, were also used as currency, possibly countersigned by multiple parties before value was withdrawn or transferred from a bank's accounts. Private corporations sometimes printed their own "script" and used it to pay employees, and the U.S. Military historically minted "wooden nickels" that were used by military personnel. Banks, accepting Promissory Notes collateralized by property and/or by personal reputation, used a principle known as "compensating balances" to create currency _by making USD valued ledger entries for bank accounts in the form of "loans". Changes occurred in 1971, by Executive Order, when President Richard M. Nixon caused the U.S. Treasury to cease printing paper money for the U.S. Government and, instead, the U.S. Treasury began servicing the U.S. Federal Reserve, printing FEDERAL RESERVE NOTES, ("FRNs"). It should be noted that the U.S. Federal Reserve, while a corporation, is not a U.S. Governmental Agency. FRNs began to circulate as currency, bearing the inscription "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE", under the signature of the Secretary of The U.S. Treasury. Again, few would argue against the legitimacy of using FRNs as currency to satisfy the regulations imposed by the UCC. Banks continued to process checks, valued in USDs, and collect FRNs from an issuing bank when a check is presented for deposit by a bank client. 4005 Manzanita Ave, Suite 6-438, Carmichael, CA 95608 Email: john.padrick@gmail.com, Tel: (916)367-9297, Fax: (916)313-32'35 TWINFLAME CONSULTING LLC ~ Additionally, banks continued to accept Promissory Notes and use "compensating balances" to create currency. These processes evolved when entities such as American Express, Diner's Club, and others began offering commercial credit, which gave rise to an "electronic currency." When bank credit cards made their debut, banks began using "compensating balances" to create currency on demand, and the use of "electronic currency" soon became prevalent. The convenience offered by credit cards soon gave birth to debit cards, and the use of electronic currency became predominant, worldwide. In summary, FRNs have replaced paper money issued by the U.S. Treasury, and electronic currency has largely replaced the use of paper FRNs and there is little dispute against the use of any of these to satisfy the requirements of the UCC. RECOGNITION OF VIRTUAL CURRENCY In recent years, "corporate script" has evolved into "virtual currency" of various forms and U.S. Federal Court decisions and IRS publications have legitimized the use of virtual currency to be used to pay for goods and services, and to be held for investment. For example, ZCASH historically has been used as "Electronic Tokens," representing a means of exchange within the confines of the business social network known as the "INTERNET CATALOGUE CLUB," valued at $2 USD each; and, CHIPS have been used as "Savings Points," valued at $1 USD each, accrued through commercial transactions between Members of the CLUB. The value and use of ZCASH and CHIPS was declared, without dissent by any party or by the Court, based on evidence presented by the U.S. Securities and Exchange Commission in case No. 4-07-CV-04518 venued in the U.S. District Court for the Southern District of Texas. The Final Judgment was entered July 5, 2011, and by Consent Decree, neither party prevailed and no fault was assigned. Another case in the Eastern District of Texas, No. 4-13-CV-00416, examined the virtual currency, "bitcoin," with the Court ruling that: "In twenty-three places throughout the IRS code, money is referred to as property. In fact, the IRS definition and guidance seem to point the court towards the similarities between money and bitcoin for federal tax purposes." 4005 Manzanita Ave, Suite 6-438, Carmichael, CA 95608 Email: john.padrick@gmail.com, Tel: {916)367-9297, Fax: (916)313-3235