SALT POND HOMEOWNERS ASSOCIATION

September 28, 2007

Dear Salt Pond property owner:

On August 11, 2007, with overwhelming support of 82 % of Salt Pond owners, the Salt Pond Homeowners Association (SPHA) voted to allow your Board to exercise the option to purchase the Salt Pond golf course land and business. Your Board of Directors extends heartfelt thanks to all the volunteers who worked toward this goal and all those who voted for the purchase. This vote clearly demonstrates Salt Pond owners’ commitment to this outstanding resort community.

In accordance with the resolutions approved by SPHA owners on August 11, 2007, a special assessment is hereby being levied on each owner of a lot or unit for the purchase of the Salt Pond golf course land and business.

On November 5, 2007, the special assessment is due. There are two options available to owners to pay the special assessment: 1) A one-time payment of the entire $5,000, or 2) payment in three installments totaling $5,450. The installment payments are due as follows:

· On November 5, 2007 - $1,800

· On November 5, 2008 - $1,825

· On November 5, 2009 - $1,825

The first installment payment ($ 1,800) includes an allowance for closing costs; the second and third installment payments ($ 1,825 each) include interest on the balance of the assessment and a nominal amount to cover transaction processing and accounting costs. Enclosed please find a payment coupon for each option and a return envelope. Please return your payment and the payment coupon for whichever option you choose no later than November 5, 2007.

We appreciate your attention to the following information to ensure that your payment is promptly credited.

• Please pay by check or money order. Your check should be payable to SALT POND HOA.
• Please select the appropriate payment coupon and insert it with your payment in the return envelope.
• Please indicate on the check or money order, the address, community number and account number (as shown on the coupon). Please do not use staples or tape.
• Payments are due on November 5, 2007. There is a 30-day grace period to December 5, 2007. After that date, a late fee of 5% of your payment will be charged and additional interest will be charged for delinquent payments as defined in the enclosed “Terms and Conditions”. Early remittance is appreciated because payment of one-third of the purchase price of $ 2.3 million ($766,667) is due to Salt Pond Associates (SPA), the seller, upon the planned settlement in late December 2007 or the entire contract will be in default.

• There are only two payment options. However, if you need assistance in obtaining a loan to finance these payments, please contact the SPHA Treasurer, Chuck Gularson, at 302-539-8228 (Home) or 302-542-9484 (Cell). SPHA has made arrangements with several banks so that a qualified homeowner can take out a home equity loan. The home equity loan would be used to pay the special assessment to SPHA. The homeowner would then repay the bank on a mutually agreed upon extended loan repayment schedule. Information on this financing will be available on the SPHA website (www.sphamembers.org) under “Hot Topics”.

Please be advised of the following special circumstances.

• If your house or lot is under contract or has sold by the November 5, 2007 payment due date, the current homeowner of record is responsible to pay the entire special assessment on the November 5, 2007 date.
• If you selected the installment payment method and you sell your property following payment of the first installment, the remaining installment payments (including any interest and fees owed) are due and payable at settlement or the appropriate November 5 special assessment due date - whichever occurs first.

Please advise your attorney, real estate agent and title company of these requirements prior to settlement and ask that a copy of the settlement sheet or recorded deed be forwarded to Legum & Norman, C4 Edgewater – Sea Colony East, Bethany Beach, DE 19930 immediately after settlement.

Should you have any questions, you may contact SPHA’s Property Manager, Donna Hemphill, at 302-537-9499.

Sincerely,

The Board of the Salt Pond Homeowners Association

Enclosures: (1) Payment coupons and return envelope

(2) Terms and Conditions

(3) Change Notice Form